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Lantino v. Clay LLC

Pandemic, PAUSE Executive Order Did Not Render Settlement's Performance Impossible

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OPINION AND ORDER   Pending before the Court is a motion by Plaintiffs Michael Lantino (“Lantino”) and Joanne Cabello (“Cabello”) (collectively, “Plaintiffs”) for entry of a Consent Judgment against Defendants The Gym at Greenwich, LLC; The Gym at Port Chester, Inc.; and The Gym at Union Square, Inc. (collectively, the “Corporate Gym Defendants”), as well as individual Defendants Seth Hirschel (“Hirschel”), Stefan Malter (“Malter”) and Barnet Liberman (“Liberman”) (collectively, the “Individual Defendants”). (Pl. 4/29/20 Not. of Mot., ECF No. 98.) Defendants resist entry of the Consent Judgment, claiming that their performance under the Settlement Agreement that permits entry of the Judgment was rendered impossible by the COVID-19 pandemic and the resultant “New York State on PAUSE” Executive Order signed by New York Governor Andrew M. Cuomo that became effective on March 22, 2020 (the “PAUSE Executive Order”). For the reasons set forth below, Plaintiffs’ motion is GRANTED. BACKGROUND This case, which was commenced on December 27, 2018, alleged violations of the Fair Labor Standards Act (“FLSA”) and the New York Labor Law.1 (Compl. 1.) Plaintiffs asserted that the Corporate Gym Defendants and the Individual Defendants routinely and knowingly operated their fitness businesses without sufficient funds to cover employee payroll. (See id.

49-57.) They alleged that Defendants routinely paid their employees later than their regularly scheduled pay date and, on many occasions, because the corporate bank account was not sufficiently funded, employees’ paychecks would bounce, leaving employees with no timely payment of wages and a bounced check fee. (See id.) They also alleged that at some point Defendants altogether stopped paying their employees for their time worked. (See id.

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