HOUSTON — Dealing a blow to the plaintiffs in a class action wage suit for violations of the Fair Labor Standards Act (FLSA), a federal court issued an order decertifying the class in the collective action against KB Home. The suit was filed by a group of current and former KB Home onsite sales representatives in Houston who were paid solely on a commission basis. They claimed that KP Home violated their minimum wage and overtime rights by classifying them as exempt from FLSA.
Class Members Must be Similarly-Situated
According to the court, there was enough evidence that the class members differed in how they performed their jobs such that a jury would likely reach different results for some of the plaintiffs on whether they were properly exempted from FLSA. Additionally, the court found vast discrepancies in how much time the class members spend on home sites. The court stated that their uniform classification as sales representatives is not enough by itself to meet the standard for certification, and that conflicting evidence regarding the daily work of the class members creates uncertainty in the ligation.
Outside Sales Exemption
KB Home had classified its on-site sales staff as exempt from FLSA under the outside sales exemption. The sales representatives were paid solely by commission without overtime or a base wage, and they alleged that they were incorrectly classified as exempt because they normally interacted with potential buyers at sales offices established in their assigned planned communities. The company apparently set up offices in a model home, a garage, or a trailer at the planned community site.
Under FLSA, employees whose primary duty is to make sales or obtain orders or services or for the use of facilities, and is customarily and regularly engaged away from the employer’s place of business, is exempt from minimum wage and overtime. An outside sales employee makes sales at the customer’s place of business. Any fixed site, whether home or office, used by a salesperson as a headquarters or for telephonic solicitation of sales is considered one of the employer’s places of business. Outside sales excludes sales made by mail, phone, or the Internet unless these methods are used merely in addition to personal phone calls.
FLSA has a defined set of exemptions with specific requirements that must be met for an employee to be considered exempt from the law’s minimum wage and overtime requirements. The burden is on employers to prove that the exemption applies. If you believe your employer misclassified you as an exempt employee, you should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page. Our top-rated team of wage lawyers will evaluate your situation to determine the best option. We will also determine you should file a lawsuit against your employer. Call our experienced attorneys today.