Perez v. Westchester Foreign Autos, Inc.
| Decision Date | 28 February 2013 |
| Docket Number | 11 Civ. 6091 (ER) |
| Parties | MANUEL PEREZ, FAUSTO GONZALEZ, EDDY PEÑA, LUIS OLIVIER, and HERMIS JIMENEZ, individually and on behalf of all other employees similarly situated, Plaintiffs, v. WESTCHESTER FOREIGN AUTOS, INC. d/b/a WESTCHESTER TOYOTA, BAY RIDGE AUTOMOTIVE MANAGEMENT CORP., CARMELO GIUFFRE, JOHN GIUFFRE, JR., RICHARD PRAGER and JOHN DOES #1-10, jointly and severally, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Appearances:
Brent E. Pelton
Taylor B. Graham
Pelton & Associates PC
New York, New York
Attorneys for Plaintiffs
John Schuyler Brooks
Marc B. Zimmerman
Denise J. D'Ambrosio
Chryssa V. Valletta
Phillips Nizer LLP
New York, New York
Attorneys for Defendants
Ramos, D.J.:
Plaintiffs Manuel Perez ("Perez"), Fausto Gonzalez ("Gonzalez"), Eddy Peña ("Peña"), Luis Olivier ("Olivier"), and Hermis Jimenez ("Jimenez," and collectively, "Plaintiffs") bring this suit individually and on behalf of all other employees similarly situated against Defendants Westchester Foreign Autos, Inc. d/b/a Westchester Toyota ("Westchester Toyota"), Bay Ridge Automotive Management Corp. ("BRAM"), Carmelo Guiffre ("Guiffre"), John Guiffre, Jr. ("Guiffre Jr."), Richard Prager ("Prager"), and John Does #1-10 ("Doe Defendants," and collectively, "Defendants") pursuant to the Fair Labor Standards Act ("FLSA") and New York Labor Law. Pending before this Court is Defendants' motion to dismiss Plaintiffs' Amended Complaint. For the reasons set forth below, Defendants' motion is DENIED.
The following facts have been taken from the allegations in the Amended Complaint, which the Court accepts as true for purposes of this motion. Famous Horse Inc. v. 5th Ave. Photo Inc., 624 F.3d 106, 108 (2d Cir. 2010). They do not constitute findings of the Court.
At all times relevant to the Amended Complaint, Plaintiffs were sales consultants and sales managers at Defendants' automobile dealership, Westchester Toyota, located in Yonkers, New York. Am. Compl. ¶ 1. Plaintiffs Perez, Olivier and Jimenez were sales consultants. Id. ¶ 17. Perez worked at Westchester Toyota from May 2010 through June 2011, id. ¶¶ 47, 48, Olivier worked at Westchester Toyota from February 2009 to December 2011, id. ¶ 73, and Jimenez worked at Westchester Toyota from February 2009 to November 2011. Id. ¶ 80.
Plaintiffs Gonzalez and Peña began their employment at Westchester Toyota as sales consultants and eventually were promoted to sales managers. Id. ¶¶ 18, 57, 67. Gonzalez began working for Defendants in 1999. Id. ¶ 57. He was a sales consultant from September 2005 to October 2006, and a sales manager from that point until he left Westchester Toyota in 2009. Id. ¶ 57. Peña worked at Westchester Toyota from October 2003 to September 2010 and again from January 2011 to May 2011. Id. ¶ 66. He worked as a sales manager from the end of 2007 until September 2010. ¶ 67. Upon information and belief, there were hundreds of other individualsemployed by Defendants during the relevant time period as sales consultants and sales managers. Id. ¶ 95.
BRAM is alleged, upon information and belief, to operate at least twenty automotive dealerships in the New York City area, including Westchester Toyota. Id. ¶¶ 11, 39. Guiffre, Guiffre Jr., Prager and the Doe Defendants are alleged, upon information and belief, to be officers, directors and/or managing agents of Westchester Toyota and BRAM. Id. ¶¶ 12-15.
As sales consultants, Plaintiffs were required to work at least five or six days per week, totaling between forty-five to sixty hours per week. Id. ¶¶ 49, 59, 68, 75, 82. They performed various automobile sales and leasing duties, id. ¶¶ 48, 58, 74, 81, and frequently worked in excess of their scheduled work hours in order to complete sales, assist with deliveries, or "simply attempt to sell enough cars." Id. ¶¶ 50, 59, 69, 76, 83. If, towards the end of a month, their sales were low, Perez, Olivier and Jimenez would work "many additional hours to make the minimum number of sales expected of [them]." Id. ¶¶ 50, 76, 83.
Prior to August 2010, while employed by Defendants as sales consultants, Plaintiffs were paid on a "salary plus commission" basis. Id. ¶¶ 51, 63, 70, 77, 84. Specifically, they were paid $150 in salary per week, plus commissions, notwithstanding the number of hours worked. Id. Thus, if Plaintiffs did not make any sales in a given week, they would only receive the base salary of $150 for that week. Id. In the event that Perez, Peña, and Gonzalez, specifically, did not sell at least ten cars per month, "the base salary of $150 would become a 'draw,'" which would then be deducted from their pay in the following month. Id. ¶¶ 53, 64, 70.
In or around August 2010, Defendants implemented a new draw system through which sales consultants would receive their base salaries of $150, plus a draw of up to $150 againstfuture commissions. Id. ¶¶ 54, 79, 86. In the event that a sales consultant was paid a $150 draw during a week for which their sales were under $150, that draw would later be deducted from their commissions in the next week they made commissions of $150 or more. Id. ¶ 54. Plaintiffs aver that sales consultants were thus paid only $150 "free and clear" weekly, as the "draw of up to $150 was simply an advance that had to be paid back to Defendants." Id.
To illustrate, Plaintiffs allege that for the pay period ending on December 19, 2010, Perez was paid $150 in salary, plus $61.54 in commissions, plus $88.46 as a draw, totaling the weekly minimum of $300. Id. ¶ 54. The following week, for the pay period ending on December 26, 2010, Perez was paid $150 in salary, plus $934 in commission, less the $88.46 paid to Perez as a draw in the previous pay period, totaling $995.54 in gross wages. Id. Plaintiffs allege that because sales consultants were required to work between forty-five and sixty hours per week, in the weeks in which sales consultants made minimal commissions or no commissions at all, Defendants failed to compensate them for all hours worked at minimum wage. Id. ¶ 55.
Moreover, Plaintiffs allege that they regularly worked in excess of ten hours per day, but never received an additional hours' pay at the minimum wage for spread-of-hours shifts. Id. ¶¶ 56, 78, 85. They also allege that deductions were taken from their earned wages for reasons such as, inter alia, customer ratings below "excellent," "for not meeting the sales quota of selling at least ten cars each month," for reporting late to work, and for receiving a negative report from a "secret shopper." Id. ¶ 88. Such deductions came at random times and in various dollar amounts throughout Plaintiffs' employment, after their commissions had been earned, and without regard to whether they brought Plaintiffs' wages below minimum wage for all hours worked. Id.
As sales managers, Plaintiffs Gonzalez and Peña were paid on a salary plus commission basis and were required to work, at minimum, forty-five hours per week. Am. Compl. ¶¶ 59, 65, 69, 71. Their weekly salaries were $300 plus commission or a draw against future commissions. Id. Their commissions were based on the gross profits of their sales teams on a monthly basis. Id. ¶¶ 65, 71. Accordingly, Gonzalez and Peña, as sales managers, received commissions on a monthly basis. Id.
As a result, there were many weeks in which, for example, Gonzalez was only paid $300 in salary plus a draw against his future commissions. Id. ¶ 65. Therefore, in those weeks Gonzalez was only paid $300 "free and clear." Id. Peña was paid $300 weekly in salary, plus commissions or a draw of $500 against future commissions. Id. ¶ 71. He also earned commissions on a monthly basis based on the gross profits of his sales team. Id. There were many weeks in which he was only paid $300 plus a draw of $500 because he did not receive commissions until the gross sales of the month were calculated. Id. In those weeks, he was thus paid only $300 free and clear because the $500 was deducted from his wages at the end of any given month. Id.
Both Gonzalez and Peña allege that they regularly worked in excess of ten hours per day, but did not receive an additional hour's pay at the minimum wage for spread of hours shifts, which was a corporate policy of the Defendants. Id. ¶¶ 62, 72. Additionally, Gonzalez and Peña allege that as sales managers, they were subjected to unlawful deductions from their earned wages, including, inter alia, deductions for customer ratings below "excellent," to pay for floor mats missing or unaccounted for at the end of each month, or for the failure of a member of their sales teams to provide a customer with a "customer guest sheet." Id. ¶ 89. They further allegethey were not provided any sort of breakdown as to the calculation of their commissions or wages. Id. ¶ 90. At times, they would receive paychecks that reflected that deductions had been taken but provided no explanation for the deductions. Id.
All Plaintiffs were provided "commission sheets" every Monday, which showed the breakdown of commissions made prior to the Thursday of the previous week. Am. Compl. ¶ 87. The commission sheets showed all sales consultants' commission amounts plus "bonuses, deductions, and chargebacks." Id. The "chargebacks" included a variety of categories, such as, inter alia, "ACV CHRGBACK," "ELITE DETAIL," "CERTIFICATION CHRGBACK," "AS PER RICH P. DO NOT PAY" and "CHRGBACK FOR CUST REIMBURSTMENT [sic]." Id. The amounts of these chargebacks varied in amount, and the reasons for which they were charged were never fully explained to the Plaintiffs. Id. Plaintiffs never agreed to such charges, which were allegedly taken at Defendants' discretion. Id.
In addition, all Plaintiffs allege that they received "pay plans" from Defendants when they were first hired, which Defendants periodically modified throughout the course of Plain...
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