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Dikker v. 5-Star Team Leasing, LLC

United States District Court, W.D. Michigan, Southern Division

March 17, 2017

5-STAR TEAM LEASING, LLC, et al., Defendants.



         This is a wage and hour case. Plaintiff Shannon Dikker asserts that Defendants K&M Northfield Dodge, Inc., and 5-Star Team Leasing, LLC failed to pay her minimum wage and overtime for work she performed. Dikker also claims Defendants failed to pay commissions due, and ultimately fired her in retaliation for her wage and hour complaints. Defendants respond that they paid everything which Plaintiff was due and did not terminate her at all, let alone in retaliation for any complaints she made. After a bench trial, the Court concludes that Plaintiff has failed to establish her claims, and that Defendants are entitled to judgment in their favor. This Opinion and Order constitutes the Court's findings of facts and conclusions of law under Federal Rule of Civil Procedure 52.

         I. BACKGROUND

         Dikker worked for K&M Northfield Dodge, Inc. (“K&M”) for less than a year, from March 2014 until January 12, 2015. From March to May of 2014, she worked hourly in the collision department. From August of 2014 until January 2015, she worked on commission in fleet sales. Between May and August of 2014 she trained with Heidi Peila, who was planning to leave K&M and whose position Dikker was meant to fill in fleet sales. During the training period, Dikker continued to work on an hourly basis. Dikker and Peila's work for K&M was all on a part-time basis.

         K&M is an automobile dealership that sells and repairs new and used cars. Defendant 5-Star Team Leasing, LLC (collectively, with K&M, “Defendants”) is the payroll company for all the employees of K&M. K&M employs about 110 employees. Most employees work on commission. The remaining positions are administrative and receive hourly-based pay. Missy Willman is the business manager of K&M and the owner of 5-Star Team Leasing.

         Beginning in late March 2014, Dikker worked as a receptionist in the collision department at K&M. She typically put in fifteen hours a week in that position. Plaintiff received an hourly wage of $10 per hour for processing paperwork and for training time. Once Dikker finished training in August 2014, she worked exclusively on commissions. Her job involved brokering car sales between Fiat-Chrysler and small car rental agencies nationwide. Dikker sold the cars directly from the manufacturer to the buyer. The commission schedule at K&M was the same one that applied to her predecessors: namely, $25 per vehicle at the time of the order; and $40 at the time of delivery following completion of all paperwork.

         Unlike her predecessor, Dikker did not always earn enough on commission to cover minimum wage for her time worked. K&M addressed this problem by grossing up her compensation to cover any shortfall so that Dikker always received at least minimum wage for her time during pay periods when her commissions fell short. For this purpose, the company maintained a computer time-keeping system. Employees, including Dikker, were responsible for logging their hours on this system and could review the time entries before they were processed by the payroll department. Dikker could log onto this system from her computer or from three other terminals at K&M. Dikker had a very flexible work schedule to accommodate her child care responsibilities. In fact, she generally clocked in and out of the system based on her own schedule. The evidence reflects that Dikker used the time-keeping system and on multiple occasions during her employment asked payroll to make changes to her recorded time. In each instance, the requested changes were in favor of Dikker. In each instance, during her employment, Defendants made the requested change for Dikker.[1]

         K&M's recorded policies reflect this pay arrangement. Kim Magoon, K&M's payroll manager, provided Dikker with K&M's employee handbook when she was hired. Dikker acknowledged that she received the handbook by signing the acknowledgment form on March 27, 2014, which Magoon also signed as a witness. The handbook describes the computer time-keeping system and requires employees to punch in when they arrive at work, punch in and out for lunch, and punch out when they leave. Most importantly, the handbook provides that if an employee works other than normally scheduled time, a company supervisor must authorize and override the employee's time. The written policy leaves no ambiguity: every employee was responsible for using the system to ensure accurate time-keeping.

         This time-recording arrangement was also carried out in practice. In August 2014, Willman instructed Dikker to record all her hours, as the written policy required. Willman explained the pay structure and time-recording system to Dikker, consistent with the written policy. Dikker understood how both worked. Dikker acknowledged during trial that she made corrections to her time sheets whenever she noticed mistakes; that K&M would make corrections whenever she asked; and that Defendants never refused to record time she reported working. This was corroborated by several recorded instances of Dikker's requests for corrections to her time sheets submitted on paper and through emails to Willman and Magoon. Some of these corrections were made the same day Dikker recorded the hours, but others were made after paychecks had already been issued. They were always in favor of Dikker.

         The only evidence at trial that in any way detracted from this was from Dikker herself. She testified that she was told to record only her administrative time, and not the time spent on sales, even after switching to the commission-based job. The Court expressly rejects this testimony as incredible and contrary to the overwhelming evidence of a consistent policy and practice on timekeeping. There are no contemporaneous documents that distinguish in any way between sales time and administrative time. Nor do Dikker's own time-keeping entries show a materially different pattern of time-keeping before and after the job change. There is surely nothing in her contemporaneous time-keeping records that evidence the kind of chess clock “on again” and “off again” that would have been required if Dikker's testimony were credited.

         Dikker was not doing nearly as well financially as she had hoped to do in the sales job. Nor was she doing as well as her predecessors in the position. There were multiple pay periods where her commissions were insufficient to cover her minimum wage, and so the company grossed up her pay to cover the shortfall. Dikker still felt, however, that she needed to make more money, to support herself and her child. Ultimately, she arranged to meet with Paul Vredeveld, the general sales manager at 5-Star Leasing, and Willman. She set the meeting for January 12, 2015. Dikker opened the meeting by saying: “I'll make this easy, I'm quitting.” Willman and Vredeveld responded that they were “on the same page.” The quitting was not particularly surprising because Dikker had made no secret of her desire to make more money, and her disappointment that the commissions were not coming in as they had for her predecessor. She reiterated some of this disappointment at the meeting. What she did not do, however-not at the meeting on January 12, or at any other earlier time-is complain that Defendants were failing to pay her what they promised, or what the law required. Disappointment with pay is not the same thing as protected conduct complaining about wage and hour, or commission requirements.

         On November 18, 2015, Dikker filed her Complaint in this Court, alleging violations of the Fair Labor Standards Act and the Michigan Workforce Opportunity Wage Act (MCL 408.411, et seq). Dikker also brings claims for commissions based on Michigan common law and the Michigan Sales Representative Commissions Act (“MSRCA”) (MCL § 600.2961).


         A. Fair Labor Standards Act

         The Fair Labor Standards Act requires employers to pay the federal minimum wage and provide overtime pay to covered employees under the Act's overtime provisions. See Jewell Ridge Coal Corp. v. Local No. 6167, 325 U.S. 161, 167 (1945). Section 206 currently requires employers to pay employees wages at $7.25 an hour. 29 U.S.C. § 206(a)(1).[2] Section 207 requires employers to compensate any covered, non-exempt employee who works more than forty hours per workweek for “employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.” 29 U.S.C. § 207(a)(1). If the employer violates the FLSA by failing to pay the minimum wage or overtime compensation to an employee covered by the Act, the employer is “liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b). Here, it is undisputed by the parties that Plaintiff is a “covered, non-exempt employee” under the FLSA and that Defendant is an “employer” for purposes of the FLSA.

         1. Duty to Keep Adequate ...

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