There remains a surprising number of employers who believe an employee with the title of “supervisor” who is paid a fixed salary is exempt from the federal overtime requirements. While such an employee may be exempt, it is not because of the title, and the salary is only one of the components (assuming the salary exceeds the minimum threshold). To be exempt, the “supervisor” must also satisfy one of the so-called “white-collar” exemptions by performing duties that qualify as “executive”, “administrative”, or “professional.”
A recent ruling from the Eighth Circuit (Garrison v. Con Agra Packaged foods, LLC) addressed whether ten employees who worked in a ConAgra plant as “team leaders” were exempt from overtime under the “executive” exemption. The team leaders claimed they were entitled to overtime when they worked more than forty hours a week. At the plant in question, a team leader was responsible for, among other things, monitoring the performance and behavior of hourly employees, and identifying rules violations and poor work performance. They had authority to reassign or recommend temporary reassignment of employees and to recommend discipline. If management agreed to the recommended discipline, it would result in a change in status of the employee.
To qualify under the “executive” exemption, an employee must meet four criteria:
1) compensation at or greater than $455 per week (increasing to $913 per week on December 1);
2) the primary duty is management of the enterprise or a customarily recognized department or subdivision of the enterprise;
3) customarily and regularly direct the work of two or more other employees; and
4) have the authority to hire or fire, or whose suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees are given particular weight.
ConAgra and the employees agreed the team leaders satisfied the first three criteria. The dispute was whether they met the fourth. To determine whether the team leaders’ suggestions and recommendations were given particular weigh in personnel decisions, the court examined whether their input into personnel decisions had more influence that the input provided by hourly employees.
The evidence showed the team leaders were told to appraise performance of probationary employees and report good or poor performance to a manager. At least two of the team leaders in the class had recommended the discharge of a probationary employee who was ultimately discharged. Team leaders also gave feedback whether promoted employees could do their new job, and if not the employees were demoted to their former positions. Team leaders were able to fill tempoary vacancies by moving someone from one class to another and managing the scheduling of hourly employees within their areas. Finally, the evidence show management followed the recommendations of team leaders with respect to employee discipline “most, if not all of the time.” The Court of Appeals found this evidence was sufficient to prove, as a matter of law, that team leaders in that plant were exempt from the overtime requirements.
If a front line supervisor is classified as exempt, the ConAgra case shows that reliable evidence the supervisor’s recommendations are actually followed is important. The best practice would be to document their input and show that management actually followed it.
images Credit: from Google images, Creative Commons license, Industrial Plant