Labor Law – Page 2 – New York Appellate Digest

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.

February 20, 2024

Civil Procedure, Contract Law, Debtor-Creditor, Employment Law, Labor Law

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.

February 14, 2024

Civil Procedure, Employment Law, Labor Law

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.

January 17, 2024

Civil Procedure, Employment Law, Evidence, Labor Law

THE COMPLAINT STATED A CAUSE OF ACTION FOR UNPAID OVERTIME WITHOUT SPECIFYING PARTICULAR DATES OR WEEKS; AFFIDAVITS ARE NOT DOCUMENTARY EVIDENCE WHICH WILL SUPPORT A “DOCUMENTARY EVIDENCE” MOTION TO DISMISS (FIRST DEPT).

The First Department, reversing Supreme Court, determined the complaint stated a cause of action for unpaid overtime wages pursuant to the Labor Law and the proof submitted by defendant did not support a motion to dismiss based on documentary evidence:

Plaintiffs’ complaint sufficiently states a claim for unpaid overtime wages in violation of Labor Law §§ 191 and 663 and 12 NYCRR 142-2.2 … . Plaintiffs allege that they were not compensated for hours spent before and after their shift, loading company vehicles and receiving job assignments, before traveling to construction sites throughout the New York City region … . Although the complaint does not contain the particular dates or weeks that plaintiffs were allegedly underpaid, it provides sufficient notice of their causes of action for unpaid wages and overtime based on pre-shift and post-shift work performed at defendant’s yard … .

In addition, defendant’s documentary evidence is insufficient to support a motion to dismiss under CPLR 3211(a)(1). Dismissal on the basis of documentary evidence is appropriate only if that evidence “utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law” … . Affidavits are not documentary evidence that can support a 3211(a)(1) motion … . The documentary evidence fails to utterly refute plaintiffs’ claim that they were not timely paid overtime compensation. Despite defendant’s assertions, it is unclear whether the daily reports submitted with its motion properly reflect the alleged work performed before plaintiffs’ shifts began or after their shifts had purportedly ended. Rosario v Hallen Constr. Co., Inc., 2023 NY Slip Op 01490, First Dept 3-21-23

Practice Point: Here the complaint stated a cause of action for unpaid overtime despite the absence of specific dates or week when plaintiffs were allegedly underpaid.

Practice Point: A motion to dismiss based on documentary evidence is not supported when the documents are affidavits.

March 21, 2023

Civil Procedure, Employment Law, Human Rights Law, Labor Law

PLAINTIFF STATED CAUSES OF ACTION FOR EMPLOYMENT DISCRIMINATION AND VIOLATIONS OF THE LABOR LAW (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff had stated causes of action for employment discrimination, failure to pay overtime, and failure to pay weekly:

… [P]laintiff has sufficiently stated a cause of action for employment discrimination under both the New York State and New York City Human Rights Laws … . Plaintiff alleges that she is a member of a protected class; that she was qualified for the position by, among other things, having a decade of experience in leadership roles; and that she was subject to an adverse employment action under circumstances giving rise to an inference of discrimination … . Specifically, plaintiff, a Black woman, alleges that her supervisor … , irritated that she had telephoned Human Resources for advice, allegedly stated to her the night before her termination, “Why did you call HR? Blacks . . . I should have never hired her.”

… [W]e find that she has sufficiently stated a claim for unpaid overtime under the Labor Law by alleging that she worked more than 40 hours per week and that defendants never paid her for the overtime (CPLR 3013 …).

Plaintiff’s claim based on defendants’ failure to pay her weekly also is sufficiently pleaded, as she alleges that she was a nonexempt employee under Labor Law § 190, and that defendants were required to pay her each week as a manual worker under New York Labor Law § 191. Kirby v Carlo’s Bakery 42nd & 8th LLC, 2023 NY Slip Op 00059, First Dept 1-10-23

Practice Point: Here plaintiff stated causes of action for employment discrimination (a racist remark just prior to her termination), as well as failure to pay overtime and failure to pay weekly in violation of the Labor Law.

January 10, 2023

Labor Law, Unemployment Insurance

PURSUANT TO LABOR LAW SECTION 511, THE NEW YORK CITY SUPPER CLUB WAS NOT THE EMPLOYER OF THE MUSICIANS, DANCERS AND OTHER PERFORMERS WHO ENTERTAINED AT THE CLUB; THEREFORE THE CLUB WAS NOT OBLIGATED TO MAKE UNEMPLOYMENT INSURANCE CONTRIBUTIONS ON BEHALF OF THE PERFORMERS (THIRD DEPT).

The Third Department, reversing the Unemployment Insurance Appeal Board, determined that the musicians, dancers and other artists who performed at a New York City supper club (Griffs) were not employees of the club under Labor Law 511. Therefore the club was not obligated to make additional unemployment insurance contributions with respect to those performers:

Pursuant to Labor Law § 511 (1) (b) (1-a), the term employment includes “any service by a person for an employer . . . as a professional musician or a person otherwise engaged in the performing arts, and performing services as such for a . . . restaurant, night club or similar establishment unless, by written contract, such musician or person is stipulated to be an employee of another employer covered by [the Labor Law]” … . “The statute, which was designed to extend the availability of unemployment insurance and workers’ compensation benefits to those in the performing arts, creates a rebuttal presumption of employment” … — a presumption that may be rebutted by a written contract establishing that the performer in question is the employee of another covered employer … . …

… [T]he sole contested issue is whether a provision contained within the written agreements executed by the performers established that they were “employee[s] of another employer covered by [the Labor Law]” (Labor Law § 511 [1] [b] [1-a]). To that end, paragraph No. 8 of the performers’ contracts with Griffs provides, in relevant part, that Griffs “is not nor shall become [the performers’] employer, as other corporations employ them” … . Matter of Griffs Global Corp. (Commissioner of Labor), 2022 NY Slip Op 06670, Third Dept 11-23-22

Practice Point: Under Labor Law 511 the musicians, dancers and other performers who entertained at the New York City supper club were not employees of the club because their contracts stated they were employees of other corporations. Therefore, the club was not required to make unemployment insurance contributions on behalf of the performers.

November 23, 2022

Contract Law, Insurance Law, Labor Law, Unemployment Insurance

EVEN IF THE CONTRACT BETWEEN THE INSURER AND CLAIMANT INSURANCE BROKER INCLUDED ALL THE STATUTORY FACTORS IN LABOR LAW 511, THE BROKER WILL BE CONSIDERED AN EMPLOYEE IF THE SERVICES ACTUALLY PROVIDED BY THE BROKER ARE NOT CONSISTENT WITH THE CONTRACT PROVISIONS (THIRD DEPT).

The Third Department determined the insurance company, Paul Revere, did not demonstrate that claimant insurance broker was not an employee. Claimant was entitled to unemployment insurance benefits:

Labor Law § 511 (21) provides that “[t]he term ’employment’ shall not include the services of a licensed insurance agent or broker if,” among other things, “the services performed by the agent or broker are performed pursuant to a written contract” … that, in turn, contains seven statutorily enumerated provisions … . Here, the Board concluded that two of the seven statutory requirements were absent from the written agreement entered into between claimant and Paul Revere — specifically, provisions demonstrating that claimant was “permitted to work any hours he . . . chooses” … and was “permitted to work out of his . . . own office or home or the office of the person for whom services are performed” … . Paul Revere disagrees, contending that article XI (A) of the written contract satisfies such requirements by providing that “Paul Revere shall not exercise nor have the right to exercise direction or control over [claimant’s] time, when or how [claimant] may work, or over the activities of [claimant].”

… [W]e agree with the Board that the conclusory and sweeping language employed in article XI (A) of the contract does not satisfy the requirements of Labor Law § 511 (21) (d) (iii) and (iv). … [E]ven assuming, without deciding, that the written agreement between Paul Revere and claimant did … fulfill all of the statutory requirements, we agree with the Board’s further conclusion that the parties’ conduct was inconsistent with the provisions of Labor Law § 511 (21) and, therefore, the services performed by claimant do not fall within the statutory exclusion…. . …

… [T]he statute requires both that the contract at issue contain the seven enumerated provisions and “that the services performed by the insurance agent or broker actually be consistent with those provisions” … . Matter of Hoyt (Paul Revere Life Ins. Co.–Commissioner of Labor), 2022 NY Slip Op 06518, Third Dept 11-17-22

Practice Point: Even if the contract between the insurer and claimant insurance broker includes all the statutory provisions in Labor Law 511 (such that the broker would not be considered an employee for unemployment insurance purposes), if the services actually performed by the broker are not consistent with those contract provisions the broker may be deemed an employee eligible for benefits.

November 17, 2022

Employment Law, Labor Law

PLAINTIFFS-EMPLOYEES SEEKING THE PREVAILING WAGE FOR PUBLIC WORKS PROJECTS PURSUANT TO LABOR LAW 220 ARE ENTITLED TO FULL SUPPLEMENTAL (FRINGE) BENEFITS, AS WELL AS WAGES (FOURTH DEPT).

The Fourth Department, reversing (modifying) Supreme Court, determined plaintiffs-employees were entitled to full payment of their supplemental (fringe) benefits in this Labor Law 220 action seeking the prevailing wage for public works projects:

Plaintiffs are members of a class of employees who allege that defendant failed to pay them prevailing supplemental (or fringe) benefits for work they performed on various public works contracts. * * *

Pursuant to Labor Law § 220 (3) (b), contractors undertaking a public works project must provide their employees with supplemental benefits “in accordance with prevailing practices for private sector work in the same locality” … . Supplemental benefits are defined as “all remuneration for employment paid in any medium other than cash, or reimbursement for expenses, or any payments which are not ‘wages’ within the meaning of the law, including, but not limited to, health, welfare, non-occupational disability, retirement, vacation benefits, holiday pay[,] life insurance and apprenticeship training” (§ 220 [5] [b]). * * *

Consider, for example, a hypothetical contractor that fails to pay prevailing wages (as opposed to benefits) to its employees on a public works project, and then pays the shortfall in wages into a common fund out of which all of its employees are compensated, including those who are not prevailing wage workers. Due to the dilution of funds resulting from those funds also being paid to the nonprevailing wage workers, the employees who worked on the public works contracts would not receive the full wages they would be entitled to for their work on the public works project. Under that scenario, the contractor would clearly have failed to comply with Labor Law § 220 (3) (a), notwithstanding that the contractor paid the same amount in wages to a fund as it would have paid if the prevailing wage workers had been paid directly according to scale. We do not perceive any justification in law or logic for treating supplemental benefits differently from wages. Vandee v Suit-Kote Corp., 2022 NY Slip Op 04852, Fourth Dept 8-4-22

Practice Point: In an action pursuant to Labor Law 220 seeking the prevailing wage for public works projects, the employees are entitled to full compensation for supplemental (fringe) benefits, as well as wages.

August 4, 2022

Corporation Law, Employment Law, Labor Law

CORPORATE SHAREHOLDERS AND OFFICERS MAY ONLY BE LIABLE FOR LABOR LAW (WAGE-PAYMENT-RELATED) VIOLATIONS IF THEY EXERCISE CONTROL OVER THE DAY-TO-DAY OPERATIONS OF THE CORPORATION, WHICH WAS ALLEGED HERE (SECOND DEPT).

The Second Department, reversing Supreme Court and reinstating defendants’ counterclaims alleging violations of the Labor Law, noted that corporate shareholders and officers can only be liable for Labor Law (wage-payment-related) violations if they exercise control of a corporation’s day-to-day operations, which was alleged here:

“[C]orporate shareholders and officers generally may not be subjected to civil liability for corporate violations of the Labor Law absent allegations that such persons exercised control of the corporation’s day-to-day operations by, for example, hiring and firing employees, supervising employee work schedules, and determining the method and rate of pay” … . Here, the defendants adequately alleged, inter alia, that the additional defendants controlled the day-to-day operations of the plaintiff, including the plaintiff’s payment practices. Interstate Home Loan Ctr., Inc. v United Mtge. Corp., 2022 NY Slip Op 03715, Second Dept 6-8-22

Practice Point: Corporate shareholders and officers may be liable for Labor Law (wage-payment-related) violations only if they exercise control over the day-to-day operations of the corporation.

June 8, 2022

Civil Procedure, Employment Law, Labor Law

ACTION AGAINST AMAZON ALLEGING RETALIATION AGAINST WORKERS WHO PROTESTED COVID-RELATED WORKING CONDITIONS PREEMPTED BY NATIONAL LABOR RELATIONS ACT (NLRA) (FIRST DEPT).

The First Department, reversing Supreme Court, determined this action by the NYS Attorney General against Amazon alleging retaliation against workers for protesting COVID-related working conditions was preempted by the National Labor Relations Act (NLRA):

… [W]e find that the Labor Law §§ 215 and 740 claims alleging retaliation against workers based, in part, on their participation in protests against unsafe working conditions plainly relate to the workers’ participation in “concerted activities for the purpose of . . . mutual aid or protection,” i.e., activities that are protected by the NLRA … , and therefore that the claims are preempted … . Where conduct is clearly protected or prohibited by the NLRA, the NLRB, and not the states, should serve as the forum for disputes arising out of the conduct … . People v Amazon.com, 2022 NY Slip Op 03081, First Dept 5-10-22

Practice Point: Here a state action, brought by the NYS Attorney General, against Amazon alleging retaliation against workers for protesting COVID-related working conditions was deemed preempted by the National Labor Relations Act (NLRA).

May 10, 2022