Massey & Duffy recently filed these proposed findings of fact and conclusions of law in a Federal Court case:
Plaintiff, Crystal Tronnes, files the following proposed Findings of Fact and Conclusions of Law as to the trial to occur on September 27, 2016:
FINDINGS OF FACT
Plaintiff was employed by Defendant from March 3, 2008 to December 2, 2014. See Pretrial Statement, Section F (Admitted Facts), Doc. 15.
At all times material, Defendant is believed to have an annual dollar volume of sales or business is $500,000 or more and has at least two employees engaged in commerce or in the production of goods for commerce or handling such goods. Id.
Alternatively, Defendants employ (and at all times Plaintiff worked for Defendants employed as), employees that handle goods or materials that have been moved in or produced for commerce. Id.
Defendants were Plaintiff’s employer as defined by 29 U.S.C. § 203(d).
At all times material, Defendant Allen controlled Defendant Williston Door and Millwork Corporation and/or the method by which Plaintiff was paid. Id.
Defendants, at all times material, were an enterprise as defined by 29 U.S.C. § 203(r). Id.
Defendants, at all times material, were an enterprise engaged in commerce as defined by 29 U.S.C. § 203(s). Id.
CONCLUSIONS OF LAW
The FLSA requires employers to pay overtime compensation for an employee’s work in excess of 40 hours per week. 29 U.S.C. § 207. Defendants, upon whom the burden rests, contends that Plaintiff was an outside salesman within the exemptions set forth in 29 U.S.C. § 213(a) (1). The issue is primarily one of fact. Walling v. General Industries Co., 330 U.S. 545, 550, 67 S.Ct. 883, 91 L.Ed. 1088 (1947).
The law requires that the claimed exemption must be narrowly construed against the employer seeking to assert it. See Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 4 L.Ed.2d 393 (1959). The employer must prove that the exemption is applicable by plain and unmistakable evidence. See Arnold v. Ben Kanowsky, Inc., supra. In short, the exemptions are limited to those falling expressly within the statute. Wirtz v. Lunsford, 404 F.2d 693, 697 (6th Cir. 1968); Hodgson v. Klages Coal and Ice Co., 435 F.2d 377, 382 (6th Cir. 1970).
The Outside Sales Exemption
The overtime provisions of the FLSA do not apply to any employee “employed in the capacity of outside salesman,” as covered by the “Outside Sales Exemption” outlined in 29 U.S.C. § 213(a)(1). Courts have explained that the
logic of the exemption is that. . .[a] salesman, to a great extent, works individually. There are no restrictions respecting the time he shall work and he can earn as much or as little, within the range of his ability, as his ambition dictates. . . . An outside salesman’s extra compensation comes in the form of commissions, not overtime, and because most of the salesman’s work is performed away from the employer’s place of business, the employer often has no way of knowing how many hours an outside salesman works.
Meza v. Intelligent Mexican Mktg., Inc., 720 F.3d 577, 581 (5th Cir. 2013), citing Jewel Tea Co. v. Williams, 118 F.2d 202, 207-08 (10th Cir. 1941). (e.s.). While Congress did not expressly define “outside salesman,” in the statute, the Department of Labor has promulgated regulations relevant to the exemption. See 29 U.S.C. § 213(a)(1).
An outside salesperson is defined by regulation as an employee:
(1)Whose primary duty is:
(i) making sales within the meaning of section 3(k) of the Act, or
(ii) obtaining orders or contracts for services or for the use of facilities for which the client or customer will pay a consideration; and
(2)Who is customarily and regularly engaged away from the employer’s place or places of business in performing such primary duty.
C.F.R. § 541.500(a).
For purposes of the “primary duty” prong, the FLSA defines “sale” or “sell” to include “any sale, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition.” 29 U.S.C. § 203(k). Regulations on the Outside Sales Exemption provide that “[s]ales within the meaning of section 3(k) of the Act include the transfer of title to tangible property, and in certain cases, of tangible and valuable evidence of intangible property.” 29 C.F.R. § 541.501(b). As for “primary duty,” the regulations provide that the term “means the principal, main, major or most important duty that the employee performs.” Id. § 541.700(a). Additionally, regulations provide:
[d]etermination of an employee’s primary duty must be based on all the facts in a particular case, with the significant emphasis on the character of the employee’s job as a whole. Factors to consider when determining the primary duty of an employee include, but are not limited to, the relative importance of the exempt duties as compared with other types of tasks; the amount of time spent performing exempt work; the employee’s relative freedom from direct supervision; and the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee.
Id. 29 C.F.R. § 541.700 further provides:
(b) The amount of time spent performing exempt work can be a useful guide in determining whether exempt work is the primary duty of an employee. Thus, employees who spend more than 50 percent of their time performing exempt work will generally satisfy the primary duty requirement. Time alone, however, is not the sole test, and nothing in this section requires that exempt employees spend more than 50 percent of their time performing exempt work. Employees who do not spend more than 50 percent of their time performing exempt duties may nonetheless meet the primary duty requirement if the other factors support such a conclusion.
The Supreme Court has expressly held that industry custom and practice does not circumscribe employees’ rights under the FLSA. See Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 741 (1981). As the Court stated in Barrentine: The Fair Labor Standards Act was not designed to codify or perpetuate [industry] customs and contracts. . . . Congress intended, instead, to achieve a uniform national policy of guaranteeing compensation for all work or employment engaged in by employees covered by the Act. Any custom or contract falling short of that basic policy, like an agreement to pay less than the minimum wage requirements, cannot be utilized to deprive employees of their statutory rights. Id. (quoting Tenn. Coal, Iron & R. Co. v. Muscoda Local, 123, 321 U.S. 590, 602-03 (1944)). Also, the Department’s regulations clearly state that job titles may not be used to establish exempt status; rather, each employee’s actual job duties must be evaluated. See 29 C.F.R. 541.2.
Calculating Overtime Pay
Overtime pay for a nonexempt employee depends upon the employee’s “regular rate” of pay. 229 Part 778 of the DOL regulations contains all of the various ways to determine an employee’s regular rate. Regardless of whether a nonexempt employee is paid by an hourly rate, salary, piece rate, day rate, book rate, flag rate, job or task rate, commission, or by some other method or combination of methods, the pay must be converted into an hourly equivalent to arrive at the “regular rate” for overtime computation purposes. DOL provides that “[t]he regular hourly rate of pay of an employee is determined by dividing his total remuneration for employment (except statutory exclusions [under section 207(e)]) in any workweek by the total number of hours actually worked by him in that workweek for which such compensation was paid.” Only hours “actually worked” count toward overtime. “Total remuneration” means all wages earned by the employee during that week from what- ever work was done and by whatever pay methods are used. For example, if an employee is paid an hourly rate plus a commission, the regular rate would be the straight-time hourly earnings plus the commission for that workweek, divided by the total number of hours worked during the workweek. If, on top of that, a productivity bonus is paid, the premium would be added to the hourly earnings and the commission and then divided by the number of hours worked to arrive at the regular rate for that workweek.
The U.S. Department of Labor has detailed regulations for determining what must be counted as hours worked. For the majority of nonexempt employees, overtime will be required if the hours worked exceed forty in a seven- day workweek. In general, an employer must pay employees for all hours in which they are “suffered or permitted” to work.
Plaintiff has provided a reasonable approximation of the number of hours worked for which compensation is owed to her from Defendant in the sum of $___________________. Additionally, Defendant did not prove it acted in good faith and its actions were willful. Thus liquidated damages brings the total sum due to Plaintiff as $__________, all for which let execution issue. The Court reserves jurisdiction to award Plaintiff her attorneys’ fees and costs.
Dated: September 19, 2016
 §§ 541.102, .202, .203(g), .301(a)-(d), (e)(5).
 Id. See also Section 778.109.
 Id. § 778.109.
 See id. § 778.110(b).
 29 C.F.R. §§ 785.1-.50.
 29 U.S.C. § 207(a)(1) (2006).
 29 C.F.R. § 785.11.
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