Hours and Wages. Richard Ackerman was an advance sales representative and account manager for Coca-Cola Enterprises, Inc His primary responsibility was to sell Coca Cola products to grocery stores, convenience stores, and other sales outlets. Coca Cola

Question

also employed merchandisers, who did not sell Coca Cola products but performed tasks associated with their distribution and promotion, including restocking shelves, filling vending machines, and setting up displays. The account managers, who serviced the smaller accounts themselves, regularly worked between fifty-five and seventy-two hours each week. Coca Cola paid them a salary, bonuses, and commissions, but it did not pay them—as they did merchandisers—additional compensation for the overtime. Ackerman and the other account managers filed a suit in a federal district court against Coca-Cola, alleging that they were entitled to overtime compensation. Coca-Cola responded that because of an exemption under the Fair Labor Standards Act, it was not required to pay them overtime. Is Coca-Cola correct? Explain.

Answer 1

Hours and wages
The court concluded that the plaintiffs were entitled to overtime compensation under the Fair Labor Standards Act (FLSA), and Coca-Cola appealed to the U.S. Court of Appeals for the Tenth Circuit. The appellate court reversed the decision of the lower court, concluding that the employees were exempt from FLSA's overtime requirements because they were "outside salesmen." The appellate court remanded the case for further proceedings. The court explained that under U.S. Department of Labor regulations, an "outside salesman" is an employee who "mak[es] sales." Although the account managers did some servicing of accounts, much like the merchandisers, the court concluded that these duties were "incidental to and in conjunction with" the sales work. The court reasoned that, in determining the importance of the sales work in relation to the service work, "what matters is whether the plaintiffs—or someone else—sold Coca Cola products at the locations where the plaintiffs performed merchandising activities and whether, if the plaintiffs sold Coca Cola products at those locations, their merchandising work promoted those sales."