Preview
INDEX NO. 158194/2023
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NYSCEF DOC. NO. 5 RECEIVED NYSCEF 10/18/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
ween eee eee ee nee eee eee eee eee eee eee eee eee eee eens
JOHN L. HYMAN, Index No. 158194/2023
Plaintiff,
Vv.
LEEDING BUILDERS GROUP LLC,
Defendants.
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MEMORANDUM OF LAW IN SUPPORT OF
LEEDING BUILDERS GROUP, LLC’S
MOTION TO DISMISS THE VERIFIED COMPLAINT
Dated: October 18, 2023
Of Counsel:
Howard M. Wexler
Kyle D. Winnick
SEYFARTH SHAW LLP
620 Eighth Avenue
New York, New York 10018
(T) (212) 218-5500
(F) (212) 218-5526
Attorneys for Defendant
Leeding Builders Group LLC
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TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT
STATEMENT OF FACTS
ARGUMENT
I STANDARD OF REVIEW
IL THERE IS NO EXPRESS PRIVATE RIGHT OF ACTION FOR WEEKLY PAY
CLAIMS
A The Court Of Appeals’ Decision In Konkur Implicitly Overruled Vega
B The New York Department Of Labor Has Long Held That Pay Frequency
Claims Are “Non-Wage” Claims, Not “Wage” Claims.
The Legislative History Further Confirms That Pay Frequency Violations
Are Non-Wage Claims...........c.0cceceees
1 The statutory and legislative history of NYLL § 191(1)(a) show
there is no private right of action for pay frequency violations................. 10
The statutory and legislative history of NYLL § 198 show pay
frequency violations are not “wage claims” . 12
a. NYLL § 198’s predecessor statute was enacted to combat
employers who failed to pay their employees wages or paid
less than what was owed 12
Subsequent amendments further confirm that NYLL § 198
does not cover frequency of pay Violations ...........cccceeeeeeeee 14
Til. THERE IS NO IMPLIED PRIVATE RIGHT OF ACTION FOR WEEKLY PAY
CLAIMS .. 17
IV. CONSTRUING VIOLATIONS OF NYLL § 191(1)(A) AS WARRANTING
LIQUIDATED DAMAGES UNDER NYLL § 198(1-A) WOULD VIOLATE
THE DUE PROCESS CLAUSE 19
CONCLUSION 21
CERTIFICATION 22
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TABLE OF AUTHORITIES
Page(s)
Cases
Accosta v. Lorelei Events Corp.,
2022 U.S. Dist. LEXIS 11494 (S.D.N.Y. Jan. 21, 2022)
Arciello v. Cty. of Nassau,
2019 U.S. Dist. LEXIS 161167 (E.D.N.Y. 2019)
Barenboim v. Starbucks Corp.
21 N.Y.3d 460 (2013) 7,9
Belizaire v. RAV Investigative and Sec. Servs. Ltd.,
61 F. Supp. 3d 336 (S.D.N.Y. 2014).
Carter v. Frito-Lay, Inc.,
74 A.D.2d 550 (1st Dept’ 1980), aff’d, 52 N.Y.2d 994 (1981) 20
Coley v. Vannguard Urban Improvement Assn.,
2018 U.S. Dist. LEXIS 54609 (E.D.N.Y. Mar. 29, 2018)
Connaughton v. Chipotle Mexican Grill, Inc.,
29 N.Y.3d 137 (2017)
Connolly v. Napoli Kaiser & Bern, LLP,
No. 105224/05, 2009 WL 2350275 (N.Y. Sup. Ct. July 16, 2009)
Gardner v. D&D Elec. Constr. Co., Inc.,
2019 N.Y. Misc. LEXIS 4448 (Sup. Ct., N.Y. Cty. Aug. 7, 2019)
Gottlieb v. Kenneth D. Laub & Co.,
82 N.Y.2d 457 (1993) 16
Grant v. Global Aircraft,
2021 N.Y. Misc. LEXIS 11125 (Sup. Ct., Queens Cty. Apr. 20, 2021)
Gutierrez v. Bactolac Pharm., Inc.,
210 A.D.3d 746 (2d Dep’t 2022) 2, 10
Hunter v. Planned Bldg. Servs., Inc.,
2018 N.Y. Misc. LEXIS 2896 (Sup. Ct. Queens Cty. June 11, 2018)
Hussain v. Pak. Int’l Airlines Corp.,
2012 U.S. Dist. LEXIS 152254 (E.D.N.Y. Oct. 23, 2012)
il
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IKEA U.S. Inc. v. Indus. Bd. of Appeals,
241 A.D.2d 454 (2d Dep’t 1997)
In re Jacob,
86 N.Y.2d 661 (1995) 19
Konkur v. Utica Academy of Science Charter Sch.,
38 N.Y.3d 38 (2022) 2,5, 6,7, 9, 17, 18, 19
Nicholson v. Alliance Nursing Staffing,
2019 N.Y. Misc. LEXIS 22473 (Sup. Ct., Bronx Cty. Apr. 30, 2019)
In re O’Brien,
98 A.D.3d 60 (Ist Dep’t 2012)
Patrolmen’s Benev. Ass’n of City of Buffalo v. City of Buffalo,
50 A.D.2d 101 (4th Dep’t 1975)
People v. City of Buffalo,
11 N.YS. 314 (Sth Dep’t 1890) 10
People v. Interborough Rapid Transit Co.
169 A.D. 32 (Ist Dep’t 1915) 10
People v. Rivera,
5.N.Y.3d 61 (2005) 19
Samiento v. World Yacht Inc.,
10 N.Y.3d 70 (2008)
Serio v. Pub. Serv. Mut. Ins. Co.,
304 A.D.2d 167 (2d Dep’t 2003)
Sheehv v. Big Flats Community Day,
73 N.Y.2d 629 (1989) 17
State Farm Mut. Auto. Ins. Co. v. Campbell,
538 U.S. 408 (2003) 19, 20
Thomas v. iStar Fin., Inc.,
652 F.3d 141 (2d Cir. 2011). 20
United States v. Magassouba,
544 F.3d 387 (2d Cir. 2008). 19
People ex rel. Van Valkenburg v. Myers,
11 N.Y.S. 217 (Sup. Ct., N.Y. Cty. 1890) 10
il
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Vega v. CM & Assoc. Constr. Mgt., LLC,
175 A.D.3d 1144 (1st Dep’t 2019) 2, 3,4, 5,6, 7,21
People v. Vetri,
309 N.Y. 401 (1955) 11,17
Statutes
NYLL§ 190(4)
NYLL§ 191
NYLL § 191 (1)(Q) cssccesssssssssssessssssnssssssnssssennsessesnnsssenneessee 2,4,9, 10, 11, 12, 14, 16, 17, 18, 19
NYLL§ 191(1)(a)(i)... .20, 21
NYLL§ 193 16
NYLL§ 195(1) 15, 18
NYLL§ 195(3) 15, 18
NYLL § 197 11
NYLL § 198 ooooeeeeeceecceeceeseeeeeeeeeeessseeeeseeeesseeseeesseesssesesassesssesseeasseseasseeneeesees 9, 10, 12, 14, 15, 16, 17
NYLL§ 198(1-a) 2, 4, 5,6, 15, 19, 20
NYLL§ 198(1-b) 15, 18
NYLL § 198-b. 2, 18
NYLL§ 198-b. 5, 6, 18
NYLL
§ 218 7, 8,9,11
NYLL
§ 218(1) 4,6, 7, 8, 17
Other Authorities
available at https://dol.ny.gov/system/files/documents/2023/04/1s223.pdf (last
visited Oct. 6, 2023)
CPLR § 3211 (a)(7) -esessssssessssssssssssessssenuesssessenssesusnssenusnssenusnassnsseseiissaseuseasennseesesnneeseeue 1,3
CPLR § 5004... 20
DOL, Opinion Ltr. RO-07-0041 (May 8, 2007)
iv
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Ex. I, Bill Jacket, Budget Rep., L. 1980, ch. 697. In 1987 11
https://dol.ny.gov/unpaidwithheld-wages-and-wage-supplements (last visited Oct.
6, 2023)
https://money.usnews.com/investing/articles/what-is-the-average-stock-market-
return (last visited, Oct. 8, 2023) .o..ceecceceeceesssceseeeeseseeseseseeseseescseseeseseeseseeeeseecseseeseseeeeseeeseneeee 20
. 1890, ch. 388, § 1 10
1890, ch. 388, §§ 2-3 10
1897, ch. 415 11
1908, ch: 442 11
1921, ch. 50 11
1935, ch. 619 11
1937, ch. 500 12
1937, ch. 500, § 1 12
1966, ch: 548 11
1987, ch. 404,§ 1 11
1989, ch: 38,§ 1 11
1993, ch. 168, § 1 11
1997, ch. 605 14
1997, ch. 605, § 1 14
2007, ch 304,§ 4 11
2010, ch 564 15, 16
2010, ch. 564, § 7 15
2021, c. 397, § 1 16
. 2021, ch. 397, § 1 16
N.Y. DOL's Labor Standards Complaint Form (Mar. 2021 ed.) at Part 8, No.
37(h)
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Defendant Leeding Builders Group LLC (“LBG”) respectfully submits this
Memorandum of Law in support of its Motion to Dismiss the Complaint of John
Hyman (“Plaintiff”) pursuant to CPLR 3211(a)(7).!
PRELIMINARY STATEMENT
LBG moves to dismiss under CPLR 3211(a)(7) because there is no private
right of action for violations of Section 191(1)(a)(i) of the New York Labor Law
(“NYLL”), as this Court and the New York State Department of Labor (“DOL”) have
previously recognized.
Plaintiff was paid for every minute he worked, and received every penny he
earned. He does not allege otherwise. Instead, he contends that he was a “manual
worker,” presumably under NYLL § 191(1)(a)(i),2 and because he was paid bi-
weekly, not weekly, he is owed liquidated damages of one hundred percent of the
purportedly “late” paid wages. In effect, Plaintiff wants an increase of fifty percent
of all wages LBG paid to him.
Such a draconian result is wholly unwarranted. NYLL § 191(1)(a)(i) provides
that “[a] manual worker! shall be paid weekly and not later than seven calendar
days after the end of the week in which the wages are earned[.]” Nothing in the
statute’s text remotely indicates that the Legislature meant to confer a private right
of action to enforce pay frequency violations. On the contrary, the legislative
1 A copy of the Complaint is attached as Exhibit A to the accompanying Affirmation
of Kyle D. Winnick dated October 9, 2023 (“Winnick Aff.”). References to the
Complaint appear as “Compl. {”.
2 Plaintiff does not actually cite NYLL § 191(1)(a)(i), but LBG construes his claim as
alleging a violation of it.
3 A manual worker is “a mechanic, workingman or laborer.” NYLL § 190(4).
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history confirms that the Legislature only meant for public, not private,
enforcement of pay frequency violations.
Nor is there a private right of action to enforce violations of NYLL §
191(1)(a)@) under NYLL § 198(1-a), which allows employees to bring a “wage claim”
in court “to recover the full amount of any underpayment,” plus liquidated damages
(among other damages). In Vega v. CM & Assoc. Constr. Mgt., LLC, 175 A.D.3d
1144 (1st Dep’t 2019), the First Department held that violations of NYLL §
191(1)(a) were actionable under NYLL § 198(1-a) because they were
“underpayments,” which the Court defined as “pay[ing] less than what is required.”
But as explained below, Vega is no longer good law for several reasons, being
implicitly overruled by the Court of Appeals:
1 Vega’s interpretation of “underpayment” does not survive the Court of
Appeals’ decision in Konkur v. Utica Academy of Science Charter Sch.,
38 N.Y.3d 38 (2022), which held that there was no private right of
action for illegal “kick-backs” under NYLL § 198-b, even though forcing
employees to return part of their wages is a literal “underpayment”
and the employer “pays less than what is required.” Rather, the Court
of Appeals held that where the Legislature intended a Labor Law
provision to be privately enforced, the Legislature expressly provided a
private right of action. As Vega concedes, there is no express provision
within NYLL § 191(1)(a)().
The Legislature amended NYLL § 198(1-a) in 2021, which confirmed
that NYLL § 198(1-a) only applies to nonpayment or partial payments,
not late payments.
Vega also conflicts with the legislative history, which establishes that
the Legislature meant for pay frequency violations to be enforced only
by the DOL, or its predecessor, and that NYLL § 198(1-a) only applies
to “wage claims,” which are claims for nonpayment or partial payments
of wages, not late payments. As the Second Department recently
observed, NYLL § 191(1)(a) “pertain[s] to frequency of pay . . not
unpaid wages.” Gutierrez v. Bactolac Pharm., Inc., 210 A.D.38d 746,
748 (2d Dep't 2022).
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This interpretation is cemented by the DOL’s interpretation, which is
entitled to deference. The DOL has historically interpreted pay
frequency violations as “non-wage” claims, subject to modest statutory
penalties, not liquidated damages.
Vega also conflicts with the statutory canon that courts should
construe a statute to avoid constitutional issues. If manual workers
are entitled to liquidated damages equal to 100 percent of late paid
wages, the gap between ostensible harm (de minimis) and liquidated
damages (extraordinarily high) would far exceed what is
constitutionally permissible.
Thus, this Court should not follow Vega (because it has been implicitly
overruled), and Plaintiffs Complaint should be dismissed with prejudice.
STATEMENT OF FACTS#4
Plaintiff alleges that he was a “laborer” whose job consisted of “performing
physical labor.” (Ex.' A, Compl. §/§ 4, 6-7.) He claims that he was paid “on a bi-
weekly basis,” and therefore under Vega, he is owed “liquidated damages for failure
to timely pay Plaintiff on a weekly basis, reasonable attorneys’ fees, and costs and
disbursements of this action[.]” (Id. J 8, 21.)
ARGUMENT
L STANDARD OF REVIEW
A claim must be dismissed where its underlying factual allegations “fail[] to
state a cause of action.” CPLR 3211(a)(7). ‘Dismissal of the complaint is
warranted if the plaintiff fails to assert facts in support of an element of the claim,
or if the factual allegations and inferences to be drawn from them do not allow for
4 LBG accepts the facts alleged in the Complaint as true solely for purposes of this
motion.
5 All exhibits are annexed to the Affirmation of Kyle Winnick.
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an enforceable right of recovery.” Connaughton v. Chipotle Mexican Grill, Inc., 29
N.Y.3d 137, 141—42 (2017).
Il. THERE IS NO EXPRESS PRIVATE RIGHT OF ACTION FOR WEEKLY PAY CLAIMS
For decades, New York courts (including this Court) held that NYLL §
191(1)(A)@) does not contain a private right of action; rather, only the DOL could
bring an enforcement action for modest statutory penalties under NYLL § 218(1).
See, e.g., Grant v. Global Aircraft, 2021 N.Y. Misc. LEXIS 11125 (Sup. Ct., Queens
Cty. Apr. 20, 2021) (no private cause of action under NYLL § 198(1-a) to enforce
violations of NYLL § 191(1)(a)(@)); Gardner v. D&D Elec. Constr. Co., Inc., 2019 N.Y.
Misc. LEXIS 4448 (Sup. Ct., N.Y. Cty. Aug. 7, 2019) (same); Nicholson v. Alliance
Nursing Staffing, 2019 N.Y. Misc. LEXIS 22473 (Sup. Ct., Bronx Cty. Apr. 30, 2019)
(same); Hunter v. Planned Bldg. Servs., Inc., 2018 N.Y. Misc. LEXIS 2896, at *4
(Sup. Ct. Queens Cty. June 11, 2018) (same); see also Accosta v. Lorelei Events
Corp., 2022 U.S. Dist. LEXIS 11494, at *11 (S.D.N.Y. Jan. 21, 2022) (same); Arciello
v. Cty. of Nassau, 2019 U.S. Dist. LEXIS 161167 (E.D.N.Y. 2019) (same); Coley v.
Vannguard Urban Improvement Assn., 2018 U.S. Dist. LEXIS 54609, at *42
(E.D.N.Y. Mar. 29, 2018) (same); Belizaire v. RAV Investigative and Sec. Servs. Ltd.,
61 F. Supp. 3d 336, 360, n. 22 (S.D.N.Y. 2014) (same); Hussain v. Pak. Intl Airlines
Corp., 2012 U.S. Dist. LEXIS 152254 (E.D.N.Y. Oct. 23, 2012) (same).
This changed with the First Department’s decision in Vega. But as explained
below, Vega no longer remains good law, because it was implicitly overruled by the
Court of Appeals and post-Vega legislation and conflicts with the DOL’s
construction of NYLL § 191(1)(a). It should therefore not be followed, and it is
4
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entirely proper for this Court not to follow an “implicitly overruled’ First
Department opinion. See Connolly v. Napoli Kaiser & Bern, LLP, No. 105224/05,
2009 WL 2350275 n.5 (N.Y. Sup. Ct. July 16, 2009) (recognizing Court of Appeals
“implicitly overruled” First Department cases); see also Serio v. Pub. Serv. Mut. Ins.
Co., 304 A.D.2d 167, 172 (2d Dep’t 2003) (recognizing that Court of Appeals decision
implicitly overruled Appellate Division case).
A The Court Of Appeals’ Decision In Konkur Implicitly Overruled
Veg
As noted above, Vega held that NYLL § 191(1)(a)(i) was privately enforceable
through NYLL § 198(1-a), reasoning that late payments are “wage claims” because
they are “underpayments,” which the Court defined as “pay[ing] less than what is
required.” But the Court of Appeals recently rejected this very argument: that
merely “pay[ing] less than what is required” creates a privately enforceable wage
claim.
In Konkur v. Utica Academy of Science Charter Sch., 38 N.Y.3d 38 (2022), the
plaintiff alleged that his employer had improperly collected “portions of [his] wage,
salary, and [] overtime” through illegal kickbacks in violation of NYLL § 198-b.
Stated another way: he contended that he was underpaid what was legally required.
The Court of Appeals rejected this contention, holding that there was no implied
right of action (and by extension, no express right of action), because where the
Legislature intended for a private right of action for a NYLL violation, it expressly
provided for one:
Where the legislature intended for an article 6 provision to be enforced
individually, it expressly provided a private right of action. * * * For
kK
oO
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example, in 2010, section 198 was amended to add a private right of
action for certain notice requirements in section 195. * * * A 2015
amendment clarified that section 194, which prohibits underpayment
based on an employee’s status in a protected class, can be individually
enforced and that employees may recover treble damages for willful
violations.
Id. at 44-45 (citations omitted).
The Court of Appeals also found dispositive that violations of NYLL § 198-b
were already enforced through actions brought by the State, including from the
DOL under NYLL § 218(1). Id. at 43. “The statutory scheme therefore expressly
provides two robust enforcement mechanisms, ‘indicating that the legislature
considered how best to effectuate its intent and provided the avenues for relief it
deemed warranted.” Id. (quoting Cruz v. TD Bank, N.A., 22 N.Y.3d 61, 71 (20138)).
While Konkur did not expressly address the Vega decision, Vega’s
construction of “underpayment” is irreconcilable with Konkur. The plaintiff in
Konkur alleged that he was paid less than what he was legally entitled to, because
he had to unlawfully “kickback” some of his income. Nonetheless, the Court of
Appeals held that he did not have a private cause of action, which necessarily
means that merely being paid less than what is owed under the law is not
synonymous with the term “underpayment” in NYLL § 198(1-a), because otherwise
the plaintiff would have had a right of action. Vega’s interpretation of
“underpayment” is, therefore, expressly rejected by Konkur.
Moreover, Konkur found that NYLL § 198-b enforcement through the DOL
meant that the Legislature specifically opted for public enforcement, to the
exclusion of private enforcement. Jd. at 43. As recounted below, the DOL has a
6
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long history of enforcing pay frequency violations as “non-wage claims” under NYLL
§ 218(1). This further shows that Vega is no longer good law after Konkur.
B. The New York Department Of Labor Has Long Held That Pay
Frequency Claims Are “Non-Wage” Claims, Not “Wage” Claims
Vega’s interpretation of a pay frequency violation as a “wage claim” is not just
rejected by Konkur, it is also rejected by the DOL, which has long classified pay
frequency claims as “non-wage claims”:
. On its website, the DOL has classified “timely payment of wages” as Non-
Wage Items. See Ex. B; https://dol.ny.gov/unpaidwithheld-wages-and-wage-
supplements (last visited Oct. 6, 2023).
The DOL’s Complaint Form likewise identifies frequency if pay claims non-
wage complaints. See N.Y. DOL’s Labor Standards Complaint Form (Mar.
2021 ed.) at Part 8, No. 37(h), available at
https://dol.ny.gov/system/files/documents/2023/04/1s223.pdf (last visited Oct.
6, 2023).
The DOL’s Guidelines, which explains that under NYLL § 218, violations for
wage claims result in liquidated damages but violations “for a reason other
than the employer’s failure to pay wages” (i.e., non-wage claims) result in civil
penalties up to $3,000. These Guidelines categorize frequency of pay
violations as a Labor Law violation other than the failure to pay wages (i.e., a
non-wage violation). See Ex. C.
Opinion letters by the DOL classify pay frequency violations as “non-wage
claims” under NYLL § 218. See DOL, Opinion Ltr. RO-07-0041 (May 8, 2007)
(pay frequency violations of NYLL § 191 result in statutory penalties for non-
wage claims, not liquidated damages for wage claims). See Ex. D.
This interpretation is entitled to deference. See Barenboim v. Starbucks
Corp., 21 N.Y.3d 460, 470 (2013) (the DOL’s “interpretation of a statute it is charged
with enforcing is entitled to deference”); Samiento v. World Yacht Inc., 10 N.Y.3d
70, 79 (2008) (“The Labor Department’s interpretation of a statute it is charged with
enforcing is entitled to deference.”).
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Significantly, the DOL has enforced pay frequency violations under NYLL §
218 as “non-wage” violations. NYLL § 218(1) provides that if an employer “has
violated a provision of article six (payment of wages),” the Commissioner of Labor
“shall order direct payment of the total wages [owed] . . . plus liquidated damages
in the amount of one hundred percent of unpaid wages.” Conversely, if a Labor Law
violation “is for a reason other than the employer's failure to pay wages” (i.e., a non-
wage claim), the Commissioner “shall direct payment” of a modest civil penalty of
“one thousand dollars for a first violation, two thousand dollars for a second
violation, or three thousand dollars for a third or subsequent violation.” Id.
For decades, the DOL has sought non-wage claim penalties for pay frequency
violations, and the Industrial Board of Appeals (“IBA”), which reviews the rules,
regulations, and orders issued by the Commissioner of Labor, has affirmed that pay
frequency violations result in penalties for non-wage claim violations, not liquidated
damages for wage claim violations.
In Ribble (d/b/a Perfecto Cleaners), PR 06-038 (Indus. Bd. of Appeals, Dec.
19, 2017), for example, the Commissioner issued an Order finding the employer did
not pay its manual workers on a weekly basis, as required, for two years. See Ex. E.
The DOL issued a modest penalty of $1,000 for the violation in accordance with
NYLL § 218. It did not impose damages of 100% of the wages paid at the wrong
frequency. See also Century Diner Buffet, Inc., PR 12-180 (Indus. Bd. of Appeals,
July 13, 2016) (issuing a modest penalty of $1,000 against employer who paid
manual worker monthly; not liquidated damages equal to 100 percent of late
8
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wages); RJS Janitorial, LLC, PR 15-148 (Indus. Bd. of Appeals, Oct. 24, 2018)
(awarding civil penalties, not liquidated damages, for pay frequency violations).
The DOL’s and IBA’s interpretation of pay frequency violations as “non-wage
claims” subject only to modest penalties, not liquidated damages, has been upheld
by New York courts. See, e.g., IKEA U.S. Inc. v. Indus. Bd. of Appeals, 241 A.D.2d
454, 455 (2d Dep't 1997).
If the pay frequency violations were wage claims, the DOL and IBA would
have been statutorily required to impose liquidated damages, because NYLL § 218
commands that the Commissioner “shall” seek liquidated damages for unpaid
wages. See In re O'Brien, 98 A.D.3d 60, 62 (1st Dep’t 2012) (equating “shall” as
“mandatory language”); Patrolmen’s Benev. Ass’n of City of Buffalo v. City of
Buffalo, 50 A.D.2d 101, 104 (4th Dep’t 1975) (“The use of the word ‘shall’ in this
”
context, absent ‘ameliorating or qualifying language is deemed to be mandatory.
(cleaned up)). That neither has done so shows that such violations are not wage
claims subject to liquidated damages. This consistent interpretation by the DOL is
entitled to deference, see Barenboim, 21 N.Y.3d at 470, and this consistent
enforcement scheme shows that there is no private right of action under Konkur.
Cc The Legislative History Further Confirms That Pay Frequency
Violations Are Non-Wage Claims
The legislative histories of both NYLL §§ 191 and 198 further establish that a
violation of NYLL § 191(1)(a) is not, and has never been, a wage claim under NYLL
§ 198. The two laws are (and were) different statutes, with different histories, and
address different concerns. NYLL § 191(1)(a) regulates pay frequency and is
9
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enforced by the DOL through civil and administrative actions. NYLL § 198, in
contrast, provides a private right of action for unpaid wage claims—non-payment or
partial payment of wages. See Gutierrez v. Bactoloc Pharm., Inc., 210 A.D.3d 746,
747 (2d Dep’t 2022) (“violations of Labor Law § 191... pertain to frequency of pay
and not unpaid wages”).
1 The statutory and legislative history of NYLL § 191(1)(a)
show there is no private right of action for pay frequency
violations
New York’s weekly pay requirement was initially enacted in 1890 with the
passage of the “Weekly Pay Act,” the predecessor to NYLL § 191(1)(a)(i). See Ex. F,
L. 1890, ch. 388, § 1; People ex rel. Van Valkenburg v. Myers, 11 N.Y.S. 217 (Sup.
Ct., N.Y. Cty. 1890). The Act required that covered employers “shall pay weekly,
each and every employee engaged in its business, the wages earned by such
employe [sic] to within six days of the date of such payment[.]” L. 1890, ch. 388, § 1.
Section 2 of the Weekly Pay Act (then codified as Labor Law § 7), provided for
modest civil penalties to be recovered in civil actions brought by “factor inspectors”
(predecessor to the DOL) for whom the Attorney General would appear. L. 1890, ch.
388, §§ 2-3. Factor inspectors and the Attorney General’s office—not private
citizens—brought civil actions to enforce the law. See, e.g., People v. Interborough
Rapid Transit Co., 169 A.D. 32 (1st Dep’t 1915); People v. City of Buffalo, 11 N.Y.S.
314
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INDEX NO. 158194/2023 FILED: NEW YORK COUNTY CLERK 10/18/2023 12:09 PM NYSCEF DOC. NO. 5 RECEIVED NYSCEF 10/18/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ween eee eee ee nee eee eee eee eee eee eee eee eee eee eens JOHN L. HYMAN, Index No. 158194/2023 Plaintiff, Vv. LEEDING BUILDERS GROUP LLC, Defendants. ween eee eee ee nee eee eee eee eee eee eee eee eee eee eens MEMORANDUM OF LAW IN SUPPORT OF LEEDING BUILDERS GROUP, LLC’S MOTION TO DISMISS THE VERIFIED COMPLAINT Dated: October 18, 2023 Of Counsel: Howard M. Wexler Kyle D. Winnick SEYFARTH SHAW LLP 620 Eighth Avenue New York, New York 10018 (T) (212) 218-5500 (F) (212) 218-5526 Attorneys for Defendant Leeding Builders Group LLC 1 of 28 INDEX NO. 158194/2023 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 10/18/2023 TABLE OF CONTENTS Page PRELIMINARY STATEMENT STATEMENT OF FACTS ARGUMENT I STANDARD OF REVIEW IL THERE IS NO EXPRESS PRIVATE RIGHT OF ACTION FOR WEEKLY PAY CLAIMS A The Court Of Appeals’ Decision In Konkur Implicitly Overruled Vega B The New York Department Of Labor Has Long Held That Pay Frequency Claims Are “Non-Wage” Claims, Not “Wage” Claims. The Legislative History Further Confirms That Pay Frequency Violations Are Non-Wage Claims...........c.0cceceees 1 The statutory and legislative history of NYLL § 191(1)(a) show there is no private right of action for pay frequency violations................. 10 The statutory and legislative history of NYLL § 198 show pay frequency violations are not “wage claims” . 12 a. NYLL § 198’s predecessor statute was enacted to combat employers who failed to pay their employees wages or paid less than what was owed 12 Subsequent amendments further confirm that NYLL § 198 does not cover frequency of pay Violations ...........cccceeeeeeeee 14 Til. THERE IS NO IMPLIED PRIVATE RIGHT OF ACTION FOR WEEKLY PAY CLAIMS .. 17 IV. CONSTRUING VIOLATIONS OF NYLL § 191(1)(A) AS WARRANTING LIQUIDATED DAMAGES UNDER NYLL § 198(1-A) WOULD VIOLATE THE DUE PROCESS CLAUSE 19 CONCLUSION 21 CERTIFICATION 22 2 of 28 INDEX NO. 158194/2023 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 10/18/2023 TABLE OF AUTHORITIES Page(s) Cases Accosta v. Lorelei Events Corp., 2022 U.S. Dist. LEXIS 11494 (S.D.N.Y. Jan. 21, 2022) Arciello v. Cty. of Nassau, 2019 U.S. Dist. LEXIS 161167 (E.D.N.Y. 2019) Barenboim v. Starbucks Corp. 21 N.Y.3d 460 (2013) 7,9 Belizaire v. RAV Investigative and Sec. Servs. Ltd., 61 F. Supp. 3d 336 (S.D.N.Y. 2014). Carter v. Frito-Lay, Inc., 74 A.D.2d 550 (1st Dept’ 1980), aff’d, 52 N.Y.2d 994 (1981) 20 Coley v. Vannguard Urban Improvement Assn., 2018 U.S. Dist. LEXIS 54609 (E.D.N.Y. Mar. 29, 2018) Connaughton v. Chipotle Mexican Grill, Inc., 29 N.Y.3d 137 (2017) Connolly v. Napoli Kaiser & Bern, LLP, No. 105224/05, 2009 WL 2350275 (N.Y. Sup. Ct. July 16, 2009) Gardner v. D&D Elec. Constr. Co., Inc., 2019 N.Y. Misc. LEXIS 4448 (Sup. Ct., N.Y. Cty. Aug. 7, 2019) Gottlieb v. Kenneth D. Laub & Co., 82 N.Y.2d 457 (1993) 16 Grant v. Global Aircraft, 2021 N.Y. Misc. LEXIS 11125 (Sup. Ct., Queens Cty. Apr. 20, 2021) Gutierrez v. Bactolac Pharm., Inc., 210 A.D.3d 746 (2d Dep’t 2022) 2, 10 Hunter v. Planned Bldg. Servs., Inc., 2018 N.Y. Misc. LEXIS 2896 (Sup. Ct. Queens Cty. June 11, 2018) Hussain v. Pak. Int’l Airlines Corp., 2012 U.S. Dist. LEXIS 152254 (E.D.N.Y. Oct. 23, 2012) il 3 of 28 INDEX NO. 158194/2023 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 10/18/2023 IKEA U.S. Inc. v. Indus. Bd. of Appeals, 241 A.D.2d 454 (2d Dep’t 1997) In re Jacob, 86 N.Y.2d 661 (1995) 19 Konkur v. Utica Academy of Science Charter Sch., 38 N.Y.3d 38 (2022) 2,5, 6,7, 9, 17, 18, 19 Nicholson v. Alliance Nursing Staffing, 2019 N.Y. Misc. LEXIS 22473 (Sup. Ct., Bronx Cty. Apr. 30, 2019) In re O’Brien, 98 A.D.3d 60 (Ist Dep’t 2012) Patrolmen’s Benev. Ass’n of City of Buffalo v. City of Buffalo, 50 A.D.2d 101 (4th Dep’t 1975) People v. City of Buffalo, 11 N.YS. 314 (Sth Dep’t 1890) 10 People v. Interborough Rapid Transit Co. 169 A.D. 32 (Ist Dep’t 1915) 10 People v. Rivera, 5.N.Y.3d 61 (2005) 19 Samiento v. World Yacht Inc., 10 N.Y.3d 70 (2008) Serio v. Pub. Serv. Mut. Ins. Co., 304 A.D.2d 167 (2d Dep’t 2003) Sheehv v. Big Flats Community Day, 73 N.Y.2d 629 (1989) 17 State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003) 19, 20 Thomas v. iStar Fin., Inc., 652 F.3d 141 (2d Cir. 2011). 20 United States v. Magassouba, 544 F.3d 387 (2d Cir. 2008). 19 People ex rel. Van Valkenburg v. Myers, 11 N.Y.S. 217 (Sup. Ct., N.Y. Cty. 1890) 10 il 4 of 28 INDEX NO. 158194/2023 FILED: NEW YORK COUNTY CLERK 10/18/2023 12:09 PM NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 10/18/2023 Vega v. CM & Assoc. Constr. Mgt., LLC, 175 A.D.3d 1144 (1st Dep’t 2019) 2, 3,4, 5,6, 7,21 People v. Vetri, 309 N.Y. 401 (1955) 11,17 Statutes NYLL§ 190(4) NYLL§ 191 NYLL § 191 (1)(Q) cssccesssssssssssessssssnssssssnssssennsessesnnsssenneessee 2,4,9, 10, 11, 12, 14, 16, 17, 18, 19 NYLL§ 191(1)(a)(i)... .20, 21 NYLL§ 193 16 NYLL§ 195(1) 15, 18 NYLL§ 195(3) 15, 18 NYLL § 197 11 NYLL § 198 ooooeeeeeceecceeceeseeeeeeeeeeessseeeeseeeesseeseeesseesssesesassesssesseeasseseasseeneeesees 9, 10, 12, 14, 15, 16, 17 NYLL§ 198(1-a) 2, 4, 5,6, 15, 19, 20 NYLL§ 198(1-b) 15, 18 NYLL § 198-b. 2, 18 NYLL§ 198-b. 5, 6, 18 NYLL § 218 7, 8,9,11 NYLL § 218(1) 4,6, 7, 8, 17 Other Authorities available at https://dol.ny.gov/system/files/documents/2023/04/1s223.pdf (last visited Oct. 6, 2023) CPLR § 3211 (a)(7) -esessssssessssssssssssessssenuesssessenssesusnssenusnssenusnassnsseseiissaseuseasennseesesnneeseeue 1,3 CPLR § 5004... 20 DOL, Opinion Ltr. RO-07-0041 (May 8, 2007) iv 5 of 28 INDEX NO. 158194/2023 FILED: NEW YORK COUNTY CLERK 10/18/2023 12:09 PM NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 10/18/2023 Ex. I, Bill Jacket, Budget Rep., L. 1980, ch. 697. In 1987 11 https://dol.ny.gov/unpaidwithheld-wages-and-wage-supplements (last visited Oct. 6, 2023) https://money.usnews.com/investing/articles/what-is-the-average-stock-market- return (last visited, Oct. 8, 2023) .o..ceecceceeceesssceseeeeseseeseseseeseseescseseeseseeseseeeeseecseseeseseeeeseeeseneeee 20 . 1890, ch. 388, § 1 10 1890, ch. 388, §§ 2-3 10 1897, ch. 415 11 1908, ch: 442 11 1921, ch. 50 11 1935, ch. 619 11 1937, ch. 500 12 1937, ch. 500, § 1 12 1966, ch: 548 11 1987, ch. 404,§ 1 11 1989, ch: 38,§ 1 11 1993, ch. 168, § 1 11 1997, ch. 605 14 1997, ch. 605, § 1 14 2007, ch 304,§ 4 11 2010, ch 564 15, 16 2010, ch. 564, § 7 15 2021, c. 397, § 1 16 . 2021, ch. 397, § 1 16 N.Y. DOL's Labor Standards Complaint Form (Mar. 2021 ed.) at Part 8, No. 37(h) 6 of 28 INDEX NO. 158194/2023 FILED: NEW YORK COUNTY CLERK 10/18/2023 12:09 PM NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 10/18/2023 Defendant Leeding Builders Group LLC (“LBG”) respectfully submits this Memorandum of Law in support of its Motion to Dismiss the Complaint of John Hyman (“Plaintiff”) pursuant to CPLR 3211(a)(7).! PRELIMINARY STATEMENT LBG moves to dismiss under CPLR 3211(a)(7) because there is no private right of action for violations of Section 191(1)(a)(i) of the New York Labor Law (“NYLL”), as this Court and the New York State Department of Labor (“DOL”) have previously recognized. Plaintiff was paid for every minute he worked, and received every penny he earned. He does not allege otherwise. Instead, he contends that he was a “manual worker,” presumably under NYLL § 191(1)(a)(i),2 and because he was paid bi- weekly, not weekly, he is owed liquidated damages of one hundred percent of the purportedly “late” paid wages. In effect, Plaintiff wants an increase of fifty percent of all wages LBG paid to him. Such a draconian result is wholly unwarranted. NYLL § 191(1)(a)(i) provides that “[a] manual worker! shall be paid weekly and not later than seven calendar days after the end of the week in which the wages are earned[.]” Nothing in the statute’s text remotely indicates that the Legislature meant to confer a private right of action to enforce pay frequency violations. On the contrary, the legislative 1 A copy of the Complaint is attached as Exhibit A to the accompanying Affirmation of Kyle D. Winnick dated October 9, 2023 (“Winnick Aff.”). References to the Complaint appear as “Compl. {”. 2 Plaintiff does not actually cite NYLL § 191(1)(a)(i), but LBG construes his claim as alleging a violation of it. 3 A manual worker is “a mechanic, workingman or laborer.” NYLL § 190(4). 7 of 28 INDEX NO. 158194/2023 FILED: NEW YORK COUNTY CLERK 10/18/2023 12:09 PM NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 10/18/2023 history confirms that the Legislature only meant for public, not private, enforcement of pay frequency violations. Nor is there a private right of action to enforce violations of NYLL § 191(1)(a)@) under NYLL § 198(1-a), which allows employees to bring a “wage claim” in court “to recover the full amount of any underpayment,” plus liquidated damages (among other damages). In Vega v. CM & Assoc. Constr. Mgt., LLC, 175 A.D.3d 1144 (1st Dep’t 2019), the First Department held that violations of NYLL § 191(1)(a) were actionable under NYLL § 198(1-a) because they were “underpayments,” which the Court defined as “pay[ing] less than what is required.” But as explained below, Vega is no longer good law for several reasons, being implicitly overruled by the Court of Appeals: 1 Vega’s interpretation of “underpayment” does not survive the Court of Appeals’ decision in Konkur v. Utica Academy of Science Charter Sch., 38 N.Y.3d 38 (2022), which held that there was no private right of action for illegal “kick-backs” under NYLL § 198-b, even though forcing employees to return part of their wages is a literal “underpayment” and the employer “pays less than what is required.” Rather, the Court of Appeals held that where the Legislature intended a Labor Law provision to be privately enforced, the Legislature expressly provided a private right of action. As Vega concedes, there is no express provision within NYLL § 191(1)(a)(). The Legislature amended NYLL § 198(1-a) in 2021, which confirmed that NYLL § 198(1-a) only applies to nonpayment or partial payments, not late payments. Vega also conflicts with the legislative history, which establishes that the Legislature meant for pay frequency violations to be enforced only by the DOL, or its predecessor, and that NYLL § 198(1-a) only applies to “wage claims,” which are claims for nonpayment or partial payments of wages, not late payments. As the Second Department recently observed, NYLL § 191(1)(a) “pertain[s] to frequency of pay . . not unpaid wages.” Gutierrez v. Bactolac Pharm., Inc., 210 A.D.38d 746, 748 (2d Dep't 2022). 8 of 28 INDEX NO. 158194/2023 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 10/18/2023 This interpretation is cemented by the DOL’s interpretation, which is entitled to deference. The DOL has historically interpreted pay frequency violations as “non-wage” claims, subject to modest statutory penalties, not liquidated damages. Vega also conflicts with the statutory canon that courts should construe a statute to avoid constitutional issues. If manual workers are entitled to liquidated damages equal to 100 percent of late paid wages, the gap between ostensible harm (de minimis) and liquidated damages (extraordinarily high) would far exceed what is constitutionally permissible. Thus, this Court should not follow Vega (because it has been implicitly overruled), and Plaintiffs Complaint should be dismissed with prejudice. STATEMENT OF FACTS#4 Plaintiff alleges that he was a “laborer” whose job consisted of “performing physical labor.” (Ex.' A, Compl. §/§ 4, 6-7.) He claims that he was paid “on a bi- weekly basis,” and therefore under Vega, he is owed “liquidated damages for failure to timely pay Plaintiff on a weekly basis, reasonable attorneys’ fees, and costs and disbursements of this action[.]” (Id. J 8, 21.) ARGUMENT L STANDARD OF REVIEW A claim must be dismissed where its underlying factual allegations “fail[] to state a cause of action.” CPLR 3211(a)(7). ‘Dismissal of the complaint is warranted if the plaintiff fails to assert facts in support of an element of the claim, or if the factual allegations and inferences to be drawn from them do not allow for 4 LBG accepts the facts alleged in the Complaint as true solely for purposes of this motion. 5 All exhibits are annexed to the Affirmation of Kyle Winnick. 9 of 28 INDEX NO. 158194/2023 FILED: NEW YORK COUNTY CLERK 10/18/2023 12:09 PM NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 10/18/2023 an enforceable right of recovery.” Connaughton v. Chipotle Mexican Grill, Inc., 29 N.Y.3d 137, 141—42 (2017). Il. THERE IS NO EXPRESS PRIVATE RIGHT OF ACTION FOR WEEKLY PAY CLAIMS For decades, New York courts (including this Court) held that NYLL § 191(1)(A)@) does not contain a private right of action; rather, only the DOL could bring an enforcement action for modest statutory penalties under NYLL § 218(1). See, e.g., Grant v. Global Aircraft, 2021 N.Y. Misc. LEXIS 11125 (Sup. Ct., Queens Cty. Apr. 20, 2021) (no private cause of action under NYLL § 198(1-a) to enforce violations of NYLL § 191(1)(a)(@)); Gardner v. D&D Elec. Constr. Co., Inc., 2019 N.Y. Misc. LEXIS 4448 (Sup. Ct., N.Y. Cty. Aug. 7, 2019) (same); Nicholson v. Alliance Nursing Staffing, 2019 N.Y. Misc. LEXIS 22473 (Sup. Ct., Bronx Cty. Apr. 30, 2019) (same); Hunter v. Planned Bldg. Servs., Inc., 2018 N.Y. Misc. LEXIS 2896, at *4 (Sup. Ct. Queens Cty. June 11, 2018) (same); see also Accosta v. Lorelei Events Corp., 2022 U.S. Dist. LEXIS 11494, at *11 (S.D.N.Y. Jan. 21, 2022) (same); Arciello v. Cty. of Nassau, 2019 U.S. Dist. LEXIS 161167 (E.D.N.Y. 2019) (same); Coley v. Vannguard Urban Improvement Assn., 2018 U.S. Dist. LEXIS 54609, at *42 (E.D.N.Y. Mar. 29, 2018) (same); Belizaire v. RAV Investigative and Sec. Servs. Ltd., 61 F. Supp. 3d 336, 360, n. 22 (S.D.N.Y. 2014) (same); Hussain v. Pak. Intl Airlines Corp., 2012 U.S. Dist. LEXIS 152254 (E.D.N.Y. Oct. 23, 2012) (same). This changed with the First Department’s decision in Vega. But as explained below, Vega no longer remains good law, because it was implicitly overruled by the Court of Appeals and post-Vega legislation and conflicts with the DOL’s construction of NYLL § 191(1)(a). It should therefore not be followed, and it is 4 10 of 28 INDEX NO. 158194/2023 FILED: NEW YORK COUNTY CLERK 10/18/2023 12:09 PM NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 10/18/2023 entirely proper for this Court not to follow an “implicitly overruled’ First Department opinion. See Connolly v. Napoli Kaiser & Bern, LLP, No. 105224/05, 2009 WL 2350275 n.5 (N.Y. Sup. Ct. July 16, 2009) (recognizing Court of Appeals “implicitly overruled” First Department cases); see also Serio v. Pub. Serv. Mut. Ins. Co., 304 A.D.2d 167, 172 (2d Dep’t 2003) (recognizing that Court of Appeals decision implicitly overruled Appellate Division case). A The Court Of Appeals’ Decision In Konkur Implicitly Overruled Veg As noted above, Vega held that NYLL § 191(1)(a)(i) was privately enforceable through NYLL § 198(1-a), reasoning that late payments are “wage claims” because they are “underpayments,” which the Court defined as “pay[ing] less than what is required.” But the Court of Appeals recently rejected this very argument: that merely “pay[ing] less than what is required” creates a privately enforceable wage claim. In Konkur v. Utica Academy of Science Charter Sch., 38 N.Y.3d 38 (2022), the plaintiff alleged that his employer had improperly collected “portions of [his] wage, salary, and [] overtime” through illegal kickbacks in violation of NYLL § 198-b. Stated another way: he contended that he was underpaid what was legally required. The Court of Appeals rejected this contention, holding that there was no implied right of action (and by extension, no express right of action), because where the Legislature intended for a private right of action for a NYLL violation, it expressly provided for one: Where the legislature intended for an article 6 provision to be enforced individually, it expressly provided a private right of action. * * * For kK oO 11 of 28 INDEX NO. 158194/2023 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 10/18/2023 example, in 2010, section 198 was amended to add a private right of action for certain notice requirements in section 195. * * * A 2015 amendment clarified that section 194, which prohibits underpayment based on an employee’s status in a protected class, can be individually enforced and that employees may recover treble damages for willful violations. Id. at 44-45 (citations omitted). The Court of Appeals also found dispositive that violations of NYLL § 198-b were already enforced through actions brought by the State, including from the DOL under NYLL § 218(1). Id. at 43. “The statutory scheme therefore expressly provides two robust enforcement mechanisms, ‘indicating that the legislature considered how best to effectuate its intent and provided the avenues for relief it deemed warranted.” Id. (quoting Cruz v. TD Bank, N.A., 22 N.Y.3d 61, 71 (20138)). While Konkur did not expressly address the Vega decision, Vega’s construction of “underpayment” is irreconcilable with Konkur. The plaintiff in Konkur alleged that he was paid less than what he was legally entitled to, because he had to unlawfully “kickback” some of his income. Nonetheless, the Court of Appeals held that he did not have a private cause of action, which necessarily means that merely being paid less than what is owed under the law is not synonymous with the term “underpayment” in NYLL § 198(1-a), because otherwise the plaintiff would have had a right of action. Vega’s interpretation of “underpayment” is, therefore, expressly rejected by Konkur. Moreover, Konkur found that NYLL § 198-b enforcement through the DOL meant that the Legislature specifically opted for public enforcement, to the exclusion of private enforcement. Jd. at 43. As recounted below, the DOL has a 6 12 of 28 INDEX NO. 158194/2023 FILED: NEW YORK COUNTY CLERK 10/18/2023 12:09 PM NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 10/18/2023 long history of enforcing pay frequency violations as “non-wage claims” under NYLL § 218(1). This further shows that Vega is no longer good law after Konkur. B. The New York Department Of Labor Has Long Held That Pay Frequency Claims Are “Non-Wage” Claims, Not “Wage” Claims Vega’s interpretation of a pay frequency violation as a “wage claim” is not just rejected by Konkur, it is also rejected by the DOL, which has long classified pay frequency claims as “non-wage claims”: . On its website, the DOL has classified “timely payment of wages” as Non- Wage Items. See Ex. B; https://dol.ny.gov/unpaidwithheld-wages-and-wage- supplements (last visited Oct. 6, 2023). The DOL’s Complaint Form likewise identifies frequency if pay claims non- wage complaints. See N.Y. DOL’s Labor Standards Complaint Form (Mar. 2021 ed.) at Part 8, No. 37(h), available at https://dol.ny.gov/system/files/documents/2023/04/1s223.pdf (last visited Oct. 6, 2023). The DOL’s Guidelines, which explains that under NYLL § 218, violations for wage claims result in liquidated damages but violations “for a reason other than the employer’s failure to pay wages” (i.e., non-wage claims) result in civil penalties up to $3,000. These Guidelines categorize frequency of pay violations as a Labor Law violation other than the failure to pay wages (i.e., a non-wage violation). See Ex. C. Opinion letters by the DOL classify pay frequency violations as “non-wage claims” under NYLL § 218. See DOL, Opinion Ltr. RO-07-0041 (May 8, 2007) (pay frequency violations of NYLL § 191 result in statutory penalties for non- wage claims, not liquidated damages for wage claims). See Ex. D. This interpretation is entitled to deference. See Barenboim v. Starbucks Corp., 21 N.Y.3d 460, 470 (2013) (the DOL’s “interpretation of a statute it is charged with enforcing is entitled to deference”); Samiento v. World Yacht Inc., 10 N.Y.3d 70, 79 (2008) (“The Labor Department’s interpretation of a statute it is charged with enforcing is entitled to deference.”). 7 13 of 28 INDEX NO. 158194/2023 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 10/18/2023 Significantly, the DOL has enforced pay frequency violations under NYLL § 218 as “non-wage” violations. NYLL § 218(1) provides that if an employer “has violated a provision of article six (payment of wages),” the Commissioner of Labor “shall order direct payment of the total wages [owed] . . . plus liquidated damages in the amount of one hundred percent of unpaid wages.” Conversely, if a Labor Law violation “is for a reason other than the employer's failure to pay wages” (i.e., a non- wage claim), the Commissioner “shall direct payment” of a modest civil penalty of “one thousand dollars for a first violation, two thousand dollars for a second violation, or three thousand dollars for a third or subsequent violation.” Id. For decades, the DOL has sought non-wage claim penalties for pay frequency violations, and the Industrial Board of Appeals (“IBA”), which reviews the rules, regulations, and orders issued by the Commissioner of Labor, has affirmed that pay frequency violations result in penalties for non-wage claim violations, not liquidated damages for wage claim violations. In Ribble (d/b/a Perfecto Cleaners), PR 06-038 (Indus. Bd. of Appeals, Dec. 19, 2017), for example, the Commissioner issued an Order finding the employer did not pay its manual workers on a weekly basis, as required, for two years. See Ex. E. The DOL issued a modest penalty of $1,000 for the violation in accordance with NYLL § 218. It did not impose damages of 100% of the wages paid at the wrong frequency. See also Century Diner Buffet, Inc., PR 12-180 (Indus. Bd. of Appeals, July 13, 2016) (issuing a modest penalty of $1,000 against employer who paid manual worker monthly; not liquidated damages equal to 100 percent of late 8 14 of 28 INDEX NO. 158194/2023 FILED: NEW YORK COUNTY CLERK 10/18/2023 12:09 PM NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 10/18/2023 wages); RJS Janitorial, LLC, PR 15-148 (Indus. Bd. of Appeals, Oct. 24, 2018) (awarding civil penalties, not liquidated damages, for pay frequency violations). The DOL’s and IBA’s interpretation of pay frequency violations as “non-wage claims” subject only to modest penalties, not liquidated damages, has been upheld by New York courts. See, e.g., IKEA U.S. Inc. v. Indus. Bd. of Appeals, 241 A.D.2d 454, 455 (2d Dep't 1997). If the pay frequency violations were wage claims, the DOL and IBA would have been statutorily required to impose liquidated damages, because NYLL § 218 commands that the Commissioner “shall” seek liquidated damages for unpaid wages. See In re O'Brien, 98 A.D.3d 60, 62 (1st Dep’t 2012) (equating “shall” as “mandatory language”); Patrolmen’s Benev. Ass’n of City of Buffalo v. City of Buffalo, 50 A.D.2d 101, 104 (4th Dep’t 1975) (“The use of the word ‘shall’ in this ” context, absent ‘ameliorating or qualifying language is deemed to be mandatory. (cleaned up)). That neither has done so shows that such violations are not wage claims subject to liquidated damages. This consistent interpretation by the DOL is entitled to deference, see Barenboim, 21 N.Y.3d at 470, and this consistent enforcement scheme shows that there is no private right of action under Konkur. Cc The Legislative History Further Confirms That Pay Frequency Violations Are Non-Wage Claims The legislative histories of both NYLL §§ 191 and 198 further establish that a violation of NYLL § 191(1)(a) is not, and has never been, a wage claim under NYLL § 198. The two laws are (and were) different statutes, with different histories, and address different concerns. NYLL § 191(1)(a) regulates pay frequency and is 9 15 of 28 INDEX NO. 158194/2023 FILED: NEW YORK COUNTY CLERK 10/18/2023 12:09 PM NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 10/18/2023 enforced by the DOL through civil and administrative actions. NYLL § 198, in contrast, provides a private right of action for unpaid wage claims—non-payment or partial payment of wages. See Gutierrez v. Bactoloc Pharm., Inc., 210 A.D.3d 746, 747 (2d Dep’t 2022) (“violations of Labor Law § 191... pertain to frequency of pay and not unpaid wages”). 1 The statutory and legislative history of NYLL § 191(1)(a) show there is no private right of action for pay frequency violations New York’s weekly pay requirement was initially enacted in 1890 with the passage of the “Weekly Pay Act,” the predecessor to NYLL § 191(1)(a)(i). See Ex. F, L. 1890, ch. 388, § 1; People ex rel. Van Valkenburg v. Myers, 11 N.Y.S. 217 (Sup. Ct., N.Y. Cty. 1890). The Act required that covered employers “shall pay weekly, each and every employee engaged in its business, the wages earned by such employe [sic] to within six days of the date of such payment[.]” L. 1890, ch. 388, § 1. Section 2 of the Weekly Pay Act (then codified as Labor Law § 7), provided for modest civil penalties to be recovered in civil actions brought by “factor inspectors” (predecessor to the DOL) for whom the Attorney General would appear. L. 1890, ch. 388, §§ 2-3. Factor inspectors and the Attorney General’s office—not private citizens—brought civil actions to enforce the law. See, e.g., People v. Interborough Rapid Transit Co., 169 A.D. 32 (1st Dep’t 1915); People v. City of Buffalo, 11 N.Y.S. 314