In California, Managers Who Perform Non-Exempt Tasks While Managing Can Be Found Non-Exempt

The assistant manager of a Safeway grocery store sued for overtime, claiming that she spent most of her working time performing the same type of work that non-exempt employees performed.  She said she spent most of her time bookkeeping, cashiering and stocking shelves, and that Safeway’s decision to classify her as exempt from overtime was therefore improper.  At trial, the assistant manager admitted that when she was performing non-exempt tasks, she was able to simultaneously supervise the hourly employees and manage the store.  But the trial court found that the “primary purpose” of the multitasking was the non-exempt work she performed, as opposed to the managerial work, and that Safeway’s decision to classify her as an exempt employee was improper.  The trial court awarded her damages for unpaid overtime, and the appellate court affirmed the judgment.  A copy of the court’s opinion in Heyen v. Safeway Inc. can be downloaded here.

California’s criteria for overtime exemptions are similar to those found in the federal Fair Labor Standards Act (FLSA), but not identical.  One key difference is that while the FLSA looks to an employee’s “primary duty,” California law employs a quantitative approach requiring exempt employees to spend the majority of their working time performing exempt work.  When an employee claims that he or she was misclassified as exempt, the finder of fact must determine whether the employee spent most of his or her working time performing either exempt or non-exempt work.  The burden to prove that the majority of working time was spent on exempt tasks falls on the employer.

In cases involving retail store managers, California employers have long argued that even when managers are performing non-exempt tasks such as cashiering, stocking shelves, and tidying up the store, they are simultaneously managing the store because they are still able to observe and supervise employees and respond to customer inquiries.  The argument has been that this time should be counted as exempt managerial time.

In this case, the assistant manager agreed that even when she was performing non-exempt tasks she was still able to observe and manage the store.  But the trial court rejected Safeway’s argument that this multitasking time should automatically be counted as exempt, and instructed the jury that when she was performing both exempt and non-exempt work, it should look to the “primary purpose” of the multitasking time, and classify that time as either exempt or non-exempt.  Given this instruction, the jury determined that the primary purpose of the multitasking time was the non-exempt work being performed, and that Safeway had failed to prove that the assistant manager spent most of her time performing exempt managerial work.  The appellate court found no error in the trial court’s instructions and affirmed the judgment against Safeway.

This decision serves as a reminder to California employers with exempt managers who occasionally “pitch in” during busy periods and perform non-exempt tasks.  These employers should limit the amount of non-exempt work performed by managers, and ensure that policies and performance reviews emphasize that a manager’s primary duty, at all times, is to supervise and manage the store.  Employers that need managers to multitask should plan ahead as to how, if and when challenged, they can prove that their managers spent the majority of their working time performing exempt managerial duties.

Aaron Buckley – Paul, Plevin, Sullivan & Connaughton LLP – San Diego, CA

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