Is a Plaintiff Entitled to Damages Under Labor Law If His Claim Is Successful ?
In Arbeeny v. Kennedy Executive Search, NYLJ, 1/20/10, the court reinstated plaintiff's Labor Law 191 and 198 claims, previously dismissed by the trial court which held that, even though plaintiff, an executive search consultant, qualified as an employee under the Labor Law, there was no enforceable contract for the commissions.
After the First Department held that dismissal of the breach of contract claim was an error, plaintiff was allowed to proceed with the statutory claims (id.; cf. Tierney v. Capricorn Investors, LP, 189 AD 2d 629, 592 N.Y.S.2d 700 [1st Dept 1993] (plaintiff asserted breach of contract claim alleging defendant's failure to pay additional compensation in connection with a certain transaction, and that it constituted a willful failure to pay wages under the Labor Law 190 et seq.
The court dismissed the breach of contract claim for insufficiency and held that plaintiff cannot assert a statutory claim for wages under the Labor Law if he has no enforceable contractual right to those wages)).
Further, Labor Law 198.1-a provides that "in any action instituted upon a wage claim by an employee ... in which the employee prevails, the court shall allow such employee reasonable attorney's fees," and if it is found that the failure to pay was willful, "an additional amount as liquidated damages equal to twenty-five percent of the total amount of the wages found to be due" (Rasmussen v. Yellow River, Inc. 298 AD2d 322, 749 N.Y.S.2d 239 [1st Dept 2002]; Wolintetz v. Island Stationary Corp., 16 Misc 3d 1133[A], 847 N.Y.S.2d 906, 2007 NY Slip Op 51679[U] [NY Dist Ct 2007] (withholding of payment of commissions was a willful act of retaliation for the plaintiff's leaving the defendant's employ)).
In Arbeeny, the court held that "the revival of claims under the state's Labor Law means that, if plaintiff prevails on either the contract or the implied covenant theory, he would be entitled to payment of his attorney's fees and a fine under the statute..." (id.).
Plaintiffs' entitlement to damages under the Labor Law 198.1-a depends upon their successful claim under 193 of the statute (Gottlieb v. Kenneth D Laub & Co., Inc., 82 NY2d 457, 626 N.E.2d 29, 605 N.Y.S.2d 213 ; Nornberg v. Thai Magic Co., Inc., supra (claim under 198.1-a "rises and falls" with plaintiff's other cause of action under the Labor Law)).