McLaughlin v. Murphy

372 F. Supp. 2d 465, 10 Wage & Hour Cas.2d (BNA) 1464, 2004 U.S. Dist. LEXIS 28016, 2004 WL 1634980
CourtDistrict Court, D. Maryland
DecidedOctober 13, 2004
DocketCiv. CCB-04-767
StatusPublished
Cited by10 cases

This text of 372 F. Supp. 2d 465 (McLaughlin v. Murphy) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McLaughlin v. Murphy, 372 F. Supp. 2d 465, 10 Wage & Hour Cas.2d (BNA) 1464, 2004 U.S. Dist. LEXIS 28016, 2004 WL 1634980 (D. Md. 2004).

Opinion

MEMORANDUM

BLAKE, District Judge.

Plaintiff Michael McLaughlin brings this action against Defendants Freedmont Mortgage Corporation and Kevin Murphy, the President of Freedmont (collectively “Freedmont”), asserting claims under the Fair Labor Standards Act (“FLSA”) and Maryland state law. Pending before the court is Freedmont’s motion to dismiss or, in the alternative, for summary judgment. For the reasons stated below, Freedmont’s motion will be granted in part and denied in part.

I.

McLaughlin was employed by Freed-mont as a mortgage broker from August 2001 to November 2003. He was paid on a strict commission basis, with no regular salary. McLaughlin was terminated on or about November 17, 2003, and he filed this five-count action in March 2004. Counts I and II allege violations of the FLSA, 29 U.S.C. § 201 et seq. He claims that at various times during the term of his employment, he worked in excess of forty hours per week and did not receive overtime pay. He also asserts that for approximately twenty weeks throughout the course of his employment, he did not receive any wage at all for his work, let alone the statutory minimum wage of $5.15 per hour. In Counts III through V, McLaughlin alleges violations of Maryland state law, asserting claims under a theory of quantum meruit and under the Maryland Wage Payment and Collection Law (“MWPCL”), Md.Code Ann. Lab. & Empl. § 3-501 et seq. He claims that he is entitled to some compensation for three loans that he prospected and was developing at the time of his termination.

II.

A.

Freedmont filed a motion to dismiss all five counts for failure to state a claim, or in the alternative, a motion for summary judgment. A motion to dismiss for failure to state a claim under Fed. R.Civ.P. 12(b)(6) should be denied “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Edüd 80 (1957). On such a motion, the court must view the allegations in the complaint in the light most favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974).

If, however, matters outside the pleadings are presented and considered by the court, the motion will be treated as one for summary judgment under Rule 56. Fed.R.Civ.P. 12(b)(6). Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, admissions, and affidavits demonstrate that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). The materiality requirement of the summary judgment standard means that only those factual disputes that might affect the outcome of the suit preclude the entry of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. *469 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In order for there to be a “genuine” issue of material fact, the evidence must be such that a reasonable jury could return a verdict for the non-moving party. Id.

B.

McLaughlin brings his two FLSA claims under 29 U.S.C. §§ 206 and 207. Section 206 requires every employer to pay employees not less than $5.15 an hour. Section 207 requires employers to compensate employees at a rate not less than one and a half times the regular rate at which the person is employed for every hour worked in excess of forty hours per week. However, the FLSA exempts certain employees from the requirements of Sections 206 and 207. 29 U.S.C. § 213. Under Section 213, employees employed in a bona fide executive, administrative, or professional capacity are exempt, as are employees employed in the capacity of “outside salesman,” as that term is defined by FLSA regulations. These FLSA exemptions must be narrowly construed. Stricker v. Eastern Off Road Equip., Inc., 935 F.Supp. 650, 654 (D.Md.1996). Furthermore, because an employee’s exempt status is an affirmative defense, the employer bears the burden of proving the exemption by clear and convincing evidence. Id. at 653-54.

Freedmont argues that McLaughlin is exempt under 29 U.S.C. § 213 as an outside salesman. An outside salesman is defined as an employee: (1) who is employed for the purpose of and who is customarily engaged away from the employer’s place of business in making sales or obtaining orders or contracts for services; and (2) whose hours of work of a nature other than that' just described do not exceed 20 percent of the hours worked in the workweek by nonexempt employees of the employer. 29 C.F.R. § 541.500(a)-(b). Work performed incidental to and in conjunction with the employee’s own sales or solicitations, however, is not considered nonexempt work that counts towards the 20 percent limit. 29 C.F.R. § 541.500(b). The regulations further elucidate the concept of “outside salesman” as follows:

Section 541.5 requires that an outside salesman be customarily and regularly engaged “away from his employer’s place or places of business”. This requirement is based on the obvious connotation of the word “outside” in the term “outside salesman”. It would obviously lie beyond the scope of the Administrator’s authority that “outside salesman” should be construed to include inside salesmen. Inside sales and other inside work ... is nonexempt. Characteristically, the outside salesman is one who makes his sales at his customer’s place of business. This is the reverse of sales made by mail or telephone.

29 C.F.R. § 541.502. Case law addressing this issue confirms that where and how salesmen do most of their work is the key factor in determining whether they are outside salesmen exempt from the FLSA. See, e.g., Nielsen v. Devry Inc., 302 F.Supp.2d 747, 761 (W.D.Mich.2003); Reich v. Chicago Title Ins. Co., 853 F.Supp. 1325, 1332-33 (D.Kan.1994). 1

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372 F. Supp. 2d 465, 10 Wage & Hour Cas.2d (BNA) 1464, 2004 U.S. Dist. LEXIS 28016, 2004 WL 1634980, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mclaughlin-v-murphy-mdd-2004.