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Jury Will Decide Whether ‘Outside Sales Exemption’ to FLSA Was Properly Applied to Plaintiff in FLSA Case

On October 21, 2014, the U.S. District Court for the Eastern District of Pennsylvania denied summary judgment to the defendant in the case Drummond v. Herr Foods Inc., et al. While the court suggested that there were several reasons that the plaintiffs might fall under the Fair labor Standards Act‘s (FLSA’s) “Outside Sales Exemption,” it nevertheless concluded that these reasons were not strong enough to declare victory for the defendant based on the pleadings alone.

The relevant statute states that “Drivers who deliver products and also sell such products may qualify as exempt outside sales employees only if the employee has a primary duty of making sales…” That is the main question the court, or the jury, will have to decide. The court began by explaining that under the statute it is the employer’s burden to establish the applicability of the exemption after considering several factors; the employer seeking to apply the exemption “must prove that the employee and/or employer comes plainly and unmistakably within the exemption’s terms.” It then noted that there are few cases applying to this legal question. The defendant argued that the court should adopt the Fifth Circuit’s ruling in Meza v. Intelligent Mexican Marketing, Inc., but the court rejected this argument based on a key difference between Meza and Drummond: unlike the route salespeople at Herr, those at Intelligent Mexican Marketing, Inc. were the only people in the company salespeople at the company. By contrast, plaintiffs Drummond, while she was responsible for doing sales work, was supported by in-house salespeople from several other departments. Further, Herr’s route salespeople, when they did make sales arrangements, were arguably constrained in making those decisions to such an extent that a jury would be able to question whether selling product was the route drivers’ primary responsibility. In many cases, Drummond’s main responsibility was arguably not to make sales but to execute the conditions of sales that were made by higher-level salespeople at the company.

It is not disputed that the plaintiffs were provided sales training, and attended meetings for that purpose. However, the court notes, both these meetings and the plaintiff’s job description included many other job functions unrelated to sales-vehicle safety, loading trucks, merchandising, computer and equipment use, etc. On the central question of the case–whether Drummond’s primary duty as a route driver for Herr was sales–there remained some open questions for a jury to consider and decide.

According to the plaintiff’s complaint there are a total of about forty route salespeople at Herr who are potential class members in her lawsuit. If a jury were to determine that they have been misclassified as exempt, the five named plaintiffs, and any additional class members, would stand to gain many hours of unpaid overtime.

If you believe your rights under the Fair Labor Standards Act have been violated, please contact The Harman Firm, LLP.

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