Under California regulations, an employee who (1) “customarily and regularly works more than half the working time away from the employer’s place of business” engaged in (2) “selling tangible or intangible items or obtaining orders or contracts” for his or her employer is exempt from overtime, minimum wage, reporting time, and meal-and-rest break requirements.

In Espinoza v. Warehouse Demo Services, Inc., the California Court of Appeal recently ruled an employee is not considered an outside salesperson when the employer sets the employee’s hours and exact work location, even where the employee works on property the employer neither leases nor owns.

Background

Georgina Espinoza worked as a demonstrator for Warehouse Demo Services at three South Bay Costco locations in Northern California during her employment. Warehouse Demo is Costco’s exclusive in-house product demonstration company, and Costco is the only place Warehouse Demo conducts its demonstration business. Warehouse Demo does not lease any space from Costco, but maintains an office in each Costco at which it provides demonstrations.

The office is used by Warehouse Demo managers to do paperwork and is used to clean and store Warehouse Demo equipment. Warehouse Demo employees clock in and out on a tablet at the office. Onsite Warehouse Demo supervisors assist demonstrators to ensure high quality demos.

Espinoza worked a regular shift of six hours, four days a week. When she arrived at her Costco location, Espinoza...

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