Reviewing a decision of a trial judge reversing a jury’s finding that several lumber company managers were properly classified as exempt, the Court of Appeals for the Eighth Circuit ruled on the narrow issue of whether testimony that ownership solicited feedback from “all employees” could support a finding that the exempt managers’ recommendations were given “particular weight” within the meaning of the FLSA executive exemption regulations. Unsurprisingly, the Court rejected the position that such evidence can support exempt status and affirmed the lower court’s reversal of a jury finding that the majority of such managers were properly classified as exempt. Madden v. Lumber One Home Ctr., Inc., 2014 U.S. App. LEXIS 4929 (8th Cir. Mar. 17, 2014).
In Madden, several individuals were hired to serve in managerial roles for a new company location. Due to Defendant’s financial struggles, there was little subordinate hiring or firing activity during the period in question. The manager responsible for the entire site was unable to identify any specific individuals whom several of the plaintiffs had recommended for hire. The Circuit Court agreed with District Judge J. Leon Holmes that the ultimate manager’s general testimony regarding the involvement of all subordinates in hiring could not support a conclusion that plaintiffs’ recommendations had been given “particular weight” within the meaning of 29 C.F.R. § 541.100(a)(4). As to another plaintiff for whom Defendant had provided evidence of specific recommendations, the Circuit overruled Judge Holmes and reinstated the jury’s verdict finding that such manager was exempt.
Madden, while an adverse decision for the employer in question, is not a particularly damaging decision to the employer community. The holding is not a sea change in the law; employers must continue to take care when classifying employees as exempt executives to ensure that this prong of the exempt test is met.