IN THE MATTER OF JOHN F. HUDACS, AS COMMISSIONER OF LABOR OF THE STATE OF NEW
YORK, APPELLANT, V. FRITO-LAY INC., ET AL., RESPONDENTS.
90 N.Y.2d 342, 683 N.E.2d 322, 660 N.Y.S.2d 700 (1997).
Decided June 17, 1997
3 No. 107
(97 NY Int. 0113)
Decided June 17, 1997
_________________________________________________________________
This opinion is uncorrected and subject to revision before publication
in the New York Reports.
_________________________________________________________________
Jennifer S. Brand, for appellant.
James H. Coil III ( pro hac vice), for respondents.
WESLEY, J.:
On the particular facts of this case, we hold thatrespondent, Frito
Lay, Inc. did not violate Labor Law § 193, which prohibits an
employer from making unauthorized deductions from wages, when it
required its route salespeople to remit moneys collected from
customers upon delivery of inventory, since these repayments to the
company were unrelated to and independent from the payment of wages.
I.
Respondent Frito Lay Inc. manufactures and distributes snack foods. As
part of its distribution process, it employs route salespeople who
pick up the snack foods from the company's wholesale distribution
warehouses, deliver them to retailers, and collect payments from those
stores on behalf of the company. It is the form of these payments
which lead to the dispute giving rise to this case.
When a salesperson picks up the product each morning from the Frito
Lay warehouse, the amount taken and the cost is verified by both the
salesperson and a warehouse employee. The salesperson then delivers
the product to various retail markets, and collects payment from the
retailer for the product delivered. For the most part, retailers pay
the salespeople through either "charge tickets," a form of credit, or
checks written directly toFrito Lay. However, those retailers that the
company does not consider sufficiently credit worthy are required to
SNIPPETS:
This opinion is uncorrected and subject to revision before publication in the New York
On the particular facts of this case, we hold thatrespondent, Frito Lay, Inc. did not violate
Respondent Frito Lay Inc. manufactures and distributes snack foods.
As part of its distribution process, it employs route salespeople who pick up the snack foods
When a salesperson picks up the product each morning from the Frito Lay warehouse, the amount
The salesperson then delivers the product to various retail markets, and collects payment
At the end of each day, the salespeople mail all funds collected directly to the company.
The company requires cash receipts to be converted into either checks or money orders, which
The company reimburses employees for the costs of money orders; however, the checks forwarded
The report shows any discrepancies between the amount of product taken by a salesperson, and
Moreover, wages are paid regardless of any outstanding account deficiencies existing at the
On June 9, 1989, the Commissioner of Labor issued an order to comply, charging that Frito
The Commissioner sought repayment of $35,017.11 for a two year period, plus 16% interest, and
The Board ruled that the payments at issue were unrelated and independent from the payment of
Given the company's policy of allowing set offs for theft, spoilage, bounced checks and
The Court further rejected the company's argument that Labor Law § 193 violated the National
The Appellate Division also upheld the Board's conclusion that application of Labor Law § 193
The Commissioner of Labor, however, eventually interpreted the statute to preclude not only
The legislature stamped its imprimatur of approval on the Commissioner's interpretation when
The payments at issue are not in any sense charges or deductions from wages; rather, these
shortages in these latter cases result from change being incorrectly paid to customers or the
In the absence of a clear legislative mandate, we decline to read the statute as requiring
|
