A New York Supreme Court judge has ruled against Go N.Y. Tours Inc. in a significant labor law case, impacting the company's operations and its compliance with wage regulations. The court's decision, issued on October 1, 2026, addresses the company's challenge against the New York State Department of Labor (DOL) regarding wage enforcement actions. This ruling could have implications for how businesses handle employee compensation and their rights in administrative proceedings.
The case, Go N.Y. Tours Inc. v. New York State Department of Labor, Index No. 154407/2026, centers on the DOL's findings that Go N.Y. Tours failed to pay wages owed to approximately 315 employees. The DOL issued an Order to Comply, which directed the company to pay over $26 million in back wages, interest, liquidated damages, and civil penalties. The company, operating as TopView Sightseeing, has been under investigation by the DOL for several years regarding its compensation practices.
The plaintiffs in this case, Go N.Y. Tours and its president, Asen Kostadinov, argue that the DOL's enforcement actions violate their constitutional rights, particularly their right to a jury trial. They claim that the administrative process overseen by the DOL and the Industrial Board of Appeals (IBA) does not provide adequate protections for their rights. The DOL, represented by Elizabeth B. Gates from the New York State Attorney General's Office, contends that its mission is to ensure fair wages for workers while protecting compliant employers.
The dispute escalated after the DOL issued an Order to Comply on July 9, 2025, which found that Go N.Y. Tours had failed to pay wages owed to its employees. The order included a breakdown of the total amount due, which included wages, interest, liquidated damages, and civil penalties. The plaintiffs challenged this order, asserting that the DOL's findings were based on an inadequate investigation and that they had not been afforded a fair hearing.
In its ruling, the court, presided over by Judge Ronald Castorina Jr., addressed the plaintiffs' request for a preliminary injunction to halt the DOL's proceedings. The court denied the injunction and granted the defendants' cross-motion to dismiss parts of the plaintiffs' claims. The court noted that the plaintiffs had not exhausted their administrative remedies, as required under the law, stating, "The central claim of the pleading is different in kind. Plaintiffs allege that the wage enforcement scheme is unconstitutional..."
Judge Castorina emphasized that the plaintiffs' challenge to the DOL's authority to impose civil penalties without a jury trial raises significant constitutional questions. However, he ruled that the plaintiffs must first complete the administrative process before seeking judicial review. The court stated, "The Legislature has prescribed a specific path for review of the Commissioner's wage determinations..."
This ruling has important implications for Go N.Y. Tours and similar businesses facing labor law enforcement actions. The court's decision reinforces the DOL's authority to investigate and enforce wage compliance without immediate judicial intervention. It also highlights the importance of the administrative process in resolving disputes related to labor law violations.
The court's ruling may set a precedent for future cases involving challenges to administrative enforcement actions by the DOL. It underscores the necessity for employers to adhere to labor laws and the potential consequences of non-compliance. Businesses may need to reassess their wage practices and ensure they are in line with state regulations to avoid similar enforcement actions.
As for what’s next, Go N.Y. Tours has the option to appeal the court's decision. However, the ongoing administrative proceedings before the IBA must be resolved before any further judicial review can occur. The plaintiffs also have a related case pending concerning unemployment insurance contributions, which adds another layer of complexity to their legal challenges.
The outcome of this case could influence how labor law is enforced in New York and the rights of employers in administrative proceedings. As the legal landscape evolves, businesses will need to stay informed about their obligations under labor laws and the potential for administrative enforcement actions.