Citations
- 136 F. Supp. 3d 433
Full opinion text
MEMORANDUM AND ORDER
MATSUMOTO, District Judge:
The named plaintiffs Anthony Chariot, Alan Remache, Jose Tejada, Gregory Ger-muska, Garwyn Richmond, Matt Riggs, and Christopher Hendley (collectively, the “Named Plaintiffs” or (‘plaintiffs”) bring this individual, collective, and class action against Ecolab, Inc. (“defendant”) for alleged violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq.; the New York Labor Law, N.Y. Lab. Law §§ 650 et seq., and its supporting regulations, N.Y. Comp.Codes R. & Regs, tit. 12, Pt. 142- (collectively, the “New York Wage Laws”); the New Jersey Wage- and-Hour Laws. N.F.S.A. §§ 34:ll-56a et seq., .its supporting regulations, N.J. Admin. Code §§ 12:56-1.1 et seq., and the New Jersey Wage Payment Law, N.J.S.A. §§ 34:11-4.1-33.6 (collectively, the “New Jersey Wage Laws”); the Pennsylvania Minimum Wage Act, 43 Pa. Stat. § 333.101 et seq., and the Pennsylvania Wage Payment and Collection Law,' 43 Pa. Stat. § 260.1 et seq. (collectively, the “Pennsylvania Wage Laws”); the Illinois Minimum Wage Law, 820 Ill. Comp. Stat. § 105/1 et seq., the Illinois Wage Payments and Collections Act, 820 Ill. Comp. Stat.. §§ 115/1 et seq., and their implementing regulations, 56 Ill. Admin. Code §§ 210.100 through "300.850 (collectively, the Illinois Wage Laws); the Washington Minimum Wage Act, Rev.Code Wash. §§ 49.46.005 et seq., the Washington Industrial Welfare Act, Rev.Code Wash. §§ 49.12.005 et seq., and the Washington Wage Rebate Act, Rev. Code Wash. §§ 49.52.050 et seq., and Washington Administrative Code §§ 296-126-092 and 296-126-050 (collectively, the Washington Wage'Laws); and the North Carolina Wage and Hour Act, N.C. Gen. Stat. § 95-25.1 et seq., and implementing regulations, 13 N.C. Admin. Code 12.0300 et‘ seq. (collectively, the North Carolina Wage Laws).
On December 22, 2014, defendant Eco-lab moved for summary judgment and the plaintiffs cross-moved for partial summary judgment on the limited issues of defendant’s affirmative defenses to overtime liar bility under the FLSA. (ECF Nos. 160-Í83.) Presently before the court are the parties’ cross-motions for summary judgment on whether plaintiffs, as Route Managers, Route Sales Managers, or Service Sales Route Managers for. defendant-employer Ecolab, were (1) exempt employees under the FLSA as either: “outside salesmen,” pursuant to 29 U.S.C., § 213(a)(1); or (2) “commissioned salespersons,” who have been properly compensated under the FLSA, pursuant to 29 U.S.C. § 207(i) (the “7(i)” defense).
I. BACKGROUND
A. Procedural Background
On September 11, 2012, plaintiffs Chariot, Remache, and Tejada commenced this putative collective and class action, bringing individual and representative claims on behalf of themselves and all other similarly situated Ecolab employees, alleging that defendant Ecolab failed to pay its Route Managers, Route Sales Managers, and Service Sales Route - Managers overtime for hours worked over forty hours per week in violation of the FLSA and pertinent state overtime and wage laws. On April 6, 2015, plaintiffs filed an amended complaint to add four additional named plaintiffs and their respective state class claims. (ECF No. 201, Amended Complaint (“Amend.Compl.”).)
Plaintiffs bring their FLSA overtime wage claim bn behalf of themselves and on behalf of a putative Section 216(b) FLSA collective class. Pursuant to the FLSA, plaintiffs must opt-in to a collective action by filing written consent with the court. 29 U.S.C. § 216(b) (requiring employees affirmatively to consent to join a collective action).
Plaintiffs allege with respect to their federal claim that, as a part of its regular business practice, “Ecolab intentionally, willfully, and repeatedly engaged in a pattern, practice, -and/or policy of violating the FLSA” by failing to record all the time that its employees worked, willfully failing to keep payroll records as required by the FLSA, willfully ¡misclassifying the plaintiffs and’ the putative class members as exempt from the requirements of the FLSA,'willfully failing to pay plaintiffs and the putative-class members earned wages, violating an agreement to pay overtime to aE employees that are not exempt from the requirements of the FLSA and willfully failing to pay. its employees, including plaintiffs and the putative class members, overtime wages for hours that they worked in excess of 40 hours per week. (Amend. Compl. ¶ 114.)
On March 11, 2014, the parties appeared for a pre-motion conference to discuss their proposed respective cross-motions for summary judgment and set a briefing schedule, advising the court that resolution of their motions would affect only the three named plaintiffs. (Minute Entry dated March 11, 2014.) On March 18, 2014, at the request of the court, the parties submitted-a joint letter clarifying that the parties had previously agreed to conduct limited discovery with respect to defendant’s two affirmative .defenses, pursuant to FLSA Sections 213(a)(1) and 207(i), and that plaintiffs would not seek class certification under FLSA Section 216(b) untfi summary judgment on the defendant’s affirmative defenses had been resolved. (ECF No. 89, Joint Letter dated 3/18/14.)
The parties’ cross-motions, for summary judgment were fully-briefed and filed on December 22, 2014. (See ECF Nos. 160-182,) On ■July 10, 2015, the parties, presented oral argument on their cross-motions for summary judgment. Following the oral argument, at the request of the court, each party submitted additional citations to evidence in the record in support of fheir arguments. (ECF Nos. 217, Plaintiffs’ Letter dated July 15, 2015; 218, Defendant’s Letter dated July 17,2015.)
On September 10, 2015, plaintiffs notified the court of the Honorable Edmond E. Ch'ang’s decision in the Northern District of Illinois, denying defendant Ecolab’s motion for summary judgment in Schneider v. Ecolab, No. 14-CV-1044 (N.D.Ill. Sept. 3, 2015) and finding that plaintiff Schneider was not exempt as either an “outside salesman” or “commissioned salesperson” under Illinois Minimum Wage Law. (See ECF No. 221, Plaintiffs’ Letter re Decision in Schneider.) Because the decision was filed under seal in the Northern District of Illinois, this court ordered defendant' to obtain permission from Judge Chang and produce the decision and file it under seal in this action. (Order dated 9/11/15.) In addition, the court permitted the parties to submit limited submissions and replies regarding why Judge Chang’s decision does or does not apply to the instant action. (See ECF Nos. 224, Defendant’s Letter re Unsealing1 of Schneider; 226, Defendant’s Submission re Schneider dated 9/17/15; 227; Plaintiffs’ Submission re Schneider dated 9/17/15; 235, Plaintiffs’ Reply Letter dated 9/24/15; 236, Defendant’s Reply Letter dated 9/24/15.)
B. Factual Background
The following facts have not been specifically or directly disputed with admissible evidence unless otherwise noted. Defendant Ecolab, Inc. sells cleaning, sanitizing, and food safety products, such as mops, floor mats and dish racks to a variety of businesses, primarily comprised of full service and fast food restaurants, and hospitality businesses, such as hotels and public facilities. (Defendant’s Rule 56.1 Statement of Undisputed Facts (“Def. 56.1”) ¶¶ 5-6; Plaintiffs’ Rule 56.1 Statement of Undisputed Facts (“Pis. 56.1”) ¶ 1.) Eco-lab’s cleaning and sanitizing solutions include products for ware-washing, housekeeping, and general sanitation chemicals, e.g., detergents, rinse-aids, sanitizers, and glass cleaners. (Def. 56.1 ¶3; Pis. 56.1 ¶ 1.) Ecolab also provides leases of dish and ware-washing machinery that include installation and regular maintenance services, which, under .Ecolab’s business model, serve as gateways for the sale of its cleaning products. (Pis. 56.1. ¶¶ 1, 3-4, 6-10; Def. 56.1 ¶¶ 63-64; see Pis. 56.1 ¶ 231 (citing Declaration of Charles Melnyk in Support of Defendant’s Motion for Summary Judgment (“Melnyk Decl.”) ¶ 7); Defendant’s Opposition to Plaintiffs’ Rule 56.1 Statement of , Undisputed Facts (“Def.Opp.Pls. 56.1”) ¶¶ 1, 6.)
Plaintiffs were Route Managers (“RMs”), Route Sales Managers (“RSMs”) or Sales Service Route Managers (“SSRMs”) for Ecolab’s Institutional and PureForce divisions during the periods alleged in the complaint. (Def. 56.1 ¶¶ 86-90; Pis. 56.1 ¶¶2.) Specifically, Chariot was an RSM between November 2009 and February 2011 in Ecolab’s Institutional Division, Tejada was an RSM' between January 2010 until March 2012 in Ecolab’s Institutional Division, and Remache was an SSRM from February 2012 untii February 2013 for Ecolab’s PureForce division. (Def. 56.1 ¶¶ .87-90; see Pis. 56.1 ¶ 2.)
1.. Ecolab’s Business Model
Ecolab employs a value-added sales model combining service and sales. (Def. 56.1 ¶¶ 76-84 (“value-added selling”).) Value-added selling is premised on developing "a relationship between the vendor and the customer through consistent and regular contact, and identifying and meeting the customer’s needs through consultation between the customer and a sales person. (Def. 56.1 ¶ 77.) Plaintiffs admit that Ecolab’s value-added sales model includes consistent and regular maintenance and repairs. (Plaintiffs’- Opposition to Defendant’s Rule 56.1 Statement of Undisputed Facts (“Pls.OppDef. 56.1”) ¶ 77.)
In addition to selling cleaning products to businesses in the restaurant and hospitality industries, Ecolab leases dish washing machines that are specially outfitted to dispense only Ecolab chemicals, and are provided to Ecolab’s customers solely to support and encourage the purchase of Ecolab products. ■ (Def. -56.1 ¶ 62-65; Pis. 56.1 ¶¶ 18-19.) The dispensers are provided to Ecolab’s customers at no charge. (Def. 56.1 ¶ 65.) Ecolab’s products — dish-washing machines and other warewashing equipment, as well as the chemical products used in conjunction with the equipment — are not sold for residential use. (Pis. 56.1 ¶¶ 270-71,. 274; see Def. 56.1 ¶6.)
Ecolab’s value-added organization uses multiple sales and marketing positions in a team effort to “push”- sales opportunities to the primary sales representative whose role is to “pull through” the actual sale. (Def. 56.1 ¶¶ 81-82.)- Although multiple team members are charged with Ecolab’s sales functions, plaintiffs, as RSMs, ,are the “only ones” - responsible for maintaining, servicing, and repairing dishwashing machines and equipment in their routes. (Pis. Opp. Def. 56.1 ¶ 81.) Ecolab uses two types of basic leases: (1) Phase I leases include service and repair of the leased equipment and sufficient chemical product to run loads as part of the lease price; and (2) Phase II leases require accounts to purchase certain dollar amounts of Ecolab products each month in addition to a lease payment. (Pis. 56.1 ¶¶ 20-22; Declaration of Michael J.D. Sweeney in Support of Plaintiffs’ Partial Motion for Summary Judgment- and in Opposition, to Defendant’s Motion for Summary Judgment (“Sweeney Decl.”) Exs. 8-9.) Ecolab’s leases require that the customer use only Eco-lab approved products in the commercial leased equipment. (Pis. 56.1 ¶¶ 18-19.) Ecolab’s leases also include a commercial dishwashing machine or related equipment as well as 'Ecolab’s obligation to service and repair the commercial equipment, including installation, routine maintenance, emergency service coverage, replacement parts and repairs. (Pis. 56.1 ¶¶ 6-10, 73.) Ecolab. provides these services to its customers for no additional fee beyond the lease payment for leased equipment. (Pis. 56.1 ¶ 14;)
Ecolab has two types of accounts: (1) independent operators, or “street” accounts and (2) corporate accounts. (Joint Appendix Ex. B, Deposition of John Myers (“Myers Depo.”) Tr. 27:16-30:7.) Street accounts, though not an official name, refer to independent operators with one location or unit, whereas corporate accounts are multi-location customers that are owned or operated by a centralized management team. (Id.; Pis. 56.1 ¶¶ 28-29; Def. 56.1 ¶¶ 182-83.), Corporate Account Executives are part of the field sales team and negotiate contracts with the corporate account’s centralized management. (Def. 56.1 ¶ 183; Pis. 56.1 ¶ 29.) Corporate Account Executives also renegotiate corporate account contracts for plaintiffs’ accounts. (Pis. 56.1 ¶ 71.)
Ecolab also includes in its leases “product programs,” or product purchase commitments, which consist of a group of products needed'to run'the commercial dishwashing machines, such as detergent, sanitizer,, and rinse. (Def. 56.1 ¶ 186; Pis. 56.1-¶ 24.) Although it is undisputed that “product programs” may be sold at the initial lease set-up, the parties dispute whether the creation of a corporate account or “product program” automatically guarantees purchases or sales of Ecolab products, ■ or whether customers have the opportunity to change, add, or subtract products from the initial product program enlisted and whether RSMs must call upon individual customers to make the actual sale. (Pis. 56.1 ¶¶25, 32-33;. Def. 56.1 ¶¶ 186, 188-89; Reply 'Declaration of Charles Melnyk in Opposition to Plaintiffs’ Motion for Summary Judgment (“Melnyk Reply Deck”) ¶¶ 23-25.)
Ecolab’s customers ’ receive their products through two methods: (1) from Eco-lab directly or (2) through food and product distributors. that regularly deliver to the customer. (Def. 56.1 ¶¶ 51-54.) : Customers may choose to receive their Ecolab products from a food distributor, however some Ecolab accounts may require customers to order through distributors. (Pis. 56.1 ¶¶ 34, 39; Def. 56.1 ¶¶39, 51-54.) Products delivered by food distributors are called “indirect product sales,” whereas products delivered directly from 'Ecolab are called “direct sales.” (Pis. 56.1 ¶ 40.) It is undisputed that approximately 50% of Ecolab’s products are delivered by distributors. (Pis, 56.1 ¶ 289; Joint Appendix Ex. A, Deposition of Charles Melnyk (“Melnyk Depo.”) Tr. 248:16-249:6.) Almost half of the Ecolab customers on Chariot’s and Tejada’s routes received Ec-olab products from food distributors, and approximately half of Remache’s routes received Ecolab products from food dis--tributors. (Pis. 56.1 ¶¶ 42-43.) ■
The parties dispute whether Ecolab’s transactions through distributors are merely a-channel for delivery of Ecolab products or whether the transactions qualify as “resale” of Ecolab’s goods for a profit, as discussed infra in Section II(A)(3)(b)(i), (Def. 56.1 ¶¶ 55-58; Pis. 56.1 ¶¶ 290-95.) There is no documentary evidence before the court that distributors are marking up and reselling Ecolab products. . Defendant contends that in some instances, distributors received a “handling fee” or “delivery fee” for the goods they delivered, and in other instances, Ecolab permits distributors to “mark-up” Ecolab products to the end-user-in lieu of a delivery fee. (Def. 56.1-¶ 55-58.) Plaintiffs, on the other hand, assert that Ecolab sold its products to distributors to resell at a profit and requires distributors • to complete a resale -tax exemption certificate. (Pis. Mem. at 27; Pis. 56.1 ¶¶ 44-45, 189-90, 289-96; Pis. Opp. Def. 56.1 ¶ 52.). .
2. Ecolab’s Work Force
Ecolab employs various types of employees in its Institutional Division and PureForce Division. Several titles are dedicated to selling leases and products to accounts and do not have service and repair responsibilities. (Def. 56.1 ¶ 169; Pis. 56.1 1Í 57.) Included in the sales team are Territory Managers, Street Sales Development Managers, Distributor Sales Development Managers, District Managers, Account Executives, Sales Development Managers,, and Corporate Account Managers. (Def. 56.1 ¶¶ 169-70; Pis. 56.1 ¶ 52; Pis. Opp. Def. 56.1 ¶¶ 169-70.) Territory Managers may do some service work, and are also responsible for selling leases to new- customers, including product purchase agreements. (Pis. 56.1 ¶ 58-60.) Once a Territory Manager sells a lease, the account is assigned to an RSM. (Def. 56.1 ¶ 174; Pis. 56.1 ¶¶ 61, 69.)
Ecolab also employs “Full Service Specialists,” who are considered part of Eco-lab’s sales team, however they exclusively perform repairs and installation, and have no sales responsibility. (Def. 56.1 ¶¶ 132-34; Pis. 56.1 ¶¶ 224.) The parties dispute whether these Full Service Specialists provide assistance to Territory -Managers exclusively, or if they also assist RSMs. (Def. 56.1 ¶¶ 132-34; Pis. 56.1 ¶¶ 58, 81-83.)
The parties dispute the job responsibilities and role of the RSMs in sales and maintenance, as discussed below.
3. RSMS’ Job Responsibilities
Ecolab’s RSMs spend most of their time engaged away from Ecolab’s places of business in performing their jobs and were provided company vehicles to cover their routes.- (Def. 56.1 ¶ 139.) Ecolab’s RSMs are responsible for the installation, service, routine maintenance, and repair of dish-washing and warewashing machines at Ec-olab’s customer’s establishments. (Pis. 56.1 ¶¶ 2, 72, 73; Def. 56.1 ¶¶ 93-94.) RSMs are required to make monthly Routine Preventative Maintenance (RPM) and, when requested, Emergency Service Request (ESR) calls for customers on their assigned accounts. (Def. 56.1 ¶¶ 93-94, 122; Pis. 56.1 ¶¶89, 105-06.) Plaintiff Chariot had between 100 and 120 assigned accounts .on which he was required to make monthly RPM calls. (Pis. 56.1 ¶ 91.) Plaintiff Tejada had between 100 and 120 assigned accounts on which he was required to provide monthly RPM calls. (Pis. 56.1 ¶ 92.) Plaintiff Remache had approximately 120 assigned accounts on which he was required to make monthly RPM calls and 900 accounts for whom he had to respond to ESRs. (Pis. 56.1 ¶¶ 93-94.)
During an RPM, RSMs are expected to “perform maintenance work on the commercial dishwashing machines and related equipment, including preparing for the call by reviewing the account’s service history, checking and ■ recording chemical ratios, checking for proper usage of ancillary products, checking the results of the' dish machine, following a service protocol that includes disassembling and reassembling the machine, entering meter readings, ti-trating the chemicals and dispensers, recording results, training on products and machines, checking account- inventory,” and any “other service- or repair work.” (Pis. 56.1 ¶¶ 95-96; Def. 56.1 ¶¶ 93-94.) After each RPM, RSMs are required to produce a Service Detail Report' (“SDR”) for each RPM call and provide a copy to the customer. (Def. 56.1 ¶114; Pis. 56.1 ¶¶ 98-99, 132.) SDRs record the “account serviced, the date and time of the service, the type of call, the results of tests and readings, any additional service or repair work done, suggestions for improved performance of the dishmaehine or related equipment, and the account’s inventory of Ecolab products.” (Def. :56.1 ¶ 114; Pis. 56.1¶103.) RSMs are also expected to obtain a customer signature, (Def. 56.1 ¶ 115; 'Pis. 56.1 ¶ 99), however' the parties dispute whether RSMs were expected to review the SDR with the on-site manager or decision-maker, of if anyone present at the account could sign the SDR. (Def. 56.1 ¶¶ 115, 119-20; Pis. . 56.1 ¶¶ 98-99; Pis. Opp. Def. 56.1 ¶¶ 115, 119-20.) The SDRs are then submitted electronically to Ecolab by the RSM. (Pis. 56.1 ¶ 136.)
Ecolab also expects its RSMs to respond to ESRs within 60 minutes of receiving the request' and monitors whether or not the RSM does so. (Pis. 56.1 ¶¶ 106-07.) When RSMs do not respond to an ESR promptly, the call is escalated to the RSM’s supervisor who then calls the RSM. (Pis. :56.1 ,¶152.) Failure to respond promptly to an ESR may result in discipline, (Pis. .56.1 ¶ 153.) Ecolab also records the hours that RSMs work through the “ESM Program,” an application on each RSM’s.tablet that requires users to enter a start and end time for each day worked, and a Performance Track reports the percentage of RPM calls and callbacks that each RSM made personally. (Pis. 56.1 ¶¶ 139-40, 146, 210-13.) Performance Track, also tracks the RSM’s individual call coverage, sales figures, and other data recorded from the RSM’s SDRs. (Pis. 56.1 ¶¶ 210-13, 215r-20.) Although plaintiffs do npt dispute that Performance Track measures sales data on each-of plaintiffs’ accounts, the parties dispute whether plaintiffs were evaluated based on their sales performance and other sales metrics or whether, they were, evaluated based on plaintiffs’ service call coverage and maintenance duties. (Def. 56.1 ¶¶ 157-58, 160-68; Pis. Opp' Def. 56.1 ¶¶ 157-59, 160.)
The parties also dispute whether plaintiffs’ responsibilities with-respect-to maintenance and repair were their “primary duties,” or whether ip performing routine maintenance and responding .to ESRs, plaintiffs also served as means for maintaining and developing customer relationships for the purpose of growing sales and taking advantage of possible sales opportunities. Although defendant does not dispute that plaintiffs were responsible for repair and maintenance work, defendant asserts that plaintiffs were aware that they were expected to make sales and that their maintenance and response to requests for repairs were integral parts of furthering and promoting sales of Ecolab products. (Def. Mem. at 16-17.) It is undisputed that the RSM job description .states that RSMs are expected to “maintain and grow sales within an existing route of foodser-vice and hospitality accounts” and provide “mechanical service combined with Eco-lab’s consultative sales approach to enhance [Ecolab’s] total value to the customer.” (Melnyk Dec. ¶ 12, Ex. A; Sweeney Decl. Ex. 64.) Plaintiffs respond with their own declaration that their primary duty was to perform service, maintenance, and repairs. (Def. 56,1 ¶ 67 and plaintiffs’ response thereto.) Defendant presents evidence that “[u]nder Ecolab’s sales model, the RSMs are supported by other positions including their managers, other field sales positions, and sales and marketing positions, who ‘push’ sales and provide the RSM, as the customers’ primary representative, with sales opportunities.” (Def. 56.1 ¶83 (citing Declaration of Michael Ahearne in Support- of Defendant’s Motion for Summary - Judgment (“Aheame Decl.”) ¶ 57); Declaration of Charles Melnyk in Support of Defendant’s Motion for Summary Judgment (“Melnyk .Decl’.’) ¶ 29; Declaration of John Myers (“Myers Decl.”) ¶¶ 19-21.)
The SDR process and inventory review were critical functions in Ecolab’s value-added sales'model and allowed the RSM to regularly meet with the customer, evaluate the customer’s needs, identify their competition, and provide customized sales consultation, for the' purpose of building and retaining the customer relationship, identifying their needs, and selling the customer products to meet then- needs. (Def. 56.1 ¶¶ 110-13, 121, 129.); (Def. Opp. Pis. 56.1 ¶¶ 109-10.) In Ecolab’s sales model the RSM, as the “on-site” sales representative, is expected tó “pull through” and make the sales of Ecolab’s products and should use the opportunity to sell or “upsell” to their customers through each service or maintenance visit. (Def. 56.1 ¶¶ 84, 92, 100-01.) Defendant asserts that Ecolab’s value-added business model is consistent with its expectation that RSMs “maintain and grow sales within their existing accounts,” (Def. 56.1 ¶ 67), and “grow” and “gain” customers. (Def. 56.1 ¶¶ 69-70.)
Plaintiffs do not dispute Ecolab’s statement of expectations and its value-added business model, but assert that their primary job duty was to “maintain, install, and repair commercial dishwashing and other related equipment on the premises of Ecolab’s customers.” (Pis. 56.1 ¶¶ 74-77.) Plaintiffs argue that the “flow of the river” — or the notion that products “flowed” based on a customer’s usage and needs — guaranteed product sales with or without the involvement of RSMs. (Pis. 56.1 ¶25 (citing Sweeney Decl. Ex. 18, Ecolab Training Document).) In fact, plaintiffs dispute that they had an opportunity to sell during customer visits, and assert that there was “no time or opportunity to sell because the primary job duty of Plaintiffs was to perform service, maintenance, and repairs to keep dishwashing and equipment working.” (Pis. Opp. Def. 56.1 ¶ 92.) Rather, plaintiffs assert that the SDR and inventory review were simply for maintenance and repair purposes, and did not afford plaintiffs the opportunity to sell products. (Pis. Opp. Def. 56.1 ¶¶ 107-OS.) Plaintiffs further contend that they did not have the opportunity to sell in corporate accounts that were negotiated and sold with a set number of products by Ecolab’s sales team. (Pis. Opp. Def. 56.1 ¶ 83.)
Moreover, plaintiffs contend that, as RSMs, they were not expected to make sales calls or sell new accounts and leases and that plaintiffs, in fact, did not seE new accounts. (Pis. ■ 56.1 ¶¶ 159-62.) Defendant counters that as part of Ecolab’s “Retain and Grow” goal, RSMs are encouraged to gain new business by calling on prospective customers and signing customers to new leases. (Def. 56.1 ¶¶ 159-60, 180.) Ecolab presented undisputed evidence that both Chariot and Tejada are listed as sales persons on dishwasher leases, and produced three leases listing Teja-da as the Ecolab salesperson (Sweeney Decl. Ex. 75), and eight leases listing Chariot as the salesperson, (Sweeney Decl. Ex. 74). Plaintiffs contend, however, that the RSM job description does not include sales caEs as part of the RSM’s job duties. (Pis. 56.1 ¶ 178.) Plaintiffs cite to Tejada’s deposition testimony that one of his leases corresponded to a period when he was a Territory Manager, and the other two were negotiated by Ecolab’s salespersons, and not him. (Pis. Opp. Def. 56.1 ¶ 181 (citing Sweeney Decl. Ex. 17, Declaration of Jose Tejada in Support of Plaintiffs’ Motion for Partial Summary Judgment (“Tejada Decl.”) ¶ 28).) Moreover, Chariot testified his leases were also sold and negotiated by other salespersons, and not him. (Pis. Opp. Def. 56.1 ¶ 181 (citing Sweeney Decl. Ex. 15, Tejada Decl. ¶ 28).)
The parties also dispute whether Ecolab supervisors review the reports of the hours RSMs worked and whether RSMs áre evaluated on their sales or the amount of service they performed,' the repairs they made, or the quality of the repairs. ' (Def. Opp. Pis. 56.1 ¶¶ 141-44.) Defendant presented evidence that RSMs’ hours are not closely monitored, that RSMs have no specific start, end,., and break times, and have little direct supervision, and R,SMs are not expected to work certain hours or a number of hours in a given, time period. (Def. 56.1¶¶ 141-144; Def. Opp. Pis. 56.1 ¶¶ 142-43.) Defendant also asserts that RSMs are able to plan their own schedules, take breaks as they choose, and have flexibility to adjust their workweek for personal and family obligations. (Def. 56,1 ¶¶ 141-44.)
Plaintiffs do not present contrary evidence, but instead contend that they and other RSMs were not able to work as they pleased because the amount of service and repair work was overwhelming. (Pis. Opp. Def. 56.1 ¶ 142 (citing Tejada Decl. ¶ 21, Declaration of Anthony Chariot in Support of Plaintiffs’ Motion for Partial Summary Judgment (“Chariot Deck”) ¶ 15, Declaration of Alan Remache in Support of Plaintiffs’ Motion for Partial Summary Judgment (“Remache Deck”) ¶ 21).) Plaintiffs also contend that they received warnings for not performing enough RPM calls in a monthly cycle. (Pis. 56.1 ¶ 116). On at least one occasion, a supervisor warned Chariot that failing to complete the required number of RPM calls was not acceptable. (Pis. 56.1 ¶ 109 (citing Sweeney Deck Ex. 62 (Letter dated July 12, 2010 to Chariot)).) Tejada received a similar warning with a threat of termination for his failure to complete and document the required number of service calls. (Pis. 56.1 ¶ 108 (citing Sweeney Deck Ex. 61 (Email to Tejada re Performance Management)).)
Finally, defendant argues that RSMs’ sales performances are tracked, and that the RSMs’ “sales to budget, total sales revenue, and sales revenue growth are critical performance metrics.” (Def. 56.1 ¶ 157-68.) Plaintiffs assert that “the most critical metric that Ecolab tracked was Plaintiffs’ service call coverage,” which was generated from the data each RSM recorded on a Service Detail Report. (Pis. Opp. Def. 56.1 ¶ 157.) Plaintiffs further contend that sales were not tracked to an individual employees, rather, ' Ecolab tracked only total sales in particular territory without crediting sales to any specific employee/ (Pis. 56.1 ¶¶ 211-16; Pis. Opp. Def. 56.1 ¶¶ 157-62.) Moreover, plaintiffs argue that Ecolab does not track leases sold by RSMs, and only tracks which Eco-lab associate originates a lease agreement with a new customer on the lease itself. (Pis. 56.1 ¶ 167.).
4. RSM Job Description Requirements
Ecolab describes the Route Sales Representative position as a role on Ecolab’s “sales team” and describes the position as a “sales opportunity.” (Def. 56.1 ¶¶ 145-46; Melnyk Dec. ¶ 12, Ex. A; Sweeney Deck Ex. 64.) The RSM Opportunity description further states: ‘You will serve as the face of Ecolab for your customers, providing recommendations on advanced cleaning and sanitation processes and programs to create cleaner, safer, and healthier environments and drive a positive guest experience.” (Def. 56.1 ¶ 66; Melnyk Dec. ¶ 12, Ex. A.) Under the heading “What You Will Do,” the RSMs’ duties are described as both “maintainpng] and growing] sales within an existing route pf foodservice and hospitality accounts” and “combining] ... mechanical aptitude and technical/problem solving ability to install and repair dish machines,” “learn[ing] customers’ operations and devis[ing] unique solutions as their expert on advance cleaning and sanitation,” “leverage[ing] your hands-on mechanical service combined with Ecolab’s consultative approach to enhance our total value to the customer,” and “provid[ing] emergency service coverage to appreciative customers.” (Def. 56.1 ¶ 67; Melnyk Deck ¶ 12, Ex. A.)
Ecolab’s RSM job description requires basic qualifications such as an “ability to lift and/or carry 75 pounds,” but does not require any sales qualifications other than a “minimum two years work or military experience.” (Pis. 56.1 ¶ 120; Melnyk Deck ¶ 12, Ex. A.) The job description also indicates as “preferred qualifications” both a “previous business to business value-add sales experience,” “industry related experience in food service, laundry, housekeeping, hospitality, and/or pool and spa,” and “mechanical ability (e.g. plumbing and/or mechanical experience) and problem solving skills to troubleshoot and repair equipment and dispensing systems.” (Def. 56.1 ¶ 147; Pis. 56.1 ¶ 120; Melnyk Decl. ¶ 12, Ex. A.) Under the heading “What’s In It For You,” the RSM position will “carve out a long term, advanced career path in sales, corporate accounts, or management,” and allow employees to “grow [their] income as [they] drive sales in [their] market” “in a flexible, independent work environment.” (Melnyk Decl. ¶ 12, Ex. A.)
5. Ecolab Job Training
It is undisputed that plaintiffs received training prior to beginning their employment and throughout their employment, both in person and online, however, the parties dispute the focus of these trainings. Plaintiffs assert that their training was primarily on the service, maintenance, and repair of commercial machinery. (Pis. 56.1 ¶¶ 154-55; 158; see Sweeney Decl. Exs. 102 (Tejada Online Training Transcript), 103 (Remache online Training Transcript), 104 (Chariot Online Training Transcript).)
Defendant contends that RSMs received extensive training in sales techniques and Ecolab’s chemicals and products in an initial three-week training course, and are expected to attend monthly sales meetings to learn about product offerings and promotions, as well as sales technique training, including how to evaluate customers’ inventories and how to meet customers’ needs. (Def. 56.1 ¶ 148-56.) Defendant also asserts that throughout their employment, RSMs are expected to take self-paced online training focused on sales. (Def. 56,1 ¶150.) Plaintiffs counter that “[t]he training modules Plaintiffs completed online were not related to making sales but rather related to the maintenance and repair work they provided to Ecolab’s customers and included training on electrical safety, water filtration, and warewashing installation and procedures.” (Pis. Opp. Def. 56.1 ¶ 150.)
6. Plaintiffs’Compensation
As RSMs, plaintiffs received a base salary and commissions from sales linked to their accounts or territories during the time they worked at Ecolab. (Def. 56.1 ¶¶ 204-06; Pis. 56.1 ¶¶ 237, 242; see Sweeney Decl. Exs. 76-78 (plaintiffs’ commission statements).) Plaintiffs also received incentive rewards and bonuses based on their sales performance. (Def. 56.1 ¶ 208.) RSMs earn commissions on products their customers purchase regardless of whether those products are delivered by Ecolab or a distributor, including “mark-up” products. . (Def. 56.1 ¶¶ 60-61; Pis. 56.1 ¶¶204, 240.) Commissions are also paid for leases, and once an account is assigned to an RSM, for all sales made in the account, regardless of which Ecolab employee executed the order. (Def. 56.1 ¶¶ 203-04; Pis. 56.1 ¶¶ 200-09, 239.)
Plaintiffs do not dispute their earnings from Ecolab as follows. In 2009, Chariot earned $10,545.05 in total compensation under the Incentive Compensation Plan, of which $6,010.39 represented earnings from commissions. (Def. 56.1 ¶¶ 223-24; Moe-chnig Decl. ¶ 5.) In 2010, Chariot earned $65,287 in total compensation, of which $42,438 was commission pay. ' (Def. 56.1 ¶¶ 226-28; Moechnig Decl. ¶ 6.) Between January and February 2011, Chariot earned $7,519.62 in total compensation, of which $4,175.37.00 represented commission payménts. (Def. 56.1 ¶¶ 230-32; Moe-chnig Decl. ¶'7.) Similarly, in 2010, Tejada earned $57,907 under the Incentive Compensation Plan,, of which $32,053 was commission pay. (Def. 56.1 ¶¶ 234-36; Moe-chnig Decl. ¶ 10.) Tejada earned $59,617 in 2011, of which $34,845 was commission pay. (Def. 56.1 ¶¶ 238-40; Moechnig Decl. ¶ 11.) Between January and March 2012, Tejada earned $15,001.75 in total compensation, of which $10,115.92 represented commission payments. (Def. 56.1 ¶¶ 242-44; Moechnig Decl. ¶ 12.) For the approximate one year that Remache was an RSM, his salary was higher than called for under the Incentive Compensation Plan. (Def. 56.1 ¶ 249.) Even so, Remache earned $41,888 in 2012 under the Incentive Compensation Plan, of which $22,748.42 was commission pay. (Def. 56.1 ¶¶ 246-48.)
7.. Ecolab’s Service Center
Ecolab’s Service Center is accessible through the -Internet, email and a toll free 1-800 number, and the Service Center’s contact .information is communicated'to.the public through Ecolab’s website, marketing materials, print advertisements, and its employees. (Def. 56.1 ¶ 42-44; Pis. 56.1 ¶¶ 49, 133.) The Service Center may also be physically accessed at its location in Eagan, Minnesota. (Def. 56.1 ¶¶ 36-37, 45.) The Service Center receives custom-, er calls or inquiries and dispatches the call to the customer’s RSM. (Def. 56.1 ¶ 50.) Customers may also place orders or request repairs and maintenance through the Ecolab Service Center number. (Def. 56.1 ¶ 37-40, 42; Pis. 56.1 ¶¶ 46, 48-49, 261-62.)
Plaintiffs ■ “performed administrative work at home, either before starting on or after returning from servicing the customers in their routes,” however plaintiffs “Chariot and Tejada did not have a home office and rarely engaged in Ecolab work while at home.” .(Pis. 56.1 ¶¶ 255-56.) Remache used a section of his living room to store manuals and other administrative paperwork. (Pis. 56.1 ¶ 257.) -
Plaintiffs also owned Ecolab-issued PC Tablets, which contained information about each of their accounts and which they were expected to sync on a daily basis. (Joint Appendix Ex. G, Deposition of Anthony Chariot (“Chariot Depo.”) Tr. 44:9-45:9, 143:13-15; Joint Appendix Ex. H, Deposition of Jose Tejada (“Tejada Depo.”) Tr. 48:5 — 25; Joint Appendix Ex. I, Deposition of Alan Remache (“Remache Depo.”). Tr. 253:18-254:14.) Plaintiffs accessed their PC Tablets each day to place orders; record their maintenance work through SDRs, receive information about new Eco-lab products, and obtain other account information, such as budgets, outstanding invoices amount due, and indirect sales to the customer. (Pis. 56.1 ¶ 140; Def. Opp. Pis. 56.1 ¶ 46; Chariot Depo. Tr. 41:10-42:14, 50:3-6, 98:2-10; Tejada Depo. Tr. 15:24-16:10, 47:17-48:4; Remache Depo. Tr. 89:7-20; Joint Appendix Ex. C, Deposition of Douglas Moechnig. (“Moechnig Depo.”) Tr. 96:13-17.)
Although the parties do not dispute that Ecolab’s Service Center is accessible to customers' and operates as discussed, plaintiffs disagree that the Service Center is accessible to the general public, and contends that the Service Center is only available to commercial entities and Eco-lab’s customers. ‘ (Pis. Opp. Def. 56.1 ¶¶ 42, 45.)
DISCUSSION
I. LEGAL STANDARD
A. Summary Judgment
“Summary judgment • is appropriate where there is no-genuine dispute as to any material fact and the record as a whole indicates that no rational factfinder could find in favor of the non-moving party.” Graves v. Finch Pruyn & Co., 353 Fed.Appx. 558, 560 (2d Cir.2009) (citing Rodal v. Anesthesia Grp. of Onondaga, P.C., 369 F.3d 113, 118 (2d Cir.2004)). “In ruling on a summary judgment motion, the district court must resolve all ambiguities, and credit all factual inferences that- could rationally be drawn, in favor of the party opposing summary judgment and determine whether there is a genuine dispute as' to a material fact, raising an issue for trial.” McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 202 (2d Cir.2007) (quotation marks omitted). “A fact is material when it might affect the outcome of the suit under governing law.” Id. (internal quotation marks omitted). Moreover, an issue of .fact is genuine only if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
“In order to defeat a motion for summary judgment supported by proof of facts that would entitle the movant to judgment as a matter of law, the nonmoving party is required under Rule 56[ ] to set forth specific facts showing that there is a génuine issue of material fact to be tried.” Ying Jing Gan v. City of New York, 996 F.2d 522, 532 (2d Cir.1993). “[Ojnly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude entry of summary judgment.” Anderson, 477 U.S. at 248, 106 S.Ct. 2505. The nonmoving party may not, however, “rely simply on conelusory statements or on contentions that the affidavits supporting the motion are not credible, or upon the mere allegations or denials of the nonmoving party’s pleading.” Ying Jing Gan, 996 F.2d at 532-33.
When cross motions for summary judgment are made, the standard is the same as that for individual motions. See Morales v. Quintet Entm’t, Inc., 249 F.3d 115, 121 (2d Cir.2001); Eschmann v. White Plains Crane Serv., Inc., No. 11-CV-5881, 2014 WL 1224247, at *3 (E.D.N.Y. Mar. 24, 2014). The court must examine each party’s motion independently, and “in each case all reasonable inferences must be drawn against the party whose motion is under consideration.” Morales, 249 F.3d at 115.
B. Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq.
The FLSA imposes minimum wage and maximum hour requirements on employers. See 29 U.S.C. §§ 206-207. Congress enacted the FLSA in 1938 with the goal of “protecting] all covered workers from substandard wages and oppressive working hours.” Christopher v. SmithKline Beecham Corp., — U.S. -, 132 S.Ct. 2156, 2162, 183 L.Ed.2d 153 (2012) (citing Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 739, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981)); see also 29 U.S.C. § 202(a). Among other requirements, the FLSA obligates employers to compensate employees for hours worked in excess of 40 per week at a rate of one and half times the employees’ regular wages. See 29 U.S.C. § 207(a); see Reiseck v. Universal Commc’ns of Miami, Inc., 591 F.3d 101, 104 (2d Cir.2010). The statute provides, in relevant part that,
Except as otherwise provided in this section, 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.
The overtime compensation requirement, however, does not apply with respect to all employees,' see § 213, and exempts workers “employed ... in the capacity of outside salesman” or as a “commissioned salesperson.” 29 U.S.C. §§ 213(a)(1), 207(i). Christopher, 132 S.Ct. at 2162. The exemptions to the overtime compensation requirement are defined by the Department of Labor (“DOL”) regulations, and “[e]mployees whose jobs fall within one of the enumerated categories are not entitled to certain protections of the [FLSA]— Employers need not pay exempt employees overtime no matter how many hours'they work each week.” Schwind v. EW & Associates, Inc., 371 F.Supp.2d 560, 562-63 (S.D.N.Y. 2005) (quoting Wright v. Aargo Sec. Servs., Inc., No. 99-CV-9115, 2001 WL 91705, at *2 (S.D.N.Y. Feb. 2, 2001)). An employer seeking to rely upon, an exemption as a defense to paying overtime bears the burden of proving that such' exemption applies. Young v. Cooper Cameron Corp., 586 F.3d 201, 204 (2d Cir.2009); Reiseck, 591 F.3d at 104; Pippins v. KPMG LLP, 921 F.Supp.2d 26, 42 (S.D.N.Y.2012) aff'd, 759 F.3d 235 (2d Cir.2014).
The determination of exempt or nonexempt status hinges on two factors: the employee’s salary and his/her actual duties at work. See 29 C.F.R. § 541.2. Whether an employee falls within an exemption under the FLSA “is a mixed question of law and fact.” Myers v. Hertz Corp., 624 F.3d 537, 548 (2d Cir.2010). “The question ' of how the [employees] spent their working time ... is a question of fact. The question whether their particular "activities excluded them from the overtime benefits of the FLSA is a question of law.” Ramos v. Baldor Specialty Foods, Inc., 687 F.3d 554, 558 (2d Cir. 2012) (quoting Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709, 714, 106 S.Ct. 1527, 89 L.Ed.2d 739 (1986)).
“A job title is not determinative of whether an employee is exempt-under the FLSA.” Pippins v. KPMG LLP, 921 F.Supp.2d 26, 42 (S.D.N.Y.2012) aff'd, 759 F.3d 235 (2d Cir.2014) (citing Kadden v. VisuaLex, 910 F.Supp.2d 523, 532-33 (S.D.N.Y.2012)); 29 C.F.R. § 541.2. Indeed, an employees’ exempt status depends less on his title, and more on the actual duties performed. Harper v. Gov’t Employees Ins. Co., 754 F.Supp.2d 461, 463 (E.D.N.Y.2010). Thus, a court must consider the employee’s “actual work activities” and may not rely on the employer’s characterization of those activities through a job title or job description. Pippins v. KPMG LLP, 921 F.Supp.2d 26, 42 (citing Goldstein v. Dabanian, 291 F.2d 208, 209 (3d Cir.1961)), cert. denied, 368 U.S. 928, 82 S.Ct. 364, 7 L.Ed.2d 191 (1961) (internal citation omitted). “Because the FLSA is a remedial statute, its exemptions are construed narrowly against the employer.” Kahn v. Superior Chicken & Ribs, Inc., 331 F.Supp.2d 115, 117 (E.D.N.Y.2004) (citing Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 4 L.Ed.2d 393 (1960)); see Reiseck, 591 F.3d at 104 (2d Cir.2010).
II. ANALYSIS
Defendant contends that plaintiffs, who worked as Route Sales Managers and Sales and Service Route Managers (collectively, “RSMs”) for Ecolab during the relevant time periods, were paid in compliance with the FLSA because they are “commissioned salespersons” pursuant to 29 U.S.C. § 207(i) or,' alternatively, are exempt from the FLSA overtime provisions because they each qualify as an “outside salesman” pursuant to 29 U.S.C. § 213(a)(1). Plaintiffs argue that neither provision of the FLSA applies, and that defendant failed to properly compensate plaintiffs for overtime work, under the FLSA. The court will address each affirmative defense in turn.
A. Commissioned Salespersons Pursuant to 29 U.S.C. § 207(i)
Title 29 U.S.C.. § 207(i) (“Section 7(i)”) addresses inequities that can arise in paying overtime to commissioned employees and provides parameters for FLSA compliance with such employees. Section 7(1) provides that in the case of “employment by [a] retail or service establishment”:
No employer shall be deemed to have violated ... [29 U.S.C. § 207](a) of .this section by employing any employee of a retail or service establishment for a workweek in excess ... [40 hours], if (1) the regular rate of pay of such employee is in excess of one and one-half times the minimum.hourly rate ..., and (2) more than half his compensation for a representative period (not less than one month) represents commissions .on goods or services. In determining the proportion of compensation representing commissions, all earnings resulting from the application of a bona fide commission rate shall be deemed commissions on goods or services without regard to whether the computed commissions exceed the draw or guarantee.
■In order to establish FLSA compliance for a commissioned salesman employee, an employer must demonstrate that the allegedly exempt employee: (1) earns at least one and one-half times the federal minimum wage; (2) earns more than half of his salary in commissions for a representative period not-less than one month; and (3) is employed by a retail or service establishment. See 29 U.S.C. § 2070); 29 C.F.R. §§ 779.410 et seq.; Johnson v. Wave Comm GR LLC, 4 F.Supp.3d 423 (N.D.N.Y.2014); English v. Ecolab, Inc., No. 06-CV-5672, 2008 WL 878456, at *2 (S.D.N.Y. Mar. 31, 2008); Schwind, 371 F.Supp.2d at 563.
1. Regular Rate of Pay is in Excess of One and One-Half Times the Minimum Hourly Rate
The first requirement of Section 7(i> is that the commissioned salesman employee earns at least one and one-half times the federal minimum wage. ■ 29 U.S.C. § 207(i). The Supreme Court defines the regular rate of pay as “ ‘the hourly rate actually paid the employee for the normal, nonovertime workweek for which he is employed’ and ‘by its very nature must reflect all 'payments which the parties have agreed shall be received regularly during the workweek, exclusive of overtime payments.’” 29 C.F.R. '§ 779.419 (quoting Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419, 424, 65 S.Ct. 1242, 89 L.Ed. 1705 (1945)); Schwind, 371 F.Supp.2d at 567. The regular rate of pay “is a rate per hour, computed for the particular workweek by a mathematical computation in which hdurs worked are divided into straight-time earnings for such hours to obtain the statutory regular rate.” 29 C.F.R. § 779.419. The regulations further provide that “a single workweek” is the standard, and . the averaging of hours over two or more weeks is not permitted. See 29 C.F.R. .§ 778.104. , .
The current federal minimum wage is $7.25 per hour. Ú.S. Dept, of Labor, Wage and Hour División, Minimum Wagé, available at' http://www.dol.gov/whd/ minimumwage.htm. One and a half times that rate is $9.06 per hour. Only for the purposes of the summary judgment cross-motions, defendant has agreed to plaintiffs’ contention that they worked up to" 70 hours per week, and that weekly hours averaged between 50 to 70 hours per week. (Def. 56.1 ¶¶ 218-20.) Based on plaintiffs’ salaries for the period they worked for'Ecolab, it is undisputed that each of plaintiffs’ hourly rates, assuming -a 70-hour work week, exceeds 1.5 times the minimum wage. Chariot’s effective hourly rate was not less than $14.75 per hour (Def. 56.1 ¶ 233); Tejada’s effective hourly rate was not less than $13.56 per hour (Def. 56.1 ¶ 245); and Remache’s effective hourly rate was. not less than $13.80 per hour (Def. 56.1 ¶ 252). Plaintiffs do not dispute that defendant has met this requirement under Section 7(i). See Clear Channel Outdoor, Inc. v. City of New York, 594 F.3d 94, 111 (2d Cir.2010) (affirming summary judgment where plaintiffs failed to meet their burden of coming forward.with admissible evidence to rebut defendants’ evidence and thus concluding that no material issue of fact existed). Accordingly, the undisputed evidence establishes ;that defendant has satisfied the first requirement that “the regular rate of pay of such employee is in excess of one and one-half times the minimum hourly rate” under the Commissioned Salesperson exemption.
2: More than Half of Plaintiff s Compensation For a Representative Period is Based an Commissions For Goods or . Services-
The second requirement of Section 7(i) is that more -than half of the commissioned salesman ' employee’s compensation rhust be from commissions on goods or services. 29 U.S.C. § 207(i), In computing the amount of earnings attributable to commissions, “all earnings resulting from the application of a bona fide commission rate shall be .deemed commissions on goods or services without regard to whether the computed commissions exceed the draw or guarantee.” Id.; see also Spicer v. Pier Sixty LLC, 269 F.R.D. 321, 333 (S.D.N.Y. 2010). The parties do not dispute that more than half of plaintiffs’ compensation was from commissions, however, the parties dispute whether defendant’s commission plan is “bona fide.”,
Congress has not defined the meaning , of “bona fide commission rate.”. Spicer, 269 F.R.D. at 333 (S.D.N.Y.2010). “The meaning of ‘commission’ under the FLSA ‘is an issue that finds little illumination from the sparse case law and the vague references in statutes and regulations.’ ” Owopetu v. Nationwide CATV Auditing Servs., Inc. (“Owopetu I”), No. 10-CV-18, 2011 WL 883703, at *3 (D.Vt. Mar. 11, 2011) (citing Klinedinst v. Swift Invs., Inc., 260 F.3d 1251, 1254 (11th Cir.2001)). Thus, the court must conduct an inquiry into “whether the employer set the commission rate in good faith,” Spicer, 269 F.R.D. at 333 (quoting Erichs v. Venator Grp., Inc., 128 F.Supp.2d 1255, 1259 (N.D.Cal.2001)), and whether an -employee is receiving a commission that “actually functions as an integral part of a true commission basis of payment” or one that “is actually paid as a salary.” 29 C.F.R. § 779.416. Guarantees that are paid as a salary do not qualify as bona fide commissions.
The DOL regulations have provided two non-exclusive examples for determining whether commission plans qualify as bona fide.- First, a -commission plan is not bona fide where “the employee, in fact, always or almost always earns the- same fixed amount of compensation for each workweek . (as would be the case where, the computed commissions seldom or never equal or exceed the amount of the draw or guarantee).” - 29 C.F.R. § 779.416(c) (emphasis added). Second, a commission plan is not bona fide where “the employee receives a regular payment constituting nearly his entire earnings which is expressed in terms of a percentage of the sales which the establishment ... can always be expected to make with only a slight addition to his wages based upon a greatly reduced percentage applied to the sales above the’ expected quota.” Id. These examples indicate that a commission plan is not bona fide if the employee will almost always receive a commission in the same fixed amount that seldom or never exceeds the guaranteed base amount, and nothing or little more. Id. There is nothing in the DOL regulations that prohibits commissions being calculated and paid on team sales. See id.
Judge Posner instructed in Yi v. Sterling Collision Ctrs., Inc., 480 F.3d 505, 508 (7th Cir.2007), that “[t]he essence of a commission is that it bases compensation on sales, for example a percentage of the sales price, as when a real estate broker receives as his compensation a percentage of the price at which the property he brokers is sold.” Judge Posner reasoned when a commissioned salesperson employee is paid a bona fide commission, the employee’s income is “is likely to be influenced by the number of hours a week that he works, [and] the relation .is unlikely to be a regular one.” Id. Therefore, because an exempt commissioned employee’s weekly income may be highly variable depending on the sales for each week, over the course of a year, the employee’s hours of work may be similar to those of regular non-exempt hourly employees. But, had .the exempt employee been,paid overtime as well, “his annual income would be higher than [non-exempt - employees] ever) though he hadn’t worked more hours over the course of the year than they had.” Id.
Courts in' this Circuit have generally identified the following three components present in a commission-based payment scheme: (1) the employee’s compensation must be tied to customer demand or the quantity of sales; (2) the compensation plan must provide performance-based incentives for the employee to increase his or her -income; and (3) there must be proportionality between the value of the goods or services sold and the rate; paid to the employee. Johnson, 4 F.Supp.3d at 442 (citing Owopetu I, 2011 WL 883703, at *1). These components ensure that commission-based compensation is “decoupled from the actual time worked,” a characteristic that multiple -circuit courts-of appeals and the DOL have identified as a “hallmark” of how commissions work. Owopetu I, 2011 WL 883703, at *4 (citing Parker v. Nutrisystem, 620 F.3d 274, 284 (3d Cir. 2010)).
The court will address each of the three components articulated in Johnson and Owopetu I.
a. Ecolab’s Commissioned-Based Com- , pensation Plan is Tied .to Customer ■ Demand and Quantity of Sales
The first component of. commissioned based compensation articulated in Johnson and Owopetu I is that the employees’ compensation is tied-to customer demand or the quantity of sales. See Johnson, 4 F.Supp.3d at 442; Owopetu I, 2011 WL 883703, at *4. Defendant argues that plaintiffs “earned a percentage of the revenue generated by sales to the customers in their routes, and their commissions fluctuated ... in direct proportion to the revenue generated by sales.” (Def. Mem. at 24.) Defendant further argues that plaintiffs’ commissions “fluctuated from month to month and -from year to year- in direct proportion to the revenue generated by sales to their customers” .and, tha,t plaintiffs’ compensation was directly tied to the quantity of sales to their customers. (Id.)
Indeed, Charles Melnyk testified that “Mr. Chariot and Mr. Tejada’s commissions rose if ... more chemicals and products [were sold] to théir customers,” and that “[plaintiffs’] commission earnings varied from month to month based on amount of products their customers purchased.” (Melnyk Decl. ¶ 39.). The plaintiffs testified similarly, indicating they received commissions on sales made in accounts -in their territories, whether those sales were made by orders plaintiffs placed themselves, orders placed through the customer center or other Ecolab representatives, or orders placed through distributors. (Chariot Depo. Tr. 1-21:3-13; 124:20-125:13; Tejada Depo. Tr. 249:19-250:12; Remache Depo. Tr, 180:18-181:2.) Moreover, plaintiffs testified that some months or seasons were busier than others, both in terms of sales revenue that was generated as well as how many hours were worked. (Tejada Depo. Tr. 224:8-225:1.)
With respect to the first factor, it is undisputed that sales based on customer demands resulted in commissions being paid to plaintiffs, and it is inconsequential who on the plaintiffs’ sales team “closed” or executed the sale. In accordance with 29 U.S.C. § 207(i), employees of a retail or service establishment need not be “salesmen” in order for their commissions to qualify as bona fide, so long as the employees’ commissioned compensation was tied to “customer demand and the quantity of [the employer’s] sales.” Owopetu I, 2011 WL 883703, at *5 (noting that plaintiff was not a salesman, but because his compensation was tied to “customer demand and quantity of sales,” he was paid a bona fide commission). As the Owopetu I court noted, “[although the “sales commission” may be the most common type of commission, ‘persons not engaged in the sale of goods — receivers, trustees, bailees, and others — are sometimes compensated in the form of what are commonly called commissions ... within the meaning of 29 U.S.C. § 207(i)[.]’ ” Owopetu I, 2011 WL 883703, at *4 (citing Mechmet v. Four Seasons Hotels, Ltd., 825 F.2d 1173, 1175 (7th Cir. 1987)).
Here, it is undisputed that the commissions plaintiffs received were tied to customer demand and the quantity of Eco-lab’s team sales, some of which plaintiffs themselves executed with their customers during their routine maintenance visits. Although plaintiffs contend that they had no control over the accounts- assigned to them and the commissions they earned, they do not dispute that they earned commissions whenever customers made purchases, regardless of whether plaintiff or another Ecolab representative executed the sale. (Pis. 56.1 ¶¶ 200-09; 237-40; Def. 56.1 ¶¶ 203-06, 209-10.) Because plaintiffs’ commissions were connected to customer demand or quantity of sales, the first component of a bona fide commission-based compensation is present in Ecolab’s commission payments. (See Def. 56.1 ¶¶ 82-84, 99.)
b. ■ Ecolab’s Compensation Plan Provides Performance-Based Incentives for The Employee to Increase Commissions
The second component articulated in Johnson and Owopetu I is that the employer’s payment of commission-based compensation incentivized its employees to improve performance in order to increase income from sales commissions. Plaintiffs assert that they were not paid a bona fide commission because the number of hours plaintiffs worked had no correlation to their commissions. Plaintiffs’ assertion misses the point that bona fide commission-based compensation is “decoupled from the time actually worked,” which, according to the DOL and multiple circuits is a “hallmark” of how commissions work. Owopetu I, 2011 WL 883703, at *4; Parker, 620 F.3d at 284. Plaintiffs further assert that their commissions were merely tied to the products purchased by customers in the territory assigned to plaintiffs, irrespective of any sales or efforts made by plaintiffs themselves. (Pis. Mem. at 36.) Plaintiffs cite no authority that prohibits payment of commissions based on team sales as opposed to sales by an individual.
Plaintiffs also argue they rarely sold new products in their accounts and- each account had a pre-established inventory of -products that the customer had already agreed to purchase; thus, -purchases were automatic and based on replenishing the pre-set inventory on the account. (Id.) Thus, plaintiffs contend that they had “almost no control over the products Ecolab customers purchased and almost no opportunity to increase the amount of sales.” (Pis. Mem. at 36.)
Plaintiffs farther argue that they have no control over the accounts assigned to them and the corresponding commissions generated by those accounts.' (Pis. Mem. at 36.) Indeed, plaintiffs assert that they lost or gained accounts, and thereby the commissions attached to them, based on account realignments that were beyond their control. (Pis. Mem. at 37.) Plaintiffs further contend that they received commissions on accounts in their territories, even when they had never visited the customer. (Sweeney Decl. Exs. 2, 216(B) Declaration of Alan Remache ¶ 25; 3, 216(B) Declaration of Jose Tejada ¶22.)
Defendant responds that Ecolab’s Incentive Compensation Plan “gave plaintiffs an ‘incentive to hustle and work efficien