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IN AN ACTION BY CATERING WAITSTAFF SEEKING TIPS ALLEGEDLY WITHHELD BY THE EMPLOYER IN VIOLATION OF THE LABOR LAW, THE EMPLOYER CANNOT SEEK INDEMNIFICATION FROM A CONTRACTOR WHICH SUPPLIED CATERING STAFF TO THE EMPLOYER (FIRST DEPT). ​

The First Department, in a full-fledged opinion by Justice Kern, in a matter of first impression, determined that an employer (Great Performances) cannot seek indemnification from from a contractor (Kensington) for alleged violations of the Labor Law. The plaintiffs alleged Great Performances kept tips which should have gone to tie waitstaff. Kensington had supplied staff to Great Performances for catered events:

We … find that Great Performances’ third-party complaint was properly dismissed as against Kensington on the ground that an employer has no right to contractual indemnification from a third party for claims brought pursuant to NYLL [New York Labor Law] 196-d because indemnification under that statute, whether contractual or otherwise, is against public policy. * * *

The policies behind the statute sought to ensure that employers be held accountable for any wage violations and are not permitted to contract away liability. Indeed, holding that an employer has a right to contractual indemnification from a third party for claims brought pursuant to NYLL 196-d would undermine the employer’s willingness to comply with its obligations under the statute. Robinson v Great Performances/Artists as Waitresses, Inc., 2021 NY Slip Op 02769, First Dept 5-4-21

 

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