Do employees who oversee different teams within a company that perform the same job, in the same location and at the same time as other teams, fall into the category of an “executive” under the Fair Labor Standards Act?
Recently several employees argued that their responsibilities were so standardized that they did not fall under the FLSA’s “executive exemption.” However, the FLSA’s executive exemption is not determined by the ubiquity of the tasks performed by supervised employees. Even when different teams within a company perform the same job, in the same location and at the same time as other teams, each team still counts as an individual subdivision for the FLSA’s executive exemption.
In the case, Luis Ramos, et al. v. Baldor Specialty Foods, Inc., et al, No. 11-2616 (2nd Cir. July 12, 2012), the court had to decide whether “captains” in Baldor’s food warehouse were exempt from the FLSA’s overtime pay provisions as “executives.”
The captains worked the night shift of Baldor’s warehouse. Their duties included overseeing the work of a “team” of employees who retrieved food products and loaded them onto trucks for delivery. Each captain was in charge of a team and responsible for ensuring the team member’s timeliness, efficiency and accuracy. Each team performed the same general tasks.
Under the FLSA, an “executive employee” is one who, among other things, has the primary duty of managing “a customarily recognized department or subdivision” of the employer.
Thus, the court had to decide whether the “team” was a “customarily recognized department or subdivision.” Although their primary duty was to manage a team, the captains argued that the teams were not “customarily recognized departments or subdivisions” because each team performed the same tasks at the same time and in the same warehouse. Rather, the captains believed the entire warehouse was the subdivision of Baldor. Because of their similar work and environment, the teams were indistinguishable and therefore could not be separate departments.
However, the 2nd Circuit disagreed. The court found nothing in the FLSA or its regulations to suggest that “customarily recognized departments or subdivisions” were required to be unique or independent.
“The job of supervising a team of employees becomes no less managerial simply because the team operates alongside other teams performing the same work in the same building,” the court held. Thus, Baldor’s decision to organize its workforce by teams did not take away a team’s status as a “customarily recognized department or subdivision.”