Wills v. Radioshack Corp.
2013 U.S. Dist. LEXIS 159727
| S.D.N.Y. | 2013Background
- Wills sues RadioShack for NYLL overtime claims since May 5, 2011, alleging bonuses precluded using the fluctuating workweek (FWW) method.
- RadioShack’s Non-Exempt Store Manager Compensation Plan (SMCP) paid base salary plus performance-based bonuses; bonuses are non-discretionary.
- Overtime for store managers was calculated under FWW, with 50% of regular rate for hours over 40.
- DOL May 5, 2011 Final Ruling purportedly changed or left unsettled FWW treatment of bonuses; expert precedents varied.
- Sisson v. RadioShack in Ohio held the Final Ruling precluded FWW after May 5, 2011 for bonuses; this case is ongoing in appeal.
- Court grants RadioShack’s motion, holding NYLL follows FLSA and Final Ruling did not change treatment of performance-based bonuses; action dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does NYLL adopt FLSA overtime standards and permit FWW with bonuses? | Wills argues FWW is invalid where bonuses exist. | RadioShack argues FWW remains lawful with performance bonuses. | Yes; NYLL adopts FLSA standards and permits FWW with bonuses. |
| Did the DOL Final Ruling change the FWW treatment of performance-based bonuses? | Final Ruling barred bonuses from affecting FWW. | Final Ruling preserved status quo; did not disturb performance-based bonuses. | No substantive change; performance bonuses permitted under FWW. |
| Is RadioShack collaterally estopped by Sisson from arguing FWW is permissible? | Wills seeks offensive collateral estoppel. | RadioShack argues estoppel should apply. | Offensive collateral estoppel denied; no final judgment on merits. |
| Are the NYLL overtime standards, including FWW, governed by the same rules as FLSA? | NYLL mirrors FLSA on overtime calculation. | RadioShack contends NYLL permits FWW with bonuses. | Yes; NYLL adopts FLSA standards. |
Key Cases Cited
- Overnight Motor Transp. Co. v. Missel, 316 U.S. 572 (1942) (establishes fixed weekly salary with 50% premium rule for fluctuating hours)
- O’Brien v. Town of Agawam, 350 F.3d 279 (1st Cir. 2003) (FWW allowed when salary fixed and hours fluctuate; half-time rule)
- Brantley v. Inspectorate America Corp., 821 F. Supp. 2d 879 (S.D. Tex. 2011) (distinguishes hours-based bonuses from performance-based bonuses under FWW)
- Clougher v. Home Depot U.S.A., Inc., 696 F. Supp. 2d 285 (E.D.N.Y. 2010) (NYLL adopts FLSA standards for overtime; supports FWW interpretation)
- Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979) (offensive collateral estoppel considerations in complex litigation)