Vera v. Saks & Co.
| Decision Date | 31 March 2006 |
| Docket Number | No. 04 Civ. 7502(RJH).,04 Civ. 7502(RJH). |
| Citation | 424 F.Supp.2d 694 |
| Parties | Angel C. VERA, individually for himself and on behalf of all others similarly situated, Plaintiff, v. SAKS & COMPANY d/b/a Saks Fifth Avenue, and United Storeworkers, Local 1102 and 2567, RWDSU, AFL-CIO, UFCW, Defendants. |
| Court | U.S. District Court — Southern District of New York |
David M. Kert, Woodside, NY, Vernon Joseph Welsh, Poughkeepsie, NY, for Plaintiff.
Richard Granofsky, Dennis Michael Rothman, Lester, Schwab, Katz and Dwyer LLP, New York, NY, Julie Pearlman Schatz, Law Offices of Richard M. Greenspan, P.C., Elmsford, NY, for Defendants.
Plaintiff Angel C. Vera brings this action against his former employer, Saks & Company ("Saks"), and his former union, United Storeworkers, Local 1102 ("Union"). As against Saks, plaintiff seeks damages arising from allegedly unpaid wages during his employment as a ladies' shoe salesman. He alleges that Saks's practice of accounting for refunds of certain returns of merchandise in the calculation of sales commissions was an unlawful deduction from employees' wages in violation of section 193 of New York's Labor Law. N.Y. Labor Law § 193 (McKinney 2004). Plaintiff previously brought a similar putative class action against Saks in state court in 2000. After the action was removed to federal court, the Hon. John G. Koeltl granted summary judgment dismissing the complaint in 2002 on the grounds that the claim was arbitrable under the relevant collective bargaining agreement and that plaintiff had failed to exhaust his remedies under that agreement. Vera v. Saks & Co., 218 F.Supp.2d 490 (S.D.N.Y.2002). Judge Koeltl's decision was affirmed on appeal in 2003. Vera v. Saks & Co., 335 F.3d 109 (2d Cir.2003). The present action was instituted against Saks and the Union on September 22, 2004, after the Union declined plaintiffs request of January 6, 2004 to pursue arbitration of his section 193 claim against Saks. As against the Union, plaintiff alleges breach of the duty of fair representation pursuant to section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a) (2000), arising out of the Union's failure to pursue to arbitration.
The parties now move for summary judgment. Plaintiff moves for summary judgment on the issue of Saks's liability for unlawful deduction from wages in violation of section 193. Plaintiff reiterates its position in the prior litigation that this claim is not arbitrable and, if arbitrable, has now been exhausted. Saks moves for summary judgment on several grounds: first that the controversy was bound by the arbitration agreement; second that the claim is barred by the applicable six-month statute of limitations; third, that the claim is still not exhausted given that the Union, as was its right, exercised its judgment not to arbitrate; and finally because on the merits section 193 has not been violated. The Union moves for summary judgment claiming, inter alia, that Vera cannot establish that the Union breached its duty of fair representation. Plaintiff does not oppose the Union's motion for summary judgment, now conceding, perhaps for tactical reasons, that the "instant action .. . does not involve ... unfair representation by the union." (Pl.'s Opp'n/Reply Mem. 10, 16.)
Plaintiff was employed by defendant as a ladies' shoe salesman at Saks Fifth Avenue's 611 Fifth Ave location from 1974 to 1975, and again from 1976 to April 2000. (Vera Dep. 06:02-06:06.) He was paid on a commission basis. (Compl. ¶ 20.) During the course of his employment, plaintiff was a member of United Storeworkers, Local 2567 and 1102, RWDSU, AFL-CIO, UFCW1 (id. at ¶ 23), and his employment was subject to the terms and conditions of a collective bargaining agreement ("CBA") (id. at 42) since at least August 1993.
There have been two CBAs between Saks and the Union since 1993 that have governed the terms of plaintiff's employment. (See Saks & Company and United Storeworkers, Local 2567, RWDSU, AFCIO Agreement ¶ 6G (effective Aug. 1, 1993), Granofsky Decl. Ex. A ("1993 CBA"); Collective Bargaining Agreement Between Saks & Company and United Storeworkers, Local 2567, RWDSU, AFCIO ¶ 7F (effective Feb. 1, 1997, expires Feb. 3, 2001), Granofsky Decl. Ex. B ("1997 CBA").) Both CBAs contain provisions allowing deductions from salespeople's wages based on "unidentified returns." Unidentified returns consist of merchandise, here shoes, returned to Saks for a refund but with respect to which the identity of the originating salesperson is not known. Since such refunds cannot be charged back against an identified salesperson, they are charged back pro rata against the commissions of all salespeople in a department. Thus, Paragraph 7F of the 1997 CBA provides:
F. Unidentified Returns. Effective June 1, 1998, on a monthly basis, all unidentified returns to the New York Store will be charged back against commissions by deducting from sales volume for each salespersons [sic] a prorated figure calculated by dividing the total of said returns among the employees based on each employee's percentage of net sales for that month.
Plaintiff claims that by complying with paragraph 7F of the CBA, Saks violated section 193 of the New York Labor Law. (Compl. Count 1.) Section 193 provides, in relevant part, that:
1. No employer shall make any deduction from the wages of an employee, except deductions which:
a. are made in accordance with the provisions of any law or any rule or regulation issued by any governmental agency; or
b. are expressly authorized in writing by the employee and are for the benefit of the employee; provided that such authorization is kept on file on the employer's premises. Such authorized deductions shall be limited to payments for insurance premiums, pension or health and welfare benefits, contributions to charitable organizations, payments for United States bonds, payments for dues or assessments to a labor organization, and similar payments for the benefit of the employee.
2. No employer shall make any charge against wages, or require an employee to make any payment by separate transaction unless such charge or payment is permitted as a deduction from wages under the provisions of subdivision one of this section.
N.Y. Labor Law § 193 (emphasis added). Because unidentified returns deductions are not specified in section 193, plaintiff alleges that Saks's reduction of his gross sales according to the unidentified returns policy—and, thereby, his net wages—is unlawful. (Pl.'s Supp. Mem. 6-8.) Saks contends that the "wages" which are protected by the statute are those defined in written employment agreements, such as the CBA, and that New York law permits commission "wages" to be calculated net of unidentified returns where an agreement so provides. (Saks's Supp./Opp'n Mem. 14-15.)2
Plaintiff's claim under section 301 of the LMRA, 29 U.S.C. § 185(a), alleges, inter alia, unfair representation by the Union for its failure to file a grievance and arbitrate Saks's alleged violation on his behalf. (Compl. Count 2.) While this claim has been abandoned, the arbitration clause in the CBA remains relevant and provides as follows:
23. Standing Committees and Arbitrations—The Union shall designate a Standing Committee of its own choice to take up with the Employer any matter arising out of the application of this Agreement with a view to its amicable settlement. Any dispute, claim, grievance or difference arising out of or relating to this Agreement which the Union and the Employer have not been able to settle, shall be submitted to arbitration upon notice by either party to the other party in writing, stating the nature of the matter to be arbitrated. The matter in dispute shall be submitted to arbitration before the American Arbitration Association of New York, under its Voluntary Labor Arbitration Rules. Both parties agree to accept the award of the arbitrator as final and binding. The arbitrator's award of any opinion rendered in connection therewith shall be limited to the issues presented to him for decision. In any arbitration, the arbitrator shall be bound by the terms of this agreement and shall have no authority to add to, subtract from, change or modify any provision of this agreement. Each party shall bear its own costs of arbitration and shall share equally the cost of the arbitrator.
The decision of the arbitrator shall be final and binding on the Union, the employee or employees involved and the Employer. [...]
(1997 CBA ¶ 23) (emphasis added).
During the course of his employment, plaintiff never filed any written grievances with the Union, but he verbally complained to Union shop stewards about the unidentified returns issue "many, many times." (Vera Dep. 13:03-13:20, 9:06-9:25.) Plaintiff testified that he first discussed his problem with unidentified returns in conversations with shop stewards and Richard Carbonell, the president of Local 2567, more than five years before his termination. (Id. at 12:19-13:02; Vernon Welsh Decl., July 15, 2005 ("Welsh Decl.") ¶ 3.)
Upon his termination in April 2000, the Union pursued a grievance on his behalf and submitted the issue of termination to arbitration on August 9, 2000. (Id. at 15:07-15:19; Bail Aff., Ex. D.) There is no indication in the record that either plaintiff or the Union sought to raise the issue of unidentified returns during the course of the grievance and arbitration process. On January 18, 2002, the arbitrator issued a determination that Saks had just cause to terminate plaintiff. (Bail Aff., Ex. D.)
While plaintiffs termination arbitration was pending, plaintiff filed an action against Saks in state court challenging the unidentified returns provision in the CBA. The Union was not named as a defendant and no allegations were made that it had failed to grieve...
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