An interesting case involving the Safeway grocery chain could have some far reaching ramifications for California employers.
First a little law. In California, a manager can be exempt from overtime pay, so long as the manager is “primarily engaged” in managerial duties. As was the case many years ago when I worked at a grocery store, managers typically do far more than manage. This case shows little has changed, and the plaintiff, Linda Heyen, when promoted to assistant manager, continued to do all the things she had done before she was promoted, but with added supervisory duties. So, when Heyen was fired, she sued, claiming that she should not have been treated as an exempt employee and was entitled to overtime pay.
Safeway argued that Heyen was properly categorized as exempt, because she was primarily engaged in managerial duties, regardless of what she was doing. When she was stocking shelves, she was still supervising the other employees. When she was running the register, she was still supervising other employees. Here is the claim by Safeway:
Safeway urges that store managers such as Heyen necessarily “multi-task” by engaging in “exempt” and “nonexempt” activities at the same time. In other words, while Heyen and other managers “might be checking and bagging (or doing stock work) they were also always still managing the store operations, including engaging in activities such as observing store operations and employee activities, and instructing employees in their assignments and any corrective measures that needed to be taken.” By instructing the jury that it must determine whether an activity was “exempt” or “nonexempt” based on the primary purpose for which Heyen undertook it, the court “effectively [read] the concept of concurrent duties almost out of existence.” Instead, Safeway suggests, the trial court should have instructed the jury that any time Heyen spent simultaneously performing “exempt” and “nonexempt” duties “should be considered to fall on the `exempt’ side of the ledger.”
Here is how the Court of Appeal responded to that argument:
Although there is some intuitive appeal to Safeway’s contention, it is unsupported by California law. As we have said, the federal regulations cited in Wage Order 7 expressly recognize that managers sometimes engage in tasks that do not involve the “actual management of the department [or] the supervision of the employees therein.” (§ 541.108(a).) In those circumstances, the regulations do not say, as Safeway would have us hold, that those tasks should be considered “exempt” so long as the manager continues to supervise while performing them. Instead, the regulations look to the supervisor’s reason or purpose for undertaking the task. If a task is performed because it is “helpful in supervising the employees or contribute[s] to the smooth functioning of the department for which [the supervisors] are responsible” (§ 541.108(a), (c)), the work is exempt; if not, it is nonexempt.
Thus, the federal regulations incorporated into Wage Order 7 do not support the “multi-tasking” standard proposed by Safeway. Instead, they suggest, as the trial court correctly instructed the jury, that the trier of fact must categorize tasks as either “exempt” or “nonexempt” based on the purpose for which Heyen undertook them.
The lesson here for employers is that you don’t get to create exempt employees with a change in title, unless that employee really does become a manager performing primarily managerial duties. From the employee’s perspective, if you get a promotion to manager, but find yourself still performing the same duties, then you are probably entitled to overtime pay.
