The transportation industry continues to battle class action lawsuits focused on the classification of freight brokers as exempt from the payment of overtime under the Fair Labor Standards Act (FLSA). These cases focus on the role performed by employees variously referred to as freight brokers/sales agents/account executives – whose primary duty is to connect shipping customers with transportation providers. Historically, it has been common for freight brokerage companies to pay these employees a salary plus commission and to classify them as exempt employees under the FLSA. Recent court decisions (and a host of settlements) have served to highlight the vulnerability of an exempt classification for these workers.

The cases ordinarily focus on the FLSA’s Administrative Exemption, and an analysis of whether freight brokers are serving in a production role or a management role. Definitive judicial guidance on the subject is limited because many of these cases have settled out of court. The courts that have addressed this issue in judicial opinions have denied the employers’ motion for summary judgment while focusing on the core sales function of the broker (not an administratively exempt function). In this environment, freight brokerage companies are urged to fully examine their classification of these workers as exempt versus non-exempt.