Ramirez v. Yosemite Water Company

ORDER
Review Granted
PETER RAMIREZ, Appellant v. YOSEMITE WATER COMPANY, Respondent No. S070114 C.A. 2nd, Div. Three, No. B097099 California Supreme Court Filed July 8, 1998
        Appellant's petition for review GRANTED.
        




[Editor's Note - For your convenience we reprint below the Daily Journal's Ruling column brief which summarized the earlier decision of the lower court.]


LABOR LAW


Salesperson spending majority of time away from employer premises is exempt from overtime laws.
        The C.A. 2nd has ruled, in the published portion of this opinion, that a salesperson spending a majority of the time away from his employer's premises was exempt from wage and overtime laws.
        Yosemite Water Co. was in the business of selling bottled water, cups and coffee, as well as renting water coolers. Peter Ramirez was an employee of Yosemite. Ramirez served as a route sales representative for Yosemite in his final months with the company. The route sales representatives were paid by the number of bottles and other items they sold. After Ramirez left the company, he sued for unpaid overtime wages, unlawful wage deductions and employee charges and unpaid wages. Yosemite cross-complained against Ramirez for interference with contractual relations and with prospective economic advantage, claiming that Ramirez had attempted to solicit Yosemite's customers when he left the company. The court found for Yosemite after trial, finding that Ramirez had been an outside salesperson exempt from wage and overtime laws.
        The C.A. 2nd affirmed. Regulations of the California Industrial Welfare Commission (IWC) provide for minimum wages and overtime pay; however, they exclude "outside salespersons," because such employees normally control their own hours and are paid on a commission basis. An outside salesperson is defined in IWC Wage Order #7-80 as a person who regularly spends more than half of work hours selling items or obtaining orders or contracts for products away from the employer's place of business. California's overtime laws and wage orders were modeled to some degree after the federal Fair Labor Standards Act, which provides that an employee is an outside salesperson if regularly engaged in sales, obtaining orders or contracts for services away from his employer's place of business. A "routeman" was characterized as an outside salesperson under federal regulations when he provided the only sales contact between the employer and the customers, called on the customers and took orders and received compensation commensurate with the volume of products sold. Ramirez was employed for the purpose of selling Yosemite's products to its customers and was compensated on a commission basis. The trial court had found that Ramirez spent 20 percent of his working time at Yosemite's workplace and the remainder of the time, 80 percent, in the field. Evidence amply supported that conclusion. All of the characteristics referenced in federal regulations indicated Ramirez was an exempt outside salesperson. In the unpublished portion of the opinion, the court determined that the trial court had properly denied Ramirez damages for penalty deductions that had been made from his paychecks. It also denied Ramirez waiting time penalties and attorney fees.

        Ramirez v. Yosemite Water Company, C.A. 2nd No. B097099. filed March 30, 1998, by Aldrich, J.

        The full text of the this case appears in 98 Daily Journal DAR 3198, April 1, 1998.