Espinal v. Sephora USA, Inc.

Background

Rosalba Espinal and Juan Rivera brought a proposed class action against their former employer, Sephora USA, Inc. Their only claim was that Sephora violated New York Labor Law § 191(1)(a)(i) by paying manual workers every two weeks instead of weekly. Espinal alleged that she worked as a Beauty Advisor at Sephora’s Lexington Avenue location in Manhattan from January 2020 through March 2021. Rivera alleged that he worked as an Operations Associate at a Sephora store in Times Square in Manhattan from November 2017 through July 2021.

The plaintiffs alleged that the delayed payments temporarily deprived them and similarly situated employees of the use of their money. They sought liquidated damages measured by the late-paid wages, along with attorneys’ fees, costs, and interest.

Procedural History

Sephora moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), which concerns jurisdiction and standing, and Rule 12(b)(6), which tests whether a complaint states a legally sufficient claim. Sephora argued that the plaintiffs lacked the required injury for standing and that New York law provided neither an express nor an implied private right to sue over violations of the weekly-pay requirement.

The court had previously adopted a magistrate judge’s recommendation rejecting Sephora’s earlier motion to dismiss. After the Second Department of New York’s decision in Grant reached the opposite conclusion from the First Department’s decision in Vega, Magistrate Judge Gabriel W. Gorenstein directed the parties to address the private-right-of-action issue again. His July 31, 2024 Report and Recommendation advised granting Sephora’s motion to dismiss. The plaintiffs objected, and Sephora responded.

Legal Issue

The issue before Judge Engelmayer was whether New York Labor Law gives employees an express or implied private right of action to seek relief when an employer pays the full wages late in violation of the weekly-payment requirement. The opinion states that the parties did not dispute, for purposes of the motion, that the amended complaint alleged violations of § 191. The court described the availability of a private lawsuit as the sole issue before it.

Court’s Analysis

New York appellate courts were divided. The First Department held in Vega that employees could sue over late wage payments. It reasoned that the New York Labor Law permits a wage claim for an “underpayment,” and that paying wages late means paying less than what the law requires because payment on time is part of what is required. Vega also relied on the federal Fair Labor Standards Act, which permits liquidated damages for delayed payment of wages.

The Second Department later reached the opposite conclusion in Grant. It reasoned that an employee who eventually receives the full agreed-upon amount has not received a lesser amount of earnings and therefore has not experienced an “underpayment.” It also concluded that the statute’s legislative history and other enforcement mechanisms did not support a private lawsuit for payment-timing violations.

Because New York’s intermediate appellate courts disagreed, Judge Engelmayer predicted how New York’s highest court would resolve the issue. He found the First Department’s reasoning more persuasive and noted that most federal courts considering the issue after Grant had also recognized a private right of action.

The court relied substantially on the relationship between the New York Labor Law and the federal Fair Labor Standards Act. It reasoned that New York’s liquidated-damages provisions were modeled on and intended to track the federal law, and that the federal statute has long been understood to permit recovery for delayed wage payments. The court found no evidence that the New York Legislature intended to depart from that federal treatment.

The court also concluded that the statutory text, history, and purpose supported allowing employees to enforce the weekly-pay requirement. It reasoned that the law was designed to protect employees’ right to receive wages and that weekly payment recognizes the real value of receiving money sooner rather than later. The court further noted that the Legislature had amended another wage provision after Vega but had not changed the interpretation of § 191 at issue here.

Judge Engelmayer separately held that the statute provides an implied private right of action. Applying New York’s three-part test, he agreed that the plaintiffs were members of the class the statute was intended to protect and that private enforcement would advance the law’s purpose. He disagreed that other enforcement mechanisms made a private lawsuit inconsistent with the statutory scheme, distinguishing a New York Court of Appeals decision involving a different wage provision.

Disposition

The court declined to adopt the Report and Recommendation and denied Sephora’s motion to dismiss. It held that New York Labor Law provides employees both an express and an implied private right of action to enforce the right to weekly wage payments. The action remains under Judge Gorenstein’s pretrial supervision, and the clerk was directed to terminate all pending motions.