Until recently, employers had the luxury of interpreting the outside salesperson exemption to minimum wage, overtime and meal and rest period requirements at face value. This is because the definition of an “outside salesperson” is simply codified as “any person, 18 years of age or over, who customarily and regularly works more than half the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services, or use of facilities.”
However, in Espinoza v. Warehouse Demo Services, Inc., California’s Court of Appeals determined that “away from the employer’s place of business” means something more than “away from the employer’s physical place of business.” The relevant inquiry is the extent of the employer’s control over the salesperson while the salesperson works away from the employer’s place of business. Quoting from a 1998 Department of Labor Standards Enforcement (DLSE) Opinion, the court explained:
Outside salesmen have historically been exempt because it’s very difficult to control their hours and working conditions. They set their own time, and they’re on the road, they call on their customers … [R]arely do you know what they’re doing on an hour-to-hour basis. (Internal quotations omitted).
Espinoza, however, presented the court with a set of facts unique to this historical assumption. There, the employer, Warehouse Demo Services, Inc., had its own space in a property owned or leased by...
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