United States: Eleventh Circuit Holds Title Insurance Executive Who Conducts "Promotional Work" Exempt Under The FLSA "Outside Sales" Exemption

Last Updated: February 5 2009
Article by Angelo Spinola and Matthew G. Laflin

In a recent decision that provides a potentially expansive counterpoint to recent federal authority and Department of Labor opinion letters, the United States Court of Appeals for the Eleventh Circuit applied the "outside sales" exemption to the Fair Labor Standards Act (FLSA) to employees who perform "promotional work" to obtain commitments for sales, but who do not finalize or process those sales. In Gregory v. First Title of America, Inc., 2009 U.S. App. LEXIS 1630 (11th Cir. Jan. 27, 2009), the Eleventh Circuit affirmed the district court's ruling that the plaintiff employee who obtained orders for title insurance was an exempt employee under the "outside sales" exemption to the FLSA, and, therefore, was not entitled to overtime compensation.

Background of Gregory v. First Title

The plaintiff, an employee with the title "Marketing Executive," sued her former employer, First Title of America, a title insurance company based in Florida, under the FLSA for failure to pay overtime wages. Her employment contract with First Title stated that her job description was "to provide the services for referring and closing title insurance companies." She was initially paid a weekly salary, but later was compensated solely through commissions based on title insurance orders from her clients that "closed" with First Title. The plaintiff contended that although she performed "promotional work" for First Title's title insurance services, she was never involved in the actual sale of title insurance to realtors, brokers and lenders, or to end users. In fact, she was not licensed to sell title insurance or any other kind of insurance. On summary judgment, First Title argued that she was an outside sales employee exempt from the FLSA's overtime pay requirements. The trial court agreed.

The Outside Sales Exemption to the FLSA and "Promotional Work"

FLSA section 13(a)(1) provides a complete minimum wage and overtime pay exemption for "any employee employed in the capacity of outside salesman." An employee qualifies for this exemption if he or she meets a duties test and a location test set forth in 29 C.F.R. Part 541. In order to qualify for the outside sales exemption, an individual must have the primary duty of making sales to, or obtaining orders or contracts for services or the use of facilities for, customers. There is no salary test for the outside sales exemption.1

The Preamble to the regulations regarding the outside sales exemption states that "technological changes in how orders are taken and processed should not preclude the exemption for employees who in some sense make the sales."2 "Employees have a primary duty of making sales if they 'obtain a commitment to buy' from the customer and are credited with the sale."3 "Exempt status should not depend on whether it is the sales employee or the customer who types the order into a computer system and hits the return button."4 Consequently, an employee need not complete a face-to-face sale with a customer in order to qualify for the exemption; however, the employee's primary duty must be sales.

Depending upon the circumstances under which it is performed, "promotional work" may or may not be exempt outside sales work.5 "Promotional work that is actually performed incidental to and in conjunction with an employee's own outside sales or solicitations is exempt work." "On the other hand, promotional work that is incidental to sales made, or to be made, by someone else is not exempt outside sales work." Thus, if the employee performing the promotional work has the primary duty of making sales, then the work is exempt; however, if the employee performing the promotional work does not make sales, the work is not exempt.

The Eleventh Circuit Holds that "Promotional Work" Is Exempt Outside Sales Work Where the Employee Is Credited with the Sale to the Client

On appeal to the Eleventh Circuit, the plaintiff contended that the district court had improperly analyzed her work with First Title under the outside sales exemption. Specifically, she argued that the primary duty she performed for First Title constituted nonexempt work, because she never actually consummated a sale with any person or business during her employment. Instead, she argued that her primary duty was to induce realtors, brokers and lenders to refer their customers to First Title to obtain title insurance services. In her view, this work consisted of "stimulating sales," not actually making sales of title insurance, which she contended was non-exempt "promotional work" under 29 C.F.R. section 541.503(a).

The plaintiff also attempted to analogize her work to that of two positions found to be nonexempt under an outside sales analysis. First, the plaintiff compared her primary duty to that of college recruitment counselors for whom the Department of Labor recommended classification as nonexempt employees in a 1999 opinion letter.6 The plaintiff also cited a 2008 district court case, which held that a class of pharmaceutical representatives was improperly classified as exempt under the outside sales exemption.7 In each case, the employees promoted the employer's product and influenced potential clients, but did not conduct or finalize sales. Rather, a series of independent events had to occur before the sales process concluded. The plaintiff argued that her primary duty was similar in that she "influenced" realtors, brokers and lenders to offer First Title's title insurance services, but did not process the final sale, which was completed by First Title.

In response, First Title, citing various authorities, argued that the plaintiff's work was covered under the outside sales exemption because, as her primary duty, she obtained orders for title services, promoted business with the goal of obtaining orders, and, importantly, was paid on commission for title services that ultimately closed from her clients. First Title also cited language in the Preamble to the regulations regarding the outside sales exemption stating that the outside sales exemption applies if an employee "obtains a commitment to buy" from the potential client and is credited with the sale, arguing that how the sales order is actually placed is immaterial to the analysis.

In affirming the district court's ruling that the plaintiff was exempt under the outside sales exemption to the FLSA, the Eleventh Circuit concluded that the plaintiff's primary duty was to obtain orders for First Title's title insurance services and to promote the company's business with the goal of obtaining orders for title insurance. The court held that she, therefore, made sales "in some sense" because she obtained the commitments of her clients to buy First Title's title insurance services and, crucially, was credited with sales for which she was paid a commission. The court also agreed that, under the Preamble to the Final Rules, how the order was actually placed by the end user was immaterial and, therefore, the fact that the plaintiff's clients ultimately placed their orders with First Title did not render her work nonexempt.

In addition, the Eleventh Circuit agreed that the college recruitment officer and pharmaceutical representative positions to which the plaintiff attempted to analogize her own position were distinguishable. The court stressed that the plaintiff's primary duty was different because there was no intervening sales efforts between the plaintiff's "promotional work" and the final sale, and that the plaintiff was "acting as a conduit" to the sale rather than "paving the way" for a later salesperson to step in and make the final sale. Moreover, the plaintiff's compensation was tied directly to her sales efforts, in the form of commission. Finally, the court determined that she was not a "pseudo-salesperson" that simply collects names of potential clients to be turned over to salespersons, which is not a covered position under the "outside sales" exemption.


The Gregory decision provides useful guidance to employers with salespersons who mostly conduct outside activities that may be described as "promotional work," but whose primary duty is closely related to obtaining sales commitments. Such employees may still be exempt from FLSA overtime and minimum wage requirements under the "outside sales" exemption, even if they do not complete or process the final sale. Further, their efforts must be geared towards promotion of their own sales, rather than the company's sales in general, and their sales efforts should be reflected in their compensation.

The Eleventh Circuit's decision also provides a counterpoint to other recent federal decisions. For example, the Tenth Circuit Court of Appeals held in Clements v. Serco, Inc.8 that civilians whose primary duty was meeting with potential recruits and encouraging and assisting them with the process of joining the Army performed "promotional work" that was nonexempt under the "outside sales" exemption. The Tenth Circuit's rationale was that the employees could not obtain commitments from the recruits, and instead referred them to enlisted recruitment personnel to do so. Similarly, as described above, the Southern District of New York held in a recent decision that a class of pharmaceutical representatives who met with physicians to promote the employer's prescription drugs and encourage their prescription to patients were not exempt outside salespersons because they did not obtain orders from the physicians and were not paid a commission.9

In contrast, the Gregory decision provides employers with a detailed analysis that favorably applies the DOL's regulations on the outside sales exemption. The elements necessary to satisfy the requirements of the outside sales exemption under Gregory are: (1) work geared toward individual sales; (2) compensation that is based on employee's sales efforts; and (3) the absence of any layer of sales work between the employees and the final sales. Employers should be aware that the authority cited above is applicable to analysis under the FLSA, and that application of the "outside sales" exemption pursuant to the laws of certain states may be different. The Eleventh Circuit covers federal courts in Alabama, Florida and Georgia.


1 See 29 C.F.R. 541.500(c).

2 69 Fed. Reg. 22162.

3 Id.

4 Id. at 22163.

5 29 C.F.R. § 541.503(a).

6 See 1999 WL 1002391.

7 See Amendola v. Bristol-Myers Squibb Co., 558 F. Supp. 2d 459 (S.D.N.Y. 2008).

8 530 F.3d 1224 (10th Cir. 2008).

9 See Amendola v. Bristol-Myers Squibb Co., 558 F. Supp. 2d 459 (S.D.N.Y. 2008).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Angelo Spinola
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.