“Business Development Managers” Fall Under FLSA Administrative Exemption, Not Entitled to Overtime

In Brown v. Nexus Business Solutions, LLC, 2022 U.S. App. LEXIS 8777 (11th Cir. Apr. 1, 2022), the Eleventh Circuit held that “business development managers,” tasked with persuading corporate customers to purchase General Motors vehicles for their fleets, are not entitled to overtime compensation under the Fair Labor Standards Act (FLSA).

The business development managers were employed through a third-party firm to develop leads and deliver sales presentations for potential corporate customers of GM vehicles. Several business development managers brought suit against their employer alleging unpaid overtime compensation under the FLSA. Before trial, the employer and the business development managers both moved for summary judgment. The district court granted summary judgment in favor of the employer after finding that the business development managers were statutorily exempt from the FLSA overtime provisions.

In an opinion written by Judge Grant and joined by Chief Judge William Pryor and Judge Anderson, the Eleventh Circuit affirmed. As the court explained, under the FLSA, employers are required to pay their employees more for working over 40 hours per week unless certain exceptions are met. The court agreed with the employer that the business development managers fell under the so-called “administrative exemption,” under which employees working in a bona fide executive, administrative, or professional capacity are not subject to the overtime provisions.

The business development managers claimed that this provision did not apply because they only made minor, ad hoc decisions and mostly relied on canned presentation materials and scripts. The court was not persuaded. It noted that the business developer managers had a hand in choosing which leads to develop, performed customized research, and delivered presentations that were somewhat customized. The court held that by nature the job involved creative thinking and tailoring to each customer. Flexibility in performing tasks, the court pointed out, was part of the business model.

The court also rejected the business development managers’ argument that their discretion is limited and does not relate to “matters of significance,” as required under the FLSA exemption. The business development managers pointed to cases from district courts in other circuits that distinguished between exercises of discretion that may impact or affect matters of significance and actually exercising discretion with respect to a matter of significance. The court held that this “strained distinction” was not found within the laws of the Eleventh Circuit and, in any event, was inapplicable to the claims of the business development managers. The court concluded that exercising discretion over how to secure new customers was undoubtedly a matter of significance from the perspective of the employer whose business model relies on that type of business. In other words, the court noted, the services provided by the business development managers go straight to the core of the service provided by the employer. Accordingly, the court affirmed the judgment.

Posted by Rebekah Whittington.

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