Appeal Docket: WH D. Determination Order: L DECISION OF THE ADMINISTRATIVE LAW JUDGE. Procedural Findings
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1 STATE OF MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES OFFICE OF HEARINGS State Secondary Complex General Office Building 7150 Harris Drive, P.O. Box Lansing, Michigan Telephone: (517) In the Matter of: Michael A. Schlussel, Petitioner, Appeal Docket: WH D Tamaroff Dodge, Inc., Respondent, Determination Order: L Bureau of Safety and Regulation, Wage Hour Division, Department. / DECISION OF THE ADMINISTRATIVE LAW JUDGE Procedural Findings This is a proceeding held under Section 11 of 1978 PA 390, as amended, the Payment of Wages Act (Act 390), MCL ; MSA (11); and in accordance with 1969 PA 306, as amended, the Administrative Procedures Act (APA), MCL ; MSA 3.560(101) et seq. The purpose of this review is to examine Determination Order L [Administrative Law Judge (ALJ) Exhibit 2] issued by the Department of Consumer and Industry Services, Bureau of WH D 1
2 Safety and Regulation, Wage Hour Division, on October 28, The Department found no wages are due for the period of October 1998 to June 1999." The Determination Order also held that the fringe benefits claimed, monthly bonus, "is not required by the terms set forth in the written fringe benefit policy/contract." Petitioner filed a timely appeal (ALJ Exhibit 3). A Notice of Prehearing Conference and Hearing was sent to the parties on February 4, 2000 (ALJ Exhibit 5). A hearing was held on March 9, Present at the hearing were Michael A. Schlussel, Petitioner; Cathie Magee, Respondent's Office Manager, Tony Jerome, Jr., Respondent's New Car Sales Manager, and David G. Cohen, attorney, representing Respondent. The Bureau of Safety and Regulation, Wage Hour Division, was not represented. The hearing proceeded in the party's absence based on Section 72(1) of the APA. The record was closed March 9, Issues Whether wages and illegal deductions are due to Petitioner from Respondent. Findings of Fact At the hearing held on March 9, 2000, three witnesses testified, fourteen exhibits were received into evidence, and one exhibit was not. Not only was each witness observed as they WH D 2
3 testified but also considered was their memory, demeanor, and the reasonableness of each witnesses' testimony in light of the other evidence presented. The ability and opportunity each of the witnesses had to observe the facts and events of or to which they testified was also taken into consideration as was the interest, bias, or prejudice that such witness may have had. Based upon all of the aforementioned, having reviewed the file and exhibits, and having determined the credibility of the witnesses, the following findings of fact and conclusions of law are made. Petitioner testified he returned to work for Respondent on or about April 2, 1997 and continued until May 26, 1999 when he quit. (He had previously worked for Respondent from May 1988 until April 1994.) Petitioner was a new car sales person who worked on a straight commission basis. He is seeking payment of $1, in commissions, a Volume Bonus of $355.00, and $ in unauthorized deductions. In his testimony, Petitioner agreed that Respondent's Commission Sales Compensation Plan (see Respondent Exhibit 1) was the compensation schedule under which Petitioner worked. Petitioner was paid 50 percent of his commissions on all of his sales on a weekly basis. The remaining 50 percent of the commissions (less taxes, etc.) was then paid on or about the 10th of the month or earlier. WH D 3
4 WH D 4
5 Unauthorized Deduction Claim Since the filing of his wage complaint and this hearing, Petitioner has received a check from Respondent in the amount of $17.50 which involved one of the claimed unauthorized deductions. The balance of alleged unauthorized deductions, $179.26, remains an issue in this matter. the following: The unauthorized deductions claimed by Petitioner involve a) $25.64 for a rear air deflector installed on a vehicle sold by Petitioner; and, b) $ for a sunroof installed on a vehicle sold by Petitioner. Petitioner contends these items were included in the purchase price of the vehicles at the time of the sale and, therefore, should not have been charged back to him. Petitioner stressed that the sunroof was included in the lease payments which took into consideration the dealership's cost and profit. However, Respondent's Office Manager, Cathie Magee, testified that, as to the air deflector, the vehicle was sold on October 22, 1998, but the air deflector was added on October 29, Neither the item nor its price were included in the invoice. According to Ms. Magee, sales persons' commissions were based upon the sales price less the original invoice and less added WH D 5
6 on items. Because the bills for these two items were not available WH D 6
7 at the time, Petitioner was paid commissions which included the overpayments. She further testified that charge backs are wage adjustments for overpayments. When overpayments occur, the sales person is notified. The deflector cost $64.10 and the charge back was 40 percent (the commission earned on add-ons), or $ Here, the adjustment was made and Petitioner, the sales person, was notified by way of his Salesperson's Compensation Report of October 1998 (see Respondent Exhibit 8). Respondent's office manager also indicated that, although the sunroof may have been on the customer's invoice, the sunroof add on was not reflected on Respondent's copy of the invoice. She testified that Mr. Schlussel must have questioned the $ charge back because, as a sales person, he was guaranteed a commission of $75.00 notwithstanding any charge backs. As a result, because he had already been paid a commission of $179.00, the $ charge back was reduced to $ so as to provide the guaranteed $75.00 commission. Respondent's Exhibit 2 is a signatory page acknowledging receipt of a copy of, and agreement with, Respondent's Commission Sales Compensation Plan (Respondent Exhibit 1). The acknowledgment also consents and authorizes Respondent to deduct from the employee's paycheck "if any moneys (sic) are owed to the Company by me... WH D 7
8 WH D 8
9 Viper Commission Claim Petitioner contends he was entitled to be paid his commission on the sale of a 1999 Dodge Viper to a Michael Soave although the car was not delivered until after Petitioner left Respondent's employ. He testified that he continued servicing the customer even though Petitioner left Respondent and was working at another dealership. In the sale of the Viper, Petitioner did all that was necessary to effectuate the sale and delivery of the vehicle, including keeping in daily contact with the costumer as well as making arrangements with the person in charge at the plant for the customer to be able to pick up the car at the plant (which was the customer's wish). The car was to be delivered in May but was not available until June 11, During that entire period of time, the customer had no contact with anyone else at Respondent's dealership except for delivering the check in full payment in order to get the necessary release papers to pick up the car. It was Petitioner's testimony that he could have sent the Viper purchaser to another Dodge dealership where the sales person was willing to split his commission with Mr. Schlussel. Apparently that dealership did not impose a $1, commission limit since Petitioner testified his share of the commission would have been $2, In any event, Petitioner dismissed that notion because he felt the Viper sale was Tamaroff's as well as his. WH D 9
10 Petitioner testified he could have delayed his resignation in order to get the Viper commission. However, there was no guarantee as to when the car would be delivered since there had been many delays in Viper deliveries due to parts problems at the Viper plant. He agreed the delay was beyond the control of Respondent. Petitioner noted that the sales person who received the commission on the Viper sale received only $ of the $1, allowable commission. Respondent's Mr. Jerome testified he had conversations with Mr. Schlussel concerning Petitioner's resignation. Mr. Jerome also indicated that by resigning at that time Petitioner was walking away from the Viper commission. He testified Petitioner was aware of his not getting the commission when he left Respondent's employ. Petitioner did not challenge any of Mr. Jerome's testimony. Conversely, none of Petitioner's testimony concerning the Viper was contradicted by any of Respondent's witnesses. That is not to indicate, however, that they agreed with Petitioner's contention in his claim and testimony that he was entitled to the commission despite the strictures of Respondent's compensation plan (see Respondent Exhibit 1). WH D 10
11 Volume Bonus Claim According to Respondent's compensation plan (Respondent Exhibit 1), a monthly volume bonus is paid based upon the number of vehicles sold, the dollar amount increasing with the number of sales. Among the relevant requirements involved in the plan were the following: Monthly Volume Bonus is based solely on the Units shown delivered in the Billing Log Book. NO EXCEPTIONS! Sales Person MUST be at Zone Average on C.S.I. to qualify... (Bold and CAPS in the original.) The C.S.I. averages, both zone and individual sales person's, are contained in the Salesperson Survey Results (see Respondent Exhibit 5). Petitioner testified that he had never before missed that bonus during his tenure with Respondent. He indicated that Mr. Tamaroff referred a customer to whom Petitioner sold a Dodge Durango. When the customer sent in his survey, he indicated dissatisfaction with the vehicle. That customer's response was the only one, of the nine responses returned, to be less than satisfactory. As a result, according to Petitioner, he missed meeting the zone average by one point in the month of April with a loss of the $ volume bonus. He requested Respondent's president, Tony Jerome, Sr., to make an exception for Petitioner to collect the bonus. However, the president would not waive the requirement. WH D 11
12 WH D 12
13 Although Petitioner did not agree with all contentions posed to him on cross-examination, the evidence presented by Respondent in its case in chief was essentially unchallenged. Conclusions of Law Petitioner's contention that he "delivered" the vehicle, in the sense that he did all of the work which was necessary for the customer to pick it up, is not without merit. Petitioner left nothing to chance. No one at Respondent's dealership had to even lift a finger to have the vehicle picked up ("delivered") at the plant pursuant to the customer's wishes. The only action remaining to be taken by Respondent's personnel was to accept the customer's payment and to relay to the plant that Respondent had received its payment. Although, based upon the proofs presented, I believe Petitioner should be entitled to a substantially significant portion, if not all, of the $1, commission on the sale of the Viper on a quantum merit basis, I simply cannot ignore the Termination language contained in Respondent's Exhibit 1: Termination In the event a Sales Person resigns from the Dealership, any pending (undelivered) deals will be reassigned to other Sales People at the Sales Manager's discretion; and the Commission will be paid to the Sales Person who delivers the car. WH D 13
14 It is crystal clear that the intended emphasis of that provision is to not pay any commissions, at or after termination, on undelivered vehicles. Although the issue of "who delivers the car" is an interesting one under the circumstances presented here, I do not find it to be determinative. Administrative Rule R places the burden of proof on the appellant. In order to succeed in his appeal, Petitioner must establish by a preponderance of the evidence that he was entitled to the commissions claimed, the volume bonus claimed, and reimbursement of the claimed unauthorized deductions. Based upon a review of the testimony and exhibits presented at the hearing, and having determined the credibility of the witnesses, I find that Petitioner has not satisfied the preponderance of the evidence in support of his appeal involving the Viper commission, volume bonus, and unauthorized deductions claims. Decision In accordance with the above Findings of Fact and Conclusions of Law, it is ordered that Determination Order L is affirmed. Appeal Docket WH D is ordered closed. Dated: March 29, 2000 Joseph L. Chylinski WH D 14
15 WH D 15 Administrative Law Judge
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