New York Employment Lawyer Blog

New York State Labor Law ("NYSLL") § 162 covers the requirements concerning employee meal periods.

NYSLL § 162(1) requires that all employees working in, or in connection with, a factory must be given at least a sixty-minute noon day meal. NYSLL § 162(2) requires that all other employees who work in excess of six hours must be given at least a thirty-minute noon day meal break.

The "noon day meal" is recognized as one that is taken during the period extending from 11:00 a.m. to 2:00 p.m., meaning that the hours of employment must extend through the noon day meal period.

NYSLL § 162(3) requires that every person employed for a period starting before 11:00 a.m. and continuing later than 7:00 p.m. must be allowed an additional meal period of at least twenty minutes between 5:00 p.m. and 7:00 p.m.

NYSLL § 162(4) requires that all factory workers who work for more than six hours between the hours of 1:00 p.m. and 6:00 a.m. must be given a sixty-minute meal break and all other workers who work for more than six hours between the hours of 1:00 p.m. and 6:00 a.m. must be given a forty-five minute meal break.

Although it's clear that most employees are in fact entitled to meal breaks, in Russo v. 210 Riverside Tenants, Inc. (July 2010), the Southern District of New York recently held that there is no private cause of action for alleged violations of Labor Law § 162, as the NYSLL vests the New York Commissioner of Labor with the sole authority to enforce § 162. This means employees who are denied meal breaks to which they are entitled cannot bring a lawsuit in court, but instead, must present their claims to the New York Commissioner of Labor who is charged with regulating and enforcing the law.

When making the determination as to whether or not an employee is entitled to any meal break, it's always smart to first consult with a New York employment attorney.

As a matter of law, neither Federal nor New York State law requires that an employer provide its employees with paid vacation, personal or sick time off. These are benefits generally provided at the discretion of the employer, or based upon an employee contract or collective bargaining agreement. Therefore, there is no "correct" or "proper" method by which an employer may provide its employees with sick, personal, and vacation time.

However, while there is no requirement for an employer to provide such benefits to its employees, once it agrees to do so, the employer must abide by the terms of that agreement. "[A]n employee's entitlement to receive payment for accrued, unused paid time off . . . is governed by the terms of the employer's publicized policy." Kolesnikow v. Hudson Valley Hosp. Ctr. (S.D.N.Y. 2009). In other words, "all that is required by [New York Labor Law] section 198-c is that an employer abide by the terms of his agreement to provide benefits." Glenville Gage Co. v. Industrial Bd. of Appeals (1979).

Such agreements need not even be in writing. They can be established through credible evidence of an employer's longstanding policy and practice or unwritten agreement with employees.

In addition, as I stated in a previous blog entry, pursuant to New York Labor Law § 195, employers are required to notify employees in writing or by publicly posting the employer's policy on sick leave, vacation, personal leave, holidays and hours. Nevertheless, a failure by an employer to provide such written notification will not relieve the employer from its obligations under that policy, notwithstanding the fact that it was not put in writing.

The New York Wage Theft Prevention Act (the "Act") was signed into law today by Governor Paterson. The Act, effective April 12, 2011, amends the New York Labor Law to provide new protections for employees in New York, as well as stiffer penalties for employers who fail to pay their employees overtime or the minimum wage.

Tougher Civil Penalties

The Act increases the amount of liquidated damages an employee can recover in cases where a violation is shown and the employer fails to prove that it had a good-faith basis for believing it was acting in compliance with the law. Specifically, the Act now permits liquidated damages of up to 100% of the total amount of wages due, an increase from 25% under the existing law. This means that employees may be entitled to recover twice what they are owed in wages or overtime.

The Act also provides for the recovery of prejudgment interest and attorneys' fees in any civil action to recover unpaid wages brought by an employee.

The new law also gives employees expanded protections against employers who have been found to have violated the law, but still fail to pay. If an employer loses in court and still fails to pay within ninety (90) days, the employee can now collect an extra 15% of the judgment owed, as well as attorneys' fees and costs for enforcing the judgment.

Employee Notice of Wages

The New York Labor Law already requires employers to notify all newly hired employees at the time of hiring, in writing, of their regular rate of pay, regular pay day, and overtime rate of pay if they will be eligible for overtime. The Act now also requires employers to include the basis of the wage payment (e.g., whether paid by the hour, shift, day, week, salary, piece, or commission, or on another basis) as well as the employer's intent to claim allowances (e.g., tip or meal allowances) as part of the minimum wage.

Under the Act, the notice must be updated and provided again to the employee at least seven (7) calendar days prior to any changes to the employee's pay or other terms contained in the notice (unless such changes are reflected in the employee's wage statement).

Lastly, the Act requires that all employers obtain from each employee a signed and dated written acknowledgment, in English and in the primary language of the employee, of receipt of the notice.

If an employer fails to provide the required notice of wages within ten (10) business days of the employee's first day of employment, the employee may bring an action in court to recover damages of $50 for each workweek that the violation occurred or continues to occur (not to exceed a total of $2,500), plus costs and reasonable attorneys' fees.

Employers are now required to preserve and maintain the employee's acknowledgment(s) of the notice for a period of six (6) years.

Pay Statements

The Act requires that employers provide pay statements that specify the applicable dates the wages cover and the rate and basis of pay. For non-exempt employees, pay statements must also include the regular and overtime pay rates and the number of regular and overtime hours worked.

If an employer fails to provide the required pay statement, the employee may bring an action in court to recover damages of $100 for each workweek that the violation occurred or continues to occur (not to exceed a total of $2,500), plus costs and reasonable attorneys' fees.

The Act also increases the length of time an employer must preserve and maintain payroll records and/or pay statements from three (3) to six (6) years.

Anti-Retaliation Provisions

The Act also increases protections for employees who complain about employer violations, as well as for workers the employer merely believes has complained about violations. The Act permits the Commissioner to order additional remedies in the event of retaliation, specifically enjoining conduct, liquidated damages not to exceed $10,000, reinstatement with back pay, and/or front pay instead of reinstatement.

Criminal Penalties

The Act imposes new criminal penalties against employers that fail to pay minimum wage or overtime compensation. Any employer that pays less than the amount owed may be guilty of a misdemeanor, and if convicted will be fined a minimum of $500 and a maximum of $20,000 or imprisoned for up to a year. If a second violation occurs within six (6) years of the first conviction, the employer will be guilty of a felony.

The new law also includes new criminal penalties against employers that fail to maintain records. Such a violation is deemed a misdemeanor, with fines between $500 and $5,000 or imprisonment for up to one year. A subsequent violation and conviction within six (6) years will result in either a fine of $500 to $20,000 or imprisonment for a period not to exceed one year and a day, or both.

In sum, although the new law does not radically change the duties of New York employers, the Act does impose significant civil and criminal penalties for employers that fail to comply with the law. If you have any questions with respect to these new requirements, we recommend speaking with a New York overtime attorney as soon as possible.

In Mullins v. City of New York (2nd Cir. 2010), the U.S. Court of Appeals for the Second Circuit recently upheld a ruling by the U.S. District Court for the Southern District of New York barring the City of New York (the "City") and the New York City Police Department ("NYPD") from conducting internal investigations related to the Plaintiffs' claims under the Fair Labor Standards Act ("FLSA") until the FLSA litigation ended.

In 2004, about 4300 current and former New York City police sergeants sued the City and NYPD, claiming systematic violations of their overtime rights under the FLSA. Because of the sheer volume of plaintiffs, the parties agreed to limit depositions to "test plaintiffs" - individuals from seventeen job categories.

After the test plaintiffs were chosen, the City's attorneys and outside counsel met with the Chief of the NYPD's Internal Affairs Bureau ("IAB") regarding the "topic of deposition testimony." The very next day, IAB officials began collecting documents, gathering command logs, memo books, activity reports, overtime slips, and requests for leave from all test plaintiffs. It was clear to the plaintiffs that this was nothing more than retaliation, as IAB did not normally conduct such collections.

In addition to establishing minimum wage and overtime requirements, the FLSA also provides that it is "unlawful for any person... to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under [FLSA]." 29 U.S.C. § 215(a)(3).

In another example, when one plaintiff was ready to retire, he was told his retirement was being deferred while the NYPD "investigated" him. It subsequently came to light that he was being investigated regarding his deposition testimony that he had given months earlier.

In addition, IAB sent an Integrity Control Officer to attend the deposition of another plaintiff, who explained that Integrity Control Officers do not normally attend depositions, and he was, therefore, "surprised and concerned" by the officer's presence. He also testified that he found the officer's presence to be "intimidating."

Next, NYPD ordered another plaintiff to undergo a type of interview reserved for allegations of serious misconduct or corruption. This plaintiff was questioned for four (4) hours - entirely about the testimony he had given regarding the FLSA lawsuit.

The Court found that IAB investigated the veracity of testimony given by plaintiffs as part of the lawsuit, and collected documents from all of the test plaintiffs, not just those plaintiffs they suspected of perjury. Further, the Court found that the NYPD sent an IAB officer to one plaintiff's deposition before there was any basis on which to conclude he had given false testimony.

As a result, the Southern District of New York issued a preliminary injunction, restraining the City and NYPD from continuing its retaliatory activities. The Southern District concluded that the evidence clearly showed that absent injunctive relief, numerous plaintiffs would likely (and reasonably) withdraw from the litigation rather than testify and face a line-by-line IAB interrogation.

The defendants appealed the decision to the U.S. Court of Appeals for the Second Circuit, which upheld the order barring the City and NYPD from conducting internal investigations related to the FLSA case, finding that the City's actions were designed to encourage the plaintiffs to drop out of the lawsuit. The Court held that the district court did not abuse its discretion in finding that the plaintiffs are likely to succeed on the merits of their FLSA retaliation claim, and that plaintiffs have established that irreparable harm is likely to flow from the putative FLSA violation absent injunctive relief.

This decision should remind all employers to always consult with a New York City employment attorney before terminating, disciplining, or even investigating an employee who has recently complained or initiated a lawsuit.

As I was reviewing recent New York employment law cases, I came across an interesting one dealing with the enforceability of non-compete agreements. In The Ayco Company, L.P. v. Brian D. Feldman (October 2010), Plaintiff, a financial services firm, brought a lawsuit against a former employee, alleging that he breached a ninety-day non-compete provision contained in his employment contract. As a result, Plaintiff sought a preliminary injunction enforcing the terms of the agreement.

At the time he was hired, Defendant signed an Employment Agreement ("Agreement"), which was thereafter revised to include a new non-compete provision. Pursuant to the terms of the Agreement, Defendant agreed that he would give Plaintiff ninety days notice of termination, during which time he would remain an employee of Plaintiff and would continue to receive his base salary. The Agreement further stated that if Defendant terminated employment prior to the end of the notice period, he would not work for a competitor anywhere in the United States for ninety days or for the unfulfilled balance of the notice period.

Needless to day, Defendant resigned abruptly without notice to begin working for a direct competitor, claiming that the ninety-day notice and non-compete provision were not reasonable and hence unenforceable. Defendant also claimed that the revised agreement was presented to him on a "take it or leave it basis" - that if he did not sign it, he would be fired. He characterized the Agreement as "onerous" and "unfair" because it denied him the ability to pursue his chosen profession and did not provide for adequate compensation during the notice period.

Under New York law, a restrictive covenant not to compete is enforceable by way of an injunction if the covenant is reasonable in time and geographic area. A restrictive covenant is enforceable only if it: (1) is no greater than is required for the protection of the legitimate interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public. Thus, courts must weigh the need to protect the employer's legitimate business interests against the employee's concern regarding the possible loss of livelihood, a result strongly disfavored by public policy in New York.

Here, the United States District Court for the Northern District of New York (New York federal court) found that the ninety-day period was well within what has been found to be a reasonable time frame for non-compete provisions. The Court found that the geographic scope of the covenant (throughout the United States) was also reasonable. Furthermore, the Court found that the non-compete provision did not impose an undue hardship on Defendant, since it entitled Defendant to continue to receive his salary during the reasonable notice period. Lastly, the Court held that the fact that the Agreement was executed during Defendant's employment, and was thus a condition of his continued employment, did not suffice to show that the Agreement was unenforceable.

In sum, the Court granted Plaintiff's preliminary injunction precluding Defendant from working for a competitor for ninety days, and also directed Plaintiff to continue paying Defendant's salary for the ninety-day period. It's also worth noting that this case reinforces the principle that an employer's threat of termination for refusing to sign a non-compete agreement does not constitute duress or coercion.