Store Manager Duties Key to Avoiding Overtime Eligibility
- By Your mom
- •
- 01 Apr, 2008
In a recent case the Eleventh Circuit Court of Appeals found a Florida grocery chain
violated the Fair Labor Standards Act (“FLSA”) when it failed to pay overtime to store managers
working more than forty hours per week. Rodriguez v. Farm Stores Grocery, Inc., 2008 U.S.
App. LEXIS 4817 (11 th Cir. March 6, 2008).
Farm Stores operates 103 drive-through grocery stores in Florida. Each store is managed
by a store manager reporting to a district manager. Each store manager supervises three to six
employees and is paid a weekly salary. The company failed to pay store managers overtime
based on the FLSA’s executive exemption. To claim the executive exemption the employer
must show the employees received a statutorily defined minimum salary that does not fluctuate
based on the number of hours worked.
Farm Stores met these requirements, but failed to show the jobs satisfied the “job duties
test,” which requires that the employees’ primary duty is “management of a recognized
department or subdivision.” In determining this test was not satisfied the court considered the
amount of time spent performing management duties, the relative importance of the employees’
managerial duties, the frequency with which employees exercised discretionary powers, and the
relationship between the alleged managers’ wages and those paid to others performing similar
non-exempt work.
While Farm Stores argued their employees met this test the jury found the employees’
testimony more persuasive. The employees stated they spent almost no time each week
performing managerial duties, lacked real authority over their stores and employees, and were
required to consult with district managers before making important decisions. The Appellate
Court found ample evidence to support the jury’s findings and affirmed its decision. It also held
there was sufficient evidence for the jury to find the employer’s actions willful because Farm
Stores, in part, failed to consult with experts prior to classifying the employees as executives. As
a result the company was required to pay plaintiffs double damages.
This case highlights the importance of classifying employees properly and using experts
when making such decisions. Getting it wrong can be extremely costly and doing so without the
benefit of expert advice may lead to a doubling of awarded damages.
violated the Fair Labor Standards Act (“FLSA”) when it failed to pay overtime to store managers
working more than forty hours per week. Rodriguez v. Farm Stores Grocery, Inc., 2008 U.S.
App. LEXIS 4817 (11 th Cir. March 6, 2008).
Farm Stores operates 103 drive-through grocery stores in Florida. Each store is managed
by a store manager reporting to a district manager. Each store manager supervises three to six
employees and is paid a weekly salary. The company failed to pay store managers overtime
based on the FLSA’s executive exemption. To claim the executive exemption the employer
must show the employees received a statutorily defined minimum salary that does not fluctuate
based on the number of hours worked.
Farm Stores met these requirements, but failed to show the jobs satisfied the “job duties
test,” which requires that the employees’ primary duty is “management of a recognized
department or subdivision.” In determining this test was not satisfied the court considered the
amount of time spent performing management duties, the relative importance of the employees’
managerial duties, the frequency with which employees exercised discretionary powers, and the
relationship between the alleged managers’ wages and those paid to others performing similar
non-exempt work.
While Farm Stores argued their employees met this test the jury found the employees’
testimony more persuasive. The employees stated they spent almost no time each week
performing managerial duties, lacked real authority over their stores and employees, and were
required to consult with district managers before making important decisions. The Appellate
Court found ample evidence to support the jury’s findings and affirmed its decision. It also held
there was sufficient evidence for the jury to find the employer’s actions willful because Farm
Stores, in part, failed to consult with experts prior to classifying the employees as executives. As
a result the company was required to pay plaintiffs double damages.
This case highlights the importance of classifying employees properly and using experts
when making such decisions. Getting it wrong can be extremely costly and doing so without the
benefit of expert advice may lead to a doubling of awarded damages.
