Zachary v. BG Retail, LLC

Background

Tova Zachary brought a proposed class action against her former employer, BG Retail, LLC. She alleged that she worked as a manual worker from approximately February through November 2018 and performed tasks including stocking shelves, moving and unpacking inventory, and organizing merchandise. She alleged that BG Retail paid her and similarly situated manual workers every other week, even though Section 191(1)(a) of the New York Labor Law requires weekly payment unless the state labor agency authorizes a less frequent schedule.

Zachary also alleged that BG Retail did not give her a wage notice at hiring or afterward. Section 195(1)(a) requires notice of information including the employee’s pay rate and regular payday. She sought relief under Sections 191 and 195 of the New York Labor Law. The proposed class covered New York workers who qualified as manual laborers and were employed by BG Retail between April 29, 2016, and the present.

BG Retail moved to dismiss under Rules 12(b)(1) and 12(b)(6), which address subject-matter jurisdiction and whether a complaint states a legally sufficient claim. Alternatively, it moved under Rule 12(f) to strike the class allegations.

Standing

The court held that Zachary had standing to bring the late-payment claim. Standing requires a concrete injury connected to the defendant’s conduct that a court can remedy. The court found that temporarily losing access to wages, including their time value, was a concrete injury. Zachary also alleged that the delayed payments interfered with her ability to pay for groceries, rent, utilities, and other ordinary expenses.

The court reached the opposite conclusion for the wage-notice claim. It held that Zachary alleged only that BG Retail failed to provide the required notice, without alleging a concrete downstream harm caused by that failure. The court rejected an argument raised in her opposition papers that the notice would have alerted her to the allegedly unlawful payment schedule because that theory was not alleged in the amended complaint and the statute did not require the notice to identify the legally required weekly schedule for manual workers. The Section 195 claim therefore had to be dismissed.

Private Right to Sue for Late Payments

BG Retail argued that Section 191 did not give employees an express or implied private right to sue. The court disagreed. New York appellate courts had divided over whether Sections 191 and 198 allow a worker to sue for wages paid late. One appellate department had held that a late payment is an underpayment because the worker did not receive the wages when the law required; another had held that receiving the full wages late is not an underpayment.

The court predicted that New York’s highest court would likely follow the first approach. It reasoned that Section 198 permits employees to bring wage claims for underpayments violating Article 6 of the New York Labor Law, which includes Section 191’s payment-frequency requirements. The court also concluded that the statute’s language and legislative purposes support a private claim because delayed payment deprives workers of money’s time value and because the law is intended to deter wage violations and protect workers who depend on their wages.

The court further held that a private right of action could be implied under New York law. It found that manual workers are the people Section 191 was designed to protect, that allowing private suits promotes the statute’s purpose, and that such suits are consistent with the statutory scheme. The Section 191 claim therefore may proceed.

The court separately denied BG Retail’s request for an early ruling limiting the potential damages to liquidated damages based on the lost time value of the wages. It found that request premature at the motion-to-dismiss stage.

Class Allegations

BG Retail argued that the proposed class was an impermissible “fail-safe” class—one defined in a way that would make membership depend on proving the defendant’s liability. The court denied the motion to strike. It held that the relevant issue for BG Retail’s liability was whether it timely paid its manual workers, while whether particular workers were manual workers could bear on commonality and predominance under Rule 23, the requirements governing class certification.

Because BG Retail’s arguments overlapped with issues better addressed on a fuller factual record at class certification, the court found the motion to strike procedurally premature. It stated that BG Retail could raise the arguments again, if appropriate, at the class-certification stage.

Disposition

The court granted in part and denied in part BG Retail’s motion to dismiss. The Section 191 late-payment claim may proceed, the Section 195 wage-notice claim is dismissed, and the motion to strike the class allegations is denied. BG Retail was ordered to answer the amended complaint by February 26, 2024. The clerk was instructed to terminate the motion.