When will employers learn?  They keep classifying retail Store Managers and Assistant Managers as exempt, when these workers are often misclassified, not intentionally, but because the nature of their duties often tends to undermine the primary duty test and render them non-exempt. Another example is a recent case where Store Managers have been granted conditional certification in their FLSA collective action. The case is entitled Spack et al. v. Trans World Entertainment Corp. and was filed in federal court in the Northern District of New York.

The plaintiffs can now send out notices to current and former store managers so they might opt in to the case.  The plaintiffs also want a class of Assistant Managers for alleged off the clock work.  The Company, however, won that round, convincing the Judge that it was too soon to certify such a class, asserting that it had not yet been ascertained if these workers were non-exempt, which would allow them to make these claims.

The Judge appeared to reserve decision on a combined class and also indicated that the class could also be de-certified.  The Court stated that “should additional discovery demonstrate the existence of significant differences between the SMs or between the SMs and SAMs, the court can choose to deny any future motion seeking conditional collective certification of the SAMs, or, at the second stage of the analysis, decertify the collective.”

The plaintiffs met the “modest” burden at this conditional stage by submitting twelve Certifications from opt-in plaintiffs who claimed they worked 50-70 hours per week and spent the vast majority of their time performing non-exempt, low-level tasks that were not managerial in nature.  The Company also submitted statements from managers that showed they performed managerial (i.e. exempt) work and tried to undermine the plaintiffs’ statements but the Court would not allow these manager statements to bear the weight that the Company urged they should be accorded.

The Takeaway

My advice to clients, for many years now, has been to treat retail store managers as non-exempt and either pay them hourly or on a fluctuating work week method of compensation.  In that way, the worry and uncertainty are removed from the equation.  Only those managers at the “top” of the store echelon (maybe overall Store Managers) can still be treated as exempt, although the employer must still ensure that these workers do not perform too much non-exempt work.

Or else the exemption will be lost even for those “truly” managerial employees…

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