Goldberg v. Bespoke Real Estate LLC

Background

Harlan Goldberg, H Gold LLC, and Jarret Willis sued Bespoke Real Estate LLC, Bespoke Luxury Marketing LLC, Bespoke Real Estate Florida LLC, Zachary Vichinsky, and Cody Vichinsky. Goldberg and Willis previously worked for the Bespoke entities. The complaint asserted common-law and statutory claims based on alleged discrimination and unpaid commissions.

Willis alleged that employees and managers repeatedly directed racial epithets and other degrading comments at him, excluded him from workplace benefits and activities, restricted his ability to show properties independently, interfered with his client relationships, demoted him, failed to pay some commissions, and constructively discharged him. Goldberg and H Gold alleged that defendants used anti-Semitic insults, failed to pay commissions owed under several alleged agreements or understandings, and terminated Goldberg after he opposed the alleged discrimination against Willis.

Motion-to-dismiss standard and outside evidence

Defendants moved to dismiss the complaint for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. At this stage, the court generally assumes the complaint’s well-pleaded factual allegations are true and asks whether they plausibly support relief. Defendants submitted affidavits, agreements, communications, and payment evidence that were not attached to or incorporated into the complaint. The court held that much of this material could not be considered on the motion to dismiss. The court also declined to convert the motion into one for summary judgment because the parties, particularly plaintiffs, had not received a reasonable opportunity to present material relevant to summary judgment.

Goldberg and H Gold’s claims

The court denied dismissal of the breach-of-contract claim concerning commissions from the Waldorf transaction, the Asia Apartment transaction, the Parkland transaction, other transactions, and the alleged Override Agreement. Although defendants argued that the alleged oral agreements were barred by the contract’s no-oral-modification provision and New York’s Statute of Frauds, the court held that the alleged additional work performed by Goldberg in Florida could support an exception based on partial performance and additional consideration. The court also held that the allegations plausibly supported the possibility that Kayt Gray Schadley had apparent authority to negotiate commission payments. Defendants’ arguments that plaintiffs had been paid relied on outside evidence that the court could not consider at this stage.

The court also denied dismissal of the promissory-estoppel claim. Plaintiffs were allowed to plead promissory estoppel as an alternative to breach of contract because defendants did not concede that the alleged commission agreements were enforceable. The court found that allegations that plaintiffs gave up other employment opportunities and related compensation in reliance on commission promises were sufficient at the pleading stage.

The court denied dismissal of the unjust-enrichment and quantum-meruit claims. It explained that these claims may be pleaded in the alternative when the validity or scope of an alleged contract is disputed or difficult to determine.

The court denied dismissal of the Goldberg Plaintiffs’ hostile-work-environment claim under 42 U.S.C. § 1981. The court declined to rely on defendants’ outside evidence about Goldberg’s own language and explained that such evidence would not necessarily defeat a claim based on defendants’ alleged anti-Semitic conduct.

The court denied dismissal of the Goldberg Plaintiffs’ Section 1981 disparate-treatment claim. It held that allegations of repeated derogatory comments about Jewish people, including comments directed at Goldberg and others, could support an inference of discrimination even without allegations that a similarly situated employee outside the protected group was treated better.

The court also denied dismissal of the Goldberg Plaintiffs’ Section 1981 retaliation claim. The complaint alleged that Goldberg opposed discrimination against Willis, that defendants learned of that opposition through Goldberg’s counsel and other communications, and that defendants later terminated Goldberg and withheld commissions. The court held that the statute did not require defendants to learn of the protected activity directly from Goldberg himself.

Finally, the court denied dismissal of the retaliation claim under Section 740 of the New York Labor Law. The court held that the complaint plausibly alleged that Goldberg disclosed or objected to conduct he reasonably believed was unlawful, including alleged discriminatory treatment of Willis, and that his termination and nonpayment of commissions followed closely enough to support an inference of retaliation. The court stated that the complaint could support a claim based either on an indirect disclosure through counsel or on Goldberg’s direct objections to conduct involving Willis.

Willis’s claims

The court denied dismissal of Willis’s Section 1981 hostile-work-environment and constructive-discharge claims. Defendants argued that Willis’s own use of racial language defeated those claims, but the court held that such allegations were not necessarily inconsistent with claims that others subjected Willis to a hostile work environment or made his working conditions intolerable.

The court also denied dismissal of Willis’s Section 1981 disparate-treatment claim. The complaint alleged discriminatory restrictions on showing properties, interference with his clients, demotion, and nonpayment of commissions. The court held that those allegations, particularly the alleged demotion and nonpayment, could support an inference of discrimination even if defendants’ interpretation of Willis’s employment agreement were correct.

Ruling

Judge Oetken denied defendants’ motion to dismiss the complaint. The order did not decide whether plaintiffs will ultimately prove their claims; it held that the complaint could proceed past the pleading stage. Defendants were directed to file an answer within 21 days after the opinion and order, and the clerk was directed to close the motion.