The most recent installment in the continuing saga concerning the exempt status of various managerial titles in the retail industry involves a group of plaintiffs referred to by their employer (the drug chain Rite Aid) as “Co-Managers” and by plaintiffs as “Assistant Managers.” Judge Paul Gardephe of the United States District Court for the Southern District of New York, finding questions of fact as to the applicability of the exemption to this position, recently denied the Defendant’s motion for summary judgment. Gordon, et al. v. Rite AID Corp. et al., S.D.N.Y., No. 09-cv-07665, 03/12/12.
In a lengthy opinion, Judge Gardephe collected and reviewed recent Second Circuit authority regarding applicability of the executive exemption within the retail and food service industries, As to the first named Plaintiff Gordon, the Court concluded that the Defendant had not established the criteria for exempt status as a matter of law, namely “that Gordon’s primary duty was management, that she customarily and regularly directed the work of two or more employees, that she was authorized to hire and fire employees, or that her suggestions and recommendations as to the hiring or firing of employees were given particular weight.” Id. at 27. The Court conducted as separate analysis before arriving at the same conclusion with respect to a second named plaintiff. Id. at 30-31. The Court however rejected Plaintiffs’ request for an injunction preventing Defendant “from engaging in . . . the unlawful practices [alleged in the Complaint],” noting that Defendant had correctly observed that “an action for injunctive relief under the FLSA rests exclusively with the United States Secretary of Labor.”
Appellate guidance regarding the application of the executive exemption test to managers in the retail setting remains limited, and litigation remains a constant concern for retailers, especially in regard to assistant managers classified as exempt. An exemption review, including a periodic review of exempt employees’ actual job duties under federal and applicable state law, should be part of every retailer’s risk management program.