Sullivan, et al. v. Sleepy’s, et al. – In a victory for retail sales employees across the Commonwealth, the Employee Rights Group, LLC recently succeeded in challenging Sleepy’s, LLC’s practice of compensating retail sales employees solely by commissions and draws against commissions.
In Sullivan v. Sleepy’s, LLC, the Massachusetts Supreme Judicial Court (Massachusetts’ highest state court) sided with our clients and determined that Sleepy’s, LLC pay practices for retail sales employees violated Massachusetts law. The SJC concluded that Sleepy’s retail sales people were entitled to additional compensation (time and a half) for overtime hours and for work on Sunday. Our clients were sales employees at the defendants’ retail stores throughout Massachusetts and were compensated on a one hundred percent commission basis. Their wages took the form of a recoverable draw of $125 per day, plus earned commissions in excess of the draw. Our clients, however, were not paid any overtime for hours that they worked in excess of 40 hours and were not paid premium pay for hours worked on Sunday, unlike other retail workers who are not paid on a commission or draw basis.
The decision has far-sweeping impacts on retail sales employees’ compensation. For example, if a dealership employee works 45 hours, he or she must be paid at least minimum wage of $12.00 per hour for the first 40 hours worked, plus an additional $18.00 per hour for the 5 hours of Overtime worked, regardless of what he or she is paid for commission. While said employee’s commissions can be credited against their wages for the first forty hours worked, the SJC’s recently ruling holds that commissions may not be credited against Overtime wages or Sunday premium wages. For many years retail businesses have been illegally using draws and commission as a credit against Overtime wages and Sunday premium wages. This decision ends these illegal and predatory practices.
Our clients brought this suit on behalf of themselves and other similarly situated employees, namely all other sales persons in Massachusetts, for the overtime and Sunday pay that was withheld by Sleepy’s in contravention of Massachusetts wage laws.
This decision vindicated workers’ rights state-wide at a range of businesses as varied as furniture sales to auto sales. If you, or someone you know works in retail sales and has been compensated on a commission-only basis, you are potentially entitled to back pay. Please contact our firm immediately for a free consultation as to your potential rights to back pay.