Wage Claims under Labor Law: Executives Need Not Apply

Wage claims under Section 191 of the Labor Law are a handy gadget in a plaintiff's toolbox. Such statutory claims provide not merely for recovery of lost wages but also liquidated damages equal to 25% of the total wages due as well as attorneys' fees and costs.

Section 191, however, has an Achilles heel, and that is its application to supervisors and executives or, better put, its inapplicability to them. Although no express exclusion appears in the statute, courts have divided over the definition of “employee” and whether it includes executives. Some courts have interpreted the definition broadly to include them. See, e.g., Daley v. The Related Cos., 179 A.D.2d 55 (1st Dep't 1992); Cohen v. Stephen Wise Free Synagogue, 1996 WL 159096 (S.D.N.Y. 1996). In contrast, the New York Court of Appeals applied the Labor Law only to non-supervisory personnel in the leading case Gottlieb v. Laub & Co., 82 N.Y.2d 457 (1993). A number of other courts have followed suit. See, e.g., Taylor v. Blaylock & Partners, 240 A.D.2d 289, 292 (1st Dep't 1997).

Judge Carter of the Southern District recently weighed in on the topic and adopted the Gottlieb court's interpretation of the statute in denying executives refuge under Labor Law Section 191. In that case, the executive was the former CEO of defendant. The court granted defendant's motion to dismiss Plaintiff's Labor Law wages claim and his effort to recover his attorneys' fees under Section 198 of the Labor Law.

Judge Carter's decision helps confirm that high-level executives are excluded from the definition of employee under Section 191 of the Labor Law. The decision does little, however, to help the practitioner apply that logic to less clear-cut executive positions. Are middle managers excluded as well? Such open questions help assure that future litigation over the proper scope of “executive” versus “non-supervisory” employees will be required before the full protection of Labor Law 191 can be discerned.

Wage claims under Section 191 of the Labor Law are a handy gadget in a plaintiff's toolbox. Such statutory claims provide not merely for recovery of lost wages but also liquidated damages equal to 25% of the total wages due as well as attorneys' fees and costs.

Section 191, however, has an Achilles heel, and that is its application to supervisors and executives or, better put, its inapplicability to them. Although no express exclusion appears in the statute, courts have divided over the definition of “employee” and whether it includes executives. Some courts have interpreted the definition broadly to include them. See, e.g., Daley v. The Related Cos. , 179 A.D.2d 55 (1st Dep't 1992); Cohen v. Stephen Wise Free Synagogue, 1996 WL 159096 (S.D.N.Y. 1996). In contrast, the New York Court of Appeals applied the Labor Law only to non-supervisory personnel in the leading case Gottlieb v. Laub & Co. , 82 N.Y.2d 457 (1993). A number of other courts have followed suit. See, e.g., Taylor v. Blaylock & Partners , 240 A.D.2d 289, 292 (1st Dep't 1997).

Judge Carter of the Southern District recently weighed in on the topic and adopted the Gottlieb court's interpretation of the statute in denying executives refuge under Labor Law Section 191. In that case, the executive was the former CEO of defendant. The court granted defendant's motion to dismiss Plaintiff's Labor Law wages claim and his effort to recover his attorneys' fees under Section 198 of the Labor Law.

Judge Carter's decision helps confirm that high-level executives are excluded from the definition of employee under Section 191 of the Labor Law. The decision does little, however, to help the practitioner apply that logic to less clear-cut executive positions. Are middle managers excluded as well? Such open questions help assure that future litigation over the proper scope of “executive” versus “non-supervisory” employees will be required before the full protection of Labor Law 191 can be discerned.