On April 16, 2014, the District Court granted Plaintiffs’ motion for summary judgment on all their claims. Plaintiffs, car sales representatives, originally filed the lawsuit on December 30, 2009 against Defendants, The Major Automotive Companies, Inc., Harold Bendell, and Bruce Bendell (collectively, “Major World”) alleging that Major World failed to pay them the proper minimum wage, overtime pay, commissions, and made unlawful deductions from their earned wages in violation of the Fair Labor Standards Act (“FLSA”) and the New York Labor Law (“NYLL”).
Plaintiffs alleged that they were paid a shift pay of $20 per day plus commissions. However, if they did not make any commissions during the week, they were still only paid $20 per day even though they worked in excess of 40 hours for the week. Plaintiffs alleged, and the Court agreed, that this pay practice was in violation of the minimum wage and overtime provisions of the NYLL. Defendants admitted that sales representatives generally worked from 45-55 hours per week and that there were periods where they did not earn commissions and were only paid $20 per day. Defendants argued that since Plaintiffs earned on average $40,000 to $50,000 per year, they were paid more than minimum wage. The Court rejected this argument stating that the “NYLL indisputably requires that employers pay employees minimum wage and overtime on a weekly basis, regardless of whether those employees earn commission in subsequent weeks.” As such, the Court granted summary judgment in favor of Plaintiffs on their minimum wage and overtime claims.
Plaintiffs also sought summary judgment on their unpaid commissions claim. They alleged that Defendants violated the commission agreement by adding “additional packs” or “extra costs” to vehicle sales prices, which reduced their commissions. Defendants argued that reductions were to cover “auction expenses,” however, they did not cite to anything in the employee agreements or the collective bargaining agreement pertaining to auction expenses. Furthermore, Defendants argued that since Plaintiffs did not make any complaints about these reductions, they agreed to this compensation practice. The Court stated that “a failure to complain does not render defendants’ conduct permissible in light of the clear contractual language to the contrary.” The Court also rejected Defendants’ argument that Patcher v. Bernard Hodes Group, 10 N.Y.3d 609 (2008) applied to this case. The Court stated that the parties’ history of past dealings should be considered “only … in the absence of a written agreement.” Since the language of the contracts were unambiguous, the Court granted summary judgment in favor of Plaintiffs on their unpaid commissions claim.
The Court also granted summary judgment in favor of Plaintiffs on their unpaid deductions claim. Plaintiffs alleged that Defendants made deductions from “earned” wages for disciplinary reasons, damage done to vehicles and mechanical problems. Defendants failed to offer evidence to the contrary and failed to address this issue in its briefing.
Also, the Court granted summary judgment in favor of Plaintiffs regarding individually liability of Harold and Bruce Bendell. It was undisputed that Harold and Bruce “possessed hiring and firing power, set work schedules, determined salaries, issued checks and drafted and signed employment agreements.” Therefore, Harold and Bruce will be jointly and severally liable for any damages awarded.
Finally, the Court granted summary judgment in favor of Plaintiffs regarding liquidated damages. “The record evidence of willfulness is overwhelming.” In 2006 the New York State Department of Labor (“NYDOL”) investigated Major World and ordered them to pay its employee and ordered them to attend an education seminar regarding compliance with the NYLL (Major World did not attend this seminar). Defendants argued that they hired outside counsel in response to the 2006 audit. However, Defendants failed to provide evidence that they were advised that the NYDOL’s rulings were erroneous. Defendants actually stated that they continued to engage in the same policies and practices that the NYDOL found to be unlawful.
The employment lawyers of Fitapelli & Schaffer, LLP represent employees in various industries with wage and hour claims such as these. Please contact the employment lawyers at Fitapelli & Schaffer, (212) 300-0375, to schedule a free consultation so that we can discuss your rights under the Fair Labor Standards Act and the New York Labor Law.