New York State Court Finds Employer Liable for Breaching Employment Agreement

In Kleinman v. Blue Ridge Foods, LLC, 32 Misc. 3d 1219(A), 934 N.Y.S.2d 34 (Sup. Ct. Kings County, July 7, 2011)[1], the King County Supreme Court granted an employee’s motion for summary judgment on his breach of contract claims against his former employer.

In this case, pursuant to the terms of an employment agreement, Defendants hired Plaintiff as their Chief Executive Officer for a term of three (3) years.  If Defendants wanted to discharge Plaintiff earlier, a prior written notice must be delivered to Plaintiff either personally or by mail.  In addition, in the event Plaintiff’s early discharge was without “cause,” Plaintiff would be entitled to additional benefits, including a severance payment equal to twelve (12) months’ salary.

After only four (4) months, with no prior written notice, Defendants abruptly discharged Plaintiff’s employment.  His discharge was communicated to him both verbally and in writing on that day. Plaintiff then sued, asserting that, in accordance with his employment contract, since his discharge was without “cause,” he was owed the severance and additional benefits.

While Defendants basically conceded that they failed to meet any of the “for cause” discharge provisions provided for in the agreement, they instead contended that Plaintiff could not recover the compensation he sought because the employment contract was unenforceable.  Defendants claimed that Plaintiff defrauded them by misstating his work experience and “was in completely over his head and was at no time able to perform the job for which he was hired.”  They argued that the employment contract was thus void and unenforceable because they were induced to enter into it by Plaintiff’s fraudulent misrepresentations as to his title and experience at his prior employment.

However, the court held that Defendants failed to establish a justifiable reliance on the purported misrepresentations, and noted a crucial factor was that Defendants failed to adequately verify Plaintiff’s experience even though the means to do so were at their disposal.

The court thus ruled that Defendants terminated Plaintiff without “cause,” as that term is defined in his employment contract.  Further, the court found that Defendants breached the employment contract, as they failed to provide Plaintiff with the contractual notice and cure period.  Therefore, the court held that Plaintiff was entitled to his actual damages, interest, attorney’s fees, and costs under Section 198 and other provisions of Labor Law article 6, and the statutory liquidated damages under Labor Law § 198.

If you believe that your former employer has breached an employment agreement with you, it’s always smart to immediately consult with a New York employment agreement attorney to preserve your legal rights. Please call the Law Office of Yuriy Moshes, P.C. at (888) 445-0234 for a free consultation with our experienced team of employment attorneys.

[1] Cited and followed by Weinstock v Merisel, 2013 N.Y. Misc. LEXIS 6039, 2013 NY Slip Op 33243(U) (Sup. Ct. NY County April 22, 2013).