Monday, December 13, 2010

California Court Dismisses Overtime and Missed Meal and Rest Break Claims by Exempt Employee

By Ronald W. Novotny

On December 9, 2010, the California Second District Court of Appeal upheld the dismissal of a lawsuit brought by a United Parcel Service supervisor for unpaid overtime and missed meal and rest breaks, on the ground that he was employed in an exempt position under California law. The court in Taylor v. UPS held that both the executive and administrative exemptions applied, since the supervisor was primarily engaged in management-related duties which qualified for application of each of the exemptions.

The supervisor, David Taylor, was employed as a Hub Supervisor, On-Road Supervisor, and Center Manager in various UPS facilities in the Southern California Inland Empire. He earned over twice the minimum wage as well as stock awards and bonuses which were not available to hourly employees. His primary duties included reviewing daily operational reports to manage productivity and performance; meeting with union officials to improve employee relations; ensuring proper staffing levels and determining training needs; providing constant feedback, motivation and support to personnel to improve employee performance; scheduling vacation time and assessing employee performance; preparing accident reports; and building customer relations. Finding that these were precisely the kind of “management duties” that the state Division of Labor Standards Enforcement (DLSE) identified as qualifying for the exemption, the court had little difficulty finding that they satisfied the “duties test” for application of the executive exemption.

The court next turned to the issue of whether Taylor actually had the authority to hire and fire employees and exercised independent judgment and discretion in performing his duties. The court determined that these factors were satisfied as well, notwithstanding the existence of a union agreement and a full-fledged personnel manual that Taylor was required to implement, given the fact that his recommendations and suggestions were given weight in carrying out personnel decisions. Finally, the court determined that the same duties which qualified Taylor for the executive exemption also justified application of the administrative exemption, in view of the fact that his administration of UPS’s customer relations and workplace safety policies related to the running of the company’s general business operations.

This case is an important one in that it specifies the kinds of job duties which will qualify for application of these exemptions to a company’s supervisor under California law.