Case 1:16-cv LTS Document 5 Filed 08/08/16 Page 1 of 9. Plaintiff, Defendants.

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1 Case 1:16-cv LTS Document 5 Filed 08/08/16 Page 1 of 9 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK x KEVIN J. O BRIEN, Plaintiff, COMPLAINT HARRIS, ST. LAURENT & CHAUDHRY LLP AND JONATHAN HARRIS, v. Defendants x Plaintiff Kevin J. O Brien, Esq. ( Plaintiff ), by his undersigned counsel, alleges as follows against Defendants Harris, St. Laurent & Chaudhry LLP (the Harris Firm ) and Jonathan Harris (together, Defendants ): NATURE OF THE ACTION 1. This is an action for wages admittedly earned and past due. Defendants have refused to pay Plaintiff, a former non-equity partner in a law firm, his rightful share of the firm s net revenue, calculated according to a fixed compensation formula applied uniformly to all equity and non-equity partners since Plaintiff joined the firm in At the time Plaintiff left the firm, in December 2015, he already was owed substantial compensation for revenues he had generated in prior months as Defendants expressly conceded in s to him. After Plaintiff s departure, moreover, he went on to collect for the firm all of the outstanding receivables owed to the firm by his clients, thereby earning additional compensation. 2. All told, Defendants now owe Plaintiff not less than $90,008 in wages and expense reimbursements (excluding interest and penalties), as his share of not less than $277,644 in net revenue. Defendants have refused to respond to this claim on the merits or even negotiate 1

2 Case 1:16-cv LTS Document 5 Filed 08/08/16 Page 2 of 9 with Plaintiff in good faith. After many months of Defendants calculated delay, Plaintiff has found it necessary to bring this lawsuit. PARTIES Plaintiff 3. Plaintiff is a resident of the State of Connecticut. He is an experienced litigator specializing in commercial and securities litigation, enforcement litigation before the SEC and other agencies, and white-collar criminal defense. A former Assistant United States Attorney in the Eastern District of New York, he has been a partner in several law firms. In June 2012, Plaintiff became a name equity partner of Harris, O Brien, St. Laurent & Houghteling LLP (the HOSH Firm ) a predecessor firm of the Defendant Harris Firm. 4. In July 2013, the HOSH Firm was renamed Harris, O Brien, St. Laurent & Chaudhry LLP (the HOSC Firm ). Plaintiff elected to become a non-equity partner of the firm that same month. At all relevant times, Plaintiff was one of the principal sources of revenue for the HOSC Firm. 5. In December 2015, Plaintiff resigned from the HOSC Firm to co-found Ford O Brien LLP. The HOSC Firm then became the Defendant Harris Firm. (Henceforward, for ease of reference, the HOSH Firm and the HOSC Firm are also denoted as the Harris Firm.) Defendants 6. The Harris Firm is a limited liability partnership organized pursuant to the partnership law of the State of New York. Its principal place of business is located in the State of New York. The equity partners of the Harris Firm are Jonathan Harris, Andrew St. Laurent, and Priya Chaudhry, all of whom are residents of the State of New York. 2

3 Case 1:16-cv LTS Document 5 Filed 08/08/16 Page 3 of 9 7. Defendant Jonathan Harris is the Managing Partner of the Defendant Harris Firm. He resides in the State of New York. Defendant Harris controls the Harris Firm, by virtue of his ownership of 60 percent of the equity of the firm and the acquiescence of the other equity partners. On information and belief, all of the actions of the Harris Firm complained of in this action have been taken by or at the direction of Defendant Harris. JURISDICTION AND VENUE 8. This Court has jurisdiction over this action pursuant to 28 U.S.C. 1332(a)-(b) because complete diversity exists between the parties and the matter in controversy exceeds the sum or value of $75, Venue is appropriate in this judicial district under 28 U.S.C. 1391(b) because a substantial portion of the events or omissions giving rise to the claims in this case occurred within the district, and both Defendants reside within the district. STATEMENT OF FACTS Partner Compensation at the Defendant Harris Firm Was Governed by a Fixed Formula 10. At all relevant times, equity and non-equity partners in the Defendant Harris Firm were compensated according to a simple, fixed formula that for each matter allocated net revenue as among the Firm (40 percent), the equity or non-equity partner who originated the matter (20 percent), and the partner(s) who worked on the matter (a total of 40 percent). This compensation formula, expressly set out in the Partnership Agreement in effect at the time of Plaintiff s departure, applied to all firm matters other than contingency cases. Beginning no later than June 2012, when Plaintiff joined the HOSH Firm, and continuing through December 2015, when Plaintiff resigned from the HOSC Firm, the formula governed partner compensation arising from all non-contingency matters at those firms. 3

4 Case 1:16-cv LTS Document 5 Filed 08/08/16 Page 4 of The compensation formula was publicized within the Defendant Harris Firm and relied upon by all of the partners, including Plaintiff. Each partner s wages often distributed monthly subject to a quarterly true up payment was set out in monthly reports showing net firm revenue for the prior month and the calculation of each partner s share based upon application of the compensation formula. Defendants Have Refused to Pay Plaintiff the Wages He Earned 12. In or around July 2015, equity partner Andrew St. Laurent informed Plaintiff that Defendant Harris ostensibly had decided to take the firm in a different direction and therefore Plaintiff should make plans to seek employment elsewhere. After several discussions over the next few months, Plaintiff and the Defendant Harris Firm agreed that Plaintiff would cease his employment at the Firm by or before the end of Consistent with this understanding, Plaintiff announced his resignation from the Harris Firm on December 4, At that time Plaintiff was owed a true up payment for the third quarter of 2015 as well as monthly distributions for his share of the net revenues received in October and November The Defendant Harris Firm represented to Plaintiff that these payments would be made in due course. As equity partner St. Laurent stated in a December 4 to Plaintiff regarding the payments owed: We can do $50k on Monday [December 7] and an additional $35k against $170k in collected receivables also seems reasonable. One week later, St. Laurent conceded in an to Plaintiff that you were then and are now owed meaningful sums by the [Harris] Firm. 14. Despite these and other representations, however, Defendants have refused to honor their acknowledged obligation to pay Plaintiff his earned wages. 4

5 Case 1:16-cv LTS Document 5 Filed 08/08/16 Page 5 of By mid-december 2015, Defendant Harris took over direct discussions with Plaintiff over the wages owed him. Since that time, Defendant Harris and other representatives of the Defendant Harris Firm acting at his direction, by making false promises, raising irrelevant issues, and misstating the facts, have avoided Plaintiff s claim for wages due and reimbursement of certain expenses and caused many months of prejudicial delay. For example, Defendants have fabricated deductions and offsets in a vain attempt to reduce Plaintiff s wages claim to zero. Defendants also have rejected Plaintiff s attempts to negotiate a settlement of this dispute on reasonable terms. 16. Despite Defendants ongoing misconduct, Plaintiff has managed to collect for the Harris Firm all of the outstanding receivables owed to that firm by his clients. Under the applicable compensation formula, Defendants presently owe Plaintiff not less than $90,008 in wages and certain expense reimbursements (excluding interest and penalties), as his rightful share of not less than $277,644 in net revenue. CAUSES OF ACTION As for the First Cause of Action (Violations of New York Labor Law 191(3), 193(1), 198(1-a), 198-c) (Against Both Defendants) 17. Plaintiff repeats and re-alleges the allegations in the preceding paragraphs as though fully set forth herein. 18. At all relevant times the Defendant Harris Firm was an employer within the meaning of New York Labor Law ( NYLL ) 190(3). 19. At all relevant times Defendant Harris was an employer within the meaning of NYLL 190(3) in that, by virtue of his dominant position within the Firm, he possessed the power to control its employees. Defendant Harris, among other powers, had the ability to hire 5

6 Case 1:16-cv LTS Document 5 Filed 08/08/16 Page 6 of 9 and fire employees, to supervise and control employee work schedules and conditions of employment, to determine the method and rate of payment, and to maintain employment records. Harris generally exercised these powers at will. 20. Defendants have violated the NYLL in the following respects, among others: (a) following termination of employment, failing to pay Plaintiff wages due him, in violation of NYLL 191(3); (b) making unauthorized deductions from the wages of Plaintiff, in violation of NYLL 193(1); and (c) refusing and failing to pay benefits and wage supplements, including but not limited to reimbursement for expenses, in violation of NYLL 198-c. 21. Furthermore, Defendants as employers have acted without any good faith basis to believe that their underpayment of wages was in compliance with the law. Accordingly, pursuant to NYLL 198(1-a), Plaintiff is entitled to recover not only the full amount of any underpayment, all reasonable attorney s fees, and prejudgment interest as required under the civil practice law and rules, but also an additional amount as liquidated damages equal to 100 percent of the total amount of the wages found to be due. 22. By reason of the foregoing, Plaintiffs have suffered and will continue to suffer substantial injury in an amount to be determined at trial. As for the Second Cause of Action (Breach of Contract) (Against Both Defendants) 23. Plaintiff repeats and re-alleges the allegations in the proceeding paragraphs as though fully set forth herein. 24. Plaintiff and Defendants entered into an implied contract, established and evidenced by a regular course of conduct of the parties from 2012 through 2015, regarding the distribution of the Harris Firm s net revenues. Pursuant to the contract, Plaintiff was entitled to 6

7 Case 1:16-cv LTS Document 5 Filed 08/08/16 Page 7 of 9 wages in the form of a percentage of net revenues under a simple, fixed formula that for each non-contingency matter allocated net firm revenue as among the firm, the originating partner, and partner(s) who worked on the matter. 25. Both sides adhered to this contract up until Plaintiff s departure from the Harris Firm in early December Plaintiff carried out his contractual obligations even after his departure by eventually collecting for Defendants all of the outstanding receivables owed to the firm by his clients. All told, Plaintiff during the relevant period collected not less than $277,644 in net revenue, of which his contractually mandated share is not less than $90,008 (excluding interest and penalties). 26. Defendants have breached this contract, and the covenant of good faith and fair dealing implicit in it, by refusing to pay Plaintiff the wages owed to him, or even to negotiate with him in good faith despite repeated attempts by him to settle this dispute informally. 27. By reason of the foregoing, Plaintiff has suffered and will continue to suffer substantial injury in an amount to be determined at trial. As for the Third Cause of Action (Quantum Meruit) (Against Both Defendants) 28. Plaintiff repeats and realleges the allegations in the preceding paragraphs as though fully set forth herein. 29. Plaintiff conferred a significant economic benefit upon the Defendant Harris Firm and Defendant Harris by, among other things, generating hundreds of thousands of dollars in net revenue during the relevant period. Defendants assented to and accepted Plaintiff s generation of net revenue and reaped, both directly and indirectly, significant economic benefit as a result. 7

8 Case 1:16-cv LTS Document 5 Filed 08/08/16 Page 8 of The significant economic benefit conferred by Plaintiff upon Defendants was given and received with the reasonable expectation of compensation in the form of wages and other benefits. Plaintiff is therefore entitled to the reasonable value of his services. 31. By reason of the foregoing, Plaintiff has suffered and will continue to suffer substantial injury in an amount to be determined at trial. As for the Fourth Cause of Action (Unjust Enrichment) (Against Both Defendants) 32. Plaintiff repeats and re-alleges the allegations in the preceding paragraphs as though fully set forth herein. 33. Plaintiff conferred a significant economic benefit upon the Defendant Harris Firm and Defendant Harris by, among other things, generating hundreds of thousands of dollars in net revenue during the relevant period. Defendants were enriched by Plaintiff s generation of net revenue, both directly and indirectly. 34. It would go against equity and good conscience to permit Defendants to enjoy the fruits of Plaintiff s generation of revenue without compensating Plaintiff fairly for their enrichment. 35. By reason of the foregoing, Plaintiff has suffered and will continue to suffer substantial injury in an amount to be determined at trial. Plaintiff hereby demands a jury trial. JURY TRIAL DEMANDED PRAYER FOR RELIEF WHEREFORE, Plaintiff demands judgment as follows: 8

9 Case 1:16-cv LTS Document 5 Filed 08/08/16 Page 9 of 9 A. On the First Cause of Action, pursuant to NY Labor Law 198(1-a), awarding Plaintiff (1) the full amount of Plaintiff s underpayment, (2) all reasonable attorney s fees, (3) prejudgment interest as required under the civil practice law and rules, and (4) an additional amount as liquidated damages equal to 100 percent of the total amount of the wages found to be due; and B. On the Second Cause of Action, awarding Plaintiff full compensatory damages, including but not limited to all consequential damages; C. On the Third Cause of Action, awarding Plaintiff the full reasonable value of his services; D. On the Fourth Cause of Action, awarding Plaintiff the full extent of Defendants enrichment as a result of the net revenue Plaintiff generated during the relevant period; E. On any and all Causes of Action, awarding Plaintiff such other and further relief, including but not limited to equitable relief, punitive damages, prejudgment interest, the costs of this action, and attorney s fees, as the Court may deem just and appropriate. Dated: August 8, 2016 New York, NY Respectfully submitted, THE SULTZER LAW GROUP, P.C. Joseph Lipari /s/ By: Joseph Lipari Attorneys for Plaintiff 14 Wall Street, 20 th Floor New York, NY (212) liparij@thesultzerlawgroup.com 9