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Karic v. Major Auto. Companies Inc.

United States District Court, E.D. New York

April 16, 2014

SLOBODAN KARIC, CLARIBEL GARCIA, STEVEN JONES, GORAN STANIC, LJUBOMIR ZIVANOVIC, DANIEL COLON AND WILLIAM CHATMAN, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
THE MAJOR AUTOMOTIVE COMPANIES INC, HAROLD BENDELL, BRUCE BENDELL, CHRIS ORSARIS, et. al, Defendants

Decided April 9, 2014

Page 197

For Slobodan Karic, Claribel Garcia, Steven Jones, Ljubomir Zivanovic, Daniel Colon, William Chatman, on behalf of themselves and all others similarly situated, Goran Stanic, Plaintiffs: Brian Scott Schaffer, Frank Joseph Mazzaferro, Joseph A. Fitapelli, Fitapelli & Schaffer, LLP, New York, NY; Eric Joshua Gitig, Fitapell & Schaffer LLP, New York, NY.

For The Major Automotive Companies, Inc., Major Universe, Inc., doing business as Major World Ford Lincoln Mercury, Major Chevrolet Geo, Major Chevrolet, Inc., Major Chrysler Jeep Dodge, Inc, Major Motors of Long Island City, Inc,, doing business as Major Kia, Major Motors of the Five Towns, Inc., Major Automotive Realty Corp., Harold Bendell, Bruce Bendall, Defendants: Garry T Stevens, Jr., Lee Squitieri, Squitieri & Fearon, LLP, New York, NY; Steven J. Harfenist, HARFENIST KRAUT & PERLSTEIN, LLP, Lake Success, NY.

For Chris Orsaris, Individually, Defendant: Christopher E. Chang, Law Offices of Christopher E. Chang, New York, NY.

Page 198

MEMORANDUM & ORDER

ERIC N. VITALIANO, United States District Judge.

Plaintiffs, current and former car salesmen employed by The Major Automotive Company (" Major" ) and affiliated entities, bring suit on behalf of themselves and others similarly situated against Major and three individual defendants, Bruce Bendell, Harold Bendell, and Christopher Orsaris, alleging various unfair tabor practices. In particular, plaintiffs allege that defendants violated the Fair Labor Standards Act (" FLSA" ), 29 U.S.C. § § 201 et seq., and the New York Labor Law (" NYLL" ) by failing to pay sales representatives proper minimum wage and overtime compensation, and by taking impermissible deductions from wages and commissions. By Order dated July 20, 2011, the Court conditionally certified this as a collective action, pursuant to § 216(b) of FLSA. The parties have now completed discovery. On September 11, 2013, plaintiffs moved for partial summary judgment. Specifically, plaintiffs sought summary judgment on liability (but not damages) with respect to Counts One through Three (minimum wage and overtime) and Counts Five and Six (unpaid commissions and unlawful deductions from wages). Additionally, plaintiffs moved for summary judgment on defendants' affirmative defense that their violations of FLSA were made in good faith, and on the issue of joint and several liability of Bruce Bendell and Harold Bendell. Finally, plaintiffs sought summary judgment on their entitlement to liquidated damages under both FLSA and NYLL. However, during the pendency of this motion, the parties settled all FLSA claims, leaving only the NYLL claims remaining for the Court's disposition. For the reasons discussed below the Court grants the balance of plaintiffs' summary judgment motion.

Page 199

Background

Major is a holding company for a group of automobile dealerships and allied companies, including Major Chevrolet, Major Chrysler Jeep Dodge, Major Kia, Major Fleet and Leasing, Major Geo and Major Ford Lincoln Mercury, all located in Queens. (Defendants' Response to Plaintiffs' Rule 56.1 Statement (" Response" ), ¶ 1.) Individual defendants Bruce Bendell and Harold Bendell were the Chairman/Chief Executive Officer and the President, respectively, of Major during the class period, which runs from December 30, 2006 to the date of the filing of this action, December 30, 2009 (the " class period" ). (Id. at ¶ ¶ 3-10.)

Plaintiffs are individuals who were employed as sales representatives at various Major car dealerships during the class period. In addition to the named plaintiffs, there were, during the class period, approximately 80 sales representatives working for Major at any given time, and around 150 sales representatives in total. (Am. Compl. ¶ 5, Response, ¶ 28.) All of these sales representatives performed essentially the same job duties and were subject to the same basic compensation structure. Specifically, they were paid $20 per day plus a commission on any car that they sold, minus certain deductions that Major took out of paychecks, purportedly for costs associated with a given sale. (Response, ¶ ¶ 33-37.) Sales representatives generally worked 45-55 hours per week and were subject to the $20 per day salary plus commission structure regardless of the number of cars sold in a given day. In other words, if a sales representative worked a five-day week and failed to sell a single car, he would receive $100 in salary that week regardless of the number of hours worked. (Response, ¶ 51.) Plaintiffs claim that this salary structure violated NYLL because, on days when plaintiffs failed to earn a penny in commission, plaintiffs received less than minimum wage.[1] Plaintiffs also allege that defendants improperly deducted monies from their commissions by disguising the deductions as costs associated with the sales upon which the commissions were earned, in violation of NYLL's provisions regulating adjustments to commissions and permissible deductions from earned wages.

Standard for Summary Judgment

Pursuant to Rule 56, a federal district court must grant summary judgment upon motion and finding, based on the pleadings, depositions, interrogatory answers, admissions, affidavits, and all other admissible evidence 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); Anderson v. Liberty Lobby, Inc.,477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The initial burden is on the moving party to demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Feingold v. New York, 366 F.3d 138, 148 (2d Cir. 2004). In determining whether the moving party has met this burden, a court must construe all evidence in a light most favorable to the nonmoving party, resolving all ambiguities and inferences in its favor. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., ...


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