Faustino Carrera v. E.M.D. Sales Inc., No. 21-1897 (4th Cir. 2023)Annotate this Case
Plaintiffs in this case are three sales representatives who alleged that their employer, a food-products distributor, did not pay them the overtime wages to which they were entitled under the Fair Labor Standards Act (“FLSA” or “Act”). Their employer defended on the ground that the plaintiffs fell within the Act’s “outside sales” exemption, which excuses overtime pay for employees who work outside the office and whose primary duty is making sales. The district court found that Plaintiffs were owed overtime pay because their employer had failed to prove, by clear and convincing evidence, that they came within the outside sales exemption. The court also awarded liquidated damages to Plaintiffs, finding that the employer had not shown objectively reasonable grounds for the challenged pay practices. The court concluded, the Plaintiffs had not shown that their employer willfully violated the Act. Both parties appealed: The employer challenged the district court’s liability finding and its award of liquidated damages, and Plaintiffs cross-appealed the court’s willfulness finding and attendant application of the two-year statute of limitations.
The Fourth Circuit affirmed. The court explained that there is ample evidence in the record to support the court’s finding that the defendants had only an “aspirational” and not a “concrete” sense of what their sales representatives did and, specifically, their ability to make sales at chain stores. Further, the court explained that the FLSA clearly contemplates as much, establishing as the default rule both the award of liquidated damages – predicated on the absence of objective reasonableness – and a two-year statute of limitations – predicated on a non-willful violation.