On December 1, 2015, the U.S. District Court for the Northern District of Texas granted conditional certification in Fustos v. White Jacobs & Associates Inc., Case No. 3:15-cv-02572, for commission-paid salespeople who sold credit repair services. In this credit repair salesperson overtime lawsuit, the workers alleged they were misclassified as exempt and paid only commissions. The court rejected the defendants’ requests to narrow the collective to one company and a shorter time period. The Siegel Law Group represented the workers.
Judge Jorge A. Solis signed the order on December 1, 2015. The defendants were White, Jacobs & Associates, Inc. (“WJA”), Tucker, Albin and Associates, Incorporated (“TAA”), and two individual defendants. The defendants opposed conditional certification and objected to the proposed notice.
The court found that the workers had met the lenient standard for this early stage. The named plaintiff and four other declarants gave substantial allegations that they and other putative class members were victims of a single decision, policy, or plan.
The order also noted consents to join from eight people.
The order uses the word “class,” but the group is an FLSA collective. In close paraphrase, the collective the court conditionally certified in 2015 included the defendants’ current and former employees who met three conditions:
The court approved the workers’ notice and consent form, with one change to show the start date of the period. Workers could get the notice by mail and email. It also had to be posted at each of the defendants’ facilities that employed people who sold credit repair services.
The defendants had until December 4, 2015, to disclose potential plaintiffs’ names, last known addresses, email addresses, and phone numbers. People who wanted to join had to do so by February 1, 2016.
The named plaintiff declared that she worked as a salesperson from about March 2014 to June 2015. She said she worked between 75 and 90 hours a week. The four other declarants said they worked between 50 and 90 hours a week, and each described the same job duties and pay structure.
She declared that the defendants paid her on a commission-only basis, and that this pay plan did not guarantee a minimum amount per hour or overtime pay for working more than 40 hours a week. She also said she worked from WJA’s single office and from her home office.
The defendants argued that the workers’ hours, pay, and possible damages were too different. The court disagreed, finding that the jobs were all sales positions in which the named and prospective plaintiffs performed similar work. It noted that the positions needed to be similar, not identical.
Two other rulings kept the collective from being narrowed. First, the defendants asked the court to leave out TAA’s salespeople, and the court declined. It noted a defense declaration stating that the same person was the current CEO of both companies. It explained that courts may conditionally certify a collective action of employees of related employers and decide later whether they are joint employers.
Second, the defendants asked to limit the period to June 2013 through August 2015, when the declarants worked. The court refused, partly because four people who had consented to join had not stated when they worked. It set the start date at August 7, 2012, three years before one opt-in worker’s consent was filed on August 7, 2015. It also declined to add a statement to the notice that the defendants denied the allegations.
This was a preliminary ruling. The court did not find that any salesperson was misclassified or that the defendants broke the law.
The workers sued under the Fair Labor Standards Act (FLSA). The amended complaint, as quoted in the order, claimed the defendants failed to pay overtime or minimum wage to Plaintiff and the Class Members because they misclassified them as exempt and only paid them commissions.
It also alleged that WJA and TAA operated as an enterprise under the FLSA.
As general information, an employer that calls a worker exempt must prove that an exemption applies. The FLSA’s outside sales exemption covers salespeople whose main duty is making sales and who are customarily and regularly away from the employer’s place of business. Inside sales work done by phone from an office or from home generally does not meet that test. Being paid by commission rather than by the hour does not change the minimum wage and overtime rules on its own.
The court applied, at the time of this 2015 order, the two-step approach that courts in the Northern District of Texas then used. At the first step, the court used a lenient standard based mostly on the pleadings and affidavits. Learn more about how conditional certification works.
Some federal appeals courts have since changed this approach — the Fifth Circuit in Swales v. KLLM Transport Services (2021) and the Sixth Circuit in Clark v. A&L Homecare & Training Center (2023). Swales now governs federal courts in Texas, Louisiana and Mississippi.
This page describes a 2015 court order. The time to join that collective was set by the court in that case. If you have worked in a similar role, the Siegel Law Group can evaluate your own claims.
Did you sell credit repair services over the phone, from an office or from home? Were you paid only commissions, with no overtime for weeks over forty hours? A lawyer can review how you were paid. The proposed notice in this case described the job as a Credit Analyst or Salesperson.
Contact the Siegel Law Group for a free consultation.
Related rulings: Smale v. AR Trinity Credit Services, another 2015 Texas case for commission-paid credit repair salespeople.
Generally, yes. Under the FLSA, a non-exempt worker’s pay for the week, including commissions, must at least equal the federal minimum wage for every hour worked. A phone salesperson who works 70 hours in a slow week can fall below that line. Commission-only pay is legal only if it meets these minimums or a valid exemption applies.
Only if a real exemption fits. The outside sales exemption requires that the worker be customarily and regularly away from the employer’s place of business making sales. Reps who sell by phone from an office or a home office generally do not meet that test. Calling inside sales reps exempt, without more, does not remove their right to overtime.
Yes, at the conditional certification stage it can. In this credit repair case, the court refused to limit the collective to one company’s salespeople. It noted that the same person was the current CEO of both companies and that the FLSA defines employer broadly. The court said joint employer questions could be decided later, and the collective could be divided or decertified if needed.
Not by themselves. In this case, the defendants argued that differences in hours, pay, and possible damages should defeat certification. The court disagreed because every job was a sales position involving similar work. At this early stage, workers need to be similar in their job requirements and pay provisions, not identical, and damages can be figured worker by worker later.
An opt-in salesperson’s claim is generally not treated as filed until his or her written consent to join is filed in the lawsuit. For the named plaintiff, it is the date the complaint and consent were filed. Each short payday generally starts a two-year clock, or a three-year clock for a willful violation, so older weeks drop out as time passes. See how FLSA filing deadlines work.
The Siegel Law Group is a national overtime and wage law firm devoted entirely to representing workers denied overtime pay. Where many firms include wage cases as a small part of a broader employment practice, the Siegel Law Group has built its entire practice around overtime litigation — and the results reflect that commitment: $100M+ recovered for workers, 50+ class and collective action certifications, and 100+ federal lawsuits filed in 27+ federal courts nationwide. Founding attorney Jack Siegel is a Bloomberg BNA contributing author on wage and hour law.
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