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News | Jun 13, 2013

Federal Judge Refuses to Decertify Overtime Misclassification Lawsuit Against Valspar Corporation

A Minnesota federal judge has refused to decertify an FLSA misclassification case brought by Territory Managers employed by Valspar Corporation.  This case, which was brought to our attention by a fellow Philadelphia wage and overtime attorney, provides a good example of an overtime “misclassification” case in which the employees allege that they were improperly designated as overtime-exempt.  The case is cited at Simmons v. Valspar Corp., 2013 U.S. Dist. LEXIS 69528 (D. Minn. May 16, 2013).  Here is how the Court summarized the dispute:  “Plaintiffs are current and former employees of Defendant (“Valspar”). In this action, they allege that Valspar failed to pay them for overtime as required by the Fair Labor Standards Act, (“FLSA”). The Court conditionally certified Plaintiffs’ collective action under  and permitted Plaintiffs to proceed jointly for the purpose of discovery. Now that discovery is complete, Valspar asserts that Plaintiffs’ claims are not sufficiently similar and moves to decertify the collective action. For the reasons set forth below, the Court will deny Valspar’s Motion.  Valspar is a paint manufacturer that sells its products through Lowe’s and other home-improvement retailers. Plaintiffs were employed by Valspar as Lowe’s Team Territory Managers (“TMs”) from 2007 through 2012, to promote and oversee Valspar’s products in Lowe’s home-improvement stores. Each TM is responsible for an assigned territory, which encompasses an average of six Lowe’s stores. A TM’s job duties are split into seven general categories:  1. In-store “sales,” which includes attending to Lowe’s customers, answering their questions, helping them select paint products, and mixing paints for them; 2. Maintaining the appearance of Valspar products in the stores, which includes cleaning and fixing displays and stock, replenishing brochures and color samples, and moving product to the easy-to-reach shelves; 3. Training and educating Lowe’s associates on Valspar’s products and selling techniques, both formally and informally; 4. Analyzing Lowe’s paint sales and inventory data using the Business Intelligence system (“BI”); 5. “Sets, resets, and remerchandises” in stores, which includes setting up new stores and setting up or restocking displays; 6. Outside “sales,” which include calling on contractors  to promote their use of Valspar’s products and Lowe’s stores’ services; and 7. Miscellaneous tasks such as preparing schedules, responding to surveys or emails, telephone calls and meetings with supervisors, etc. VMs are expected to execute these tasks for each of their assigned store locations.  TMs are each supervised by a Regional Manager (“RM”), with whom they communicate at least weekly. RMs evaluate the TMs’ job performance, in part, by performing a quarterly walk-through of Lowe’s stores. On these walk-throughs, the RMs use a standardized checklist that focuses almost entirely on store appearance (i.e. how well the TM has maintained Valspar’s products and displays within the Lowe’s paint department).  The average number of weekly hours each Plaintiff reported working varied, but all Plaintiffs reported working more than forty hours per week. They testified that they were expected to be in Lowe’s stores Monday through Friday, and some Saturdays, for at least eight hours each day, and that they were expected to visit each of their stores at least once a week. The amount of time each Plaintiff devoted to a given task varied—not only from Plaintiff to Plaintiff,   but also from day to day, week to week, and store to store. Nonetheless, all Plaintiffs reported spending a majority of their time on “in-store selling” and “store appearance.”  TMs generally were not required to keep track of their time because they were not paid on an hourly basis. But a few sources provide hard data on the amount of time they spent working and on which tasks. First, they were expected to log in and out of the Lowe’s time-keeping system (“LSM”) upon arriving and departing each Lowe’s store. They were also expected to keep track of their contact with contractors, although not necessarily the time spent with contractors. TMs also reported the amount of time they spent on each of the seven categories of job duties through Valspar’s “time-and-action” surveys. While this data is helpful to evaluating how Plaintiffs spent their time and how much time they spent working, the parties agree that it does not accurately reflect their schedules—it does not include time they worked at home, their commutes between stores, or time spent on “outside sales,” and it may include time that they were not working because Plaintiffs occasionally did not log out of LSM before leaving a Lowe’s store. Overall, Plaintiffs estimate they worked fifty to sixty-five hours a week. Because Valspar classified TMs as exempt from the FLSA as either outside salespeople or administrative employees, it did not pay them on an hourly basis or for overtime. Instead, TMs were paid an annual salary plus a commission based on Valspar’s sales at the Lowe’s stores in the TM’s territory, and, on designated days, TMs were also eligible to earn an additional amount or “spiff” for each can of Valspar paint sold.”  (internal citations omitted).  It will be interesting to see how this case turns out.  Our firm’s Pennsylvania wage/overtime lawyers and New Jersey  and New York wage/overtime lawyers are well prepared to evaluate cases in which employees allege that they have been misclassified as exempt under the outside sales exemption to the overtime laws.

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