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NY Court Denies Commission Salesman Statutory Damages, Fees


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1/27/2016
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Image: Stuart Miles/FreeDigitalPhotos.net

When reading this decision, I couldn't help but remember that famous line from Joe Friday of Dragnet - "Just the facts, ma'am."

A few years back, the New York Law Journal reported on an interesting decision from a New York County trial court in a breach of contract case, Garber v. Inter Capital Resources LLCwhich serves as a cautionary tale to commission salespersons across New York State, and particularly for anyone who is pursuing an individual defendant personally, by trying to pierce the corporate veil.

In Garber, the plaintiff was a commission salesman who sought to recover the commissions that he purportedly earned - but was never paid - for the second and third quarters of calendar year 2008.

Fair enough.

The Problem(s) With the Commission Salesman's Complaint

In dismissing large portions of the plaintiff's complaint, the Court made two (2) important observations:

(1) "Plaintiff has not pled sufficient facts which would establish that Nunnally [the individual defendant] breached an agreement under which he was personally liable causing plaintiff’s damages. Accordingly, the court hereby severs and dismisses the claims against Nunnally, personally,"  and,

(2) Since the Court found that the plaintiff had not particularized any specific violations of the Labor Law, but had only set forth enough facts to sustain a common law (as opposed to statutory) breach of contract claim, the plaintiff was not entitled to recover statutory damages under the Labor Law.

As a result, the Court dismissed the plaintiff's claims seeking to recover liquidated damages and attorney's fees that had been based upon the defendants' alleged violations of Labor Law 198 (1-a), stating:

"Breach of contract claims do not give rise to the relief afforded under Labor Law 198 (1-a). See Gottlieb v. Kenneth D. Laub & Co., Inc., 82 NY2d 457, 464 (1993); Pachter v. Bernard Hodes Group, 10 NY3d 609 (2008)."

The Takeaways

  • If you plan on litigating an action for the breach of an employment agreement, make sure that your causes of action are not only supported with specific factual allegations - and with enough particulars to sustain your statutory causes of action, but that they are also separately and distinctly pled.
  • If you want to have a prayer of piercing the defendant's corporate veil, you had better have - and plead - the facts to back it up.


Category: Breach of Contract


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