Beauford Ex Rel. Cox v. ActionLink, LLC
781 F.3d 396
8th Cir.2015Background
- ActionLink hired "brand advocates" to promote LG products in retail stores; advocates trained, followed scripts, maintained displays, and did not make direct sales or set pricing.
- Advocates were paid a fixed salary (~$42,000) with no incentive pay; many worked 50–75 hours/week and received no overtime from Feb–Nov 2011.
- DOL investigated in Sept 2011, concluded misclassification; ActionLink reclassified employees as non-exempt and, on Dec 30, 2011, mailed back-pay checks with fine-print language stating that cashing the check constituted receipt of "full payment" of wages.
- Some employees cashed the checks (Adams plaintiffs); others did not (Beauford plaintiffs). The DOL investigator reviewed amounts only after returning from leave; he did not approve the check stub language before distribution.
- Plaintiffs sued claiming additional FLSA recovery; district court held employees non-exempt. It later granted summary judgment for ActionLink on claims of those who cashed checks, finding a waiver supervised by the DOL; this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Were brand advocates exempt as outside salesmen? | Advocates were effectively making sales by driving purchases and thus fit the outside-sales exemption. | Advocates promoted and stimulated retailer sales; their role equated to making sales under §203(k). | No — not outside salesmen; promotional activity to stimulate others' sales is non-exempt. |
| Were brand advocates exempt under the administrative exemption? | Not argued by plaintiffs; they contended lack of discretion and significance. | Advocates exercised discretion in communications and budgeting, meeting administrative criteria. | No — advocates lacked the requisite exercise of discretion and independent judgment on matters of significance. |
| Did cashing the checks amount to a DOL‑supervised waiver under 29 U.S.C. § 216(c)? | Cashing checks with fine-print did not give notice of waiving statutory FLSA rights; DOL did not supervise/authorize the release language. | Receipt language on check stubs and DOL involvement in calculating back wages sufficed as a supervised settlement and waiver. | No — the stub language was insufficient as a matter of law to notify employees they waived FLSA claims; thus cashing did not effect a valid waiver. |
| Overall disposition | Plaintiffs sought to proceed on unpaid overtime, liquidated damages, fees. | ActionLink sought dismissal of claims from those who cashed checks and exemption ruling. | Court affirmed non-exempt status, reversed dismissal of Adams plaintiffs, and remanded for further proceedings. |
Key Cases Cited
- Copeland v. ABB, Inc., 521 F.3d 1010 (8th Cir. 2008) (standards for FLSA settlement waivers and supervision requirement)
- Christopher v. SmithKline Beecham Corp., 132 S. Ct. 2156 (U.S. 2012) (outside‑sales exemption analysis in pharmaceutical context)
- Dent v. Cox Commc'ns Las Vegas, Inc., 502 F.3d 1141 (9th Cir. 2007) (employee must agree to accept payment and receive notice of rights waived for §216(c) waiver)
- Walton v. United Consumers Club, Inc., 786 F.2d 303 (7th Cir. 1986) (cashing checks without a release does not necessarily constitute waiver)
- Sneed v. Sneed's Shipbuilding, Inc., 545 F.2d 537 (5th Cir. 1977) (valid waiver requires an agreement and receipt of payment; DOL‑supervised releases enforceable)
- Niland v. Delta Recycling Corp., 377 F.3d 1244 (11th Cir. 2004) (release language comparable to DOL form, when authorized, can constitute enforceable waiver)