United States District Court, E.D. Arkansas, Western Division
JENNIFER BEAUFORD, et al., individually and on behalf of others similarly situated PLAINTIFFS
ACTIONLINK, LLC DEFENDANT
OPINION AND ORDER
LEON HOLMES UNITED STATES DISTRICT JUDGE.
plaintiffs in this case were employed by ActionLink, LLC, as
brand advocates in the LG Slingshot program, which was a
program in which ActionLink provided marketing services for
LG Electronics, LLC. The plaintiffs brought this action
alleging that ActionLink failed to pay them overtime as
required by the Fair Labor Standards Act, 29 U.S.C. §
201 et seq. ActionLink contended that the brand
advocates were exempt from the overtime requirements of the
Fair Labor Standards Act pursuant to the outside sales
exemption and the administrative exemption. This Court
granted the plaintiffs’ motion for partial summary
judgment, holding as a matter of law that the brand advocates
were not exempt.
subsequently moved for partial summary judgment contending
that the claims of more than twenty plaintiffs should be
dismissed pursuant to 29 U.S.C. § 216(c). Those
plaintiffs signed and cashed checks the stubs of which stated
that the checks represented full payment of all wages earned.
This Court granted ActionLink’s motion and dismissed
the claims of those plaintiffs.
appeal, the United States Court of Appeals for the Eighth
Circuit affirmed this Court’s holding that, as a matter
of law, the brand advocates were not exempt from the overtime
requirements of the Fair Labor Standards Act, but reversed
with respect to the plaintiffs whose claims were dismissed
pursuant to 29 U.S.C. § 216(c). Beauford v.
ActionLink, LLC, 781 F.3d 396, 399 (8th Cir. 2015). As
to those plaintiffs, the Eighth Circuit held that the
language on the check stubs was insufficient to notify
employees of the consequences of cashing the checks.
remand, ActionLink moved for partial summary judgment
contending that the remaining plaintiffs do not have
sufficient evidence to show that the amount and extent of
overtime work should be different from that recorded on the
Department of Labor’s Form WH-56. The Department of
Labor conducted an investigation into ActionLink’s
overtime pay practices in the fall of 2011. By December of
2011, the Department of Labor had determined that brand
advocates were not exempt. ActionLink then reclassified brand
advocates from exempt to nonexempt. In January of 2012, the
Department of Labor investigator provided ActionLink with a
Form WH-56 reflecting the amounts that should have been paid.
Id. at 400. Although the plaintiffs initially
opposed ActionLink’s motion for partial summary
judgment, they subsequently withdrew their opposition, so the
Court entered an order granting the motion for partial
summary judgment on the issue of whether the amount and
extent of overtime work should be different from that
recorded on the Department of Labor’s Form WH-56.
Court then conducted a bench trial on the issue of whether
the remaining plaintiffs are entitled to liquidated damages
pursuant to 29 U.S.C. § 216(b), which provides that any
employer who fails to pay the required minimum wage or
overtime must pay that amount plus an additional equal amount
as liquidated damages. An employer may avoid the additional
damages by showing that the failure to pay the required
overtime was in good faith and that the employer had
reasonable grounds for believing that the decision was not a
violation of the Fair Labor Standards Act. 29 U.S.C. §
damages under the Fair Labor Standards Act are not punitive;
rather, they are designed to compensate employees for the
delay in the payment of the wages due under the Fair Labor
Standards Act. Chao v. Barbeque Ventures, LLC, 547
F.3d 938, 941 (8th Cir. 2008). The employer bears the burden
of proving both good faith and reasonableness. Id.
“‘This burden is a difficult one, with double
damages being the norm and single damages being the
exception.’” Id. at 941-42 (quoting
Herman v. RSR Sec. Servs., Ltd., 172 F.3d 132, 142
(2nd Cir. 1999)).
good faith requirement is a subjective standard that requires
the employer to establish an honest intention to ascertain
and follow the requirements of the Fair Labor Standards Act.
Id. at 942. To carry the burden of showing good
faith, the employer must show that it took affirmative steps
to determine the requirements of the Fair Labor Standards Act
but nevertheless violated those requirements. Id. In
addition, as mentioned, the employer must prove that its
position was objectively reasonable. Id. Ignorance
is no excuse. Id.
appeal, the Eighth Circuit described the job duties of brand
advocates as follows:
ActionLink hired “brand advocates” to visit
retail stores, to train the retail stores’ employees on
how LG electronics worked, and to convince those employees to
recommend LG products to customers. ActionLink preferred to
hire brand advocates with prior sales and marketing
experience, but it did not require this prior experience.
Brand advocates occupied the bottom of ActionLink’s
ActionLink typically trained brand advocates for five days.
It assigned every brand advocate approximately twenty stores
to cover each week. ActionLink provided brand advocates with
scripts, PowerPoint presentations, and other promotional
materials to use when they visited stores. In addition to
teaching store employees about LG products, the brand
advocates maintained in-store LG displays, cleaned and
repaired LG products, and spoke with customers who had
questions about the products. The brand advocates’ goal
was to boost sales of LG products. ActionLink provided each
brand advocate a small monthly budget to use for promotional
activities. Despite their other tasks, brand advocates did
not sell directly to customers or to retail stores.
ActionLink prohibited brand advocates from negotiating
prices, making marketing decisions, and deciding what
inventory should be ordered. Brand advocates maintained a
close relationship with their supervisors.
They frequently spoke with supervisors during conference
calls and through emails. And at the end of each store visit,
ActionLink required brand advocates to complete a six-page
call report informing ActionLink exactly what the brand
advocates did during their visits.
Beauford, 781 F.3d at 399-400.
evidentiary hearing, ActionLink presented the testimony of
David Gries, who was the payroll manager for ActionLink at
the time the decision in question was made, and Delbert
Tanner, who was and is the Chief Operating Officer of
ActionLink. The testimony of Gries and Tanner established
that ActionLink had several persons involved in discussing
whether brand advocates in the LG Slingshot program were
exempt from the overtime requirements of the Fair Labor
Standards Act. Document #191 at 13, 56-63. After some period
of investigation, a roundtable meeting was conducted among
these various individuals, with Tanner present, after which
Tanner made the decision that brand advocates were exempt and
would not be paid overtime. Id. at 61. Persons who
participated in this discussion included some employees from
ActionLink’s human resources department and some from
its executive team. Id. at 13. Before the roundtable
meeting, Gries printed ...