By: Ty Hyderally, Esq, Francine Foner, Esq.

March 19, 2025

An employee’s job title alone does not determine whether an employee is properly classified as exempt from the protection of state and federal wage laws. Rather, an employee’s specific job duties and responsibilities must be carefully reviewed to see if those duties allow an employer to classify the employee as an exempt employee who is not entitled to overtime pay.  The New Jersey District Court recently applied this principle to find that an employee who worked for a used car sales dealer adequately alleged in his complaint that, despite his job title of inside sales representative, his actual job duties were not those of an salesperson, sufficient to meet the requirements to be exempt from having to be paid overtime pay.

In Savage v. Autolender’s Liquidation Ctr., Inc., 2025 U.S. Dist. LEXIS 30674, 2025 WL 559706 (D.N.J., Feb. 20, 2025), the plaintiff, Patrick Savage (Mr. Savage) alleged that Autolender’s Liquidation Center, Inc., Algo, LLC and Certified Automotive Lease Corporation (Defendants) hired him on April 10, 2023 to work as a “virtual buyer and inside sales representative” at their New Jersey used vehicle sales and lease business.  In that role, Mr. Savage asserts that he was tasked with going through company leads of potential customers seeking a quote on the sale of their used vehicle, verifying the type of vehicle, its condition and other data, speaking to a supervisor to obtain a quote and then clicking “accept” in the computer system if the customer agreed to the quote. After that, Mr. Savage was no longer involved in any subsequent sales activities. Rather, the computer automatically transmitted an email to the customer and customer support then took over to complete the purchase. Thus, despite his title, Mr. Savage alleged that “he was never involved in actual sales.”

As a non-sales employee Mr. Savage believed that he was a “non-exempt” employee entitled to overtime pay. However, Mr. Savage alleged that despite that he averaged working at least forty-five (45) hours per week, Mr. Savage was not compensated for any overtime hours. Mr. Savage also alleged that his employer did not make any effort to track or record the actual hours that he worked for Defendants. In late June or early July 2023, when Mr. Savage asked why he was not being paid overtime, his employer asserted that Mr. Savage was an “exempt employee” (i.e., exempt from the protection of the wage laws which provide for overtime) and therefore was not entitled to overtime. Mr. Savage then asked Human Resources for clarification on why his position would be considered exempt, since his duties did not appear to fit the definition of an exempt employee under the wage laws. Mr. Savage’s concerns about his misclassification and unpaid overtime culminated in a meeting with management on August 14, 2023. Mr. Savage alleged that at that meeting he “was handed a printout and ‘aggressively’ informed that his position fell under the administrative exemption of state and federal wage-and-hour laws.” On August 30, 2023, Mr. Savage was terminated from his position. In the termination letter, the company specifically referenced the meeting on August 14, 2023.

Mr. Savage then brought a lawsuit against Defendants for retaliatory discharge in violation of the Fair Labor Standards Act (FLSA) and the New Jersey Conscientious Employee Protection Act (CEPA) and failure to pay overtime in violation of The New Jersey Wage and Hour Law (NJWHL) and FLSA. Defendants moved to dismiss Mr. Savage’s case, based upon their contention that he “was exempt from overtime under federal and state law because he was a salesman primarily engaged in selling automobiles” and received commissions. With regard to Mr. Savage’s retaliation claims, Defendants argued that Mr. Savage failed to establish a causal connection between Mr. Savage’s complaints in June or early July 2023 and his termination on August 30, 2023, because his termination was too far after his complaints to show that the termination was related to his complaints. Defendants further argued that Mr. Savage’s CEPA claim should be dismissed because it was not credible for Mr. Savage to believe Defendants were violating the law, because during the meeting on August 14, 2024 Defendants showed him a copy of the wage law exemption.  The New Jersey District Court disagreed with all of Defendants’ contentions and denied their motion to dismiss Mr. Savage’s claims.

The Court found that despite his title, Mr. Savage alleged sufficient facts to support that he did not meet the statutory definition of either the vehicle salesperson exemption or the inside sales employee exemption. Rather, because Mr. Savage’s role did not involve his actual participation in any sale and he did not have any post-sale role, the Court found he was not primarily engaged in sales of vehicles to the ultimate purchasers and therefore did not qualify for either exemption. In addition, the Court found that Defendants did not meet their burden to show that Mr. Savage was paid bona fide commissions, rather than “performance bonuses” as alleged by Mr. Savage, because it was “unclear whether any bonus or commission paid to plaintiff was proportional to the charges passed on to the consumer.”  The Court also found that the time span between Mr. Savage’s complaints and his termination was short enough to allow an inference that Mr. Savage’s termination was in retaliation for his complaints. However, the Court observed that not only temporal proximity supported that his termination was based on Mr. Savage’s complaints, but also the fact that in their termination letter Defendants “specifically referenced the August 14, 2023 meeting as an example of plaintiff being insubordinate and counterproductive.”

This holding demonstrates that employers cannot classify an employee as an exempt salesperson based solely upon their designating a position as a “sales” position, when in reality an employee’s job duties fall short of the statutory definition of the exemption. If you believe that you have been improperly classified as an exempt employee, you should consult with a qualified attorney to determine your rights.

En nuestra firma hablamos español. This blog is for informational purposes only. It does not constitute legal advice and may not reasonably be relied upon as such. If you face a legal issue, you should consult a qualified attorney for independent legal advice regarding your particular set of facts. This blog may constitute attorney advertising. This blog is not intended to communicate with anyone in a state or other jurisdiction where such a blog may fail to comply with all laws and ethical rules of that state or jurisdiction.