A Few Out-of-State Telephone Calls Per Week May Be Sufficient To Establish FLSA Coverage, 11th Circuit Holds

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An administrative assistant, who regularly made three to five telephone calls out of state per week to her employer’s clients and vendors, may have sufficiently engaged in interstate commerce to establish “individual coverage” under the Fair Labor Standards Act (FLSA), the U.S. Court of Appeals for the Eleventh Circuit concluded. St. Elien v. All County Environmental Servs., 2021 U.S. App. LEXIS 7935 (11th Cir. Mar. 18, 2021). The Eleventh Circuit has jurisdiction over Alabama, Georgia, and Mississippi.

With respect to an employer’s overtime pay obligation, the FLSA generally provides that

no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.

29 U.S.C. § 207(a)(1). Typically, whether an employee is covered under the FLSA is not in dispute, as the FLSA broadly covers not only individuals who are engaged in commerce or the production of goods for commerce (“individual coverage”) but also those who may not satisfy this standard but who are employed by a covered employer — an “enterprise engaged in commerce or the production of goods for commerce” (“enterprise coverage”). Occasionally, however, coverage disputes do arise, particularly when a claim involves a small company that seems to operate only within one state.

Such was the case with Wendy St. Elien, who worked as an administrative assistant for All County Environmental Services, a small pest control company in Broward County, Florida. St. Elien sued All County and its owners, claiming they had violated the FLSA by failing to pay her overtime. The primary issue at trial was whether the company had sufficient interstate contacts to bring St. Elien within the FLSA’s individual coverage clause. To establish such coverage, St. Elien asserted that she called the company’s out-of-state customers, primarily to obtain payment information from, or permission to access the property of, “snowbird” customers, that is, those who lived out of state most of the year but spent their winters in Florida. St. Elien also telephoned out-of-state vendors to discuss billings and payments regarding local purchases made by All County. St. Elien made regularly made these types of telephone calls three to five times per week.

Two days into the trial, the district court granted judgment as a matter of law in favor of All County, finding that the company was not covered by the FLSA. The trial court premised its decision primarily on Thorne v. All Restoration Services, Inc., 448 F.3d 1264 (11th Cir. 2006), which held that for an employee to be “engaged in commerce,” he “must be directly participating in the actual movement of persons or things in interstate commerce by (i) working for an instrumentality of interstate commerce, e.g., transportation or communication industry employees, or by (ii) regularly using the instrumentalities of interstate commerce in his work, e.g., regular and recurrent use of interstate telephone, telegraph, mails, or travel.” Id. at 1266. The trial court concluded that St. Elien could not satisfy either prong of this standard and dismissed the case. St Elien appealed and the Eleventh Circuit reversed.

In reversing and remanding the case (presumably for a retrial), the Court of Appeals noted that the district court had reached an improper conclusion when applying the second method recognized in Thorne by which individual FLSA coverage may be established, that is, when an employee regularly uses “interstate telephone, telegraph, mails, or travel.” Contrary to the trial court’s determination, a reasonable jury could conclude that St. Elien’s weekly telephone calls to clients and vendors were sufficient to establish individual FLSA coverage, the Eleventh Circuit found. The Court of Appeals noted that several Department of Labor (DOL) regulations supported this conclusion, including  29 C.F.R. § 779.103, which states in part that “employees engaged in interstate or foreign commerce include . . . workers who regularly use the mails, telephone or telegraph for interstate communication” and 29 C.F.R. § 776.23(d)(2), which provides in part that “employees who regularly use instrumentalities of commerce, such as the telephone, telegraph and mails for interstate communication are within the scope of the [FLSA].”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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