Lax & Neville is Successful in Defending a Hedge Fund's Motion for Summary That Sought to Dismiss a Managing Director's Claims, Including for Liquidated Damages, Prejudgment Interest, and Attorneys' F
Lax & Neville represented a managing director in a dispute against Kylin Management LLC, a hedge fund, before the United Stated District Court for the Southern District wherein he alleged that the hedge fund unlawfully withheld millions of dollars of his earned compensation in violation of his employment contract, New York Labor Law (NYLL), and various other claims. In motion for summary judgment, the hedge fund sought to dismiss each of the managing director's claims on various grounds, but primarily argued that the NYLL claim should be dismissed on the ground that carried interest and performance bonuses are not "wages" under the statute. On July 31, 2019, the United Stated District Court for the Southern District denied the hedge fund's motion for summary judgment. Relying upon clear precedent in the New York Court of Appeals and Second Circuit, the Court held that "although 'incentive pay' like the disputed bonus amounts in this case 'does not constitute a wage until it is actually earned and vested,' when it is 'guaranteed under [a] formula to be a percentage of the revenues . . . generated' and 'not left to [the employer's] discretion,' it constitutes protected 'wages' under the Labor Law." (quoting Reilly v. Natwest Markets Grp., 181 F.3d 253, 264-65 (2d Cir. 1999)). The District Court allowed the managing director's claims, including for liquidated damages, prejudgment interest, and attorneys' fees under the NYLL, to proceed and ordered the parties to prepare for trial.
Courts and FINRA arbitration panels have considered the applicability of the New York Labor Law to brokers and other financial services professionals in several recent cases involving attempts by financial services firms to evade deferred compensation and bonus obligations to their former employees. Lax & Neville has extensive experience helping professionals in the financial services industry enforce their rights under the New York Labor Law in FINRA, state and federal court, and AAA and JAMS arbitrations. For a free consultation, please call (212) 696-1999.