Hensel v. Bestpass, Inc.

• Decision Date: 25 August 2022
• Docket Number: Index No.: 906270-20
• Citation: 77 Misc.3d 1011,182 N.Y.S.3d 853
• Parties: Tanya HENSEL, Plaintiff, v. BESTPASS, INC., Defendant.
• Court: New York Supreme Court

77 Misc.3d 1011

182 N.Y.S.3d 853

Tanya HENSEL, Plaintiff,

v.BESTPASS, INC., Defendant.

Index No.: 906270-20

Supreme Court, Albany County, New York.

Decided on August 25, 2022

Smith Hoke, PLLC, Attorneys for Plaintiff, (John J. Hoke, of counsel), 16 Wade Road, Latham, New York 12110

Barclay Damon LLP, Attorneys for Defendant, (Michael J. Murphy, of counsel), 80 State Street, Albany, New York 12207 Richard M. Platkin, J. Plaintiff Tanya Hensel commenced this action on September 30, 2020, seeking to recover commissions allegedly withheld by her former employer, defendant Bestpass, Inc. ("Bestpass"), in violation of Labor Law § 193 and the parties' contractual agreement. Hensel later amended her complaint to add claims of unlawful retaliation and discrimination.

Bestpass denied the allegations and counterclaimed to recover alleged overpayments of commissions made to Hensel under causes of action alleging fraud and unjust enrichment.

Discovery is complete, and a trial-term note of issue was filed on March 21, 2022. Plaintiff now moves for partial summary judgment on her Labor Law § 193 claim and for dismissal of defendant's counterclaims. Bestpass opposes the motion and cross-moves for dismissal of Hensel's claims for breach of contract, promissory estoppel and retaliation.

BACKGROUND

Bestpass provides toll management systems to trucking companies (see NYSCEF Doc No. 59 ["D-SOMF"], ¶ 1), and Hensel is a former employee.

Hensel was hired by Bestpass as a customer service representative in September 2011 (see id., ¶ 3) and promoted in 2019 to Director of Inside Sales and Operations (see NYSCEF Doc No. 14 ["Amended Complaint"], ¶¶ 3, 8; see also NYSCEF Doc No. 68 ["P-RSOMF"], ¶ 2). The new position was outlined in a May 10, 2019 letter from Bestpass (see P-RSOMF, ¶ 3), which provided that Hensel would continue to serve as an "at-will, exempt employee" in the new position of Director of Inside Sales and Operations, a role in which she would "directly manage all inside sales account executives, two onboarding coordinators, sales development representative and sales assistant" (NYSCEF Doc No. 46 ["Joint EBT Exhibits"], Ex. 1 ["2019 Offer Letter"]).

The 2019 Offer Letter states that Hensel would receive an annualized salary of $125,000, together with commissions paid on the following terms:

• 5% commission on all Inside Account Representative's revenue up to 2,000 tags per month (exclusive of any hardware/transponder fees);

• Commission will be paid out for the first 12 months of a customer's billing (starting with the customer's first billing); and

• Commission will be paid out monthly for the previous month

(id.; see also P-RSOMF, ¶ 4). The 2019 Offer Letter further provides that an "updated job description is forthcoming," and "a more formalized commission plan will be created when all operations functions have been transitioned." Hensel signed the letter on May 13, 2019, thereby manifesting her "agreement with the employment and commission terms" (id.).

In connection with the promotion, Hensel also was in discussions with John Andrews, then-CEO of Bestpass, and John Lang, the Vice-President of Finance, regarding "certain incentives that [she] would need to make the new position financially feasible" (Amended Complaint, ¶ 9). According to Hensel, Andrews "promised" her that "when her job description was fully implemented," Bestpass "would develop a formalized commission plan consistent with the terms offered [to] other inside sales executives" (id., ¶ 10).

In June 2019, Hensel allegedly "was provided both a new job description and a formalized Commission Plan consistent with [the] terms of her [2019 Offer Letter]" (id., ¶ 11). "The formalized Commission Plan ... was provided to her by [Bestpass'] general counsel, William Decaire, Esq., and included the terms that she had discussed with both" Andrews and Lang (id., ¶ 12; see Joint EBT Exhibits, Ex. 2 ["2019 Commission Plan"]). However, Bestpass insists that Hensel herself prepared the 2019 Commission Plan, with Decaire's assistance, and it was not approved by Bestpass (see P-RSOMF, ¶¶ 6-7).

Under the 2019 Commission Plan, Hensel would "be paid a 5% commission on all Earned Commissionable Revenue from transponder-based and/or plate-based accounts during the first 12 months beginning after the customer's account is first billed" (p. 1). Additionally, a "Monthly Commission Percentage Accelerator" would increase Hensel's base commission percentage by specified amounts if monthly sales exceeded certain benchmarks (id.; see also P-RSOMF, ¶¶ 8-9). The document has signature lines for Hensel and Andrews, but is unsigned (see 2019 Commission Plan, p. 2; see also P-RSOMF, ¶ 11).

Hensel claims that, beginning in or about June 2019, she was "compensated consistent with the terms of the 2019 ... Commission Plan" (Amended Complaint, ¶ 16), which Andrews approved during a June 24, 2019 meeting (see P-RSOMF, ¶ 10). Since then, "[p]laintiff used all her efforts to produce sales and thus earned commissionable revenue on behalf of [Bestpass]. Her efforts resulted in commissions that included the commission accelerator payments that during certain months reached 15%" (Amended Complaint, ¶ 17). "However, beginning with [the] January 2020 commission payment, [her] wages were unilaterally reduced by [Bestpass]" (id., ¶ 18).

For its part, Bestpass insists that "[n]either Mr. Lang, Mr. Andrews, nor Mr. Decaire approved of, implemented, or signed [the 2019 Commission Plan] on behalf of Bestpass" (P-RSOMF, ¶ 10). But despite the lack of executive approval, Hensel informed Jenna Menetti—the Assistant Controller of Bestpass, who was responsible for creating monthly commission reports—that her commission rate was as reflected in the 2019 Commission Plan (see id., ¶¶ 12-14; see also NYSCEF Doc No. 25 ["Answer"], ¶¶ 75-77).

Based on Hensel's representation, Menetti updated the Bestpass accounting system to use the commission rates reflected in the 2019 Commission Plan (see P-RSOMF, ¶¶ 15-18; Answer, ¶ 79). Once Menetti prepared a commission report for Hensel under the new plan, Hensel would review the report and make any necessary changes before a final number was arrived at and sent to the payroll department for processing (see P-RSOMF, ¶¶ 19-22).

According to Bestpass, Hensel "has been paid all commissions earned under the May 13, 2019 signed offer" (Answer, ¶ 74). And when Bestpass learned in April 2020 that plaintiff was being paid commissions under the unapproved 2019 Commission Plan (see P-RSOMF, ¶¶ 23-24), it conducted an investigation and determined that Hensel was "paid $83,687.01," which was "$49,077.12 more than the total of $34,609.89 in commissions to which she was entitled under the [2019 Offer] Letter" (id., ¶ 25; see Answer, ¶ 80). Bestpass then held back Hensel's commissions "at her direction" to "ensure [that she] was being paid an appropriate commission rate" (P-RSOMF, ¶ 26).

Hensel denies ever directing Bestpass to withhold earned commissions (see id.). Rather, Hensel claims to have "expressed a willingness ... to revisit her commission schedule" with Andrews and Lang, "because she believed that [Bestpass'] revenue had declined in the wake of the [COVID-19] pandemic and that could put her position in jeopardy" (Amended Complaint, ¶ 19; see P-RSOMF, ¶ 26). Thus, "[p]laintiff assumed that her commissions were being withheld because [Bestpass] was under financial strain caused by the ... pandemic" (Amended Complaint, ¶ 19).

Hensel maintains that she was not contacted to discuss her commissions until June 26, 2020, when she received a new compensation plan entitled "2020 Director of Sales Operations, Training & Sales Automation — Compensation & Commission Plan" (id., ¶¶ 20-21; see Joint EBT Exhibits, Ex. 3 ["2020 Commission Plan"]). That plan "radically reduced and changed her commission structure" (Amended Complaint, ¶ 21).

Hensel also was provided with a check for $5,672.11, representing the commissions due under the 2020 Commission Plan, retroactive to March 2020 (see id.). Hensel claims that she was "never advised" of any changes to her commission structure until she was presented with the 2020 Commission Plan, and the $5,672.11 payment did not reflect the commissions that were due under either the 2019 Commission Plan or the 2019 Offer Letter (P-RSOMF, ¶ 27).

Over the next several months, the parties unsuccessfully attempted to resolve Hensel's compensation issue. Bestpass maintains that Hensel rejected its negotiation efforts, whereas Hensel complains that Bestpass unfairly was seeking to have her forfeit earned commissions (see id., ¶ 28).

Bestpass further contends that it did not discipline or terminate Hensel for misrepresenting her commission rate to Menetti, and, in fact, promoted her in August 2020 to the Director of Sales, Operations and Training (see id., ¶¶ 29-30).

Hensel's compensation in the new position was made subject to a July 31, 2020 plan, which then was replaced in January 2021 "with a plan that further reduced [her] compensation" (Amended Complaint, ¶ 22). According to Hensel, "the June 26th, 2020, July 31st, 2020, and January 2021 plans contained terms that were substantially less lucrative" than the prior plans, although she acknowledges that Bestpass "retained the right to change the terms of [her] compensation model" (id., ¶ 23).

Still, Hensel alleges that she was not paid her earned commissions between January 2020 and June 26, 2020 (see id., ¶ 24). Further, "none of [her] commission payments beginning in late 2019 and continuing through 2020 corresponded with the total commissions she earned as certain tags that should have been included within the scope of the account revenue utilized in calculating her commissions w[ere] unlawfully deducted" (id., ¶ 25). "Additionally, [Hensel] was never paid commissions on all revenue generated by the inside sales account executives, onboarding coordinators, sales development representatives and sales assistants" (id., ¶ 26).

When Hensel...