May 29, 2013

Multi-Tasking Managers Can Get You Into Hot Water, According To The California Court of Appeal

It is hard to think of a job in the United States that does not involve some type of multi-tasking.  Every day, employees all around the country talk on the phone while simultaneously writing an e-mail.  Or manning the phones while overseeing office operations.

But apparently, the California Labor Code has not caught up with the concept of multi-tasking.  At least that is the impression you would have if you read the California Court of Appeal’s decision in Heyen v. Safeway, Inc.  In that case, the 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.

Linda Heyen worked at a Safeway store as an Assistant Manager.  Because her store was short-staffed, she believed that she and other managers needed to do both managerial work and non-exempt work in order to meet the company’s expectations.  But, she testified that when she needed to do non-exempt work, she was able to multi-task and do managerial work simultaneously.  So, for example, 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.

She brought a lawsuit claiming that she was misclassified as an exempt employee under the “executive” exemption and that she was therefore entitled to overtime pay for anything worked over 8 hours in a day.  The case was tried to a jury who found in her favor, awarding her over $26,000 in overtime.

On appeal, Safeway made two arguments, both of which the Court of Appeal rejected.  First, it maintained that a managerial employee can simultaneously do exempt and non-exempt work without losing the exemption.  It was a common sense argument – 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 acknowledged the “intuitive appeal” of the argument, but nonetheless found that California law did not support it.  Instead, the court found 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.  A jury’s responsibility is to determine whether the primary purpose of performing a non-exempt task is for one of those permissible reasons or for some other reason and, in this case, there was sufficient evidence to support the jury’s verdict.

Safeway’s second argument was that although Heyen 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.  Under California law and under the Fair Labor Standards Act, an employee who primarily performs non-exempt work can still be found to be exempt when an employer has a “realistic expectation” that the employee is performing exempt work based on the “realistic expectations of the job.”  So, for example, 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 Heyen’s argument that Safeway’s expectations were unrealistic based on the limited staffing that was available at the time and, as a result, it affirmed the verdict.

Because the court’s opinion is so distanced from the reality of modern work life, it raises more questions than it answers.  Do you know whether your managers are regularly performing non-exempt tasks in addition to their everyday responsibilities?  Why are they doing them?  Do they complain about it?  Do you see it?  If not, do you expect that they are doing it?  All of these questions are now significant based on the Heyen decision.

To be sure, there are some proactive measures that you can take to guard against a claim like this.  For example, your managerial employees should be informed that if their actual duties ever deviate from their job descriptions, they need to let someone know.  And you can have a policy which states that managerial employees are not expected to perform non-managerial tasks except in unusual circumstances.  But, at the end of the day, you need to keep a watchful eye on your managers to make sure that they are doing what they are supposed to do and that their work is truly managerial in nature.


Category: Wage-Hour,