788 F. Supp. 2d 200
S.D.N.Y.2011Background
- Gorey filed a putative FLSA collective action alleging overtime exemptions for herself and opt-in plaintiffs under federal and New York law.
- Manheim operates dozens of auto auctions and various services; outside sales reps travel to dealers to solicit business and earn commissions, while inside reps are non-exempt hourly workers.
- Outside sales reps are salaried with commissions; they routinely work more than 40 hours per week, with commissions tied to dealers' vehicle sales.
- Plaintiffs seek summary judgment on overtime violations; Gorey also asserts New York wage-law and spread-of-hours claims, while Manheim disputes exemptions.
- The court conditionally certified a collective; factual duties are undisputed; issues focus on exemptions, statute of limitations, and proper defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether outside sales reps are exempt under the FLSA outside salesman or administrative exemptions. | Gorey argues reps do not meet exemptions. | Manheim contends reps are exempt as outside salesmen or administrative employees. | Exemptions do not apply; plaintiffs are non-exempt salespersons under the FLSA. |
| What statute of limitations applies to the remaining opt-ins. | Willfulness extends recovery to three years for some claims. | No wilfulness shown; use two-year period unless willful. | Limitations narrowed to employees hired on or after Oct. 22, 2008; only 32 opt-ins remain. |
| Who are the proper defendants and whether joint-employer liability exists. | Corporate parents may be jointly liable as a single enterprise. | Economic reality theory limits joint liability to actual employers. | Only Manheim Remarketing, Inc. and Manheim Investments, Inc. are proper defendants; no joint-employer liability for Cox Enterprises or Manheim, Inc. |
Key Cases Cited
- In re Novartis Wage & Hour Litig., 611 F.3d 141 (2d Cir. 2010) (pharmaceutical sales reps not exempt under outside salesmen)
- Reiseck v. Univ. Comm. of Miami, Inc., 591 F.3d 101 (2d Cir. 2010) (sales directors promoting general sales vs. specific sales noted)
- Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132 (2d Cir. 1999) (economic reality test for joint employment)
- McLaughlin v. Richland Shoe Co., 486 U.S. 128 (S. Ct. 1988) (willfulness standard for FLSA statute of limitations)