How much is enough? Employers get some leeway with classification in the Sixth Circuit

With many recent cases questioning employer's classification of certain employees as "exempt" under the FLSA and therefore not eligible for overtime, re-examining the rules is important. Recently, the Sixth Circuit analyzed the duties of a store manager for a Speedway gas station/convenience store in the case of Thomas v. Speedway SuperAmerica, LLC, No. 06-3768 (October 30, 2007). Ms. Thomas was terminated several years ago, and shortly thereafter, she sued Speedway asserting that Speedway had failed to pay her overtime under the FLSA & under Ohio state law, as well as discriminating against her for her age and wrongfully discharging her under Ohio law. Ms. Thomas moved to has the FLSA claim designated a collective action and the state overtime class as a class action, which was conditionally approved by the court a year after suit was initially brought. Speedway moved for summary judgment on the overtime claims, while Ms. Thomas sought leave to amend her complaint to include 28 other store managers at Speedway locations to the suit. The court granted summary judgment to Speedway dismissing all of Ms. Thomas' claims and did not rule on her request for leave to amend. Ms. Thomas appealed the court's ruling to the Sixth Circuit solely as to the overtime claims.

The Sixth Circuit found that Ms. Thomas' primary duty was management of the station, following "numerous" other courts in determining plaintiffs involved in factually similar cases were primarily management. The Sixth Circuit was influenced by the definition of "management" in the FLSA regulations and clarified that "primary duty" is not necessarily the "most time-consuming duty" rather the most important duty of the employee. So even though Ms. Thomas only spent 40% of her time on management, management was her most important duty and allowed her to be classified as "exempt." See Opinion at p.6. The court went through a substantial analysis of Ms. Thomas' duties to determine what her primary duty was and whether she was properly classified as "exempt." The opinion gives attorneys and employers insight in the how classifications of employees will be assessed.

The guidelines for determining if an employee is "exempt" under the FLSA are found at Part 541 of Title 29 of the CFR. These regulations clarify that a job title alone will not establish that an employee is "exempt;" rather, a case-by-case, factual determination must be made after assessing the employee's salary and his or her duties on the job. In light of this decision, employers should carefully assess employee's primary duties, as well as allocation of duties, to determine exempt status.