IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION

JOSEPH HOPKINS, et al.,

vs.

CORNERSTONE AMERICA, et al.

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§

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CIVIL ACTION NO. 4:05-CV-332-Y

Consolidated with Civil Actions:

4:05-CV-333-Y; 4:05-CV-334-Y

PLAINTIFFS’ MEMORANDUM IN SUPPORT OF RESPONSE TO DEFENDANTS’ 

MOTION FOR PARTIAL SUMMARY JUDGMENT (OUTSIDE SALES 

EXEMPTION)

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Plaintiffs’ Memorandum in Support of Response to Defendants’ Page i

Motion for Partial Summary Judgment (Outside Sales Exemption)

TABLE OF CONTENTS

Page

TABLE OF CONTENTS ..................................................................................................... i

LIST OF AUTHORITIES .................................................................................................... ii

SUMMARY RESPONSE..................................................................................................... 1

STATEMENT OF FACTS................................................................................................... 2

I. The Primary Duty of District Managers – As Previously 

Defined by the Court and Defendants................................................................. 2

II. Specific Issues and Objections to Defendants’ Statement of Facts................... 4

III. Summary Judgment Evidence Regarding Each Plaintiffs’ Role 

as a District Manager.............................................................................................. 6

A. Andrew Bowman.................................................................................................... 6

B. Norman Campbell .................................................................................................. 7

C. Jeffrey Gessner......................................................................................................... 8

D. Bob Howell............................................................................................................... 8

E. Donnie Klein............................................................................................................ 9

F. Mark Mann .............................................................................................................. 10

G. David Young............................................................................................................ 11

H. Eric Dodson.............................................................................................................. 12

I. Carl France ............................................................................................................... 13

J. Clyde Robert Jetter, Jr............................................................................................. 14

K. Glenn Marshall........................................................................................................ 15

L. William Matles ........................................................................................................ 16

M. Jose Quintero ........................................................................................................... 17

N. Audra Thompson.................................................................................................... 18

O. Michael Vogler ........................................................................................................ 19

P. Stephen Wike........................................................................................................... 20

ARGUMENTS & AUTHORITIES..................................................................................... 21

I. Standard of Review................................................................................................. 21

II. The Outside Sales Exemption – Generally .......................................................... 22

III. Pre-August 23, 2004 Outside Sales Exemption – The 20% Test ....................... 25

IV. Post-August 23, 2004 Outside Sales Exemption –

The Primary Duty Test........................................................................................... 26

PRAYER................................................................................................................................ 31

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LIST OF AUTHORITIES

CASES

Arnold v. Ben Kanowsky, Inc., 

361 U.S. 388, 80 S.Ct. 453 (1960) ................................................................ 22

Celotex Corp. v. Catrett, 

477 U.S. 317, 106 S.Ct. 2548 (1986) ............................................................ 21

Cobb v. Finest Foods, Inc., 

755 F.2d 1148 (5th Cir. 1985) ....................................................................... 22

Dalheim v. KDFW-TV, 

918 F.2d 1220 (5th Cir. 1990) ....................................................................... 27

Edwards v. Alta Colleges, Inc., 

2005 WL 578333 (W.D. Tex. Jan. 28, 2005) ............................................... 22, 23-24

Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,

475 U.S. 574, 587, 106 S.Ct. 1348 (1986) ................................................................ 21

Moore v. Willis Indep. Sch. Dist., 

233 F.3d 871 (5th Cir. 2000) ......................................................................... 22

STATUTES, RULES, AND OTHER AUTHORITIES

29 C.F.R. §541.5........................................................................................................ 25

29 C.F.R. §541.500.................................................................................................... 26-27

29 C.F.R. §541.700.................................................................................................... 27, 30

29 U.S.C. §213 .......................................................................................................... 22

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SUMMARY RESPONSE

Defendants seek summary judgment on the FLSA overtime claims of 16 Plaintiffs 

(including original and collective action Plaintiffs) based on the contention that they are 

exempt from receiving overtime pay because they were engaged in outside sales. 

Because the Department of Labor changed the test for determining the applicability of 

the outside sales exemption on August 23, 2004, there are two tests that apply to these 

Plaintiffs.

For work performed before August 23, 2004, the issue is whether the district 

managers spent more than 20% of their time performing tasks other than outside sales. 

This is a pure mathematical calculation. If the district managers performed more than 

20% of their time on something other than their own outside sales, they are not subject 

to the outside sales exemption and Defendants’ motion for summary judgment must be 

denied as to these Plaintiffs. There is evidence the district managers who performed 

work before August 23, 2004, spent significantly more than 20% of their time on things 

that were not related to their own sales.

For work performed on and after August 23, 2004, the issue is whether the 

primary duty of the district managers was work performed in relation to the managers’ 

own outside sales. This primary duty test is not a simple mathematical calculation. 

Instead, it requires the Court to consider the totality of the circumstances to determine 

whether the district managers’ primary duty was outside sales. Cornerstone promoted 

these Plaintiffs to the role of district manager for the specific purpose of training and 

managing the sales agents under them in the hierarchical structure. Before labeling this 

position as District Manager, Cornerstone called these employees Sales Trainers. 

Although the primary duty of the sales agents is outside sales, the primary duty of 

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district managers is to train and manage the sales agents. Cornerstone’s own 

documents admit the primary duty of its district managers is not outside sales: “As a 

Sales Trainer/District Manager, you have a variety of roles, however, your primary role 

is that of role model, mentor and coach for the agents on your team.” The summary 

judgment evidence at least raises genuine issues of material fact that the primary duty 

of these Plaintiffs was not outside sales, but rather, was to train and mentor the sales 

agents.

STATEMENT OF FACTS

I. The Primary Duty of District Managers – As Previously Defined by the 

Court and Defendants

In its Order Partially Granting Motion for Interlocutory Appeal, this Court 

explained part of its reasoning in finding the managers at Cornerstone were employees 

and not independent contractors. In the following analysis, the Court has already 

addressed one the issues raised by Defendants’ Motion for Summary Judgment – i.e., 

whether the primary role of the District Managers is outside sales:

The Court’s decision was not based on the fact that Plaintiffs were 

insurance agents. Instead, it was based, in part, on the fact that Plaintiffs 

were employed as managers at varying levels of management. And as 

managers, Plaintiffs’ primary job no longer involved actually selling 

Defendants’ insurance policies, but, rather, involved managing insurance 

agents and managers under them.

[Doc. #123, p. 8 (emphasis added)]

According to Defendants’ own Cornerstone University seminar materials, the 

primary duty of a District Manager is not outside sales. 

As a Sales Trainer/District Manager, you have a variety of roles, however, 

your primary role is that of role model, mentor and coach for the agents 

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on your team. Your focus should be on helping your team members 

achieve their dreams.

[App. 538 (emphasis added)]

According to Cornerstone’s “Sales Trainer Addendum”:

YOU acknowledge and accept this position of confidence and trust and 

agree and accept the duties and responsibilities as follows: a) contract 

and train SUBMEMBERS in generally accepted methods of insurance 

solicitation at Your expense in accordance with materials and guidelines 

established through CMA; b) comply with and oversee the compliance of 

SUBMEMBERS to the CONTRACT, as well as rules and procedures of 

CMA; c) safeguard LEADS provided YOU by CMA, distribute them to 

and retrieve the from Your SUBMEMBERS; d) follow the rules and 

procedures of those persons designated at HIERARCHY levels above you; 

e) review applications submitted by SUBMEMBERS for completeness 

and accuracy; f) acknowledge and accept the fiduciary responsibility of 

receiving in trust and distributing ADVANCES made by CMA to YOU 

and Your SUBMEMBERS.

[App. 48 (emphasis added)]

According to Cornerstone’s “District Sales Leader Supplement to Agent Contract 

with Cornerstone America”:

I acknowledge and accept this position of confidence and trust and agree 

and accept the duties and responsibilities as follows: a) contract and 

train Agents in generally accepted methods of insurance solicitation at My 

expense in accordance with materials and guidelines available from 

CORNERSTONE AMERICA; b) comply with and oversee the compliance 

of Agents in my Hierarchy with the CORNERSTONE AMERICA Agent 

Contract and any supplements thereto, as well as rules and procedures of 

CORNERSTONE AMERICA; c) safeguard LEADS provided me by 

CORNERSTONE AMERICA; distribute and retrieve Leads to and from 

Agents in my Hierarchy; d) safeguard all confidential and proprietary 

information of CORNERSTONE AMERICA and/or MID-WEST in My 

possession and return same to the office of CORNERSTONE AMERICA 

within forty-eight (48) hours of the termination of My Contract with 

CORNERSTONE AMERICA; and e) review insurance applications 

submitted by Agents for completeness and accuracy.

[App. 420 (emphasis added)]

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II. Specific Issues and Objections to Defendants’ Statement of Facts

In its section entitled “Undisputed Facts Pertaining to Individual DSL Plaintiffs,” 

Defendants make several statements that are clearly disputed by the evidence and 

constitute improper inferences construed in favor of the movant Defendants and 

against the non-movant Plaintiffs contrary to the proper summary judgment standard 

of review. Plaintiffs do not agree the Defendants’ statements of fact are undisputed, but 

rather, that there are genuine issues of fact that prevent the Court from granting the 

requested summary judgment. Below are three examples of some of the statements

made by Defendants that are either clearly disputed or constitute improper inferences. 

Further, Section III of Plaintiffs’ Statement of Facts set forth additional summary 

judgment evidence that precludes a finding that Defendants have met their burden of

proof in this matter.

Defendants make several statements regarding hours they have calculated and 

what percentage of time that would translate to for specific Plaintiffs. These numbers 

often are contradictory to clear testimony from the Plaintiffs. For example, Defendants 

state the following with regard to Clyde Robert Jetter, Jr.: 

In total, Jetter accounted for approximately 65 to 70 working hours per 

week, in which he spent 50 to 55 hours doing personal production or tasks 

incidental to his personal production, and 15 hours a week on non-sales 

activities such as training new agents and attending the weekly turn-in 

meeting. In other words, according to Jetter’s testimony regarding his 

weekly schedule, Jetter spent 77% to 79% of his time on personal 

production or tasks incidental to personal production.

[Defendants’ Memo., p. 21] Not only do Defendants not explain how they arrived at 

their calculation that Mr. Jetter conducted only 15 hour a week in non-sales activities, 

the statement that he spent 77% to 79% of his time on personal production is directly 

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contradictory to Mr. Jetter’s testimony that he spent 30% of his time on personal 

production. 

Q: As a percentage of time spent as a DSL doing personal production, 

what would you estimate your – what percentage of time were you doing 

personal production?

A: Thirty percent, maybe.

Q: Thirty percent?

A: Maybe 30 percent.

Q: The rest of the time you we doing DSL stuff?

A: Administrative stuff.

 [App. 324-325] Earlier in the deposition, Mr. Jetter testified he had to “attend two or 

three days’ worth of meetings per week.” [App. 308] The statement made by 

Defendants in their Memorandum simply is not consistent with the testimony of 

Mr. Jetter that the majority of his time was spent on things other than personal 

production.

Defendants also often make statements about certain work being incidental to 

the Plaintiffs’ own sales when the record does not make such a connection. For 

example, with regard to Andrew Bowman, Defendants make the following statement: 

“On Mondays, he checked paperwork that was incidental to his sales, which took an 

average of two to three hours.” [Defendants’ Memo., p. 8 (emphasis added)] But in 

Mr. Bowman’s deposition testimony on which Defendants’ rely, he testified that the

paperwork was that of his sales agents. “And everybody on my team, I had to go over 

their business and make sure that they didn’t forget anything. . . . That usually took 

between two and three hours.” [App. 14 (emphasis added). There is no basis for 

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Defendants’ statement to the Court and it necessarily raises questions about 

Defendants’ calculations with regard to all Plaintiffs.

Finally, Defendants often make inferences that are improper in the summary 

judgment context. For example, with regard to Glenn Marshall, Defendants state: 

“Marshall testified that the only mandatory meeting he had to attend lasted less than 

five hours a week, suggesting he spent the remaining 55 to 60 hours per week working 

on his personal production or engaging in tasks incidental to his personal production, 

such as filling out paperwork to close his sales.” [Defendants’ Memo., p. 23 (emphasis 

added)] Defendants are asking the Court to infer the only time a District Manager 

spends on anything other than his own outside sales is during mandatory meetings. 

This is an improper inference for purposes of summary judgment and contrary to the 

evidence as to the other time Mr. Marshall spent training and managing his agents 

outside of mandatory meetings. Further, Defendants’ inference is inconsistent with 

Mr. Marshall’s testimony that twice a week he spent a half to a full day going with 

agents on their appointments, that he would listen to his agents make their phone calls 

and critique them, and that he would arrive early to the mandatory meeting and go 

over the agents’ paperwork and leads, all of which were not his personal production. 

[App. 366, 369-372] 

III. Summary Judgment Evidence Regarding Each Plaintiff’s Role as a 

District Manager

A. Andrew Bowman

Andrew Bowman was a District Manager from 2001 to 2004. [App. 558] All of 

his overtime work as a District Manager, therefore, is subject to the 20% test. 

Mr. Bowman spent more than 20% of his time performing work other than his own 

sales and those tasks incidental to or in conjunction with his personal sales. [App. 558] 

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Mr. Bowman worked 60 to 70 hours each week as a District Manager for 

Cornerstone. [App. 558] He has identified scheduled, weekly meetings that accounted 

for 19 to 23.5 hours of his time each week. [App. 7-8, 12-23, 30, 34, 38-39, 558-559] 

Consequently, even without considering the additional time Mr. Bowman spent each 

week training and managing his sales agent on an unscheduled basis and without 

considering the 10 to 20 hours he spent each week going with his agents on their sales 

appointments, he spent more than 20% of his time on matters that did not relate to his 

outside sales. [App. 7, 36-37, 558] Further, Mr. Bowman’s sales themselves were not all 

completed outside the office. In fact, approximately 20% of his sales meetings were 

conducted at his office. [App. 40, 558]

B. Norman Campbell

Norman Campbell was a District Manager for Cornerstone from October 2000, 

until he was promoted to a Regional Manager in December 2003. [App. 44-45, 561] All 

of his work as a District Manager, therefore, is governed by the 20% test. He spent 

significantly more than 20% of his time on matters unrelated to his own personal sales. 

[App. 561]

Mr. Campbell worked 70 to 80 hours each week as a District Manager for 

Cornerstone. [App. 561] He has identified scheduled or planned meetings and 

activities that accounted for 28.5 to 30 hours of his time each week. [App. 561] In 

addition to these scheduled duties, Mr. Campbell spent numerous additional hours 

performing agent training and management, so that most of his time as a District 

Manager was not spent on his own personal sales. [App. 55-64, 561-562] He also spent 

3 to 7 hours each week on his agents’ sales calls for which he did not share credit for a 

successful sell. [App. 562]

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C. Jeffrey Gessner

Jeffrey Gessner was a District Manager for Cornerstone from March 2001, until 

January 1, 2003, when he was promoted to a Regional Manager. [App. 107, 110, 564] 

All of his time as a District Manager, therefore, is governed by the 20% test. He spent 

significantly more than 20% of his time on matters that were not related to his own 

sales. [App. 564]

Mr. Gessner averaged 60 to 65 hours each week as a District Manager for 

Cornerstone. [App. 134-135, 564] He spent only 16 to 21 hours each week on his own 

sales and matters incidental to his own sales. [App. 115-117, 564] The remainder of his 

time was spent recruiting, training, and managing sales agents. [App. 121-122, 124-125, 

128, 130-132, 564] Mr. Gessner identified 27.5 to 28.5 hours of his time each week that 

was spent on scheduled tasks that were not related to his own sales. [App. 564] After 

considering these scheduled tasks along with the various other unscheduled 

responsibilities he performed that were unrelated to his own sales, Mr. Gessner spent 

the majority of his time on matters other than his outside sales. [App. 132, 564]

D. Bob Howell

Bob Howell was a District Manager from August 2003 until January 2004, when 

he was made a Regional Manager. He stepped down from the Regional Manager 

position in February 2004 and worked as a District Manager again until May 2004. 

[App. 139, 566] All of Mr. Howell’s overtime work at issue in this matter, therefore, is 

governed by the 20% test. He spent much more than 20% of his time on matters that 

were not related to his personal production. [App. 566]

Mr. Howell worked an average of 60 hours each week as a District Manager for 

Cornerstone. [App. 159, 566] He has identified 15.5 to 16 hours each week that were 

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spent on scheduled meetings. [App. 566] Mr. Howell also spent numerous hours each 

week training agents, including listening to and critiquing their phone calls, giving tips 

in sales presentation techniques, and generally mentoring sales agents, that were not 

scheduled and were not conducted in connection with his own sales. [App. 140-141, 

566] He also spent about 4.5 hours each week with agents on their sales calls (for which 

the agent, not Mr. Howell, would receive credit) and spent about 3 hours each week 

with his agents in the neighboring businesses teaching them to get sales leads and 

allowing them to keep any leads obtained. [App. 165-166, 169-170, 566] But even 

without considering this unscheduled time he spent on matters unrelated to his sales, 

Mr. Howell spent more than 20% of his time on scheduled matters that did not relate to 

his outside sales.

E. Donnie Klein

Donnie Klein was a District Manager from April 2002 until November 2002, 

when he left Cornerstone. [App. 177-182, 569] Mr. Klein was recruited by 

Cornerstone’s upper management to come back and work as a Regional Manager in its 

experimental corporate office, so he came back in the middle of 2003 and worked as a 

District Manager for a couple of months before he became the Regional Manager at 

Cornerstone’s experimental corporate office. [App. 177-182, 569] All of Mr. Klein’s 

time as a District Manager is governed by the 20% test. He spent much more than 20% 

of his time on matters other than his personal production. [App. 569]

Mr. Klein worked 60 to 65 hours each week as a District Manager. [App. 569] 

He has specified 16 to 19 hours spent each week on scheduled tasks that were not 

related to his personal sales. [App. 187-211, 569] He was also required to attend special 

weekend events (3 all-day training sessions and manager meetings) that would take 

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place once a month. [App. 211, 569] In addition to these scheduled matters, Mr. Klein 

estimated that he spent at least 18 hours a week on phone calls and ad hoc meetings 

with his agents, going over appointments, answering questions about the applications, 

helping them with the licensing process, discussing sales techniques, and various other 

issues that were not related to and did not enhance his own sales. [App. 213, 569-570] 

Consequently, most of Mr. Klein’s time as a District Manager was spent on matters 

other than his own sales.

F. Mark Mann

Mark Mann was a District Manager from May 1999 to August 2005. [App. 222, 

597] Although most of his time as a District Manager is governed by the 20% test, the 

last year of his work is governed by the “primary duty” test. Mr. Mann testified that he 

spent considerably more than 20% of his time on tasks other than his outside sales and 

that his primary duty as a District Manager was, “to train rookie agents so they could 

get into the field and make money for Cornerstone.” [App. 597]

Mr. Mann worked an average of 58 to 61 hours each week as a District Manager 

for Cornerstone. [App. 239, 597] He has identified 18 hours of time he spent each week 

on scheduled matters that were not for his own sales. [App. 597] In addition to these 

scheduled matters, Mr. Mann spent a significant amount of additional time recruiting, 

training, and mentoring the sales agents under him. [App. 227, 239, 597] He had up to 

75 sales agents assigned under him in the Cornerstone hierarchy. [App. 226, 597] Even 

looking only at the scheduled matters, Mr. Mann spent much more than 20% of his time 

as a District Manager on tasks that did not relate to or further his personal sales.

Mr. Mann’s primary duty was not outside sales, but training new agents. [App. 

597-598] He explained that the hierarchy system at Cornerstone is designed so that the 

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primary duty of a sales agent is to sell, but the primary duty of a district manager is to 

train the sales agents to they can go in the field and sell products for Cornerstone. 

[App. 598] Because there is significant turnover in sales agents, there is a constant need 

to have a manager responsible for training these agents so they can be productive 

members of the team. [App. 598] 

Defendants imply that because Mr. Mann was working outside his house or the 

office he must have been engaged in his own personal production. But Mr. Mann 

explained that when he was in the field he was training new agents between his 

personal appointments. [App. 598] He would usually take a sales agent with him for 

an entire day to be present during his sales presentations. But before and after the sales 

presentations, Mr. Mann would teach the sales agents sales techniques, such as 

visualization skills and why he presented in a certain order, how to overcome customer 

objections, and how to close a sale. [App. 598] He would ask the agents to watch his 

presentation and be ready with any questions they might have so that after the call he 

could answer those questions. [App. 598] Mr. Mann stated that it was more difficult 

for him to make a sale when he had agents with him, but that he had to have them there 

as part of his field training. [App. 245, 598] Consequently, even though Mr. Mann 

might have been outside the office, he was spending a significant portion of his time 

training new agents in a way that did not further his own sales. 

G. David Young

David Young was a District Manager from April 2000 until he was promoted to a 

Regional Manager in October 2002. [App. 250-252] All of Mr. Young’s overtime, 

therefore, is subject to the 20% test. Mr. Young spent significantly more than 20% of his 

time on matters that were not related to his own sales. [App. 258, 267, 270-286]

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Mr. Young worked 60 to 70 hours each week as a District Manager for 

Cornerstone. [App. 261] Mr. Young spent 10 hours a week on the phone with his 

agents coaching and training them. [App. 279] He would lead weekly sales meetings 

for agents that would take 2.25 to 2.5 hours. [App. 279-280] He would facilitate initial 

training sessions for new agents twice a month that would last from 1 to 3 days. [App. 

282-283] He would have Friday turn-in meetings that lasted 1.5 hours. [App. 281-282] 

It would take him 1.5 hours each week to pass out leads for his agents. [App. 284] Mr. 

Young was also responsible for recruiting new agents and would make 100 calls and 

send 200 emails each week in recruiting efforts. [App. 270-272] He would attend a 2-

hour group recruiting meeting every other week, and would conduct 1.5 hours of oneon-one interviews three times a week. [App. 273, 275] Mr. Young would also handle a 

significant amount of paperwork, including sales contracts, applications, reports, 

number crunching, keeping track of agents’ appointments and sales, managing resumes 

(which alone took 1 hour each week), managing leads, and reviewing agents’ contracts. 

[App. 283-286] Based on his deposition testimony, Mr. Young identified 21.75 to 22 

hours of work he conducted each week that was not related to his personal sales and 

identified numerous other meetings and activities for which he did not provide an 

amount of time. [App. 258, 267, 270-286] This was much more than 20% of his time as a 

District Manager.

H. Eric Dodson

Eric Dodson was a District Manager from April 2005 to June 2007. [App. 290, 

572] All of his time as a District Manager is, therefore, governed by the primary duty 

test. Although almost half of Mr. Dodson’s 60 hours each week were spent on personal 

production, he described his primary duty as a District Manager, “was to assume 

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responsibility for sales agents, training, mentoring, and spending time with them so 

they would become successful sales agents.” [App. 291-292, 572] 

Mr. Dodson kept in constant contact with his 12 to 15 sales agents on the phone 

and in face-to-face meetings. [App. 291-293, 572] He had formal training sessions with 

his agents as well as gave them general advice, helped them fill out their applications, 

answered questions about the insurance products they were selling, and generally 

mentored them to be successful sales agents. [App. 572] Mr. Dodson even went out 

into the field with his agents at least 6 times a week on his agents’ sales appointments to 

help train them in the field, even though he did not receive any credit for these sales 

and made no more money than if he had not gone on the call. [App. 572] He did this to 

observe their sales techniques and provide feedback to assist them in being better 

salespersons. [App. 572] In explaining why training and mentoring sales agents was 

his primary duty he stated: “my Regional Sales Leader and Cornerstone relied on my 

ability to manage, train, and mentor the sales agents for the success of the hierarchy and 

the company.” [App. 572]

I. Carl France

Carl France was a District Manager from September 2003 until May 2005, when 

he moved from Washington to Idaho, and again from July 2005 to July 2006. [App. 334-

339, 576] Although part of his time as a District Manager is governed by the 20% test, 

the last two years of his work is governed by the “primary duty” test. Mr. France 

testified that he spent more than 20% of his time on tasks other than his outside sales 

and that his primary duty as a District Manager was, “to manage and train the sales 

agents under me.” [App. 340-341, 576]

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Mr. France worked an average of 55 to 60 hours each week as a District Manager. 

[App. 340, 576] He identified 12 hours of time he would average each week based on 

standing meetings (including his standing weekly meetings and his standing monthly 

meeting in Seattle). [App. 348-356, 576] But he performed numerous managerial tasks 

in addition to these standing meetings. [App. 576] Mr. France estimates that he spent 

in excess of 30 hours each week training and recruiting agents in a manner that was not 

related to his own personal sales. [App. 576]

Mr. France explained that even though almost half of his time was spent on 

personal production, his primary duty as a District Manager was not selling policies. 

When he was a sales agent, his primary duty was selling policies, but once he became a 

District Manager his “role changed dramatically.” Mr. France described this change in 

his role once he became a District Manager as follows: “I went from being a member of 

a team responsible from my production to being the quarterback of the team 

responsible for making sure the entire team of agents below me were properly trained 

and successful.” [App. 576] He explained that it was his “duty to make sure the agents 

were trained, had leads, were successful and not being left behind. Tending to the sales 

agents was my primary duty and personal production is something I did in the time I 

could make available.” [App. 576]

J. Clyde Robert Jetter, Jr.

Clyde Robert Jetter, Jr., first signed a contract to be a District Manager for 

Cornerstone in February 2006 and remained a District Manager until June 2006. [App. 

574] All of his time as a District Manager is, therefore, governed by the primary duty 

test. 

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Mr. Jetter spent about 30% of his 66 to 71 hours each week on personal 

production. [App. 322-325, 574] He testified his primary duty as a District Manager 

was to manage and train sales agents. [App. 574] He explained that once he went from 

being a sales agent to a District Manager his “role changed from one of selling to 

managing.” [App. 574] He was required to be available to his agents at all hours of the 

day and would receive calls from agents asking questions about the insurance products 

and seeking advice and guidance. [App. 307-308, 574] He was required to evaluate the 

sales agents, assess their performance, set their goals, monitor their advertisements, and 

handle their complaints. [App. 327, 329, 574]

K. Glenn Marshall

Glenn Marshall first became a District Manager in September 1996 and went 

back to being a sales agent for a couple of months in 1997 before he was promoted again 

to District Manager in March 1997 and remained a district manager until he was 

required to leave because of Hurricane Katrina in August 2005. [App. 594] Although 

most of Mr. Marshall’s time as a District Manager will be governed by the 20% test, the 

last year of his time is subject to the primary duty test. 

Mr. Marshall worked 60 to 65 hours a week as a District Manager for 

Cornerstone. [App. 373, 594] He spent more than 20% of his time on tasks other than 

outside sales and matters incidental to or in conjunction with his own outside sales. 

[App. 594] Mr. Marshall specifically identified 16 to 16.5 hours of his time that he 

would spend each week on planned matters that were not related to his personal 

production. [App. 594] He also spent considerable time on various other matters as a 

District Manager that were unplanned or unscheduled and did not assist in his personal 

production. [App. 594] 

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Mr. Marshall described his primary duty as a District Manager for Cornerstone 

was, “managing sales agents by helping to hire and train sales agents and completing 

paperwork with regard to those managerial duties.” [App. 595] Mr. Marshall was 

required, as part of his district manager responsibilities, to run an office in Jackson, 

Mississippi. [App. 595] He was responsible for checking the paperwork of all the 

agents under his Regional Manager (not just his agents). [App. 371] He was also 

required to spend time between his personal appointments training sales agents in the 

field on sales strategies and techniques. [App. 365-366, 369, 595] Mr. Marshall 

explained that “Cornerstone and my regional managers relied on me to make sure the 

sales agents were trained and producing effectively.” [App. 595]

L. William Matles

William Matles was a District Manager from October 2003 to April 2005 and 

again from October 2005 to April 2007. [App. 378-381, 582] Thus, while the first year of 

his management is governed by the 20% test, the remainder of his time is governed by 

the primary duty test. 

Mr. Matles worked 60 to 70 hours each week as a District Manager. [App. 389, 

582] He spent 20 to 30 hours each week on matters that were not incident to his own 

sales. [App. 395-396, 582] Consequently, he spent much more than 20% of his time on 

matters other than his outside sales.

Mr. Matles testified that his primary focus as a District Manager, “was to conduct 

field training with my sales agents to the point where all of my time on personal 

production was part of field training.” [App. 582] During his deposition, Mr. Matles 

stated that he had about 40 hours each week that he could focus on his personal 

production. [App. 395, 582-583] But part of that time he was trying to work on his 

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personal production, he was actually required to spend with his sales agents. [App. 

582-583] For example, when he was in the office trying to make his phone calls to set up 

appointments, he would often have to spend some of his time listening to his agents 

make phone calls and critiquing their phone style. [App. 582-583] Also, when he was 

out in the field trying to run appointments, sometimes he would be required to go on 

one of his agents’ sales to watch their technique and give them training. [App. 384-385, 

582-583] He spent 4 to 6 hours of his 40 hours watching and listening to his sales agents 

make their own sales. [App. 583] Further, he would routinely provide field training to 

agents between his appointments, so that when he was driving to an appointment or 

back from an appointment, he would be training agents. [App. 583] Taking this field 

training into consideration in addition to his in-house training, Mr. Matles spent more 

time training agents than he did on his personal sales. [App. 583] The focus of his 

duties as a District Manager was training, not personal sales.

M. Jose Quintero

Jose Quintero was a District Manager from April 2, 2004 until March 2007. [App. 

404, 406, 585] Thus, while the first five months of his management is governed by the 

20% test, the remainder of his time is governed by the primary duty test.

Mr. Quintero worked an average of 57 hours each week as a District Manager. 

[App. 408, 505] He identified 17 to 18.5 hours each week when he conducted scheduled 

meetings and tasks that had nothing to do with his personal production. [App. 585] In 

addition to these schedules matters, Mr. Quintero spent approximately 6 hours each 

week with agents on their sales calls for which he did not receive credit. [App. 585] 

Even without considering the various times Mr. Quintero was required to attend ad hoc 

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week, Mr. Quintero spent considerably more than 20% of his time on matters that were 

not related to his personal sales. [App. 408-409, 586]

Mr. Quintero’s regional manager was in Houston, Texas, so that Mr. Quintero 

was solely responsible for running his office in San Antonio, Texas. [App. 407, 586] 

Mr. Quintero was required to be in the office every day, where he fulfilled all of the 

administrative duties, such as filling out hiring packets, checking agents’ paperwork, 

distributing leads to his agents, ensuring his agents had brochures and applications, 

sending paperwork to the corporate offices, and fielding recruiting calls, as well as 

substantive managerial matters that did not involve his personal sales, such as 

interviewing recruits and in-house training of sales agents on Cornerstone’s products 

and guidelines and sales techniques. [App. 586] 

Mr. Quintero described his primary duty as a District Manager as training new 

people to become sales agents. [App. 585-586] Although he was still required to 

maintain personal production, once he became a District Manager that took a secondary 

role to his running the San Antonio office and training sales agents. [App. 586]

N. Audra Thompson

Audra Thompson was a District Manager from November 2003 until July 2005. 

[App. 429, 434, 591] Consequently, about half of her time as a District Manager is 

governed by the 20% test and half is governed by the primary duty test. 

Ms. Thompson worked 60 to 70 hours a week as a District Manager. [App. 441, 

591] She spent 25 to 30 hours on personal production and 35 to 40 hours1 on matters 

 1 Defendants attempt to reduce the amount of time she testified she spent doing things 

other than personal production. First, they claim “[m]uch of the paperwork Thompson 

completed was incidental to her sales. . . .” [Defendants’ Memo., p. 27] Although it is true Ms. 

Thompson’s sales did have paperwork associated with them, there is no basis for inferring that 

“much of her paperwork” was for her own sales. Ms. Thompson testified that the paperwork 

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that did not involve her own sales. [App. 442-443, 453, 591] Consequently, she spent 

considerably more than 20% of her time on matters unrelated to her own outside sales.

Ms. Thompson has testified her primary duty as a District Manager for 

Cornerstone was training sales agents. [App. 430, 591-592] She had to spend less time 

on personal sales than she did when she was a sales agent, because her primary 

function was to manage and train agents and she had to squeeze her personal 

production time around her primary functions. [App. 592]

O. Michael Vogler

Michael Vogler was a District Manger from July 2004 until October 2005. [App. 

458-462, 579] Consequently, his time as a District Manager is split between the 20% test 

and the primary duty test. 

Mr. Vogler worked 54 to 67 hours each week as a District Manager. [App. 475, 

579] Mr. Vogler identified more than 17 hours of time each week he would spend on 

regularly scheduled tasks that did not involve his own sales. [App. 464-474, 579] He 

had 32 agents under him, so he also spent a significant amount of unscheduled time 

throughout the week fielding calls from agents at all different times to help them with 

product information, sales techniques, filling out paperwork, and other issues that did 

not involve Mr. Vogler’s own sales. [App. 579] Thus, Mr. Vogler spent much more 

 

she reviewed was for all of the agents under her Regional Manager, which most logically results 

in an inference that most of the paperwork she was reviewing was that of the agents, not her 

own. [App. 443] Second, Defendants imply Ms. Thompson spent less than half of her time on 

tasks other than personal production by claiming she spent only 20-25 hours on training, 

recruiting, and paperwork. [Defendants’ Memo., p. 27] But Ms. Thompson testified that only 

25 to 30 of her 60 to 70 hours was spent on personal production: “Q: Of that 60 to 70 hours a 

week, how many hours would you estimate, or how many – what percentage of that time 

would you estimate was time spent on personal production? A: I’d say probably only about 25 

to 30 hours.” [App. 442] Consequently, Ms. Thompson testified she spent 35 to 40 hours each 

week on non-personal production, not the figure Defendants put in their Memorandum.

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than 20% of this time each week on tasks other than his own outside sales and matters 

incident to those sales.

Mr. Vogler testified his primary duty as a District Manager was, “to manage and 

build a team of successful sales agents.” [App. 579-580] Mr. Vogler stated that when he 

went from being a sales agent to a District Manager his “responsibilities changed 

dramatically.” [App. 461, 463, 580] He was required to wear a coat and tie at the office 

to display a “corporate image.” [App. 477, 580] He went from purely selling product to 

making sure the agents were a “successful team.” [App. 580] Mr. Vogler explained his 

role as follows: “My role was to teach agents how to make presentations, fill out 

paperwork, and most importantly how to build business prospects. It was this 

management and team building that dictated how I spent most of my time and I was 

required to fit my personal sales into the gaps when I could find some time.” [App. 

580]

P. Stephen Wike

Stephen Wike was a District Manager from March 2001 to August 2003 and again 

from June 2005 until November 2005. [App. 485-487, 494-497, 588] Although most of 

his time is governed by the 20% test, his second stent as a District Manager is subject to 

the primary duty test.

Mr. Wike worked 60 to 65 hours each week as a District Manager for 

Cornerstone. [App. 503, 588] He spent 20 to 25 hours each week on personal 

production, and 20% of that personal production constituted sales made at his office. 

[App. 500, 503-505, 588] Mr. Wike has identified 31.5 to 32.5 hours he spent each week 

on scheduled meetings during his first tenure as a District Manager, when he was 

running a satellite office. [App. 510-521, 588-589] He identified 16 to 19 hours of 

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scheduled meetings during his second tenure as a District Manager. [App. 589] In 

addition to these hours spent on scheduled meetings and training sessions, Mr. Wike 

spent additional time tending to his management duties, such as training agents in his 

office, preparing reports for his Regional Managers regarding his sale agents’ 

productivity, and answering agents’ questions. [App. 589] These duties that had 

nothing to do with his own personal sales took the majority of Mr. Wike’s time as a 

District Manager, and far in excess of 20% of this weekly time.

Mr. Wike testified his primary duty as a District Manager was to train new 

agents, so they could begin to write business. [App. 588-589] Although he was 

required to maintain a certain level of personal production, he spent significantly less 

than half of his time on his own sales. [App. 589] He explained that the focus of his job 

was not on his own sales, but rather, on his role as a sales trainer and manager. [App. 

488-490, 589]

ARGUMENTS & AUTHORITIES

I. Standard of Review

The party seeking summary judgment always bears the initial responsibility of 

informing the court of the basis for its motion and identifying those portions of the 

“pleadings, depositions, answers to interrogatories, and affidavits, if any,” that 

demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 

U.S. 317, 323, 106 S.Ct. 2548 (1986). To determine whether summary judgment is 

appropriate, the record presented is viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 

S.Ct. 1348 (1986). The Court must review all of the evidence in the record, but make no 

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determinations of credibility or weigh any evidence, disregard all evidence favorable to 

the moving party that the jury is not required to believe, and give credence to the 

evidence favoring the non-moving party as well as uncontradicted and unimpeached 

evidence that supports the moving party. Moore v. Willis Indep. Sch. Dist., 233 F.3d 871, 

874 (5th Cir. 2000).

“The district court’s determination as to whether an employee is exempt under 

the [FLSA] is primarily a question of fact.” Cobb v. Finest Foods, Inc., 755 F.2d 1148, 1150 

(5th Cir. 1985). When an employer asserts an FLSA exemption, it bears the burden of 

establishing it is entitled to the benefits of the exemption. Edwards v. Alta Colleges, Inc., 

2005 WL 578333, *6 (W.D. Tex. Jan. 28, 2005). Moreover, when analyzing the 

applicability of the outside sales exemption, the Court should heed the mandate of the 

United State Supreme Court that, “exemptions are to be narrowly construed against 

the employers seeking to assert them and their application limited to those 

establishments plainly and unmistakably within their terms and spirit.” Arnold v. Ben 

Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453 (1960) (emphasis added).

II. The Outside Sales Exemption – Generally

Defendants are requesting this Court find that as a matter of law all of 

Cornerstone’s district managers are exempt from the FLSA’s wage and hour 

requirements because they are outside salesmen. 29 U.S.C. §213(a)(1). As discussed 

below, the Department of Labor modified the standard by which one determines 

whether an employee falls within the outside sales exemption as of August 23, 2004. 

Specifically, the standard changed from a pure mathematical calculation of whether the 

employee spent at least 80% of his time on outside sales to whether the employee’s 

primary duty was outside sales. Because some of these Plaintiffs were district managers 

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for Cornerstone before those modifications, some after the modification, and some 

during both periods, each Plaintiff’s status must be determined in light of when he or 

she was employed as a district manager. Although the differences in the standards or 

tests that apply to the various district managers might require the Court to address the 

employees on an individualized basis, there are common issues to the status of these 

employees because they were all employed by Cornerstone to perform essentially the 

same duties as district managers. 

Much of Defendants’ arguments in support of their request for summary 

judgment are based on the role these Plaintiffs fulfilled when they were initially hired 

by Cornerstone as sales agents. Defendants continually refer to what the Plaintiffs 

understood their role to be when they were brought on to sell insurance and that they 

were required to be licensed. But Plaintiffs are not claiming they were employees for 

purposes of the FLSA when they were hired as sales agents; rather, once they were 

promoted to district manager their role changed dramatically. There is no question that 

even after they were promoted into management all district managers, regional 

managers, and area managers were required to maintain their licenses to sell insurance 

and were still under contract with Cornerstone as sales agents. The issue that is before 

the Court (which is similar to the issue that was before the Court when it held the 

managers were employees and not independent contractors) is the distinction between 

the duties of a sales agent and those of a manager. 

The district court in the Western District of Texas addressed a similar issue in 

Edwards v. Alta Colleges, Inc., supra. The issue in Edwards was whether the plaintiff’s 

work as a recruiter for an educational institution subjected her to the outside sales 

exemption. That plaintiff was originally hired as a Field Admissions Representative 

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(FAR), in which she would sell educational programs to prospective students. Edwards, 

at *1. The plaintiff was promoted to the position of Assistant Regional Manager (ARM), 

in which her duties included both sales and training of FARs. Id. Much like the district 

managers in this case, that plaintiff remained a FAR during her whole tenure and after 

her promotion was both a FAR and an ARM. Id. As an ARM, the plaintiff would make 

her sales presentations accompanied by FAR-trainees, would attend the FAR-trainees’ 

own sales presentations, followed up with her FARs by phone, and listened to her FARs 

make phone calls to prospective customers. Id. Both parties agreed the plaintiff’s 

duties as a FAR constituted outside sales. Id. at *7. 

The employer in Edwards argued the plaintiff’s duties were primarily her FAR 

sales duties with some training of other sales personnel. Edwards, *9. In support of its 

argument, the employer cited cases holding that employees who sold similar education 

programs were subject to the outside sales exemption. Id. at 8. The court distinguished 

those other cases, however, because they did not involve an employee who has been 

promoted from mere sales to the managerial position of a sales trainer. Id. at *9 

(“Neither of those courts addressed the training component of ARM work. Rather, they 

merely adjudicated FAR and FAR-like sales duties.”). In denying the employer’s 

request for summary judgment, the court found:

The evidence in this case establishes that most of the training component 

of plaintiff’s ARM work was not exempt sales work. For example, when 

plaintiff attended sales presentations made by her FAR-trainees, any sales 

made were credited to the trainee’s account – not plaintiff’s. For the same 

reason, any work plaintiff did coaching, advising or observing her FARtrainees either in-person or over the telephone cannot properly be 

considered sales or work “incidental to or in conjunction” with plaintiff's

sales.

Edwards, at *9 (emphasis in original).

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Much like the employer in Edwards, Defendants are claiming these district 

managers should be exempt from overtime pay because although they are now in 

management, they still also sell products. Defendants are failing to recognize the 

drastic change in duties these Plaintiffs underwent once they were promoted from sales 

agent to district manager. In granting Plaintiffs’ Motion for Summary Judgment on 

their status as employees, this Court has already recognized the primary duty of the 

district manager is no longer to sell insurance but to now manage the sales agents. 

Cornerstone’s reason for promoting these Plaintiffs from sales agents to district 

managers was to have them manage and train the sales agents under them in their 

hierarchical system.

 III. Pre-August 23, 2004 Outside Sales Exemption – The 20% Test

For work performed by Plaintiffs as district managers before August 23, 2004, the 

standard by which their status is evaluated is a pure mathematical test. If the Plaintiffs 

spent more than 20% of their time on work other than their own personal sales and 

work incidental to or in conjunction with their own personal sales, they are not subject 

to the outside sales exemption. 29 C.F.R. §541.5. 

All of the Plaintiffs who worked as district managers before August 23, 2004, 

have presented summary judgment evidence that they spent far in excess of 20% of 

their time each week on duties that had nothing to do with their personal sales: 

Bowman [App. 558]; Campbell [App. 561]; Gessner [App. 564]; Howell [App. 566]; 

Klein [App. 569]; Mann [App. 597]; Young [App. 258, 267, 270-286]; France [App. 340-

341, 576]; Marshall [App. 594]; Matles [App. 389, 395-396, 582]; Quintero [App. 408-409, 

586]; Thompson [App. 441-443, 453, 591]; Vogler [App. 475, 464-474, 579]; and Wike 

[App. 500, 503-505, 588]

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In fact, Plaintiffs were able to identify far more than 20% of their time that was 

required to be spent in various standing, weekly meetings, such as in-house agent 

training sessions, recruiting sessions, call-in conferences (where the agents would call in 

to the district manager their scheduled appointments and sales figures and the district 

manager would report those to his or her regional manager), and turn-in meetings. [Id.] 

Although these standing meetings account for more than 20% of the district managers’ 

time each week, they are not, by any means, the only time the district managers spend 

training and managing their sales agents.

The Court should deny Defendants’ request for summary judgment as to these 

Plaintiffs who worked as district managers before August 23, 2004.

IV. Post-August 23, 2004 Outside Sales Exemption – The Primary Duty Test

Several of these Plaintiffs also worked as district managers for Cornerstone on 

and after August 23, 2004. For this time, the Court’s analysis of these Plaintiffs is 

conducted under the “primary duty” test. The standard for determining whether the 

outside sale exemption applies is set forth in 29 C.F.R. §541.500:

(a) The term “employee employed in the capacity of outside salesman” 

in section 13(a)(1) of the Act shall mean any employee:

(1) whose primary duty is:

(i) making sales within the meaning of section 3(k) of the Act, or

(ii) obtaining orders or contracts for services or for the use of facilities 

for which a consideration will be paid by the client or customer; and

(2) Who is customarily and regularly engaged away from the 

employer’s place or places of business in performing such primary duty.

(b) The term “primary duty” is defined at §541.700. In determining the 

primary duty of an outside sales employee, work performed incidental to 

and in conjunction with the employee’s own outside sales or solicitations, 

including incidental deliveries and collections, shall be regarded as 

exempt outside sales work. Other work that furthers the employee’s sales 

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efforts also shall be regarded as exempt work including, for example, 

writing sales reports, updating or revising the employee’s sales or display 

catalogue, planning itineraries and attending sales conferences.

29 C.F.R. §541.500. The term “primary duty” is defined generally for all types of 

exemptions, in part, as follows:

The term “primary duty” means the principal, main, major or most 

important duty that the employee performs. Determination of an 

employee’s primary duty must be based on all the facts in a particular 

case, with the major emphasis on the character of the employee’s job as a 

whole.

29 C.F.R. §541.700.

Unlike the 20% test, the primary duty test is not necessarily based on the amount 

of time the employee spends on particular tasks. “[A]n employee’s ‘primary duty’

cannot be ascertained by applying a simple ‘clock’ standard that contrasts the amount 

of time each day an employee spends on exempt and nonexempt work.” Dalheim v. 

KDFW-TV, 918 F.2d 1220, 1227 (5th Cir. 1990). Consequently, even though Plaintiffs 

have testified they spent most of their time on managerial duties that were not part of 

their own sales, this is merely one of the factors the Court should consider.

In this case, the totality of the circumstances demonstrates the primary duty of 

these Plaintiffs, as district managers, was to manage and train sales associates. 

Although they were required to maintain personal sales production, that was not their 

primary duty. The Court need look no further than Defendants’ own documents to 

determine the primary role of its district managers (which were previously called sales 

trainers) was not their own sales.

Defendants conducted Cornerstone University, which was a training session for 

managers. In one of the documents expressly addressed to district managers, 

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Defendants admit the primary role of district managers is to manage the sales agents 

under them:

As a Sales Trainer/District Manager, you have a variety of roles, however, 

your primary role is that of role model, mentor and coach for the agents 

on your team. Your focus should be on helping your team members 

achieve their dreams.

[App. 538 (emphasis added)] Likewise, the addendum contract Defendants required an 

employee to sign upon becoming a district manager outlines the duties of a district 

manager. These duties begin with recruiting and training new sales agents and address 

various other managerial tasks that do not further the district managers’ own sales. 

[App. 48, 420] This Court reiterated the district managers’ responsibilities in its Order 

on the Motion for Summary Judgment regarding employment status, as follows:

District managers’ responsibilities were to recruit and train new sales 

agents, see that agents under them complied with the agent contracts and 

with Cornerstone’s rules, procedures and guidelines, inform Cornerstone 

of any violations by a sales agent, safe guard leads obtained through 

Cornerstone’s “LEAD Program,” and distribute the leads to sales agents 

under them.

[Doc. #104, p. 5]

This Court has also specifically stated that one of the reasons it found Plaintiffs 

were employees is because, “as managers, Plaintiffs’ primary job no longer involved 

actually selling Defendants’ insurance policies, but, rather, involved managing 

insurance agents and managers under them.” [Doc. #123, p. 8 (emphasis added]

Although each of the Plaintiffs might state their primary duty as a district 

manager slightly different, they all testified that their primary duty involved 

management of the sales agents under them, primarily with a focus on training. [Mann, 

App. 597-598; Dodson, App. 572; France, App. 576; Jetter, App. 574; Marshall, App. 595; 

Matles, App. 582-583; Quintero, App. 585-586; Thompson, App. 430, 591-592; Vogler, 

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App. 461, 463, 579-580; Wike, App. 588-589] More important, none of them described 

their primary duty as making sales outside the office. [Id.] 

When analyzing the primary duty of district managers, it is important to 

understand why Cornerstone placed an emphasis on their role as managers. 

Cornerstone is designed under a hierarchical system. It has a high turnover of sales 

agents. Consequently, it relies heavily upon district managers to train this continual 

flow of new sales agents so they can go into the field and sell Cornerstone’s products. 

Mark Mann, who was a district manager for more than six years before being fired for 

bringing this lawsuit, explained his primary duty was “to train rookie agents so they 

could get into the field and make money for Cornerstone,” later adding:

The Cornerstone hierarchy system is created so that the company relies on 

District Managers to train the rookie sales agents. There is a lot of 

turnover in agents, so the company could not be productive without a 

strong training force getting those agents to be productive.

[App. 598] Eric Dodson explained the importance of his role as a manager as follows: 

“my Regional Sales Leader and Cornerstone relied on my ability to manage, train, and 

mentor the sales agents for the success of the hierarchy and the company.” [App. 572] 

Glenn Marshall also mentioned the importance of his role as a manager to the 

Cornerstone system: “Cornerstone and my regional managers relied on me to make 

sure the sales agents were trained and producing effectively.” [App. 595]

In order to reach the conclusion that outside sales are the primary duty of the 

district managers, Defendants have to take the position that every minute the district 

managers are outside the office they are working toward their own sales. This is not the 

case. All of the district managers spent a portion of their time outside the office training 

their sales agents in a way that was not incidental to or in conjunction with their own 

outside sales. For example, all of the district managers testified they spent part of their 

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time in the field observing their sales agents make appointments and then offering 

advice and critiques of the agents’ presentations. The district manager would not share 

the credit for those calls.2 District Managers also provided training to their sales agents 

in between their own appointments. Although the time spent in the appointment 

would constitute the district manager’s own sale, the time before and after the 

appointment that the district manager spent training the agent in the field was not part 

of that sale and did not further the district manager’s own productivity. In fact, several 

district managers complained that taking agents with them made it more difficult to

close a sale, but they took the agents along because it was part of their duty to train.

The term “primary duty” is defined as, “the principal, main, major or most 

important duty that the employee performs.” 29 C.F.R. §541.700(a). The most 

important duty the district managers performed was the day-to-day management of 

Cornerstone’s sales agents. Not only did this duty of managing the team of sales agents 

take most of the district managers’ time, it was the reason Cornerstone had district 

managers. Although the district managers still had to maintain their own sales, their 

primary job no longer involved selling the policies, but managing the sales agents 

under them in the hierarchy. 

 2

 Although the district managers make an overwrite commission on all their agents’ sales, 

managers would have made just as much money if they did not go to the agent’s appointment. 

Consequently, attending those appointments does not constitute sharing commissions.

Case 4:05-cv-00332-Y Document 234 Filed 10/01/2009 Page 33 of 34
Plaintiffs’ Memorandum in Support of Response to Defendants’ Page 31

Motion for Partial Summary Judgment (Outside Sales Exemption)

PRAYER

Plaintiffs request the Court deny Defendants’ Motion for Partial Summary 

Judgment on the issue of outside sales exemption and find none of these Plaintiffs are 

exempt from receiving overtime pay because of the outside sales exemption.

Respectfully Submitted,

WATTS GUERRA CRAFT, LLP

By: /s/ Francisco Guerra, IV.______

Mikal C. Watts

State Bar No. 2098120

Francisco Guerra, IV.

State Bar No. 00796684

Bank of America Plaza

300 Convent, Suite 100

San Antonio, Texas 78205

(210) 527-0500 

(210) 527-0501 Facsimile

mcwatts@wattslawfirm.com

fguerra@wattslawfirm.com

CERTIFICATE OF SERVICE

I certify that a true copy of the above and foregoing was served on each attorney 

of record or party in accordance with the Federal Rules of Civil Procedure on the 1st day of 

October, 2009.

__/s/ Francisco Guerra, IV.__________

Francisco Guerra, IV.

Case 4:05-cv-00332-Y Document 234 Filed 10/01/2009 Page 34 of 34