Costello v. Home Depot USA, Inc. - 928 F. Supp. 2d 473 (D. Conn. 2013)

Rule:

Since the exemption to overtime pay in the FLSA provides an affirmative defense to overtime claims, the employer has the burden of proving that a plaintiff is an exempt 'bona fide executive' by a preponderance of the evidence. Under the "bona fide executive" exemption, as of 2004, federal regulations exempt an employee: (1) Compensated on a salary basis at a rate of not less than $455 per week; (2) Whose primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof; (3) Who customarily and regularly directs the work of two or more other employees; and (4) Who 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.

Facts:

Plaintiffs James Costello and Aron Moore brought the instant action against defendant Home Depot U.S.A., Inc. ("Home Depot'), alleging that they were not paid for overtime work in violation of the Fair Labor Standards Act (the "FLSA"), 29 U.S.C. § 207. Home Depot simultaneously filed these Motions for Summary Judgment as to Costello and Moore, arguing that there was no violation of the FLSA because both former employees were properly categorized as exempt as executive employees from the FLSA's rules governing overtime payments. During the course of his employment, Costello was a merchandising assistant store manager (“MASM”) who supervised departments and employees. Various department supervisors reported to him, and he also exercised common tasks of managers such as recruiting, interviewing applicants, and making recommendations to the store manager; teaching training classes; reviewing associates’ work and training schedules; approving or disapproving requests for vacation time; and ensuring customer satisfaction, among others. Similarly, Moore was a MASM who supervised multiple departments, conducted interviews for new hires, training and developing his subordinates, and make decisions regarding the store and employee schedules, among others.

Issue:

Is summary judgment in favor of Home Depot proper?

Answer:

No.

Conclusion:

In re: Costello — Home Depot argues that Costello frequently performed managerial tasks as set out in 29 C.F.R. § 541.102, and that those tasks were Costello's principal value to the company. However, unlike some of the other cases to consider the relative importance of an employee's more managerial duties, here the court did not have any direct testimony from Home Depot officials as to how the company viewed the importance of the various tasks assigned to and carried out by Costello. Instead, the court was left to attempt to divine such conclusions, in part, from what can only be described as a somewhat intuitive assessment of what duties are critical to a large-scale retail operation. It is undisputed that Costello performed at least some of the tasks that track those outlined in Donovan, although the frequency with which Costello performed those tasks, and whether he was the only person performing them, is a matter of contention. Also unclear is how other employees regarded the importance of what Costello was doing. As stated above, unlike in Donovan, the defendants here provide no corroborating testimony or evidence as to whether Costello's ostensibly managerial tasks were "critical to the success" of the store. Here, given the absence of corroborating testimony from Home Depot officials or other employees regarding the importance of Costello's various tasks, divergent accounts of the amount of time actually spent on managerial tasks (including performance of MOD functions), the degree to which those functions were replicated by lower-level employees, Costello's testimony that he was informed by supervisors that customer service was his primary job function, and his somewhat uncertain degree of influence in hiring decisions, a material issue of fact remained as to the relative importance of Costello's managerial functions. Other factors, such as time spent performing non-exempt work, extent of freedom from direct supervision, and his salary compared to wages paid nonexempt workers for performing similar tasks were still in question. Thus, material issues of fact exist as to Costello's primary duty at Home Depot, precluding summary judgment. 

In re: Moore — As with Costello, it is not clear from the record whether Moore's arguably managerial actions which, both sides agree, constituted less than 50 percent of Moore's work week, were critical to the success of the store. As with Costello, Home Depot offers no affidavits or evidence related to how Home Depot directly interpreted the relative importance of Moore's duties. Further, it is unclear which, if any, of Moore's managerial tasks were critical to the success of the store. Evidence as to what Moore did as MOD is even more sparse than that considered for Costello (indeed, Home Depot's Memorandum as to Moore does not refer at all to the importance of his MOD tasks). While perhaps slightly more evidence exists as to how Home Depot viewed the relative importance of Moore's managerial tasks than Costello, there are still significant factual disputes that remain such that the court cannot determine this factor as a matter of law. Accordingly, material issues of fact exist as to whether Moore's primary duty at Home Depot was, in fact, managerial. A more fully developed record will greatly aid a jury in making an appropriate determination.