The
Department of Labor (“DOL”) has established a four-part test to determine
whether or not an employee has been appropriately classified under the
executive exemption. See 29 C.F.R. 541.100. An employee who is an exempt
executive is one who is “(1) [c]ompensated on a salary basis at a rate of not
less than $455 per week . . . ; (2) [w]hose primary duty is management of the
enterprise in which the employee is employed or of a customarily recognized department
or subdivision thereof; (3) [w]ho customarily and regularly directs the work of
two or more other employees; and (4) [w]ho has the authority to hire or fire
other employees 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.”
The plaintiffs only disputed the fourth prong and the
Court determined that the employer was entitled to judgment if it could show “that
Plaintiffs were instrumental in other employment status changes such as reassignments
or changes in benefits or pay.” The plaintiffs disputed that their personnel
responsibilities were given any weight.
For instance, the plaintiffs disputed that their evaluation of
probationary employees was given any weight since the probationary employees
were generally hired as a matter of course and the evaluations were often
turned in only after the employee’s probationary period had been completed. Moreover, they did not participate in job
interviews and were never trained to do so.
Their job descriptions also lacked any indication that they made
suggestions about hiring, firing or other personnel actions. They also presented evidence that their
recommendations about personnel actions were frequently disregarded and that
all decisions were made by their managers and directors.
This
Court has defined a change of status as a tangible employment action that
constitutes “a significant change in employment status, such as hiring, firing,
failing to promote, reassignment with significantly different responsibilities,
or a decision causing a significant change in benefits.” . . . Furthermore, temporary
reassignments that do not cause pay or benefit reductions are not changes of
status, as a matter of law.
The
DOL provides the following three-prong test for determining whether an employee
has significant influence over other employees’ “changes of status”: “[1]
whether it is part of the employee’s job duties to make such suggestions and
recommendations; [2] the frequency with which such suggestions and
recommendations are made or requested; and [3] the frequency with which the
employee’s suggestions and recommendations are relied upon.” See 29
C.F.R. 541.105. Occasional suggestions and recommendations do not suffice to
demonstrate that an employee had significant influence over other employees’
changes of status.
The Court concluded that the employer could not
demonstrate undisputed facts concerning the plaintiff’s level of personnel
responsibilities: “As a matter of law,
an employee who merely carries out the orders of a superior to effectuate a
change of status is not performing exempt executive duties.” While the employer argued that the plaintiff
first-level supervisors implemented progressive disciplinary actions, the
plaintiffs produced evidence that their disciplinary actions were removed from
personnel files and given the same level of punishment for repeated rule
violations.
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 change or
be 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.
