Labor Code Section 1171 - Overtime Wages for An Outside Salesperson In California

In Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785, a bottled water route sales representative filed an action against his former employer for unpaid overtime wages. ( Ramirez, supra, 20 Cal.4th at p. 790.) The trial court concluded, among other things, that the plaintiff was exempt from overtime pay because he was an outside salesperson within the meaning of Labor Code section 1171. ( Id. at pp. 789-790.) The Court of Appeal affirmed relying on federal regulations and criteria to find that plaintiff was an outside salesperson. Our Supreme Court reversed the Court of Appeal judgment and remanded the matter. ( Id. at p. 804.) In so doing, the court focused on the distinction between the less-protective federal rule for exemption status ("primary function") versus the stricter California standard ("primarily engaged in") which requires that over one-half of the employee's work time be spent actually engaged in exempt activities. ( Id. at pp. 797-798.) In remanding the matter for resolution of factual discrepancies, the Ramirez court noted that "the question whether the plaintiff was an 'outside salesperson,' turns on a detailed, fact-specific determination of this matter." ( Ramirez, supra, 20 Cal.4th at p. 790.) Specifically, the Ramirez court instructed the lower court to "itemize the types of activities that it considers to be sales related, and the approximate average times that it finds the employee spent on each of these activities." ( Id. at p. 803, fn. 5.)