Defendants have moved for summary judgment dismissing the complaint against them, and Plaintiff has cross-moved for summary judgment on his second and third causes of action under Massachusetts General Laws (MGLA), ch. 149, §§148, and 150.

Background

This case involves a wage claim by a former executive employee of Defendant Zenhire, Inc. ("Zenhire"), who at all times lived and worked in Massachusetts. Unless otherwise stated, the following facts are undisputed.

Plaintiff and Zenhire entered into an Executive Employment Agreement on April 2, 2007, for a term of three years (the "Agreement").Robert Fritzinger was the President, CEO and a director of Zenhire, and Deborah Fritzinger was a director. Plaintiff was paid through August 19, 2007. [*2]

Plaintiff contends that, between August 30, 2007 and February 2008, he continued to work for Zenhire, while Mr. Fritzinger made repeated promises to pay him, for past and future work. By February 25, 2008, Plaintiff left Zenhire's employ and applied for, and received unemployment benefits, with the cooperation of Zenhire. Plaintiff retained his Zenhire email address and contends he continued to perform work for Zenhire into September 2008 and that Zenhire was holding him out as an employee as late as October 2008. However, in an affidavit submitted in 2011 in connection with a motion to dismiss, Robert Fritzinger asserted that plaintiff "rendered no services for Zenhire that were of any material value" between August 2007 and September 2008.

The Agreement contains both a choice-of-law and a forum selection clause, as follows:

This Agreement shall be binding upon the parties hereto, and shall be governed and construed in accordance with the laws of the State of New York. Further, [Zenhire] and [Plaintiff] ( i ) agree that any and all disputes arising out of this Agreement or the employment relationship created thereby shall be resolved in the courts situated in the State of New York, County of Erie and (ii) consent to the venue of all courts situated in the State of New York, County of Erie.

Further, the Agreement provided several methods by which it could be terminated prior to the end of the first term (April 2010): Zenhire could terminate for cause on thirty (30) days' notice, based upon, inter alia, Plaintiff's breach of contract or failure to perform in a satisfactory manner, in the opinion of Zenhire's Board of Directors. In addition, the Agreement would terminate upon Plaintiff's resignation or discontinuance of services due to death, physical disability, or by mutual agreement. Defendants submitted no evidence (on their motion or in opposition to Plaintiff's cross-motion) that Zenhire terminated the Agreement "for cause", or for any other reason.

Procedural History

Plaintiff pursued his wage claim administratively, beginning in September 2008 in Massachusetts (see MGLA ch. 149, § 150). In May 2009, with the permission of the Massachusetts Attorney General, Plaintiff filed a complaint in the Superior Court of Massachusetts (the "Massachusetts Action"). The complaint was dismissed by order dated July 13, 2010, based upon the forum selection clause contained in the Agreement. Plaintiff appealed, and the Massachusetts Supreme Judicial Court affirmed the dismissal in a lengthy opinion, issued May 8, 2012 (see, Melia v Zenhire, Inc., 462 Mass 164 [2012]).

Plaintiff had also commenced the instant action on February 17, 2011, within three (3) years of the date he left and applied for unemployment insurance (see MGLA ch. 149, §150 [3 year statute of limitations]). Defendants' motion to dismiss this action, based primarily on the existence of another action pending, was denied by (then) Presiding Justice John A. Michalek in June 2011.

After oral argument on the instant motion and cross-motion, the Court invited the parties to supplement their submissions by addressing the issue of whether an employee may recover upon both breach of contract and statutory wage claims.

Plaintiff asserts that New York courts routinely grant relief in wage claim cases, on theories of both breach of contract and statutory labor law (see e.g. Ryan v Kellogg Partners Inst. [*3]Servs., 19 NY3d 1 [2012]; Arbeeny v Kennedy Exec. Search, 71 AD3d 177, 185 [1st Dept 2010]; Kleinman v Blue Ridge Foods, LLC, 32 Misc 3d 1219 (A), *9-10 [Sup Ct Kings County July 7, 2011]; see also, Nichols v SG Partners, Inc., Memo Dec'n, Index No. 109439/2009, *20-22 [Sup Ct NY County Jan 27, 2010]). In Ryan, supra, the Court of Appeals affirmed a jury verdict finding that the employer had breached an oral employment agreement and also granted attorneys' fees under Labor Law § 198 (1-a) (see 19 NY3d at 11). In fact, a contractual provision in an employee's contract in New York that operates to forfeit statutory benefits to which the employee is entitled is unenforceable (see Weiner v Diebold Group, Inc., 173 AD2d 166,167-168 [1st Dept 1991]).

Therefore, this Court determines that Plaintiff's right to sue for back wages under the Agreement does not bar him from recovering from Defendants — assuming he has proven such claims — under statutory wage laws.^[FN1]

First Cause of Action

The individual Defendants contend that they have no personal liability under Business Corporation Law (BCL) § 630(a), because plaintiff failed to give notice of intent to sue the largest shareholders within 180 days after termination of his services, a statutory pre-requisite to recovery against such shareholders (see Beam v Key Venture Capital Corp.,152 AD2d 825 [3rd Dept 1989]).

BCL § 630 (a) provides that the ten (10) largest shareholders of a corporation such as Zenhire shall be personally liable for wages and salaries due to employees for service to the corporation, provided the employee gives notice in writing as required by that section. However, as conceded by Plaintiff, BCL § 630 does not apply with regard to foreign corporations such as Zenhire (see Stuto v Kerber, 18 NY3d 909, 910 [2012]). Plaintiff also concedes that, without BCL § 630, his claims against the individuals under Labor Law § 198 cannot stand, and therefore the Court grants that part of Defendants' motion that seeks dismissal of the first cause of action as against the individual Defendants only.

Second and Third Causes of Action

Defendants contend that all of Plaintiff's claims arise from the Agreement, and pursuant to the Agreement's choice-of-law provision, are subject to and governed by New York law. For that reason, Defendants allege that the second and third causes of action under the Massachusetts Wage Act (MGLA ch. 149, §§148 et seq.) against Zenhire and the individual Defendants, respectively, cannot stand. Defendants assert no other basis for dismissal of those causes of action. Because the Court determines that the choice-of-law provision does not cover a statutory [*4]wage claim, and further that this Court will apply the Massachusetts Wage Act, Defendants' motion for summary judgment on these two causes of action is denied.

This issue was already the subject of a decision in the Massachusetts Action. In that action, Plaintiff alleged causes of action for breach of contract by Zenhire, fraud by Robert Fritzinger, as well as quantum meruit and violations of the Massachusetts Wage Act (MGLA c. 149, §§148, 150 [the Massachusetts Wage Act]). Chapter 149, § 150 of that act provides:

An employee claiming to be aggrieved by a violation of section ... 148 ... may, 90 days after the filing of a complaint with the attorney general, or sooner if the attorney general assents in writing, and within 3 years after the violation, institute and prosecute in his own name and on his own behalf... a civil action ... for any damages incurred, and for any lost wages and other benefits. An employee so aggrieved who prevails in such an action shall be awarded treble damages, as liquidated damages, for any lost wages and other benefits and shall also be awarded the costs of the litigation and reasonable attorneys' fees.

The president and treasurer of a corporation and any officers or agents having the management of such corporation shall be deemed to be the employers of the employees of the corporation within the meaning of this section.

In the Massachusetts Action, the SJC held that, because enforcement of the forum selection clause in the Agreement would not deprive Plaintiff of the protections of the Massachusetts Wage Act, the trial court properly applied it to dismiss the action. Specifically, the SJC stated:

... [A] forum selection clause operates as a special contract [under MGLA ch. 149, § 148] only when three conditions are met: the employee's claim is covered by the Wage Act; the court of the forum State, applying its choice of law principles, would choose a law other than that of Massachusetts to govern the dispute; and application of the foreign law will deprive the employee of a substantive right guaranteed by the Wage Act .... On the facts alleged in the present case, a New York Court, applying New York's choice-of-law doctrine, would certainly apply the Wage Act to this dispute.

In determining that a New York court would "certainly" apply the Massachusetts Wage Act to Plaintiff's claims, the SJC conducted a four-part conflict-of-laws analysis. First, it determined that the choice-of-law provision clearly does not apply to statutory claims. The SJC noted that, as interpreted by the United States Court of Appeals for the Second Circuit, New York State courts are reluctant "to construe contractual choice of law clauses broadly to [*5]encompass extra-contractual causes of action", and that tort claims fall outside of such provisions (Finance One Pub. Co. v Lehman Bros. Special Fin., Inc., 414 F3d 325, 334 [2nd Cir 2005], cert. denied, 548 US 904 (2006)]. In a case where the choice-of-law provision in an agreement stated that its "validity, interpretation, construction and performance" would be construed under New York law, that provision was held inapplicable to a tort cause of action (Twinlab Corp v Paulson, 283 AD2d 570, 571 [2nd Dept 2001]; see also Gutstadt v National Fin. Partners Corp., 2013 WL 5859550, *1 [Sup Ct New York County 2013] [choice-of-law clause governing interpretation of agreement did not dictate law for breach of fiduciary duty, fraud and unjust enrichment]).

Second, the SJC applied New York's general choice-of-law rules to give effect to the law of the jurisdiction with the "greatest concern with the specific issue raised" (citing Babcock v Jackson, 12 NY2d 473, 481 [1963]). Applying both tort and contract conflicts-of-laws principles under New York law, the SJC determined that, under either standard, New York courts would apply the Massachusetts Wage Act to Plaintiff's claims (462 Mass at 180).

This court agrees that the Agreement's choice-of-law provision does not apply to a statutory wage claim. Therefore, traditional conflict-of-law principles apply. "New York choice of law principles require a court to apply the law of the state with the most significant relationship with the particular issue in conflict" (Indosuez International Finance B.V. v National Reserve Bank, 98 NY2d 238, 245 [2002]). "[T]he rule which has evolved clearly in our most recent decisions is that the law of the jurisdiction having the greatest interest in the litigation will be applied and that the facts or contacts which obtain significance in defining state interests are those which relate to the purpose of the particular law in conflict" (Zeevi & Sons v Grindlays Bank, 37 NY2d 220, 226—227, cert. denied 423 US 866 [1975] [internal citations and quotations omitted]).

As the SJC found, New York State case law does not define a statutory wage claim for conflict-of-laws purposes, as either tort or contract. However, two United States District Court cases applied a torts conflict-of-laws analysis to New York Labor Law § 198 claims (see Chong v Healthronics, Inc., 2007 WL 1836831 [EDNY 2007]; and Bierer v Glaze Inc., 2006 WL 2882569 [SDNY Oct. 6, 2006]).

The general torts conflict-of-laws standard has been summarized as follows:

"Under th[e interests analysis], the significant contacts are, almost exclusively, the parties' domiciles and the locus of the tort" . . .. Where "conflicting conduct-regulating laws are at issue, the law of the jurisdiction where the tort occurred will generally apply because that jurisdiction has the greatest interest in regulating behavior within its borders" [citations omitted].

(Dorsey v Yantambwe, 276 AD2d 108, 110 [4th Dept 2000], lv denied 96 NY2d 712 [2001]).

Applying these standards, it is clear that Massachusetts has the greatest interest in regulating Zenhire's conduct in this case: Plaintiff resided and performed his work in Massachusetts. Therefore, Massachusetts law should apply to Plaintiff's wage claim.

Assuming arguendo, that the New York Court of Appeals would characterize a wage claim as a contractual remedy, rather than a tort (and apply a contract conflict-of-laws analysis), Massachusetts law would still govern. "With respect to ... contract and quantum meruit or quasi-contract claims, New York courts apply a center of gravity' or grouping of contacts' analysis to choice-of-law situations in order to determine which state has the most significant relationship to [*6]the transaction and the parties" (Chong v Healthtronics, Inc., 2007 WL 1836831, *13 [EDNY 2007], citing Matter of Allstate Ins. Co. [Stolarz], 31 NY2d 219, 226 [1993]).

"Factors potentially relevant to the existence of sufficient contacts include (1) the place of contracting; (2) the place of contract negotiation; (3) the place of performance; (4) the location of the subject matter of the contract; and (5) the domicile of the contracting parties'" (McPhee v General Elec. Intern. Inc., 736 FSupp 2d 676, 680 [SDNY 2010], affd 426 Fed Appx 33 [2nd Cir 2011] [applying New York conflict-of-laws principles]). The parties' respective submissions do not reveal where the Agreement was negotiated or signed, but the place of performance and the location of the subject matter of the Agreement (i.e., the individuals recruited by Plaintiff) was Massachusetts. As to domicile, Zenhire was incorporated in Delaware, with a principal place of business located in New York, and Plaintiff resided in Massachusetts.

"There are of course instances where the policies underlying conflicting laws in a contract dispute are readily identifiable and reflect strong governmental interests, and therefore should be considered" (Matter of Allstate Ins. Co. [Stolarz], 81 NY2d at 226). The SJC has clearly stated its State's strong interest in enforcing the Massachusetts Wage Act policies with respect to employees residing in Massachusetts — so much so, as to rule that if a choice of forum clause would deprive an employee living in Massachusetts of the protection of the Wage Act, that provision would be deemed a "special contract" unenforceable in Massachusetts (Melia v Zenhire, 462 Mass at 173; MGLA ch. 149, § 148). Therefore, in this case, the court will apply the Massachusetts Wage Act.

Cross-Motion for Summary Judgment

Plaintiff has submitted the following in support of his cross-motion for summary judgment on the second and third causes of action under the Massachusetts Wage Act: the Agreement (which provides for an annual salary of $150,000 plus vacation time); Plaintiff's affidavit (stating that Zenhire failed to pay him from, and after August 20, 2007 until February 25, 2008, a total of over thirteen and one-half (13 ½) pay periods; he was paid every two weeks); Defendants' documents (establishing what plaintiff was paid bi-weekly); and evidence that the wage amount owed is $78,461.53 (or $576.00 per day). Defendants do not contest these calculations.^[FN2]

In addition, Plaintiff asserts that he was entitled to eighteen days of vacation pay, totaling $10,384.56. Pursuant to the Massachusetts Wage Act, a plaintiff with a wage claim is entitled to a mandatory award of treble damages (see Lipsitt v Plaud, 466 Mass 240, 246 [2013], citing MGLA ch. 149, § 150). Thus, taking the unpaid wage and vacation time together, Plaintiff claims he is owed a total of $266,538.27. Further, the statute specifically provides that, "[o]n the trial, no defense for failure to pay as required" (absent certain defenses not applicable or proven here) "shall be valid" (MGLA ch. 149, § 150). Plaintiff has established entitlement to judgment as a matter of law on the Massachusetts Wage Act claims. In opposition, the individual Defendants Robert and Deborah Fritzinger, who are personally liable under that statute (MGLA ch. 149, § 148), and the corporate Defendant, Zenhire, have failed to raise any issue of fact [*7]requiring a trial. Therefore, the Court grants summary judgment in favor of Plaintiff against all Defendants jointly and severally, in the amount of $266,538.27. Plaintiff is also entitled to an award for attorneys' fees and costs, upon proper submission.

Fourth Cause of Action for Breach of Contract.

With respect to the fourth cause of action against Zenhire for breach of the Agreement due to its failure to pay wages and vacation time, Defendants allege that Zenhire is entitled to summary judgment because Plaintiff breached the contract by suing first in Massachusetts in violation of the forum selection clause, and causing Defendants to incur unduly burdensome and oppressive expenses. However, the Court agrees with Plaintiff that, based upon the uncontroverted evidence, Zenhire breached the Agreement first by failing to pay Plaintiff any wages from and after August 20, 2007. Therefore, Zenhire has failed to meet its burden on summary judgment, and that part of the motion seeking dismissal of the fourth cause of action is, therefore, denied.

Fifth and Sixth Causes of Action

Defendants address the fifth and sixth causes of action in quantum meruit (against Zenhire) and fraud (against Robert Fritzinger) only in an attorney's affidavit, in which they allege that the failure to provide notice to the individual Defendants of the intent to sue them under BCL § 630 bars any claims against them, including fraud, and that relief under the quantum meruit claim is barred by unclean hands. In a "reply", serving more as a movant's memorandum of law, Defendants argue that a fraud cause of action that duplicates a breach of contract cause of action cannot stand. However, Plaintiff has not alleged a common-law breach of contract claim against Robert Fritzinger, because the Agreement was between Zenhire and Plaintiff — and the only fraud cause of action is against the individual Defendant, not the corporation. However, because there is an enforceable contract cause of action against Zenhire, the quantum meruit cause of action must be dismissed.

Conclusion

For the reasons stated herein, it is hereby

ORDERED, that Defendants' motion is granted in part, and the first cause of action under Labor Law § 198, is hereby dismissed as to the individual Defendants only; and the fifth^[FN3] cause of action is dismissed in its entirety; and it is further

ORDERED, that the cross-motion is granted in its entirety and Plaintiff is awarded judgment in the amount of $266,538.27, together with attorney's fees and costs in an amount to be determined by the Court upon further submissions.

This constitutes the Decision and Order of this Court. Submission of an order by the Parties is not necessary. The mailing of a copy of this Decision and Order by this Court shall not constitute notice of entry.

Dated: December 11, 2013 [*8]

Buffalo, New York

_____________________________________

HON . TIMOTHY J. WALKER, J.C.C.

Acting Supreme Court Justice

Presiding Justice, Commercial Division

8th Judicial District