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Ninth Circuit Revives FLSA Exempt Classification Class Action

Published by on May 30, 2014

The Ninth Circuit issued an opinion Monday reviving a class action brought by store managers of the auto-parts store, AutoZone, alleging that they were misclassified as exempt employees and denied overtime pay when the majority of their duties were identical to those of non‑exempt employees. The Court reversed and remanded the summary judgment granted by […]

The Ninth Circuit issued an opinion Monday reviving a class action brought by store managers of the auto-parts store, AutoZone, alleging that they were misclassified as exempt employees and denied overtime pay when the majority of their duties were identical to those of non‑exempt employees.

The Court reversed and remanded the summary judgment granted by an Arizona Federal Court in favor of AutoZone for further review of the store managers’ roles.  Under the “bona fide executive” exemption of the Fair Labor Standards Act (FLSA), employees whose “primary duty” is performing exempt activities i.e., activities related to the “management of the enterprise… or of a customarily recognized department or subdivision thereof” are exempt from overtime pay.

In this case, the store managers spent less than 50% of their time performing exempt activities, and the remainder of their time was spent assisting customers and performing other non-exempt duties. The lower court awarded summary judgment in favor of AutoZone, holding that even though the managers spent more than half their time performing non-exempt duties, management is still their primary duty.  The Ninth Circuit disagreed with the lower court’s analysis in light of the evidence produced, and remanded for further consideration of the store managers’ duties and responsibilities as a whole.

Laconic Lesson: The revival of this class action suit indicates that courts are taking classification seriously – employees classified as exempt must truly be in managerial roles.

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