Car dealerships are a commonplace for negotiating deals, however, over the last couple of years sales representatives have been realizing they might actually be the ones getting the short end of those transactions. Two former sales representatives at Star Nissan Autogroup, one of the largest privately owned car dealerships of the NY metropolitan area, have brought a lawsuit against the company to try and remedy violations that they allege include failing to pay minimum wage, overtime, agreed upon wages, unlawful retention of wages, and unlawful deduction of commissions.<\/p>\n
Star Nissan Autogroup is a franchise dealer for Chrysler, Jeep, Dodge, Fiat, Toyota, Scion, Hyundai, Nissan and Subaru and employs at least 500 people, over 150 of which are car salespersons, known as sales representatives. Unfortunately, Star Nissan\u2019s massive success has come at the expense of these commissioned sales representatives. The lawsuit alleges that sales representatives were not paid proper minimum wages and overtime pay, and that the Star Nissan failed to calculate commissions in accordance with sales representatives\u2019 commission agreement. In many instances a sales representative did not earn any commissions in a given pay period or did not earn enough commissions to reach the minimum wage and overtime requirements of the Fair Labor Standards Act (\u201cFLSA\u201d) and New York Labor Law (\u201cNYLL\u201d). Regardless of how many hours sales representatives worked or the amount of commissions they earned, sales representatives were not paid additional compensation.<\/p>\n
Additionally, even though sales representatives were promised commissions based off of a percentage of the \u201cback end\u201d and \u201cfront end\u201d gross for new and used vehicles, Star Nissan often failed to pay sales representatives in accordance with the agreed upon terms of their commission agreement. Specifically, commissions were often reduced by \u201cpacks\u201d added to the \u201cfront end\u201d of new and used vehicles. Star Nissan would also reduce the commissionable gross when a customer traded-in a vehicle for the purchase of another vehicle of a different make and model. Moreover, Star Nissan often gave sales representatives flat commissions on certain deals regardless of the profit margin on the \u201cfront\u201d or \u201cback end.\u201d Such deals included, but were not limited to, deals where the vehicle was previously listed on Craig\u2019s List, leased vehicles, and deals where the buyers require specially financed deals as the result of bad credit. As a result of these practices, sales representatives\u2019 commissions are impermissibly reduced.<\/p>\n
Furthermore, Star Nissan has a policy where it charged back its sales representatives\u2019 paid commissions for reasons like repairs. These often unexplained charge backs were made weeks or months after the sales representative closed a deal, received the commission, and were given a commission breakdown.<\/p>\n