United States District Court, D. Massachusetts
JOSEPH MODESKI, et al., on behalf of themselves and all similarly situated employees, Plaintiffs,
SUMMIT RETAIL SOLUTIONS, INC., Defendant.
MEMORANDUM AND ORDER ON DEFENDANT'S MOTION TO
Dennis Saylor, IV United States District Judge.
case concerns claims by “Brand Representatives”
against their employer, defendant Summit Retail Solutions,
for violations of the Fair Labor Standards Act
(“FLSA”) and analogous laws of Maryland, New
York, and Pennsylvania. Section 207 of the FLSA requires
employers to compensate all non-overtime exempt employees at
not less than one and one-half times their regular wage for
each hour worked in excess of 40 hours per work-week. Only
those who work in certain capacities, including outside
salespersons, are exempt from that requirement. Plaintiffs
contend that Summit improperly classified its Brand
Representatives as overtime-exempt and thus denied them
overtime compensation to which they were entitled. Section
216(b) of the FLSA further permits employees to bring
collective actions on behalf of themselves and others who are
has moved to dismiss the complaint. For the following
reasons, the motion to dismiss will be denied.
following facts are set forth as described in the complaint.
Retail Solutions, Inc. is a Delaware corporation with its
principal place of business in Massachusetts. (Compl.
¶¶ 4-5). It does business throughout the eastern
United States, including in Massachusetts, New York,
Pennsylvania, and Maryland. (Id. ¶ 6). Summit
provides marketing services to its clients, which include
department stores, grocery stores, and wholesale retailers.
(Id. ¶ 7).
marketing services are performed by Brand Representatives.
(Id. ¶ 8). Brand Representatives are assigned
to work at the location of Summit's clients.
(Id. ¶ 32). Their primary responsibilities
include “making sales pitches, performing product
demonstrations[, ] and providing samples to customers.”
(Id.). Other responsibilities include gathering
products from inventory warehouses, transporting those
products to client stores, and assembling and dissembling
promotional displays. (Id. ¶¶ 35-36).
Representatives are assigned to particular geographic
territories, which are called “pods.”
(Id. ¶ 33). Each pod corresponds with “a
cluster of retail stores” owned by Summit's
clients. (Id.). Brand Representatives perform
several day-long “shows” within their pods.
October 2014 and March 2017, lead plaintiff Joseph Modeski
was employed as a Brand Representative and assigned to market
products at retailers in Maryland, including BJ's,
Costco, and Sam's Club. (Id. ¶ 9). Between
March and September 2015, co-lead plaintiff Giovanni Zammito
was employed as a Brand Representative and assigned to market
products at retailers in New York, including BJ's.
(Id. ¶ 10). Between January and August 2017,
co-lead plaintiff Nathan Damboise was employed as a Brand
Representative and assigned to market products at retailers
in Pennsylvania and Maryland, including BJ's and
Sam's Club. (Id. ¶ 11).
Representatives all worked the same schedule. (Id.
¶ 39). They were scheduled to work Thursdays through
Sundays for 10 hours each day. (Id.). Specifically,
they worked from 9:00 a.m. to 7:00 p.m. on Thursdays and
Saturdays; from 10:00 a.m. to 8:00 p.m. on Fridays; and from
8:00 a.m. to 6:00 p.m. on Sundays. (Id.).
could come in two forms: a base hourly wage and commissions.
Brand Representatives were paid at a rate of $12 per hour.
(Id. ¶ 41). Senior Brand Representatives were
paid at a rate of $15 per hour. (Id. ¶
Brand Representatives were eligible for commissions if they
reached certain sales goals. (Id. ¶ 48). To be
eligible, “Brand Representatives were required to
accrue a pre-determined percentage of sales that exceeded the
sum of their weekly paychecks. The dollar volume of this
percentage was based on the volume of sales generated from
the products they marketed.” (Id. ¶ 47).
“Whether or not [Brand Representatives] met their goals
was determined on a week to week basis.” (Id.
¶ 48). “When the weekly percentage of sales . . .
exceeded the sum of [Brand Representatives'] weekly
paychecks, a predetermined amount generated from the sales
was added to a ledger. That amount was categorized as a
commission.” (Id. ¶ 49).
“[i]f the weekly sales percentage generated from the
marketed products failed to exceed the sum of the weekly
paycheck, the difference was subtracted from [the] Brand
Representative's ledger.” (Id. ¶ 50).
Brand Representatives were eligible for commissions only if
their “ledger was positive at the end of the
month.” (Id. ¶ 51). In addition, Brand
Representatives “had to ensure that their ledgers never
fell below negative three-hundred dollars. If their ledgers
were under negative three-hundred dollars for too long, they
could face disciplinary action, ” including being
demoted or having their pay cut. (Id. ¶ 52).
Moreover, if Brand Representatives “maintained a
negative balance for three months in a row, ” they
“could be terminated.” (Id.).
complaint alleges that Summit made it extremely difficult for
Brand Representatives to earn commissions. For example,
Summit would “routinely adjust the percentage of
gross sales from a given product that would be counted toward
earning a commission.” (Id. ¶ 54). In
addition, Summit would assign Brand Representatives to stores
“that made it nearly impossible to earn
commissions” and to products that were “less
desirable” to customers. (Id. ¶¶
56-57). Given those factors, “it was impossible to
prevent a negative balance” most weeks. (Id.
¶ 58). Therefore, “[t]o avoid being terminated . .
. Brand Representatives would underreport their hours.”
(Id. ¶ 53). The rationale was that the higher
the Brand Representatives' total wage pay, the higher
their sales targets and the more likely it would be they
would end up with a negative ledger balance. (Id.).
to the complaint, one task that was rarely reported on the
timesheets of Brand Representatives was “setting up
inventory and promotional displays prior to . . .
shifts.” (Id. ¶ 61). Brand
Representatives would perform those tasks on days they were
not scheduled to work. (Id. ¶ 62). Brand
Representatives also spent time after their shifts putting
away inventory and cleaning their work stations, which they
would not report. (Id. ¶ 63). Similarly, Brand
Representatives would not report time spent on mandatory
conference calls, which were scheduled three to four times
per week and could each last more than an hour. (Id.
¶ 64). Moreover, absenteeism was a chronic problem at
Summit, requiring Brand Representatives to pick up extra
shifts for which they were not compensated. (Id.
complaint alleges that as a result, Brand Representatives
would commonly work seven days per week and more than 50
hours per week. (Id. ¶¶ 66-67). Summit is
alleged to have been aware of ...