[BROKERDIRT] DD 9/20/06 Notwithstanding contract, subdivision sales personnel are not "independent agents" for federal wage and hour requirements, other issues

Daily Development for Wednesday, September 20, 2006
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
dirt@umkc.edu

BROKERS; REAL ESTATE SALES REPRESENTATIVES; FAIR LABOR STANDARDS:   Real estate salespersons hired by a residential home builder to sell homes in its communities are not “outside salespersons” and therefore not subject to the applicable exemption under the Fair Labor Standards Act (“FLSA”) and are not exempt from the minimum wage and overtime pay requirements of FLSA. 

Billingslea v. Brayson Homes, Inc., 2006 WL 562198 (N.D.Ga., March 7, 2006).

Defendant is residential home builder that purchases parcels of land to be developed and subdivided into small parcels of land for form new subdivision communities.  Defendant hired Plaintiffs to sell homes in its communities.  Each plaintiff was assigned to work in a specific community, and was responsible for selling homes on the various subdivided lots within that community.  Plaintiffs were expect to greet potential home buyers at the model home sales centered located in each community.  As part of the hiring process, each of Plaintiffs signed an “Independent  Contractor Agreement” with Defendant.  Based on Plaintiffs’ job activities, Defendant classified Plaintiffs as “outside sales persons” exempt from minimum wage and overtime pay requirements of the FLSA.  Plaintiffs brought an action to recover unpaid wages and overtime.  Defendant moved for summary judgment

The United State District Court of the Northern District of Georgia denied Defendant’s motion for summary judgment because it found that Plaintiffs were not outside salespersons.  The District Court concluded this because they found that the evidence showed that Plaintiffs’ primary duty was not to make sales away from their employer’s place of business, but to assist in making sales within their employer’s place of business, which the District Court construed to be the entire subdivision site to which they were assigned and from which they could not leave during the assigned work day.

Comment: Although the editor has listed this case under the “broker” heading, obviously these were not brokers, as they worked for a sole employer for a fixed wage. 

Comment 2: The case apparently was not appealed.  But the Westlaw entry has the briefs and other related documents for readers who wish to know more about this issue.  It is likely that the finding that these parties are not “independent agents” will have consequences beyond wage and hour issues.

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