Just Energy: US Appeals Court Affirms Use of the Outside Sales Exemption

Just Energy Group Inc. announced that in Kevin Flood, et al. v. Just Energy Marketing Group, et al. 2d Cir., No. 17-0546, the United States Court of Appeals for the Second Circuit yesterday affirmed the lower court’s decision holding that the plaintiffs fit the “outside salesman” exemption under the Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”).

Accordingly, the plaintiffs were not entitled to the minimum wage and overtime claims brought under the FLSA and NYLL.

Just Energy said that, Judge Meyer, writing on behalf of a unanimous three judge panel, held that there was no dispute that the plaintiffs were regularly employed away from Just Energy’s office and that their primary duty was to make sales as well as to obtain orders or contracts for services. Just Energy said that, accordingly, the Court rejected the plaintiffs’ argument that the outside salesman exemption may not be applied because Just Energy retained discretion to reject contracts that plaintiffs secured from door-to-door customers or because of the overall degree of supervision that Just Energy exercised over the plaintiffs’ activities. The Court referenced the recent U.S. Supreme Court decision in Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134, 1142 (2018) holding that exemptions under the FLSA should not be read narrowly.

Patrick McCullough, Just Energy’s President and Chief Executive Officer stated that “We are very pleased with the decision of the Court of Appeal. It validates our conviction that we have consistently adhered to the law. We believe that this decision will fortify our positions in similar class action claims brought in other jurisdictions as we continue to vigorously defend them. Accordingly, this decision provides the opportunity for Just Energy to revisit the approximately $4 million legal reserve remaining for these claims.”