eBay Accused Of Breaking NY, Federal Labor Laws In Sneaker Authentication Workers Class Action Suit
eBay faces class action from sneaker authenticators employed at the company's former Queens, NY facility, alleging pay structure violates Fair Labor Standards Act and New York Labor Law requiring manual laborers to be paid on a weekly basis.
The lawsuit was brought by ex-employee, Manuel Duran, who joined the company when eBay acquired Sneaker Con's authentication operations in 2021.
Duran's complaint explains eBay should have done due diligence as part of the acquisition, including assessing the legality of Sneaker Con's labor and employment practices to ensure compliance with state and federal laws.
When Plaintiff Duran first started working in the Queens Warehouse, the
warehouse was operated by a company named Sneaker Con.On or around November 24, 2021, Sneaker Con was acquired by eBay.
Upon information and belief, eBay performed due diligence into Sneaker Con prior to acquiring it, including, inter alia, the legality of Sneaker Con’s labor and employment practices.
After acquiring Sneaker Con, eBay continued the operation of the sneaker authentication business at the Queens Warehouse before moving operations to New Jersey on or around April 3, 2023.
eBay maintained a common policy of paying all its employees who worked in the Queens Warehouse on a bi-weekly basis, including those who spent more than 25% of working time engaged in physical labor.
Since the majority of Duran’s job responsibilities and his primary duty at eBay consisted of physical labor, the complaint argues he and other workers who performed similar duties would be legally classified as manual workers, which would require the employer to pay on a weekly basis.
New York Law requires companies to pay their manual workers on a weekly basis and no later than seven days after the end of a week in wages are earned unless they receive an express authorization to pay in accordance with agreed terms of employment from the New York State Department of Labor Commissioner. See NYLL §191.
Defendant received no such authorization from the New York State Department of Labor Commissioner.
Defendant violated NYLL §191 and the FLSA by paying Duran and the Putative Class every other week rather than on a weekly basis and by paying Duran and the Putative Class more than 7 days after the completion of the first week of each pay period.
The suit is seeking class action status for Duran and "other similarly situated" plaintiffs, which could potentially cover about 60 other workers who are or were employed at the authentication center doing similar manual work, and is asking for:
- A declaratory judgment that the practices listed in the complaint are unlawful under the FLSA and the NYLL
- An award of monetary damages in the amount of their untimely paid wages as liquidated damages
- Prejudgment and post-judgment interest on all amounts awarded
- An order awarding Plaintiffs reasonable attorneys’ fees, expenses, and costs of suit
- and Such other and further relief as the Court deems just and proper
The company's hiring and labor practices have come under increasing legal and regulatory scrutiny, particularly since eBay acquired collectible trading card marketplace TCGPlayer in 2022,
Due diligence concerns were also raised about TCGPlayer when authentication workers at their Syracuse, NY facility voted to form a union just months after the acquisition was finalized - a risk that eBay should have foreseen given the agreement left TCGPlayer CEO Chedy Hampson and other key management in place in an environment that had a public history of "strained" labor relations and an unsuccessful organizing campaign in 2020.
Liz Morton
While TCGPlayer would have posed a unique risk due to those previous unionization efforts, the apparent due diligence failures raised questions about other labor-centric authentication operations too.
It was largely missed by media and analysts in 2021, but unsuckEBAY noted at the time in-house authentication was a "significant step-change" for the company as it departed from the asset light, "just a venue" model that had previously protected it from unionization efforts which had targeted competitors like Amazon.
Shortly after those due diligence and risk disclosure missteps were publicly raised in March 2023, eBay announced the sudden departure of then Chief Accounting Officer Brian Doerger with no official explanation and less than two weeks notice, leaving room for speculation he may have been a "sacrificial lamb" to ease investor concerns.
The timing of eBay deciding to move their sneaker operations from New York to New Jersey less than a month later is also noteworthy - was it a knee jerk reaction to try to mitigate further risks?
TCGUnion-CWA has continued their now year plus long fight to get eBay to bargain in good faith and agree to a contract, filing multiple complaints with the National Labor Relations Board along the way.
eBay has recently undertaken an "investor recommended" indepedendant Values Assessment to determine if the company is living up to their published Human Rights Policy - including respecting the rights of workers to organize and rights regarding wages, working hours, health and safety, freedom of association and non-discrimination.
Given the multiple active NLRB unfair labor practice claims and this lawsuit alleging FLSA and NYLL violations, one might wonder how Davis Wright Tremaine LLP came to the conclusion eBay deserved a passing grade.
Liz Morton
Here's the trick - eBay simply excluded any topics related to employees' working conditions, pay or benefits, practically guaranteeing what the results would be before the assessment even started.
While Davis Wright Tremaine LLP is not directly handling eBay's labor relations legal matters, their assessment is not exactly surprising considering their firm's labor expertise is advertised as "minimizing disruption, distraction and exposure" for their corporate clients who are facing unfair labor practice charges.
However, it's not just authentication workers that eBay has to worry about - Don Bivens PLLC is also investigating the company for potential employee rights violations related to underperformance of assets tied to 401(K) benefits that crosses over into eBay's wider white collar salaried tech employee base as well.
Liz Morton
eBay also undertook a mass layoff at the beginning of this year that cut ~1,000 roles and as other big tech companies have done the same, they've increasingly been subjected to scrutiny of hiring practices, particularly around H-1B visas - could eBay find themselves under the immigration microscope soon too?
Bernadette Walker
The Department of Justice is already keeping a close eye on the company as part of a deferred prosecution agreement regarding multiple federal felonies committed by eBay security employees who targeted journalists Ina and David Steiners of EcommerceBytes in 2019 with a shocking campaign of harassment and stalking aimed at influencing their coverage and outing an anonymous source, the person behind the unsuckEBAY Twitter account.
Liz Morton
Last year, eBay promoted Aaron Johnson to take on the role of Chief Ethics Officer, despite the fact that in his previous role at the company he was the main recipient of the infamous "Whatever. It. Takes" email from ex-Chief Communications Officer Steve Wymer, revealed in the cyberstalking case.
Given the criminal events that occurred following this email, it would appear neither Johnson nor then Chief Legal Officer Marie Oh Huber took action in their respective positions to make sure eBay's head of security, Jim Baugh, handled executive "frustration" within established legal bounds or reported this troubling and highly inappropriate communication from Wymer through any of the internal compliance or ethics channels which existed at that time - or, if they did, those channels clearly failed.
How are current employees supposed to feel knowing this is the person who may ultimately handle any internal reports or ethics complaints they may have?
eBay has not responded to either the lawsuit or requests for comment about the allegations at time of publishing.
The case is Duran v. eBay Inc. Case #: 1:24-cv-08281 in US District Court Eastern District of New York.
