Contract Consideration | FLSA Fees | High School Teacher

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No Consideration – No Contract

No Consideration – No Contract

An agreement between a husband and wife that obligated the husband to help pay the rent of their grown and gainfully employed children is an unenforceable contract, a Nassau County Supreme Court Judge ruled. In J.L. v. J.L., the Court concluded that the so called “Rent Agreement” that the parties entered into three years before starting divorce proceedings lacked the essential contract ingredient of “consideration.”

The Court noted it is “well-settled that a valid contract requires certain essential elements, one of which is consideration. Consideration for a promise is (a) an act other than a promise, or (b) a forbearance, or (c) the creation, modification or destruction of a legal relation, or (d) a return promise, bargained for and given in exchange for the promise. And while it is true that the beneficiaries of the agreement may be third parties (i.e., the daughter and the son), and that a party to the contract may bind himself to obligations he would otherwise not legally be required to undertake, the contract must nevertheless evince the action and/or forbearance to be undertaken by each of the parties to the contract (i.e., Plaintiff/Wife and Defendant/Husband), as well as the bargained-for exchange of value or benefit to each.”

The March 2014 agreement said the husband had to pay each child $1,900 every month to be put solely toward rent for their respective Manhattan apartments. The payments would end with whatever happened first: the children’s marriages; his or her cohabitation “with a romantic partner” for six months; or their 30th birthdays. The agreement’s preamble said the parties believed the contract would “enhance and encourage a harmonious marital relationship” and the parties did not “presently intend to separate or divorce.” Two months after the agreement was executed, in May 2014, the wife filed for divorce on no fault grounds. Around February, the husband sent a $10,000 check to each child and said the lump sums represented his last payment to them. The wife then moved to compel the husband to comply with the terms of the agreement.

The Court recognized that the husband and wife were the sole parties to the rent agreement, “which makes clear that but for the agreement” the husband “was under no legal obligation to pay the daughter’s and the son’s monthly rent, as they were adults, years earlier emancipated.” The Court also recognized that although the wife was a party, “the agreement insofar as it concerns the rent payments does not obligate her to do or give up anything.” Instead it only “binds and obligates” the husband to pay a monthly sum to his two adult children, specifically for rent, and for a specified period of time. The Court found that “the terms of the agreement fail to identify any value to be conferred upon” the husband “as the quid pro quo for his undertaking the payment obligation. Not only is the articulated value or benefit to Defendant/Husband plainly absent from the terms of the agreement, it also cannot be clearly discerned from the surrounding language contained in the ‘WHEREAS’ clauses upon which the agreement is arguably premised. To that point, one of the referenced clauses specifically states, ‘WHEREAS, the parties do not presently intend to separate or divorce…’ which contradicts Plaintiff/Wife’s claim that the agreement served as a forbearance of her commencing a divorce action. Furthermore, despite Plaintiff/Wife’s forbearance claims, she nevertheless commenced a divorce action approximately two (2) months following the execution of the agreement.” The Court concluded that “the essential contract element of consideration is conspicuously absent from the parties’ March 14, 2014 ‘Rent Agreement’, thereby rendering it a one-sided, invalid, and unenforceable contract.”

FLSA Does Not Allow For Reimbursement of Expert Fees

FLSA Does Not Allow For Reimbursement of Expert Fees

In Gortat v Capala Brothers, Inc. 795 F.3d 292 (2d Cir. 2015), the Second Circuit Court of Appeals recently reversed a federal Court’s award of expert fees to former employees against their employer under the federal Fair Labor Standards Act (FLSA), holding that the FLSA does not authorize reimbursement of expert fees to a prevailing plaintiff.

According to the decision, after nearly seven years of litigation between the former employees and the employer, the federal District Court for the Eastern District of New York awarded the former employees $514,284.00 in attorneys’ fees and $68,294.50 in costs. Of that latter amount, it awarded $10,425 to reimburse counsel for costs incurred retaining an expert accountant needed to prove their case.

The underlying litigation began in 2007, when a complaint was filed seeking compensation under the FLSA and New York’s Labor Law (NYLL) for unpaid regular and overtime wages, liquidated damages, punitive damages, costs, and attorneys’ fees. The employer answered the complaint and filed counterclaims against several of the former employees for negligence, conversion, breach of fiduciary duty, and tortious interference.

The case proceeded to trial and after a successful jury verdict on liability, the District Court awarded attorneys’ fees and costs, including the expert fees.

On appeal, the employer argued, among other things, that the award of expert fees was not supported by the federal statute. Although the Court of Appeals recognized that the standard for reviewing the amount of any award of attorneys’ fees and costs is one of “an abuse of discretion” by the District Court, the “question whether fees or costs may be awarded under a given statute, however, is one of statutory interpretation that we review de novo.” “De novo” is Latin for “anew” and under a “de novo review” an appellate court acts as if it were considering the question for the first time, affording no deference to the decision below.

The FLSA provides that “[t]he court … shall, in addition to any judgment awarded to the … plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action.”

Here, the Court of Appeals concluded “that this provision does not authorize district courts to award costs reimbursing plaintiffs for expert fees.” The Court reasoned that the “Supreme Court has made clear on multiple occasions that, absent explicit statutory authorization, a district court may not award reimbursement for expert fees beyond the allowances authorized by” the federal code that allows for reimbursement of travel and witness fees, generally. The Court of Appeals did, however, remand the case to the District Court “for the limited purpose of determining whether the NYLL provides a basis for recovery of these expert fees and, if so, whether to award them on that basis.”

High School Teacher Gets Another Day In Court

High School Teacher Gets Another Day In Court

In Vega v. Hempstead Union Free School District, the Second Circuit Court of Appeals held, among other things, that Carlos Vega, a high school teacher, had pleaded a plausible discrimination claim against the School District under Title VII and Section 1983.

Title VII of the Civil Rights Act of 1964 protects individuals against employment discrimination on the bases of race and color, as well as national origin, sex, and
religion. It applies to employers with 15 or more employees, including state and local governments. It also applies to employment agencies and to labor organizations, as well as to the federal government.

“Section 1983” refers to 42 U.S.C. §1983, the federal statute that enables someone to file a civil action for deprivation of constitutional and federal statutory rights by persons acting under “color of law.” It is part of the Civil Rights Act of 1871 and was formerly enacted as part of the Ku Klux Klan Act of 1871, originally designed to combat post-Civil War racial violence in the Southern states. Now part of the Civil Rights Act, section 1983 is the primary means of enforcing all constitutional rights.

In reversing the federal District Court’s judgment dismissing the pleadings, the Second Circuit concluded that Vega “pleaded a plausible discrimination claim under Title VII and § 1983, based on his allegation that the District assigned him classes with higher numbers of Spanish-speaking students and, in doing so, assigned him a disproportionate workload.”

The Court found that “Vega has plausibly alleged that his assignment to classes with increased numbers of Spanish-speaking students was an ‘adverse employment action’ taken ‘because of’ his Hispanic ethnicity. First, Vega alleges that he was forced to spend disproportionately more time preparing for his classes and therefore experienced a material increase in his responsibilities without additional compensation. He contends that these assignments required him to do ‘twice as much work’ and that he was assigned class preparations on a basis that exceed ‘District policy. We have previously held that the assignment of ‘an excessive workload as a result of ‘discriminatory intent’ can be an adverse employment action because it is ‘more disruptive than a mere inconvenience or an alteration of job responsibilities.’ Second, Vega has also plausibly alleged that the adverse action was taken ‘because of’ his Hispanic ethnicity, that is, that his Hispanic ethnicity was a motivating factor in the employment decisions. He contends that he was assigned a large percentage of Spanish-speaking students because he is Hispanic and bilingual, while his similarly-situated co-workers were not assigned additional work. Vega’s other allegations of discrimination, even if they do not independently constitute adverse employment actions, provide ‘relevant background evidence’ by shedding light on Defendant’s motivation and thus bolster his claim that Defendants treated him differently because of his ethnicity.” For example, the District placed a ‘University of Puerto Rico’ banner outside his classroom and attempted to transfer him to a Hispanic principal’s school. These actions are plausibly connected to Vega’s Hispanic background and therefore provide a contextual basis for inferring discrimination. Vega has thus plausibly alleged that his Hispanic background was a ‘motivating factor’ contributing to his being assigned extra work. The District may contend that Vega was assigned a disproportionate number of Spanish-speaking students solely because of his language ability, and not because of his Hispanic background, but these competing explanations are better evaluated at the summary judgment stage or beyond, and not on a motion for judgment on the pleadings.”

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