The opinion of the court was delivered by: Sifton, Senior Judge
MEMORANDUM OPINION ND ORDER
Plaintiff Andy Bierer ("Bierer") brings this action against Defendant Glaze, Inc., d/b/a Headline Products, LCC ("Glaze") to recover damages arising from the allegedly wrongful termination of Plaintiff's employment contract. Glaze hired Bierer to oversee the marketing of a line of products using the "Good Housekeeping" label owned by nonparty Hearst Magazines ("Hearst"). After Glaze lost its contract to use Hearst's label, Glaze terminated Bierer's employment on the ground of "illegal" use of a company cell phone for personal purposes. Glaze also refused to give Plaintiff his severance package allegedly called for by the employment agreement. Plaintiff contends that the asserted basis for his termination is frivolous and alleges claims for: (1) breach of contract, (2) quantum meruit, and (3) willful failure to pay damages under New York Labor Law §§ 198(1) and 198(1-a).*fn1 Defendant asserts a counterclaim for breach of the employment agreement, seeking as damages the amount of compensation and benefits provided to Plaintiff by the Defendant during his employment.
Presently before the Court are the parties' cross-motions for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons that follow, Plaintiff's motion for summary judgment is granted in part and denied in part. Defendant's motion is denied and the counterclaim is dismissed.
The following facts are drawn from the complaint, Local Rule 56.1 statements, affidavits, depositions, and exhibits submitted in connection with these motions. Disputes are noted.
Plaintiff Bierer is a citizen of the state of New York. Defendant Glaze is a New Jersey company with its principal place of business in Edison, New Jersey. This Court has diversity jurisdiction over this action pursuant to 28 U.S.C. § 1332(a)(1) since Plaintiff and Defendant are citizens of different states and the amount in controversy exceeds $75,000, exclusive of interest and costs.
Glaze is a small importer and wholesale distributor, selling a variety of consumer products, such as household cleaning supplies, kitchen items, automotive products, electronics, and toys, to retail wholesalers. For twenty years, Glaze has sold merchandise to several New York companies. Mr. Bihari Lund ("Lund") is the President of Glaze.
In 2003, Glaze sought to expand its business by selling name brand or licensed consumer products. Lund created Headline Products LLC that year for the purpose of marketing these products. On July 10, 2003, Glaze entered into a license agreement with non-party Hearst Magazines to use the Good Housekeeping seal to market a line of cleaning tools.
On July 25, 2003, Glaze hired Bierer to oversee the marketing of Good Housekeeping products. After an in-person interview in New Jersey and negotiations by phone and email, Bierer signed an employment contract in New York. According to the employment contract, Bierer's title was "Director of Sales and Marketing -- Good Housekeeping Division." His annual base salary was $145,000 per year. Under the heading "Home Office," Glaze agreed to "provide or reimburse employee for a Laptop Computer, digital service, fax, color copier, dedicated phone lines for office and fax." Glaze also agreed under the contract to reimburse Bierer's travel expenses, including airfare, lodging, meals, and cell phone bills, anticipating that Bierer would need to travel to promote sales and market Good Housekeeping products. In addition, Glaze covered "all costs except gas associated [with] the leased vehicle."
Under the severance provisions of the employment agreement, Glaze was to pay Bierer one year's salary, plus benefits for one year if Glaze terminated the contract within three years of Bierer's initial employment. The contract provided that severance would be paid "if employee is terminated for any reason (except if employee is terminated for any illegal activity)."
While Bierer's employment with Glaze commenced on July 25, 2003 when Bierer signed the employment contract, Bierer started working for Glaze on September 2, 2003. During the first couple of weeks, Bierer came to the Edison, New Jersey office of Glaze nearly every day for training. On September 25, 2003, Mark Weinberger, a Glaze employee, sent an email to Lund, saying that Bierer had indicated he would like to begin working out of the house a few days of the week, as he is now averaging [three] hours each way to and from the office. I know we indicated to him that this would be possible, however, we need to set up some parameters.
Nearly all of our preferences would be for him to begin hitting the road, hence there would be no need for him to come into the office, however, until such time as he is up to speed and has his normal class of trade to call on, I would recommend that we come up with some plan.
My initial thoughts are that he spend anywhere from 2 to 3 days a week in the office, unless of course there is a pressing reason such as a meeting being held in Edison requiring his attendance.
Lund states in his affidavit that "I agreed with Weinberger's proposal, and after that time, Bierer was to be in the office 2 to 3 days per week while he worked on the Hearst account."
In addition to managing the Hearst account, Bierer solicited business and made sales in New York State on behalf of Glaze, Inc. Bierer states that he also created a line of cleaning wipes for Glaze to sell soon after his employment with Glaze began. During the period of Bierer's employment, Glaze also sold items at a trade show in New York City.
In November 2004, Glaze informed Hearst that Glaze could not continue to sell products under the license agreement due to adverse market conditions. Hearst terminated the license agreement with Glaze on March 2, 2005 and commenced a lawsuit against Glaze for breach of contract.
Because sales decreased following the loss of the Hearst account, Lund and Bierer entered negotations to revise Bierer's employment terms. According to email correspondence between Lund and Bierer in late February and early March, no new employment terms were agreed upon. Bierer did not respond to the draft agreement Glaze had proposed. On March 9, 2005, Lund stated to Bierer via email that "we were expecting you in the office every day" following Bierer and Lund's agreement to renegotiate Bierer's employment terms. When Bierer did not come to the office, Lund wrote to Bierer, stating "[p]lease understand that for each day you are not in the office, you will not be paid."
In a subsequent exchange of emails, Bierer asserted that according to the employment agreement, he was to work from his home office, as he had done for the past year, and was therefore not contractually bound to come to the office every day. Lund countered that Bierer's salary and benefits originally contemplated Bierer's frequent travel for business purposes. Because Bierer's responsibilities no longer required much travel, Lund determined that Bierer should come to the office each day.
In mid-March 2005, Lund also asked Bierer to provide detailed records of his cell phone use. The cell phone was in Bierer's name and Bierer had owned the phone prior to his employment with Glaze. He retained the same phone number.
Bierer submitted monthly invoices for compensation for his cell phone use, but he did not furnish the detailed records Lund requested. A Glaze employee contacted Bierer's cellular telephone services provider and obtained copies of the statements, which showed that Bierer had made calls to Charles Schwab, a financial services company. These calls were not related to Bierer's employment with Glaze. At the same time, Plaintiff rarely exceeded his monthly allotment of "free" cell phone minutes. Lund states in his deposition that Glaze has no policy prohibiting the use of company phones for personal calls. Both Lund and Weinberger state that they have used their company phones to make personal calls. Lund also did not inquire about the terms of Bierer's calling plan.
On March 31, 2005, Bierer stated via email that, based on his attorney's advice, he would not sign the draft employment agreement Glaze had proposed in early March. He wrote, "[u]ntil we both sign on the dotted line, all terms and conditions are still in effect from my original agreement." Later that day, Glaze terminated Bierer's employment agreement "based upon [Bierer's] illegal activity of misappropriating company funds through the use of our company paid cell phone bill for personal profit . . . ." According to Defendant, since Plaintiff's cell phone use constituted "illegal activity," Plaintiff was not ...