Payment of overtime is not required for sales managers of banquet facilities, according to a recent decision by the United States Court of Appeals in the First Circuit in the case of Leporacci v. State Room, Inc.
The State Room and Belle Mar are affiliated banquet facilities that host high-end wedding receptions and other social functions in Boston, Massachusetts and Newport, Rhode Island. The sales managers at these banquet hall restaurants were the primary client contacts on behalf of the event venues. Principally, their role was to secure event business for the company, either by use of a cold-call list kept by management or in response to inquiries by potential clients. Attorneys for the sales managers alleged that these employees were unlawfully denied overtime compensation under the Fair Labor Standard Act (“FLSA”).
The court’s decision concluded that the matters about which the sales managers exercised discretion were matters of significance to the employer and that the customer service position that each worker occupied was integral to the functioning of the employers’ food service facilities. According to the court, sales managers were the face of the businesses to prospective clients, and the judgment that they exercised concerned how best to represent the employers and to develop a proposal that would attract the prospective clients to a contract with the venues. In sum, the court decided that the sales managers exercised adequate discretion to come within the administrative exemption of the FLSA and were not workers entitled to overtime under the law.