Opinion
Index No.: 906270-20
08-25-2022
Tanya HENSEL, Plaintiff, v. BESTPASS, INC., Defendant.
Smith Hoke, PLLC, Attorneys for Plaintiff, (John J. Hoke, of counsel), 16 Wade Road, Latham, New York 12110 Barclay Damon LLP, Attorneys for Defendant, (Michael J. Murphy, of counsel), 80 State Street, Albany, New York 12207
Smith Hoke, PLLC, Attorneys for Plaintiff, (John J. Hoke, of counsel), 16 Wade Road, Latham, New York 12110
Barclay Damon LLP, Attorneys for Defendant, (Michael J. Murphy, of counsel), 80 State Street, Albany, New York 12207
Richard M. Platkin, J. Plaintiff Tanya Hensel commenced this action on September 30, 2020, seeking to recover commissions allegedly withheld by her former employer, defendant Bestpass, Inc. ("Bestpass"), in violation of Labor Law § 193 and the parties' contractual agreement. Hensel later amended her complaint to add claims of unlawful retaliation and discrimination.
Bestpass denied the allegations and counterclaimed to recover alleged overpayments of commissions made to Hensel under causes of action alleging fraud and unjust enrichment.
Discovery is complete, and a trial-term note of issue was filed on March 21, 2022. Plaintiff now moves for partial summary judgment on her Labor Law § 193 claim and for dismissal of defendant's counterclaims. Bestpass opposes the motion and cross-moves for dismissal of Hensel's claims for breach of contract, promissory estoppel and retaliation.
BACKGROUND
Bestpass provides toll management systems to trucking companies (see NYSCEF Doc No. 59 ["D-SOMF"], ¶ 1), and Hensel is a former employee.
Hensel was hired by Bestpass as a customer service representative in September 2011 (see id., ¶ 3) and promoted in 2019 to Director of Inside Sales and Operations (see NYSCEF Doc No. 14 ["Amended Complaint"], ¶¶ 3, 8; see also NYSCEF Doc No. 68 ["P-RSOMF"], ¶ 2). The new position was outlined in a May 10, 2019 letter from Bestpass (see P-RSOMF, ¶ 3), which provided that Hensel would continue to serve as an "at-will, exempt employee" in the new position of Director of Inside Sales and Operations, a role in which she would "directly manage all inside sales account executives, two onboarding coordinators, sales development representative and sales assistant" (NYSCEF Doc No. 46 ["Joint EBT Exhibits"], Ex. 1 ["2019 Offer Letter"]).
The 2019 Offer Letter states that Hensel would receive an annualized salary of $125,000, together with commissions paid on the following terms:
• 5% commission on all Inside Account Representative's revenue up to 2,000 tags per month (exclusive of any hardware/transponder fees);
• Commission will be paid out for the first 12 months of a customer's billing (starting with the customer's first billing); and
• Commission will be paid out monthly for the previous month
(id.; see also P-RSOMF, ¶ 4). The 2019 Offer Letter further provides that an "updated job description is forthcoming," and "a more formalized commission plan will be created when all operations functions have been transitioned." Hensel signed the letter on May 13, 2019, thereby manifesting her "agreement with the employment and commission terms" (id.).
In connection with the promotion, Hensel also was in discussions with John Andrews, then-CEO of Bestpass, and John Lang, the Vice-President of Finance, regarding "certain incentives that [she] would need to make the new position financially feasible" (Amended Complaint, ¶ 9). According to Hensel, Andrews "promised" her that "when her job description was fully implemented," Bestpass "would develop a formalized commission plan consistent with the terms offered [to] other inside sales executives" (id., ¶ 10).
In June 2019, Hensel allegedly "was provided both a new job description and a formalized Commission Plan consistent with [the] terms of her [2019 Offer Letter]" (id., ¶ 11). "The formalized Commission Plan ... was provided to her by [Bestpass'] general counsel, William Decaire, Esq., and included the terms that she had discussed with both" Andrews and Lang (id., ¶ 12; see Joint EBT Exhibits, Ex. 2 ["2019 Commission Plan"]). However, Bestpass insists that Hensel herself prepared the 2019 Commission Plan, with Decaire's assistance, and it was not approved by Bestpass (see P-RSOMF, ¶¶ 6-7).
Under the 2019 Commission Plan, Hensel would "be paid a 5% commission on all Earned Commissionable Revenue from transponder-based and/or plate-based accounts during the first 12 months beginning after the customer's account is first billed" (p. 1). Additionally, a "Monthly Commission Percentage Accelerator" would increase Hensel's base commission percentage by specified amounts if monthly sales exceeded certain benchmarks (id.; see also P-RSOMF, ¶¶ 8-9). The document has signature lines for Hensel and Andrews, but is unsigned (see 2019 Commission Plan, p. 2; see also P-RSOMF, ¶ 11). Hensel claims that, beginning in or about June 2019, she was "compensated consistent with the terms of the 2019 ... Commission Plan" (Amended Complaint, ¶ 16), which Andrews approved during a June 24, 2019 meeting (see P-RSOMF, ¶ 10). Since then, "[p]laintiff used all her efforts to produce sales and thus earned commissionable revenue on behalf of [Bestpass]. Her efforts resulted in commissions that included the commission accelerator payments that during certain months reached 15%" (Amended Complaint, ¶ 17). "However, beginning with [the] January 2020 commission payment, [her] wages were unilaterally reduced by [Bestpass]" (id., ¶ 18).
For its part, Bestpass insists that "[n]either Mr. Lang, Mr. Andrews, nor Mr. Decaire approved of, implemented, or signed [the 2019 Commission Plan] on behalf of Bestpass" (P-RSOMF, ¶ 10). But despite the lack of executive approval, Hensel informed Jenna Menetti—the Assistant Controller of Bestpass, who was responsible for creating monthly commission reports—that her commission rate was as reflected in the 2019 Commission Plan (see id., ¶¶ 12-14; see also NYSCEF Doc No. 25 ["Answer"], ¶¶ 75-77).
Based on Hensel's representation, Menetti updated the Bestpass accounting system to use the commission rates reflected in the 2019 Commission Plan (see P-RSOMF, ¶¶ 15-18; Answer, ¶ 79). Once Menetti prepared a commission report for Hensel under the new plan, Hensel would review the report and make any necessary changes before a final number was arrived at and sent to the payroll department for processing (see P-RSOMF, ¶¶ 19-22).
According to Bestpass, Hensel "has been paid all commissions earned under the May 13, 2019 signed offer" (Answer, ¶ 74). And when Bestpass learned in April 2020 that plaintiff was being paid commissions under the unapproved 2019 Commission Plan (see P-RSOMF, ¶¶ 23-24), it conducted an investigation and determined that Hensel was "paid $83,687.01," which was "$49,077.12 more than the total of $34,609.89 in commissions to which she was entitled under the [2019 Offer] Letter" (id., ¶ 25; see Answer, ¶ 80). Bestpass then held back Hensel's commissions "at her direction" to "ensure [that she] was being paid an appropriate commission rate" (P-RSOMF, ¶ 26).
Hensel denies ever directing Bestpass to withhold earned commissions (see id.). Rather, Hensel claims to have "expressed a willingness ... to revisit her commission schedule" with Andrews and Lang, "because she believed that [Bestpass'] revenue had declined in the wake of the [COVID-19] pandemic and that could put her position in jeopardy" (Amended Complaint, ¶ 19; see P-RSOMF, ¶ 26). Thus, "[p]laintiff assumed that her commissions were being withheld because [Bestpass] was under financial strain caused by the ... pandemic" (Amended Complaint, ¶ 19).
Hensel maintains that she was not contacted to discuss her commissions until June 26, 2020, when she received a new compensation plan entitled "2020 Director of Sales Operations, Training & Sales Automation — Compensation & Commission Plan" (id., ¶¶ 20-21; see Joint EBT Exhibits, Ex. 3 ["2020 Commission Plan"]). That plan "radically reduced and changed her commission structure" (Amended Complaint, ¶ 21).
Hensel also was provided with a check for $5,672.11, representing the commissions due under the 2020 Commission Plan, retroactive to March 2020 (see id.). Hensel claims that she was "never advised" of any changes to her commission structure until she was presented with the 2020 Commission Plan, and the $5,672.11 payment did not reflect the commissions that were due under either the 2019 Commission Plan or the 2019 Offer Letter (P-RSOMF, ¶ 27).
Over the next several months, the parties unsuccessfully attempted to resolve Hensel's compensation issue. Bestpass maintains that Hensel rejected its negotiation efforts, whereas Hensel complains that Bestpass unfairly was seeking to have her forfeit earned commissions (see id., ¶ 28).
Bestpass further contends that it did not discipline or terminate Hensel for misrepresenting her commission rate to Menetti, and, in fact, promoted her in August 2020 to the Director of Sales, Operations and Training (see id., ¶¶ 29-30).
Hensel's compensation in the new position was made subject to a July 31, 2020 plan, which then was replaced in January 2021 "with a plan that further reduced [her] compensation" (Amended Complaint, ¶ 22). According to Hensel, "the June 26th, 2020, July 31st, 2020, and January 2021 plans contained terms that were substantially less lucrative" than the prior plans, although she acknowledges that Bestpass "retained the right to change the terms of [her] compensation model" (id., ¶ 23).
Still, Hensel alleges that she was not paid her earned commissions between January 2020 and June 26, 2020 (see id., ¶ 24). Further, "none of [her] commission payments beginning in late 2019 and continuing through 2020 corresponded with the total commissions she earned as certain tags that should have been included within the scope of the account revenue utilized in calculating her commissions w[ere] unlawfully deducted" (id., ¶ 25). "Additionally, [Hensel] was never paid commissions on all revenue generated by the inside sales account executives, onboarding coordinators, sales development representatives and sales assistants" (id., ¶ 26).
When Hensel raised the issue of her unpaid commissions with Decaire, Tom Fogarty (the new CEO) and Ken Creager (the Vice-President of Sales and Marketing), Creager allegedly told her "to accept that she was not going to be paid for her earned commission and was issued a vaguely worded ultimatum that she should ‘take the deal, you have worked hard ... you need to be careful’ " (id., ¶¶ 27-28). Hensel understood that "to be a threat that if she continued to request her earned commissions, she would suffer an adverse employment action" (id., ¶ 28). But Hensel continued in her new role, although some of her responsibilities were shifted to a new sales manager, and her compensation continued to be reduced (see id., ¶¶ 29-30).
Hensel commenced this action on September 30, 2020. Her original complaint alleged causes of action for: (1) breach of contract, based on Bestpass' failure to compensate her in accordance with the 2019 Commission Plan; (2) promissory estoppel, based on Bestpass' alleged promise to pay her commissions consistent with the 2019 Commission Plan; and (3) violation of Labor Law § 193, for unlawful withholding of earned commissions (see NYSCEF Doc No. 2).
Bestpass joined issue on November 10, 2020 through an answer denying the pertinent allegations and alleging counterclaims for fraud and unjust enrichment directed at recovering the overpayments made to Hensel by reason of her misrepresentations to Menetti regarding the 2019 Commission Plan (see NYSCEF Doc No. 4).
On April 28, 2021, Bestpass terminated Hensel's employment "for cause," although she denies having violated any known company policies or procedures (Amended Complaint, ¶ 31). According to Hensel, she "was never provided any basis for her termination and believes that any basis is simply a pretext for [her] opposition to [Bestpass'] unlawful employment practices" (id., ¶ 32). Hensel further alleges that her husband, who worked for Bestpass as an independent contractor, was terminated at the same time without justification, "despite being a high performing salesperson" (id., ¶ 33). Hensel amended her complaint on July 23, 2021 to add a claim for unlawful retaliation under Labor Law § 215 based on her termination, and a claim under Labor Law § 194, alleging that she was "compensated at a rate substantially less than her male predecessor" (id., ¶¶ 50-62).
In its amended answer, Bestpass asserts that "[p]laintiff was terminated for cause, including, among other reasons[,] claiming credit for transactions for which she was not entitled to credit, improperly steering sales and leads to provide her with compensation to which she was not entitled, taking credit for sales in a fashion that deprived others of credit for sales for which they were entitled and falsifying and creating misleading documents" (Answer, ¶ 72).
Following completion of discovery, the instant motion practice ensued, and this Decision & Order follows.
GENERAL PRINCIPLES
The movant for summary judgment "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact" ( Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324, 508 N.Y.S.2d 923, 501 N.E.2d 572 [1986] ), and the "[f]ailure to make such showing requires denial of the motion, regardless of the sufficiency of the opposing papers" ( Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642 [1985] ).
If the prima facie showing has been made, the burden shifts to the opponent of the motion "to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action" ( Alvarez, 68 N.Y.2d at 324, 508 N.Y.S.2d 923, 501 N.E.2d 572 ). All evidence must be viewed in the light most favorable to the opponent of summary judgment (see Vega v. Restani Const. Corp., 18 N.Y.3d 499, 503, 942 N.Y.S.2d 13, 965 N.E.2d 240 [2012] ), but "mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient" to defeat the motion ( Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 [1980] ).
I. HENSEL'S MOTION
Hensel moves for partial summary judgment on her Labor Law § 193 cause of action and for the dismissal of Bestpass' counterclaims alleging fraud and unjust enrichment.
A. Labor Law § 193
Hensel alleges that, "[b]eginning on or after May 13, 2019 and continuing through July 31, 2020, [Bestpass] unlawfully deducted a portion of [Hensel's] wages constituting earned commissions. [Bestpass] had no justification to do so[,] and for several months, [it] paid no commissions at all" (Amended Complaint, ¶¶ 47-48). While recognizing that "there is a dispute as to the [amount of] commissions that were owed to [her] between May, 2019 and June 26, 2020," she asserts that there is "no dispute" that, between March 2020 and June 26, 2020, "all of [her] commissions were withheld" (NYSCEF Doc No. 49 ["MOL"], p. 13). As such, Hensel claims to be entitled to partial summary judgment on her Labor Law § 193 claim.
Labor Law § 193 prohibits employers from making "any deduction from the wages of an employee," except under the limited circumstances set forth in the statute ( Labor Law § 193 [a] ). The statute does allow deductions "made in accordance with the provisions of any law or any rule or regulation issued by any governmental agency" (id. [1] [a]), deductions "expressly authorized in writing by the employee [that] are for the benefit of the employee" (id. [1] [b]), and "deductions which ... are related to recovery of an overpayment of wages where such overpayment is due to a mathematical or other clerical error by the employer" (id. [1] [c]; see Ryan v. Kellogg Partners Inst. Servs., 19 N.Y.3d 1, 16, 945 N.Y.S.2d 593, 968 N.E.2d 947 [2012] ). "Wages" include commission payments earned by an employee for labor or services rendered (see Kolchins v. Evolution Mkts., Inc., 31 N.Y.3d 100, 109, 73 N.Y.S.3d 519, 96 N.E.3d 784 [2018] ).
Neither side cites nor refers to the latter provision.
Nonetheless, the prevailing view is that a "wholesale withholding of [wages] is not a ‘deduction’ within the meaning of Labor Law § 193" ( Perella Weinberg Partners LLC v. Kramer, 153 A.D.3d 443, 449, 58 N.Y.S.3d 384 [1st Dept. 2017] [collecting authorities]; see Dreni v. PrinterOn Am. Corp., 486 F.Supp. 3d 712, 728 [S.D.N.Y. 2020] ; accord Kahlon v. Project Verte Inc., 2022 WL 861638, *8, 2022 US Dist. LEXIS, *25 [S.D.N.Y., Mar. 23, 2022] ; Vergara v. Mission Capital Advisors, LLC, 200 A.D.3d 484, 485, 155 N.Y.S.3d 68 [1st Dept. 2021] [complaint "only alleg(ing) a wholesale withholding of payment, and not a specific deduction from wages"]; cf. Ryan, 19 N.Y.3d at 16, 945 N.Y.S.2d 593, 968 N.E.2d 947 ; but see Zinno v. Frank J. Schlehr, M.D., P.C., 175 A.D.3d 843, 844, 107 N.Y.S.3d 220 [4th Dept. 2019] [failure to pay "the full amount of the additional compensation that plaintiff had earned, as required by the parties' agreement, constituted a deduction from wages"]).
While acknowledging the clear weight of authority precluding her from maintaining a claim under Labor Law § 193 for the withholding of all commissions from March 2020 to June 26, 2020, Hensel relies on the August 19, 2021 amendment to Labor Law §§ 193 and 198, also known as the "No wage theft loophole act" (2021 NY Senate-Assembly Bill S858, A1893 ["Act"]; see 2021 McKinney's Session Law News of NY, ch 397 [S.858]). The Act added the following language to Labor Law § 193 : "There is no exception to liability under this section for the unauthorized failure to pay wages, benefits or wage supplements" (id., [5]).
This action was commenced on September 30, 2020, and plaintiff's Labor Law § 193 claim seeks damages for the alleged wholesale withholding of commissions from March 2020 through June 26, 2020. Accordingly, Hensel may obtain the benefit of the new legislation only if the Act applies retroactively.
In this regard, Hensel argues that, "[a]s stated explicitly in the legislative intent, the [Act] was remedial in nature and thus [should be] applied retroactively to embrace the present dispute" (MOL, p. 12). Relatedly, Hensel observes that the Act "was in direct response to a line of cases that held withholding wages, as distinct from a deduction from wages, did not state a violation of Section 193" (id., citing Miles A. Kletter, D.M.D. & Andrew S. Levine, D.D.S., P.C. v. Fleming, 32 A.D.3d 566, 567, 820 N.Y.S.2d 348 [3d Dept. 2006] ).
"[R]etroactive operation is not favored by courts and statutes will not be given such construction unless the language expressly or by necessary implication requires it" ( Majewski v. Broadalbin-Perth Cent. School Dist., 91 N.Y.2d 577, 584, 673 N.Y.S.2d 966, 696 N.E.2d 978 [1998] ). "It takes a clear expression of the legislative purpose to justify a retroactive application" ( Jacobus v. Colgate, 217 N.Y. 235, 240, 111 N.E. 837 [1916, Cardozo, Ch. J.]). "[T]o determine if such a purpose exists, courts look to the text of the legislation at issue. If the text is not clear, courts then look to the legislative history" ( Gold v. New York Life Ins. Co., 730 F.3d 137, 143 [2d Cir. 2013] [citations omitted] [denying retroactive application to Labor Law § 198's presumption of an entitlement to liquidated damages given the absence of any reference to retroactivity in the text or legislative history]).
As in Gold, neither the text of the Act nor its legislative history provides any support for retroactive application. Indeed, the State Legislature declared that the Act "shall take effect immediately" (§ 5), which ordinarily is indicative of prospective effect (see Marrero v. Crystal Nails, 114 A.D.3d 101, 113, 978 N.Y.S.2d 257 [2d Dept. 2013] ; Matter of Moynihan v. New York State Employees' Retirement Sys., 192 A.D.2d 913, 914, 596 N.Y.S.2d 570 [3d Dept. 1993] ; McKinney's Cons Laws of NY, Book 1, Statutes § 52; accord Durkin v. Shea, 957 F.Supp. 1360, 1374 [S.D.N.Y. 1997] [collecting cases]).
Nevertheless, Hensel contends that retroactive application is warranted because the legislative history refers to the "remedial" purpose of the Act (see MOL, p. 12). As she observes, the legislative findings of the Act do make clear that "[t]he purpose of this remedial amendment is to clarify that ... the unauthorized failure to pay wages, benefits and wage supplements has always been encompassed by the prohibitions of section 193" (2021 McKinney's Session Law News of NY, ch 397 [S.858], § 1 [emphasis added]).
Nonetheless, "the classification of a statute as ‘remedial’ no longer automatically overcomes the strong presumption against retroactivity"; "a better guide for discerning the intent of the legislature is [the statute's] text and history" ( Gold, 730 F.3d at 144, citing Majewski, 91 N.Y.2d at 584, 673 N.Y.S.2d 966, 696 N.E.2d 978 ; see Matter of OnBank & Trust Co., 90 N.Y.2d 725, 730, 665 N.Y.S.2d 389, 688 N.E.2d 245 [1997] ). And, as in Gold, "there is no support for retroactivity in the text or legislative history" of the Act ( 730 F.3d at 144 ; see also Gottwald v. Sebert, 203 A.D.3d 488, 489, 165 N.Y.S.3d 38 [1st Dept.2022] ; Marrero, 114 A.D.3d at 112-113, 978 N.Y.S.2d 257 ).
Moreover, even "[r]emedial statutes ... designed to correct imperfections in prior law" are not accorded retroactive effect where they "create[e] new rights and remedies where none previously existed" ( Matter of Cady v. Broome County, 87 A.D.2d 964, 965, 451 N.Y.S.2d 206 [3d Dept. 1982] [internal quotation marks and citations omitted], lv denied 57 N.Y.2d 602, 454 N.Y.S.2d 1027, 440 N.E.2d 798 [1982] ; see State of New York v. Daicel Chem. Indus., Ltd., 42 A.D.3d 301, 302, 840 N.Y.S.2d 8 [1st Dept. 2007] ).
Here, the "remedial" provisions of the Act amended a statute that had been interpreted for decades as having "nothing to do with failure to pay wages or severance benefits, governing instead the specific subject of making deductions from wages" ( Komlossy v. Faruqi & Faruqi, LLP, 2017 WL 722033, *14, 2017 US Dist. LEXIS 25490, *37 [S.D.N.Y., Feb. 23, 2017], affd 714 Fed.Appx. 11 [2d Cir. 2017] ; accord Fersel v. Paramount Med. Services, P.C., 588 F.Supp.3d 304, 320–21 [E.D.N.Y. 2022] ; see Perella, 153 A.D.3d at 449, 58 N.Y.S.3d 384 ). And through the amendments worked by the Act, a party now is entitled to sue for the wholesale withholding of wages under Labor Law § 193 and obtain the full panoply of remedies available under Labor Law § 198, including a presumption of enhanced (double) damages and an award of reasonable attorney's fees (see Labor Law § 198 [1-a] ; Gebhardt v. Time Warner Entertainment-Advance/Newhouse, 284 A.D.2d 978, 978, 726 N.Y.S.2d 534 [4th Dept. 2001] ). Thus, the Act clearly expands a claimant's rights and remedies.
Based on the foregoing, the Court concludes that the Act cannot be applied retroactively to Hensel's claim herein (see Overton v. Egami Group, Inc., 201 A.D.3d 455, 455, 156 N.Y.S.3d 734 [1st Dept. 2022] [affirming dismissal of plaintiff's Labor Law § 193 claim based on employer's nonpayment of severance payments]).
In reply, Hensel insists that she still "is entitled to judgment as a matter of law" under Labor Law § 193, even without retroactive application of the Act, inasmuch as "the Court of Appeals ruled in both Ryan ... and Kolchins ... that the failure to pay earned wages is a violation of Labor Law § 193" (NYSCEF Doc No. 70, pp. 5-6). But the issue of whether a wholesale withholding of compensation is a "deduction" within the meaning of Labor Law § 193 "was not addressed by the Court of Appeals in Ryan" (Perella, 153 A.D.3d at 449-450, 58 N.Y.S.3d 384 ; see also Dreni v. PrinterOn Am. Corp., 486 F.Supp. 3d 712, 729 [S.D.N.Y. 2020] ), and this Court remains bound by Perella and the other binding precedents of the Appellate Division cited above (see Perella, 153 AD3d at 449, 58 N.Y.S.3d 384 ; accord Overton, 201 A.D.3d at 455, 156 N.Y.S.3d 734 ; Kolchins v. Evolution Markets, Inc., 182 A.D.3d 408, 409, 122 N.Y.S.3d 288 [1st Dept. 2020] ).
Finally, to the extent that plaintiff relies on a dispute as to the commissions that were owed to her between May 2019 and June 26, 2020, "[t]his dispute ... does not reflect a deduction from wages within the meaning of Labor Law § 193" ( Kletter, 32 A.D.3d at 567, 820 N.Y.S.2d 348 ).
While Hensel further alleges that her commissions were "radically reduced" in the 2020 Commission Plan and the subsequent plans (Amended Complaint, ¶¶ 21-22), she admits that Bestpass "retained the right to change the terms of [her] compensation model" (id. , ¶ 23; see 2019 Offer Letter; Cuervo v. Opera Solutions LLC, 87 A.D.3d 426, 426-427, 928 N.Y.S.2d 26 [1st Dept. 2011] ).
The Court therefore concludes that Hensel is not entitled to summary judgment on her claim under Labor Law § 193. Further, upon searching the record (see CPLR 3212 [b] ), the Court concludes that plaintiff's Labor Law § 193 claim must be dismissed in all respects. B. Bestpass' Counterclaims
1. Fraud
" ‘The elements of a cause of action for fraud require a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by [the defendant] and damages’ " ( Town of Tupper Lake v. Sootbusters, LLC, 147 A.D.3d 1268, 1270, 47 N.Y.S.3d 778 [3d Dept. 2017], quoting Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 559, 883 N.Y.S.2d 147, 910 N.E.2d 976 [2009] ).
In seeking dismissal, Hensel argues that Bestpass cannot show that it was defrauded by her representation that the 2019 Commission Plan was in effect because Bestpass assented to that plan (see id., p. 16). Hensel avers that Andrews orally agreed to compensate her in accordance with the 2019 Commission Plan on two occasions: first during a May 7, 2019 meeting at a restaurant, and again in his office on June 24, 2019 (see NYSCEF Doc No. 38 ["Hensel Aff."], ¶¶ 21-26; NYSCEF Doc No. 40 ["Hensel EBT"], pp. 72-75). Hensel further relies on deposition testimony in which Andrews did not recall these meetings, but did not deny that they took place (see NYSCEF Doc No. 41 ["Andrews EBT"], pp. 57-59).
While this evidence is sufficient to shift the burden to Bestpass, the Court is satisfied that proof adduced in opposition to the motion suffices to raise triable issues of fact. Andrews denies that Hensel showed him the 2019 Commission Plan, claims that he did not discuss with her a commission plan different from the one set forth in the 2019 Offer Letter, and avers that he "did not, verbally or in writing, review, approve of, or agree to, the terms or commission rate in the Proposed [2019] Commission Plan" (NYSCEF Doc No. 55 ["Andrews Aff."], ¶¶ 23-25; see also id., ¶ 28). According to Andrews, "Bestpass would not have agreed to" the 2019 Commission Plan, and Hensel "was not permitted to change the terms of the commission plan set forth in the May 10, 2019 [Offer] [L]etter without it being approved in writing by Bestpass" (id., ¶¶ 26-27).
Inasmuch as Andrews was not asked at his deposition whether he had approved the 2019 Commission Plan (see Andrews EBT, pp. 57-59, 62-64), there is no inconsistency between his deposition and affidavit testimony.
Lang and Decaire submit affidavits similarly attesting that the 2019 Commission Plan was not approved by Bestpass and that Hensel's commissions were governed by the 2019 Offer Letter at pertinent times (see NYSCEF Doc No. 54 ["Decaire Aff."], ¶¶ 5-15; NYSCEF Doc No. 56 ["Lang Aff."], ¶¶ 10-15).
Bestpass also submits the affidavit of Menetti, who avers that Hensel informed her that the 2019 Commission Plan was in effect, a representation that Menetti relied upon in using that plan to calculate Hensel's monthly commissions (see NYSCEF Doc No. 57 ["Menetti Aff."], ¶¶ 8-10). In this regard, Hensel acknowledges that she "shared a copy" of the 2019 Commission Plan "with Jenna Menetti," and that "Menetti input that data into the commission report" (P-RSOMF, ¶¶ 13, 15-16).
Finally, Bestpass submits proof that it learned in April 2020 that Hensel was receiving commissions consistent with the unapproved 2019 Commission Plan, rather than the schedule set forth in the 2019 Offer Letter (see Decaire Aff. ¶ 13). It determined that plaintiff was paid $49,077.12 in excess commissions by reason of the misrepresentation (see id., ¶¶ 13-15). Based on the foregoing, the Court concludes that Hensel has not demonstrated her entitlement to dismissal of the fraud counterclaim.
Hensel claims that Bestpass was not damaged by the alleged fraud because she was still owed $9,464.81 (see Joint EBT Exhibits, Ex. 34). However, that calculation reflected a settlement offer made during negotiations (see NYSCEF Doc No. 45; RPSOMF, ¶¶ 89-92; NYSCEF Doc No. 44, pp. 190-194), and, in any event, plaintiff's calculations of damages are in direct conflict with those of Bestpass (see Hensel Aff., ¶¶ 62-63; cf. Joint EBT Exhibits, Ex. 41, Resp. 8). Thus, Hensel has not conclusively established the absence of fraud damages.
2. Unjust Enrichment
Hensel argues that Bestpass' quasi-contractual counterclaim for unjust enrichment must be dismissed because her commissions were governed by a contractual agreement, although the parties disagree on which agreement is controlling (see MOL, p. 19). Bestpass counters that Hensel "ignores the evidence ... that [she] was receiving commissions in excess of the commissions available under the enforceable contract between the parties dated May 10, 2019," and plaintiff's receipt of money to which she was not entitled pursuant to that contract "provides the basis for Bestpass' unjust enrichment claim" (NYSCEF Doc No. 61 ["Opp Mem"], p. 16).
"Unjust enrichment occurs when in equity and good conscience, a party obtains or possesses value that rightfully belongs to another party" ( Henning v. Henning, 103 A.D.3d 778, 780-781, 962 N.Y.S.2d 189 [2d Dept. 2013] [internal quotation marks, brackets and citations omitted]). It is a quasi-contractual " ‘obligation which the law creates, in the absence of any agreement’ " ( State of New York v. Barclays Bank of N.Y., 76 N.Y.2d 533, 540, 561 N.Y.S.2d 697, 563 N.E.2d 11 [1990], quoting Miller v. Schloss, 218 N.Y. 400, 407, 113 N.E. 337 [1916] ). Thus, "[t]he existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract for events arising out of the same subject matter" ( Clark-Fitzpatrick, Inc. v. Long Is. R.R. Co., 70 N.Y.2d 382, 388, 521 N.Y.S.2d 653, 516 N.E.2d 190 [1987] ).
It is undisputed that the payment of commissions to Hensel is governed by either the 2019 Offer Letter or 2019 Commission Plan. In either case, the dispute is contractual, and Bestpass' counterclaim for unjust enrichment must be dismissed (see generally D'Amato v. Five Star Reporting, Inc., 80 F.Supp. 3d 395, 421 [E.D.N.Y. 2015] ; Klein v. Torrey Point Group, LLC, 979 F.Supp. 2d 417, 434 [S.D.N.Y. 2013] ).
II. BESTPASS' CROSS MOTION
Bestpass cross-moves for the summary dismissal of Hensel's claims for breach of contract, promissory estoppel, and unlawful retaliation in violation of Labor Law § 215.
Defendant's cross motion does not challenge the Labor Law § 194 claim.
A. Breach of Contract
"The elements of a cause of action for breach of contract are (1) formation of a contract between plaintiff and defendant; (2) performance by plaintiff; (3) defendant's failure to perform; and (4) resulting damage" ( Clearmont Prop., LLC v. Eisner, 58 A.D.3d 1052, 1055, 872 N.Y.S.2d 725 [3d Dept. 2009] [internal quotation marks and citation omitted]; see A.E. Rosen Elec. Co., Inc. v. Plank, LLC, 181 A.D.3d 1080, 1081, 120 N.Y.S.3d 220 [3d Dept. 2020] ). Bestpass argues that Hensel's right to commissions at pertinent times was governed by the 2019 Offer Letter, as there was not mutual assent to the unsigned 2019 Commission Plan, and, in any event, the statute of frauds would bar enforcement of that alleged agreement (see Opp Mem, pp. 18-20). Thus, Bestpass maintains that the claim for breach of contract should be dismissed because Bestpass "did not fail to pay [Hensel] commissions set forth in the May 10, 2019 [Offer] Letter" and, in fact, overpaid them (id., p. 18).
While these assertions find adequate support in the record (see Lang Aff., ¶¶ 7-17; Andrews Aff., ¶¶ 7-29), the 2019 Offer Letter did contemplate that "a more formalized commission plan will be created when all operations functions have been transitioned," and Hensel submits proof in admissible form that Bestpass orally approved the 2019 Commission Plan and that she did not receive the commissions called for under such plan (see Hensel Aff., ¶¶ 21-33).
Moreover, Bestpass' general counsel acknowledges assisting Hensel in drafting the 2019 Commission Plan for presentation to Andrews (see Decaire Aff., ¶¶ 8-11), and Andrews' testimony that he "did not, verbally or in writing, review, approve of, or agree to, the terms or commission rate in" that plan (Andrews Aff., ¶ 25) simply gives rise to a disputed question of material fact (see Hensel Aff., ¶ 32; Hensel EBT, pp. 72-75; cf. Andrews EBT, pp. 62-64).
Bestpass further argues that the 2019 Commission Plan is "unenforceable as a matter of law, as it fails to comply with the requirement that such an agreement for commissions be put in writing and signed by the parties" (Opp Mem, pp. 19-20, citing General Obligations Law ["GOL"] § 5-701 [a] [1] ; Kelley v. Bryan Ins. Agency, Inc., 176 A.D.3d 1042, 1044, 113 N.Y.S.3d 94 [2d Dept. 2019], lv denied 35 N.Y.3d 917, 2020 WL 6789216 [2020] ).
"The statute of frauds ... provides that an agreement is void if it is not in writing and ‘subscribed by the party to be charged therewith’ when the agreement ‘[b]y its terms is not to be performed within one year from the making thereof’ " ( Sheehy v. Clifford Chance Rogers & Wells LLP, 3 N.Y.3d 554, 559-560, 789 N.Y.S.2d 456, 822 N.E.2d 763 [2004], quoting GOL § 5-701 [a] [1] ). "[T]o remove an agreement from the application of the statute of frauds, both parties must be able to complete their performance of the contract within one year" ( id. ). GOL § 5-701 (a) (1) "has consistently been interpreted to encompass only those contracts which, by their terms, have absolutely no possibility in fact and law of full performance within one year" ( Air Masters, Inc. v. Bob Mims Heating & A.C. Serv., Inc., 300 A.D.2d 513, 515, 752 N.Y.S.2d 388 [2d Dept. 2002] ).
As observed by Hensel, "absent an agreement establishing a fixed duration, an employment relationship is presumed to be a hiring at will, terminable at any time by either party" ( Sabetay v. Sterling Drug, Inc., 69 N.Y.2d 329, 333, 514 N.Y.S.2d 209, 506 N.E.2d 919 [1987] ). Inasmuch as Hensel was an at-will employee (see e.g. 2019 Offer Letter), any agreement to pay her "commissions earned during the period of ... her employment is capable of performance within one year and does not violate the Statute of Frauds" ( Kieper v. Fusco Group Partners Inc., 152 A.D.3d 1030, 1031, 59 N.Y.S.3d 561 [3d Dept. 2017] [internal quotation marks and citations omitted] [emphasis added]; see also Ryan, 19 N.Y.3d at 14, 945 N.Y.S.2d 593, 968 N.E.2d 947 ; cf. Kelley, 176 A.D.3d at 1044, 113 N.Y.S.3d 94 ["agreement to continue to pay renewal commissions following the termination of an at-will employment relationship"]). Accordingly, Bestpass has not demonstrated its entitlement to dismissal of the claim for breach of contract. B. Promissory Estoppel
Bestpass contends that it is "entitled to summary judgment on [p]laintiff's promissory estoppel claim because [she] has not established a clear and unambiguous promise on behalf of Bestpass and because the alleged promise violates the statute of frauds" (Opp Mem, p. 20).
"To establish a viable cause of action sounding in promissory estoppel, [plaintiff] must allege (1) a clear and unambiguous promise, (2) reasonable and foreseeable reliance by the party to whom the promise is made, and (3) an injury sustained in reliance on the promise" ( Fleet Bank v. Pine Knoll Corp., 290 A.D.2d 792, 797, 736 N.Y.S.2d 737 [3d Dept. 2002] [internal quotation marks and citation omitted]). Further, "[i]f a contract is barred by the statute of frauds, a promissory estoppel claim is viable in the limited set of circumstances where unconscionable injury results from the reliance placed on the alleged promise" ( Castellotti v. Free, 138 A.D.3d 198, 204, 27 N.Y.S.3d 507 [1st Dept. 2016] ).
Hensel submits proof that "Andrews promised [her] that when her job description was fully implemented ... [Bestpass] would develop a formalized commission plan consistent with the terms offered [to] other inside sales executives" and then "promised commissions consistent with the" 2019 Commission Plan (Amended Complaint, ¶¶ 10, 41-45; Hensel Aff., ¶¶ 21-33; NYSCEF Doc No. 65 ["Hensel Reply Aff."], ¶¶ 3-4; Hensel EBT, pp. 57, 95-96). Further, the statute of frauds defense lacks merit for the reasons stated above. Accordingly, Bestpass is not entitled to dismissal of the promissory estoppel claim.
C. Retaliation
Labor Law § 215 prohibits an employer from discharging, penalizing or discriminating against an employee in retaliation for making a complaint that the employer has "violate[d] any provision of [the Labor Law]" or because such employee "has caused to be instituted ... a proceeding under or related to [the Labor Law]."
"To establish a prima facie case of retaliation, a plaintiff must demonstrate that (1) he or she was engaged in a protected activity, (2) the employer was aware of the activity, (3) he or she suffered an adverse employment action, and (4) there was a causal connection between the protected activity and the adverse action" ( Romney v. New York City Tr. Auth., 8 A.D.3d 254, 254, 777 N.Y.S.2d 324 [2d Dept. 2004] [citations omitted]; see Forrest v. Jewish Guild for the Blind, 3 N.Y.3d 295, 312-313, 786 N.Y.S.2d 382, 819 N.E.2d 998 [2004] ). Conversely, "[t]o establish its entitlement to summary judgment in a retaliation case, a defendant must demonstrate that the plaintiff cannot make out a prima facie claim of retaliation or, having offered legitimate, nonretaliatory reasons for the challenged actions, that there exists no triable issue of fact as to whether the defendant's explanations were pretextual" ( Delrio v. City of New York, 91 A.D.3d 900, 901, 938 N.Y.S.2d 149 [2d Dept. 2012] [citations omitted]).
Hensel alleges that Bestpass failed to pay her commissions in violation of the Labor Law, she complained about such nonpayment to Bestpass and later commenced this lawsuit, and Bestpass responded by terminating her employment "for cause" without providing any basis for the adverse action (see Amended Complaint, ¶¶ 50-57). As observed by Bestpass, however, Hensel cannot maintain a cause of action for retaliation under Labor Law § 215 because the predicate Labor Law violations upon which her retaliation claim is based—the alleged nonpayment of commissions in violation of Labor Law § 193 —was not a protected activity under the Labor Law at pertinent times (see Part I [A], supra), and Hensel has failed to allege any other predicate violation (see Tsatskin v. Kordonsky, 189 A.D.3d 1296, 1299, 138 N.Y.S.3d 641 [2d Dept. 2020] ).
The retaliation claim therefore must be dismissed.
CONCLUSION
The Court has considered the parties' remaining arguments but finds them either to be lacking in merit and/or unnecessary to entertain given the disposition reached herein.
ORDERED that plaintiff's motion for summary judgment is granted solely to the extent of dismissing defendant's counterclaim for unjust enrichment, and the motion is otherwise denied; and it is further
ORDERED that, upon searching the record, plaintiff's Labor Law § 193 cause of action is dismissed; and it is further
ORDERED that defendant's cross motion for summary judgment is granted solely to the extent of dismissing plaintiff's cause of action for retaliation under Labor Law § 215, and the motion is otherwise denied.
This constitutes the Decision & Order of the Court.