Peloton's Extreme Sales Quotas Shortchanged Workers, Lawsuit Says

(Bloomberg) — Peloton Interactive Inc. was sued by a former sales representative who says the company forced employees to work off the clock without paying overtime and set sales quotas impossibly high.

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Joseph D. Mateer, who says he worked as a salesman at the fitness equipment company from October 2017 to June 2021, filed the suit Friday in federal court in New York, alleging he regularly worked more than 40 hours a week and eight hours a day but wasn’t paid overtime. Mateer said the company’s “practice and policy” was to tell inside sales representatives not to enter more than 40 hours a week without prior authorization.

The suit comes as Peloton is facing pressure from an activist investor demanding that it fire Chief Executive Officer John Foley and pursue a sale. The company’s shares have plummeted from their all-time high a year ago amid concerns about growth as pandemic restrictions were eased, making costly at-home equipment less desirable. The shares touched a nearly two-year low last week after after CNBC reported that Peloton was temporarily halting production of its bikes and treadmills.

Peloton didn’t immediately respond to an email seeking comment on the suit.

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Mateer, who is seeking to represent a class of plaintiffs, said in the suit that his work “and the work of similarly situated ISRs did not end when the workday ended.” To the contrary, he claimed, Peloton’s “practice, policy, and systems allowed for the performance of and consummation of sales pre-shift, during meal and rest breaks, and post-shift, as well as on weekends and holidays.”

He also accused Peloton of setting monthly sales quotas so high “that the sales personnel could not meet the performance standards by selling solely within their assigned work shift.” Not meeting the quotas could results in termination, he alleged.

The case is Joseph D. Mateer v. Peloton Interactive Inc., 22-cv-00740, U.S. District Court, Southern District of New York (Manhattan).