Termite Inspectors' Lawsuit Seeking Overtime Pay
On May 31, 2008, Termite inspectors in California sued ServiceMaster and its Terminix Unit for failure to pay overtime, allow the opportunity for lunch and rest breaks,and for failure to reimburse vehicle and other work-required expenses. The case challenged the company's classification of termite inspectors as "outside sales persons". Federal and state labor laws exempt employers from the duty to pay overtime and minimum wages to "outside sales" employees. The company characterized termite inspections as "sales activities" and contended its termite inspectors were, therefore, properly classified as sales persons. On June 20, 2011, the U.S. District Court held that termite inspections are not sales activities. Although the case was filed as a class action, following the April 27, 2007 U.S. Supreme Court ruling that the Federal Arbitration Act bars class actions in arbitration, the company asserted its arbitration rights and the class action was denied; individual claims allowed. Denial of a class action lifts a stay of the statute of limitations and thereafter requires claimants to file within the applicable time limits or forfeit the right to sue for back pay.
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