Ohio Supreme Court Rejects Challenge to White Collar Exemptions in Minimum Wage Statute

This morning, a divided Ohio Supreme Court rejected a constitutional challenge to Ohio’s minimum wage statute on the basis that the General Assembly’s incorporation of the FLSA exemptions into the Ohio statute violated the Ohio constitution.  Haight v. Minchak, Slip Opinion No. 2016-Ohio-1053.  In particular, the Court held that the General Assembly’s incorporation of the FLSA’s white collar and other minimum wage exemptions into the statutory definition of “employee” at Revised Code § 4111.14 did not “clearly conflict with or restrict” the meaning of “employee” in the 2006 voter-initiative Fair Minimum Wage Amendment to the Ohio Constitution at Article II, section 34a.   The plaintiffs had been commissioned sales people who alleged that they were not paid the mandatory minimum wage by their employer, which, in turn, asserted that they were not covered by Ohio or federal minimum wage statutes as exempt commissioned salespeople. While the FLSA contains an exemption for commissioned sales employees, the Ohio constitutional provision did not.   As previously reported here, the Montgomery County Court of Appeals ruled in favor of the employees, which then brought all white-collar exemptions in the minimum wage statute into question.

The dispute centers on certain language in the FMWA in Article II:

“[E]mployer,” “employee,” “employ,” “person” and “independent contractor” have the same meanings as under the federal Fair Labor Standards Act or its successor  law, except that “employer” shall also include the state and every political subdivision and “employee” shall not include an individual employed in or about the property of the employer or individual’s residence on a casual basis. Only the exemptions set forth in this section shall apply to this section.

* * *

This section shall be liberally construed in favor of its purposes. Laws may be passed to implement its provisions and create additional remedies, increase the minimum wage rate and extend the coverage of the section, but in no manner restricting any provision of the section or the power of municipalities under Article XVIII of this constitution with respect to the same.  (emphasis added).

The FMWA also contained a number of exemptions from the statute which did not mirror the FLSA exemptions and did not, for instance, include any of the white collar exemptions for administrative, professional or management employees.   When the General Assembly passed implementing legislation in 2007, it defined “employee” to include both the FLSA definition of employee and to also include the exemptions to the minimum wage which existed in the FLSA’s § 213 (i.e., the white- collar exemptions).  

The plaintiffs argued that the exclusion of the white collar exemptions violated the constitutional admonition that “only the exemptions set forth in this section shall apply . . . “  However, the employer asserted that the FMWA broadly incorporated the FLSA and would have specified which specific exemptions to reject if it had not meant to incorporate all of the white-collar exemptions.   

The Court noted that legislation is presumed to be constitutionally valid unless it appears “beyond a reasonable doubt that the legislation and constitutional provisions are clearly incompatible.”   In this case, the FMWA said that it broadly incorporated “meanings” (plural) from the FLSA, which means that more than one definition applies.  This could include both definitions and exemptions (and, thus, creates a reasonable doubt).  Further, it would be logical to assume that the FMWA did not list exemptions which already existed in the FLSA because it impliedly included them.   Indeed, at least one publication from 2006 distributed by at least one group advocating the passage of the FMWA implied as much.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.