Atlanta Employment Attorneys Blog
As an employer or an employee, compliance with the Fair Labor Standards Act is important to you. If you are a worker, non-compliance often means denial of the total compensation the law says your employer owes you. As an employer, non-compliance can have numerous damaging and costly consequences. If you have questions about FLSA compliance, including classification and exemption issues, make sure you are getting reliable answers by contacting an experienced Atlanta wage and hour lawyer.
For employers, misclassification is a common basis for FSA violation liability. Errors can occur in the context of employer-versus-independent contractor classifications or exempt-employee-versus-non-exempt-employee determinations. When deeming a worker as an exempt employee, it is important to identify all bases under which that worker may be exempt under the law, as a recent ruling from the 11th Circuit Court of Appeals illustrates.
The unpaid overtime case involved an auto dealership group in West Palm Beach, Florida, and three of its call center employees. The employees, who worked in the dealership’s “business development center,” a separate building next door to the dealership’s auto showroom, spoke to prospective car buyers over the phone to convince them to make appointments to visit the showroom and speak with showroom salespersons.
The employer gave the appointment setters the job title of “sales associate,” and paid them a salary plus additional compensation for each appointment booked and for each appointment ending in a sale.
After the trio resigned, they sued for unpaid overtime compensation. The employer argued that it did not owe the workers overtime pay because they were exempt employees under the FLSA. Specifically, the call center jobs fell under the automobile salesperson exemption contained in 29 U.S.C. § 213(b)(10)(A), according to the employer. The employer further maintained that, even if the appointment setters were not vehicle salespersons under the FLSA, they still were exempt “employees of a retail or service establishment” as established by 29 U.S.C. § 207(i).
Selling Appointments, Not Vehicles
The trial court sided with the workers, concluding that neither exemption applied. The workers, according to the district court, were in the business of selling appointments to view (and possibly purchase) vehicles, not the business of selling autos, so the vehicle salesperson exemption could not possibly apply. Because the appointment setters worked in a call center located outside the dealership’s sales building(s), the court reasoned that they could qualify as working in a “retail or service establishment.”
The employer appealed and was partially successful.
The court upheld the rejection of the auto salesperson exemption argument. To qualify under the auto salesperson exemption, a worker must be “’primarily engaged in selling . . . automobiles’ at an ‘establishment primarily engaged in the business of selling such vehicles . . . to ultimate purchasers.’” That did not describe the appointment setters’ roles, the appeals court concluded.
What ‘Integrally Involved’ in Selling Means
In upholding the ruling for the workers, the appeals court rejected an argument by the employer that the call center employees were “integrally involved” in the selling process, and therefore fell under the exemption. The court illustrated how the employer’s interpretation stretched the exemption too far by pointing out that a “janitor may be ‘integral’ to the sales process in the sense that customers are more likely to buy cars from a clean showroom. But the janitor isn’t engaged in the exchange of a commodity for money,” so the janitor’s job cannot fall within the vehicle salesperson exemption.
The call center workers, the court determined, were – to the extent they sold anything – selling appointments, not cars.
The ‘Retail or Service Establishment’ Exemption
The court, however, revived the employer’s “retail or service establishment” argument. If two operations with one business venture:
- are physically separated,
- are functionally operated as… separate units having separate records, and separate bookkeeping, and
- have no interchange of employees between the units,
then they are separate establishments. In the dealership case, the call center employees were on the same payroll as the rest of the dealership’s workers, met with showroom salespeople to discuss upcoming appointments, and were controlled and directed by the dealership’s president and CEO. According to the court, that evidence could be enough to mean the call center was not a separate establishment, potentially making the appointment setters fall under the “retail or service establishment” exemption.
Whether you are an employer seeking to protect your business from liability because of misclassification or a worker who has questions about overtime you think you should have received (but did not,) the knowledgeable Atlanta wage and hour attorneys at the law firm of Parks, Chesin & Walbert can help you with keen insight and effective advice. Our team possesses a deep understanding of the FLSA, so we can clearly communicate all of your rights and obligations to you. Contact us today us at 404-873-8048 or through this website to schedule a consultation to learn more.