Chalk up a big win for NutriSystem Inc. now that a federal judge has rejected the claims of a group of sales associates in its Horsham, Pa., call center who said they were cheated out of overtime pay.

Because the workers are paid commissions for every order they take, Chief U.S. District Judge Harvey Bartle III concluded that the company's pay scheme qualifies for the "retail commission exception" in the Fair Labor Standards Act (pdf).

Plaintiffs lawyers argued that since the workers are paid a "flat rate" for every order, their pay is comparable to the "piecework" wages paid to some factory workers.

Bartle disagreed, saying the NutriSystem sales associates compared more directly to many other workers paid by commission because their wages depend on the whims of customers.

"NutriSystem's payments to its sales associates are sufficiently proportional to the cost of the products it sells to qualify as commissions," Bartle wrote. "The flat rate payments made to the NutriSystem sales associates have the hallmarks and functionality of a bona fide commission plan," Bartle wrote in his 25-page opinion in Parker v. NutriSystem Inc.

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