good morning and ma'am please the court my name is shannon patton and it's my honor and privilege to be here today representing my clients the appellant's collectively just energy i would like to reserve three minutes for rebuttal we're familiar with the old adage if it looks like a salespeople their sales people no matter how much the apple east desperately want them to be something else if these people aren't engaged in making sales then what are they doing the outside so just a procedural question decide that question we actually disagree that the jury needed to be impaneled as well your honor if they break the employee's duties are what their primary duties are are a question of fact we believe those disputed applying those duties to the law is a question of law for the court exemptions the primary duty must be making sales or obtaining orders or contracts for services and the work must be performed away from the employer's place of business that nd element is not not at issue in this case its focus is on whether what the primary duty is whether it's making sales we've raised three assignments of error we believe that the district court st aired in denying several different motions for judgment as a matter of law we believe the district court erred in instructing the jury on what the exact elements of the outside sales exemption actually are and finally we believe the district court abused its discretion in admitting evidence of plaintiffs compensation levels when compensation is not an element of the exemption now the  two judges the judge in this case gave the fair labor standards act just a tortured tortured reading of the statutory language she read elements into the exemption that don't exist and that reading pervaded his decisions on judgments is a matter of law and in the struct and in instructing the jury and those errors are to be elements the very elements that the supreme court looked at in christopher i'm sorry in one of those the war the factual elements and the arguments that the of what the court looked at doesn't track the christopher smith no it does not again the two elements making sales or obtaining orders or contracts for services christopher stood for the cut stood for the present stand for the proposition that a sales person must have the authority to buy and it does not stand for the proposition that an only if the regulatory requirements that there but it employer can reject a contract because of regulatory requirements christopher doesn't stand for that christopher actually broadened the exemption and said it applies to anyone who is making sales in some sense or obtaining the maximum commitment posset didn't didn't christopher specifically explain that the making sales and now with this is functional absolutely rather than a formal inquiry and what you do you view all of the employees responsibilities in the context of the particular industry exactly that's what the supreme court didn't kristopher it reviewed it in the context of the pharmaceutical industry where reps cannot make sales directly directly to the patient and in what context and why and smith kline were not able to mix directly they were unable to make sales directly because of the regulatory requirements unique to pharmaceuticals so instead of selling to the end user to the patient or even to the retail pharmacy you know they sold they sold to the doctors but the supreme court held they were still making sales so what christopher stands for it doesn't stand for the proposition that you have to obtain a final and binding commitment you look at it in the context of that particular industry and now that the in that particular industry the they did everything they did everything they could and that is precisely what the plaintiffs in our case did and they did far more and obtain far more binding commitments than the pharmaceutical representatives there who again marketed or who sold to to the doctors are plaintiffs here are engaging face to face with the customer at the door selling them on the product educating them about just energy's gas and electricity products overcoming objections like sales but do regulatory or particular environment prohibiting those employees from going on and actually making the site our position is not that regular that are that in the interest of regular the energy industry which is of course you know very highly regulated but our position is not that regulatory requirements prevented prevented  the plaintiffs from making a sale we believe the judge you know erred in that regard in that regard as well but here the contract in the interest is in the end energy industry just like you know any other you know any other industry where you have a contract with certain conditions proceed and that had to be had to be satisfied before before the energy would actually begin to flow actually they're selling gas or electricity priest stipulated that it was a tangible tangible commodity you think it's inappropriate for us to rely on other provision about opinion orders for services because they're not selling services we don't think it matters we think it's a distinction without a difference the definition of sales in the fair labor standards act includes a sale or sell to include any sale exchanged contracts to sell and here our sales reps sales representatives why why why is the op orders provision in the regulation why were what worked as a do over and above making sales provision i guess the distinction would be you could make a sale you can sell a good or a service you but the way the language reads you obtain a contract for a better service we actually think this is a hybrid kind of a thing because certainly gas and electricity are products they're tangible goods but just energy is providing it to the customer's home it's not like the customer goes to a brick and mortar building and actually collects product to take that home so you flip the light switch that's a service but again even if we're just looking at the making sales problem there obtaining a contract for the gas and electric for just energy to provide the gas and electricity and like the sales representatives and christopher getting assigned signature at the door after educating the customer on the product obtaining their commitment to buy that was the maximum commitment the representatives could get at the door and that's what christopher requires that's what all the fair labor standards act requires applications and agreements the agreements the customer signed in this case that right from the top customer agreements so for purposes of this case use of the term application contract we think has no difference but to your question if i get your question and application in the traditional sense a contract is binding contains material terms an application say in the sense of a job application the terms or you are aren't fully defined or or binding at the time the application  submitted you might have you know you might negotiate a salary you might it because she had a title things like that but the contract but the cuts the customer signed at the door contained all the material terms they were going to  chooses to do so and there is not a shred of evidence in the record your honor that that ever happened for any arbitrary reason plaintiffs several plaintiffs may have testified contracts were cancelled maybe they didn't know but there was no evidence of any arbitrary cancellations why would so like any prudent business sure if a customer passes a credit or fails a credit check and they're not going to be able to pay sure they're not they're not going to honor that so your statement says that if the customer could evidence in the record evidence is that the con the application includes a discretionary right but it was subject to against certain legal or technical requirements which was a key to the district court's decision in the daily case in the northern district  california and to the flood courts the district court in the southern district of new york in the nd circuit both held you know the flood the flood court said and this is a quote although some of flood customer sign ups did not  energies product this was for technical and legal reasons the fact that just energy like any prudent business might occasionally decline to go through with the transaction for example if it turns out the customer changes his minders on credit worthy that does not alter the character flood zone activities to retroactively transform them into something other than making sales the courts focus really needs to wasn't flood are you arguing that flood controlling in this case it's certainly persuasive on this on this court went to these homes that they had to go to and were on their list and they could get someone to sign an application but they could not complete it where and flood well let me back up to the plaintiffs here once they had their very had to leave they could not stay at the location they would initiate a verification called and then by left and that was the last contact they were allowed to hay of with the people to whom they were selling but that's not true in flood the counselors remain nearby but outside the customer's presen while the customer made the rd party verification call after that the verify are gave the confirmation number and the training materials allowed those solicitors to go back in to meet with the people they were selling to confirm the program details to ensure that the customer had no further questions and to close the sale by giving the customer from this solicitor the actual contract that's a that's a completely different from what the what the plaintiffs in this case were allowed to do i mean to my my rebuttal time your honor but i would like to answer that question if i may it's really not very different just energy is a matter of course in every jurisdiction in which it operates engages a rd party verifier called different regular different jurisdictions have different regulatory requirements that either require the sales person to leave and never come back others allow the representative to her or you if you are not doing it properly you might have entered an agreement for what you had to do but nama lists that's part of the constellation of factors as to whether these were actually salespeople or th application providers know they were salespeople they were still educating but there for their function at the door was the same in both flood and dailies their function at the door the same if i ask if i can say here's what i want you to do here's an application you can fill it out take the application i have to leave nail no further contact with that person versus flood who said oh ok you filled out this application i have to step out while you make the verification call and as soon as that is completed you will be given a number i will come back in the room i will enter the number on the contract i will answer your questions i will tell you how the program works i will confirm the details and i will close the sale no in football in both cases when the when the verification calls initiated there's a number there is a number assigned to the car the difference phone to the customer and then leave and then they left and then they would leave it in ohio in different jurisdictions is different but in any case i'm also concerned about we have not gotten to the rest of the smith kline beech method that the supreme court used to analyze the sales after setting up the test as a functional test discussing the unusual unique environment regulatory environment and back case then the supreme court shia and they looked at whether the workers were hired for their sales experience whether they were trying to obtain the maximum commitment whether they worked away from the office with minimal supervision and whether they were rewarded with incentive compensation don't those factors fall in favor as found by the court below that these particular individuals were not  salespeople because they weren't hired for their sales experience they worked away from the office but they were required to report every day they were closely supervised if they went in an area of a community that was not on their list they were in trouble their supervisors had complete control if of their schedule so they worked what twelve hours a day some seven days a week and they were also provided a detailed script and compliance metrics isn't that very different from the pharmaceutical sales person who goes out in the smith kline beecham supervision your honor plaintiff made more than seventy thousand dollars a year in commissions doesn't that within the f l a f l s a diskette exemption discussion that says that these outside sale people's typically aren't salaries well above the minimum wage true in smith kline true in flood not true here i enjoyed other benefits that set them apart from the nonexempt workers entitled to overtime  true they are not true here performed a kind of work that was difficult to standardize in any timeframe and couldn't easily could not easily spread to other workers well true those workers in by were going out and they were making the contacts and creating these relationships with the doctors the guys in this case were assigned into a street told where to go told how long they could span given their blur told they couldn't go anywhere else and they had no opportunity to even complete the cycle why isn't under the very supreme court precedent here these people just completely distinct category now they're they're not your honor they were still again and as flood teaches as vast a lot of the nd circuit teaches there is no subject to supervision requirement the compensation requirement is also that's also our position has no bearing no place in this case  struggling with your argument that you may narrowly define in this category and call it a legal conclusion when in fact all of the cases including smith says this is a functional rather than a formal inquiry it views the employee's responsibility in the context of a particular industry and then it goes on to look at all of the factors that distinguish these plaintiffs from the cases for example in flood which we were successful and smith kline beecham i'm a little of a loss as to how you can give away the hand to factual distinctions between your case and the cases that should go from well i don't believe i mean certainly there are factual distinctions between our case and smith kline beecham there really aren't any meaningful factual distinctions between the daily in the flood cases i think the these plaintiffs here would say the guy in flood was making seventy thousand dollars a year and that's a big difference in what am i getting but your honor there is no requirement or no element in the outside sales exemption for a minimum salary threshold but that has been i just know there's no you have to make x but it is part of the constellation of factors that the court looks to and it is in this functional test those things matter otherwise anybody anybody that you hire and does some work off no matter how much you control them no matter what you pay or don't pay them they're just outside sales people from coverage of the protections of minimum wage and maximum hour was because they already makes our ease well above the minimum wage they enjoy other benefits  that's simply not true no your honor the functional inquiry focuses on the nature the nature of the work the external and disha is sort of a bolster but again the the condition is paid on a commission basis it's not good morning your honor may i please the current new call of fear only for the plaintiff class in this case judgment as a matter of law was absolutely not appropriate to be granted to the defendants as the discussion with my opposing counsel  illustrated there are a number of factors here that the jury had to look at in deciding whether or not the exemption applied the same question of you that i asked of your colleague on the other side of setting aside the factual distinctions between these cases it still was my understanding that the ultimate conclusion about whether whether a particular employee fell within a particular exemption was a question of law for the court historical facts for and it was for the jury but i'm i  don't understand why the ultimate conclusion of whether these individuals were outside jurors people would have gone to the jury sure your honor so as part of the outside sales test there are a number of indices level of control whether they're hired for their sales they also discussed some of the in disha and in that case the district court had declined to consider the in dish and granted summary judgment to the employer and this court had held that was error they needed to look at the court is to identify which factors are relevant and then it's up to the jury to determine which way they tell us so in that regard that that is exactly why judge me as a matter of law for the defendants is not appropriate here the district court did not in this case and found that based on the interest and based further on the fact that these workers had no ability to decide whether or not this application was in fact going to turn into a say all these things precluded judgment as a matter of law now as for looking at these and these in disha i mean just energies position is that we're entitled to judgment as a matter of law because the don't matter the supreme court did this is a secondary analysis and we don't need to get there we just just need to say are they getting these people to sign this application at the door that is not what the vast majority of courts have how the vast majority of courts do in fact look at the disha yes flood had sort of been critical of looking at the into the outside sales test but then if you look at the decision after that the vast two decision the nd circuit after the flood decision actually went through and analyzed the end to show all of the industry that christopher discussed so it is absolutely the supreme court to just go through they have a have an academic exercise in going through the through these and disha they matter to the outside sales test and because they matter to the outside sales and there is evidence in the record your honor judge strength went through their tight supervision and the fact that they were you know anyone was hired for this job they were working long hours they weren't making a lot of money all of those things support the jury's verdict in this case you know the standard is whether or not you know a reasonable juror could have found for the nonmoving party and absolutely given the fact that there was such tight control over these individuals whether the fact that when they left the door they didn't know whether that application was actually going to turn into a paid commission and in fact fifty percent of the time in some cases it did not even even workers who were good at their job there was testimony at trial that even the the workers who were great at this had a thirty percent rejection rate and that was not that had to do with credit and that had to do with just energ assume putting that aside i think that we still prevail for the reason that judge quinn had mentioned in his post trial opinion the fact that there is all these other in disha that suggest they were not in fact making say even if we find that they were making contracts for sale because these were agreements we we would still say that the extra noise should trump the playwright the jury's finding in looking at the totality of the circumstances the jury's verdict was supported it's not contrary to all reason that they should find these people to not be exempt given the evidence in the record about these other and dishes that went in plaintiff's favor what would you ask the hypothetical oftentimes there's agreements where you have a be because that because of that option but would you would make it fall outside of the sales person exemption because it wasn't a binding commitment i think it depends on what the employer's role is in that i mean in this instance we have the employer controlling whether or not it goes it goes through irrespective of any regulation there they are the gatekeeper as to whether this turns into a sale if it was the know for sales people to reach refund policies right i mean if you don't like the product you can return it and that's part of the writing but this is more than just a refund i mean there's that component to it too because if you know by law they have so many days to cancel but then beyond that just energy gave people sixty days to cancel and if you cancel within sixty days the sales person didn't get there didn't get their commission but the other part of it here irrespective of the refund two sides to it that's on the customer side but on the employer side the employer still has to approve it or which side of this because for instance i'll go back to the killing case in that instance the which volume that the employee was able to get that employer control said this court said as a matter of law we cannot conclude that these people were exempt outside sales people and the jury has to determine whether or not based on that fact in all these other and disha whether or not they meet the sales exemption so if you're if i don't think you can look at just why there are they obtaining a commitment there is the there's a whole other part about what happens afterwards that's relevant and that's through  you know we cited a number of cases in our brief you know the killing case for example versus real stone out of the district of idaho where the employee was getting sales proposals from these retailers that they went to i think they were selling stone and these retailers would agree he would draft up the sales proposal get them to sign it they would commit to buying this initial inventory of stone that's attaining a commitment and he would then turn that into his employer and it was the employer who decided whether or not that was actually going to go through or not and the court actually went farther than our judge did here and said as a matter of law that's not making sales summary judgment appropriate for the plaintiff you know and there's other cases so it sort of support that overall concept that you know when there's a hold up on the employer and and it and the worker can't influence that at all then then there's no and there's no exemption  and i don't think we have a contract if the employer can agree to say there is no contract i mean there was only a contract in this case of just energies that there was a contract and that was totally separated from what the what the worker was doing so i think that that's you know that's maybe where some of some of the courts have have come out on this issue the other thing is if you look at you know the overall capacity of a sales person or their own their functional what we what they're doing and looking at the overall picture you know the there's the issue of control and whether or not they're highly supervisor or whether they are independently going out and trying to sell things and i think that that factor suggests it matters in terms of who's able to close the deal if they have any control over that or not in a situation where you take that out of the workers he hands because exempt sales people are supposed to be independent they're supposed to be you know not how we supervise their working they're working all kinds of hours their pay is not conducive to an hourly rate muser all factors discus christopher and when you have a highly regulated individual going out you know where to where to work what street to work what doors to knock on what persuasively to say then you have to leave after you're at the door you're not allowed to have any further contact with that customer you know that's not the independent sales person who's you know meeting with clients taking them out to dinner you know is sort of doing more traditional salesman type activities  the there was not an overlap because of their certain there's different defendants and different defendants are like in control of different offices so the office i think were different so none of the employees  i do not believe so no i mean this could this was an opt in case we had an ohio rule twenty three dollars class which virtually almost every no one almost no one opted out and then the opt in case i think there were was a new york office included in the class definition but i i think wow i don't know i that's a good question i mean if it's a federal claim as a practical matter i mean i think that any statute of limitations would probably be run at this point so i'm not sure that it would come up for  for example in flood in addition to you know the fact that he was highly compensated in the evidence and here was much much different you know the court in flood said you know while there was an occasional need to just energy was  declining to go through with the transaction so they viewed it as more of a technical issue the evidence record here show that it was not technical i mean fifty percent of these things were being rejected so there's a big factual difference  and i how can you say that a in an application that gets rejected fifty percent of the time when the employee has nothing to do with it that that's still as a matter of law making sales and i think the judge can reach the right conclusion when he sent to the  thank you your honor so i will try try to be brief a couple of quick follow ups i would like to judge murphy i think you have been absolutely correct in that there really were no questions of material fact and the district court in this case whether whether the outside sales exemption applied really was a quote of law at that point that should have been decided for the court we believe the court should have either entered a directed verdict in defendant's favor or granted our motion for judgment as a matter of law after the jury verdict would you agree if the court thought that they were the day works once the facts are determined there the court has to decide one way or the other it's a my only thinking about the case is that the ultimate decision was for the court whether to say they were outside sales people or it was that they didn't follow orders correct that would have been you know that's a decision for the court and in fact it's within the property of of the jury to make the factual determinations upon which the court rect would agree or not agree that is correct so we believe judgment as a matter of law should have been entered into our favor on the factual record i don't know my actual plaintiffs had to do their work operated no we don't believe there were you know there were real as not to sume the control we agree they weren't hired for their prior sales experience but they were not arguing that the a should have been considered not applied we're just arguing that they should have been the primary in our case here the jury couldn't have even gotten to the addition based on the instructions because that instruction at that they could or may consider these external and disha follow the instruction that required the plaintiffs to her that required the jury to consider the extent to which the plaintiffs could have the authority to buy a company or to consider the company's discretion to reject which we maintain or simply  are simply outside outside the exemption another point i'd like to clarify is that these contracts were binding just energy was committed and bound by the terms of the contract provided provided the conditions proceed and were satisfied after the agreement was signed and those conditions were satisfied there was no other up selling there was no other renegotiation or change of terms my time is running out so i would just like to say i'd like to ask the court if you had on your door at your home a sign that said no salespeople or no solicitation and one of these plaintiffs knocked on your door and attempted to convince you to become a customer of just energy and get your gas and electricity from them would you feel like that sign was violated that a salesperson had in fact knocked on your door