top of page

The Second Circuit’s Analysis of the “Outside Sales” Exemption


This month, the Second Circuit vacated a district court order concluding that Time Warner’s Territory Sales Representatives (“TSRs”) who spent the majority of their time at work performing non-exempt work were “outside salesmen” and were therefore exempt from the FLSA overtime provision. Sydney v. Time Warner Entertainment-Advance/Newhouse Partnership, 17-cv-1219, 2018 U.S. Dist. Lexis 28097 (2nd Cir. NY, Oct. 4, 2018).

The FLSA requires employers to pay overtime to employees who work more than 40 hours per week. However, under the FLSA, outside salesmen are exempt from the FLSA overtime provisions. An outside salesperson is defined 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 a consideration will be paid by the client or customer; and (2) who is customarily and regularly engaged away from the employer’s place or places of business in performing such primary duty. 29 C.F.R. § 541.500(a)(1)-(2).

In Sydney, two TSRs appealed the district court’s decision that they were exempt from the FLSA’s overtime provisions under the “outside salesmen” exemption. Concluding that the labor required to complete installations was more consistent with the work of an installer than that of a sales rep, the appeals court found that the district court erred in holding on summary judgment that the outside sales exemption applied. The two former TSR’s primary duties primarily included the physical installation of cable, internet, and telephone equipment at apartment complexes. TSRs were responsible for developing and maintaining positive relationships with leasing agents and management, and worked 50 to 70 hours per week, performing on average five to ten installations per day. The appeals court determined that because a reasonable fact finder could conclude that the TSRs spent the majority of their time at work performing non-exempt work, i.e. installations, they did not satisfy the primary duty requirement.

The Second Circuit vacated the judgment of the district court holding that the installations conducted by the TSRs were not merely incidental to their sales efforts.

Featured Posts
Recent Posts
Archive

Disclaimer: This blog is made available by Skidmore | Fomina, PLLC (“SFLaw” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of the Firm, its attorneys, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with SFLaw through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to SFLaw through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. SFLaw makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. SFLaw expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall SFLaw or any of its members, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Search By Tags
No tags yet.
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • LinkedIn Social Icon
bottom of page