Marcante v. Collins Enterprises LLC
Company Profit Distribution Could Qualify As 'Wages' Under §31-71a
Labor and Employment | Employee Benefits | Executive Compensation (Labor and Employment) | Wages and Hours
- Superior Court
- Stamford/Norwalk J.D., at Stamford
- Dec 05 2012 (Date Decided)
- Jennings, J.T.R.
Allegations that corporate profit distributions, although linked to the success of affiliated company entities, are nondiscretionary, fully vested and directly tied to an employee's efforts, can be sufficient to allege that the distributions constitute "wages." The defendant, Collins Enterprises LLC, hired the plaintiff, Michael Marcante, to work as a chief financial officer. Marcante sued, claiming that he was "responsible for the overall management of the financial affairs of the Company and its affiliated entities," and Collins allegedly failed to pay his profit entitlements, in violation of Connecticut General Statutes §31-72. Collins moved to strike and argued that the profit entitlements were the equivalent of corporate stock dividends and did not qualify as "wages," for purposes of C.G.S. §31-71a. Marcante objected that the profit entitlements were promised as part of his employment, in return for his work, and he accepted the entitlements in lieu of a higher base salary. The statute defines "wages" as "compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation." The key issues, wrote the court, were whether Marcante adequately alleged that his rights to profit entitlements from affiliated entities were nondiscretionary and tied directly to the success of the affiliated business entities, as a result of Marcante's work. The plaintiff's allegations that the profit entitlements, although linked to the success of affiliated company entities, were nondiscretionary, fully vested and directly tied to Marcante's efforts as chief financial officer, were sufficient to allege that profit entitlements constituted "wages." The court denied Collins' motion to strike.