- Employee Who Asks to Be Compensated on Commissions Is Exempt under the FLSA
- March 10, 2009 | Author: V. Brette Bensinger
- Law Firm: Hinshaw & Culbertson LLP - Chicago Office
A title insurance marketing company hired an employee as a marketing executive because of her prior experience in selling title insurance. The employee worked outside of the office and, due to her request, was compensated on a commission basis depending upon the on the amount of sales that she closed. The title company considered the employee an exempt employee pursuant to the Fair Labor Standards Act (FLSA) outside sales exemption and therefore did not compensate her for overtime. The employee sued the employer arguing that she was entitled to overtime because her primary work duty was more appropriately classified as promotional work as opposed to sales. The United States Court of Appeals for the Eleventh Circuit ruled that the employer correctly classified the employee as exempt. The court noted that although the employer had the burden of proving that the FLSA exemption applied, the employee’s own testimony that she obtained orders for title services and that she promoted the business with the goal of obtaining her own orders indicated that the employee was effectively “making sales” within the FLSA’s outside salesperson exemption. Although the employee may not have had the license to actually input the sales into the system, all of her efforts were directed toward the consummation of her own sales and not toward stimulating sales of the title insurance company in general. Employers should be aware that FLSA exemptions require a fact-specific analysis with regard to the particular duties of an employee, and that job titles alone do not definitively indicate an employee’s exempt status.
Gregory v. First Title of Am., Inc., No. 08-10737 (11th Cir. Jan. 27, 2009)