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IN THIS CLASS-ACTION-CERTIFICATION PROCEEDING ALLEGING FAILURE TO PROVIDE NOTICE OF PAY RATE AND PAY DAY AS REQUIRED BY LABOR LAW SECTION 195(1), THE COURT SHOULD NOT HAVE GRANTED CERTIFICATION FOR THE CLAIM FOR LIQUIDATED DAMAGES AND SHOULD NOT HAVE GRANTED THE REQUEST FOR THE SOCIAL SECURITY NUMBERS OF CLASS MEMBERS WHOSE CLASS-ACTION NOTICE WAS RETURNED AS UNDELIVERABLE (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court in this class-action-certification proceeding concerning wage notice violations, noted that CPLR 901(b) prohibits class actions seeking liquidated damages and the request for social security numbers for class members whose notice was returned as undeliverable should not have been granted:

… [T]he court should not have granted class certification for the wage notice claims, which are based on the alleged failure to provide a notice of pay rate and pay day as required by Labor Law § 195(1), and seek liquidated damages, plus reasonable attorneys’ fees and costs under Labor Law § 198(1-b). Where, as here, defendant pleaded a Labor Law § 198 statutory affirmative defense to the wage notice claim, the court should have declined to grant certification by applying the CPLR 901(b) prohibition against class actions seeking liquidated damages … .

To the extent the court ordered defendants to provide the names, addresses, phone numbers, and email addresses of all class members, as well as social security numbers for all class members whose notice is returned as undeliverable without a forwarding address, the order is modified to deny the request for social security numbers. The court otherwise properly granted the request for phone numbers and e-mail addresses, which is a reasonable request to expedite class notification. Idahosa v MFM Contr. Corp., 2025 NY Slip Op 03762, First Sept 6-24-25

Practice Point: Where class-action notices are returned as undeliverable, the request for phone numbers and e-mail addresses is properly granted to expedite class notification, but the request for social security numbers should not be granted.

 

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THE COMPLAINT, WHICH ALLEGED PLAINTIFF’S FORMER EMPLOYER “BLACKBALLED” HIM BY PREVENTING HIM FROM PROCURING EMPLOYMENT WITH OTHER COMPANIES. STATED A CAUSE OF ACTION FOR TORTIOUS INTERFERENCE WITH PROSPECTIVE CONTRACTUAL RELATIONS (SECOND DEPT). ​

The Second Department, reversing (modifying) Supreme Court, determined the complaint stated a cause of action for tortious interference with prospective contractual relations. Plaintiff was allegedly “blackballed” by his former employer, Con Edison, when he sought employment with other companies after he was fired by Con Edison, allegedly for complaining about illegal dumping of waste:

Contrary to the plaintiff’s contention, the amended complaint failed to state a cause of action to recover damages for tortious interference with contract insofar as asserted against Con Edison. The amended complaint alleged that the plaintiff entered into certain employment contracts after he was terminated from Restani and that Con Edison interfered with those contracts, causing the plaintiff’s termination. Inasmuch as the plaintiff failed to allege that those employment contracts were for a definite term, we presume that they were terminable at will … . A contract that is terminable at will cannot form the basis of a claim for tortious interference with contract because such a contract “contemplates prospective contractual relations only” … .

… [T]he amended complaint stated a cause of action to recover damages for tortious interference with prospective contractual relations insofar as asserted against Con Edison. “Where, as here, the alleged interference was with prospective contractual relationships, rather than existing contracts, a plaintiff must show that the defendant interfered with the plaintiff’s business relationships either with the sole purpose of harming the plaintiff or by means that were unlawful or improper” … . “‘This standard is met where the interference with prospective business relations was accomplished by wrongful means or where the offending party acted for the sole purpose of harming the other party'” … . Wrongful means may include physical violence, fraud, misrepresentation, civil suits, criminal prosecutions, and economic pressure … . Here, the plaintiff sufficiently alleged that Con Edison tortiously interfered with his prospective contractual relationship with his employers by engaging in unlawful retaliatory conduct in violation of Labor Law § 740 … . Ackerson v Restani Constr. Corp., 2024 NY Slip Op 06322, Second Dept 12-18-24

Practice Point: The court noted that interference with at will contracts cannot be the basis for a tortious interference with contract cause of action. However interference with at will contracts can be the basis for a tortious interference with prospective contractual relations cause of action.

 

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PLAINTIFF’S SUIT AGAINST HIS EMPLOYER UNDER THE WHISTLEBLOWER LAW (LABOR LAW 740) SHOULD NOT HAVE BEEN DISMISSED BECAUSE THE AMENDMENTS TO THE STATUTE APPLY RETROACTIVELY TO PLAINTIFF’S ALLEGATIONS; PLAINTIFF’S AGE-DISCRIMINATION CAUSES OF ACTION UNDER THE STATE AND NYC HUMAN RIGHTS LAW SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing Supreme Court, determined amendments to the  Whistleblower Law (Labor Law 740) applied retroactively. Therefore plaintiff could sue based upon events which preceded the amendments. In addition, the First Department held plaintiff’s age-discrimination claims pursuant to the state and NYC Human Right Law should not have been dismissed:

Plaintiff states that he made numerous complaints to management at the hotel where he was employed. He complained that the windows lacked safety bars and were left wide open, that a fire exit was blocked by flammable materials, and that the hotel lacked permits for construction work. Plaintiff was later terminated. Because plaintiff failed to prove that an actual violation had occurred, his claim for retaliation would not have withstood summary judgment under the Whistleblower Law in effect at the time … . The Whistleblower Law has since been amended in this respect. It now covers activity “that the employee reasonably believes” violates law or poses a danger to the public (Labor Law § 740 [2] [a] …). …

We now find that the Whistleblower Law has retroactive application because the amendment at issue was remedial in nature … . * * *

… [P]laintiff submitted evidence that the hotel’s general manager, who participated in the decision to terminate plaintiff, told front desk managers about a plan to fill front desk positions “with young and attractive individuals,” naming as examples two front desk agents in their twenties. The hotel’s list of front desk employees hired between 2006 and 2012 shows that plaintiff was the oldest and that the two most recent hires were decades younger.

Plaintiff’s evidence that the hotel had twice attempted to terminate him for reasons found by arbitrators to be unsubstantiated, failed to interview him about the incident giving rise to his third termination, and prohibited testimony favorable to him from being offered at his third arbitration, as well as evidence that the arbitrator found plaintiff’s grievance to be a close case, could lead a reasonable jury to conclude that defendants’ proffered reason for the termination was “false, misleading, or incomplete” … . Therefore, the evidence supports an inference of age discrimination sufficient to reach a jury … . Spiegel v 226 Realty LLC, 2024 NY Slip Op 05076, First Dept 10-15-24

Practice Point: The amendments to the Whistleblower Law (Labor Law 740) were found by the First Department to apply retroactively to plaintiff’s allegations.​

Practice Point: Plaintiff made out a prima facie case of age-discrimination under the state and city Human Rights Law.

 

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THE SIX-MONTH EXTENSION FOR COMMENCEMENT OF AN ACTION UNDER CPLR 205(A) IS NOT AVAILABLE WHEN THE PRIOR ACTION WAS VOLUNTARILY DISCONTINUED; HERE THE CPLR 205(A) EXTENSION WAS NOT AVAILABLE FOR A STATE ACTION WHICH PLAINTIFF ATTEMPTED TO COMMENCE AFTER VOLUNTARILY DISCONTINUING A SIMILAR FEDERAL ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the six-month extension for the commencement of an action codified in CPLR 205 (a) was not available to the plaintiff because a similar federal action had been voluntarily discontinued by the plaintiff. Plaintiff had sued in federal court for violations of the Fair Labor Standards Act and the Labor Law. Plaintiff discontinued that action and brought a state action under the Labor Law. Because plaintiff could not take advantage of CPLR 205 (a), the state action was time-barred:

“CPLR 205(a) extends the time to commence an action after the termination of an earlier related action, where both actions involve the same transaction or occurrence or series of transactions or occurrences” … . However, the six-month grace period provided under CPLR 205(a) is not available where the previous action has been terminated by “a voluntary discontinuance, a failure to obtain personal jurisdiction over the defendant, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits” … .

CPLR 205(a) was not applicable to this action, since the similar and timely commenced federal action was terminated by means of a voluntary discontinuance. A discontinuance effectuated pursuant to either CPLR 3217(a) or (b) constitutes a voluntary discontinuance for purposes of CPLR 205(a) … . Pursuant to a similar provision in the Federal Rules of Civil Procedure, an action may be voluntarily dismissed either by a stipulation or notice, pursuant to Federal Rules of Civil Procedure rule 41(a)(1), or by a court order, pursuant to Federal Rules of Civil Procedure rule 41(a)(2). Thus, since the discontinuance here was affirmatively requested by the plaintiff and was granted pursuant to Federal Rules of Civil Procedure rule 41(a)(2), CPLR 205(a) was not available to extend the limitations period beyond the termination of the federal action … . Castillo v Suffolk Paving Corp., 2024 NY Slip Op 04239, Second Dept 8-21-24

Practice Point: Here plaintiff voluntarily discontinued a federal action and brought a similar action in state court. Because the federal action was voluntarily discontinued, the six month extension for commencing an action under CPLR 205 (a) was not available to plaintiff and the state action was time-barred.

 

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ABSENT AN ORDER BASED UPON AN EXCEPTION TO THE SECRECY PROVSIONS IN TAX LAW SECTION 697, THE NYS DEPARTMENT OF TAXATION AND FINANCE WAS NOT REQUIRED TO TURN OVER TAX FORMS SUBMITTED BY THE CORPORATE DEFENDANTS IN THIS LABOR LAW ACTION TO RECOVER UNPAID WAGES AND TIPS (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiffs’ subpoena demanding that the nonparty NYS Department of Taxation and Finance turn over tax forms submitted by the corporate defendants should have been quashed. The plaintiffs brought a class action to recover unpaid wages and tips pursuant to Labor Law 196-d. The relevant portion of the Tax Law prohibits disclosure of the tax forms absent an order based upon an exception in the controlling statute:

The Supreme Court should have granted that branch of the Department’s motion which was to quash so much of the subpoena as sought “All Form NYS-45 for each quarter from 2009 until present submitted by or related to” the corporate defendants pursuant to Tax Law § 697 (see CPLR 2304). The Department established that it should not be required to disclose the information contained in any return filed with it, as, pursuant to Tax Law § 697(e)(1) and (2), “‘[e]xcept in accordance with proper judicial order or as otherwise provided by law, it shall be unlawful’ for the [D]epartment or any of its officers to divulge the information contained in any return filed with it, and . . . it ‘shall not be required to produce any of them or evidence of anything contained in them in any action or proceeding in any court'” … . “[A] ‘proper order’ is one which either effectuates the enumerated exceptions within the statute or which arises out of a case in which the report is itself at issue, as in a forgery or perjury prosecution” … . In opposition, the plaintiffs failed to identify any exceptions to the statute … or demonstrate extraordinary circumstances … . Cornejo v Rose Castle Corp., 2024 NY Slip Op 04193, Second Dept 8-14-24

Practice Point: The NYS Department of Taxation and Finance is not required to turn over tax forms pursuant to a subpoena absent a court order based upon an exception to the privacy/secrecy provisions in Tax Law section 697​.

 

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LABOR LAW 193 PROHIBITS AN EMPLOYER FROM REDUCING AN EMPLOYEE’S PAY TO COMPENSATE FOR THE EMPLOYEE’S ALLEGEDLY POOR PERFORMANCE; HERE THE EMPLOYER REDUCED PLAINTIFF’S PAY TO RECOUP COSTS ASSOCIATED WITH PLAINTFF’S TRAFFIC ACCIDENT WITH A COMPANY TRUCK (SECOND DEPT).

The Second Department, reversing Supreme Court, determined Labor Law section 193 prohibited plaintiff-truck-driver’s employer from reducing plaintiff’s pay to recoup costs associated with a traffic accident alleged to have been the result of plaintiff’s negligence:

Labor Law § 193 “prohibits an employer from making any deduction from an employee’s wages unless permitted by law or authorized by the employee for certain purposes” … . To allow an employer to recover the return of paid wages based upon an employee’s alleged lack of performance “would be permitting [that employer] to do indirectly and retroactively that which the law specifically prohibits it from doing directly” … . This principle applies equally whether the cause of action sounds in negligence or in contract, as an employee may not waive the protections of Labor Law § 193 … .

… [T]he defendants’ counterclaims are explicit attempts to recoup costs for their business allegedly arising out of the plaintiff’s negligence or poor performance. Because such causes of action are barred by the Labor Law, the Supreme Court erred in denying the plaintiff’s motion pursuant to CPLR 3211(a)(7) to dismiss the defendants’ counterclaims. Craig v Fastex Logistics Transp., LLC, 2024 NY Slip Op 03678, Second Dept 7-3-24

Practice Point: Here plaintiff-truck-driver’s employer reduced his pay to recoup costs associated with plaintiff’s traffic accident with a company truck. Such a pay reduction is prohibited by Labor Law section 193.

 

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PLAINTIFF’S COMPLAINT STATED CAUSES OF ACTION FOR FAILURE TO PAY WAGES UNDER THE “NO WAGE THEFT LOOPHOLE ACT” AND RETALIATION (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff’s claims for failure to pay wages and retaliation pursuant to Labor Law sections 193, 198 and  215 should not have been dismissed:

The court incorrectly dismissed plaintiff’s Labor Law claims on the ground that the dispute was governed solely by the parties’ contract. Contrary to defendants’ contention, Labor Law claims for unpaid wages can be asserted alongside claims for breach of an employment contract … . …

The complaint … adequately states a claim for “unauthorized failure to pay wages” under the No Wage Theft Loophole Act … . Plaintiff alleges that his employment contract entitled him to an annual salary of $425,000 per year, which would increase in six months to $450,000 per year unless his performance was deemed “unsatisfactory,” and a cash bonus incentive … .” These “earnings . . . for labor or services rendered” constituted “wages” within the meaning of Labor Law 190(1) … . …

The complaint also states a claim for retaliation. Plaintiff’s notice of resignation subject to cure constituted protected activity, as plaintiff “made a complaint” to defendants that they had “engaged in conduct that [plaintiff], reasonably and in good faith, believe[d]” constituted unlawful withholding of his earned wages, specifically his nondiscretionary annual bonus (Labor Law § 215[1][a]). Plaintiff’s characterization of the bonus as “formulaic and a nondiscretionary wage” evidences his belief that he had a legal entitlement to the bonus and that defendants’ withholding of it was unlawful … . Neu v Amelia US LLC, 2024 NY Slip Op 02019, First Dept 4-16-24

Practice Point: Here plaintiff alleged he was not paid the salary and bonuses called for in his employment contract. The complaint stated causes of action for “unauthorized failure to pay wages” and “retaliation” under the Labor Law.

 

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ALTHOUGH THE SPECIFIC CONTRACT WAS NOT IDENTIFIED IN THE COMPLAINT, THE NATURE OF THE BREACH OF CONTRACT CLAIM WAS SUFFICIENTLY ALLEGED BY REFERENCE TO THE NYC ADMINISTRATIVE CODE AND NYC DEPARTMENT OF TRANSPORTATION PERMITS (FIRST DEPT).

The First Department, reversing Supreme Court, determined the breach of contract cause of action was sufficiently alleged. Although the complaint did not specifically identify the breached contract, the reference to the relevant provisions of the NYC Administrative Code and the NYC Department of Transportation (DOT) permits gave sufficient notice of the nature of the claim:

… [P]laintiffs alleged that Con Edison failed to ensure payment of prevailing wages by codefendant … as required by the permits issued by the City Department of Transportation (DOT), in that it breached agreements required to be made, pursuant to Administrative Code of City of NY § 19-142, prior to obtaining such permits. Administrative Code § 19-142 required Con Edison “to agree that . . . the prevailing scale of union wages shall be the prevailing wage for similar titles as established by the fiscal officer pursuant to section [220] of the labor law, paid to those so employed,” and provides that “[n]o permit shall be issued until such agreement shall have been entered into with the” DOT. As required by the Administrative Code, the DOT permits issued to Con Edison stated that the permittee was required, “before such permit may be issued, to agree . . . that the prevailing scale of union wages shall be the prevailing wage for similar titles” established pursuant to Labor Law § 220 … …

… [T]he fact that the breach of contract cause of action in the complaint does not specifically identify the relevant contract but instead refers to “the promises required to be made pursuant to New York City Administrative Code § 19-142 prior to obtaining such permits,” does not require dismissal. Despite the non-specificity, the complaint “give[s] sufficient notice of the nature of the claim” by referencing Administrative Code § 19-142 and the DOT permits … . Ross v No Parking Today, Inc., 2024 NY Slip Op 00880, First Dept 2-20-24

Practice Point: Here the failure to identify the specific contract which was breached did not require dismissal of the breach of contract cause of action because the nature of the action was sufficiently alleged by reference to the applicable NYC Administrative Code provision and NYC Department of Transportation permits.

 

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PARTIAL PAYMENT OF A DEBT WITHIN THE STATUTE OF LIMITATIONS PERIOD MAY REVIVE OR TOLL THE STATUTE OF LIMITATIONS FOR AN ACTION BASED UPON THE DEBT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff in this suit against his employer seeking payment for work performed raised a question of fact whether the statute of limitations was revived by defendants’ partial payment:

There is a “long-standing common law rule” that partial payment of a debt, if made under “circumstances from which a promise to honor the obligation may be inferred,” will operate to start the statute of limitations running anew from the time the partial payment is made … . To show that the statute of limitations has been renewed by a partial payment, it must be shown that the payment was accompanied by circumstances amounting to “an absolute and unqualified acknowledgment by the debtor of more being due, from which a promise may be inferred to pay the remainder” … .

Here, the plaintiff alleged that, over a course of years, the defendants made repeated assurances that they would pay him salary and bonus money that he was owed pursuant to his employment arrangement. Further, he alleged that the defendants made a partial payment of outstanding bonus money to the plaintiff on July 17, 2015, within the statute of limitations. Under these circumstances, the plaintiff raised a question of fact as to whether the statute of limitations was tolled or revived … . Costello v Curan & Ahlers, LLP, 2024 NY Slip Op 00758, Second Dept 2-14-24

Practice Point: Partial payment of a debt made within the statute of limitations period may revive or toll the statute of limitations for an action based on the debt.

 

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THE LABOR LAW DOES NOT PROVIDE A PRIVATE RIGHT OF ACTION ALLOWING A WORKER TO SUE FOR LIQUIDATED DAMAGES, PREJUDGMENT INTEREST, AND ATTORNEY’S FEES BECAUSE THE WORKER WAS PAID BIWEEKLY, NOT WEEKLY AS REQUIRED BY LABOR LAW 191 (SECOND DEPT).

The Second Department, disagreeing with the First Department, over a partial dissent, determined that Labor Law 191, entitled “Frequency of payments,” does not create a private right of action which would allow an employee, who was fully paid, to sue for liquidated damages, prejudgment interest and attorney’s fees because the employee was paid “biweekly,” not “weekly” as required by the statute:

… {The] … legislative history reveals that Labor Law § 198(1-a) was aimed at remedying employers’ failure to pay the amount of wages required by contract or law. There is no reference in the legislative history of Labor Law § 198 to the frequency or timing of wage payments, and nothing to suggest that the statute was meant to address circumstances in which an employer pays full wages pursuant to an agreed-upon, biweekly pay schedule that nevertheless does not conform to the frequency of payments provision of law.

[W]e conclude that Labor Law § 198 does not expressly provide for a private right of action to recover liquidated damages, prejudgment interest, and attorneys’ fees where a manual worker is paid all of his or her wages biweekly, rather than weekly, in violation of Labor Law § 191(1)(a). Grant v Global Aircraft Dispatch, Inc., 2024 NY Slip Op 00183, Second Dept 1-17-24

Practice Point: The Labor Law does not provide a private right of action allowing a worker to sue for liquidated damage, prejudgment interest and attorney’s fees because the worker was paid biweekly, not weekly as required by Labor Law 191.

 

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