The Second Circuit Court of Appeals has held that a regional director of advertising sales for the Elite Traveler magazine was non-exempt under the Fair Labor Standards Act. The Court rejected the contention that the employee fell within the administrative exemption.
The administrative exemption and inside sales people have enjoyed a fraught history in the courts. Courts have held that such employees are “white collar production employees” in that they are really only “producing” the goods of the employer and not engaging in the ancillary, back-office kinds of duties that are deemed administrative under the FLSA. In this case, the Second Circuit continued that line of reasoning.
The Court found that as the primary duty of the employee was selling advertisements to individual customers and not promoting sales generally, the employee was only a producer, not an administrative employee.
Although there was evidence that the plaintiff developed new clients with the goal of increasing advertising sales generally, her primary duty remained selling specific advertising space to clients.
The administrative exemption is very fuzzy, and this case is a good example of the problems involved in claiming it--an employer may succeed, but only after paying a hefty toll to find out. There is a continuing tension between whether an employee is merely producing goods or is performing the more esoteric duties that support and comprise the business. Those duties are administrative, but precise definitions are difficult to come by. The upshot: 'here be dragons' an employer's legal map----if you go all in on the administrative exemption, be prepared to have a beefy stack for an attorney in your litigation budget.
Reiseck v. Universal Communications of Miami Inc., 09-1632 (2nd Cir 2010)
