JOSEPH MODESKI, et al. v. SUMMIT RETAIL SOLUTIONS, INC.
No. 20-1747
United States Court of Appeals For the First Circuit
February 25, 2022
Hon. F. Dennis Saylor, IV, Chief U.S. District Judge
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS
Benjamin L. Davis, III, with whom the Law Offices of Peter T. Nicholl was on brief, for appellants.
Barry J. Miller, with whom Michael E. Steinberg and Seyfarth Shaw LLP were on brief, for appellee.
I.
A. Facts
The following facts are undisputed. Summit Retail Solutions is a marketing company that contracts with clients -- department stores, grocery stores, and wholesale retailers -- to provide in-store demonstrations designed to increase sales. Its clients include Costco, Sam‘s Club, and BJ‘s.
Summit employs “Brand Representatives” to perform these in-store demonstrations and engage with customers. Brand Reps are assigned to designated stores, where they set up a display featuring a particular product (for example, bamboo pillows, frozen pierogi, or a garlic butter purported to make the “best grilled cheese sandwich ever“). Brand Reps then hand out samples or otherwise demonstrate the product (e.g., by getting customers to “feel how soft the pillow” is). Summit provides Brand Reps with sales pitch scripts, promotional materials, and training in specific sales techniques. Brand Reps often have sales experience before joining Summit.
The Brand Reps’ goal is to “convert” a sale by getting the customer to place the product in his or her cart or basket. Brand Reps do not finalize any sale at their display station. Rather, customers pay for all their items at cash registers near the front of the store. Summit adopted this approach because it is more efficient for the actual sales transactions to occur all at once, at the registers operated by the retail store‘s own employees. That is also how retail stores typically operate.
Because of these arrangements, Brand Reps cannot be sure that customers with
In addition to assigning Brand Reps to specific stores, Summit sets their schedules and dictates which products they display. Once assigned to a store, Brand Reps set up and stock their own displays. At the beginning of their workday, Brand Reps are required to submit time-stamped pictures of their displays to Summit, to confirm that they have arrived on time and that the displays are properly set up. Brand Reps’ hours are carefully recorded and tracked.
Summit pays its Brand Reps a base hourly wage ranging between $10 and $15 per hour. Brand Reps can also earn commission-style bonuses (referred to internally as “true-up payments“).1
B. Procedural background
A group of former Brand Reps sued Summit on behalf of themselves and other Brand Reps, seeking to recover unpaid overtime wages under the FLSA and analogous state wage laws. Their theory was that the true-up system forced Brand Reps to systematically underreport their actual hours, lest they face termination or other adverse consequences for maintaining a negative balance between their hourly pay and the set percentage of product sales. As a result, they alleged, many Brand Reps failed to receive overtime wages for working over forty hours per week.
As part of its defense, Summit argued that plaintiffs fell within the FLSA‘s outside sales exemption and thus were not entitled to overtime compensation at all.2 The parties cross-moved for summary judgment on that issue. The district court agreed with Summit and, in a comprehensive and thoughtful decision, granted summary judgment in Summit‘s favor and dismissed the case in its entirety. On appeal, plaintiffs argue that the district court
II.
We review a grant of summary judgment de novo and affirm if the record, construed in the light most favorable to the nonmovant, presents no genuine issue of material fact and shows that the movant is entitled to judgment as a matter of law. See Lawless v. Steward Health Care Sys., LLC, 894 F.3d 9, 20-21 (1st Cir. 2018). That both plaintiffs and defendant moved for summary judgment does not change the underlying standard; we simply determine whether either side deserves judgment as a matter of law on the undisputed facts. See Wells Real Est. Inv. Tr. II, Inc. v. Chardon/Hato Rey P‘ship, S.E., 615 F.3d 45, 51 (1st Cir. 2010).
While the FLSA generally requires that employers pay their employees a statutory minimum wage and overtime, see
The relevant federal regulations, in turn, define an “employee employed in the capacity of outside salesman” as any employee (1) “whose primary duty is . . . making sales within the meaning of [
Plaintiffs do not contest that they were “customarily and regularly engaged away from the employer‘s place or places of business.”
III.
Our analysis begins with the Supreme Court‘s seminal consideration of the outside sales exemption in Christopher v. SmithKline Beecham Corp., 567 U.S. 142 (2012). In determining whether certain pharmaceutical sales representatives fell within the exemption, the Court in Christopher outlined several considerations that are germane
First, the FLSA provision establishing the exemption refers to anyone employed “in the capacity of [an] outside salesman.”
Second, as previously mentioned, the relevant statutory definition provides that “‘[s]ale’ or ‘sell’ includes any sale, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition.”
Third, Christopher noted that the DOL itself has explained (in reports and regulations) that the exemption is applicable “whenever an employee ‘in some sense make[s] a sale.‘” Id. at 149 (quoting U.S. Dep‘t of Labor, Wage & Hour Div., Report and Recommendations of the Presiding Officer at Hearings Preliminary to Redefinition 46 (1940)). The Department has also “made it clear that ‘[e]xempt status should not depend’ on technicalities, such as ‘whether it is the sales employee or the customer who types the order into a computer system and hits the return button.‘” Id. (quoting Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, 69 Fed. Reg. 22,122, 22,163 (Apr. 23, 2004)).
Christopher thus indicates that we should consider the plaintiffs’ situation pragmatically, in the context of the relevant industry, not relying on technicalities, and without requiring them to have obtained a firm commitment to buy in order to determine that they “mak[e] sales” within the meaning of the FLSA. Taken together, these considerations support our conclusion that Brand Reps fall within the outside sales exemption.
Although they do not ring up any purchase at the register, Brand Reps do as much as practically possible to “in some sense make[] a sale” in the retail store context in which they operate. Id. at 149 (quoting U.S. Dep‘t of Labor, Wage & Hour Div., Report and Recommendations of the Presiding Officer at Hearings Preliminary to Redefinition 46). Brand Reps work to persuade shoppers, who then can demonstrate some intention (or “nonbinding commitment“) to buy a product by placing it in their shopping carts or baskets. Id. at 149, 161. As the district court noted, “[t]he cashiers r[i]ng up the sale, but otherwise engage[] in no sales activity of any kind. There is no evidence that any cashier ever attempted to persuade a customer
Our conclusion, which is grounded on Christopher, the text of the statute, and the DOL regulations, draws further support from a recent DOL opinion letter. This opinion letter considered the status of employees like plaintiffs who “travel to various retail operations such as . . . so-called big-box stores,” “set up displays in which they exhibit and demonstrate products they are selling,” and “spend most of their time pitching products to potential customers at the various retail locations.” U.S. Dep‘t of Labor, Wage & Hour Div., Opinion Letter FLSA2020-8 (June 25, 2020), at 1. Although the DOL could not conclusively determine whether the specific employees at issue were engaged in sales, the letter identified the relevant inquiry as whether “the employees are obtaining commitments from customers and being credited for
the sales consummated because of their efforts.”
IV.
Appellants offer several arguments against their inclusion within the outside sales exemption. Most importantly, they suggest that we should not be guided by Christopher because of a key factual difference between that case and ours. The pharmaceutical sales representatives in Christopher were
prohibited by law from consummating any sales because prescription drugs, under federal law, can be dispensed only with a doctor‘s prescription. Christopher, 567 U.S. at 150.
Obtaining a nonbinding commitment from a physician to prescribe one of respondent‘s drugs is the most that petitioners were able to do to ensure the eventual disposition of the products that respondent sells. This kind of arrangement, in the unique regulatory environment within which pharmaceutical companies must operate, comfortably falls within the catchall category of “other disposition.”
Id. at 165 (footnote omitted). In an accompanying footnote, the Court further clarified its point: “[W]hen an entire industry is constrained by law or regulation from selling its products in the ordinary manner, an employee who functions in all relevant respects as an outside salesman should not be excluded from that category based on technicalities.” Id. at 165 n.23.
Of course, Summit‘s Brand Reps were not prohibited by law from finalizing the sales at their display stations. Instead, they were constrained by Summit‘s choice, based on the practicalities involved in the retail store context, to have all products rung up at the store registers. But as the Second Circuit has explained, “[a]lthough Christopher noted that the regulatory context barred an employee from selling the company‘s drugs directly to a consumer without a doctor‘s prescription, . . . Christopher does not further suggest that its reasoning and interpretation of the statute and regulations” -- what we have identified as its pragmatic approach, not relying on technicalities -- “lack[s] general applicability to other cases arising under the FLSA.” Flood v. Just Energy Mktg. Corp., 904 F.3d 219, 230-31 (2d Cir. 2018). We agree that Christopher‘s overall construction of the FLSA and the attendant regulations are not limited to that case‘s particular facts. See 567 U.S. at 161-64.8
Plaintiffs argue that out-of-circuit case law supports their position. They rely particularly on Hurt v. Commerce Energy, Inc., 973 F.3d 509 (6th Cir. 2020). The plaintiffs there worked as door-to-door solicitors, trying to convince customers to purchase electricity and natural gas products from their company, Just Energy. Id. at 514. If interested, customers would sign
something called a “customer agreement,” but that agreement “was non-binding and did not finalize the transaction.” Id. Just Energy had complete authority to accept or reject the agreement. Id. In practice, it would regularly reject agreements -- sometimes due to a failed credit check, but often seemingly for purely discretionary reasons, which were often not even communicated to the solicitors. Id. at 514-15, 519. On these facts, the court concluded that the solicitors were not “making sales.” Id. at 521.
In reaching that conclusion, as the plaintiffs here stress, the Hurt court found it significant that “[n]o regulatory environment prohibited the solicitors from controlling and completing the sale directly to customers.” Id. at 519. To the Hurt court,
In any case, Hurt also seemed to rely on the fact that, regardless of whether the arrangement was determined by law or the choice of a business model, any customer agreement was subject to verification and approval by Just Energy and customer agreements were frequently rejected. Id. at 519. That is, Just Energy retained ultimate discretion to finalize the sale. Id. Here, by contrast, although customers can choose not to purchase a product after interacting with a Brand Rep, no entity at the store other than the Brand Rep has any discretionary role in determining whether the sale is consummated.
For additional support of their position, plaintiffs point to Beauford v. ActionLink, LLC, 781 F.3d 396 (8th Cir. 2015), in which the court determined that so-called “brand advocates” were not subject to the outside sales exemption. Id. at 405. But the Beauford plaintiffs were hired merely “to visit retail stores, to train the retail stores’ employees on how [the brand‘s] electronics worked, and to convince those employees to recommend [the brand‘s] products to customers.” Id. at 399. The brand advocates occasionally answered questions for customers, but their job duties did not entail engaging customers for the purpose of persuading them to buy a particular product. Id. In other words, unlike in this case, “[b]rand advocates simply promoted products so employees of retail stores could make sales.” Id. at 403.
Plaintiffs also suggest that, rather than “making sales,” they were engaged in non-exempt “promotional work.” They point to DOL regulations recognizing that potential distinction: as an example of promotional work, the regulations cite a hypothetical “company representative who visits chain stores, arranges the merchandise on shelves, replenishes stock by replacing old with new merchandise, sets up displays and consults with the store manager when inventory runs low, but does not obtain a commitment for additional purchases.”
We find these regulations to be of limited help to plaintiffs. Christopher rejected the idea that these particular regulations shed any light on the underlying inquiry here -- what qualifies as “making a sale.” See 567 U.S. at 164 (noting that “the promotion-work regulation distinguishes between promotion work that is incidental to an employee‘s own sales and work that is incidental to sales made by someone else,” but arguing that “this distinction tells us nothing about the meaning of ‘sale‘“). More fundamentally, plaintiffs are not helped by the promotion regulations because the promotion-type work that they do (e.g., setting up displays) is so clearly incidental to their own sales efforts. Further, they are not engaging in any type of work so that someone else can obtain a purchase commitment and consummate the sale.
Plaintiffs also contend that they do not exhibit the “external indicia” of salespeople. In Christopher, the Supreme Court found “further support” for its conclusion
These “external indicia” are not helpful to plaintiffs, even if the indicia do not precisely fit the Brand Rep position. Many of the Brand Reps had prior sales experience, even if they were not always specifically hired because of that experience. They received sales training from Summit and were paid commissions based on purchases made at their assigned stores (even if the true-up payments were not necessarily easy to qualify for). And while
Brand Reps had to report their hours and provide pictures of their display stations, they were not closely supervised on a day-to-day or hour-to-hour basis.
Lastly, plaintiffs point to a statement in Christopher that the Court‘s holding “also comports with the apparent purpose of the FLSA‘s exemption for outside salesmen,” because the pharmaceutical sales reps there were well-paid (earning more than $70,000 annually) and their work hours were hard to standardize. Id. at 166. Courts have opined that the outside sales exemption “is premised on the belief that exempt employees ‘typically earn[] salaries well above the minimum wage’ and enjoy[] other benefits that ‘se[t] them apart from the nonexempt workers entitled to overtime pay.‘” Hurt, 973 F.3d at 522 (quoting Christopher, 567 U.S. at 166).
It is true that, unlike the pharmaceutical reps in Christopher, Brand Reps are not paid well above the minimum wage, their retail-based hours would seem easy to standardize, and they are not the beneficiaries of job-related perks. But we think it would be a mistake to rely on Christopher‘s “apparent purpose” comment rather than the Supreme Court‘s reasoning regarding the dispositive “making sales” issue. Cf. Flood, 904 F.3d at 233 (noting that other aspects of the analysis in Christopher are “secondary to the Supreme Court‘s primary analysis of whether the ‘making sales’ requirement was satisfied in the first place“).
Plaintiffs’ arguments that they do not fall within the outside sales exemption are thus ultimately unavailing.10
In summary, our analysis of the FLSA, guided by Christopher, leads us to the firm conclusion that plaintiffs do “mak[e] sales” within the meaning of
So ordered.
-Dissenting Opinion Follows-
THOMPSON, Circuit Judge, dissenting. The Supreme Court has recognized that Congress enacted the Fair Labor Standards Act (“FLSA“) “with the goal of protect[ing] all covered workers from substandard wages and oppressive working hours.” Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 147 (2012) (internal quotation omitted). This fundamental purpose animates why I would chart a different analytical path from my colleagues and would reverse the district court‘s ruling, instead finding that Brand Reps are non-exempt hourly employees entitled to overtime pay not subject to the Outside Sales Exemption (“OSE“).11
In reaching their conclusion, my colleagues, in my opinion, over-rely on Christopher without taking into account the ways in which its holding is tethered to the facts of the case that was before the Court (facts very different than those presented here). There, the Court found that pharmaceutical sales representatives whose primary duty was to obtain nonbinding commitments from physicians to prescribe their employers’ prescription drugs qualified as “outside salesmen.” 567 U.S. at 165. But as I read it, Christopher‘s holding was wrapped up in what constitutes a sale in the pharmaceutical industry, subject to extensive federal regulation, an issue not present here. Id. at 150, 154.
To back up slightly, it‘s important to be clear on who an outside salesperson is, and what constitutes a “sale“. An outside salesperson is defined by regulation as an employee:
(1) Whose primary duty is:
(i) making sales within the meaning of
section 3(k) of the Act , or(ii) obtaining orders or contracts for services or for the use of facilities for which consideration will be paid by the client or customer; and
(2) Who is customarily and regularly engaged away from the employer‘s place or places of business in performing such primary duty.
In Christopher, the Court, paraphrasing the FLSA and DOL regulations, offered the following definition: “an outside salesman is any employee whose primary duty is making any sale, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition.” 567 U.S. at 148. The definition of “sale” is broad, and the list of transactions defining a “sale” in the regulations represents “an attempt to accommodate industry-by-industry variations in methods of selling commodities.” Id. at 163-64. The pharmaceutical sales reps at issue in Christopher were exempt under the OSE because of the DOL‘s “other disposition”
In this appeal, we are not scrutinizing a technicality, and the majority‘s attempt to place Brand Reps in the shoes of pharmaceutical reps for the purposes of the “making sales” analysis is like trying to fit a square peg into a round hole. Here, unlike in Christopher, there is nothing highly regulated or unique about the retail industry that prevents Brand Reps from making sales. In contrast to the pharmaceutical industry, Summit determines how far Brand Reps can go in their sales efforts. So when the majority says that “a Brand Rep is the last person to make an actual sales effort“, it isn‘t because that is what the industry dictates (like in Christopher), but rather it is Summit‘s preferred business model that prevents Brand Reps from completing sales. Indeed, the fact that there is “no intervening sales effort” tells us nothing about whether Brand Reps make sales, because in this context, it‘s difficult to even tie the sales to the “effort” in a concrete way. The commissions received by Brand Reps were not necessarily tethered to their individual performance, because a customer could pick up an item from their display without a Brand Rep knowing, (for instance, someone could pick up one of the products they were promoting while the Brand Rep was on a break, thereby purchasing the product without any “sales” effort on the part of anyone), just as a customer could seem to want a product at a display and later discard it elsewhere in the store before checkout. While Christopher can provide us insight into how to evaluate when a “sale” is made, our judicial superiors analyzed the FLSA‘s OSE paradigm as it related to the facts in front of it -- facts quite different from what we analyze today. The majority‘s lock-step loyalty to Christopher ignores this limitation, and because of that, I depart from them.
Our sister circuits, who‘ve ably navigated this issue in a way I find more persuasive, focus on the importance of obtaining binding commitments as a cornerstone in determining who makes sales.12 In Hurt v. Commerce Energy, Inc., 973 F.3d 509 (6th Cir. 2020), cert. denied sub nom. Just Energy Mktg. Corp. v. Hurt, 141 S. Ct. 2720 (2021), plaintiffs went door-to-door seeking to convince customers to buy natural gas products for the defendants. 973 F.3d at 514. Once a customer became interested, there was a
Here, the Sixth Circuit noted that Christopher is of limited import because of the “unique regulatory environment of the pharmaceutical industry.” Id. at 519. Rather, in considering the work performed by the Hurt plaintiffs, the court found that “mere soliciting or inducing applications is not making sales,” id., because “the touchstone for making a sale is . . . obtaining a commitment,” id. (alteration in original) (quoting Clements v. Serco, Inc., 530 F.3d 1224, 1227 (10th Cir. 2008)). Because the plaintiffs “could only lay the groundwork,” but not complete the sale, the Sixth Circuit concluded that due to defendants’ business model, plaintiffs were not subject to the OSE. Id. at 520 (quoting Clements, 530 F.3d at 1229).
The path taken in Hurt, which emphasizes the importance of obtaining a commitment to be considered a sale, is the best approach flowing from Christopher‘s reasoning when analyzing the fate of Brand Reps as outside salespeople or not. The job of Brand Reps is to communicate with customers and try to convince them to buy Summit‘s client‘s products. Just as in Hurt, after the Brand Rep‘s interaction with a customer, they have no way of knowing if they would be credited for the sale until much after, when the sales numbers from the retailer came in. Id. at 514-15.
My colleagues write off Hurt because “although customers can choose not to purchase a product after interacting with a Brand Rep, no entity at the store other than the Brand Reps has any discretionary role in determining whether the sale is consummated.” In essence, they are saying, “if Brand Reps aren‘t making the sales, then who is?” It is this fundamental flaw that weighs in favor -- not against -- seeing Brand Reps as exempt from the OSE, and why context matters when interpreting “making sales” in different industry environments. It is Summit‘s choice that Brand Reps don‘t make sales -- in fact, Summit‘s own website states their mission as “grow[ing] brands [and] produc[ing] results“. In other words, Brand Reps are better viewed as pitch men, not product sellers or retailers.13
Another sister circuit has addressed this issue in a similar factual context. See Beauford v. ActionLink, LLC, 781 F.3d 396 (8th Cir. 2015). There, “brand advocates” employed by a marketing services provider, who did not make direct sales (but rather engaged in promotional activities to boost sales for an electronics manufacturer), were not considered outside salesmen exempt from the FLSA‘s overtime requirements. Id. at 403. The job duties of brand advocates, as described by the Eighth Circuit, were quite similar to that of Brand Reps here:
ActionLink hired “brand advocates” to visit retail stores, to train the retail stores’ employees on how LG electronics worked, and to convince those employees to recommend LG products to customers. ActionLink preferred to hire brand advocates with prior sales and marketing experience, but it did not require this prior experience. Brand advocates
occupied the bottom of ActionLink‘s organizational chart. ActionLink typically trained brand advocates for five days. It assigned every brand advocate approximately twenty stores to cover each week. ActionLink provided brand advocates with scripts, PowerPoint presentations, and other promotional materials to use when they visited stores. In addition to teaching store employees about LG products, the brand advocates maintained in-store LG displays, cleaned and repaired LG products, and spoke with customers who had questions about the products. The brand advocates’ goal was to boost sales of LG products. ActionLink provided each brand advocate a small monthly budget to use for promotional activities. Despite their other tasks, brand advocates did not sell directly to customers or to retail stores. ActionLink prohibited brand advocates from negotiating prices, making marketing decisions, and deciding what inventory should be ordered. Brand advocates maintained a close relationship with their supervisors. They frequently spoke with supervisors during conference calls and through emails. And at the end of each store visit, ActionLink required brand advocates to complete a six-page call report informing ActionLink exactly what the brand advocates did during their visits.
As this lengthy description lays bare, the majority appears to cherry-pick parts of these brand advocates’ job duties that minimize their efforts and distinguish them from Brand Reps. However, some of the key duties that the majority fails to mention are the most similar to Brand Reps here, such as “sp[eaking] with customers who had questions about the products” and “boost[ing] sales of LG products.” Id. at 399. Nothing in the job descriptions of the Brand Reps here or the brand advocates in Beauford suggests these employees were outside salesmen as contemplated by
The Eighth Circuit also pointed out the importance of industry differences, reasoning that
[u]nlike the pharmaceutical industry discussed in Christopher, the world of consumer electronics is not subject to a “unique regulatory environment” that requires a recommendation from a licensed professional to obtain a product. Although a recommendation from a sales person may help a customer decide to purchase a specific brand of electronics, a customer need not obtain a recommendation before purchasing a product, and the customer is not constrained to purchase only recommended products. [So,] [t]he same danger that accompanies pharmaceutical drugs is not present in the electronics context . . . . Those retail-store employees engaged in the paradigmatic sale of electronics -- they convinced customers to choose a product and helped that customer pay for it at the cash register.
The same is true here. Brand Reps can only go so far as to promote a product, and never know (until the sales numbers come in) whether or not a sale is actually consummated at the register by the retail store employees, and whether their promotion (if one even took place) had anything to do with it.14
What‘s more -- Brand Reps do not retain the “external indicia,” Christopher, 567 U.S. at 165, of salesmen, a consideration the Court made along with determining if an employee‘s position “comports with the apparent purpose of the . . . exemption[,]” Hurt, 973 F.3d at 522 (quoting Christopher, 567 U.S. at 166.) In Christopher, the Court considered the fact that “[p]etitioners were hired for their sales experience[,]” had “minimal supervision” and “were rewarded for their efforts with incentive compensation” as factors supporting the external indicia of salespeople. Christopher, 567 U.S. 142 at 165-66. In Hurt, the Sixth Circuit notes that where, as here, employees were “closely supervised” and “supervisors controlled Plaintiff‘s daily schedules, including selecting the streets on which they were to work[,]” employees’ external indicia weighs against considering them outside salespeople. Hurt, 973 F.3d at 522. Here, Brand Reps look much more like the Hurt employees than the Christopher employees, and I‘ll explain why.
As discussed above, Brand Reps cannot obtain commitments from customers, which is one of the most important responsibilities of a salesperson. In addition, a typical salesperson has motivation to work, because typically, the more sales they make, the more money they take home, i.e., they are “rewarded for their efforts“. Christopher, 567 U.S. at 166. But here, that dynamic isn‘t at play. Brand Reps have minimal independence, independence being one of the hallmarks of a salesperson. Brand Reps don‘t have control over their schedules or work assignments; they are given a schedule by a manager, and they clock their hours every day. Summit also has control over where they are assigned, and the hours could vary based on the retailer they are assigned to visit. The Brand Rep doesn‘t choose their store assignment -- their manager does. Brand Reps are expected to send their managers pictures of their store display so the manager would know they
Taking together the analytical paths travelled by sister circuits and mindful of the instructive considerations and factors those cases lay out, on the facts of this case, I‘m compelled to reach the opposite conclusion from my colleagues in the majority. Ever mindful of the legislative goal of the FLSA -- to protect employees from unfair employment practices -- I‘ll end where I began: with an outcome weighing in favor of employee pay, compelling a reversal of the district court‘s ruling and finding that Brand Reps are non-exempt hourly employees entitled to overtime pay.