Eleventh Circuit Holds FLSA Administrative Exemption Applies To Business Development Managers Who Drove Business To Car Manufacturer

• Published date: 12 April 2022
• Subject Matter: Corporate/Commercial Law, Employment and HR, Corporate and Company Law, Employee Benefits & Compensation
• Law Firm: Littler Mendelson
• Author: Mr Alan Persaud and Rocio Blanco Garcia

On April 1, 2022, the U.S. Court of Appeals for the Eleventh Circuit, in Brown v. Nexus Business Solutions, LLC¹ affirmed a district court's decision² that business development managers who solicited and sold General Motors vehicles to corporate clients are not entitled to overtime compensation under the Fair Labor Standards Act (FLSA).³ Specifically, the appellate court held that the business development managers were "bona fide executive, administrative, or professional capacity"⁴ employees because they exercised discretion in the performance of their business development tasks. Accordingly, they fell within the FLSA's "administrative exemption" and were not entitled to overtime, notwithstanding they regularly spent over 40 hours per week convincing corporate clients to buy General Motors vehicles for their fleets.

In their capacity as business development managers, the employees built relationships and developed leads, which required creative thinking and tailoring to each corporate client. While they developed opportunities between clients and dealerships, the business development managers did not have the final authority to quote prices or close deals themselves.

In deciding that the business development managers were exempt from the FLSA and subject to the administrative exemption, the district court found the exemption applied because: (1) the employees' compensation met or exceeded the U.S. Department of Labor's minimum salary requirement of $684.00 per week; (2) they were engaged in office or non-manual work directly related to the management or general business operations of General Motors; and (3) they exercised sufficient discretion in the day-to-day performance of their duties.⁵

On appeal, the employees did not dispute that their salaries exceeded the requisite minimum or that they performed office or non-manual work directly related to the employer's customers. Rather, they argued they did not exercise discretion and independent judgment with respect to matters of significance because their work was too repetitive to allow for meaningful discretion. They also tried to draw what the Eleventh Circuit described as a "strained distinction" by arguing that though they used discretion with respect to matters that impacted or affected matters of significance, they did not directly exercise discretion with respect to matters of significance.

In rejecting the employees' argument, the Eleventh Circuit noted that the "discretion exercised by the...