Sullivan v. Sleepy's LLC
121 N.E.3d 1210
Mass.2019Background
- Plaintiffs were inside retail sales employees paid on a commission-plus-recoverable-draw plan (daily $125 recoverable draw, plus commissions above the draw) while working for defendant employers between 2014–2016.
- On occasions plaintiffs worked over 40 hours in a week and worked on Sundays; employers did not pay any separate overtime or Sunday premium beyond draws and commissions.
- Parties stipulated that total weekly compensation always equaled or exceeded minimum wage for the first 40 hours and 1.5× minimum wage for overtime/Sunday hours when measured as a lump sum.
- Plaintiffs sued under the Massachusetts overtime statute (G. L. c. 151, § 1A), the Sunday premium statute (G. L. c. 136, § 6(50)), and the Wage Act; case was removed to federal court and two questions were certified to the SJC.
- The core legal question: whether employers may retroactively allocate draws/commissions to satisfy separate overtime and Sunday premium obligations when lump-sum pay meets (or exceeds) the statutory hourly/overtime minimums.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether employers can retroactively credit draws/commissions to satisfy overtime obligations for commission-only inside sales employees | Draws/commissions cannot be retroactively allocated; employees are entitled to separate additional overtime pay | Employers satisfied overtime by paying lump-sum draws/commissions that equaled or exceeded required overtime amounts | Held: No. Draws/commissions cannot be retroactively allocated; employees are entitled to separate overtime pay equal to 1.5× the minimum wage for hours over 40. |
| Whether employers can avoid separate Sunday premium pay by treating lump-sum draws/commissions as covering Sunday premium hours | Same as overtime: Sunday premium is a separate statutory obligation and cannot be satisfied by retroactive allocation | Employers argue lump-sum compensation equaled 1.5× for Sunday hours and thus satisfied Sunday-pay obligation | Held: No. Employees are entitled to separate Sunday premium pay equal to 1.5× the minimum wage for hours worked on Sunday. |
Key Cases Cited
- Mullally v. Waste Mgt. of Mass., 452 Mass. 526 (explaining overtime purpose: reduce hours, encourage hiring, compensate long workweeks; rejecting payroll schemes that nullify overtime premium)
- Somers v. Converged Access, Inc., 454 Mass. 582 (employer cannot diminish overtime obligations by arguing it would have paid lower base wages had it known of the obligation)
- Dixon v. Malden, 464 Mass. 446 (gratuitous or undifferentiated payments cannot substitute for distinct statutory wage entitlements)
- Goodrow v. Lane Bryant, Inc., 432 Mass. 165 (definition of "regular rate" as hourly rate for normal non-overtime workweek)
- Swift v. AutoZone, Inc., 441 Mass. 443 (harmonizing Sunday premium and overtime statutes; crediting premium toward overtime only when it satisfies both statutes)