Thursday, March 5, 2009

“Outside sales" exemption applies to title insurance promotional work

A marketing executive, whose promotional work was credited with the sale of title insurance to clients, was an exempt employee under the Fair Labor Standard Act’s (FLSA) "outside sales" exemption and, therefore, not entitled to overtime compensation, the Eleventh Circuit ruled in affirming a decision by a federal district court in Florida.

The plaintiff was hired by the insurance company as a marketing executive due, in large part, to her prior career in selling title insurance. Although she initially was paid a weekly wage, and later suggested that she be paid on a commission basis—receiving a 50% commission on clients who closed with the insurance company—plaintiff claimed that she often worked more than 40 hours per week, but was never compensated for overtime.

At issue was the definition of “promotional work,” which may or may not be exempt outside sales work, depending on the circumstances under which it is performed. Despite the plaintiff’s contention on appeal that her primary duty consisted of "stimulating sales," rather than actually making sales of title insurance—"promotional work" that she claimed was non-exempt—her stated job description was "to provide the services for referring and closing title insurance companies."

However, the plaintiff received both credit and commission for the orders received, the appellate court noted, making a distinction between her role as "conduit" to the sale rather than one that paves the way for another salesperson to step in to make the final sale. Once the orders were obtained, the court concluded, the sale was complete.

(Gregory v First Title, 11thCir, 157 LC 35,535.)

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