In a case involving retailer Dollar General, another federal judge has refused to hold as a matter of law that a retail store manager is an overtime-exempt “executive” for purposes of the FLSA. Judge James Jones denied summary judgment to Dollar General in Hale v. Dolgencorp, Inc., 2010 U.S. Dist. LEXIS 62584 (W.D. Va. June 23, 2010) based upon his “fact-intensive inquiry as to each prong of the five-factor [exemption] test.” Id. at * 8.
Plaintiff Hale had served as a full-time clerk and then an assistant store manager before her promotion to store manager. Even though the parties agreed that as store manager Hale satisfied the salary basis test for exemption, and that “her work included the regular direction of two or more employees,” Plaintiff testified that she spent only ten percent of her time – six hours per week – on managerial tasks and the remainder of her time “performing menial labor: cleaning restrooms, scrubbing floors, checking out customers, and stocking shelves.” Id. at * 9. She further claimed that Dollar General’s policy of limiting her quota of labor hours for non-exempt employees forced her to run the store by herself or with a skeleton crew a large percentage of the time.
Consistent with the Eleventh Circuit’s similar decision in Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1257-58 (11th Cir. 2008), the Court determined that “[b]ased upon the applicable five-prong test, a reasonable juror could determine that Hale’s primary duty was not management.” This test examines: (1) "the amount of time spent in performance of [*6] managerial duties"; (2) "the relative importance of the managerial duties as compared with other types of duties," (3) "the frequency with which the employee exercises discretionary powers"; (4) "his relative freedom from supervision"; and (5) the relationship between the employee’s "salary and the wages paid other employees for the kind of nonexempt work performed by the supervisor." Id at * 5-6 citing Morgan. On this last issue, the Court observed that based on Plaintiff’s testimony that she worked 60-70 hours per week, a factual question existed as to whether the “effective rate” at which she was paid was actually less than that paid to the non-exempt employees who reported to her.
This highly technical attack on the use of the executive exemption in retail stores has divided courts, but highlights both the technical nature of the exemption and the need to ensure that for purposes of the FLSA an exempt “executive’s” primary duty is management and that such primary duty is reflected by documents such as evaluations and disciplinary notices.
/* Style Definitions */
mso-padding-alt:0in 5.4pt 0in 5.4pt;
mso-fareast-font-family:”Times New Roman”;
mso-bidi-font-family:”Times New Roman”;
[UPDATE] On July 8, 2010 a second district judge echoed the reasoning in Hale, denying Dollar General’s motion for summary judgment in another misclassification case brought by a store manager in Missouri. Kanatzer v. Dolgencorp, 2010 U.S. Dist. LEXIS 67798 (E.D. Mo. July 8, 2010). In Kanatzer, the judge found material issues of fact as to all four factors set forth in 29 C.F.R. § 541.700(a).