Employees with supervisor job titles or who have some supervisory authority are often misclassified as exempt from overtime pay. Usually applied to them is the "executive," "supervisor" or "manager" exemption to overtime pay requirements. The Sixth Circuit recently considered application of this exemption in Bacon v. Eaton Corp., No 13-1816 (6th Cir., May 1, 2014).
Plaintiffs were "front line" shift supervisors for more than 20 hourly employees. In turn, the plaintiffs were under the supervision of second-level managers. Their employer, Eaton Corporation, refused to pay plaintiffs overtime claiming the "executive" exemption applied to them. Plaintiffs sued, the district court granted summary judgment to Eaton, and plaintiffs appealed. The issue on appeal was whether the executive exemption applied to plaintiffs.
The executive exemption to overtime pay requirements has a four-part test:
- the employee must be compensated on a salary basis of at least $455 per week;
- the employee's primary duty must be management of the enterprise or of a customarily recognized department or subdivision of it;
- the employee must customarily and regularly direct the work of two or more other employees; and,
- the employee must have hire or fire authority or their "suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees [must be] given particular weight."
The Sixth Circuit reversed the summary judgment finding that plaintiffs had created a fact issue regarding whether the executive exemption applied to them based on the following:
- although plaintiffs completed probationary evaluations for employees they supervise, Eaton did not place great weight on those evaluations;
- sometimes the plaintiffs submitted their evaluations after the probationary employees' probation had ended, a reality showing they had no influence on whether or not the probationary employee was hired;
- the plaintiffs' job descriptions did not include providing suggestions as to hiring and firing or other changes in employment status;
- Eaton did not follow their disciplinary recommendations and sometimes ignored them completely.
In essence, the Sixth Circuit ruled that the plaintiffs had presented enough evidence showing that Eaton did not pay much if any attention to their evaluations or other inputs to the personnel process for a jury to find that the "executive exemption" did not apply to them. The court also stated that: "As a matter of law, an employee who merely carries out the orders of a superior to effectuate a change in status is not performing exempt executive duties." Therefore, the case was remanded for trial.
Senior Circuit Judge Damon Keith wrote the opinion for the Sixth Circuit.
Robert L. Abell
www.RobertAbellLaw.com
