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LAW FIRM ASSOCIATE WAS ENTITLED TO 5% OF $5 MILLION FEE UNDER A BREACH OF ORAL CONTRACT THEORY, BUT NOT UNDER A LABOR LAW 190 THEORY (FOURTH DEPT).

The Fourth Department determined plaintiff, an associate in defendant law firm, was entitled to 5% of the $5 million fee collected by the law firm in an action on behalf of a client brought in by the associate. The jury found that the plaintiff was entitled to payment under the Labor Law 190 cause of action, as well as under the breach of contract cause of action. The Fourth Department determined the verdict on the Labor Law 190 cause of action should have been set aside because, under the law described in the jury instructions, the jury should have found the payment to be “incentive compensation” which is excluded from the type of pay covered by the Labor Law:

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Applying the facts to the law as stated in the jury charge, the evidence establishes that the collections bonus was “incentive compensation” because it was based on more than just plaintiff’s performance. Among other things, the matter took considerable effort from other attorneys, some of whom billed far more hours on the matter than plaintiff, and a partner conducted international arbitration and filed enforcement proceedings to secure a settlement collectible by the client. Contrary to plaintiff’s contention, inasmuch as the collections bonus was calculated as a percentage of the fee in the matter and “the fee collected” by defendant was based on the abovementioned factors outside of plaintiff’s control, the jury could not have rationally concluded that the collections bonus was anything other than “incentive compensation” excluded from protection under Labor Law § 193 (1). …

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… [T]he evidence adduced by plaintiff established, prima facie, that the parties entered into a binding oral agreement in which at least one of defendant’s partners promised to pay plaintiff a bonus consisting of 5% of the fee collections from any client generated by plaintiff if such fees exceeded $100,000, that plaintiff subsequently performed under the agreement by generating the client, and that defendant breached the agreement by failing to pay the collections bonus, thereby causing plaintiff to incur damages … . Doolittle v Nixon Peabody LLP, 2017 NY Slip Op 08126, Fourth Dept 11-17-17

 

EMPLOYMENT LAW (LAW FIRM ASSOCIATE WAS ENTITLED TO 5% OF $5 MILLION FEE UNDER A BREACH OF ORAL CONTRACT THEORY, BUT NOT UNDER LABOR LAW 190 THEORY (FOURTH DEPT))/LABOR LAW (INCENTIVE COMPENSATION, LAW FIRM ASSOCIATE WAS ENTITLED TO 5% OF $5 MILLION FEE UNDER A BREACH OF ORAL CONTRACT THEORY, BUT NOT UNDER LABOR LAW 190 THEORY (FOURTH DEPT))/INCENTIVE COMPENSATION (LABOR LAW, LAW FIRM ASSOCIATE WAS ENTITLED TO 5% OF $5 MILLION FEE UNDER A BREACH OF ORAL CONTRACT THEORY, BUT NOT UNDER LABOR LAW 190 THEORY (FOURTH DEPT))/CONTRACT LAW (EMPLOYMENT LAW, (LAW FIRM ASSOCIATE WAS ENTITLED TO 5% OF $5 MILLION FEE UNDER A BREACH OF ORAL CONTRACT THEORY, BUT NOT UNDER LABOR LAW 190 THEORY (FOURTH DEPT))

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