California Overtime: Hershey Job Title Versus Job Activities

San Francisco, CAThe Hershey Company is one of many corporations facing a California overtime class action. When will employers realize that your job title doesn't determine whether you are exempt from overtime?

The Hershey suit, which was filed on behalf of a San Francisco woman in 2008, alleges that a group of sales representatives were misclassified: they were paid a flat salary and were not compensated for overtime, even though sales made up 10 percent or less of their work.

Many jobs, including professional or outside sales positions, are exempt from paid overtime under the California labor code and federal law, but misclassification cases such as the Hershey suit reiterate that an employee's daily activities dictate whether they are exempt and not their job title.

In 2003, The Hershey Company created an entry-level Retail Sales Representative (RSR) position, classified this position as exempt from overtime under both federal and California law, and never paid hourly compensation to RSRs for any overtime they worked. Hershey's job description of RSRs are outside salesmen, but for this exemption to apply to the plaintiffs in the class action, their primary duty must be "making sales" or "obtaining orders or contracts for services." Employees who spend more than 50 percent of their time performing this work are exempt, but Hershey RSRs have shown that they seldom perform direct sales and, therefore, have been misclassified as exempt.

In the past few years, attorneys have seen more California overtime lawsuits regarding retail and sales as "misclassification" cases like the Hershey case. In September 2010, the Court held that the RSRs are not exempt under the "outside sales" or "administrative exemptions" as a matter of law.

On February 23, 2011, Magistrate Judge Bernard Zimmerman, of the United States District Court for the Northern District of California, issued an order holding that the Hershey Retail Sales Representative ("RSR") plaintiffs and those RSRs who have joined the case of Campanelli, et al. v. The Hershey Company, Case No. 3:08-cv-01862-BZ, are entitled to overtime compensation. The Court held that the RSRs are not exempt under the "outside sales" or "administrative exemptions" as a matter of law.

Further, all RSRs employed by The Hershey Company in the US from August 2007 through the present may join a lawsuit pending before the Court seeking past overtime pay.

The plaintiff's attorney said that "We hope all RSRs join the lawsuit so they receive what has been unfairly denied them. They worked incredibly hard and were not paid fully and fairly for their work. In this difficult economy it is more important than ever that workers are fully paid and that companies not take advantage of their workers. At the trial on April 18, 2011, a jury can determine whether they are entitled to unpaid overtime, and how much."

And that goes for anyone who has been misclassified and/or owed overtime compensation.

You can read a copy of the Hershey order here.