Facts

On April 13, 1990, plaintiff Walter Pickett was hired by defendant Slauson Transmission Parts Inc. to work in defendant's sales department. At the time of trial, the plaintiff was still employed by defendant as a salesperson.

During most of plaintiff's employment, the defendant did not keep track of the hours the plaintiff worked or the days accrued and/or used vacation time, sick time and/or PTO time.

Since the time he was hired, the plaintiff was classified as an exempt employee pursuant to the "inside salesperson" exemption. Throughout his employment, the plaintiff was paid a weekly salary and was eligible to earn commissions. The commission plan has changed throughout the years and has not always been set forth in writing.

From in or about March 1, 2001 through in or about March 31, 2003, the defendant maintained a rebate program for its customers, reflected in the "Slauson Transmission Parts Discount Schedule." The discount schedule explains that the "rebate will be in the form of a credit to [the salesperson's] account . . ." In other words, in the month following any month in which a customer qualified for a rebate, the salesperson would begin the month with a deficit commission.

In June 2004, the defendant changed its commission plan to add elements, which were never previously used to determine an employee's eligibility to earn full commission. One of the newly added elements was composed of three sub-elements. Specifically, the sub-elements required that, in order to be eligible to earn full commission, the salesperson must spend an average of 2.75 on telephone calls per day; the salesperson must average at least 75 business telephone calls per day; and the salesperson must have an average response to customers of at least 70 percent.

On Sept. 8, 2004, the defendant presented the plaintiff with yet another commission plan. This one was entitled "Slauson Transmission Parts Sr. Salesperson Pay Plan." This new plan now eliminated the telephonic sub-elements, which had been added to the June 2004 commission plan as requirements and converted those sub-elements to conditions for employees to receive a "Service Bonus." The new pay plan also, for the first time, presented the employees with an arbitration agreement. The salespersons, including the plaintiff, were required to sign the new pay plan as a condition of employment.

PLAINTIFF'S CONTENTIONS:
The plaintiff contended that he was due overtime because he was misclassified as exempt from the overtime laws; premium pay for missed, late or short meal periods; restoration of his forfeited vacation and PTO time due to defendant's use-it-or-lose-it vacation policy; wages for the instances when defendant's computer showed the sale price of an item as lower than the company cost, resulting in a negative commission; and restoration of the wages he lost as a result of shouldering part of the cost of defendant's rebate program.

DEFENDANT'S CONTENTIONS:
The defendant contended that the plaintiff was properly classified as exempt and, thus, not due any overtime; was not due any premium pay for missed, late or short meal periods; never suffered negative commissions; was not due any money under the rebate program because the program was entirely lawful; and was not due any vacation pay.

Settlement Discussions

At the mandatory settlement conference, the plaintiff demanded $24,999.99 pursuant to C.C.P. section 998, including attorney fees and costs. The defendant did not make any offer at that time.

Result

In addition to the judgment in plaintiff's favor, the court also issued an injunction, ordering the defendant to cease its illegal wage and hour practices and restore to all current and former employees the wages, which the defendant failed to pay them.

Other Information

The plaintiff's motion for attorney fees will be heard on Sept. 27, 2007. FILING DATE: May 1, 2006.