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Tag Archives: Administrative Exemption

9th Cir. Seeks Clarification From California Supreme Court Re: Proper Classification Of Pharmaceutical Sales Reps

On May 5, the 9th Circuit Court of Appeals certified the question of exempt status (under California state law) of pharmaceutical sales representatives to the California Supreme Court.

The 9th Circuit asked for guidance from the California Supreme Court to determine two issues, pertaining to the oft-litigated issues of whether Pharmaceutical Sales Reps are outside sales exempt and/or administrative exempt under those so-called exemptions in the California Wage and Hour law, which is similar to the FLSA. The first question focuses on whether or not pharmaceutical representatives fall within the “outside sales exemption.”  The other question focuses on the administrative exemption and whether or not application is applicable to the pharmaceutical sales reps at issue as well.

Pharmaceutical sales reps across the country will be watching this and other key cases in the months to come. If you worked as a pharmaceutical sales rep within the last 3 years, you may may entitled to overtime pay which was incorrectly denied to you, if you worked more than 40 hours per week.

Call 1-888-OVERTIME or visit http://www.overtimeadvocate.com to learn more about your overtime rights today.

4th Cir.: Racing Track Employees Not Subject To The Administrative Exemption; Work Not “Directly Related To The Management Of General Business Operations”

Desmond v. PNGI Charles Town Gaming, L.L.C.

The case was before the Court on appeal. Previously the lower Court had awarded the employer Summary Judgment finding that all of the Plaintiff’s were exempt under the FLSA’s Administrative Exemption. The 4th Circuit disagreed and reversed.

“Charles Town Gaming operates a casino and live horse racing facility in Charles Town, West Virginia. The Former Employees worked for Charles Town Gaming in a non-supervisory position denominated as “Miscellaneous Racing Official,” which we will refer to as “Racing Official.” In the performance of their work duties, each of the Former Employees assisted in various tasks associated with Charles Town Gaming’s staging of live horse races. In the morning and on non-race work days, Racing Officials assist with clerical duties in the secretaries’ office, including noting rider changes, putting together the next day’s racing program, and completing racing entries for the following day. Racing Officials, including the Former Employees, rotated work in four roles: Placing Judge, Paddock Judge, Horse Identifier, and Clerk of Scales during horse races. A Placing Judge “observ[es] races from start to finish and determine[s] the final outcome using a viper computer system and photo finish systems … The Paddock Judge observ[es] the horses in the paddock prior to the running of a race, [ ] ensure[s] the horses are wearing the proper equipment for racing [and that] a responsible trainer or groom is in the paddock to saddle the horse and prepare it for the race. The Paddock Judge is also involved in seeing that a published workout is in the program or announced if [it is] not available by press time. The Horse Identifier is “responsible for foal papers, Coggins test results, and tattoos insuring the correct horse is running in any given race. The [Horse] Identifier goes to the paddock at race time and checks each horse’s tattoo.” J.A. 69, 152, 215; see also
W. Va.Code R. § 178-1-20 (2009). The Clerk of Scales “works in the jockeys’ room prior to and after each horse race and verifies each jockey’s presence and licensure, [as well as the jockey’s weight] before and after each race….”

Finding that Plaintiff’s duties did not fulfill either the 2nd prong of the administrative exemption. “directly related to the management of general business operations,” the Court explained:

“In contrast to the duties of these exempt employees in Shockeley, West, and Darveau, the Former Employees’ work was not directly related to the general business operations of Charles Town Gaming. During the horse races, Racing Officials fulfilled one of several roles, which required them to observe and examine the horses, the jockeys, the trainers or grooms, the relevant paperwork for the horses, the order of finish for the race, or the paperwork associated with any subsequent claims. Racing Officials have no supervisory responsibility and do not develop, review, evaluate, or recommend Charles Town Gaming’s business policies or strategies with regard to the horse races. Simply put, the Former Employees’ work did not entail the administration of-the “running or servicing of”-Charles Town Gaming’s business of staging live horse races. The Former Employees were not part of “the management” of Charles Town Gaming and did not run or service the “general business operations.” While serving as a Placing Judge, Paddock Judge, or performing similar duties is important to the operation of the racing business of Charles Town Gaming, those positions are unrelated to management or the general business functions of the company.

Instead, a Racing Official’s work consisted of tasks somewhat similar to those performed “on a manufacturing production line or selling a product in a retail or service establishment.” Cf.
29 C.F.R. § 541.201(a). Although the administrative-production dichotomy is an imperfect analytical tool in a service-oriented employment context, it is still a useful construct. Other Circuit Courts of Appeal have adopted and modified its logic to less traditional “production” situations:

[A]pplying the administrative-production dichotomy is not as simple as drawing the line between white-collar and blue-collar workers. On the contrary, non-manufacturing employees can be considered “production” employees in those instances where their job is to generate (i.e., “produce”) the very product or service that the employer’s business offers to the public. See, e.g., Reich v. New York, 3 F.3d 581, 587-89 (2d Cir.1993) (police investigators conduct or “produce” criminal investigations); Dalheim v. KDFW-TV, 928 F.2d 1220, 1230-31 (5th Cir.1990) (television station’s producers, directors, and assignment editors “produced” newscast, and were thus non-exempt).
Reich v. John Alden Life Ins. Co., 126 F.3d 1, 9 (1st Cir.1997).

As relevant here, Charles Town Gaming “produces” live horse races. The position of Racing Official consists of “the day-to-day carrying out of [Charles Town Gaming’s] affairs” to the public, a production-side role. See Bratt v. County of Los Angeles, 912 F .2d 1066, 1070 (9th Cir.1990), cited with approval in Shockley, 997 F.2d at 29. Because a Racing Official’s duties are not directly related to the general business operations of Charles Town Gaming, the position does not satisfy the requirements for the administrative exemption under the FLSA.”

Note, the Court declined to determine whether the “independent judgment and discretion” requirement of the 3rd prong was met, after having decided that Plaintiff’s work was not “directly related to the management of general business operations” although it is likely that they would have found that prong to have been lacking as well.

W.D.Ky.: “Plant Engineering-Facilities Support Group-Business Professional” For UPS Is Administrative Exempt

Hubbuch v. United Parcel Service, Inc.

This case was before the Court on Defendant’s Motion for Summary Judgment, seeking a finding that Plaintiff, a “plant engineering-facilities support group-business professional” was administratively exempt from the FLSA, and therefore not entitled to overtime pay. In reaching its decision the Court discussed the factual background of Plaintiff’s job duties:

“It is undisputed that Hubbuch is a salaried employee. Hubbuch does not dispute that his primary duty is directly related to the management or general business operations of UPS or its customers and includes the exercise of discretion and independent judgment with respect to matters of significance. However, Hubbuch argues that he does not perform office or non-manual work. Hubbuch argues that his job is “comparable to that of a maintenance mechanic, troubleshooting alarm systems, performing hands on investigations, solve [sic] problems with mechanical, electrical, plumbing and sprinklers, overhead door, etc.” UPS argues that Hubbuch performs exempt work.

Upon review of the facts, the court finds that Hubbuch performs a variety of non-manual work. The Job Description for engineering specialist at UPS identifies a host of responsibilities and activities that are fairly characterized as non-manual. The General Summary provides an overview:

The Business Professional is responsible for solving day-to-day problems inherent in keeping the physical facility in good working order, so as to enhance the hub operations. Activities performed include but are not limited to responding to internal customer requests, responding to facility alarms and emergencies, troubleshooting problems that arise, and coordinating repair work with outside vendors.

Each of the responsibilities and activities listed above have non-manual components. Other of Hubbuch’s enumerated Job Responsibilities, including developing training resources for other team members, working with vendors, and performing facility audits are non-manual in nature, as well. See Id. In addition, Hubbuch’s very basis for a claim here is that he has not been paid for the performance of non-manual work-troubleshooting by phone-while on call. Hubbuch has submitted an affidavit stating that, “The work performed while “on call” was the same work that Affiant performed on site.”

Hubbuch is not simply a mechanic.  Hubbuch may perform substantial manual labor as part of his job; nonetheless his primary duty is the performance of non-manual work directly related to the management or general business operations of UPS or its customers. Hubbuch meets the definition of an exempt administrative employee and thus is exempt from FLSA’s overtime requirements.”