United States District Court, S.D. New York
ELIAS WEXLER, ZERO INTERNATIONAL REALTY CO., INC., ZERO OHIO, LLC, ZERO AMERICA LATINA, LTD., ZERO ASIA PACIFIC LTD., and ZERO EAST, LTD., Plaintiffs,
ALLEGION (UK) LIMITED and SCHLAGE LOCK COMPANY, LLC, Defendants.
OPINION AND ORDER
Edgardo Ramos, U.S.D.J.
Wexler (“Wexler”), Zero International Realty Co.,
Inc. (“Zero Realty”), Zero Ohio, LLC (“Zero
Ohio”), Zero America Latina, Ltd. (“Zero
Latina”), Zero Asia Pacific Ltd. (“Zero
Asia”), and Zero East, Ltd. (“Zero East, ”
and collectively, “Plaintiffs”) brought this
action against Allegion (UK) Limited (“Allegion
UK”) and Schlage Lock Company, LLC (“Schlage,
” and collectively, “Defendants”), alleging
a host of state law claims. Now pending before the Court is
Defendants' motion to dismiss Counts I, II, III, VII, and
VIII of the Complaint. For the reasons discussed below,
Defendants' motion is GRANTED in part and DENIED in part.
Plaintiffs will be given an opportunity to replead.
is an entrepreneur and engineer who, for thirty-five years,
served as the President and CEO of Zero International, Inc.
(“Zero International”), a Bronx company known for
creative, effective, and affordable approaches to
construction material needs in the acoustical, fireproofing,
and door-hardware fields. Compl. (Doc. 2, Ex. A) ¶ 28.
Under Wexler's leadership, Zero International expanded
its operations from one small factory in the Bronx to an
international company, with four factories in the United
States, branches all over the country, and sales in
thirty-five countries around the world. Id. ¶
31. Wexler is also the sole shareholder and President of Zero
Realty, the majority member and President of Zero Ohio, and
the 51% shareholder and President of each of Zero Latina,
Zero Asia, and Zero East. Id. ¶¶ 9-13.
has been published in many trade magazines and has served as
a visiting lecturer at the Pratt Institute of Design,
President of the New York Society of Manufacturing Engineers,
and President of the New York Critical Manufacturing Sector
Coordinating Council. Id. ¶¶ 35- 38. He
was a member of the Builders Hardware Manufacturers
Association, which advises and writes standards for the
American National Standards Institute. Id. ¶
2014, Defendants expressed an interest in acquiring Zero
International. Id. ¶ 42. At all relevant times,
Wexler's primary contact for Defendants was Anshu
Mehrotra (“Mehrotra”), Allegion's Vice
President and General Manager of Commercial Mechanical
Business. Id. ¶ 43. In connection with
Defendants' acquisition of Zero International, Wexler and
Mehrotra discussed Wexler's desire and expectation to
continue working in the industry. Id. ¶ 45. The
two agreed that Wexler would continue to use his extensive
expertise to further Defendants' business interests.
Id. Specifically, Mehrotra told Wexler that
Defendants would continue to employ him after the acquisition
for a minimum of eighteen months and that Wexler would be
permitted to retain the title of “‘President
Emeritus' of Zero International for life.”
Id. ¶ 48.
and Mehrotra also discussed Wexler's desire that,
following the acquisition, Defendants continue to use Zero
Latina, Zero Asia, and Zero East as Zero International's
exclusive distributors. Id. ¶ 46. Mehrotra, on
behalf of Defendants, agreed that with regard to these three
companies, “nothing would change, ” and that they
would continue to be the exclusive distributors in their
respective geographic regions for products manufactured and
sold by Zero International. Id. ¶ 47.
about February 13, 2015, Mehrotra sent Wexler a formal offer
of employment upon the closing of Defendants' acquisition
of Zero International. Id. ¶ 49. Wexler was
offered to join Defendants as “President Emeritus -
Zero Group International” with a base annual salary of
$190, 000 plus benefits and other financial incentives.
Id. ¶ 50. Wexler's job responsibilities
were to include: sharing his knowledge of the industry and of
Zero International's products and applications with
Defendants' team at business meetings and presentations,
helping Steelcraft (a company owned by Allegion) comply with
acoustical standards, continuing his efforts to include
Intumescent (a product produced by Zero International) in the
Builders Hardware Manufacturers Association's standards
and the National Fire Protection Association's
certifications, providing support at Zero International's
Bronx facilities on an as-needed and as-requested basis, and
engaging and building relationships with international
customers. Id. ¶ 52. The offer contained the
If Allegion involuntarily terminates your employments
[sic] without cause prior to August 31, 2016,
Allegion will pay you a lump sum equal to the total amount of
base salary that would have been paid to you through August
31, 2016 if you had remained employed by Allegion through
that date reduced by any amounts of base salary paid to you
prior to such date. This lump sum payment shall be made as
soon as administratively practicable after your termination
of employment date and in no event later than the end of the
month following the month in which your employment
Id. ¶ 51. On February 19, 2015, Defendants
acquired Zero International pursuant to an Asset Purchase
Agreement (“APA”) executed by Defendants, Wexler,
and certain other parties. Id. ¶ 44.
worked for Defendants from approximately April 1, 2015
through September 17, 2015. Id. ¶ 53. As part
of his duties and at Defendants' request, Wexler attended
meetings in New York, throughout the country, and around the
world. Id. ¶ 54. Wexler also met regularly with
Defendants' employees to discuss Zero International's
business and products. Id. ¶ 57. During the
term of his employment, neither Mehrotra nor anyone else on
behalf of Defendants ever complained to Wexler about his work
performance, and Defendants never reprimanded or disciplined
Wexler in any way connected with his work. Id.
about September 17, 2015, Mehrotra traveled to Wexler's
office in the Bronx, accompanied by the head of human
resources and two security guards. Id. ¶ 69.
Mehrotra abruptly told Wexler that “we're
separating” and that he had thirty minutes to pack up
his personal belongings and leave the building. Id.
¶ 70. Wexler was humiliated, and he silently collected
his belongings. Id. ¶ 72. After meeting briefly
with a representative of Defendants' human resources
department, Wexler was expelled from the building by two
security guards, in plain sight of his coworkers and
colleagues, who stared at him. Id. ¶¶
72-74. Wexler alleges that the spectacle gave those who
viewed it the false impression that Wexler had engaged in
misconduct and was being terminated for cause. Id.
¶ 75. Later, Wexler discovered that Defendants had also
terminated his wife and son-whom Defendants had also employed
after acquiring Zero International-in a similarly
“public and humiliating” fashion. Id.
¶ 79. Wexler was 65 years old at the time he was fired.
Id. ¶ 80.
about September 17, 2015, Defendants sent Wexler a letter
concerning his termination. Id. ¶ 81. The
letter advised Wexler that he had been terminated as part of
a “reduction in force.” Id. However,
Wexler alleges that he was actually terminated because of his
age and his “old-school” business practices.
Id. ¶ 2. In the letter, Defendants agreed to
pay Wexler the approximately $175, 000 to which he was
entitled, pursuant to his offer letter, because he had been
terminated without cause, but only if Wexler first agreed to
sign a ten-page contract that included a general release and
other conditions affecting his rights. Id. ¶
81. Wexler refused to sign the contract, and Defendants, in
turn, did not pay Wexler the $175, 000. Id. ¶
alleges that Defendants falsely informed prominent members of
the acoustical, fireproofing, and door-hardware industries
that Wexler's work for Defendants had been unsatisfactory
and that Wexler was unworthy of continued employment.
Id. ¶ 83. Wexler also alleges that Defendants
informed these industry leaders about the manner of his
termination, and that these individuals interpreted
Defendants' conduct as conveying the fact that Wexler had
engaged in misconduct, was being terminated for cause, and
was incompetent, dishonest, and unworthy of employment.
Id. ¶¶ 83-85. Wexler asserts that
Defendants' conduct damaged his reputation, destroyed his
future career prospects, and rendered meaningless the title
of “President Emeritus.” Id.
¶¶ 86-87. Since being terminated, Wexler has been
stripped of his membership on the board of the New York
Critical Manufacturing Sector Coordinating Counsel, and can
no longer attend meetings and events for the Builders
Hardware Manufacturers Association. Id. ¶¶
90-91. Defendants also refused to use Zero Latina, Zero Asia,
and Zero East as their exclusive suppliers and distributors
for Zero International products. Id. ¶ 95.
February 29, 2016, Plaintiffs brought this action against
Defendants in New York State Supreme Court, Bronx County,
alleging age discrimination in violation of the New York
State Human Rights Law (“NYSHRL”) and the New
York City Human Rights Law (“NYCHRL”);
defamation; breach of various contracts, including
Wexler's employment contract and the oral distributor
contracts with Zero Latina, Zero Asia, and Zero East; unjust
enrichment; and conversion. Id. ¶¶
125-183. Plaintiffs seek damages in excess of $10 million, as
well as certain declaratory and injunctive relief.
Id. at 26-27. On March 28, 2016, Defendants removed
the case to this Court on the basis of diversity
jurisdiction. Doc. 2. On November 9, 2016, the Court denied
Plaintiffs' motion to remand the case back to state
court. Doc. 36.
pending before the Court is Defendants' motion to dismiss
Plaintiffs' claims for age discrimination (Counts I and
II); defamation (Count III); breach of the distributor
contracts with Zero Latina, Zero Asia, and Zero East (Count
VII), and conversion (Count VIII). After Defendants filed their
motion, Plaintiffs voluntarily ...