The founders of the defunct Clarity Juice company are suing Saratoga Spring Water Co. after their affiliation agreement turned sour.
The lawsuit filed Tuesday in state Supreme Court in Saratoga County seeks hundreds of thousands of dollars in compensation and penalties.
The lawsuit alleges the water company president took a controlling interest in the juice company, hired its founders as water company employees, then assigned them to long hours of menial water company duty when they were supposed to be developing the juice company, which he subsequently shut down. It alleges breach of employment agreement, failure to pay regular wages and failure to pay overtime wages, among other claims.
The plaintiffs are Brian Homicz and Sydney Peyser, Saratoga County residents represented by Mark Walsh of Albany law firm Gleason, Dunn, Walsh and O’Shea.
Saratoga Spring Water did not return a call for comment for this story.
The lawsuit lays out the following case:
- Homicz and Peyser developed a formula for a cold-pressed juice product and trademarked the name “Clarity Juice.”
- On Aug. 9, 2013, Peyser formed Clarity Juice LLC; she held 95 percent interest, Homicz 5 percent.
- In 2016, plaintiffs sought a strategic and financial investor to expand Clarity and secure its profitability.
- By October 2016, the plaintiffs and water company President Adam Madkour were in negotiations. They reached a deal whereby Clarity would become part of the Saratoga Spring Water Co. brand family, which Madkour controlled. He would provide investment in working capital, provide sales support, secure one or more distributors, and provide the plaintiffs employment with salary and benefits for at least three years.
- Madkour formed Saratoga Beverage Acquisition LLC, owned and controlled by him, and it acquired a 75 percent interest in Clarity and the trademark.
- The plaintiffs’ employment agreement was with Saratoga Spring Water Co., not Saratoga Beverage Acquisition.
- As of March 8, 2017, Clarity was owned 75 percent by Saratoga Beverage Acquisition 15 percent by Peyser and 10 percent by Homicz. Saratoga Spring Water Co. had become the plaintiffs’ new employer.
- The plaintiffs' duties under the employment agreement were product promotion, sales, education, and development of existing and new products, plus whatever else the company wanted them to do along these lines.
- Within a short time, Homicz and Peyser became packaging and delivery workers. This manual labor came at the expense of the promotion and development of Clarity as the employment agreement had specified.
- By August 2017, Homicz was spending 90 percent of his time delivering spring water and juice to retailers statewide, sometimes working 5 a.m. to 10 p.m. in a single day.
- Based on their job description, neither got overtime pay -- 1.5 times the regular rate of pay for time worked beyond 40 hours a week -- even though their actual duties would dictate that they receive overtime pay.
- Peyser attempted to expand Clarity's market but told to instead focus on menial tasks.
- Despite this, the plaintiffs substantially increased the number of new accounts for Clarity.
- In late 2017, perhaps in October, Madkour said he’d become disenchanted with Clarity and was going to dissolve it. He said if the plaintiffs did not purchase it for $100,000, he was take Clarity and its trademark for himself and his companies in return for his investment.
- On Oct. 13, Madkour gave plaintiffs until Oct. 27 to accept his offer; if they did not, he’d dissolve Clarity on Nov. 1.
- On Oct. 27, plaintiffs’ counsel counter-offered to trade the balance of their three-year employment agreements -- worth $325,000 to $345,000 -- for the return of Clarity as a going concern.
- In response, Madkour immediately locked the plaintiffs out of the facility and out of their email accounts.
- Madkour sent the plaintiffs termination letters dated Nov. 17 citing acts or omissions on their part from April to September 2017, a period when they were receiving favorable evaluative comments from supervisors.
- On Dec. 12, Madkour canceled an already-placed and ready-to-be filled order for 2,800 bottles from the Clarity Juice co-packer.
- On Dec. 15, Madkour signed a resolution dissolving Clarity Juice LLC effective Dec. 18.
- On Dec. 28, Madkour had a letter sent to customers and friends of Clarity Juice stating Clarity would cease operations immediately due to the difficulty obtaining fresh organic products in certain seasons.
- Homicz’s and Peyser’s salaries each were $65,000 a year, so termination of the three-year employment agreement after less than a year cost them at least $150,000 each.
The plaintiffs seek that sum, plus unpaid wages from Nov. 13 to 21, plus unpaid overtime, and additionally at least 100 percent of each of these sums in liquidated damages.
The lawsuit also seek unreimbursed charges to Peyser’s E-ZPass account, plus plaintiffs’ costs and disbursement fees, plus interest, plus any other relief the court deems proper and just after a jury trial.
The Clarity Juice case unfolded as Saratoga Spring Water Co. was wrangling with another Saratoga County-based company that sells cold-pressed organic juice in small square bottles at a premium price: Saratoga Juice Bar.
On April 11, 2016, Saratoga Spring Water Co.filed a petition with the U.S. Patent and Trademark Office seeking to block Saratoga Juice Bar from using its name, on the grounds that the word “Saratoga” might confuse customers into thinking that the juice company and water company were connected, or that their products are similar. (This despite the dissimilarity between their bottles and the bottles’ contents, and the fact that there were nearly 100 other trademarks bearing the name “Saratoga” for everything from potato chips to beer.)
The Saratoga Juice Bar trademark dispute was resolved in October 2017 -- about the time Homicz and Peyser allege that Madkour informed them he was giving up on Clarity Juice.
The Juice Bar agreed to rename its wholesale bottled product “Legacy Juice Works.” Their retail location on Broadway in Saratoga Springs remains Saratoga Juice Bar.