Salespersons are generally not exempt from the overtime provisions of the Fair Labor Standards Act unless their primary duty involves outside sales activities.  A new case from the Third Circuit Court of Appeals holds out hope for exempt classification of some employees who are not directly selling to customers.  In Smith v. Johnson and Johnson, the plaintiff was a pharmaceutical sales representative who spent part of her day travelling to doctors' offices to acquaint them with new drugs and new uses for existing products.  She was not paid overtime, and sued, alleging that she was not exempt from the FLSA's overtime requirements.

For procedural reasons, the Third Circuit did not consider whether the plaintiff fell under the outside salesperson exemption.  However, the court concluded that her job met the requirements for the administrative overtime exemption.  First, the Third Circuit noted that the plaintiff's duties involved marketing her employer's products through development of a comprehensive sales plan for her territory.  The administrative exemption is deemed inapplicable to most sales jobs, but here the plaintiff was considered to be primarily in a marketing rather than a sales role.  The doctors she met with prescribed drugs, but their patients actually bought them.

Next, the court concluded that the plaintiff had sufficient discretion and independent judgment to meet the requirements of the administrative exemption.  She managed marketing activities in her own territory, and had little direct oversight.  This was considered sufficient to meet the requirement that the work must be of a high level, and must be accomplished without much supervision.

In its Cooper Tire decision, the Third Circuit originally declared inside salespersons not to be eligible for the administrative exemption, because their activities were production rather than support functions.  At the end of the Smith opinion, the Third Circuit factually distinguished that decision from the present case.  It also said that since Cooper Tire, Department of Labor regulations have made it clear that jobs that contain both marketing and sales functions can meet the requirements for the administrative exemption.  This opinion may give employers some leeway to structure inside sales and similar jobs to arguably meet the requirements of the administrative overtime exemption.