Harris v. F. Schumacher & Co., LLC
1:23-cv-05676
S.D.N.Y.Sep 19, 2024Background
- Mary Harris, a former employee of F. Schumacher & Co., LLC, sued her employer under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL) for unpaid wages and related violations.
- Schumacher moved to dismiss the case, arguing Harris had executed a severance agreement with a release of claims after filing the complaint but before Schumacher counter-signed and paid out the severance.
- Harris opposed dismissal, challenging both the enforceability of the release (noting factual disputes) and the propriety of defense conduct, and cross-moved for sanctions alleging attempts to evade required court review under Cheeks v. Freeport Pancake House, Inc.
- The severance agreement was not attached to or referenced in the complaint, and Harris’s counsel raised doubts about whether Harris validly signed it.
- The alleged improper conduct also included possible violations of professional conduct rules due to communications with Harris while she was represented by counsel.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Consideration of Severance Agreement on Motion to Dismiss | Not before court—agreement not in complaint or relied on in suit | Agreement bars claims; signed post-complaint filing | Court cannot consider it at 12(b)(6) stage |
| Application of Cheeks review to Severance Agreement | Release unenforceable without Cheeks (court) approval | Cheeks doesn’t apply since agreement offered pre-lawsuit | Declined to decide at this stage |
| Sanctions for Bad Faith or Professional Misconduct | Defense tried to evade Cheeks review and contacted Harris when represented | No bad faith; offered agreement pre-suit, did not contact Harris post-filing | No sanctions; no clear evidence of bad faith |
| Summary Judgment on Release/Severance | Factual disputes (e.g., authenticity, enforceability of agreement) preclude SJ | Not advanced, but Defendant referenced summary judgment precedents | Even if treated as SJ, would be denied |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard for Rule 12(b)(6) motions)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (standard for plausibility of claims on a motion to dismiss)
- Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (court approval required for FLSA settlements)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Chambers v. NASCO, Inc., 501 U.S. 32 (inherent power of courts to sanction bad-faith conduct)