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PACHTER v. BERNARD HODES GROUP

August 25, 2005.

ELAINE PACHTER, Plaintiff,
v.
BERNARD HODES GROUP, INC., Defendant.



The opinion of the court was delivered by: ROBERT PATTERSON, Senior District Judge

OPINION AND ORDER

The Plaintiff, Elaine Pachter, brings this action against her former employer, Bernard Hodes Group, Inc., alleging that the formula used to calculate her compensation violated New York Labor Law § 193. On November 1, 2004, both the Plaintiff and the Defendant moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. On January 13, 2005, this Court heard argument on the two summary judgment motions on the liability issues only. For the following reasons, the Defendant's and the Plaintiff's motions for summary judgment are granted in part and denied in part.

BACKGROUND

  The Plaintiff worked as an account representative for the Defendant from April 1992 until December 2003. (Def.'s 56.1 Stmt. ¶ 3.) The Defendant is a "recruitment marketing and staffing services company." (Id. ¶ 2.) Companies hire the Defendant "to create and implement marketing strategies to attract new employees." (Id. ¶ 2.)

  The Defendant compensated the Plaintiff in the form of commissions. (Pl.'s 56.1 Stmt. ¶ 5.) The Plaintiff received monthly Commission Statements ("Statements") that set forth the formula the Defendant used to calculate her compensation. (Def.'s 56.1 Stmt. ¶ 7.) Under the Plaintiff's compensation arrangement, she initially received six percent, and later six and one-half percent, of the gross billings for media advertisements she placed for clients. (Id. ¶¶ 13, 14.) The Plaintiff also received a percentage share of the billings for "services related to preparing and producing media and other miscellaneous services" ("Other Billings"). (Id. ¶ 15.) Beginning in May 1998, the Statements refer to the Plaintiff's share of both types of billings as "Total Income." (Pl.'s Statements, attached as Ex. C to Def.'s 56.1 Stmt.)

  The Plaintiff's Statements also demonstrate that she was held responsible for a number of "Charges," which the Defendant subtracted from the Plaintiff's "Total Income" to calculate the Plaintiff's "Commissions Payable." Depending on the Statement, these "Charges" were comprised of: finance charges for the Plaintiff's clients' unpaid bills ("Finance Charges") (id. ¶ 17); errors made by the Plaintiff in placing or purchasing the media*fn1 ("Errors") (id. ¶ 18); half of any debts that the Plaintiff's clients were unable to pay ("Bad Debt") or unwilling to pay for reasons other than Errors ("Unbillables") (id. ¶ 20); a percentage of the salary of an assistant who worked with the Plaintiff (id. ¶ 21); and other miscellaneous costs for travel, entertainment, marketing, and out-of-pocket expenses (id. ¶ 22).*fn2

  The Plaintiff never agreed in writing to the "Charges" that appeared on her Statements. (Pl.'s 56.1 Stmt. ¶ 14.) In 1996, the Plaintiff wrote a letter to the Defendant explaining that she had "concerns" about her compensation formula; however, the compensation formula remained the same throughout the Plaintiff's remaining years as an employee for the Defendant. (Def.'s 56.1 Stmt. ¶¶ 10, 12.)

  The Plaintiff initiated this action by filing a Complaint on December 29, 2003. The Complaint contains twelve claims for relief, six of which the Plaintiff has chosen not to pursue.*fn3 The remaining six claims are all brought pursuant to Section 193 of Article 6 of the New York Labor Law ("Section 193"). The Plaintiff claims that the Defendant violated Section 193 by making the following deductions from her wages: (1) deductions for assistants' salary and benefits (First claim); (2) deductions for Finance Charges (Third claim); (3) deductions for Errors and Bad Debt (Fifth claim); (4) deductions for Unbillables (Seventh claim); (5) deductions for legal fees (Ninth claim); and (6) deductions for other amounts (Eleventh claim). Both the Plaintiff and the Defendant moved for summary judgment on November 1, 2004.

  DISCUSSION

  I. Standard of Review

  Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The burden is on the moving party to establish that there are no genuine issues of material fact in dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). A court deciding a motion for summary judgment must view the facts in the light most favorable to the non-moving party, drawing all reasonable inferences in his or her favor. See Young v. County of Fulton, 160 F.3d 899, 901 (2d Cir. 1998). "When no rational juror could find in favor of the non-moving party because the evidence to support its case is so slight, there is no genuine issue of material fact and a grant of summary judgment is proper." Gallo v. Prudential Residential Servs., Ltd. Partnership, 22 F.3d 1219, 1223-24 (2d Cir. 1994) (citation omitted). Lastly, where, as here, the parties submit cross motions for summary judgment, a court need not "grant judgment as a matter of law for one side or the other," but "must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration." Heublein, Inc. v. United States, 996 F.2d 1455, 1461 (2d Cir. 1993) (citations omitted).

  II. New York Labor Law Claims

  The Plaintiff alleges that the Defendant made six different types of deductions from her earned commissions, each of which violated Section 193 of Article 6 of the New York Labor Law ("Section 193"). The Defendant's argument in response is two-fold. First, the Defendant argues that the Plaintiff is barred from recovery under Section 193 because she acted in an executive or administrative capacity and, therefore, was not a covered "employee" as that term is used in Article 6. Second, the Defendant argues ...


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