AMSTERDAM — Legal counsel for Sticker Mule on Tuesday said the company admits an honest mistake was made with overtime pay calculations for its employees over the past two years, and the company has begun repaying the owed money.
Attorney Sal Ferlazzo, the in-house counsel for Sticker Mule, said attorneys representing former Sticker Mule employee Tierra Bonefort contacted the company approximately one month ago to alert them to her complaint that she had not received proper overtime pay while working for the sticker manufacturer.
“They felt that there may have been an error in the payroll system, and I researched it and there had been an inadvertent error in a pay differential, so I offered to pay this plaintiff whatever losses she had incurred, and they wouldn’t tell me what they were,” Ferlazzo said. “(Sticker Mule CEO and founder) Anthony Constantino directed us to rectify this immediately, and we are already in the process of repaying people. We’ve been doing it for weeks now.”
Bonefort’s attorney’s — Kessler Matura P.C., of Melville, Suffolk County, and the Law Offices of Raphael A. Katri of Beverly Hills, California — filed a federal lawsuit on Oct. 5 in the U.S. District Court for the Northern District of New York against Sticker Mule and its mutually owned sibling company, Print Bear, alleging the companies had not paid her overtime pay at the correct rate between Sept. 12, 2018 through Jan. 31, 2020.
The lawsuit states the two companies have three work shifts and provide a pay differential for the late and overnight shifts, but don’t include the shift pay increase when calculating overtime pay. The suit states Bonefort was paid $21.23 per hour for regularly occurring overtime, which is one and one-half her base rate of pay of $14.15 per hour, but did not include the $1.70 per hour shift differential as part of the calculation, as required by state and federal labor laws.
Ferlazzo said the error was ongoing over a period of a “couple of years” and the company is taking a year-by-year approach to correcting the mistake. Ferlazzo said the shift differentials are not required by law, but were an added benefit, which were inadvertently excluded from the overtime calculation made by Sticker Mule’s payroll company. He said Bonefort never alerted Sticker Mule as to the error while she was an employee.
“The first time we learned about it was a month ago, and we immediately took action,” Ferlazzo said.
Sticker Mule made headlines and created viral internet traffic in December 2019 when Constantino announced surprise $1,000 Christmas bonuses for all of his employees.
Ferlazzo said Sticker Mule believes the bonuses in many, if not all, cases were significantly more than any overtime differential owed to employees.
“I don’t think the main plaintiff is owed even $100,” he said.
Bonefort’s lawsuit does not state how many overtime hours she claims to have been shortchanged, but references one week, Aug. 19, 2019 through Aug. 24, 2019, where she said she worked 47.56 hours, and stated she received overtime regularly over the two year period she worked for the two companies at their 49 Elk St. and 336 Forest Ave. locations.
Another aspect of the lawsuit alleges Sticker Mule violated New York state Labor Law, which requires employers to “furnish each employee with a statement with every payment of wages” that contains the employer’s “phone number” and the “basis” of the employee’s pay.
“Defendants’ pay stubs, however, failed to provide Class Members with the employers’ phone number and to list the Class Members’ basis of pay,” reads the lawsuit.
Ferlazzo said he’s still reviewing information regarding the pay stub allegation in Bonefort’s lawsuit. He added that he’s not yet certain whether the pay stub complaint is true, whether it affected only Bonefort or other employees and what forms were used by Sticker Mule’s payroll company to create the pay stubs.
He said he did not want to reveal the name of the company involved in Sticker Mule’s payroll forms at this time because he’s not yet determined the source of any mistakes made.
“I can’t comment on that aspect because we’re still investigating the allegations,” Ferlazzo said. “Payroll companies have certain obligations, but it is the obligation of the employer to double check, so whether or not [the payroll company] had any impact is probably mute, because it’s our responsibility as the employer to pay in full. I don’t know if the payroll company has any liability.”
In a social media post on Facebook Monday, Sticker Mule stated that employees affected by the shift differential were owed “$136 on average.” Ferlazzo said some have been owed as little as $10, but he did not have an estimate on the total amount owed to all employees on Tuesday.
Sticker Mule in its social media post also made reference to $300,000 the company has spent annually on events and $100,000 donated to the city for upgrades to Veteran’s Park.
Bonefort’s lawsuit is seeking back pay, attorneys fees and class action status to allow approximately 40 former and current workers at Sticker Mule and Print Bear to join the lawsuit.
Ferlazzo said in Sticker Mule’s legal response to the lawsuit he plans to argue that class action status be denied the lawsuit because the company is already paying its employees and former employees the money owed to them. He said the employees affected by the pay differential have been offered payment, but have not been asked to sign any documents waiving their right to participate in the class action suit.
“We’re not buying releases; we aren’t trying to convince people; we’re just paying them,” he said. “And if the calculation they feel [accurate] is different than [what we’ve offered] we’ll talk to them and work it out. A lot of this is mathematical, and we’ve had a mathematical correction.”
Ferlazzo said he will file a legal answer to Bonefort’s federal lawsuit within the 30-day deadline to do so, and he may also file a motion to dismiss the case completely.
Ferlazzo also explained why Sticker Mule views the lawsuit as a waste of the federal court’s resources.
“We think most of them have been reimbursed already. We’re trying to find the former employees, and we’re sending letters and emails, but we didn’t need a lawsuit to correct this problem. However, certain law firms specialize in this type of class action, and if they want to bring a class action, we have the right to defend and to say there is no need for a class [action,]” Ferlazzo said. “It’s our position that it’s improper to have a class action, when the class was and has been and will be repaid before the need for a lawsuit. The major position the defense has taken is that there was a payroll mistake, mistakes happen, and we moved to correct it immediately.”