Recent Northern District of Georgia Decision Examines Applicability of Common FLSA Exemptions


Although most recent conversations regarding the Fair Labor and Standards Act (“FLSA”), legislation establishing a minimum wage and other compensation rules for most U.S. employees, has focused on the Supreme Court’s recent ruling in Integrity Staffing Solutions, Inc. v. Busk, lower federal courts on a daily basis address many questions regarding the provisions of this important law. Among the most common disputes that arise in FLSA litigation are those regarding the applicability of the numerous exemptions from overtime wage provisions. This everyday FLSA battle is illustrated in Bailey v. Innovative Contracting Solutions, Inc., a recent decision from the Atlanta Division of the United States District Court for the Northern District of Georgia.

The plaintiff is this case was hired by the principal defendant, Innovative Contracting Solutions, Inc. (“Innovative”), in July 2011. The plaintiff worked as a project superintendent for Innovative, which is a commercial general contractor that renovates offices, medical facilities, industrial buildings, and restaurants throughout the region. For his work, the plaintiff was paid an annual salary of $49,000. Beyond these fundamental facts, many issues remained in dispute. Specifically, the parties disputed facts involving the scope and apportionment of the plaintiff’s responsibilities as project superintendent, the plaintiff’s supervisory authority and control over lower-level Innovative employees and subcontractors, and finally the proper hierarchy of power at Innovative, particularly in relation to project superintendents and project managers. Innovative never paid the defendant time and half for any overtime hours worked in excess of 40 hours per workweek. The plaintiff therefore brought a suit against Innovative for these unpaid overtime wages. The defendant moved for summary judgment, which the district court ultimately denied with respect to the most important issues.

As noted above, the plaintiff’s claims depended on the district court not finding that the duties of his job did not fall, as a matter of law, within any of the numerous exemptions to the overtime wage provisions of the FLSA. The two exemptions at issue in the case – among two of the most frequently invoked in FLSA cases – were the Administrative exemption and the Executive exemption. First, the Administrative exemption exempts an employee from the overtime wage requirements if he or she is compensated with a salary no less than $455 a week and has a primary duty of office or non-manual work that is related to management or operations, which involves the “exercise of discretion and independent judgment with respect to matters of significance.” 29 C.F.R. § 541.200. In this case, the final two prongs of the test were in dispute. In particular, the court noted that even if the evidence suggested, as a matter of law, that the plaintiff’s primary duty was administrative in nature, this was insufficient evidence to hold that he exercised discretion and independent judgment.

Second, the Executive exemption exempts an employee from the overtime wage provisions of the FLSA if he or she is compensated with a salary amounting to no less than $455 per week, has a primary duty of management of the enterprise in which he or she is employed, customarily and regularly directs the work of two or more other full-time employees, and has the authority to hire or fire other employees or give suggestions regarding hiring and firing that are given suitable weight by those empowered to make such decisions. With respect to this test, the Eleventh Circuit Court of Appeals has held that an issue of material fact precluding summary judgment exists when an employee performs some managerial tasks but spends more than half of his or her work time performing non-exempt tasks identical to those of non-exempt employees. See Barreto v. Davie Marketplace, LLC, 331 F. App’x 672, 675 (11th Cir. 2009). Looking at the disputed facts in this case, the court held that there were genuine issues of material fact regarding the plaintiff’s exercise of managerial duties because he spent considerable time performing manual labor, and the employees whom he was supposed to be managing already knew their responsibilities and thus needed little in the way of actual management. In addition, the facts neither showed that the plaintiff supervised two or more full-time employees nor that he had influence over hiring and firing. Accordingly, the district court held that the exemptions did not apply as a matter of law and denied the summary judgment motion.

Although a jury will still need to determine whether these exemptions apply, the plaintiff has still surmounted a major hurdle by avoiding summary judgment on his overtime claim. Indeed, although one’s job title may include “supervisor,” “manager,” “executive,” or some other comparable word, the title alone does not determine whether an employee’s work falls into any applicable exemption. Instead, this determination depends on whether the employee is, in fact, principally engaged in work that is managerial, executive, or supervisory in nature. Many employees are not provided with overtime pay to which they are entitled. If you’re currently compensated as an exempt employee but feel that your job does not qualify for exemption, you should consult an attorney to determine what, if any, legal recourse you may have. The Atlanta overtime wage attorneys at Christopher Simon Attorney at Law have many years of experience  litigating federal and state wage and hour cases and can provide useful information regarding your rights. Feel free to contact us for a free case consultation.

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