Adler v. Payward, Inc.

Background

Robert C. Adler formerly worked for Payward, Inc., doing business as Kraken, on its Institutional Sales and Trading Business, referred to as the Trading Desk. Payward terminated Adler without cause at the end of May 2018 and did not pay him a bonus.

A written employment agreement stated that Adler would receive a base salary of $125,000 per year, stock options, benefits, and, based on prior discussions, an entitlement to a bonus equal to 3.5% of the Trading Desk Profit. The agreement also stated that Payward expected to supplement the letter with additional mutually agreed terms about the bonus calculation and targets. The parties did not appear to execute a separate bonus document.

Adler and Payward disagreed about how to calculate Trading Desk Profit, including the starting balance and the cost of capital. Adler sued for breach of contract, quantum meruit, and breach of the implied covenant of good faith and fair dealing. He also sought double damages under New York Labor Law § 191.

Summary Judgment Standards and Contract Claim

Payward moved for summary judgment under Rule 56. Summary judgment is appropriate only when there is no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law.

The court denied summary judgment on Adler’s breach-of-contract claim. It concluded that substantial factual disputes existed about the bonus, including the meaning of “Trading Desk Profit,” the calculation method, and the amount of any bonus. The court noted evidence concerning the parties’ prior discussions, their course of performance, communications about the calculations, methods used for other employee bonuses, and the use of overall profit in calculating bonuses.

Because the agreement showed an intent to provide Adler with a bonus and the disputed terms could potentially be clarified through outside evidence, the court held that a jury was required to determine the bonus amount. Payward’s argument that the agreement was merely an unenforceable agreement to agree therefore did not justify summary judgment.

Quantum Meruit

The court also denied summary judgment on Adler’s quantum meruit claim. Quantum meruit is a claim seeking the reasonable value of services when contract recovery is disputed. The court held that because there was a bona fide dispute about the enforceability or scope of the bonus agreement, Adler could pursue quantum meruit in the alternative to his contract claim.

New York Labor Law Double Damages

The court granted Payward summary judgment on Adler’s claim for double damages under New York Labor Law § 191. That provision applies to qualifying commission salespeople, and the opinion states that Adler acknowledged he was not a commissioned salesperson and held a management position. The court therefore held that he was not entitled to double his damages under the statute.

Implied Covenant of Good Faith and Fair Dealing

The court granted Payward summary judgment on Adler’s claim for breach of the implied covenant of good faith and fair dealing. The court explained that Adler’s employment was at will, meaning Payward had the legal right to terminate the employment at any time. Because there was no factual dispute about the at-will nature of the employment, the court held that Adler’s claim failed as a matter of law.

Disposition

Payward’s motion for summary judgment was denied with respect to the breach-of-contract and quantum meruit claims. Summary judgment was granted with respect to the New York Labor Law and breach-of-the-implied-covenant claims. The court also scheduled a conference with the parties and principals for April 10, 2024.