Failure to review classifications for two decades strengthens willfulness finding
A federal judge ruled that TEKsystems wrongly classified its recruiters as exempt from overtime, finding they sell staffing services rather than manage company operations.
On Wednesday, February 11, 2026, a Pennsylvania federal court handed down a decision that should make every HR director take a hard look at their own exemption classifications. The ruling against TEKsystems, one of the nation's largest staffing firms, centered on a question that keeps compliance officers up at night: when does a professional employee's work cross the line from administrative to production?
Judge William S. Stickman IV didn't mince words. He found that recruiters at TEKsystems spend their days doing exactly what the company sells to clients: finding people for jobs. That makes them producers, not administrators, and entitled to overtime pay.
The case started in April 2021 when Michael Thomas and six colleagues sued on behalf of themselves and other recruiters employed by the company over a three-year period. TEKsystems, a subsidiary of staffing giant Allegis Group, had classified these recruiters as exempt administrative employees who weren't eligible for overtime under the Fair Labor Standards Act.
The company argued its recruiters exercised significant independent judgment by sourcing candidates, evaluating qualifications, and partnering with sales teams to understand client needs. TEKsystems painted a picture of sophisticated professionals making consequential decisions that affected both the company's bottom line and its clients' success.
But the court saw something different when it examined what recruiters actually do each day. They spend most of their time reviewing resumes and LinkedIn profiles, making phone calls to potential candidates, and trying to match people with open positions. While that requires skill and effort, it's the core product TEKsystems sells, not the kind of high-level policy work that qualifies for exemption.
Judge Stickman pointed to telling details in the record. An internal email from a TEKsystems talent acquisition specialist made clear that the company considers its recruiter role to be inside sales and its account manager role to be outside sales. An account manager testified that recruiters are essentially selling people.
Lauren Estimada, who worked as a director of business operations in TEKsystems' Hawaii market, described recruiter duties as seeking candidates for opportunities and partnering with account managers to identify the best talent or situation where the company can provide its services.
The court found that recruiters don't actually make the final decisions about which candidates get hired. Account managers handle client relationships and make those calls. Recruiters don't set pay rates between the company and its clients. They don't create management policies or operational procedures. They follow established practices and metrics, getting coached by supervisors when their performance numbers slip.
What made the decision particularly damaging for TEKsystems was the willfulness issue. The company has been down this road before. In 2002, it settled a lawsuit over recruiter classification in Johannes v. Aerotek, Inc. As part of that settlement, TEKsystems created a new recruiter trainee role classified as non-exempt and eligible for overtime. In September 2024, a California federal court found that TEKsystems' recruiters didn't qualify for exemption under that state's law.
Despite this history, Faith Johnson, the company's director of human resources, testified that there hasn't been a reevaluation of whether recruiters should be exempt throughout her entire tenure at the company. Not after the 2002 case. Not even after the current lawsuit was filed.
That failure to act caught the judge's attention. The court found enough evidence that a jury could reasonably conclude TEKsystems acted recklessly in continuing to classify recruiters as exempt. That matters because willful violations extend the statute of limitations from two years to three years, significantly increasing potential damages in a class action case covering multiple states.
For HR professionals, this case offers several uncomfortable lessons. First, job titles and descriptions don't determine exempt status. The court emphasized repeatedly that what matters is what employees actually do day to day, not what their business cards say or what responsibilities are listed in job descriptions.
Second, exercising some discretion doesn't automatically make a job exempt. Recruiters at TEKsystems chose their own sourcing strategies and made initial screening decisions about candidates. But those choices happened within established frameworks and metrics. The company monitored their activities closely and coached them toward the right behaviors when performance lagged.
Third, past litigation should trigger immediate compliance reviews. TEKsystems' failure to reassess its classification practices after being sued multiple times over the same issue struck the court as particularly problematic. When you're put on notice of a potential problem, ignoring it doesn't make it go away.
The case now moves forward to calculate damages for recruiters across Pennsylvania, Washington, New York, and Massachusetts. With a potential three-year lookback period and multiple state wage laws in play, the financial exposure could be substantial.
The broader message for HR directors is clear: exemption classifications require regular audits based on actual job duties, not assumptions about professional roles. And when courts or regulators raise questions about your practices, conducting a thorough review isn't just good risk management. It might be the difference between a two-year problem and a three-year disaster.
