15-3104 Goldberg v. Jacquet



### UNITED STATES COURT OF APPEALS **FOR THE SECOND CIRCUIT**



## SUMMARY ORDER

**R ULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT**  **. C**  **ITATION TO A SUMMARY ORDER FILED**
**ON OR AFTER J** **ANUARY 1,**  **2007, IS PERMITTED AND IS GOVERNED BY**  **F EDERAL**  **R ULE OF**  **A PPELLATE**  **P ROCEDURE**  **32.1 AND THIS COURT**  **’ S**  **L OCAL**  **R ULE**  **32.1.1. W**  **HEN CITING A SUMMARY ORDER IN A**
**DOCUMENT FILED WITH THIS COURT ,**  **A PARTY MUST CITE EITHER THE F**  **EDERAL A** **PPENDIX OR AN**
**ELECTRONIC DATABASE (**  **WITH THE NOTATION “**  **SUMMARY ORDER ”).**  **A PARTY CITING A SUMMARY ORDER MUST** 
**SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL .**  **At a stated term of the United States Court of Appeals** 1 **for the Second Circuit, held at the Thurgood Marshall United** 2 **States Courthouse, 40 Foley Square, in the City of New York,** 3 **on the 30 th** **day of June, two thousand sixteen.** 4 5 **PRESENT: DENNIS JACOBS,** 6 **GUIDO CALABRESI,** 7 **REENA RAGGI,** 8 **Circuit Judges**

**.** 9 10 - - - - - - - - - - - - - - - - - - - -X 11 **MARC GOLDBERG,** 12 **Plaintiff-Appellant ,**  13 14 **-v.- 15-3104** 15 16 **ERNEST K. JACQUET,** 17 **Defendant-Appellee**

**.** 18 - - - - - - - - - - - - - - - - - - - -X 19 20 **FOR APPELLANT:** ARIEL Y. GRAFF, The Ottinger 21 Firm, P.C., New York, New York. 22 23 **FOR APPELLEE:** HARLAN M. LAZARUS, Lazarus & 24 Lazarus, P.C., New York, New 25 York. 26 27

1Appeal from a judgment of the United States District 1 Court for the Southern District of New York (Crotty, J. ). 2 3 **UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED** 4 **AND DECREED**that the judgment of the district court be 5
**AFFIRMED**

. 6 7 Plaintiff Marc Goldberg appeals from the judgment of 8 the United States District Court for the Southern District 9 of New York (Crotty, J. ), granting summary judgment in favor 10 of defendant Ernest K. Jacquet

. The plaintiff argues that 11 the district court erred by ruling that his claims are 12 outside the scope of New York Labor Law (“NYLL”) §§ 193 and 13 198-b. We review a grant of summary judgment de novo. See 14 Delaney v. Bank of Am. Corp. , 766 F.3d 163, 167 (2d Cir. 15 2014). We assume the parties’ familiarity with the 16 underlying facts, the procedural history, and the issues 17 presented for review. 18 19 1. Under NYLL § 193(1)(b), “[n]o employer shall make 20 any deduction from the wages of an employee, except 21 deductions which . . . are expressly authorized in writing 22 by the employee and are for the benefit of the employee.” 23 In order to state a claim for a violation of NYLL § 193, a 24 plaintiff must allege a specific deduction from wages and 25 not merely a failure to pay wages. See Kletter v. Fleming
, 26 32 A.D.3d 566, 567 (N.Y. App. Div. 3d Dep’t 2006). 27 28 A “‘deduction’ is more targeted and direct than the 29 wholesale withholding” of wages and “New York courts 30 recognize that the purpose of section 193 is to ‘place the 31 risk of loss for such things as damaged or spoiled 32 merchandise on the employer rather than the employee.’” 33 Gold v. Am. Med. Alert Corp. , 2015 WL 4887525, at *5 34 (S.D.N.Y. Aug. 17, 2015) (quoting Hudacs v. Frito–Lay, Inc.
, 35 90 N.Y.2d 342, 349 (1997)). The district court correctly 36 ruled that although Goldberg did not receive wages to which 37 he was entitled, his wages were not reduced in the manner 38 prohibited by NYLL § 193. 1 39 40

1 Wholesale withholding of wages is covered by NYLL § 191, which the parties agree does not apply to the plaintiff because he was an executive and therefore exempt from this provision.

22. Goldberg argues that because he was under threat of 1 termination if he refused to accept lower wages, his 2 employer violated NYLL § 198-b(2), which provides that it is 3 “unlawful for any person . . . to request, demand, or 4 receive . . . a return, donation or contribution of any part 5 or all of [an] employee’s wages [or] salary, . . . upon the 6 statement, representation, or understanding that failure to 7 comply with such request or demand will prevent such 8 employee from procuring or retaining employment.” 9 10 As the district court recognized, this is a novel 11 application of the so-called “kickback” statute because the 12 threatened termination was not coercive in the usual sense; 13 rather, it was a result of the company’s financial trouble. 14 The company’s distress caused the company to ask the 15 management team, including the plaintiff, to accept a pay 16 cut, and they agreed to do so. The company was never able 17 to secure additional funding to pay back its employees, and 18 eventually ceased all business operations. The “threat of 19 termination” was not a threat as such, but instead was the 20 obvious consequence of what would happen if the company 21 folded due to its financial trouble. Under these 22 circumstances, it cannot be expected that the reach of NYLL 23 § 198-b would extend to the conduct at issue. 2 24 25 For the foregoing reasons, and finding no merit in the 26 plaintiff’s other arguments, we hereby **AFFIRM** the judgment 27 of the district court. 28 29 FOR THE COURT: 30 CATHERINE O’HAGAN WOLFE, CLERK 31 32 33 34

2 Notably, the defendant was not the plaintiff’s employer; rather, the defendant was a majority investor in, and non-executive Chairman of, Passport Brands, Inc., which was the plaintiff’s actual employer. The parties do not address whether the economic realities of the defendant’s role at Passport were such that he qualified as the plaintiff’s “employer” for NYLL purposes. See, e.g. , Bonito v. Avalon Partners, Inc. , 106 A.D.3d 625, 626 (N.Y. App. Div. 1st Dep’t 2013).

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