Who doesn’t like free samples when shopping? But are the representatives providing those samples actually “selling” them so that they are exempt from overtime under the Fair Labor Standards Act (FLSA) as outside salespersons?

Yes, according to the U.S. Court of Appeals for the First Circuit. Although they may not undertake the final act of selling the products to customers, in-store brand representatives employed by a third party satisfy the requirements of the exemption. Modeski v. Summit Retail Sols., Inc., 2022 U.S. App. LEXIS 5132 (1st Cir. Feb. 25, 2022).

The First Circuit has jurisdiction over the federal courts in Maine, Massachusetts, New Hampshire, Puerto Rico, and Rhode Island.

The Outside Sales Exemption

The FLSA generally requires that employees be at least paid minimum wage for all hours worked and one-and-a-half times their hourly wage for hours worked beyond 40 in a week. 29 U.S.C. §§ 206(a), 207(a)(1). One of the exceptions to both of these requirements applies to anyone employed “in the capacity of outside salesman.” Id. § 213(a)(1).

The FLSA itself does not define the term “outside salesman,” instead leaving those details to the Department of Labor (DOL). The DOL, in turn, has established two primary requirements for the exemption: (1) the employee’s primary duty must be making sales (as defined in the FLSA) or obtaining orders or contracts for services or for the use of facilities, for which a consideration will be paid by the client or customer; and...

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