Recent District Court Decision Highlights Complexity of FLSA Exemption Analysis

U.S. District Court Magistrate Judge Robertson recently issued an order denying defendants’ motion for summary judgment in a case involving an alleged violation of the Fair Labor Standards Act (FLSA), citing, among other grounds, defendants’ failure to meet their burden on the “primary duty” element of the executive exemption.  See August 10, 2021 Memorandum and Order, Hamel v. The Wheatleigh Corp., et al. (C.A. No. 3:18-CV-30113).  The case serves as a reminder of the complexities of properly classifying employees as exempt from the FLSA’s overtime laws and highlights the need for thoughtful analysis to ensure that an exemption is established.

Plaintiff, a former “Restaurant Manager” employed by company defendant the Wheatleigh Corporation (“Wheatleigh”), a Massachusetts luxury hotel and fine-dining restaurant owned and operated by three other individual defendants, alleged that defendants misclassified him as an exempt employee under the “executive” exemption, and failed to pay him overtime wages.  In addition to meeting the salary requirement (which is currently $684 per week), an employer must establish the following 3 elements for the proper application of the executive exemption: (1) the employee’s “primary duty” is management, (2) the employee “customarily and regularly directs the work of two or more other employees,” and (3) the employee “has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.” Order at 6 (internal citations and quotations omitted).

While the parties agreed that the plaintiff performed both managerial and non-managerial duties, they disagreed over whether management was the plaintiff’s “principal, main, major or most important duty [] perform[ed],” pursuant to the FLSA.  Id. at 9. The regulations lay out a list of four non-exhaustive factors to consider when determining the primary duty of an employee: “(a) the relative importance of the exempt duties as compared with other types of duties; (b) the amount of time spent performing exempt work; (c) the employee’s relative freedom from direct supervision; and (d) the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee.” Id.

Among other arguments, the plaintiff asserted that his non-managerial duties were equally, if not more, critical and time-consuming than his managerial ones. He claimed that cleaning the restaurant, setting tables, greeting guests, and answering telephones (i.e., classically non-exempt duties) were among his most commonly performed responsibilities and took precedence over his supervisory and managerial (i.e., more clearly exempt) duties.

The Court ultimately ruled that the defendants were not entitled to summary judgment given a host of factual disputes regarding several prongs of the FLSA regulations’ test for proper application of the executive exemption, including the requirement that the plaintiff’s “primary duty” was management. In particular, the Court found that “[t]he record contains evidence that [P]laintiff[‘s] managerial and non-managerial duties were both essential for the smooth functioning of the[ ] restaurant, [and that] the question of whether the ‘relative importance’ of duties factor supports the overtime exemption cannot be determined without a factfinder’s judgment on the impact of the [P]laintiff[‘s] varied undertakings.”  Id. at 10.

As this case demonstrates – and contrary to popular belief – job titles or descriptions are not determinative and the propriety of an exemption is determined based on actual work activities.  Proper application of the FLSA exemption rules is a nuanced issue with many layers of detailed tests that require in-depth analysis, and we are here to help. 

This information is a general description of the law and is intended for general information purposes only.  It is not intended to provide specific legal advice nor is it intended to create an attorney-client relationship with Chinitz Law LLC.  Before taking any action on this information you should seek professional counsel.  Attorney advertising.  Prior results do not guarantee a similar outcome. 

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