Debevoise Wins at New York High Court with Novel Legal Theories

11 April 2018

Debevoise & Plimpton LLP secured an important win at the New York Court of Appeals on behalf of client Andrew Kolchins in his compensation dispute with his former employer. Debevoise also represents Mr. Kolchins and the brokerage firm he founded, Titan Energy Markets, in a related lawsuit commenced by EvoMarkets attempting to enforce restrictive covenants.

In the affirmative case against EvoMarkets, we advanced two novel legal theories. First, we argued that an email exchange between Mr. Kolchins and EvoMarkets’ CEO constituted a valid and binding contract under New York law to extend the terms of Mr. Kolchins’ lucrative written agreement for an additional three-year term. EvoMarkets countered that the email exchange could not constitute a binding contract, given that the parties subsequently tried to memorialize their understanding in a more formal instrument and that they failed to do so after negotiations over specific language in the proposed document broke down. Second, we argued that EvoMarkets breached the written contract by failing to pay Mr. Kolchins his final production bonus and that language in the contract purporting to require Mr. Kolchins to be employed on the payment date (which he indisputably was not) was unenforceable and a violation of a provision of the New York Labor Law prohibiting forfeiture of earned wages.

Justice Bransten in the New York Supreme Court endorsed our theories on both points, and the Appellate Division, First Department affirmed on both points, with one Justice writing a lengthy and strenuous dissent. In light of the dissent and some critical commentary from the legal press, the New York Court of Appeals granted EvoMarkets’ leave to appeal. Oral argument was held on February 13, 2018.

On March 29, the Court of Appeals affirmed, ruling in our client’s favor on all issues, holding that (i) a binding contract could be formed by the email exchange notwithstanding the fact that the parties indisputably tried and failed to memorialize their understanding in a more formal instrument, and (ii) contract language purporting to allow for forfeiture of an earned bonus if the employee is no longer employed on the anticipated payment date is unenforceable under the New York Labor Law.

The team was led by Jyotin Hamid and included former Debevoise lawyer Olga Buland.

Debevoise & Plimpton LLP is a premier law firm with market-leading practices, a global perspective and strong New York roots. We deliver effective solutions to our clients’ most important legal challenges, applying clear commercial judgment and a distinctively collaborative approach.