STORE MANAGERS MIGHT BE ENTITLED TO OVERTIME PAY

A California Court of Appeals has confirmed that store managers can be considered “non-exempt” and entitled to overtime pay when they spend over 50% of the time performing non-exempt (i.e. non-managerial) duties. In Heyen v. Safeway Inc., the California Court of Appeals upheld a trial court’s award of overtime pay to an assistant manager of a Safeway who spent more than 50% of her time engaged in non-exempt work such as stocking, customer service, bagging, checking, and bookkeeping. Specifically, the trial court found that a manager who performed various non-exempt tasks while simultaneously supervising other employees was not primarily engaged in the performance of exempt work and awarded her damages for overtime.

The Plaintiff Linda Heyen worked at a Safeway store as an Assistant Manager.  Her store was short-staffed which required her to perform both managerial work and non-exempt work. While she was busy supervising her employees, she also assisted them by bagging groceries or stocking shelves.  She did those tasks – both exempt (i.e., supervising employees) and non-exempt (i.e., manual labor) simultaneously. A jury awarded her over $26,000 in overtime wages.

Safeway appealed and made two arguments which were rejected by the Court of Appeal. First, it argued that a managerial employee can simultaneously do exempt and non-exempt work without losing the exemption (i.e. while managers may be bagging or stocking, they are always managing by supervising others, instructing others what to do, observing the store and taking corrective action where needed).  The Court of Appeal held that the only time such multi-tasking will be found to be exempt is when: (1) the non-exempt task is helpful in supervising employees; or (2) it contributes to the smooth functioning of the manager’s department. 

Safeway’s second argument was that although Plaintiff may have performed non-exempt tasks, it had no reason to believe that she was doing so (because she never told anyone she was) and that it had a “reasonable expectation” that she was performing exclusively exempt work.  Some courts have found that an otherwise exempt sales employee who was supposed to be performing exempt work more than 50 percent of the time, but failed to do so because of his own substandard performance, cannot evade the exemption, so long as the employer’s expectations were reasonable.  In this case, however, the court found that there was sufficient evidence to support Plaintiff’s argument that Safeway’s expectations were unrealistic based on the limited staffing that was available at the time and affirmed the jury’s verdict.