A partly-owned subsidiary of the New York Yankees became one of the latest companies to allegedly violate state wage payment statutes.  State wage payment laws generally define “wages” and then dictate how wages must be paid to employees.  Such statutes usually have penalty provisions and oftentimes are subject corporate officers to both civil and criminal penalties.  The statutes usually provide for recovery of additional damages and attorneys’ fees.

Legends Hospitality, the defendant in this recent lawsuit, was formed by the New York Yankees, Dallas Cowboys, Goldman Sachs and CIC Partners to provide premium catering at Yankees Stadium and the Cowboys Stadium.  Ballpark patrons sitting in high-end seats at Yankees Stadium are subjected to an automatic 20 percent service charge for food and beverages.  Often, the customers also add additional gratuities for good service. 

The lawsuit claims that Legends Hospitality has been pocketing the service charge instead of paying its employees as required by New York state law.  The lawsuit, which seeks class-action status, further states that tickets for the premium seats in the new Yankees Stadium typically cost between $100 and $325.  The lawsuit does not seek a specific amount of damages but claims the amount in dispute is more than $5 million, involving more than 150 employees.

The New York Payment of Wages Law (“NYPWL”) defines wages broadly as the earnings of an employee for labor or services rendered regardless of whether the amount is based on time, piece, commission or other basis.  It also defines the frequency at which wage payments must be made to employees.  The NYPWL, like many other state wage laws, provides for increasing civil and criminal penalties if violations are found to be willful or if they are repeated. 

Pennsylvania and New Jersey both have laws similar to the NYWPL:  In Pennsylvania, the Wage Payment and Collection Law, and in New Jersey, the Wage Payment Law.  These laws are intended to hold large and rich companies, like a subsidiary of the Yankees, responsible for the proper and fair compensation of the working class employees who keep their businesses running. 

About the Author—Christopher Hinderliter is a trial attorney at Sheridan & Murray in Philadelphia, PA.