In Michigan, a federal judge this week held that certain employees of a staffing company – namely account managers, senior account managers, assistant branch managers, staffing consultants, and senior staffing consultants – were administrative employees under the Fair Labor Standards Act, and therefore not entitled to overtime. Perry v. Randstad Gen. Partner (US) LLC, 14 Civ. 11240, (E.D. Mich. May 12, 2015).

In Perry, plaintiffs argued that they did not qualify for the administrative exemption because their primary duty did not “include[] the exercise of discretion and independent judgment with respect to matters of significance,” 29 U.S.C. § 541.200(a), because the employer’s Work Planning Index (WPI) dictated what tasks they performed, constraining their discretion and exercise of independent judgment.

Judge John Corbett O’Meara, collected legal authority regarding the exempt status of recruiters for staffing agencies, who performed duties similar to those performed by plaintiffs. Applying those cases to plaintiffs’ claims, the court concluded that, plaintiffs’ main focus was to determine whether a candidate would be the best “fit” for a position and client. Further, plaintiffs had the authority to assess candidates and to decide whether to present certain candidates to clients. They also built relationships with clients, resolved issues between clients and candidates, and coached candidates about meeting the client’s expectations. In short, plaintiffs “performed inherently discretionary tasks.” Rejecting plaintiffs’ argument that they were “micromanaged” and “constrained” by the WPI, the court found that the Index was simply “a spreadsheet – … a method for tracking the completion of tasks, but it does not bear upon how the employee completes those tasks.”

The court further found that, even if plaintiffs’ positions did not qualify for the administration exemption, the employer was entitled to application of the good faith defense under the Portal-to-Portal Act because the employer relied upon a 2005 Department of Labor opinion letter stating that staff managers at a temporary agency qualified for the administrative exemption.

Staffing firms, like all business owners, should analyze their employees’ job duties to ensure compliance with federal and applicable state wage and hour laws in consultation with legal counsel.