Matthew Purushotham
Thu, 08/03/2023
On July 27, 2023, a three-judge panel of the Fourth Circuit unanimously upheld a district court ruling that sales representatives working for a food-products distributor were not exempt from the overtime provisions of the Fair Labor Standards Act (“FLSA”). The district court rejected the defendants’ argument that the FLSA’s “outside sales” exemption applied to the plaintiffs because it concluded that the defendant failed to show that the plaintiffs’ primary duty was to make sales. The exemption excludes from the FLSA’s overtime protections workers who are “employed . . . in the capacity of outside salesman.” 29 U.S.C. § 213(a)(1). The Department of Labor has defined “outside salesman,” in part, as an employee whose “primary duty is [] making sales.”
The district court found that defendants failed to demonstrate that plaintiffs could make their own sales at chain stores—where they spent most of their time—instead concluding that plaintiffs’ primary duty at such stores was “keeping shelves full, keeping shelves clean, and placing orders promptly.” What “sales” they did make at such chain stores consisted of submitting orders to fill space or stock displays that had already been negotiated by company management. At independent stores, the court found that plaintiffs had more opportunity to make sales, but not enough such that it made sales, rather than inventory management, their primary duty.
The district court awarded plaintiffs their unpaid overtime wages, and liquidated damages but limited the plaintiffs’ claims to the two-year default statute of limitations under the FLSA. The Fourth Circuit affirmed the district court’s decision, rejecting defendants’ challenges, including that the district court had applied too stringent an evidentiary standing (“clear and convincing evidence”) to their exemption defense.
McGillivary Steele Elkin has represented thousands of employees in cases involving employers unlawfully misclassifying workers as exempt from the overtime provisions of state and federal wage and hour laws.
If you believe your employer is not paying you the appropriate amount of overtime, contact us at info@mselaborlaw.com.
