FLSA2008-3 — Product Technology Application and Marketing Analyst and section 13(a)(1)

U.S. Department of Labor
Employment Standards Administration
Wage and Hour Division
Washington, D.C. 20210

FLSA2008-3

April 21, 2008

Dear
Name*:

This is in response to your request for an opinion regarding whether the Product
Technology Application and Marketing Analyst (PTA) employed by your client
(company) qualifies for exemption under section 13(a)(1) of the Fair Labor Standards Act
(FLSA).
∗
Based on the information provided, it is our opinion that the PTA is an exempt
administrative employee.

Your client provides products and services to prevent soil erosion and strengthen
retaining walls and foundations of parking lots, bridges, levees, and buildings. The
company markets its products to dealers, licensees, developers, construction companies,
and state and federal agencies. The company also markets services related to its
products, including consulting, design, engineering, installation, permitting and testing
services.

The PTA’s primary responsibility is to work independently with the company’s
Engineering and Design Group (EDG) to develop tests that measure the performance of
new products and assess the feasibility of novel uses of current products. For example, if
an existing product has the potential to stabilize and reinforce the lining of coal mine
tunnels in a remote region, the PTA will review all relevant information regarding the
environmental conditions and the features of the mine. The PTA then works with the
EDG to develop a test to measure the product’s performance under varying conditions.
The PTA evaluates numerous factors, including the type of equipment needed to create
the precise environmental conditions and accurately capture the test results. The PTA
spends approximately 40 percent of her time working with the EDG on tests for new and
existing products.

Additionally, the PTA spends approximately 30 percent of her time as a liaison to the
company’s sales professionals, who visit potential and current customers. During these
visits, the sales professionals are confronted with questions from customers regarding
specific features/uses of the company’s products and how they compare to competing
products. The sales professionals rely on the PTA to provide them guidance on the
appropriate responses to these customer inquiries. The PTA independently reaches
conclusions regarding testing methodology, testing results, and product performance that
allow the company to secure product sales by demonstrating that the company’s products
meet customer specifications or are superior to competing products.

∗
Unless otherwise noted, any statutes, regulations, opinion letters, or other interpretive material cited in
this letter can be found at www.wagehour.dol.gov.

The PTA spends the remainder of her time performing standardized tests on the
company’s products and preparing reports reflecting the test results and how they
compare to competitors. The PTA reports directly to the company’s Vice President of
Process and Product Development. The PTA receives at least $455 per week on a salary
basis.

Section 13(a)(1) of the FLSA provides a minimum wage and overtime pay exemption for
any employee employed in a bona fide administrative capacity as defined in 29 C.F.R.
Part 541. An employee may qualify for an exemption if all of the duties and salary tests
are met.

Under 29 C.F.R. § 541.200(a), “employee employed in a bona fide administrative
capacity” means “any employee”:

(1) Compensated on a salary or fee basis at a rate of not less than $455 per week
. . . ;

(2) Whose primary duty is the performance of office or non-manual work
directly related to the management or general business operations of the
employer or the employer’s customers; and

(3) Whose primary duty includes the exercise of discretion and independent
judgment with respect to matters of significance.

“Work directly related to the management or general business operations” of the
employer refers to work in such functional areas as quality control, research, and
marketing.
29 C.F.R. § 541.201(b). An employee’s primary duty is “the principal,
main, major or most important duty that the employee performs.” 29 C.F.R. § 541.700(a).

We conclude that the PTA’s duty of working with the EDG to develop tests that
measure the performance of new products and assess the feasibility of novel uses of
current products directly relates to the functional areas of quality control and
research. The PTA’s duty of performing standardized tests on company products
and preparing reports on how those products compare to competitors’ products also
directly relates to the functional area of research. Other duties, including assisting
sales representatives in responding to customer questions regarding specific
features/uses of the company’s products, and evaluating product features for
potential customers, directly relate to the functional area of marketing. Therefore,
the PTA’s primary duties involve the “performance of office or non-manual work
directly related to the management or general business operations of the employer or
the employer’s customers.” 29 C.F.R. § 541.200(a)(2).

Section 541.202(b) sets out several factors “to consider when determining whether
an employee exercises discretion and independent judgment with respect to matters
of significance.” See also 69 Fed. Reg. 22,122, 22,144 (preamble to Part 541
regulation). Examples of duties indicating the PTA “carries out major assignments
in conducting the operations of the business” include working independently with the
EDG to develop tests that measure performance of the company’s new products and
assess the feasibility of novel uses of the company’s current products. 29 C.F.R.

§ 541.202(b). Also, in determining how specific features/uses of the company’s
products compare to competing products, evaluating features within the context of
scenarios posed by sales professionals working in the field with customers, and
making important conclusions that allow the company to secure product sales, the
PTA “performs work that affects business operations to a substantial degree.” Id.
Accordingly, we also conclude that the PTA’s primary duties “include[] the exercise
of discretion and independent judgment with respect to matters of significance.” 29
C.F.R. § 541.200(a)(3).

Based on the information provided, the PTA meets the requirements of
§ 541.200(a)(1)-(3). Therefore, it is our opinion that the PTA is an exempt
administrative employee.

This opinion is based exclusively on the facts and circumstances described in your
request and is given based on your representation, express or implied, that you have
provided a full and fair description of all the facts and circumstances that would be
pertinent to our consideration of the question presented. Existence of any other factual or
historical background not contained in your letter might require a conclusion different
from the one expressed herein. You have represented that this opinion is not sought by a
party to pending private litigation concerning the issues addressed herein. You have also
represented that this opinion is not sought in connection with an investigation or litigation
between a client or firm and the Wage and Hour Division or the Department of Labor.

We trust that this letter is responsive to your inquiry.

Sincerely,

Alexander J. Passantino
Acting Administrator

* Note: The actual name(s) was removed to preserve privacy in accordance with 5
U.S.C. § 552(b)(7).