Under the FLSA, an employee is exempt from overtime compensation as an "executive" if: (1) he is compensated on a salary basis at a rate of not less than $455 per week; (2) his primary duty is “management of the enterprise in which the employee is employed”; (3) he “customarily and regularly directs the work of two or more other employees”; and (4) he has “the authority to hire or fire other employees” or his “suggestions and recommendations as to the hiring, firing, advancement, promotion” of other employees are “given particular weight.”
In Smith v. BLD Servs., LLC, No. 117-00167-JMC, 2018 BL 57886 (D. Md. Feb. 21, 2018), the Plaintiff claimed that his employer misclassified him as an "executive" employee exempt from overtime compensation and paid him on a salary basis in order to avoid paying him overtime compensation mandated by the FLSA and MWHL
The Defendant filed a motion for summary judgment arguing that Plaintiff was exempt as an "executive" employee.
In the Court's analysis, it noted that Plaintiff admitted to elements 1 and 3 of the "executive" employee exemption.
Plaintiff also conceded element 4, although he tried to argue that his suggestions were not given particular weight because his project manager, who outranked him in his superintendent position, ultimately made final hiring and firing decisions. The Court noted, however, that the regulations specifically state that an employee’s suggestions and recommendations may still be given particular weight even if the employee does not make the ultimate decision.
Finally, the Court analyzed the second element of the executive employee exemption requiring that management be the primary duty of the exempt employee.
For management to be the employee’s “primary duty,” it must be the principal, main, major or most important duty that the employee performs.” 29 C.F.R. § 541.700(a). In analyzing what constitutes an employee’s primary duty, courts consider “the relative importance of the exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee’s relative freedom from direct supervision; and the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee.” Jackson v. ReliaSource, Inc., Civ. No. WMN–16–358, 2017 WL 193294, at *4 (D. Md. Jan. 18, 2017).
The Defendant argued that Plaintiff acted in a managerial role because he was responsible for production, expense, and time reports, had the authority to discipline crew members, planned jobs based on a list of projects provided to him in order to maximize efficiency, scouted upcoming projects, maintained safety guidelines, and was given a company credit card to purchase necessary items for jobs. Defendant further alleged that Plaintiff was the only person performing these managerial duties for his crew, and for that reason Plaintiff’s managerial duties were his most important duties.
However, Plaintiff testified that his primary duties were physically setting up and doing the manual work on the lateral production and that his supervisory duties were only a minor part of his day to day job, both in the amount of time he spent doing them and the importance of those activities to the crew’s function.
Plaintiff also contended that he worked under the direct supervision of a project manager and without much autonomy, while Defendant argued that he operated his crew without direct supervision the vast majority of time. Neither Plaintiff nor Defendant provided a comparison of Plaintiff’s monetary compensation to that of his other crew members.
The Court ruled that a genuine dispute of material fact existed as to whether management was Plaintiff’s primary duty in his position as superintendent for Defendant and therefore denied Defendants' motion for summary judgment.