Stevens & Company, LLC v. Tang

Background

Stevens & Company, LLC, doing business as The Chef Agency (TCA), sued Nicole Miller and Jiaqi Tang. TCA alleged that Miller and Tang operated a competing business in violation of agreements they had signed with TCA. Miller asserted counterclaims against TCA for breach of contract and retaliation under Section 215 of the New York Labor Law.

Miller alleged that TCA engaged her from October 2021 through December 2022 under an agreement providing her 50% of the gross placement fee for each placement she generated or made for TCA. She alleged that TCA treated her as an employee even though she had been told she was a contracted worker. Miller further alleged that TCA failed to pay commissions for 23 placements, owing her at least $154,995, as well as compensation for unpaid management and consulting work.

Miller also alleged that she repeatedly demanded payment of the commissions, that TCA ignored or denied those requests, and that TCA representatives told her she would not be paid because of her involvement in a California business called Perfect Hire. She alleged that TCA threatened to sue her over a non-compete provision and prohibited her from contacting clients or seeking compensation for her placements.

Motion to dismiss standard

TCA moved to dismiss Miller’s counterclaims, or alternatively to stay them. On a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), the court accepts well-pleaded factual allegations as true and asks whether they plausibly show an entitlement to relief. The court evaluated Miller’s counterclaims under that standard.

Retaliation counterclaim

The court held that Miller alleged enough facts to support a retaliation claim under New York Labor Law Section 215. That law protects an employee from discharge, threats, penalties, discrimination, or other retaliation because the employee complained to the employer about conduct the employee reasonably and in good faith believed violated the law.

TCA argued that Miller merely asked about payment and therefore did not engage in protected activity. The court disagreed. It found that Miller alleged more than general dissatisfaction: she provided a breakdown of overdue payments and specifically demanded the commissions she believed she was owed. Construed in Miller’s favor, those allegations could constitute an informal complaint that TCA was not paying her as legally required.

The court also found that Miller adequately alleged an adverse employment action and a causal connection. She alleged threatening and intimidating conduct, including TCA’s lawsuit against her, after she demanded payment. The short time between her complaints and the alleged adverse actions supported an inference of a causal connection at the motion-to-dismiss stage. The court therefore denied TCA’s motion to dismiss the retaliation counterclaim.

Breach-of-contract counterclaim

Under New York law, a breach-of-contract claim requires an agreement, the plaintiff’s performance, the defendant’s breach, and damages. Miller alleged that she had an agreement with TCA under which she was entitled to 50% of the gross placement fee for each qualifying placement. She also alleged that she performed by making 23 placements and that TCA breached the agreement by failing to pay at least $154,995 in commissions.

TCA argued that the contract counterclaim should be dismissed or stayed because of a parallel California state-court action. Miller represented that she had dismissed that action, and TCA provided no evidence that it remained pending. The court concluded that the California action provided no basis to dismiss or stay the counterclaim. TCA also referred to a California Labor Commissioner proceeding, but the court noted that TCA cited no authority supporting dismissal at that stage and that the proceeding appeared to have a status of “Closed Dismissed—No Jurisdiction.”

Disposition

Judge J. Paul Oetken denied TCA’s motion to dismiss Miller’s counterclaims. TCA was directed to file an answer to the counterclaims within 21 days after the opinion and order. The Clerk of Court was directed to close the motion at ECF Number 24.