Founder and Managing Partner
On March 1, we, and others, reported on Vaquero v. Stoneledge Furniture LLC (Ashley Furniture), a new California Court of Appeal case finding that commission pay plans providing base pay for rest breaks that could be “clawed back” against future earnings was invalid under California law. The Court of Appeal had two important rulings:
- that employees who earn only commissions must be paid separately for rest breaks (since the commissions do not cover time spent not-selling, or resting); and
- that employers who pay employees both hourly wages and some form of incentive pay, including commissions, violate the rest period pay requirement if they claw back any part of the employees’ base hourly pay as an advance against commissions (draw).
Yesterday, a Southern California plaintiff’s wage and hour class action law firm, known for filing massive class actions against auto dealers on behalf of service technicians under the infamous 2013 California Court of Appeal decision in Gonzalez v. Downtown LA Motors LP, initiated a blitzkrieg on Facebook targeting employees of numerous auto dealer groups.
The sponsored advertisement shows up in the news feed of Facebook users who list a targeted auto group as their employer and often includes a picture of the auto dealer’s lot and includes the name and, in some cases, the trademark of the auto dealer, stating:
ATTENTION [DEALER GROUP] SALES PEOPLE!! If you’re a salesperson for [dealer group], and you are paid on a commission basis, you might be entitled to compensation. Find out here to learn more about this investigation.
Act Now! Learn More Here…
The California Court of Appeal recently ruled …
The Facebook user can then click on the website link purportedly to learn more about the case and investigation. But the website is merely a potential client contact/intake form for the law firm.
The Scali Law Firm became aware of this and sent a cease and desist letter to the law firm on behalf of one of its Northern California auto dealer clients, claiming that the advertising violates California law by:
- Providing false and misleading information about the auto dealership group, namely that it strongly infers that the dealer group is under investigation by an official government agency or body;
- Using the auto dealer’s logo and image for commercial gain;
- Tortiously interfering with the auto dealer’s business relationships; and
- Violating the Rules of Professional Conduct governing attorneys and their solicitations.
Within minutes of receiving our cease and desist letter, the offending law firm committed in writing to remove the offensive advertising campaign against our auto dealer client.
The Scali Law Firm also obtained information that the offending law firm initiated this advertising campaign against numerous dealership groups. However, the offending law firm suggested that it was suspending this entire auto dealer advertising campaign for the time being. Nonetheless, it is possible that the campaign could be retooled or amended and distributed in this or other media.
If you obtain information that your auto dealer group or employees is the subject of targeted law firm advertising trolling for plaintiff employees to initiate class action litigation against your group, contact your attorney right away. Your attorney may be able to take action to nip that advertising in the bud before obtaining widespread exposure or responses to its bogus advertising.
The Scali Law Firm also strongly advises that you immediately contact the CNCDA if you discover that your dealership is being targeted in this way.
This turn of events underscores the importance of immediately addressing whether your sales associate pay plans comply with California law after the Vaquero decision. We predict a certainty of a deluge of class actions against California auto dealers for their pay practices concerning sales associates and we urge you to immediately contact your attorney to confirm that your pay plans are compliant. If your pay plans are not compliant with existing law, we urge you to contact your attorney to address means of protecting yourself from class action liability. Means may exist to limit your exposure before a class action is filed against you. Once a class action is filed, your options become much more limited.