Wage and Hour Law Update
Tenth Circuit: District Court Improperly Analyzed Exemption Status of Los Alamos Security Officers
Even when employers successfully prevail on exemption defenses at the trial court level, such victories often do not signal the end of litigation –as evidenced by the recent decision of the United States Court of Appeals for the Tenth Circuit, which reversed a summary judgment decision upholding an employer’s application of the executive exemption. Maestas v. Day & Zimmerman, LLC, 2012 U.S. App. LEXIS 53 (10th Cir. Jan. 4, 2012).
Maestas concerned a group of employees providing private security at Los Alamos National Laboratory in New Mexico, in a military-like hierarchy: Lieutenant, Captain and Major (collectively the “Supervisors”). The District Court concluded that all Supervisors qualified as exempt “executives” under the FLSA because “[s]upervisors on duty at the time of a security threat do not abandon their posts and all run to personally engage the threat. They coordinate the response, and some of the supervisors go to the scene to ensure that the response is being handled appropriately. [They] are the ones in charge of ensuring an orderly response to any threat, and in charge of preparing their subordinates to face any threat that emerges. They are employed for the purpose of ‘ensur[ing] that the protective force as a whole is ready and able to do its job.’” Maestas v. Day & Zimmerman, LLC, 2010 U.S. Dist. LEXIS 139702 (D.N.M. Nov. 30, 2010).
In reviewing this decision, the Circuit court (which encompasses Utah, Wyoming, Colorado, Kansas and Oklahoma along with New Mexico) began from the premise that “a court must first determine the employee's primary duty, and then determine whether that primary duty disqualifies the employee from FLSA's protections.” Citing Supreme Court precedent relied on by the district judge, the Court ruled that the “question of which duty is the ‘primary duty’ is a question of fact.” Because the lower court had ruled on this issue as a matter of law, such error required reversal of the decision, and remand for a determination of this factual issue.
Executive exemption cases continue to produce scattered results, with the Maestas litigation constituting but one example of the inconsistent and unclear law in this area but the lack of clarity as to which fundamental issues are to be determined as a matter of law, and which are the provenance of the jury, subject to a trial. Litigation continues, with many individuals in management positions continuing to assert claims on a national basis, due to what one judge observed as a “[l]ack of creativity and overwork . . . an undesirable by-product of working for a national chain in a struggling economy.” Taylor v. Autozone Inc., 2012 U.S. Dist. LEXIS 10207 (D. Ariz. Jan. 26, 2012) (finding store managers covered by the executive exemption and having management as primary duty "as a matter of law" based on factual test set forth at 29 C.F.R. § 541.700(a)).