402 F.Supp.3d 128
D. Maryland2019Background
- Plaintiffs (Carrera, Muro, Gervacio) are EMD outside sales representatives paid on commission under a union collective-bargaining agreement; they allege EMD failed to pay overtime in violation of the FLSA.
- EMD delivers to independent stores and large chain stores (Walmart, Giant, Safeway); Plaintiffs primarily (≈97%) service chain stores and perform restocking, shelving, conditioning, and order-taking tasks there.
- Dispute centers on whether Plaintiffs’ work at chain stores constitutes "sales" (exempt outside sales) or is promotional/merchandising incidental to sales made by other EMD employees (non‑exempt).
- Defendants contend Plaintiffs’ primary duty is making sales (outside-sales exemption); Plaintiffs contend they mainly perform non‑exempt merchandising and order‑taking for space negotiated by others.
- Court resolved several evidentiary disputes: struck certain defense-produced sales/commission spreadsheets for failure to disclose under Fed. R. Civ. P. 37; allowed other business records that could be authenticated at trial; denied sealing of a Walmart supplier agreement.
- On cross-motions for summary judgment, the court found genuine disputes of material fact as to whether Plaintiffs make "sales," whether sales are their primary duty, defendants’ good‑faith defense to liquidated damages, and willfulness; summary judgment denied on those issues. E&R was dismissed as an employer on summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Defendants are liable employers (including E&R) | Plaintiffs asserted they worked for E&R in limited years | Defendants denied Plaintiffs ever worked for E&R | Court granted summary judgment for Defendants as to E&R (no genuine evidence Plaintiffs worked for E&R) |
| Whether Plaintiffs’ work qualifies as "sales" under FLSA (outside-sales exemption) | Plaintiffs: primarily perform merchandising, restocking, and order-taking at planogrammed chain stores; these tasks are incidental to sales by others and not exempt | Defendants: sales reps make sales (commission-based pay, opportunities to open accounts and secure extra shelf space); some reps testify they spend majority time selling | Genuine dispute of material fact exists; summary judgment denied to both sides on exemption issue |
| Whether Defendants acted in good faith (liquidated damages defense) | Plaintiffs: Devarie failed to investigate day-to-day duties and did not consult counsel after complaints; so good faith is disputed | Defendants: relied on DOL materials, accountants, and CBA; believed reps were exempt | Genuine factual dispute; summary judgment denied on good-faith defense |
| Whether violations (if any) were willful (three-year statute) | Plaintiffs: Devarie's limited investigation and failure to consult counsel supports willfulness | Defendants: believed pay practice lawful based on advice and bargaining history | Willfulness is a fact question; summary judgment denied on limitation period |
Key Cases Cited
- Christopher v. SmithKline Beecham Corp., 567 U.S. 142 (defining DOL regulatory framework for outside-sales exemption)
- Killion v. KeHE Distribs., LLC, 761 F.3d 574 (6th Cir.) (sales reps who primarily place orders in planogrammed stores may not be exempt)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden principles)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment—credibility and inference rules)
- Brinkley-Obu v. Hughes Training, Inc., 36 F.3d 336 (4th Cir.) (employer burden to show good faith re: liquidated damages)
- Mountaire Farms, Inc. v. Perez, 650 F.3d 350 (4th Cir.) (good-faith/legal advice factors relevant to liquidated-damages defense)