Nissan Shifts Blame To Dealerships In Mechanic Wage Suit
By Grace Elletson
Law360 (April 7, 2022, 7:46 PM EDT) -· Nissan said it can’t be held liable in a suit filed by mechanics alleging the company underpaid them for their services because it did not directly employ the workers named in the suit -their dealerships did.
Nissan North America Inc. asked Judge Roy B. Dalton Jr. on Wednesday to grant the car manufacturer summary judgment in the suit brought by Jose J. Ayala Jr. and Jeff Santos, who said Nissan underpaid them minimum and overtime wages for flat-rate warranty work. But Nissan said it had nothing to do with the way the mechanics were paid –the dealerships the mechanics worked for set their pay rates and controlled all other conditions of their employment.
“The independent dealerships for which plaintiffs actually worked -and those dealerships alone – handled all of these matters without any guidance, direction or control from Nissan,” the company said.
Ayala sued Nissan in September 2020 and later added Santos to the suit, alleging in the class and collective action that Nissan failed to pay mechanics for their labor. They said they were only paid a flat-rate for the service provided. They requested both class and collective certification in late December, which Nissan has contested.
Nissan said the mechanics have presented a “fanciful” legal theory that Nissan is a joint employer of the workers, alongside the dealerships they perfom1ed work for. But Nissan said this isn’t possible because it has no control over any element of the workers’ employment.
The carmaker said it did not hire workers, set their schedules, assign them work, review their performance, discipline them, set their rates of pay or promote them. The independent dealerships handled all of these matters without any direction from Nissan, the company said.
Nissan is a car manufacturer, the company said, and Florida law prohibits Nissan from selling its cars directly to consumers, so it contracts with independent dealerships. The dealerships both sell and service Nissan cars.
“Nissan’s relationship with the independent dealerships for which plaintiffs worked -like its relationship with any independent dealership -is strictly arm’s-length,” Nissan said.
There is no common ownership, corporate affiliation or common management between Nissan and the independent dealerships it contracts with, Nissan said. Therefore, Nissan said it has no authority over the technicians the dealerships employ.
The payments Nissan makes to the dealerships for warranty work does not change this relationship, the company argued, despite the mechanics’ arguments that Nissan’s payments for this work constituted a joint employer relationship.
Florida law requires that Nissan make payments to dealerships for warranty work, and those payments are separate from the compensation the dealerships paid to the mechanics for their labor, Nissan said. Nissan’s warranty claims are calculated by using a flat-rate time multiplied by the dealership’s approved labor rate, the company said.
The flat rate time is the average time Nissan has determined it will take for a specific fix, Nissan said. The approved labor rate is set by the dealership for the mechanics’ work, which Nissan pays as well, the company said.
“In effect, plaintiffs assert that every repair person who follows a manufacturer’s instructions manual when performing his or her work is the manufacturer’s employee,” Nissan said, “That is not the law.”
Counsel for both parties did not immediately respond t:o requests for comment, nor did a Nissan spokesperson.
The mechanics are representecl by Jolynn Marie Falto, Nicola Jean Pappas and Kevin Kenneth Ross of Eclat Law PLLC, Lisa Elizabeth Bolinger of Factory Direct Marine & RV and Mitchell E. Grodman of Mitchell E. Grodman PA.
Nissan is represented by Thomas R, Brice, Peter N, Farley, Christopher M, Michalik and Igor Babichenko of McGuireWoods LLP and Mark E, Levitt of Allen Norton & Blue PA.
The case is Ayala et al. v, Nissan North America Inc., case number 6:20-cv-01625, in the U.S. District Court for the Middle District of Florida.
–Editing by Neil Cohen