Opinion
607755-2018
12-12-2019
Jesse PHILLIPS, Plaintiff, v. MAX FINKELSTEIN, INC. and Michael Weller, individually, Defendants.
BORRELLI & ASSOCIATES, PLLC, Attorneys for Plaintiff, 910 Franklin Avenue, Suite 200, Garden City, New York 11530 Attorneys for Defendants, PROSKAUER ROSE, LLP, Eleven Times Square, New York, New York 10036
BORRELLI & ASSOCIATES, PLLC, Attorneys for Plaintiff, 910 Franklin Avenue, Suite 200, Garden City, New York 11530
Attorneys for Defendants, PROSKAUER ROSE, LLP, Eleven Times Square, New York, New York 10036
James F. Matthews, J. It is
ORDERED that defendants' motion is granted in all respects.
Defendants move for partial dismissal pursuant to CPLR 3211(a)(7) for failure to state a cause of action, or in the alternative, for summary judgment pursuant to CPLR 3212 dismissing the first and second causes of action, which allege that the defendants violated New York Labor Law (NYLL) § 191(1)(a) for failing to pay plaintiff on a frequency of at least a weekly basis and for violating NYLL § 198(1-d) for failing to furnish employees with accurate wage statements containing all of the required criteria, respectively.
On a motion pursuant to CPLR 3211 (a)(7), "...the court must accept the facts as alleged in the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (citations omitted)" Wallkill Medical Development, LLC v. Catskill Orange Orthopaedics, P.C. , 131 A.D.3d 601, 603, 15 N.Y.S.3d 406 (2nd Dep't 2015) ; Tirpack v. 125 North 10, LLC , 130 A.D.3d 917, 14 N.Y.S.3d 110 (2nd Dep't 2015) ; GFRE v. U.S. Bank, N.A. , 130 A.D.3d 569, 13 N.Y.S.3d 452 (2nd Dep't 2015).
With respect to the defendants' motion for summary judgment pursuant to CPLR 3212, "the Court's function is limited to the ascertainment of the existence of any genuine issues of material fact in the proofs laid bare by the parties' submissions of affidavits based on personal knowledge and documentary evidence, rather than in their conclusory or speculative averments. The court makes no discretionary examination of such fact issues, nor does it resolve them (citations omitted)." Behar v. Ordover , 92 A.D.2d 557, 558, 459 N.Y.S.2d 304 (2nd Dep't 1983).
There are no factual issues in dispute. Plaintiff alleges and defendants' concede that at all relevant times plaintiff was a manual worker and was therefore entitled by law to be paid at least once per week. Plaintiff's wages were paid in full but on a bi-weekly basis, which defendants concede was in violation of law. Plaintiff received required wage statements on a bi-weekly basis at the time he was paid.
Defendants argue that there exists no private right to a cause of action for civil damages based upon untimely paid wages, known as a "frequency" claim. Here, there is no dispute that plaintiff was a "manual laborer" as defined in the statute and, as such, he was required to be paid no less than on a weekly basis. It is also not in dispute that defendants paid plaintiff all of his wages but paid them bi-weekly. Therefore, the wages were paid "late" because they were not paid once per week as required by NYLL § 191(1)(a). Because plaintiff was actually paid all of the wages due him, albeit not weekly as legally required, defendants argue that there was no "underpayment" of wages and, as a result, plaintiff possesses no right to bring a private cause of action since NYLL provides for no remedy for this violation aside from fines which can be levied by the Commissioner of Labor.
Relying upon a recent decision of the Appellate Division, First Department, in Vega v. CM and Associates Construction Management, LLC , 175 A.D.3d 1144, 107 N.Y.S.3d 286 (1st Dep't 2019), plaintiff argues that the payment of wages on a bi-weekly basis instead of weekly as the statute requires is an "underpayment" and thus plaintiff possesses the right to bring a cause of action for damages, which in this case would be liquidated damages in the amount of at least 100% of the underpayment. The Vega court squarely held that "the term underpayment encompasses instances where an employer violates the frequency requirements of section 191(1)(a) but pays all wages due before the commencement of an action..." The court also ruled that " Labor Law § 198(1-a) expressly provides a private right of action for a violation of Labor Law § 191. Defendant's position that no private right of action exists is dependent on its erroneous assertion that the late payment of wages is not an underpayment of wages." The Vega court would in any event find that an implied private right of action exists.
These holdings by the Vega court are on all fours with the facts and arguments made in this case. Unless there exists a ruling on these issues issued out of the Second Department or any other New York appellate court, this court is bound to follow the law as articulated in Vega. See Mountain View Coach Lines, Inc. v. Betty Storms , 102 A.D.2d 663, 476 N.Y.S.2d 918 (2nd Dep't, 1984).
Defendants, however, assert that the Appellate Division, Second Department has in fact ruled on the issues now before the court in IKEA U.S., Inc. v. Industrial Board of Appeals , 241 A.D.2d 454, 660 N.Y.S.2d 585 (2nd Dep't 1997), in which the court ruled that substantial evidence supported the determination of the respondent Commissioner of Labor. After an administrative hearing, the Commissioner found, inter alia, that IKEA U.S., Inc. had violated Labor Law § 191.1a by paying manual workers bi-weekly instead of weekly as the statute required. There was no finding that the employer had failed to pay required wages. The Commissioner assessed a fine only against IKEA. There was no finding that the wages paid bi-weekly was an "underpayment". Liquidated damages were not assessed. The Commissioner made this determination based upon its "... findings, and giving due consideration to the statutory criteria of the size of the employer's business, the good faith of the employer, the gravity of the violation, the history of previous violations and the failure to comply with record keeping or other requirements..." (Exhibit 5 to defendant's notice of motion).
Defendants argue that because the Commissioner of Labor did not explicitly make a finding that IKEA's failure to timely pay wages constituted an "underpayment" then the statutory remedies set forth in Labor Law § 198.1-a were not triggered. Thus, since the Commissioner did not assess these remedies for the benefit of the affected employee, and on appeal the Appellate Division, Second Department upheld this determination, then that court has at least implicitly ruled that such remedies are not available where the employer has paid all wages in full, albeit on a bi-weekly basis rather than once per week as statutorily required.
To evaluate the merits of this argument, the court must examine the language of Labor Law § 198.1-a. In pertinent part, the statute states as follows:
On behalf of any employee paid less than the wage to which he or she is entitled under the provisions of this article, the commissioner may bring any legal action necessary, including administrative action, to collect such claim and as part of such legal action, in addition to any other remedies and penalties otherwise available under this article, the commissioner shall assess against the employer the full amount of any such underpayment , and an additional amount as liquidated damages, unless the employer proves a good faith basis for believing that its underpayment of wages was in compliance with the law....In any action instituted in the courts upon a wage claim by an employee or the commissioner in which the employee prevails, the court shall allow such employee to recover the full amount of any underpayment , all reasonable attorney's fees, prejudgment interest as required
under the civil practice law and rules, and, unless the employer proves a good faith basis to believe that its underpayment of wages was in compliance with law, an additional amount as liquidated damages equal to one hundred percent of the total amount of the wages found to be due...(emphasis added)
In the event an underpayment of wages is found, this statute mandates the payment of the full amount of the underpayment plus liquidated damages of 100%. The employer can avoid the liquidated damages only if "the employer proves a good faith basis to believe that its underpayment of wages was in compliance with law." Whether in a legal action or through administrative action, there is no discretion. The Commissioner or the Court as the case may be "shall" require the employer to pay the full amount of the underpayment plus other remedies as set forth in the statute.
This is significant because the Commissioner in fact did not find that the failure to timely pay wages in the IKEA case was an underpayment and therefore did not require payment of any amounts to the employees. Upon review in an article 78 proceeding brought by IKEA, the court explicitly confirmed the finding at the administrative level that the employer had in fact "[failed] to pay weekly wages to manual workers not later than seven calendar days after the end of the week in which the wages were earned..." 241 A.D.2d at 455, 660 N.Y.S.2d 585. Nevertheless, the court did not find that the failure to pay the covered workers weekly instead of bi-weekly was an "underpayment" that triggered the mandatory payment of wages together with the other statutory remedies. If in fact IKEA had failed to timely pay wages and there remained outstanding amounts of wages that were due, neither the Commissioner at the administrative level nor the court had discretion to omit this relief. As stated above, Labor Law § 198.1-a imposes a mandatory requirement for several remedies in the event there is a finding of an underpayment. In the IKEA case the fact that no such finding was made is clear, which leads to the inescapable conclusion that neither the Commissioner nor the court determined that an underpayment under the facts presented had occurred.
The court notes that these exact same issues were litigated in Hunter v. Planned Building Services, Inc. , 2018 N.Y. Slip Op. 31541(U)(Trial Order), 2018 WL 3392476 (Queens Sup. Ct.). There the court found that no private right action existed for a frequency of pay violation unless there was nonpayment of wages. This court agrees. Labor Law § 198.1-a explicitly provides for a lawsuit by an employee to recover stated damages in the event there is an underpayment of wages. We concur with the court in Hunter that actual payment of wages in full albeit on a bi-weekly basis where the law requires payment on a weekly basis does not constitute an "underpayment" that would trigger an employee's right to commence a lawsuit to recover the damages set forth in that section of the Labor Law. In this respect, this ruling is a departure from the Vega decision of the Appellate Division, First Department discussed above. However, based upon the ruling in the IKEA case from the Appellate Division, Second Department, this court is not bound to follow the rule of law enunciated in Vega. This determination, however, does not accord with the ruling in Rojas v. Hi-Tech Metals, Inc. , 2019 N.Y. Slip Op. 32755(U)(Trial Order), 2019 WL 4570161 (Queens Sup.Ct.), which sustained the cause of action for underpayment of wages paid on a bi-weekly basis rather than weekly even though all wages had been paid. The Rojas court relied upon the Vega decision made by the Bronx Supreme Court, 2018 WL 236761. As stated, this court has reached a different conclusion. This court's ruling accords with the ruling of local federal courts that have addressed the same issue. See Hussain v. Pak. Int'l Airlines Corp. , No. 11 CV 932 (ERK)(VVP), 2012 WL 5289541 (E.D.N.Y. Oct. 23, 2012) ; Belizaire v. RAV Investigative & Sec. Svcs. Ltd. , 61 F. Supp 3d 336 (S.D.N.Y. 2014) ; Coly v. Vannguard Urban Improvement Ass'n, Inc. , 12-CV-5565 (PKC)(RER), 2018 WL 1513628 (E.D.N.Y. March 27, 2018).
With respect to the allegation in the second cause of action that the defendants failed to provide specified wage information at the time the employee is paid pursuant to Labor Law § 195(3), this court concurs with the ruling by the Rojas and Hunter courts that under a plain reading of the statute there is no requirement that the wage information be provided weekly. There is no frequency requirement set forth in the statute.
Accordingly, the court grants defendants' motion to dismiss the first and second causes of action alleged in the complaint. The court also finds that defendants are entitled to summary judgment on those two causes of action as well.