On March 10, 2025, the Supreme Court of the United States (“SCOTUS”) denied a petition for writ of certiorari from F.W. Webb (“Webb”), a wholesale plumbing and HVAC supply company, who had asked SCOTUS to review a First Circuit ruling that the company misclassified inside sales representatives as administrative employees. Under the Fair Labor Standards Act’s (“FLSA”) exemptions to overtime, employees classified as administrative employees are not entitled to time and a half after working 40 hours a week.
The Department of Labor (“DOL”) sued Webb in 2020 for misclassifying the workers as exempt from overtime. A district judge granted the DOL summary judgment in 2023, applying a U.S. Court of Appeals for the First Circuit ruling on how to analyze the relationship between a worker’s main tasks and an employer’s general business operations or management to determine whether an employee is exempt from overtime under the FLSA.
Using the same relational analysis, on appeal, the First Circuit affirmed in 2024 that the workers’ primary duties of selling company products are directly related to the company’s business purpose. The appellate court found that the employees mainly performed sales duties for a wholesale company, and by making those wholesales, their “primary duties are not ‘administrative’ in any sense of the word.”
Webb argued that the plain text of the FLSA’s regulations does not support the relational analysis test applied by the First Circuit, and that the First Circuit erred in focusing on Webb’s business purpose. As such, Webb urged SCOTUS to step in and review the appellate court’s decision, though SCOTUS declined, and did not give a reason for its decision, as is customary.