The opinion of the court was delivered by: Shira A. Scheindlin, U.S.D.J.
Joseph Grande, now proceeding pro se,*fn1 brings this defamation action*fn2 against his former employer, Gristede's Foods, Inc. ("Gristede's" or the "Company") and Gristede's Chairman and CEO John Catsimatidis ("Catsimatidis"). Grande alleges that Catisimatidis and Gristedes gave a defamatory quote to the New York Post (the "Post") accusing Grande of attempted extortion. Plaintiff seeks damages for distress, harm to his reputation, and harm to his professional, business and employment prospects.
Defendants now move to dismiss Grande's defamation claim pursuant to Federal Rule of Civil Procedure 12(b)(6) on the following grounds: (1) the defamatory statement did not allege criminal conduct; (2) the defamatory statement alleged only an intent to commit a crime; and (3) failure to prosecute. Defendants also seek attorneys' fees and costs pursuant to N.Y. Labor Law § 740(6).*fn3 Plaintiff did not submit opposition papers. For the reasons stated below, defendants' motions are denied.
Grande is a former employee of Gristede's, a chain of food stores in
New York City. Beginning in 2008, Grande was employed as the
Controller, where he was in charge of "financial reporting, managing
Gristedes' financial accounts, and dealing with the company's credit
lines."*fn5 While reviewing the Company's profit and
loss accounts, which includes expense accounts, Grande noticed
discrepancies in the Union Pension Fund account ("Pension Account").
The Pension Account made payments to the Company's unionized workforce
pension fund. Grande alleges that "in addition to the normal pension
fund payments, regular payments were also being made from this account
to various corporate officers and employees of Gristedes."*fn6
Grande alleges that these payments were not being processed
through the normal payment channels, and none of the regular payroll
deductions required by law were deducted from these payments or
otherwise made from the Pension Account.*fn7
Grande became "concerned and suspicious" of the improper payments and brought this to the attention of the Chief Financial Officer ("CFO"), Mark Kassner.*fn8 Grande was advised that Kassner would review the matter and would, in turn, inform the Vice President and the assistant to the owner of Gristede's, Bob Zorn. Grande alleges that checks to certain employees from the Pension Account continued and that he repeatedly brought it to Kassner's attention. Grande alleges that Kassner became more defensive, telling him: "I have no power . . . [President] Charlie [Criscuolo] runs the show."*fn9 Grande alleges that when he approached Criscuolo about the Pension Account, Criscuolo responded by saying "you really don't want to ask about that account."*fn10
A. The Annual Financial Audit
In September 2009, Gristede's had its annual financial audit,
conducted by Russell Bedford, LLP (the "Auditors").*fn11
When asked by the Auditors if he knew of any fraud, Grande
mentioned the Pension Account.*fn12 Upon further
review by the Auditors, Kassner advised Grande that the "company was
going to have to make a 'ledger entry' change 'reclassifying' the
payments from the pension fund account as wages."*fn13
Grande alleges that the reclassification was in name only, and that
the Company did not issue amended W-2's, thus failing to
adhere to proper federal and State reporting requirements.*fn14
Grande alleges that Gristede's then stopped making payments
to employees from the Pension Account but instead deducted the
continuing payments "from other various 'expense'
accounts."*fn15 When Grande learned of the continued
wrongdoing, he again went to Kassner and objected.*fn16
To stop him from again reporting the misconduct to the
Auditors in the upcoming August 2010 audit, Grande was moved into a
"different 'corporate controller' role that did not review the expense
accounts of Gristedes."*fn17
Shortly thereafter, Grande was fired and told it was because Gristede's wanted more leadership within the accounting department.*fn18 Grande claims he was never reprimanded, disciplined, or counseled on any performance issues.*fn19 Further, Grande alleges that "Gristedes has made fraudulent wage and compensation payments over the past 10 years, without reporting or paying the appropriate payroll taxes in excess of $3.2 million."*fn20
On February 4, 2010, the day the original Complaint was filed, Catsimatidis gave an interview to the Post regarding Grande's allegations.*fn21 On February 5, 2011, the Post published the article, stating that "Catsimatidis also said Grande, 42, tried to extort $2 million from the company."*fn22 Grande alleges that this statement is false and defamatory.*fn23 Further, Grande alleges that this statement constitutes defamation per se, as it accuses him of serious criminal conduct, and that it is an attack on his character and integrity.*fn24 Grande alleges that the incident has caused him "extensive distress and damages, harm to his reputation, and harm to his professional, business and employment prospects."*fn25
In deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the court evaluates the sufficiency of the complaint under the "two-pronged approach" suggested ...