New York Employment Lawyer Blog

In Kleinman v. Blue Ridge Foods, LLC (July 7, 2011), the Kings County Supreme Court granted an employee's motion for summary judgment on his breach of contract claims against his former employer.

In this case, pursuant to the terms of an employment agreement, Defendants hired Plaintiff as their Chief Executive Officer for a term of three (3) years. If Defendants wanted to discharge Plaintiff earlier, a prior written notice must be delivered to Plaintiff either personally or by mail. In addition, in the event Plaintiff's early discharge was without "cause," Plaintiff would be entitled to additional benefits, including a severance payment equal to twelve (12) months' salary.

After only four (4) months, with no prior written notice, Defendants abruptly discharged Plaintiff's employment. His discharge was communicated to him both verbally and in writing on that day.

Plaintiff then sued, asserting that, in accordance with his employment contract, since his discharge was without "cause," he was owed the severance and additional benefits.

While Defendants basically conceded that they failed to meet any of the "for cause" discharge provisions provided for in the agreement, they instead contended that Plaintiff could not recover the compensation he sought because the employment contract was unenforceable. Defendants claimed that Plaintiff defrauded them by misstating his work experience and "was in completely over his head and was at no time able to perform the job for which he was hired." They argued that the employment contract was thus void and unenforceable because they were induced to enter into it by Plaintiff's fraudulent misrepresentations as to his title and experience at his prior employment.

However, the court held that Defendants failed to establish a justifiable reliance on the purported misrepresentations, and noted a crucial factor was that Defendants failed to adequately verify Plaintiff's experience even though the means to do so were at their disposal.

The court thus ruled that Defendants terminated Plaintiff without "cause," as that term is defined in his employment contract. Further, the court found that Defendants breached the employment contract, as they failed to provide Plaintiff with the contractual notice and cure period. Therefore, the court held that Plaintiff was entitled to his actual damages, interest, attorney's fees, and costs under Section 198 and other provisions of Labor Law article 6, and the statutory liquidated damages under Labor Law § 198.

If you believe that your former employer has breached an employment agreement with you, it's always smart to immediately consult with a New York employment agreement attorney to preserve your legal rights.

On April 29, 2011, in Cortes v. Foot Locker, Inc.pdf, the Southern District of New York denied, for the second time, Plaintiffs' motion for class certification of their New York State Labor Law ("NYSLL") claims pursuant to Rule 23 of the Federal Rule of Civil Procedure ("Rule 23").

In this case, Plaintiffs sued their employer alleging that the store managers continually altered their time sheets to decrease hours and thus meet corporate quotas. In January 2010, the Court conditionally certified the case as an opt-in collective action under the Fair Labor Standards Act ("FLSA"), but denied Plaintiffs' motion to certify their NYSLL claims as an opt-out class, pursuant to Rule 23.

While Rule 23 does not govern FLSA collective actions, it does govern NYSLL class action claims brought in federal court. The primary difference between a Rule 23 class action and an FLSA collective action is the manner in which a class is formed. In order to participate in an FLSA collective action, an employee who is not a named plaintiff must "opt-in" or affirmatively consent to litigation of his or her claims in the named lawsuit. A Rule 23 class action does not require consent of class members. Instead, all members of the class are included as parties to the action unless they "opt- out." To opt-out, a class member must expressly request exclusion and formally withdraw from the lawsuit. In addition, while the FLSA's statute of limitations is only two years (three years for "willful" violations), the NYSLL has a six-year statute of limitations.

When the Court conditionally certified the FLSA opt-in collective action, it permitted Plaintiffs to take discovery beyond the FLSA's statute of limitations and gave them permission to renew their motion for Rule 23 class certification only if they uncovered evidence showing that the Defendant had committed violations outside of the FLSA's statute of limitations.

However, after discovery, when Plaintiffs did in fact renew their motion, the Court renewed its denial of the Rule 23 certification, stating that, "certifying a Rule 23 class as to plaintiffs' state-law claims would lead to a significant expansion of the scope of fact discovery, which, in turn, would likely substantially delay trial on plaintiffs' claims arising under the [FLSA] . . . If an opt-out class were certified on the New York state labor law claims, the proofs on those claims would potentially overshadow and overwhelm the claims that arise under federal law, as to which I have already certified an opt-in collective action."

Unfortunately, this is not the first time that a court stressed the incompatibility of certifying a collective action under the FLSA and certifying a class action under Rule 23 in the same case. As such, it's so important for all New York employees to first consult with a New York wage and hour attorney before initiating a lawsuit for unpaid wages.

On July 11, 2011, in Ridinger v. Dow Jones & Co Inc., the Second Circuit ruled that a 62-year-old employee's age discrimination claim brought under the Age Discrimination in Employment Act ("ADEA") was barred due to a valid separation agreement that the employee had signed.

In his separation agreement, the employee agreed to waive and release all claims up to the point of his termination, explicitly including those claims for discrimination under the ADEA. Despite signing it and accepting all the benefits of the severance package, the employee nonetheless sued for discrimination, arguing that the release was invalid because it violated the Older Workers Benefit Protection Act ("OWBPA"), which requires that an employee waive his or her ADEA claim in a "knowing and voluntary" way and that a separation agreement be "written in a manner calculated to be understood."

The employee also argued that the waiver provision violated Equal Employment Opportunity Commission ("EEOC") regulations, which require a waiver to be drafted in plain language, not using "technical jargon" or "long, complex sentences," and "geared to the level of understanding" of the employee, taking into consideration the typical employee's education level.

The Second Circuit rejected the employee's arguments and held that the separation agreement was in fact enforceable, as it was written by the employer in a "manner calculated to be understood" by the relevant employees. Comparing the language in this agreement to those found in cases in which the court invalidated a company's separation agreement, the Court found that the terms in this separation agreement were sufficiently clear and complied with the OWBPA.

This decision should serve as a reminder to all employers of the importance of drafting separation agreements in a clear manner using plain language. In addition, if you signed a severance or separation agreement as an employee, it's always smart to have a New York Severance Agreement attorney review the agreement, especially if it includes provisions related to age discrimination.