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Kramsky v. Chetrit Group

November 16, 2010


The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge


The Defendants bring this motion to dismiss following Plaintiff's having brought suit against Defendants Chetrit Group, LLC, Joseph Chetrit, Juda Chetrit, Meyer Chetrit, and Jacob Chetrit. Plaintiff filed his Second Amended Complaint ("SAC") on May 6, 2010, alleging causes of action for (1) promissory estoppel; (2) religious discrimination in violation of New York City Administrative Code § 8-502(a), et seq.; (3) being made to suffer smoking in the workplace, and (4) retaliation for his complaints about smoking, in violation of New York City Administrative Code § 17-504; (5) nonpayment of wages owed, in violation of New York State Labor Law § 198, et seq.; (6) retaliation in violation of New York State Labor Law § 215; and (7) breach of contract.

Defendants move to dismiss the claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Defendants argue that Plaintiff's assertion of a claim pursuant to New York Labor Law § 740 in his original Complaint and his First Amended Complaint effectively waives all of his other claims, because section 740 contains an election of remedies provision requiring a plaintiff to choose between commencing a section 740 whistleblower action or asserting some other claim or claims. Defendants argue that Plaintiff's Second Amended Complaint, in which he omits all reference to New York Labor Law § 740, does not render his initial section 740 pleading void. For the reasons stated below, Defendant's motion is granted in part and denied in part.


Kramsky, a real estate attorney, alleges that he interviewed with the Chetrit Group, a multi-million dollar real estate company, on February 11, 2009 for the position of General Counsel. On March 31, 2009, the parties allegedly executed an employment agreement pursuant to which Kramsky was hired and would begin work on April 7, 2009. He was to receive a salary of $150,000 per year, in addition to which he would be eligible for a $30,000 bonus upon completion of one year of employment. According to Kramsky, the agreement further reflected Defendant Joseph Chetrit's preference that Kramsky be paid as a 1099 independent contractor for his first ninety days of work, after which he would become a full-time, W-2 employee with health insurance benefits.

After shutting down his private practice, Kramsky began work at the Chetrit Group on April 20, 2009. On July 21, 2009 he informed Defendants Joseph and Meyer Chetrit that the initial 90 day independent contractor period had expired and that he should be reclassified as a W-2 employee as stipulated in the employment agreement. Kramsky alleges that Defendants refused to pay him as a W-2 employee, stating that he would continue to be paid as a 1099 contractor, but would receive monthly reimbursements for a private health insurance plan. Between July 2009 and January 2010, Kramsky continued to request that he be put on the Chetrit Group's health insurance plan, and ultimately informed Defendants that he would file a complaint with the New York Department of Labor if the situation was not rectified by January 22, 2010. On January 22, 2010, Kramsky was terminated by the Chetrit Group.

Kramsky alleges that during the period of time when he worked at the Chetrit Group, he was discriminated against due to his religious beliefs-namely, because he does not practice Orthodox Judaism. He alleges that in June 2009, Defendant Meyer Chetrit asked whether Kramsky belonged to an Orthodox synagogue, and after Kramsky replied in the negative, Defendants began to treat him differently. For example, Kramsky claims that projects that would normally be assigned to him as general counsel were instead assigned to outside, Orthodox Jewish counsel. Furthermore, Kramsky alleges that Defendants refused to provide him with blank checks or power of attorney during real estate closings.

Based on these facts, Kramsky filed a Complaint in this Court on March 24, 2010, in which he alleged religious discrimination and various claims relating to his employment agreement and termination. He alleged the same causes of action in his First Amended Complaint, which he filed as a matter of course on April 16, 2010. In both the original Complaint and the First Amended Complaint, Kramsky also raised a retaliation claim based on New York Labor Law § 740, a whistleblower statute that prohibits employers from retaliating against employees who report certain illegal or otherwise prohibited activities by their employers.

At a pre-trial conference on May 5, 2010, Defendants revealed that they planned to move to dismiss the Complaint based on Plaintiff's references to section 740. On May 6, without having received permission from the Court pursuant to Rule 15(a)(2), Kramsky filed a Second Amended Complaint, in which he deleted his claims pursuant to section 740 and replaced them with retaliation claims pursuant to New York Labor Law § 215, which has no waiver provision. On May 7, counsel for Kramsky wrote to the Court seeking permission to file the Second Amended Complaint which had, in fact, already been filed. By endorsement dated May 12, I granted Kramsky's request to file a Second Amended Complaint,

In the meantime, also on May 7, Defendants filed their motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). After Kramsky filed his Second Amended Complaint, Defendants updated their motion to dismiss. They continued to argue that Kramsky's initial pleading pursuant to section 740 had waived his right to pursue other remedies, despite the fact that he had received permission to file a Second Amended Complaint that omitted all references to section 740.


A complaint will be dismissed under Rule 12(b)(6) if there is a "failure to state a claim upon which relief can be granted." Fed. R. Civ. P.12(b)(6). To survive a motion to dismiss under Rule 12(b)(6), a plaintiff must "plead enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A facially plausible claim is one where "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). Where the court finds well-pleaded factual allegations, it should assume their veracity and determine whether they "plausibly give rise to an entitlement to relief." Id. at 1950.

When evaluating a motion pursuant to Rule 12(b)(6), a court must accept as true all of the allegations contained within the complaint. See Cooper v. Pate, 378 U.S. 546 (1964) (per curiam). The court must also draw all reasonable inferences from the complaint's allegations in favor of the nonmoving party. ...

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