If somebody told you that they were classified as a ‘bona fide executive’ at work, images of the classic corner office along with a personal assistant and a generous expense account may come to mind. Clearly, this could be a person who is living the good life. But one who is considered a bona fide executive in the eyes of the law is quite different. This was made clear in the Second Circuit’s decision this past July in Ramos v. Baldor Specialty Foods, Inc.,.
Managers who worked the night shift in a warehouse sued Baldor Specialty Foods, Inc. arguing that they were entitled to unpaid overtime wages (among other damages) because they were improperly classified as bona fide executives by Baldor. While acknowledging that they met the majority of the requirements to be considered bona fide executives as set forth by the Department of Labor (“DOL”), the plaintiffs argued that they did not supervise what the DOL defines as “customarily recognized department[s] or subdivision[s].” The managers based their argument, in large part, on the fact that they were each supervising different teams of employees performing the exact same job duties at the same exact time and in close proximity with each other (working side by side in the warehouse). Therefore, the managers argued, they could not be considered to be supervising separate ‘subdivisions’ since everybody was performing the same exact work under one roof.
The Second Circuit disagreed with the managers. The Court placed more value on the actual job duties and responsibilities of the managers as oppose to the proximity of the managers teams and the similarity of work performed by each team. The Court noted that each manager clearly supervised his or her workers and a distinct team, their subordinates could not change teams without permission of the managers and the managers were responsible for evaluating their team along with the ability to fire and promote within their staff. Clearly, each manager ran his or her own respective group.
The Court reasoned that the very job duties and responsibilities which made the plaintiffs managers were not negated merely because other managers in close proximity supervised separate teams of employees performing the same tasks. Ultimately, the Court found that the fact that separate teams of employees perform the same work under one roof does not mean that “subdivisions” cannot exist for the purposes of an executive classification under the Fair Standards Labor Act.
While employers will naturally be excited about this recent decision, they should still tread cautiously. Ultimately, the Second Circuit has not provided an open ended invitation for employers to classify all warehouse supervisors or other supervisors in ‘blue-collar’ facilities as “bona fide executives.” If one is unclear whether an employee should be considered a bona fide executive for purposes of overtime pay, it is best to speak to an attorney. This will prevent the possibility of significant financial consequences due to an improper classification.