Phoenix v. Cushman & Wakefield U.S., Inc.

Background

William Phoenix brought a proposed class action against Cushman & Wakefield U.S., Inc. He alleges that he worked as a maintenance technician at multiple WeWork locations in Manhattan from about June 2023 through about January 2024. According to the complaint, more than 25% of his responsibilities involved manual labor, including replacing toilet parts, cleaning and maintaining appliances, fixing doors, replacing HVAC filters, and painting and spackling.

Phoenix alleges that Cushman & Wakefield paid him every two weeks even though New York Labor Law Section 191 requires certain manual workers to be paid weekly. He claims that the delayed payments temporarily deprived him of money he could otherwise have invested, used, or put to work earning interest. The complaint asserts one claim under Section 191.

Defendant’s motions

Cushman & Wakefield moved to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Rule 12(b)(1) concerns the court’s subject-matter jurisdiction, while Rule 12(b)(6) concerns whether a complaint states a legally sufficient claim. The company argued that Sections 191 and 198 of the New York Labor Law do not give employees a private right to sue over late payment of wages. It also argued that Phoenix lacked damages sufficient to support jurisdiction under the Class Action Fairness Act because he relied on statutory liquidated damages.

Alternatively, the company moved under Rules 12(f) and 23(d) to strike Phoenix’s proposed class allegations. It argued that the proposed class was an improper “fail-safe” class and would not produce common answers sufficient to resolve the case. Finally, it asked the court to administratively close the case without prejudice while awaiting a possible decision from New York’s highest court concerning conflicting appellate decisions about Section 191.

Private right of action under New York law

The court declined to dismiss the case for lack of a private right of action. New York Labor Law Section 191(1)(a) requires covered manual workers to be paid weekly and no later than seven calendar days after the end of the week in which the wages were earned. Section 198(1-a) allows an employee paid less than the amount required under Article 6 of the New York Labor Law to bring a wage claim and seek unpaid wages, attorney’s fees, interest, and—unless the employer proves a good-faith basis for compliance—liquidated damages.

The court described a disagreement between New York’s intermediate appellate courts. In one decision, the First Department held that these provisions create a private right of action for untimely wage payments. In another, the Second Department held that they do not. New York’s highest court had not resolved the disagreement.

The court followed the reasoning of the substantial majority of federal courts in its district and concluded that manual workers have both an express and an implied private right of action to enforce Section 191(1)(a). The court also held that this right includes the remedy provided by Section 198(1-a). It therefore denied the portion of the motion based on the alleged absence of a private right of action.

Subject-matter jurisdiction

The court also denied the jurisdictional challenge. Cushman & Wakefield argued that liquidated damages would violate due process and therefore could not be counted toward the amount in controversy under the Class Action Fairness Act. The court found that argument premature because no damages had yet been awarded. At this stage, there was no factual record showing the amount of any award, the degree of misconduct, or the relationship between the actual harm and any liquidated-damages award.

The court stated that the company could renew the jurisdiction argument after developing an adequate factual basis. It therefore denied the motion to dismiss for lack of subject-matter jurisdiction at this stage.

Proposed class allegations

The court denied the motion to strike the proposed class allegations. It held that questions about whether the proposed class was a “fail-safe” class and whether the class satisfied Rule 23’s commonality and predominance requirements were better addressed at the class-certification stage, after a more complete factual record had been developed. The company could revisit those arguments later.

Administrative closure and disposition

The court declined to administratively close the case while waiting for possible guidance from New York’s highest court. It found that Cushman & Wakefield had not provided a persuasive reason to delay the litigation and noted that a future decision might be far off or might never occur.

The court denied the defendant’s motion in full. It directed Cushman & Wakefield to answer the complaint within 14 days and stated that it would separately issue a notice of an initial conference. Judge Halpern’s order did not decide whether Phoenix or the proposed class would ultimately prevail on the Section 191 claim; it allowed the action to continue.