United States: Retail Victory Delayed, But Not Denied: Following 6th Circuit Remand, Michigan Federal Court Rules (Again) That Assistant Manager Is Exempt

Few industries have been as heavily targeted by FLSA plaintiffs' attorneys as the retail industry. In a retail environment where salaried managers often pitch in to help complete the day's work while simultaneously supervising and directing subordinates, plaintiffs' attorneys routinely argue that the most relied upon overtime exemption in this area—the executive exemption—is not satisfied because the manager's "primary" duty is something other than management. Given the pervasiveness of such claims, a victory for one retailer in this space is a victory for all retailers.

On that note, we highlight a decision rendered on Monday by a federal district court in Michigan, which found that the First Assistant Manager of a retail wheel/tire shop was properly classified as exempt. The decision, Little v. Belle Tire Distributors, Inc., adds to the retail industry's long and growing list of victories in store manager and assistant manager misclassification cases. Little, however, is especially important due to its unique procedural history.

This is not the first time that the Eastern District of Michigan has ruled in Belle Tire's favor. The court granted the retailer's motion for summary judgment nearly two years ago. The plaintiff, Joseph Little, argued that management was not his primary duty—and thus he did not satisfy the executive exemption—because he spent as much as 90% of his time performing non-managerial work. The court rejected the argument, finding that even while Little performed hourly-type work, he simultaneously carried out a managerial function (e.g., supervising employees), which was his most important function as First Assistant Manager. Also notable, the court found, was that Little worked more than 20% of the time without the Store Manager present.

In October 2014, the Sixth Circuit vacated Belle Tire's victory and remanded the case for further proceedings. The court identified two sources of evidence in support of Belle Tire's motion—(i) deposition testimony by Little, and (ii) deposition and declaration testimony by Belle Tire's corporate vice president and two Store Managers—and rejected the latter as lacking specificity about duties actually performed by Little. As to the former, the court found that a factual issue remained as to Little's primary duty, given his testimony that whatever managerial functions he did perform were, in fact, mostly clerical and highly constrained by corporate policies.

In May 2015, the parties returned to the Eastern District of Michigan for a three-day bench trial. After considering the testimony of five witnesses, including Little, and exhibits reflecting his job duties, job performance, and compensation, the court entered judgment in Belle Tire's favor for a second time. En route to that ruling, the court made several key findings, including:

  • Little worked opposite ends of the day as his Store Manager (i.e., one opened and the other closed), who was off-premises for 27% of Little's working hours.
  • "On occasion," Little interviewed job applicants and made recommendations about who to hire. The Store Manager considered those recommendations.
  • Little trained the technicians in the shop, as well as the front-end sales staff.
  • Little determined the sequence in which work orders generated by the sales team would be completed and assigned that work to the technicians.
  • Little advised technicians when they ran into problems, resolved disputes among them, and had authority to send them home if the day's work lagged.
  • While Little performed some nonexempt sales work, that work comprised less than half of his workday.

Based on these findings, the court summarily ruled that as First Assistant Manager, Little satisfied multiple FLSA overtime exemptions, including the executive exemption.

At first whim, the Little decision is simply another win to add to the pile of retailer victories in this brand of cases—the findings, reasoning, and holdings are not terribly unique. What makes the decision especially important, however, is its procedural history. For the past year, the Sixth Circuit's vacate-and-remand decision was no doubt viewed as a victory for the FLSA plaintiffs' bar. By entering judgment for Belle Tire yet again, the Eastern District of Michigan has returned that victory to Belle Tire and confirmed, again, that store managers and assistant managers can be properly classified as exempt under the right circumstances.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Kevin M. Young
 
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