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Meritage Collective Action Overtime Claim Decertified

GALVESTON, Texas — A group of home sales representatives for Meritage Homes Corp., claiming to be misclassified as exempt outside sales persons may not be able to continue with their collective action overtime lawsuit against the company. Recently a Texas federal judge decertified their collective action under the Fair Labor Standards Act (FLSA), finding the class members were not similarly situated enough to move forward with a single trial. However, six plaintiffs are allowed to continue together and have been ordered to prepare for a November trial.

Home Sales Representative Claims

Three home sales representatives filed their lawsuit in 2010 seeking to represent similarly situated sales representatives in Texas, Arizona, Nevada, Colorado, and Florida. They claimed the commission-only wages they received denied them proper minimum wage and overtime pay. According to their claim, the company expected its sales representatives to be at its model home to make sales and mortgages. The representatives allegedly worked more than 40 hours a week since they were expected to be at the company’s sales offices during business hours, along with their outside sales duties. Meritage claims that some sales representatives may have spent more of their time on site, but all of the representatives performed outside sales.


After the initial conditional certification, the parties began the discovery process, where evidence was collected, exchanged, and reviewed. Some of the evidence included video from “mystery shoppers” of the home sales representatives’ activities. The evidence also included documentation of Meritage’s blanket policy for determining whether to apply the outside sales exemption to its sales representatives.

The evidence, according to the judge’s decision, indicated that the plaintiffs all had a common job description, but that their actual job duties varied. In his decision, the judge stated that it is likely a jury would reach different results for some plaintiffs. Since the intent of a collective or class action is to resolve the claims of multiple plaintiffs in one trial with one overarching result, a collective action in this case is not viable.

There were 104 plaintiffs in the collective actions at the time of decertification. The judge instructed each side to select three plaintiffs who worked for Meritage in Texas. Those six plaintiffs will go to trial. The judge acknowledges that a jury may find more similarities between the plaintiffs than the court did at decertification and the judge may reconsider whether the remaining plaintiffs may proceed collectively, based on the jury’s verdict.

Outside Sales Exemption

The FLSA allows for a minimum wage and overtime exemption for employees performing outside sales. An exempt outside sales employee must have a primary duty of making sales or contracting services. They must also regularly and customarily perform these duties away from the employer’s place of business. In this case, whether or not the six Meritage sales representatives regularly and customarily performed their duties away from the sales offices could determine the fate of the claims of the remaining representatives.

If you believe you have been misclassified as an outside sales representative, contact our experienced team of overtime pay lawyers today at (855) 754-2795 to discuss your situation. If we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.

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