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Marketing Co. 'Brand Advocates' Entitled to Overtime: 8th Cir.

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By Mark Wilson, Esq. on March 24, 2015 3:55 PM

From the Eighth Circuit comes another in the increasingly lengthy list of lessons that courts do not like it when employers creatively classify employees in order to circumvent labor laws.

ActionLink, a marketing company, partners with electronics and appliance companies, like LG, to provide "brand advocates" who go into stores to convince employees to push their clients' products.

Read the Misspelled Fine Print

For years, ActionLink treated these brand advocates as outside sales, which exempted them from overtime, even though many of them worked 50 to 75 hours per week.

After the Department of Labor got involved, ActionLink relented and paid the brand advocates the back overtime they were entitled to. The checks ActionLink sent contained fine print stating that it represented "full payment" (then misspelled the name of the company) for "wages earned, including minimum wage and overtime."

Except that wasn't the case. Some employees were entitled to more than ActionLink gave them and tried make FLSA claims, but ActionLink more or less argued, "too bad, so sad, you accepted a settlement" and tried to have subsequent litigation tossed. It also argued that the employees should be exempt from overtime.

Death of an Outside Salesman

The Eighth Circuit agreed with the district court that the brand advocates weren't outside salesmen (or women). Instead, the court said, theirs was "non-exempt promotional work." Critically, unlike outside sales personnel, brand advocates didn't themselves make any sales; they merely facilitated sales of their clients' products by promoting those products to retail store employees.

Nor did brand advocates fall under the "administrative exception," which ActionLink hilariously claimed. The administrative exception exempts from overtime employees who have "authority to formulate, affect, interpret, or implement management policies or operating practices," or provide management advice, or perform work that substantially affects the company's business operations. Basically, managers.

Even though brand advocates have some latitude in using their judgment to determine how to spend their monthly marketing budget, that small degree of independence doesn't make them administrators for FLSA purposes. At the end of the day, they "simply follow set scripts and 'well-established techniques, procedures or specific standards described in manuals or other sources,' conduct that is insufficient to fall within the administrative exemption," the Eighth Circuit said.

Finally, Eighth Circuit didn't buy ActionLink's claim that brand advocates waived their future rights thanks to a misspelled and vague statement on the back of their back-payment checks. For one thing, the Department of Labor investigator in charge of the case was on vacation when ActionLink issued the checks. It's not clear whether he ratified the language on the back when he got back, but he certainly didn't do so before.

For another, the language didn't state, or even suggest, that employees were surrendering statutory rights by cashing the checks. The court declined to "specify the 'magic words' necessary to constitute valid release language," instead saying it sufficed that, whatever else a valid release looks like, ActionLink's ain't it.

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