Recently, a jury in the U.S. District Court for the Eastern District of Virginia found that a mortgage company proved that it properly classified an employee as an outside sales person under the Fair Labor Standards Act and therefore was not required to pay the employee overtime. Cougill v. Prospect Mortgage, LLC, No. 13-1433 (E.D.Va. Feb. 5, 2014). The suit is one of many that have been filed across the country involving claims by employees that they were misclassified and were not paid overtime or minimum wage. The verdict came on the same day the court ruled in favor of the mortgage company on summary judgment in a separate, but similar case. Hantz v. Prospect Mortgage, LLC, No. 13-1435, 2014 WL 463019 (E.D.Va. Feb. 5. 2014). In that case, the court held that the loan officer’s claims were time barred under the FLSA’s two-year statute of limitations because the officer failed to demonstrate the alleged misclassification would constitute a willful violation, which would have extended the time limit by a year. Although its holding on the statute of limitations issue was dispositive of the case, the court went on to address the plaintiff’s status as an outside sales person. The court reasoned that in determining FLSA classification, the inquiry is whether the employee performs tasks critical to the sales process away from the office on more than an occasional basis. The fact that the employee may also perform a significant amount of work inside the mortgage company’s office does not limit the exemption. In this case, the court noted that the loan officer’s outside meetings with realtors, time spent distributing flyers, attending open houses, and giving seminars demonstrated that the officer “customarily and regularly” engaged in outside sales activity sufficient to trigger the exemption, notwithstanding the officer’s testimony that he also worked considerable hours inside the office. The court also rejected the officer’s argument that the exemption should not apply because he did not make any sales at a borrower’s home or place of business, noting that where the actual sale occurs is irrelevant.
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