One of our clients was recently served with a lawsuit by one of its salespeople who was asserting violation of the overtime and minimum wage provisions of the Fair Labor and Standards Act (“FLSA”) and New York Labor Law (“NY Labor Law”). It was our position that the salesperson was not entitled to overtime or minimum wages since he was an “outside salesperson” who was exempt from the requirements of the FLSA and Labor Law. This was the basis of our motion to dismiss this lawsuit.
To give some history, the salesperson’s function was to sell jewelry at our clients’ customers’ places of business in three territories that were outside New York State. The salesperson did not work out of our clients’ New York office. He performed some functions out of his home office that were incidental to his duties as a salesperson, but 50% of the time he was making jewelry sales away from his home, away from our clients’ New York headquarters and at the customers’ places of business.
The overtime and minimum wage provisions of the FLSA and Labor Law do not apply to an “outside salesperson.” As defined by the FLSA, an outside salesperson “shall mean any employee: (1) [w]hose primary duty is: (i) making sales… and (2) who is customarily and regularly engaged away from the employer’s place or places of business in performing such primary duty.” The Labor Law’s definition of an “outside salesperson” is similar to the FLSA definition and is treated the same way.
Based upon the allegations of the salesperson’s lawsuit against our clients, it was clear that he was an “outside salesperson” who was exempt from the overtime and minimum wage provisions of the FLSA and Labor Law. The salesperson only made sales at the customers’ places of business, he did not work out of our clients’ New York office and the activities that he performed out of his home office were activities that were incidental to his salesperson duties, such as making travel itineraries, completing sales reports and mailing out brochures and catalogs to our clients’ customers.
In dismissing the overtime and minimum wage claims against our clients, the Court held that since “Plaintiff’s own allegations … plainly and unmistakably establish that he qualified as an exempt outside salesperson under both the FLSA and NY Labor Law…his claims under those statutes must be and are dismissed.”
This was a successful dismissal of claims that should have never been brought against our clients. The dismissal was also obtained very early on in the litigation, which avoided the costs and expenses that are affiliated with these types of lawsuits.
“Franklin, Gringer & Cohen, PC: Dismissal of Overtime & Wage Claims” was written by Michael S. Mosscrop.