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Tuesday, May 08, 2012

Ind. Decisions - 7th Circuit issues two Indiana decisions today

In Susan Schaefer-LaRose v. Eli Lilly (SD Ind., Barker), a 54-page combined opinion, Circuit Judge Ripple writes:

These two cases, which we have consolidated for opinion, involve the application of the outside sales and administrative exemptions of the Fair Labor Standards Act (“FLSA” or the “Act”), 29 U.S.C. §§ 201-19, to pharmaceutical sales representatives employed by Eli Lilly & Co. (“Lilly”) and Abbott Laboratories, Inc. (“Abbott”). The plaintiffs in each case claim that, during their tenure as sales representatives with these pharmaceutical companies, they were misclassified as exempt employees and denied overtime pay, in violation of the statute. The employers contend that both the administrative exemption and the outside sales exemption, 29 U.S.C. § 213(a)(1), remove the sales representatives from the overtime protections of the FLSA. The two district courts in the present cases reached opposite conclusions, each relying on cases decided by other circuits.

Before this court, the Department of Labor (“DOL” or the “Department”) has participated as amicus curiae in case number 10-3855 and has asked us to consider its arguments in our disposition of cases 11-1980 and 11-2131 as well. In the Department’s view, the plaintiffs are neither administrative employees nor outside salespersons within the meaning of the statute and the Department’s regulations.

After thorough consideration of the positions of the parties, the view of the Department, the opinions of our sister circuits and the facts in the records before us, we conclude that, under the regulations of the Department of Labor, the pharmaceutical sales representatives are classified properly within the administrative exemption to the overtime requirements of the FLSA. Consequently, we do not address the applicability of the outside sales exemption. We therefore affirm the judgment of the district court in favor of Lilly in case number 10-3855 and reverse the judgment in favor of the plaintiff class in cases 11-1980 and 11-2131 and remand with instructions to enter judgment for Abbott.

In Sandifer, et al v. US Steel (ND Ind., Miller), a 19-page opinion, Circuit Judge Posner writes:
These appeals arise out of a class action (technically a “collective action,” as it is brought pursuant to 29 U.S.C. § 216(b), a part of the Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201 et seq., rather than pursuant to Fed. R. Civ. P. 23) on behalf of 800 former and current hourly workers at U.S. Steel’s steel works in Gary, Indiana. The plaintiffs argue that U.S. Steel has violated the Act by failing to compensate them for the time they spend in putting on and taking off their work clothes in a locker room at the plant (“clotheschanging time”) and in walking from the locker room to their work stations, and back again at the end of the day (“travel time”). The collective bargaining agreement between U.S. Steel and the steelworkers union does not require compensation for such time, and apparently none of the previous collective bargaining agreements between U.S. Steel and the union since 1947, nine years after the FLSA was enacted, required it either. But the plaintiffs argue that the Act itself requires compensation; and if it does, it overrides any contrary contractual provision. Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 740-41 (1981).

The district judge ruled that the Fair Labor Standards Act does not require that the clothes-changing time in this case be compensated, but that the Act may require that the travel time be compensated and he therefore refused to dismiss the suit. But he certified the issue of the compensability of the travel time for an interlocutory appeal under 28 U.S.C. § 1292(b) by U.S. Steel, and we accepted the appeal. * * *

[Page 5 includes a color photo of "a man modeling the clothes." The opinion states that "These work clothes are in the record, and since a picture is worth a thousand words ...".]

We resolve the specific issue that we have been asked to resolve in this interlocutory appeal in favor of U.S. Steel. On the basis of that resolution, the suit has no merit and should be dismissed by the district court.

Posted by Marcia Oddi on May 8, 2012 01:35 PM
Posted to Ind. (7th Cir.) Decisions