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Answer the following - 1

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Answer the following - 1. Analyze each case with respect to the tests that must be considered for determination of exempt status of executive, professional, or administrative jobs. 2. If you were the judge, how would you rule? Is the job exempt or non-exempt? Why or why not? please include in text citations and references in apa

 

Case 1. Harry Phipps, Senior Professional Sales Representative Harry Phipps was employed by K & K Pharmaceutical Company as a senior professional sales representative. Phipps' position required him to travel across doctors' offices and hospitals where he promoted the benefit of K & K's drug, Provita, to the prescribing doctors. K & K used this method in the hope that when doctors realized the benefit of Provita, they would prescribe the drug for their patients. By law, Phipps could not sell the drug directly to doctors. The company provided Phipps with a list of target doctors, and he was expected to complete ten visits per day, and each doctor had to be visited at least once a quarter. K & K left the itinerary and method of achieving the targets up to Phipps. However, they did provide Phipps with a budget for the visits. He was also given pre-approved visual aids and had received training in basic "marketing" skills, a core message about the product, and how to gauge doctor interest in the product. Each representative was expected to develop a plan for how to handle his or her territory. Phipps had to complete post-visit reports and refer back to them in planning the next visit. Being successful in the job required some creativity since doctors were extremely busy each day with their patients. Phipps cultivated relationships with their staff and used this as a means to gain access to the doctors. Phipps earned $66,000 annually but was not paid for overtime. He also had the use of a company car. K & K could award a bonus based on the number of actual prescriptions issued in Phipps' territory. After the completion of two months on the job, Phipps added up the time he spent in completing his work and found he was working more than 8 hours a day. He approached K & K and requested to be paid for overtime. The HR manager indicated that Phipps did not qualify for overtime because the job of senior professional sales representative is exempt under the Fair Labor Standards Act and that overtime is only available to non-exempt employees. Additionally, the HR manager pointed out that although a supervisor accompanied Phipps during his doctor visits on a few days each quarter, he was unsupervised 95 percent of the time. Phipps did not agree with this and argued that he had little discretion in doing his job because he had to follow company guidelines and was given a list of targeted doctors. Furthermore, since he did not work at the company's offices, he was technically an outside salesman. Phipps subsequently filed a class action suit on behalf of himself and the other senior professional sales representatives at K & K, arguing that their jobs were non-exempt

 

Case 2.Cheryl Wiley, Auto Damage Adjuster Cheryl Wiley was promoted from auto damage appraiser to auto damage adjuster after being employed with Auto Insurance for three years. In her former position as auto damage appraiser, she worked at one of Auto Insurance's drive-in locations inspecting damaged cars that remain in drivable condition. She performed this job under close supervision and all of her work had to be approved by the supervisor. The job was considered non-exempt and Wiley received overtime pay whenever she exceeded her required work hours. In her new position as auto damage adjuster, Wiley had responsibility for "assessing, negotiating, and settling automobile damage claims." She spent a majority of her time appraising damaged vehicles and estimating repair costs, but also negotiating and settling claims with body shops over repair costs and with claimants over total loss vehicles. An auto damage adjuster had to determine how much Auto Insurance should pay to restore a vehicle to its pre-damage condition using the most economical parts available unless safety was a consideration. In assessing each vehicle, the adjuster used a software program to perform the analysis. While the software assisted with providing information on the cheapest parts and prices, the adjuster also had to make decisions not dictated by the software. For example, the adjuster had to figure out if there was pre-existing damage, interview claimants, negotiate with shops over repair times, and ensure claims were not fraudulent. All adjustors had set dollar limits on their negotiating authority. Wiley was a level 1 adjuster and had settlement authority up to $10,000. However, she could recommend settlements in excess of her authority, but they had to be approved by her supervisor. Auto damage adjusters report to supervisors who report to auto damage managers who in turn report to auto damage directors. In the case of total loss vehicles, Wiley had to decide whether it was economically feasible to repair a vehicle or to pay the owner its value. These decisions were more time consuming because they involved thousands of dollars in additional liability for Auto Insurance. However, Auto Insurance had set standards for determining when to declare a vehicle a total loss. In her job as auto damage adjuster, Wiley handled on average more than 1,000 claims per year, totaling $2.5 million. About 20 percent of the yearly claims involved total loss vehicles. Wiley also worked under some supervision in the field one or two days a week at one of the drive-in locations. Wiley earned $41,000 per year in her new position but regularly worked in excess of 40 hours per week. When she asked about being paid for overtime, she was told that unlike her prior job, the auto damage adjuster position was non-exempt. Wiley did not agree and filed a lawsuit against Auto Insurance alleging she is entitled to overtime pay because her job is primarily administrative, using well-defined guidelines and policies

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