Goya Foods Inc. will need to face charges against them from three sales representatives alleging that the company violated wage laws by misclassifying them as independent contractors after an opinion from Judge Stanley R. Chesler entered on Thursday in the District of New Jersey.
The plaintiffs in the case, Jose Ortiz, Saul Hernandez, and Pedro Urena, are Pennsylvania residents, who have sales routes in the state and both sell and distribute Goya Foods products. They accused the company of breaching Pennsylvania wage laws because of the misclassification and that the company illegally took deductions from their sales commissions. They filed a class-action complaint against Goya Foods and A.N.E. Services in October 2019.
Thursday’s opinion addressed an amended complaint filed by the plaintiffs. The complaint said that they are not independent contractors because they are assigned routes and are required to wear branded apparel, work assigned shifts including holidays, and attend meetings in New Jersey which they are not paid for.
The defendants attempted to dismiss the lawsuit, claiming that the plaintiffs failed to state a claim under the Pennsylvania Wage Payment and Collection Law (PWPCL), because the broker agreement the plaintiffs cited is not an employment contract and, secondly, the individuals did not claim they were deprived compensation under the terms of the contract.
The judge stated that the issue was not whether the employees would prevail, but whether they should be allowed to offer evidence to support their claims. Judge Chesler further said that the argument that the broker agreement did not count as an employee contract under the PWPCL because it “expressly disclaims an employer-employee relationship and provides for compensation in the form of commissions, not wages, is unavailing.” However, the judge does say that the plaintiffs should provide “concrete factual allegations” to show that they were treated as employees by the defendants.
To address the defendants’ second claim, the judge noted that the plaintiffs’ claim that deductions from the Broker Agreement by the company violate state labor regulations. The court ruled that “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.”
Ultimately, the court ruled that the plaintiffs’ amended complaint withstands the defendants’ motion to dismiss and that the case will continue to move forward, although no determination was made on the merits of the plaintiffs’ claims.
The plaintiffs are represented by Marchetti Law and Sattiraju & Tharney. The defendants, Goya Foods and A.N.E. Services, Inc., are represented by Ogletree Deakins Nash Smoak & Stewart.