A Bayside, N.Y., Nissan dealership has lost its bid to keep a lawsuit by two former salesmen upset over their take-home pay from becoming a class action.
A U.S. magistrate judge in New York ruled last month that current and former sales representatives of Star Nissan Inc. can pursue class-action claims alleging the dealership violated federal and state minimum wage laws.
Star Nissan, which denies any violations, unsuccessfully argued that any claims should be decided on a salesperson-by-salesperson basis with individual trials.
The plaintiffs are ex-salesmen Razvan Hotaranu and Luis Felix. In their suit, they allege Star Nissan paid them commissions plus a flat $100 per week regardless of how many hours they worked and that in many pay periods, they didn't earn enough commissions "to satisfy the applicable minimum wage." They sued the dealership and four of its executives, including the president and the dealer principal.
The decision, by way of example, cited evidence that one salesman received only $277.64 in commissions plus a flat weekly rate during a pay period when he worked 45 to 50 hours, and "this equates to less than the applicable minimum wage."
Dealership lawyer Jamie Felsen of Lake Success, N.Y., said the salespeople understood the compensation structure. He also said the plaintiffs' lawyers are "going after" other dealers in the New York City area but "are not going to be successful" against Star Nissan.
The federal Fair Labor Standards Act allows employees to pursue collective actions to obtain unpaid overtime compensation and minimum wage.
Star Nissan opposed certification of a collective action, arguing that the plaintiffs failed to show a "common unlawful policy" and asserting that the salespeople didn't account for commissions that Nissan Motor Corp. paid them directly through sales incentive programs.
The ruling by U.S. Magistrate Judge Robert Levy, who sits in Brooklyn, allows all salespeople who have worked at the store since July 12, 2013, to join the suit.
During that period, the federal minimum wage was $7.25 an hour, and the New York state hourly minimum wage ranged from $7.15 to $9.
Felsen said the dealership had about 20 salespeople during that period and that they are being notified of their right to opt into the case. So far, six have asked to join Hotaranu and Felix in the suit, according to the decision.
The judge said the class-action status may be reversed if the evidence shows there's not enough similarity in the plaintiffs' claims.
The plaintiffs' lawyers did not respond to a request for comment.