Jaspan Schlesinger LLP Defeats Claim by Client’s Employee for Unpaid Wages
Date: August 7th, 2017

Jaspan Schlesinger successfully defended its clients in a breach of contract claim by a former employee who alleged that he was owed $320,000 in unpaid wages.  In Menghi v. Sterling Aircraft Materials, et al.(Suffolk Supreme Index No. 610716/16), the employee, who retired in 2015, commenced an action alleging that in 2009 the company improperly changed the formula it had used since 1989 to calculate his commissions and, as a result, owed him $320,000 – – the difference between the amount he was paid and what would have been paid under the original formula.  In addition to naming the company as a defendant, the employee sued its owners alleging, inter alia, that they owed him a fiduciary duty because of his years of service to the company and that they tortiously interfered with his original commission agreement by changing the commission formula.

Jaspan Schlesinger LLP moved to dismiss the complaint on several grounds including the fact that the employee did not have a written employment agreement for a specified term and was therefore an “employee at will.”  As an employee at will, the terms of his employment could be changed at any time and that by choosing to remain with the company after the change he agreed to the new commission plan.

The Court in granting the motion held that the employee’s breach of contract claim failed because the oral commission agreement he was relying upon violated the Statue of Frauds and was therefore void.  Since he did not have a valid enforceable contract the employee’s additional claims for unpaid wages under the New York Labor Law and for tortious interference with contract also failed.  With respect to the claims against the individual owners, the Court found that the employee failed to allege the existence of a fiduciary relationship since a conventional business relationship without more was not sufficient to create such a relationship.

Finally, the Court also dismissed plaintiff’s causes of action for an accounting and imposition of a constructive trust finding that the allegations in the complaint failed to state a cause of action.

Jaspan Schlesinger partner, Stanley A. Camhi, represented the defendants.

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