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August 24, 2004
Exempt Employee Loses Overtime Suit

An employee's duties carry more weight than his or her job title when determining whether the employee is exempt from the overtime provisions of the Fair Labor Standards Act (FLSA).

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What happened. Theadore Carl Walton, Jr., began work as a service advisor for Cavalier Ford after job-related injuries forced him to stop working at Portsmouth Naval Hospital. The federal Office of Workers' Compensation Programs (OWCP) helped Walton obtain his new job at Cavalier, and OWCP and Cavalier signed an April 18, 2000, agreement stating that the agency would reimburse Cavalier for a percentage of Walton's wages over a 3-year period.

Walton signed a pay plan agreement with the auto dealership, stating that he would be paid $231 per week plus a 5 percent commission on parts and labor for repair orders that he completed. He was guaranteed the greater of $40,000 per year or his salary plus commission. As a service advisor, Walton greeted customers, listened to their concerns about their cars, wrote repair orders, followed up on repairs, kept customers informed about maintenance, and suggested additional services to be performed.

Sixteen months after he started working for Cavalier, Walton gave the dealership a doctor's note stating that he could only work up to 8 hours per day. The company informed him that it would move him to a greeter position since he could no longer work the hours required of service advisors. The position paid $8 per hour. Walton turned down the job and stopped working for Cavalier. He sued his former employer, claiming that the company owed him pay for nearly 900 overtime hours, and that the company breached a 3-year employment contract.

What the court said. A U.S. district court granted summary judgment for the company, saying that Walton's job duties classified him as an exempt employee under FLSA and that no employment contract existed. The U.S. Court of Appeals for the 4th Circuit (MD, NC, SC, VA, and WV) affirmed the decision.

The appeals court said that Walton was a salesman primarily engaged in servicing automobiles, making him exempt from FLSA's overtime provisions. It listed several tasks that Walton performed as part of his job (e.g., he promoted and attempted to sell goods and services provided by Cavalier and openly solicited business by telephone). "Despite these facts, Walton largely asks us to find that he was a nonexempt employee by placing great weight on his job title, rather than the duties he actually performed under that title. … However, based on the above-detailed facts in this case regarding Walton's duties, we hold that Walton was indeed a salesman under the statute," the court wrote.

In addition, the appeals court dismissed Walton's argument that he had an employment contract with Cavalier. Nothing in the letter promised him employment for any definite amount of time, according to the court (Walton, Jr., v. Greenbrier Ford, Incorporated, t/a Cavalier Ford, No. 02-2432, U.S. Court of Appeals, 4th Cir. (5/28/2004)).

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