State:
August 03, 2011
Did Executive Exemption Apply to This Employee?

You work between 50 and 65 hours a week, doing everything a store needs done, from stocking shelves and sweeping the floor to training and disciplining employees. You earn a salary of just over $34,000 a year. Your title is store manager, but do you really qualify for the executive exemption? In fact, courts have ruled differently on the question.

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What happened. “Graves,” a Georgia employee, joined Family Dollar Stores in 1996. She was soon promoted to store manager and stayed with the company until October 2004. She could neither hire nor fire other store employees, although she was responsible for training and disciplining them. Further, company policies dictated the layout of her store and chose the merchandise.

Like all Family Dollar managers, Graves managed her store to a quarterly budget and earned an annual bonus if she met a certain profit level. She also ran the cash register, unloaded merchandise from delivery trucks, opened and closed the store each day, and performed a wide variety of distinctly nonmanagerial duties. When she filed suit in a federal district court on behalf of herself and all similar Family Dollar managers, she charged that they spent the bulk of their time doing nonmanagerial tasks and should not be exempt from the Fair Labor Standards Act’s provision of overtime. Her suit was joined by 74 other managers.

With a number of similar cases pending, Family Dollar moved Graves’s suit to North Carolina, where the company is headquartered. Believing that her duties—and those of the other managers—were primarily managerial, the district judge dismissed the suit. The plaintiffs appealed to the 4th Circuit, which covers Maryland, North Carolina, South Carolina, Virginia, and West Virginia.

What the court said. Appellate judges knew that in 2008, the 11th Circuit (AL, FL, GA), in a very similar suit against Family Dollar, affirmed a large jury verdict in favor of the plaintiffs. There, judges said the store managers were wrongly classified as exempt. But judges in Graves’s case said her testimony carried more weight than the earlier ruling. As did the district judge, judges noted that Graves earned more than nonexempt employees, exerted authority over them, and was relatively free of supervision herself. So she and the other managers can be exempt. In Re Family Dollar FLSA Litigation, U.S. Court of Appeals for the 4th Circuit, No. 09-2029 (2011).

Point to remember: As the Supreme Court decided recently that a huge class of female Walmart employees couldn’t be a class because their managers and work conditions were all different, so these judges ruled that Family Dollar managers may work differently from others.

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