MOLNAR v. GREENTECH CAPITAL ADVISORS (2022)

Order, Supreme Court, New York County (Jennifer Schecter, J.), entered October 6, 2021, which, to the extent appealed from as limited by the briefs, granted defendants’ motion to dismiss plaintiff's claim for violation of article 6 of the New York Labor Law, unanimously affirmed, without costs.

Plaintiff failed to state a claim for violation of article 6 of the Labor Law, as her equity-based compensation did not constitute “wages” within the meaning of Labor Law § 190(1).  The ultimate value of plaintiff's equity-based compensation was contingent on the company's future market value, and thus, was dependent, at least in part, on the financial success of the business enterprise.  As a result, the compensation that plaintiff seeks to recover is a form of incentive compensation in the nature of a profit-sharing arrangement.  However, Labor Law article 6 contemplates an entirely different type of compensation – that is, compensation directly related to an employee's individual performance, as distinct from compensation based on the performance of the entire business enterprise (see Matter of Lerner v. Credit Suisse Sec. (USA) LLC, 193 A.D.3d 649, 650, 147 N.Y.S.3d 31 [1st Dept. 2021], lv. denied 38 N.Y.3d 902, 2022 WL 839281 [2022];  Guiry v. Goldman, Sachs & Co., 31 A.D.3d 70, 72, 814 N.Y.S.2d 617 [1st Dept. 2006]).