Thoens v. Kennedy, 304 N.Y. 274 (1952)

A release of wage claims, knowingly and voluntarily executed by employees after consulting with their attorney and with awareness of an existing wage dispute, is enforceable and not against public policy, even in the context of prevailing wage laws.

Summary

Ninety-three stationary engineers employed by New York City sought additional compensation for late shifts and Sunday work under the Labor Law. After an initial determination against them, they signed releases waiving their claims in exchange for payment. The Court of Appeals held that these releases were enforceable, barring their recovery of the additional compensation. The court reasoned that the releases were knowingly executed after consultation with counsel and in light of an existing wage dispute, and that enforcing them did not violate public policy.

Facts

Ninety-three stationary engineers employed by New York City departments sought additional compensation for late shifts and Sunday work between January 14, 1944, and May 22, 1947, based on the prevailing wage rate under Section 220 of the Labor Law.
The City Comptroller initially denied their claims, but this determination was later reversed in a related case.
In 1948, following the Comptroller’s initial determination, the engineers executed releases waiving any claims for wage differences during the relevant period.
Prior to signing the releases, the engineers consulted with their attorney, who approved the releases.

Procedural History

The engineers filed a petition seeking additional compensation.
The lower courts ruled in favor of the engineers, finding that the reversal of the Comptroller’s initial determination benefited all engineers who filed complaints in the original proceeding.
The Court of Appeals reversed the lower courts’ decisions and dismissed the petition.

Issue(s)

Whether releases executed by the engineers in 1948, after the Comptroller’s initial determination denying their wage claims, preclude their recovery of additional compensation for Sunday and night work during the period in question.
Whether the releases are against public policy and prohibited by subdivision 8-a of section 220 of the Labor Law.
Whether the releases fail for lack of consideration.

Holding

No, the releases preclude the engineers’ recovery because they were knowingly and voluntarily executed with awareness of the wage dispute and after consulting with counsel.
No, the releases are not against public policy because they represent a solemn release duly executed and acknowledged, not merely a failure to protest.
No, the releases do not fail for lack of consideration because the payment by the Comptroller in settlement of a known but undetermined controversy constitutes valid consideration.

Court’s Reasoning

The court found the language of the releases to be clear and unambiguous, expressly waiving any claim for wage differences during the relevant period. The court emphasized that to hold otherwise would render the releases meaningless.
The court noted that the engineers had consulted with their attorney and received approval before signing the releases. They were aware of the controversy regarding shift differentials, as evidenced by their specific claims and their attorney’s exception to the Comptroller’s adverse ruling at the May 9, 1947, hearing.
The court rejected the argument that the releases violated public policy, distinguishing the situation from a mere failure to protest under subdivision 8-a of section 220 of the Labor Law. The court cited Matter of Dinan v. Patterson, emphasizing the difference between failing to protest and executing a solemn release.
The court further held that the releases were supported by valid consideration because the payment made by the Comptroller prior to the final determination constituted a settlement of a known but undetermined controversy. The court referenced Debtor and Creditor Law, § 243, and Labor Law, § 220, subd. 8, in its reasoning.