When an Employer Can — and Can’t — Use a Statutory Exemption Argument as a Stopper Against an Unpaid Overtime Claim

In some ways, wage and hour law can be like the game of bridge. Each has various sets of rules that can layer on top of (or intertwine with) one another. In each setting, the difference between success and defeat often can come down to which side understands, utilizes, and deploys those concepts more effectively. If you have questions about the law of overtime compensation, be sure to get in touch with an experienced Atlanta wage and hour lawyer (who may or may not be able to help you with your bridge game.)

Why do we bring up bridge? In this instance, it’s because some employees of the world’s largest contract bridge league recently scored a win in their unpaid overtime lawsuit.

In 2018, the league reorganized its Field Operations Department, creating four new salaried roles: Area Manager, Mentor, National Tournament Director, and Associate National Tournament Director.

Last year, several of those employees sued, alleging that the league improperly classified them as exempt employees. The employer disagreed, arguing that all of the employees met the standards of theĀ  Fair Labor Standards Act’s administrative exemption.

The administrative exemption has three requirements. The employee must:

  1. make at least $684 per week,
  2. perform “office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers” as their primary duty, and
  3. “exercise… discretion and independent judgment with respect to matters of significance” as part of their primary duties.

Assessing What Is — or Isn’t — a Job’s Primary Duty

As the bridge case highlights, if your primary task involves making your employer’s primary product or providing its main service, you automatically don’t meet the second prong and your job is not exempt.

In the bridge case, the primary role of the league’s director and associate director jobs was specifically to supervise bridge tournaments, a/k/a “the very service that [the league] is in the business of providing.” That meant that neither of those job classifications qualified under the exemption and both groups were entitled to overtime compensation.

The managers and mentors both were exempt, however. This portion of the decision highlights a different bit of important information, which is that the time an employee spends on a particular task does not, by itself, decide the second prong of the test. In the bridge case, managers sometimes spent three-fourths of their time directing tournaments, yet they still qualified as exempt.

That’s because they also did work related to “tournament organization… workforce supervision…tournament operations, and… executing the strategic direction of field operations.” Also, unlike the directors and associate directors, managers had the authority to hire and fire workers and to write performance reviews. These differences made the managers exempt (unlike the directors.)

Last year, the 11th Circuit Court of Appeals (whose decisions directly impact federal lawsuits in Georgia, Florida, and Alabama) also looked at the administrative exemption and, more specifically, the third prong of the test. That court looked to the Labor Department’s regulations on the topic. In doing so, the court declared that to satisfy the third prong’s requirements, jobs must involve “the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered.”

Additionally, satisfying the third element requires the power to make choices “free from immediate direction or supervision” and those decisions “cannot be mechanical, repetitive, recurrent or routine.”

If an employer cannot demonstrate all these things, the exemption may not apply and the employee may be entitled to overtime compensation.

Whether you’re an employer or an employee, it is important to understand that federal law contains exemptions to the overtime compensation requirement. If you have questions about overtime law or statutory exemptions, make sure you’re getting the answers you need from a knowledgeable legal professional. The experienced Atlanta wage and hour attorneys at the law firm of Parks, Chesin & Walbert offer our clients reliable advice and, when necessary, zealous litigation advocacy in pursuit of a fair outcome that properly protects their vital interests. Contact us through this website or at 404-873-8048 to schedule a consultation today.

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