Lawsuit: Goya Foods Misclassified Sales Reps as Contractors, Took Unlawful Deductions from Commissions

New to ClassAction.org? Read our Newswire Disclaimer

Goya Foods, Inc. and a subsidiary have misclassified sales representatives as independent contractors and taken unlawful deductions from their wages, a proposed class action alleges.

According to the 17-page case, Goya and A.N.E. Services, Inc., an entity that the suit claims “exists for the sole purpose of providing another corporate intermediary in an effort by Goya to attempt to avoid the requirements of state and federal wage and worker protection laws,” have maintained over their sales reps and sales brokers a level of day-to-day control that indicates the workers should be classified as bona fide employees rather than contractors.

The lawsuit argues that Goya has misclassified sales representatives in order to take illegal deductions from their commissions, including amounts for workers’ compensation insurance and non-payment of a customer’s bill. The case asserts that the plaintiff and similarly situated workers, under a state employment relationship test, should be considered employees entitled to certain statutory protections.

“Although Goya purports to classify all sales representatives as independent contractors, under the Connecticut employment relationship test, Plaintiff should have been classified as an employees [sic] of Defendants and provided the protections of the [sic] Connecticut’s wage payment laws,” the complaint contends.

The lawsuit claims Goya, directly and through A.N.E., hires sales representatives to sell Goya-branded products to retailers and other customers throughout the U.S., and requires the workers to sign a contract called a broker agreement. According to the suit, however, Goya maintains “substantial control” over sales representatives’ work, including by prohibiting them from working with anyone else while working for Goya, setting all prices paid by customers and commissions paid to workers, closely supervising sales representatives’ work, requiring that all male sales reps wear a suit and tie, withholding from workers the authority to reject sales or customers, and specifying the locations and times they are required to work.

The case goes on to state that all sales representatives are required to form a business entity to work for Goya and increase their sales by three percent each year. Goya, on the other hand, retains the power to terminate the workers if it is dissatisfied with their work, the lawsuit relays. Per the suit, sales representatives’ work is integral to Goya’s business, and the workers are economically reliant on the defendants for their livelihood, which the case says are indications that sales reps should have been classified as employees.

According to the lawsuit, the defendants have taken illegal deductions from sales representatives’ commissions, including for workers’ compensation insurance and a “reserve” account from which Goya pays itself if a customer does not timely pay an invoice. The case claims the deductions “unlawfully shift the costs of doing business (including insuring its employees and protecting against non-payment of customers) to [Goya’s] employees.”

The plaintiff, a Wethersfield, Connecticut resident who worked for Goya in the state, says she took medical leave in January 2020 and provided the requisite documentation for her treatment. Per the case, the defendants deducted $670 to $770 from the plaintiff’s commission earnings each week to pay for her temporary replacement. The lawsuit says the defendants located pictures of the plaintiff on vacation through her social media account and accused her of requesting time off for an overseas vacation instead of for medical reasons. The plaintiff clarified to the defendants, however, that the pictures were from the previous year, according to the suit.

Despite the plaintiff’s clarification, the defendants terminated her in June 2020, charging that she had committed a “non-curable breach” of her contract by taking leave to go on vacation and providing false and dishonest information, the complaint says.

The lawsuit, which was recently removed from New Jersey Superior Court to the state’s District Court, looks to represent anyone who, during the “class period,” worked on a full-time basis for the defendants in Connecticut as a sales representative and signed a broker agreement directly or on behalf of a business entity.

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s newsletter here.