2d Circuit makes it more difficult to sue over Labor Law wage notice violations

Under the New York Labor Law, management must issue their employees a wage notice that describes the rate of pay for regular and overtime hours, makes reference to health care benefits, and discusses tips and meals allowance. The Labor Law provides for damages up to $10,000 if the employer does not provide the wage notice. When can the plaintiff sue over the employer's failure to provide the wage notice?

The case is Guthrie v. Rainbow Fencing Inc., issued on August 30. The State Legislature adopted the wage notice requirement in 2010, and since that time, the district courts have grappled with the issue of when an employee can sue over the failure to provide these notices. The Court of Appeals definitively resolves that issue, making it difficult for employees to bring a lawsuit unless the can show the employer's dereliction caused the employee to suffer real damages.

The Second Circuit (Menashi, Nathan and Kahn) frames this as a standing case, governed by the constitutional requirement that each plaintiff must have an actual case-or-controversy. In 2022, the Second Circuit said, “a plaintiff has standing to bring a claim for monetary damages following a statutory violation only when he can show a current or past harm beyond the statutory violation itself.” 

Drawing from the body of district court case law on this issue, the Circuit notes that some trial judges hold that the statutory violation allows plaintiffs to sue because the Labor Law "provides not only an avenue for employees to recover wages owed them by their employer but also a means to empower them—namely, through the provision of written notices with respect to employers’ legal obligations—to advocate for themselves.”

That is all well and good, the Court of Appeals says, but it adopts the following rule: 

a plaintiff must show some causal connection between the lack of accurate notices and the downstream harm. The legislature may have intended to empower employees to advocate for themselves, but unless the plaintiff-employee can show that he or she would have undertaken such advocacy and plausibly would have avoided some actual harm or obtained some actual benefit if accurate notices had been provided, the plaintiff-employee has not established a concrete injury-in-fact sufficient to confer standing to seek statutory damages under § 195.