Case 2:19-cv-19003-SRC-CLW Document 68 Filed 10/05/20 Page 1 of 21 PageID: 803
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`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NEW JERSEY
`
`
`
`JOSE ORTIZ, SAUL HERNANDEZ,
`and PEDRO URENA individually
`and on behalf of all others similarly
`situated,
`
` Plaintiffs,
` v.
`
`GOYA FOODS, INC., and A.N.E.
`SERVICES, INC.
`
` Defendants.
`
`
`
`
`C.A. NO. 2:19-CV-19003-SRC-CLW
`Class Action
`
`PLAINTIFFS’ BRIEF IN
`OPPOSITION TO DEFENDANTS’
`MOTION FOR
`RECONSIDERATION
`
`
`
`
`
`
`
`
`
`
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`

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`TABLE OF CONTENTS
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`
`
`
`
`
`I.
`
`II.
`
`INTRODUCTION ...................................................................................... 1
`
`STANDARD OF REVIEW ........................................................................ 3
`
`
`LEGAL ARGUMENT ............................................................................................... 5
`
`
`A. The Court Properly Declined to Dismiss the Unlawful
`Deduction Claim .............................................................................. 5
`
`B. The Court Implicitly Rejected Defendants’ Unreimbursed
`Business Expenses Argument ........................................................ 13
`
`
`CONCLUSION ........................................................................................................ 15
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`

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`
`CASES
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`TABLE OF AUTHORITIES
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`Page(s)
`
`Blystone v. Horn,
`664 F.3d 397 (3d Cir. 2011) ............................................................................. 1, 4
`
`Carrow f. FedEx Ground Package Systems, Inc.,
`2019 WL 7184548, at *11 (D.N.J. Dec. 26, 2019) ............................................. 15
`
`Chavarriaga v. Ross Public Affairs Group, Inc.,
`Docket No. L-2161-09, 2011 WL 2713466, at *4-5 ()App. Div. July 14,
`2011) ................................................................................................................... 15
`
`Clark v. Prudential Ins. Co. of Am.,
`940 F. Supp. 2d 186 (D.N.J. 2013) ................................................................... 1, 4
`
`Crespo v. Kismet Executive Limousine Sevice, Inc.,
`Civil Action No. 15-5706, 2018 WL 3599738 (D.N.J. July 27, 2018) .............. 15
`
`Dorman v. Computer Credit, Inc.,
`154 F. Supp. 3d 126 (D.N.J. 2015) ..................................................................... 13
`
`Fellenz v. Lombard Inv. Corp.,
`400 F. Supp. 2d 681 (D.N.J. 2005) ................................................................. 3, 13
`
`G. & J.K. Enters., Inc. v. Div. of Alchoholic Beverage Control,
`205 N.J. Super. 77, 500 A.2d 43 (App. Div. 1985), certif. denied, 102
`N.J. 397, 508 A.2d 255 (1986) ............................................................................. 6
`
`Gov’t of Virgin Islands v. Berry,
`604 F.2d 221 (3d Cir. 1979) ............................................................................... 13
`
`In re Morgan Stanley Smith Barney LLC Wage & Hour Litig. MDL 2280,
`2013 WL 6255697, at *5 (D.N.J. 2013) ....................................................... 10, 14
`
`Interfaith Cmty. Org. v. Honeywell Int’l. Inc.,
`215 F. Supp. 2d 482 (D.N.J. 2002) ....................................................................... 4
`
`Ireton-Hewitt v. Champion Home Builders Co.,
`501 F. Supp. 2d 341 (N.D.N.Y.2007) ................................................................. 12
`
`
`
`

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`Maldonado v. La Nueva Rampa, Inc.,
`2012 WL 1669341, at *8 (S.D.N.Y. May 14, 2012) .......................................... 12
`
`Male v. Acme Markets, Inc.,
`110 N.J. Super. 9 (App. Div. 1970) .................................................................... 11
`
`Max’s Seafood Café v. Quinteros,
`176 F.3d 669 (3d. Cir. 1999) ................................................................................ 4
`
`Osio v. deMane,
`No. DIV.A. 05-2280 (JLL), 2006 WL 827846, at *3 (D.N.J. Mar. 30,
`2006) ................................................................................................................... 14
`
`Pellicano v. Blue Cross Blue Shield Ass’n,
`540 F. App’x 95, 99 (3d Cir. 2013) ...................................................................... 5
`
`Reining v. RBS Citizens, N.A.,
`2017 WL 8941217, *15-18 (W.D. Pa. Aug. 2, 2017) .................................... 9, 10
`
`Ressler v. Jones Motor Co. Inc.,
`487 A.2d 424 (Pa. Super. 1985) ........................................................... 1, 2, 5, 6, 7
`
`Sendi v. NCR Comten, Inc.,
`619 F. Supp. 1577, (E.D. Pa. 1985) .................................................................... 11
`
`Snyder v. Dietz & Watson, Inc.,
`837 F. Supp. 2d 428 (D.N.J. Dec. 22, 2011) ...................................................... 11
`
`Tischio v. Bontex, Inc.,
`16 F. Supp. 2d 511 (D.N.J. 1998) ......................................................................... 4
`
`Veer v. Maibec Inc.,
`No. CIV.A. 11-3951 PGS, 2013 WL 1694835, at *2 (D.N.J. Apr. 18,
`2013) ..................................................................................................................... 5
`
`Velazquez v. UPMC Bedford Mem’l Hosp.,
`338 F. Supp. 2d 609 (W.D. Pa. 2004)................................................................... 4
`
`Walzer v. Muriel Siebert & Co.,
`No. CIV. 04-5672 DRD, 2010 WL 4366197, at *1 (D.N.J. Oct. 28, 2010) ......... 5
`
`White v. City of Trenton,
`848 F. Supp. 2d 497 (D.N.J. 2012) ....................................................................... 4
`
`
`
`

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`Zion v. Nassan,
`No. CIV.A. 09-383, 2010 WL 4237929, at *1 (W.D. Pa. Oct. 21, 2010) ............ 5
`
`
`STATUTES
`
`N.J.S.A. 34:11-4.1 ...................................................................................................... 6
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`I.
`
`INTRODUCTION
`
`Plaintiffs submit this brief in opposition to Defendants’ Motion for
`
`Reconsideration (Dkt. 64) of this Court’s denial of their motion to dismiss.
`
`Defendants’ motion contains no new law, no new facts and, instead, simply asks
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`the Court to “take a second look” at the same arguments presented in the
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`underlying Motion to Dismiss. See Dkt. 64-1 at 6. The Court should deny the
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`motion because motions for reconsideration “are not to be used as an opportunity
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`to relitigate the case,” see Blystone v. Horn, 664 F.3d 397, 415 (3d Cir. 2011)
`
`(emphasis supplied), nor are they meant to provide “parties with an opportunity for
`
`a second bite at the apple.” Clark v. Prudential Ins. Co. of Am., 940 F. Supp. 2d
`
`186, 189 (D.N.J. 2013). This is especially true where Defendants do not even
`
`attempt to distinguish Ressler v. Jones Motor Co., Inc., 487 A.2d 424 (Pa. Super.
`
`1985), upon which this Court relied in denying the motion.
`
`Defendants set forth three arguments: (1) that this Court incorrectly
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`determined that whether commission were “earned” prior to reserve-fund
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`deductions is an issue of fact; (2) that this Court did not give sufficient weight to
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`Defendants’ arguments that the unreimbursed expenses should be dismissed; and
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`(3) the decision (on both issues) has outsized consequences because it will be cited
`
`in similar cases brought under New York and New Jersey state law. Dkt. 64-1 at 1-
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`2. None of these are grounds for reconsideration.
`
`
`
`1
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`

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`Regarding the reserve-fund deduction, the Court has already explicitly
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`considered and rejected Defendants’ arguments. See Opinion, at *11 (Dkt 58).
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`Defendants argue that the Court erred in finding that whether sales representatives’
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`wages were “earned” prior to the reserve-fund deductions, was an open question of
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`fact; however, all Defendants do through the instant motion is repeat their
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`argument the 15% weekly deduction was unearned because the deduction is
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`written into Section 16 of the Broker Agreement. Dkt. 64-1 at 1 & n. 1, 9.
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`This argument ignores that the reserve-fund deduction, both in actuality and
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`in contract, is intertwined with the “Bad Debts” deduction; the reserve-fund
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`deduction is merely a security mechanism designed to effectuate the Bad Debts
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`obligation. See Broker Agreement (Dkts. 50-5 to 50-7) ¶ 16. The two deductions
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`are therefore bound up together in one (open) question of fact. Further, as a matter
`
`of law, because the reserve-fund deductions arise from the Bad Debts obligation,
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`the Court must first determine whether the purpose of the Bad Debts obligation
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`violates the Pennsylvania Wage Payment and Collection Law (“PWPCL”) Section
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`260.3 and its implementing regulations. Under Ressler, as this Court
`
`acknowledged, the relevant inquiry is whether the statute permits the purpose of
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`deduction– not whether the deduction is memorialized in contract.
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`Defendants’ argument also ignores the express prohibition on private
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`agreements that contravene employee protections provided pursuant to the
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`2
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`

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`PWPCL. See 43 P.S. § 260.7 (“No provision of this act shall in any way be
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`contravened or set aside by private agreement.”). Indeed, if Defendants’ argument
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`were to prevail, the Broker Agreement would have to be read as rendering all
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`commissions (the sales representatives’ sole form of income) as “unearned” until
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`the Bad Debts obligation is cleared, e.g. until the sales representative is separated
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`from the company. In other words – Plaintiffs wages would not be “earned” until
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`they were “paid.” Such a reading of the statute would preclude a worker from ever
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`enforcing their right to wages under the PWPCL. This reading would gut the
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`protections of the statute and render 43 P.S. § 260.7 meaningless.
`
`As far as the unreimbursed business expenses claim, Defendants previously
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`set forth their argument in full in their underlying motion to dismiss (Dkt. 50-2)
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`and the Court denied the motion, thus implicitly rejecting the request to dismiss the
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`reimbursement claim. See Fellenz v. Lombard Inv. Corp., 400 F. Supp. 2d 681,
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`683 (D.N.J. 2005). In any event, Plaintiffs should be permitted to proceed with
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`discovery on the unreimbursed business expenses claim, as Defendants citation to
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`similar state law supports. The Court should therefore deny reconsideration.
`
`I.
`
`STANDARD OF REVIEW
`
`A motion for reconsideration is “an extraordinary remedy” that is to be
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`granted “very sparingly.” White v. City of Trenton, 848 F. Supp. 2d 497, 500
`
`(D.N.J. 2012) (quoting Interfaith Cmty. Org. v. Honeywell Int'l, Inc., 215 F. Supp.
`
`
`
`3
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`

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`2d 482, 507 (D.N.J. 2002)). “The scope of a motion for reconsideration, we have
`
`held, is extremely limited. Such motions are not to be used as an opportunity
`
`to relitigate the case; rather, they may be used only to correct manifest errors of
`
`law or fact or to present newly discovered evidence.” Blystone v. Horn, 664 F.3d
`
`397, 415 (3d Cir. 2011). “A motion for reconsideration should not provide the
`
`parties with an opportunity for a second bite at the apple.” Clark v. Prudential Ins.
`
`Co. of Am., 940 F. Supp. 2d 186, 189 (D.N.J. 2013) (quoting Tischio v. Bontex,
`
`Inc., 16 F. Supp. 2d 511, 533 (D.N.J. 1998)). District courts “grant motions for
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`reconsideration sparingly as there is an interest in finality,” and such motions are
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`“strictly reviewed” in part because they “run counter to the operation of the Federal
`
`Rules of Civil Procedure which provide all the necessary safeguards to promote
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`fair decisions.” Velazquez v. UPMC Bedford Mem'l Hosp., 338 F. Supp. 2d 609,
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`611 (W.D. Pa. 2004). Defendants have not alleged an intervening change in the
`
`law or any new evidence, and thus must meet the high burden of showing a “clear
`
`error of law.” See Max’s Seafood Café v. Quinteros, 176 F.3d 669, 677 (3d. Cir.
`
`1999). At the motion to dismiss stage, motions for reconsideration are even more
`
`extraordinary, and are rarely granted. See, e.g., Clark v. Prudential Ins. Co. of Am.,
`
`
`
`4
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`940 F. Supp. 2d 186, 189 (D.N.J. 2013) (denying motion for reconsideration in part
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`where court did not “overlook” case law but found such cases not persuasive).1
`
`I.
`
`ARGUMENT
`A. The Court Properly Declined to Dismiss the Unlawful Deduction
`Claim
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`Defendants’ motion attempts to expand on an argument already raised and
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`already rejected. Defendants argue that, because Pennsylvania law purportedly
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`requires a “contract” of employment that paid “wages”, Plaintiffs cannot state a
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`claim because Defendants read the Broker Agreement as defining Plaintiffs’ wages
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`as “earned” when “paid.” Defendants’ argument rests on the false premise a
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`written contract can define what constitutes wages and what deductions are illegal
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`– no matter the law. This Court correctly rejected that argument, in particular based
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`on a detailed review of Ressler v. Jones Motor Co., Inc., 487 A.2d 424 (Pa. Super.
`
`
`1
`Pellicano v. Blue Cross Blue Shield Ass'n, 540 F. App'x 95, 99 (3d Cir.
`2013) (affirming denial of motion for reconsideration of dismissal, where party’s
`cases were inapposite and related to health benefit law’s federal jurisdiction not
`substantive defense); Walzer v. Muriel Siebert & Co., No. CIV. 04-5672 DRD,
`2010 WL 4366197, at *1 (D.N.J. Oct. 28, 2010) (denying motion for
`reconsideration of dismissal where plaintiff articulated new collateral-reliance
`theory and other new arguments on reconsideration); Zion v. Nassan, No. CIV.A.
`09-383, 2010 WL 4237929, at *1 (W.D. Pa. Oct. 21, 2010) (denying motion for
`reconsideration of dismissal where pointing out allegedly overlooked facts in
`record did not amount to a clear error of law); see also Veer v. Maibec Inc., No.
`CIV.A. 11-3951 PGS, 2013 WL 1694835, at *2 (D.N.J. Apr. 18, 2013) (denying
`motion to reconsider denial of motion to dismiss where defendant claimed court
`did not apply Iqbal-Twombly standard, yet court cited both cases and thus
`defendant attempted “to convert the standard to dismiss into a more rigid
`standard”).
`
`
`
`5
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`

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`1985), which demonstrates that the relevant inquiry is whether the deductions are
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`authorized by the statute and its implementing regulations legal – not whether the
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`deduction was memorialized in an agreement. See Dkt. 58 at 10-11.2
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`In Ressler, the Superior Court reversed a grant of summary judgment to the
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`employer on Plaintiffs’ PWPCL deductions claim. The Ressler plaintiffs had
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`alleged that their employer’s withholding of sums from their wages, which the
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`employer had designated as “contributions” to the “Earnings Participation Plan”
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`(the “Plan”), constituted an improper deduction. Id. at 425-27. The trial court
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`found the “contributions” to be mere salary reductions, not deductions; the
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`Superior Court disagreed, in part because “the contributions were identified on
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`employees' pay slips as an amount presumably subtracted from gross pay.” Id.
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`(bold emphasis supplied). The Superior Court therefore found these
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`“subtract[ions]” constituted deductions, not salary reductions. As this Court
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`explained, the Superior Court in Ressler concluded that “in spite of the written
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`agreement by the plaintiff employees to be bound by the earnings plan, the subject
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`wage deductions fell into the catch-all category and were thus subject to the
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`
`2
`Plaintiffs suggest that the “contract for employment” requirement in PA law
`simply means that there must be some mutual agreement between the parties of the
`exchange of work for pay. This can be easily contrasted with other states, such as
`New Jersey which uses a “suffer or permit” standard. See, N.J.S.A. 34:11-4.1; see,
`e.g., G. & J.K. Enters., Inc. v. Div. of Alcoholic Beverage
`Control, 205 N.J.Super. 77, 500 A.2d 43 (App.Div.1985) (holding regulation
`reaches dancers regularly appearing at bar), certif. denied, 102 N.J. 397, 508 A.2d
`255 (1986).
`
`
`
`6
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`

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`approval of the Department of Labor.” Dkt. 58 at 10 (emphasis supplied).
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`Therefore, there remained a genuine issue of fact in Resssler to whether the
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`amounts agreed upon in writing were authorized deductions – or unlawful under
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`the implementing regulations of Section 260.3. Ressler, 487 A.2d at 427.
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`Reconsideration is not warranted given that this Court a) relied upon an accurate
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`statement of Pennsylvania law and b) the Defendants do not, in this motion,
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`mention let alone even attempt to quarrel with the application of Ressler.
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`Here, that the amount of the weekly reserve-fund deduction is spelled out in
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`the Broker’s Agreement does not mitigate its unlawfulness, nor does it transform
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`the relevant inquiry – whether the deduction is authorized under Section 260.3 and
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`its implementing regulations – into a question of law, rather than fact. Contra Dkt.
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`64-1 at 3, 9.3 Defendants attempt to foreclose this question by making the same
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`argument rejected by the court in Ressler: that the subtraction is an allowable
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`reduction (here termed “adjustment” to the commission structure), not a deduction.
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`This argument should fail because it misreads the Broker Agreement, misconstrues
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`the case law, and twists facts.
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`First, Defendants’ interpretation of the reserve-fund and Bad Debts
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`deduction misreads the contract: the reserve-fund deduction is derivative of the
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`Bad Debts obligation of Section 16 (which Defendants do not ask this Court to
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`Defendants do not mention Ressler in their brief, let alone distinguish it.
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`7
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`3
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`

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`reconsider). The “Bad Debts” provision imposes a stand-alone obligation on all
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`sales reps to pay a percentage of Defendants' bad debts. Section 16 then creates a
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`“security” mechanism to help ensure that Plaintiffs pay for Defendants’ debts by
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`authorizing Defendants to retain 15% of their commissions each week (the
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`“reserve-fund deduction) in an account used solely to satisfy Plaintiffs' bad debt
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`obligations. The Broker Agreement deems the monies in this “security” account
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`not to be “earned” by sales reps until Defendants actually pay this money to sales
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`reps. Defendants argue that because the 15% deduction each week is deemed by
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`contract to be “unearned” prior to actually being paid to the Plaintiffs, the entire
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`reserve-fund obligation is merely part of the calculation of Plaintiffs’ earned
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`commissions. However, nowhere does the Broker Agreement state that the
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`Plaintiff’s obligation to pay a percentage of these Bad Debts in the first place—as
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`opposed to the additional contractual mechanism that secures this obligation—is
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`part of the calculation of Plaintiffs’ earned commissions; by the terms of the
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`Agreement, Section 16 is a clear subtraction from Section 13’s earned
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`commissions (rather than part-and-parcel to the commission calculation). See
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`Broker Agreement ¶ 16 (“Broker authorizes [Defendants] to retain fifteen percent
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`15% … of the weekly Broker commissions due Broker pursuant to Section 13”).
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`Ressler teaches that the fact that a deduction is in the agreement does not make it a
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`legal deduction under Pennsylvania law.
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`
`8
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`

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`Second, case law cited by Defendants only establishes that parties may agree
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`on a legitimate commission formula, not that commissions can be subject to legal
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`deductions after they are earned, as Defendants attempt to argue here. In cases
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`cited by the Defendants, the parties’ agreements made exceedingly clear that
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`reductions were part and parcel of the employees’ commission calculation; they
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`were not separate financial obligations that the employee owed—and would be
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`responsible for paying—independently from the calculation of their commissions.
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`For example, Defendants rely on Reinig v. RBS Citizens, N.A., 2017 WL
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`8941217, *15-18 (W.D. Pa. Aug. 2, 2017) as “directly on point” precedent. Dkt.
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`64-1 at 12. However, Reinig is distinguishable in multiple respects.
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`In Reinig, Plaintiffs Mortgage Loan Officers (“MLOs”) were compensated a
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`base hourly rate, overtime (if applicable), and commission (if earned) based on
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`loans closed; Plaintiffs were always guaranteed the base hourly pay for hours
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`worked. 2017 WL 8941217, at *5-6.4 Commission was earned if MLOs made a
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`gross commission that exceeded base pay, overtime, and any offsets. In other
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`words, the parties agreed to treat the base and overtime pay as an advance, and
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`then once the commissions totaled more than what had already been paid, the
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`
`4
`As explained by the Court the employer “paid [Plaintiffs] MLOs in three
`ways. First, MLOs received base hourly pay of $11.50. Second, MLOs received
`overtime pay, according to a two-step calculation process described below. And
`third, MLOs were eligible to receive commissions on the loan products they sold.”
`2017 WL 8941217, at *4.
`
`
`
`9
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`

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`commission bonus was payable. 2017 WL 8941217, at *4.5 The district court
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`granted summary judgment to the employer on the recapture claim seeking to
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`recover some of these offset losses – but only after “extensive discovery.” Id. at *2,
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`20. Reinig does not apply here, because this is not a situation in which the
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`Plaintiffs received an advance against future commissions. Id. at *17.
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`In contrast, here, commissions are Plaintiffs’ only earned wages and the
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`complained-of deductions are not part-and-parcel to a complex incentive structure.
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`The deductions are simply taken out of Plaintiffs’ weekly earned commission –
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`and indeed are defined as a 15% deduction retained from Broker’s weekly
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`commission. See Broker Agreement ¶ 16. The other cases cited by Defendants are
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`also distinguishable in that those cases considered adjustments built into a
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`commission formula – unlike the deductions that are issue in this case. See, e.g.,
`
`In re Morgan Stanley Smith Barney LLC Wage & Hour Litig. MDL 2280, 2013
`
`WL 6255697, at *5 (D.N.J. 2013) (alleged deductions “were built into the formula
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`for a financial advisor’s commission”).6 Indeed, neither New York nor New Jersey
`
`
`5
`A roll-over deficit occurred when an MLO’s gross commission amount was
`less than the off-set amount. 2017 WL 8941217, at *5-6. In short, if the MLO did
`not earn (in the colloquial sense of the word) his keep through closing enough
`loans so that his gross commission matched his base-pay and other offsets, that
`amount was carried over and off-set against next month’s commission. Id.
`6
`Sendi v. NCR Comten, Inc., 619 F. Supp. 1577, 1579-80 (E.D. Pa. 1985) is
`distinguishable because that case did not address a deductions claim but rather the
`timing of whether Plaintiff had earned his commission. Critically, Plaintiffs do
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`
`
`10
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`

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`permit an employer to make deductions to cover the employers’ business losses.
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`See, Male v. Acme Markets, Inc., 110 N.J. Super. 9, 11 (App. Div. 1970) (finding
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`that an employer violated the New Jersey Wage Payment Law (“NJWPL”) where
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`its policy—as well as the parties’ collective bargaining agreement—required
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`“cashiers at the check-out counters of its supermarkets to reimburse it for any
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`shortages in their receipts.”); 7 Snyder v. Dietz & Watson, Inc., 837 F. Supp. 2d
`
`428, 445 (D.N.J. Dec. 22, 2011); Ireton-Hewitt v. Champion Home Builders Co.,
`
`501 F. Supp. 2d 341, 353 (N.D.N.Y. 2007) (New York Labor Law prevents
`
`
`not seek commission on unpaid invoices, or seek to overcome a forfeiture clause;
`they seek to recover deductions taken from paid and completed sales. Dkt. 54 at 6.
`7
`In Male v. Acme Markets, Inc., the Superior Court Appellate Division
`recounted how “[f]ormerly, the shortages were taken out of the wages,” but after
`“this was deemed to be in violation of N.J.S.A. § 34:11-4.4,” the defendant
`employer “changed its policy” to instead require “the employees to reimburse [the
`employer for shortages] on some day subsequent to payday.” 110 N.J. Super. 9, 11
`(App. Div. 1970). As the appellate court noted, “the obligation was the same” but
`the defendant changed the time of reimbursement in an attempt to “overcome the
`statutory prohibition.” Id. The court held that this policy still “constituted a
`withholding or diverting of wages for an unauthorized purpose, regardless of the
`exaction of the money on some day other than payday.” Id. As the appellate court
`put it, “[i]t would be an anomaly for the employer to pay the wages in full on a
`Friday night and then require the employee to take the money out of the same pay
`envelope and turn it back to the employer a day or so later to reimburse for the
`shortage.” Id. Here, Goya/A.N.E.’s practice of withholding Sales Representatives’
`wages for “Bad Debts” is even more egregious than the grocery store’s practice of
`requiring repayment for shortages in ACME Markets. First, Goya/A.N.E.’s
`practice similarly violates the plain language of the statute, because it is a
`withholding or diversion not expressly authorized by the PWPCL and its
`implementing regulations. Second, Goya/A.N.E.’s practice violates the spirit of
`the law, by requiring Sales Representatives to pay whenever Defendant’s
`customers do not pay their invoice—a deduction that in no way benefits Sales
`Representatives.
`
`
`
`11
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`employer from requiring employees to cover “lost profits.”).8 In short, Defendants
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`struggle to override the widely accepted principle that employee protection statutes
`
`that guard against unlawful deductions are designed to prohibit the exact type of
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`deduction taken here by Goya – those designed to shift an employer’s loss (or risk
`
`of loss) to the employee. There is no reason that this Court’s denial of the Motion
`
`to Dismiss in this case, under Pennsylvania law, should not be cited or discussed in
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`considering Defendants’ motions to dismiss under New York and New Jersey
`
`wage statutes.
`
`Third, Defendants’ argument ignores the factual questions that arise
`
`regarding the implementation of the reserve-fund deduction. Defendants do not
`
`address the open question regarding how the reserve-fund is maintained, such as
`
`when and how sales reps can access the funds – and ignore that at least $3,000 in
`
`the reserve-fund deductions is maintained until the sales rep is clear and free of
`
`any possible “Bad Debts” obligation, which Plaintiffs believe discovery will show
`
`is only possible upon termination or separation from the company. See Broker
`
`
`8
`See also Maldonado v. La Nueva Rampa, Inc., 2012 WL 1669341, at *8
`(S.D.N.Y. My 14, 2012) (finding that the Defendant’s deduction of $360 from the
`Plaintiff’s pay, after Plaintiff was robbed of $360 of Defendant’s money, amounted
`to an unlawful deduction because it was “intended to shift the ‘risk of loss’” to the
`employee, “which the law does not allow.”); see also Opinion Letter, N.Y. Lab.
`Dep’t, February 6, 2008 (advising that “asking for money back” from future
`earning of temp placement, who left placement early, in order to cover the fee paid
`back to the temp’s placement site, “would constitute a deduction from wages
`within the meaning of [New York Labor Law] Section 193”)
`
`
`
`12
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`Case 2:19-cv-19003-SRC-CLW Document 68 Filed 10/05/20 Page 18 of 21 PageID: 820
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`Agreement ¶ 16. In other words, questions of fact remain regarding how the Bad
`
`Debts obligation is effectuated.
`
`Finally, Defendants fail to recognize that, should their reading of the Broker
`
`Agreement prevail, Plaintiffs’ wages would therefore only ever become earned
`
`upon separation from the company, e.g. when the Bad Debts obligation is cleared.
`
`This reading is absurd; it simply cannot be that the PWPCL allows employers to
`
`withhold all of employees’ wages (their only source of income) under the
`
`argument they are “unearned” until paid out, which can only occur once upon
`
`separation from the employer. Dorman v. Computer Credit, Inc., 154 F.Supp.3d
`
`126, 130 (D. N.J. 2015) (“Where the plain meaning of a statute would lead to an
`
`absurd result, we presume ‘the legislature intended exceptions to its language [that]
`
`would avoid results of this character.”) (quoting Gov't of Virgin Islands v. Berry,
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`604 F.2d 221, 225 (3d Cir.1979)) (alterations in the original).
`
`B. The Court Implicitly Rejected Defendants’ Unreimbursed
`Business Expenses Argument
`
`Defendants argue the Court erred in failing to dismiss the unreimbursed
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`business expenses claim, an issue fully briefed on the motion. Plaintiffs believe
`
`the Court did not “overlook” the issue but rather assessed the argument and
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`implicitly found it unpersuasive. See Fellenz v. Lombard Inv. Corp., 400 F. Supp.
`
`2d 681, 683 (D.N.J. 2005) (denying motion to reconsider dismissal where court
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`“previously considered and either implicitly or explicitly rejected these
`
`
`
`13
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`Case 2:19-cv-19003-SRC-CLW Document 68 Filed 10/05/20 Page 19 of 21 PageID: 821
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`arguments”); Osio v. DeMane, No. CIV.A. 05-2280 (JLL), 2006 WL 827846, at *3
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`(D.N.J. Mar. 30, 2006).
`
`Here, the Court determined Plaintiffs had asserted plausible claims, then
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`summarized and disposed of Defendants’ remaining arguments. Dkt. 58 at 10-11.
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`First, the Court noted Defendant’s “additional” argument that the Broker
`
`Agreement does not support that commissions are “wages.” Id. The Court then
`
`found that the remaining “issues related to what amounts could be considered
`
`wages and when such wages could be considered earned raise questions of fact
`
`which go beyond the scope of this motion.” Id. As such, the Court implicitly
`
`considered and rejected Defendants’ arguments on the issue.
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`Defendants now attempt to bolster their argument by citing to cases from
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`other jurisdictions. Dkt. 64-1 at 8 n. 4. However, similar state law has recognized
`
`failure to reimburse claims. For example, Defendants cite to In re Morgan Stanley
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`Smith Barney LLC Wage & Hour Litig. MDL 2280, 2013 WL 6255697, at *6-7
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`(D.N.J. 2013), for the proposition that the New Jersey Wage Payment Law
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`(“NJWPL”) does not recognize failure to reimburse claims. Dkt. 64-1 at 8 n. 4.
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`However, In Re Morgan Stanley contains scant analysis of New Jersey law, has
`
`never been adopted by a New Jersey state court (that Plaintiffs are aware of), and
`
`
`
`14
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`New Jersey state and federal courts have permitted such claims for unreimbursed
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`business expenses to proceed in litigation brought under the NJWPL.9
`
`As with deduction claims brought under NJWPL, the relevant inquiry under
`
`the PWPCL is not what form the deduction takes but whether the purpose of the
`
`deduction is an authorized purpose under statue and regulations. See 43 P.S. §
`
`260.3; 34 Pa. Code §§ 9.1(2)-(7), (10)-(13). At this early stage, prior to any
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`discovery on the question of Plaintiffs’ business expenses, there is no reason to
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`revisit this Court’s implicit denial of Defendants’ request to dismiss the failure to
`
`reimburse deductions claim.
`
`
`
`
`
`CONCLUSION
`
`For the reasons set forth above, Defendants’ Motion for Reconsideration
`
`should be denied in its entirety.
`
`
`
`
`9
`See, e.g., Crespo v. Kismet Executive Limousine Service, Inc., Civil Action
`No. 15-5706, 2018 WL 3599738 (D.N.J. July 27, 2018) (“car lease fee” paid by
`plaintiff-employees “constitutes an unlawful deduction in violation of New Jersey
`state law”); see also Chavarriaga v. Ross Public Affairs Group, Inc., Docket No.
`L–2161–09, 2011 WL 2713466, at *4-5 (App. Div. July 14, 2011) (reversing grant
`of a motion to dismiss where plaintiff had sufficiently pl