Employment Law Daily Taco Bell assistant GM's misclassification case to turn on relative importance of exec duties
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Friday, March 11, 2016

Taco Bell assistant GM's misclassification case to turn on relative importance of exec duties

By Ronald Miller, J.D. Taco Bell was denied summary judgment against a claim by an assistant general manager (AGM) that she and other similarly situated employees were misclassified as exempt employees and denied overtime compensation, ruled a federal district court in Tennessee. Here, the court found genuine disputes of material fact on the employee’s primary duties, whether she “customarily and regularly” directed the work of two or more employees, and whether she had authority to hire and fire employees or make recommendations that were given any weight (Tyler v. Taco Bell Corp., March 8, 2016, McCalla, J.). Primary duties. The employee, who was an AGM at various Taco Bell restaurants in the Memphis area, claimed the employer misclassified AGMs as exempt from the overtime provisions of the FLSA. She was a member of the management team and was responsible for the restaurant when there was no Restaurant General Manager (RGM) present. However, the parties differed in their perceptions of her role as AGM. According to Taco Bell, her primary duties included coaching, developing, and training employees to perform their duties well and provide excellent customer service. Specifically, Taco Bell expected the employee to manage the store’s budget, coach staff on speed of service, perform “manager-in-charge” walks, monitor labor, and ensure that the restaurant had the correct amount of product. According to Taco Bell, the employee managed and directed the work of two to seven employees each day, and interviewed applicants and recommended whether they should be hired. For her part, the employee claimed her primary duties were manual tasks, such as cleaning, cashiering, and taking out the trash. She asserted that she regularly “performed hourly work because she was told to, and because there were not enough hourly workers to get the work done.” Further, she contended that she was a member of the management team in name only and did not have any actual authority to make material decisions. However, the employee conceded that she completed paperwork for new hires and ordered product, uniforms, and supplies, but maintained that she did so only when she was instructed. Further, although the employee acknowledged that she would “sometimes” issue corrective actions, she asserted that they were merely documents that would go into the file and no other consequences would result. Executive exemption. Moving for summary judgment, Taco Bell argued that the AGM’s primary responsibilities were “executive” and she was properly classified as exempt. It further argued that her failure to perform managerial duties did not transform her into a non-exempt employee. At issue here was whether the AGM was employed in an “executive capacity.” The parties agreed that the employee’s annual salary satisfied the $455 per week requirement for the executive exemption. However, they contested the remaining three elements of executive capacity. The court first examined the AGM’s primary duty. Management is considered to be an employee’s primary duty if it is “the principal, main, major, or most important duty that the employee performs.” Here, the court found that the employee’s testimony that she performed certain managerial tasks was not necessarily inconsistent with her contention that she spent approximately 90 percent of her time on manual, non-managerial tasks. The court could not determine the relative importance of the employee’s supervisory duties as compared with her other duties. Thus, the “relative importance of duties” factor could not be determined without a factfinder’s judgment regarding the impact of the employee’s varied duties. Supervisor duties. Next, the court examined whether the AGM directed the work of two or more employees. Taco Bell argued that the employee admitted that she managed two to seven employees on any given day and “could direct” those employees to perform tasks. However, the court pointed out that the executive exemption applies only where an “employee customarily and regularly directs the work of two or more employees.” In this instance, the employee did not testify regarding the frequency of this responsibility or the extent to which she “directed” the work of these employees. Thus, the court found a genuine dispute of material fact as to whether the employee “customarily and regularly” directed the work of two or more employees. Authority to hire and fire. Finally, the court examined whether the AGM had authority to hire or fire or provide suggestions that were given particular weight. Again, Taco Bell argued that she admitted that she interviewed applicants and recommended whether applicants should be hired. Specifically, Taco Bell pointed out that the employee hired two employees in 2014, one of them without the approval of the area coach. However, the employee countered that, during her entire time as an AGM, she interviewed only two candidates, recommended only one be hired, was never asked for her input on promotions or pay raises, and on the one occasion she recommended that an employee be given “a recognition card,” her recommendation was not followed. Under such circumstances, the court concluded that there was a genuine dispute of material fact as to whether the employee had the authority to hire and fire employees or make recommendations that were given any weight. Thus, Taco Bell’s motion for summary judgment was denied.

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