Opinion
09-14-2021
Neil E. StClair, Claimant, v. Tarik Sansal, and HOMEPEOPLE CORPORATION, Defendants.
Ilana J. Marcus, J.
Claimant Neil E. StClair brought this small claims matter against defendants Tarik Sansal and Homepeople Corporation for failure to pay wages in the amount of $3,250.00 and for a doubling of that amount as damages pursuant to the Freelance Isn't Free Act ("FIFA"). A virtual trial was held over the MS Teams platform on August 12, 2021. Claimant is awarded judgment as follows:
It was undisputed that claimant was hired as an independent contractor performing work as the "Chief Growth Officer" and "Chief Operating Officer" of defendant Homepeople Corporation (referred to hereafter as, "Homepeople"). Claimant and Homepeople entered into a written agreement memorializing his consulting agreement on January 2, 2019. Defendant Sansal signed the agreement as the "President and Chief Executive Officer" of Homepeople. The agreement provides that claimant would be paid $6,500.00 monthly, in biweekly installments. Payments were made without issue until February 2020. Claimant was not paid for his biweekly wages spanning February 1, 2020 through February 15, 2020. Shortly thereafter, claimant filed a complaint with the New York City Office of Labor Policy & Standards (OLPS) alleging a FIFA violation. Claimant also commenced this action.
At the outset, the claims as against defendant Sansal are dismissed. The claims here solely stem from non-payment of wages in accordance with the consulting agreement. There are no cognizable claims against defendant Sansal personally, and thus, this action is dismissed as against him.
As to Homepeople, claimant invokes a violation of FIFA as the basis of his claim. Passed in 2016 and made effective in 2017, FIFA created new protections for New York City's freelance workforce against unlawful practices by employers (see NYC Admin Code § 20-927 et seq). FIFA entitles freelancers to written contracts for any work exceeding $800 during a 120-day period, timely payment, and freedom from retaliation (id.). FIFA further provides, inter alia, the right to file a complaint with OLPS, and court navigation services, which provide assistance with filing lawsuits, sample contracts, and other information (see Freelance Isn't Free Act: Frequently Asked Questions (FAQs), available at https://www1.nyc.gov/assets /dca/downloads/pdf/workers/FAQs-Freelance.pdf [last accessed Sept. 14, 2021]). Companies in breach of FIFA expose themselves to statutory damages, injunctive relief, and attorney's fees (see NYC Admin Code § 20-933).
FIFA violations can be resolved through complaints made to OLPS. Once a party files a complaint, OLPS will notify the hiring party (see Freelance Isn't Free Act: Frequently Asked Questions (FAQs), available at https://www1.nyc.gov/assets/ dca/downloads/pdf/workers/FAQs-Freelance.pdf [last accessed Sept. 14, 2021]). Failure to respond to the complaint within 20 days "creates a rebuttable presumption in any civil action commenced pursuant to this chapter that the hiring party committed the violations alleged in the complaint" (NYC Admin Code § 20-931).
Here, claimant testified that he followed OLPS's procedures by filing a complaint with the agency. In response, OLPS notified Homepeople to respond to the violation. On June 8, 2020, OLPS generated a "Notice of Hiring Party's Failure to Respond to Complaint" ("Notice"). The Notice and provisions of FIFA create a rebuttable presumption here that Homepeople violated the law (see NYC Admin Code § 20-931[d]). Therefore, the burden at trial shifted to Homepeople to demonstrate that it acted lawfully (see id., https://www1.nyc.gov/assets/dca/ downloads/pdf/workers/FAQs-Freelance.pdf [last accessed Sept. 14, 2021]).
In its defense, Homepeople, through its president, Mr. Sansal, did not contest that it failed to pay claimant's disputed wages. At the time of the wage dispute, Homepeople was waiting for an investment to make payroll, which never materialized. Mr. Sansal testified that the company is presently insolvent. However, Mr. Sansal offered that claimant's work was unsatisfactory, which contributed to the non-payment. Mr. Sansal also argued that during the wage dispute, claimant demanded that Homepeople cease the use of his intellectual property and work product. In response, Homepeople did remove some of claimant's work product from the company's literature and media. That, Mr. Sansal argued, was reason not to pay claimant the disputed wages.
In essence, the parties agree that claimant was not paid $3,250.00 due in February 2020 for work claimant performed. The argument that claimant's work was unsatisfactory was not supported by any evidence and not credible given his continued employment. Homepeople's argument that it stopped using claimant's work product does not mean that claimant should not be compensated for that work after the fact. Claimant is therefore entitled to his unpaid wages in the amount of $3,250.00 with interest from February 15, 2020.
At trial, claimant demanded double damages under FIFA. However, the Small Claims Case Record Card indicates the amount in dispute is $3,250.00. As to damages, FIFA provides that in addition to any other damages awarded, a claimant who prevails on a claim alleging an unlawful payment practice "is entitled to an award for double damages, injunctive relief and other such remedies as may be appropriate." ((NYC Admin Code § 20-933).
The purpose of FIFA is to "protect freelance workers who were denied compensation by inter alia imposing double damages on companies that breached agreements" (Turner v Sheppard Grain Enterprises, LLC, 68 Misc.3d 385 [Sup Ct 2020]). Double damages provide a punitive recourse as a policy measure to ensure lawful and timely payments to freelancers. Honoring that statutory measure is appropriate here even though the ad damnum clause of the Case Record Card is only $3,250.00.
Small Claims Court is not bound by the rules of formal practice, procedure or pleadings (see CCA § 1804; Wai-Sun Chen v Unique Food & Vending Services, Inc., 2002 NY Slip Op 40408(U) [App Term 2nd and 11th Jud Dists, 2002]). The court is charged with following the rules and principles of substantive law (see id.). Homepeople cannot claim prejudice or surprise concerning the application of FIFA and its double damages provision. This controversy was initially referred to OLPS. OLPS notified Homepeople about the violation claim and Homepeople failed to respond. OLPS then sent the Notice to Homepeople. As such, this court, in its discretion, shall conform the pleadings to the proof and award double damages (see CPLR § 3025(c)).
Accordingly, it is hereby ORDERED, that claimant is awarded a judgment in the amount of $6,500.00, with interest from February 15, 2020.
This constitutes the decision and order of the court.