973 F.3d 509
6th Cir.2020Background
- Plaintiffs (Hurt and Hill) worked as door‑to‑door solicitors for Just Energy’s Ohio affiliate (Commerce Energy), paid solely on commission and required to follow company training, a script, dress code, daily check‑ins, maps/assignments, and supervised transport to assigned neighborhoods.
- Solicitors collected signed “customer agreements,” then were required to initiate a third‑party verification call from the customer’s premises and leave; thereafter customers underwent credit checks and Just Energy retained final discretion to accept or reject the application before a sale was finalized and commissions paid.
- Many solicitors earned little or nothing; documentary payroll data showed the large majority of solicitors made under $1,000 total during their tenure.
- Plaintiffs sued under the FLSA and parallel Ohio law, alleging misclassification (outside‑sales exemption). The district court tried liability to a jury, which found Plaintiffs were not exempt outside salespeople; the court denied JMOL and directed verdict motions. Just Energy appealed.
- The Sixth Circuit affirmed, rejecting challenges to denial of JMOL, the jury instructions (including consideration of employees’ authority to bind), and admission of compensation evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs are "outside salesmen" because they were "making sales" under 29 C.F.R. § 541.500 | Plaintiffs persuaded customers and obtained signed customer agreements; that constitutes "making sales." | Agreements were non‑binding; Just Energy retained and exercised discretion (verification, credit checks, final approval), so solicitors could not bind or complete sales. | Jury verdict that plaintiffs were not "making sales" upheld; record supported reasonable jury finding given employer discretion and solicitors’ inability to finalize sales. |
| Whether plaintiffs were "obtaining orders or contracts for services" (alternate prong) | Plaintiffs argued their work fit the "making sales" prong; they did not obtain contracts for services. | Just Energy argued they obtained orders or contracts for services. | Court treated electricity/natural gas as commodities; plaintiffs were not obtaining orders/contracts for services—alternate prong not satisfied. |
| Legality of jury instruction requiring consideration of employee "authority to bind" employer | Plaintiffs (and district court) supported instruction as proper factor under Christopher and regulations. | Just Energy argued "authority to bind" is not required and instruction was legally erroneous. | Instruction upheld as a correct, non‑dispositive factor (per Christopher); no reversible error in charging jury. |
| Admission of compensation evidence at trial | Plaintiffs argued compensation evidence was necessary to prove minimum wage/overtime claims and relevant to indicia of outside sales status. | Just Energy argued compensation was irrelevant and it had already stipulated to not paying overtime/minimum wage. | Evidence admissible; stipulation did not concede plaintiffs actually earned less than minimum wage and compensation was relevant to both liability and indicia analysis. |
Key Cases Cited
- Christopher v. SmithKline Beecham Corp., 567 U.S. 142 (Supreme Court interpreted "making sales" broadly and endorsed a functional, industry‑specific inquiry into outside‑sales exemption)
- Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709 (Supreme Court: factfinding on how employees spend time is factual; application of FLSA exemptions to those facts is legal)
- Flood v. Just Energy Mktg. Corp., 904 F.3d 219 (2d Cir. 2018) (similar door‑to‑door solicitor found exempt as outside salesman; discussed nonbinding commitments and indicia of sales work)
- Killion v. KeHE Distributors, LLC, 761 F.3d 574 (6th Cir. 2014) (distinguishing account managers who controlled orders from reps who merely solicited; Christopher’s limited transferability outside pharmaceutical context)
- Clements v. Serco, Inc., 530 F.3d 1224 (10th Cir. 2008) (military recruiters held not "making sales" where employer retains sole authority to complete enlistments)