On August 26, 2014, Winebrake & Santillo filed a brief with the Court of Appeals for the Third Circuit which seeks to reverse a district court’s grant of summary judgment against a Family Dollar Store Manager who alleges that he was misclassified as overtime-exempt under the executive exemption to the overtime premium pay requirements of the Pennsylvania Minimum Wage Act. See Itterly v. Family Dollar Stores, Inc., 2014 U.S. Dist. LEXIS 12340 (E.D. Pa. Jan. 30, 2014). Below is the contents of that brief:
I. JURISDICTIONAL STATEMENT
The district court had jurisdiction under 28 U.S.C. § 1331. This Court has appellate jurisdiction under 28 U.S.C. § 1291.
II. STATEMENT OF THE ISSUE PRESENTED FOR REVIEW
Is the evidence supporting the classification by Defendants/Appellees Family Dollar Stores, Inc. and Family Dollar Stores of Pennsylvania, Inc. (collectively “FD”) of Plaintiff/Appellant Albert Itterly (“Itterly”) as an overtime-exempt “executive” so one-sided that, even after accepting Itterly’s evidence as true and drawing all justifiable inferences in his favor, no reasonable jury could conclude that “management” was not Itterly’s “primary duty”? [Suggested Answer: No.]
III. STATEMENT OF THE CASE
A. Commencement of Itterly’s Lawsuit.
From July 21, 2007 until November 21, 2007, Itterly worked for FD as a salaried store manager (“SM”) in Allentown, PA. See Joint Appendix (“JA”) at 173a, ¶ 5. FD classified Itterly as an “executive” exempt from the overtime pay mandates of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq., and the Pennsylvania Minimum Wage Act (“PMWA”), 43 P.S. §§ 333.101, et seq.
In March 2008, Plaintiff commenced in the United States District Court for the Eastern District of Pennsylvania (“EDPA”) a “hybrid” class/collective action lawsuit alleging that FD’s classification of him and other Pennsylvania SMs as overtime-exempt violated the FLSA and PMWA. See JA at 25a-33a. FD promptly answered, denying all liability. See id. at 34a-45a.
B. The JPML Proceedings.
In June 2008, the Judicial Panel on Multidistrict Litigation (“JPML”) transferred Itterly’s lawsuit to the Western District of North Carolina (“WDNC”) to be coordinated with other SM misclassification lawsuits. See In re Family Dollar Stores, Inc. Wage and Hour Empl. Practices Litig., 545 F. Supp. 2d 1363 (JPML 2008) (transferring initial actions to WDNC). Thereafter, Itterly’s lawsuit generally sat in limbo for several years, while FD and the MDL “Lead Counsel” focused on other, earlier-filed lawsuits.
Sometime in late-2011, the presiding MDL judge – WDNC Judge Graham Mullen – suggested that lawsuits consisting solely of state law claims could be released from the MDL proceedings and remanded to their originating jurisdictions. Based on this suggestion, Itterly withdrew his FLSA claim and sought remand to the EDPA. In February 2012, the JPML granted Itterly’s remand request over FD’s objections. See In re Family Dollar Stores, Inc. Wage and Hour Empl. Practices Litig., JPML No. 1932, 2012 U.S. Dist. LEXIS 15587 (JPML Feb. 8, 2012).
C. The Summary Judgment Motion and Opposition.
Upon remand to the EDPA, the district court entered a scheduling order staying all class certification proceedings and class discovery until after the parties completed discovery specific to Itterly’s legal claim and FD moved for summary judgment. See JA at 46a. Discovery ensued, and, in August 2012, FD filed its summary judgment papers. See id. at 47a-178a.
Pursuant to the district court’s individual procedures, FD’s motion included a 35-paragraph statement of purportedly “undisputed” facts. See JA at 47a-53a. The record evidence submitted by FD consisted entirely of: (i) Itterly’s deposition transcript, see id. at 54a-170a; (ii) a paralegal’s affidavit describing Itterly’s compensation, work hours, and other basic information, see id. at 171a-174a; and (iii) the job resume Itterly prepared after leaving FD, see id. at 175a-178a. FD did not submit any evidence from Itterly’s supervisors or coworkers. See generally id. at 47a-178a. Nor did FD submit any documents demonstrating Itterly’s purportedly “executive” activities. See generally id.
In September 2012, Itterly filed his summary judgment opposition. See JA at 179a-2588a. Itterly’s opposition included a 37-page counterstatement of facts that responded to each of the factual assertions made in FD’s factual statement. See id. at 179a-215a. Itterly’s counterstatement was accompanied by 26 separate exhibits. See id. at 216a-2588a.
Itterly’s counterstatement served several functions. First, because FD’s factual statement repeatedly mischaracterized – through selective quotation, etc. – Itterly’s deposition testimony, Itterly was required to “set the record straight” by referencing competing deposition passages and explaining why FD’s characterizations of his testimony were inaccurate. See, e.g., JA at 179a-215a, ¶¶ 9, 10(a), 11, 11(a), 13, 14(a), 15(a), 15(b), 16, 17(a), 18(a), 19(a), 22, 23, 24(a), 29, 33, 35. Second, because FD’s factual statement contained many assertions that were contradicted by competing evidence, Itterly was required to introduce and describe the contradictory evidence. See, e.g., id. at 179a-215a, ¶¶ 10(a), 11(a), 11(b), 11(c), 12(b), 13, 14(c), 15(a), 16, 17(a), 18(a), 18(b), 19(a), 23, 24(d), 24(e), 24(q), 29, 32(a), 32(b), 32(c), 32(d), 32(e), 32(f), 32(h), 33, 34, 35. Finally, because FD’s factual statement simply ignored many facts relevant to Itterly’s overtime classification, Itterly was required to introduce and describe the ignored evidence. See, e.g., id. at 179a-215a, ¶¶ 10(b), 11(d), 12(a), 12(c), 13, 14(b), 14(c), 17(b), 17(c), 18(b), 19(b), 19(c), 23, 24(b), 24(c), 24(f), 24(g), 24(h), 24(i), 24(j), 24(k), 24(l), 24(m), 24(n), 24(o), 24(p), 32(g), 35.[1]
In October 2012, FD filed a reply brief that did not attach any new evidence.
D. The District Court’s Summary Judgment Decision.
The fully-briefed summary judgment motion remained undecided for 15 months. Then, on January 30, 2014, the district court entered an order and 11-page memorandum granting summary judgment. See JA at 5a-17a.
Itterly does not take issue with the first six pages of the district court’s opinion. Therein, the district court: (i) describes Itterly’s legal claim, see JA at 7a; (ii) sets out some uncontroverted facts regarding Itterly’s overtime-exempt classification, work hours, and compensation, see id. at 7a-8a; (iii) describes the summary judgment standard of review, see id. at 8a-9a; (iv) describes the PMWA test for determining whether an employee is an overtime-exempt executive, see id. at 9a-10a (quoting 34 Pa. Code § 231.82); (v) recognizes – per the parties’ agreement – that the FLSA’s definitions of “primary duty” and “management” apply to Itterly’s PMWA claim, see id. at 10a; (vi) recognizes that, to qualify for the executive exemption, Itterly must have “a primary duty consisting of management,” see id. at 11a; and (vii) describes the regulatory definitions of “primary duty” and “management,” see id. at 11a-12a.
Itterly respectfully takes issue with pages 7-8 of the district court’s memorandum. Therein, the district court concludes that Itterly’s “primary duty” was “management.” See JA at 13a-14a. This is an independent requirement of the PMWA’s executive exemption. See id. at 9a-10a (quoting 34 Pa. Code § 231.82).[2] The district court’s primary duty discussion – which is the subject of this appeal – is summarized below:
1. The District Court’s Factual Findings.
The district court’s four-paragraph primary duty analysis contains few factual findings.[3] In particular:
The first paragraph summarizes – in the most general manner – the parties’ respective arguments. See JA at 13a. No factual findings are included in this paragraph. See id.
The second paragraph contains three broadly-worded factual assertions. See JA at 13a. They are: (i) “[Itterly] was performing some non-exempt work in addition to his managerial duties;” (ii) “It is clear that [Itterly] performed non-exempt work when he operated cash registers, unloaded freight, arranged merchandise on shelves, and cleaned the store;” and (iii) “It is also clear that [Itterly] was ultimately responsible for the overall management of the store at all times when he was working.” Id.
The third paragraph starts out by summarizing – again in the most general terms – the parties’ disagreement regarding the extent to which Itterly’s district manager oversaw his work. See JA at 14a. Then, the district court then makes two factual findings: (i) “A district manager was present at [Itterly’s] store about once a week;” and (ii) the district managers “would remain in contact with the store manager through phone and email.” Id.
The fourth paragraph makes several factual findings regarding Itterly’s pay: (i) Itterly “was the highest paid employee in the store, making $930 per week;” (ii) Itterly’s “compensation was greater than that of his subordinates;” and (iii) Itterly once “received a bonus of $904.75, for which none of the nonexempt employees were eligible.” JA at 14a.
2. The District Court’s “Primary Duty” Discussion.
The district court correctly observed that, in determining whether a purported “executive” has “management” as his “primary duty,” the jury should consider the four factors described in 29 C.F.R. 541.700(a). See JA at 11a-12a. This regulation provides:
Factors to consider when determining the primary duty of an employee include, but are not limited to, the relative importance of the exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee’s relative freedom from direct supervision; and the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee.
29 C.F.R. 541.700(a). The district court also correctly observed that Itterly and FD “disagree on each prong of the primary duty analysis.” JA at 13a.
The district court’s discussion of the four primary duty factors is described below:
The first factor – “the relative importance of the exempt duties as compared with other types of duties” – was neither addressed nor analyzed. See JA at 13a-14a.
The second factor – “the amount of time spent performing exempt work” – was addressed but not analyzed. See JA at 13a. The district court recognized Itterly’s assertion that he “frequently performed non-exempt work” and found that Itterly “was performing some non-exempt work” and “performed non-exempt work when he operated cash registers, unloaded freight, arranged merchandise on shelves, and cleaned the store.” Id. But the district court never determined which party benefits from the second factor. See id.
The third factor – “the employee’s relative freedom from direct supervision” – was addressed but not analyzed. See JA at 14a. The district court recognized Itterly’s argument that he “was not free from direct supervision in managing the store, as there was close oversight by the district manager,” and found that a “district manager was present at [Itterly’s] store about once a week” and “would remain in contact with the store manager through phone and email.” Id. But the district court never determined which party benefits from the third factor. See id.
The fourth factor – “the relationship between the employee’s salary and the wages paid to other employees” – was addressed but not analyzed. See JA at 14a. The district court accurately recognized the undisputed facts that Itterly received a weekly salary of $930, that his compensation exceeded the compensation of other store employees, and that he once received a $904.75 bonus that other store employees did not receive. See id. The district court also stated that the some non-exempt store employees made $8.21/hour, that the highest-ranking non-exempt store employee made $10.00/hour per hour, that FD converts Itterly’s salary to a rate of $14.65/hour, and that Itterly converts his salary to a rate of $12.39/hour. See id. at 14a n. 2. But, once again, the district court never determined which party benefits from the fourth factor. See id. at 14a.
3. The District Court’s Apparent Justification For Not Analyzing the Four Primary Duty Factors.
The district court apparently decided that a detailed analysis of the four primary duty factors was not required because Itterly purportedly “was ultimately responsible for the overall management of the store at all times when he was working.” JA at 13a. The district court did not reference any specific evidence supporting this factual conclusion. See id.
After making the above factual conclusion, the district court asserted that “[t]his responsibility of overall management is the key factor or outweighs the fact that the plaintiff performed some non-managerial work.” J.A. at 13a. The district court did not provide any legal authority for this proposition. See id. However, it appears that this “key factor,” in combination with Itterly’s purported “ultimate responsibility” for his store, spelled the end of Itterly’s lawsuit.
4. The District Court’s Reference to the Western District of North Carolina Decisions.
At the end of its memorandum, the district court observed that, in the MDL proceeding, WDNC Judge Mullen routinely grants summary judgment in favor of FD, and, without providing any analysis or referencing any specific evidence, asserted that these WDNC cases “are very factually similar” to Itterly’s case. See JA at 15a-16a.
The district court made no mention of Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233 (11th Cir. 2008), a frequently-referenced opinion in which the Eleventh Circuit affirmed a $35 million judgment against FD for misclassifying SMs and held that SMs did not have management as their primary duty.
E. The Instant Appeal.
On January 31, 2014, Itterly filed a notice of appeal from the district court’s summary judgment decision. See JA at 1a-3a.
IV. STATEMENT OF FACTS
A. Itterly’s Position, Pay, and Work Hours.
Although Itterly worked at various FD stores in various positions around the country, this lawsuit concerns his time working as a SM in an Allentown, PA store from July 2007 until November 2007. See JA at 47a, ¶ 1. During this time, Itterly was classified as overtime-exempt and received a weekly salary of $930. See id. at 47a, ¶ 1. Meanwhile, the non-exempt Assistant Store Managers (“ASM”) assigned to Itterly’s store earned $10/hour. See JA at 174a, ¶ 10; 179a, ¶ 3 (citing JA at 262a).
Itterly generally worked between 60 and 80 hours per week. See JA at 213a-214a, ¶ 32(h) (citing JA at 122a). FD admits that Itterly averaged 63.5 work hours per week. See id. at 173a, ¶ 7.
B. Itterly’s Job Responsibilities Are Not Significantly Different from the Job Responsibilities of the Non-Exempt ASMs.
At deposition, Itterly repeatedly explained that virtually all of the purportedly “managerial” tasks he was questioned about also were performed by non-exempt ASMs. See JA at 184a, ¶ 11(c) (citing JA at 90a; 134a; 140a-141a; 145a; 152a-157a). This testimony is consistent with FD’s written policies and guidelines, which confirm that SMs generally shared responsibilities with ASMs. Seeid. at 184a-188a, ¶ 11(d). In this regard, Itterly provided the district court with 48 separate examples of general tasks/duties that, according to FD’s company documents, can be performed by either the SM or the ASM.[4]
C. Itterly Spent Virtually All of His Time Performing Manual Labor and Other Non-Managerial Tasks.
Itterly was required to resign his SM position after he injured his back at work. See JA at 180a, ¶ 6 (citing JA at 58a-60a). FD refused to allow Itterly to continue working because his back injury prohibited him from lifting anything over 20 pounds or being on his feet for an extended period. See id. at 212a, ¶ 32(b) (citing JA at 158a). This is not surprising, given the physical demands of Itterly’s SM employment. As reflected in FD’s company documents, the SM position “frequently” entails “Climbing,” “Stooping,” “Kneeling,” “Crouching,” “Reaching,” “Pushing,” “Pulling,” “Lifting,” and “Fingering,” and “continuously” entails “Balancing,” “Standing,” and “Walking.” See id. at 213a, ¶ 32(g) (citing JA at 2586a-2588a).
Itterly’s supervisors referred to him as a “work horse.” See JA at 213a, ¶ 32(h) (citing JA at 159a-161a). As Itterly explains: “I mean, they were – they were just saying that I do the physical work, and that’s what they wanted from everybody.” See id. at 213a, ¶ 32(h)(citing JA at 161a).
FD admits that Itterly performed “non-managerial tasks” such as “operat[ing] cash registers, unload[ing] freight and arrang[ing] merchandise on shelves, and clean[ing] the store.” See JA at 51a, ¶ 32. But this is an understatement. In fact, the evidence reveals that Itterly spent virtually all of his time performing non-managerial tasks. See generally JA at 211a-214a, ¶¶ 32(a)-32(h) (citing JA at 122a; 125a-126a; 127a; 134a; 135a; 140a-141a; 143a; 158a; 159a-161a; 2586a-2588a).
For example, Itterly spent most Fridays unloading inventory from trucks. See JA at 211a-212a, ¶ 32(a) (citing JA at 125a-126a). As Itterly explained: “80 percent of the time it was me and the truck driver unloading the truck and it took seven hours.” Id. at 212a, ¶ 32(a)(citing JA at 126a). When Itterly complained to his District Manager (“DM”) that he needed help unloading the truck, the DM responded: “if you can’t do it, just quit.” Id. at 212a, ¶ 32(a)(citing JA at 127a).
During the other six days of the week, Itterly’s basic duties included “putting out freight,” “recovering” (which means re-shelving stray inventory), and “running a register.” See JA at 212a, ¶ 32(c) (citing JA at 134a). As Itterly explains: “I was constantly stocking shelves, ringing on a register. There was nothing that I was doing that was extra special. I was just trying to keep the store running.” Id. at 212a, ¶ 32(c) (emphasis supplied) (citing JA at 135a).
During the morning hours, Itterly often was the sole store employee, left alone to work the cash register. See JA at 212a, ¶ 32(d) (citing JA at 122a and 134a). Asked about his daily routine, Itterly explains: “I would get in there so that I could get what little paperwork before the store opened, about ten minute’s worth, get the money to the bank and be ready to start ringing on the register.” See id. at 212a-213a, ¶ 32(e) (citing JA at 135a). Later, if Itterly “got lucky,” he would be able “to go start stocking shelves” and to perform other tasks such as “doing planograms” (which means placing merchandise according to FD’s requirements), “sweep[ing]” the store, and “mop[ping]” the floor. Id. at 213a, ¶ 32(e) (citing JA at 135a).
D. Itterly’s Store Was Managed By His District Manager.
The Allentown Store was managed by Itterly’s DM. Under FD’s written policies, the DM’s “Principal Duties and Responsibilities” include “[p]rovid[ing] staff training, development and counsel using [FD] training programs to ensure store operating standards . . . are consistently met.” JA at 182a, ¶ 10(b) (citing JA at 269a-270a). DMs also have “direct responsibility for managing and controlling company assets as well as managing and developing employees for future growth,” and are “[r]esponsible for maximizing return on investment, profit and loss, daily operation, planning and development and implementation of marketing plans for both short and long-term sales growth.” JA at 196a, ¶ 24(b) (citing JA at 269a-270a). Moreover, DMs must “[a]ssess, evaluate and analyze store and store management performance,” id., and must “[i]nsur[e] appropriate staffing levels for current and projected needs . . .,” id. at 189a, ¶ 12(c) (citing JA at 269a-270a).
FD’s policies and guidelines repeatedly mandate that decisions pertaining to store operations be approved by the DM. See generally JA at 196a-199a, ¶ 24(c). Indeed, Itterly provided the district court with 31 separate examples of store-based decisions/tasks that must be approved by the DM.[5] As these examples demonstrate, DMs oversee even the most minor aspects of store operations. See, e.g.,JA at 332a (DM must approve use of coffee pots and other appliances in the break room).
Itterly’s DM once instructed that Itterly was not expected to make any decisions regarding store operations. See JA at 199a, ¶ 24(e) (citing JA at 161a-162a). On two other occasions, the DM told Itterly: “you’re not paid to think, you’re paid to do.” Id. at 199a, ¶ 24(e) (citing JA at 162a) (emphasis supplied).
Itterly’s DM communicated with Itterly by e-mail. See JA at 199a-200a, ¶¶ 24(f)-24(g) (citing JA at 2524a, 2526a-2527a). Although most emails are not recoverable, see id. at 199a, ¶ 24(f), the few surviving emails confirm that Itterly’s DM micro-managed the Allentown store, see id. at 199a-200a, ¶¶ 24(f)-(g) (citing JA at 2524a, 2526a-2527a).
Itterly’s DM also managed the Allentown Store through FD’s “Anytime 5” Program. See JA at 201a-202a, ¶ 24(i) (citing JA at 121a, 224a-226a, 240a, 242a, 225a-240a, 246a-250a). Under this program, all FD stores are evaluated based on over 20 separate criteria. See id. at 201a, ¶ 24(i)(citing JA at 1388a-1389a). To ensure compliance, DMs perform “Anytime 5 Visits” and complete detailed “Visit Reports” that are used to score the store’s performance against various grading criteria. See id. at 201a-202a, ¶ 24(i)(citing JA at 2532a-2533a, 225a-240a, 246a-250a, 253a-259a, 111a-115a, and 124a-130a). During a typical week, Itterly’s DM made approximately 1-2 Anytime 5 visits to Itterly’s store. See id. at 201a, ¶ 24(i)(citing JA at 121a).
E. Itterly Was Required to Follow Corporate Directives that Micro-Managed His Job.
Itterly’s store was subjected to voluminous corporate mandates, directives, policies, and guidelines that eliminated the need for Itterly or any other store employee to exercise managerial judgment or discretion. The discovery record contains thousands of pages of mandatory guidelines and policies that applied to the Allentown store. See JA at 205a-210a, ¶ 24(p). In an effort to synthesize this large body of material, Itterly provided the district court with a list categorizing the materials’ contents into 55 separate topics.[6]
The extent to which these company policies micromanaged Itterly’s day-to-day employment is extraordinary. For example, Itterly was not even free to arrange the store’s office as he saw fit. Instead, he was required to comply with “Office Schematics,” which FD describes as “requirements as to how the store office should be arranged and maintained.” JA at 202a, ¶ 24(j) (citing JA at 701a; 703a-711a). These Office Schematics dictate matters such as the specific materials (e.g. “[p]encil and penholder” and “[r]ubber bands”) that Itterly must maintain on his desktop, the manner in which clipboards should be maintained, the organization of file drawers, the items that may be hung on the office wall, and the organization of “Task Crates” and “Monthly Retention Files.” See id. at 202a, ¶ 24(j) (citing JA at 703a-711a).
Itterly also received emails and “Monthly Reminders” from FD executives dictating the need to strictly follow company mandates. See JA at 200a-201a, ¶ 24(h) (citing JA at 2519a-2522a; 2529a-2530a). And, each week, Itterly received “Weekly Action Items” in which FD conveyed “direction regarding all aspects of day-to-day operations.” Id. at 202a-203a, ¶ 24(k) (emphasis supplied) (citing JA at 439a and 2535a-2582a).
Each month, Itterly received store “Schematics” which provided “a blueprint of the physical lay layout of the store merchandise . . . show[ing], by department and category, what types of fixtures are to be used and how the fixtures need to be arranged.” JA at 203a-204a, ¶ 24(l) (citing JA at 1111a and 151a). Itterly’s compliance with these schematics was mandatory. See id. at 203a, ¶ 24(l) (citing JA at 469a; 398a; 1111a; 1112a; 1119a; 2205a). The store schematics are simply too detailed to describe here. For example, the schematic for August 2007 numbers 422 pages and covers every conceivable aspect of store set-up and merchandise display. See id. at 203a, ¶ 24(l).
In addition to the schematics, Itterly was required to follow other monthly merchandising blueprints, such as, for example, a “Promotional Planner” dictating the manner in which promotional items should be displayed and advertised, see JA at 204a, ¶ 24(m), and a “Monthly Sign Kit” dictating the display of store signage and advertisements, see id. at 204a, ¶ 24(n) (citing JA at 1244a-1254a).
F. Itterly Played No Meaningful Role With Respect to Basic Store Management Decisions.
Itterly played no role in ordering store merchandise. See JA at 191a-192a, ¶ 17(a) (citing JA 151a-152a). Itterly also played no role in setting merchandise prices, and his ability to change prices was strictly limited to damaged or outdated merchandise. See JA at 204a-205a, ¶ 24(o) (citing JA at 1235a and 1237a-1240a).
FD implemented a strict payroll budget that allotted a fixed number of employee hours to Itterly’s Store. See JA at 192a-193a, ¶¶ 18(a)-(b) (citing JA at 120a; 124a; 269a; 455a; 162a). Itterly played no role in establishing the payroll budget and was unable to make changes to the payroll budget. See id. at 192a-193a, ¶¶ 18(a)-(b) (citing JA at 120a; 124a; 162a). When Itterly requested a change to the payroll budget, his DM responded: “you’re not paid to think, you’re paid to do.” JA at 193a, ¶ 18(b) (citing 162a); see also JA at 210a, ¶ 29 (citing JA at 127a) (DM tells Itterly: “if you can’t do it [within allotted payroll hours], just quit”).
Itterly played almost no role in scheduling store employees. See JA at 188a-189a, ¶¶ 12(a)-(b) (citing JA at 122a-125a; 565a; 1000a-1001a). Instead, FD sent Itterly a “Staff Scheduler” that outlined the employee schedule for each week. See id. at 188a, ¶ 12(a) (citing JA at 565a; 1000a-1001a). Itterly was required to follow the Staff Scheduler. See JA at 189a, ¶ 12(b) (citing JA at 122a-125a). As Itterly explains: “The schedule came pre-made, all I did was put names in it.” Id. at 189a, ¶ 12(b) (citing JA at 122a).
Itterly played no role in deciding the pay rates of store employees. See JA at 210a, ¶ 24(q) (citing JA at 133a). When one of the store’s employees asked Itterly for a pay raise, Itterly “told her [he] had no control over that.” Id. at 210a, ¶ 24(q) (citing JA at 133a).
Itterly played no discernable role in training Store employees. See JA at 181a-182a, ¶¶ 10(a)-(b) (citing JA at 138a-139a; 145a; 267a). Moreover, as already noted, the DM has the principal duty and responsibility of training staff. Id. at 182a, ¶ 10(b) (citing JA at 269a-270a).
Itterly played an extremely limited role with respect to store personnel decisions. For example, he never demoted an employee or recommended an employee demotion. See JA at 191a, ¶ 15(a), n. 8 (citing JA at 148a). On one occasion, Itterly recommended to his DM that a store employee receive a pay raise after informing the employee that he lacked authority to give her the pay raise on his own. See JA at 190a, ¶ 15(a) (citing JA at 148a-149a). On one occasion, Itterly completed a two-page “progress review” form. See JA at 191a, ¶ 15(b) (citing JA at 149a-151a; 2517a). On one occasion, Itterly spoke to and “wrote-up” an employee about a rule violation after consulting with the DM. See JA at 191a, ¶ 16 (citing JA at 145a-146a). Finally, on one occasion, Itterly provided information to his DM that resulted in the DM’s decision to terminate an employee for violations of company rules. See id. at 191a, ¶ 16 (citing JA at 146a-147a).
Itterly did have discretion to hire cashiers/stockers and provide recommendations as to the hiring of ASMs. See JA at 211a, ¶ 30 (citing JA at 141a; 773a-777a). However, Itterly’s involvement in the hiring process took little time. For example, Itterly spent only one hour per month reviewing job applications and deciding who should be interviewed. See id. at 213a, ¶ 32(f) (citing JA at 140a-141a).
V. STATEMENT OF STANDARD OF REVIEW
The district court’s summary judgment decision is subject to de novo review. See Lawrence v. City of Philadelphia, 527 F.3d 299, 310 (3d Cir. 2008).
VI. SUMMARY OF ARGUMENT
In resolving a civil defendant’s summary judgment motion, the judicial role is limited. The judge should not resolve factual disputes. Rather, the judge must accept the plaintiff’s evidence as true and draw all legitimate inferences in the plaintiff’s favor. Summary judgment may be granted if – and only if – no reasonable jury could find in the plaintiff’s favor.
Here, the district court violated the above rules. All agree that Itterly cannot be classified as overtime-exempt unless his “primary duty” is “management.” The factual record contains substantial evidence that, when construed in Itterly’s favor, enables a reasonable jury to conclude that Itterly’s “primary duty” was not “management.” Yet, this evidence is generally ignored by the district court.
The district court might prefer FD’s evidence over Itterly’s evidence. But, at the summary stage, the district court was not empowered to “pick the winner” by weighing disputed evidence in FD’s favor and drawing broad conclusions based on FD’s disputed version of the facts. A reasonable jury might weigh the evidence differently and might draw different conclusions. Indeed, in Morgan, supra, a reasonable jury awarded FD store managers over $35 million based on evidence that is similar to the evidence presented by Itterly in this case.
The district court’s two-page “primary duty” discussion is flawed. Although the district court recognizes the four primary duty factors, it steers clear of stating whether any of the factors can possibly favor Itterly. It seems like the district court does not want to acknowledge that Itterly can “win” some or all of the factors. So it just avoids any detailed analysis or discussion.
The district court emphasizes that Itterly “was ultimately responsible for the overall management of the store at all times when he was working.” JA at 13a. Even if this factual conclusion was based on undisputed facts – and it certainly was not – the conclusion did not enable the district court to avoid a rigorous primary duty analysis that confronts each of the primary duty factors. This Court explained as much in Guthrie v. Lady Jane Collieries, Inc., 722 F.2d 1141, 1145 (3d Cir. 1983), and other circuit courts – including the Eleventh Circuit in Morgan – agree.
In sum, viewing this case through the lens of summary judgment, Itterly’s evidence – as well as the legitimate inferences drawn from such evidence – enables a reasonable jury to conclude that Itterly’s primary duty was not management. As such, summary judgment was improper.
No one can doubt that Judge Stengel is top-notch. But, in this era of “trial by summary judgment,” even the best judges can go too far. This Court should reverse.
VII. ARGUMENT
A. Overtime Exemptions Are Narrowly Construed.
Employers bear the burden of proving that employees are overtime-exempt, and such exemptions must be narrowly construed. See Pignataro v. Port Auth. of New York and New Jersey, 593 F.3d 265, 268 (3d Cir. 2010); Davis v. Mountaire Farms, Inc., 453 F.3d 554, 556 (3d Cir. 2006). In fact, employers “must prove that the employee . . . comes ‘plainly and unmistakably’ within the exemption’s terms.” Lawrence, 527 F.3d at 310 (quoting Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S. Ct. 453, 456, 4 L. Ed. 2d 393, 396 (1960)) (emphasis in original). These basic principles apply to overtime exemption lawsuits arising under the PMWA. See, e.g., Mudgett v. Univ. of Pittsburgh Med. Center, No. 09-00254, 2010 U.S. Dist. LEXIS 44266, *7-8 (W.D. Pa. May 6, 2010); Baum v. AstraZeneca LP, 605 F. Supp. 2d 669, 674 (W.D. Pa. 2009), aff’d, 372 Fed. Appx. 246 (3d Cir. 2010).
B. The Proper Summary Judgment Standard.
The Supreme Court very recently reversed an appellate court for “fail[ing] to adhere to the axiom that in ruling on a motion for summary judgment, ‘[t]he evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor.’” Tolan v. Cotton, __ U.S. __, 134 S. Ct. 1861, 1863, 188 L. Ed. 2d 895, 897 (2014) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 2513, 91 L. Ed. 2d 202, 216 (1986)). The “‘judge’s function’ at summary judgment is not ‘to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.’” Tolan, 134 S. Ct. at 1866, 188 L. Ed. 2d at 901 (2014) (quoting Anderson, 477 U.S. at 249, 106 S. Ct. at 2511, 91 L. Ed. 2d at 212). “Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, . . .” Anderson, 477 U.S. at 255, 106 S. Ct. at 2513, 91 L. Ed. 2d at 216.
Put differently, the non-moving party is not required to produce conclusive evidence. See Cloverland-Green Spring Dairies, Inc. v. Penna. Milk Marketing Bd., 298 F.3d 201, 217 (3d Cir. 2002). “Instead, it need only offer sufficient evidence for a reasonable jury to find the facts necessary for a decision in its favor.” Id.
The above safeguards should be strictly followed since summary judgment deprives the non-movant of the chance to present her case to a jury of her peers. As Justice Black observed:
The right to confront, cross-examine and impeach adverse witnesses is one of the most fundamental rights sought to be preserved by the Seventh Amendment provision for jury trials in civil cases. The advantages of trial before a live jury with live witnesses, and all the possibilities of considering the human factors, should not be eliminated by substituting trial by affidavit and the sterile bareness of summary judgment.
Adickes v. S. H. Kress & Co., 398 U.S. 144, 176, 90 S. Ct. 1598, 1618, 26 L. Ed. 2d 142, 164-65 (1970) (Black, J., concurring).
“Since the Supreme Court removed the summary judgment procedure from disfavored status in the 1980s, some have observed that the pendulum has swung too far in the opposite direction.” Doe v. Abington Friends School, 480 F.3d 252, 258 (3d Cir. 2007) (citing Arthur R. Miller, The Pretrial Rush to Judgment, 78 N.Y.U. L.Rev. 982 (2003); Hon. Patricia M. Wald, Summary Judgment at Sixty, 76 Tex. L.Rev. 982 (2003)); see also Melvin v. Car-Freshener Corp., 453 F.3d 1000, 1003-04 (8th Cir. 2006) (Lay, J., dissenting) (“Too many courts in this circuit, both district and appellate, are utilizing summary judgment in cases where issues of fact remain.”); Gallagher v. Delaney, 139 F.3d 338, 342 (2d Cir. 1998) (recognizing “dangers of robust use of summary judgment to clear trial dockets”); In re One Star Class Sloop Sailboat, 517 F. Supp. 2d 546, 555 (D. Mass. 2007) (“Today, commentators are in near unanimous agreement that federal courts overuse summary judgment as a case management tool.”).[7]
C. The “Primary Duty” Analysis.
The PMWA – like the FLSA – requires that an exempt executive’s “primary duty consisted of the management of the enterprise in which he is employed.” 34 Pa. Code § 231.82(6). All parties agree that the FLSA definitions of “primary duty” and “management” apply to Itterly’s PMWA claim. See JA at 11a-12a; see also Baum v. AstraZeneca LP, 372 Fed. Appx. 246, 248 n.4 (3d Cir. 2010) (applying FLSA’s regulatory language to claim arising under PMWA’s “administrative exemption”).[8] The term “management” includes activities such as:
interviewing, selecting, and training of employees; setting and adjusting their rates of pay and hours of work; directing the work of employees; maintaining production or sales records for use in supervision or control; appraising employees’ productivity and efficiency for the purpose of recommending promotions or other changes in status; handling employee complaints and grievances; disciplining employees; planning the work; determining the techniques to be used; apportioning the work among the employees; determining the type of materials, supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked and sold; controlling the flow and distribution of materials or merchandise and supplies; providing for the safety and security of the employees or the property; planning and controlling the budget; and monitoring or implementing legal compliance measures.
29 C.F.R. § 541.102.
The regulations define “primary duty” to mean “the principal, main, major or most important duty that the employee performs.” 29 C.F.R. § 541.700(a). The regulations also describe four non-exclusive factors that should be considered in determining an employee’s primary duty:
Factors to consider when determining the primary duty of an employee include, but are not limited to, the relative importance of the exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee’s relative freedom from direct supervision; and the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee.
29 C.F.R. § 541.700(a). Importantly, the employee is not required to demonstrate that she can prevail with respect to every one of these factors in order to defeat summary judgment. SeeBarreto v. Davie Marketplace, LLC, 331 Fed. Appx. 672, 676 (11th Cir. 2009); Tamas v. Family Video Movie Club, Inc., No. 11-01024, 2013 U.S. Dist. LEXIS 44313, *24 (N.D. Ill. March 28, 2013); In re: Enterprise Rent-a-Car Wage & Hour Litig., MDL No. 2056, 2012 U.S. Dist. LEXIS 136252, *52 (W.D. Pa. Sept. 24, 2012).
Several appellate courts have observed that it should be very difficult for an employer to win summary judgment against an employee who asserts that her “primary duty” was not “management.” For example, the Tenth Circuit has observed that that “[b]ecause the primary duty determination is a factual one” and because the employer “bears the burden of producing evidence that ‘plainly and unmistakably’ shows that its position is correct, . . . any gaps in the evidence work in plaintiffs’ favor.” Maestas v. Day & Zimmerman, LLC, 664 F.3d 822, 828-31 (10th Cir. 2012).[9]
D. The District Court’s Conclusory Finding that Plaintiff was “Ultimately Responsible” for the Store Did Not Excuse It from Thoroughly Analyzing the Four Primary Duty Factors.
The district court’s two-page discussion of the four primary duty factors is cursory. See JA at 13a-14a. In this regard, the Court might compare the district court’s discussion to the extensive analysis undertaken by Judge Munley in cases involving store managers employed by Dollar General retail stores. SeePierce v. Dolgencorp, Inc., No. 09-00097, 2011 U.S. Dist. LEXIS 10624, *2-10, 14-39 (M.D. Pa. Feb. 3, 2011); Plaunt v. Dolgencorp, Inc., No. 09-00084, 2010 U.S. Dist. LEXIS 132135, *2-8, 13-42 (M.D. Pa. Dec. 14, 2010).
Here, the district court did not even consider the first primary duty factor, which required analysis of “the relative importance of the employee’s exempt duties as compared with other types of duties.” See JA at 13a-14a. The second, third, and fourth factors – “the amount of time spent performing exempt work,” “the employee’s relative freedom from direct supervision,” and “the relationship between the employee’s salary and the wages paid to other employees” – were mentioned but never resolved by the district court. See id. In other words, the district court never addressed whether these factors can weigh in Itterly’s favor. See id.
It’s hard to know for sure what the district court had in mind. But it seems the court believed it could avoid a detailed analysis of the four primary duty factors based on its conclusion that Itterly “was ultimately responsible for the overall management of the store at all times when he was working” and that “[t]his responsibility of overall management is the key factor or outweighs the fact that the plaintiff performed some non-managerial work.” J.A. at 13a.
The district court’s approach cannot be reconciled with Guthrie, supra, wherein this Court explained that an employee’s status as the person “in charge” of an entity’s operations does not automatically resolve the primary duty issue and does not excuse a thorough analysis of the primary duty factors:
Preliminarily, we reject the implication in the district court’s opinion that by merely holding that the foremen were “in charge” of their respective sections, without analyzing the underlying criteria of the relevant regulation, the district court could properly conclude that the regulation’s requirement that the foremen’s primary duty be management had been satisfied. The regulation clearly directs the court’s attention to several factors, which must be considered before a determination of “primary duty of management” may be made. Thus, the regulation requires more than a conclusory leap from a holding of “in charge” to a conclusion that a “primary duty of management” has been established.
Guthrie, 722 F.2d at 1145.[10]
Guthrie’s observations are consistent with Morgan, supra, wherein the Eleventh Circuit rejected FD’s argument that “its store managers were ‘in charge’ of the store, and therefore, exempt as a matter of law.” Morgan, 551 F.3d at 1271. The Morgan Court cogently observed:
In answering the primary duty inquiry, courts do not “simply slap[]on a talismanic phrase.” Family Dollar’s “in charge” label strikes us as a way to bypass a meaningful application of the fact-intensive factors.
Id. at 1272 (quoting Rodriguez v. Farm Stores Grocery, Inc., 518 F.3d 1259, 1264 (11th Cir. 2008)); see alsoAle v. Tennessee Valley Auth., 269 F.3d 680, 691 (6th Cir. 2001) (“The words ‘in charge’ are not a magical incantation that render an employee a bona fide executive regardless of his actual duties.”); Indergit v. Rite Aid Corp., No. 08-09361, 2010 U.S. Dist. LEXIS 32322, *16-19 (S.D.N.Y. March 31, 2010) (store manager’s status as “captain of the ship,” as person “in charge,” and as “highest ranked employee in his store” not relevant to exemption analysis); Kohl v. Woodlands Fire Dept., 440 F. Supp. 2d 626, 634 (S.D. Tx. 2006) (exempt status not determined by “the labels the employee or the employer place on those duties”).
Consistent with the above principles, various circuit courts have held that an employee can be misclassified as overtime-exempt notwithstanding her status as the highest-ranking employee. See, e.g., Rodriguez, 518 F.3d at 1263-65 (store managers); Jackson v. Go-Tane Services, Inc., 56 Fed. Appx. 267, 268-72 (7th Cir. 2003) (manager of car wash facility); Aaron v. City of Wichita, No. 96-3091, 1997 U.S. App. LEXIS 13039, *11-17 (10th Cir. May 23, 1997) (fire captains); Dept. of Labor v. City of Sapula, 30 F.3d 1285, 1287-88 (10th Cir. 1994) (fire captains).
Likewise, many trial judges reject the notion that retail store managers are overtime-exempt by sole virtue of their position as the person ultimately responsible for store operations. For example, in Pierce, supra, Judge Munley refused to grant summary judgment against the store manager, even though she “was the leader of the store and was the employee most in charge.” Pierce, No. 09-00097, 2011 U.S. Dist. LEXIS 10624, at *8; see also Plaunt, No. 09-00084, 2010 U.S. Dist. LEXIS 132135, *7 (SM could be non-exempt even though she “was largely in charge of the store and responsible for its profitability”).
In sum, based on Guthrie and the other decisions discussed above, Itterly’s purported status as the person “ultimately responsible” for the “overall management” of his store did not excuse the district court from undertaking a rigorous analysis of the four primary duty factors.[11]
E. Even if the District Court Were Correct that an Employee’s Status as “Ultimately Responsible” for “Overall Management” Did Excuse a Thorough Analysis of the Four Primary Duty Factors, the Factual Conclusion that Itterly Was “Ultimately Responsible” for the “Overall Management” of His Store Is Not Supported By the Undisputed Evidentiary Record.
Even if the district court’s approach to the primary duty analysis was legally valid, it should nonetheless fail because, contrary to the district court’s conclusion, a reasonable jury could conclude that Itterly was not “ultimately responsible for the overall management of the store at all times when he was working.” JA at 13a.
In this regard, Itterly presented ample evidence that would enable a reasonable jury to conclude that the DM – not Itterly – was ultimately responsible for store operations. See pp. 14-16 supra. In addition, to the limited extent Itterly had managerial responsibilities, such responsibilities were shared with the hourly ASM. See pp. 11-12 supra.[12] Finally, Itterly played no role in many of the most basic store management functions. See pp. 19-21 supra.
In sum, when viewed through the lens of summary judgment, the district court’s factual conclusion that Itterly “was ultimately responsible for the overall management of the store at all times when he was working,” JA at 13a, cannot withstand scrutiny.
F. Summary Judgment Was Improper Because a Reasonable Jury Weighing the Primary Duty Factors Can Conclude that Itterly’s Primary Duty Was Not Management.
As discussed below, when the evidentiary record is viewed through the lens of summary judgment, Itterly’s evidence – as well as the legitimate inferences drawn from such evidence – is sufficient to enable a reasonable jury to conclude that Itterly’s primary duty was not management based on the four primary duty factors:
1. First Factor: “The Relative Importance of the Exempt Duties as Compared with Other Types of Duties.”
The first factor – “the relative importance of the exempt duties as compared with other types of duties” – could weigh in Itterly’s favor. In fact, a reasonable jury easily could conclude that the most “important” aspect of Itterly’s job was his ability to work long hours – an average of 63.5 hours per week – performing manual labor and other routine work. See p. 11 supra. In this regard, it is telling that FD terminated Itterly’s employment when he returned from his back injury with doctor’s restrictions prohibiting him from lifting anything over 20 pounds or standing for an extended period. See p. 12 supra.
The SM position’s emphasis on manual labor is further corroborated in FD’s “Essential Job Functions” document, which recognizes that the SM position “frequently” entails “Climbing,” “Stooping,” “Kneeling,” “Crouching,” “Reaching,” “Pushing,” “Pulling,” “Lifting,” and “Fingering,” and “continuously” entails “Balancing,” “Standing,” and “Walking.” See p. 12 supra; see also Morgan, 551 F.3d at 1270 (considering FD’s “Essential Job Functions” document in analyzing “relative importance” factor); accord Ely v. Dolgencorp, LLC, 827 F. Supp. 2d 872, 887 (E.D. Ark. 2011).
Itterly was referred to as a “work horse,” see p. 12 supra, and, on two separate occasions, Itterly’s DM told him: “you’re not paid to think, you’re paid to do,” see p. 15 supra. As Itterly explains: “I mean, they were – they were just saying that I do the physical work, and that’s what they wanted from everybody.” See pp. 12-13 supra. Other courts have found such employee testimony important in considering the “relative importance” factor. See, e.g., Johnson v. Big Lots Stores, Inc., 604 F. Supp. 2d 903, 916 (E.D. La. 2009).
Moreover, almost all of the purportedly “managerial” duties performed by Itterly also were performed by ASMs who were classified as non-exempt and earned $10.00/hour. See pp. 11-12 supra. In other dollar store manager cases, courts have found that similarities between the SM and ASM positions weigh in the plaintiff’s favor under the “relative importance” factor. See, e.g., Ely, 827 F. Supp. 2d at 887; Pierce, No. 09-00097, 2011 U.S. Dist. LEXIS 10624, at *26-27; Myrick v. Dolgencorp, LLC, No. 09-00005, 2010 U.S. Dist. LEXIS 1781, *15-16, n.7 (M.D. Ga. Jan. 11, 2010); see also Johnson, 604 F. Supp. 2d at 916.
FD also imposed a strict and inflexible payroll budget on Itterly’s store. See p. 19 supra. This required Itterly – as the Store’s only salaried employee – to work long hours in order to stay within the budget. See id. In Morgan, the Eleventh Circuit explained that such evidence weighs in the SM’s favor under the “relative importance” factor. See Morgan, 551 F.3d at 1270 (“A large amount of manual labor by store managers was a key to FD’s business model given each store’s limited payroll budget and the large amount of manual labor that had to be performed.”); accord Clougher v. Home Depot, 696 F. Supp. 285, 291 (E.D.N.Y. 2010); Ely, 827 F. Supp. 2d at 887-88; Johnson, 604 F. Supp. 2d at 916.
FD also required Itterly to follow detailed directives, policies, and guidelines that eliminated the need for him to exercise managerial judgment or discretion. See pp. 16-19 supra. The Morgan Court, in considering the “relative importance” factor, observed that such FD “manuals and other corporate directives micro-managed” virtually all aspects of store operations. See Morgan, 551 F.3d at 1270. Here, as in Morgan, a reasonable jury could find that FD’s detailed policies, procedures, and mandates “routinized,” Aaron, 1997 U.S. App. LEXIS 13039, at *17, the SM position and thereby lessened the “relative importance” of Itterly’s management responsibilities. Other courts have so reasoned. See, e.g., Ely, 827 F. Supp. 2d at 887-88; Plaunt, No. 09-00084, 2010 U.S. Dist. LEXIS 132135 at *24, 27.
The “relative importance” of Itterly’s management responsibilities is further undermined by evidence that Itterly’s DM closely monitored the store and was required to approve even the most minor decisions. See pp. 14-16 supra.
The record also establishes that Itterly played no meaningful role in many managerial decisions and functions, such as, for example, scheduling employees, setting employee pay rates, training employees, ordering store merchandise, pricing store merchandise, and arranging merchandise within the store. See pp. 16-20 supra. This evidence also weighs in Itterly’s favor under the “relative importance” factor. See, e.g., Jones v. Dolgencorp, Inc., 789 F. Supp. 2d 1090, 1105-06 (N.D. Iowa 2011).
Finally, FD’s summary judgment motion presented no affirmative evidence other than Itterly’s deposition transcript. As several courts have observed, an employer seeking to prevail under the “relative importance” factor is expected to present actual evidence from company representatives attesting to the value of the employee’s purportedly managerial work in comparison to the non-managerial work, and the failure to present such evidence is fatal to the employer. See Myrick,No. 09-00005, 2010 U.S. Dist. LEXIS 1781, at *14-15; Indegrit, No. 08-09361, 2010 U.S. Dist. LEXIS 32322 at *16-18.
In sum, the “relative importance” factor, when viewed through the lens of summary judgment, can favor Itterly.
2. Second Factor: “The Amount of Time Spent Performing Exempt Work.”
This second factor – “the amount of time spent performing exempt work” – usually involves disputed facts, making the factor’s resolution at the summary judgment stage inappropriate. SeeJones, 789 F. Supp. 2d at 1104; Indegrit, No. 08-09361, 2010 U.S. Dist. LEXIS 32322, at *21-24. This is such a case.
The record evidence surely enables a reasonable jury to conclude that the “amount of time” factor weighs in Itterly’s factor. As Itterly testified: “I was constantly stocking shelves, ringing on a register. There was nothing that I was doing that was extra special. I was just trying to keep the store running.” See p. 13 supra (emphasis supplied); see also pp. 13-14 supra (summarizing other testimony). This account of Itterly workday is consistent with: (i) FD’s own assessment of the physical demands of the SM position, see p. 12 supra; (ii) FD’s refusal to permit Itterly to return to work with restrictions limiting his ability to perform certain physical labor, see id.; and (iii) the fact that FD management referred to Itterly as a “work horse” and told him “you’re not paid to think, you’re paid to do,” see pp. 12, 19 supra. Indeed, FD admits that Itterly performed “non-managerial tasks” such as “operat[ing] cash registers, unload[ing] freight and arrang[ing] merchandise on shelves, and clean[ing] the store.” JA at 51a, ¶ 32.
As significantly, FD failed to provide the district court with any affirmative analysis or evidence demonstrating the amount of time Itterly spent performing managerial versus non-managerial tasks. [13] See JA at 47a-51a. This failure is fatal to FD. As the party bearing the heavy burden of proof, FD – not Itterly – was required to demonstrate how Itterly actually spent his time. See Morgan, 551 F.3d at 1269-70; Ely, 827 F. Supp. 2d at 833; Jones, 789 F. Supp. 2d at 1104; McKinney v. United Stor-All Centers, 656 F. Supp. 2d 114, 131 (D.D.C. 2009).
In sum, the “amount of time” factor, when viewed through the lens of summary judgment, can favor Itterly.
3. Third Factor: Itterly’s “Relative Freedom from Direct Supervision.”
In addressing the third primary duty factor – “relative freedom from direct supervision” – the district court acknowledged Itterly’s argument that he “was not free from direct supervision in managing the store, as there was close oversight by the district manager,” and found that a “district manager was present at [Itterly’s] store about once a week” and “would remain in contact with the store manager through phone and email.” JA at 14a. These factual findings seem to favor Itterly. Yet, as with the other factors, the district court never said so. See id.
In Morgan, the Eleventh Circuit found that the “relative freedom from direct supervision” factor weighed in favor of the plaintiff SMs: “Indeed, ample evidence showed that the combination of sweeping corporate micro-management, close district manager oversight, and fixed payroll budgets left store managers little choice in how to manage their stores and with the primary duty of performing manual, not managerial, tasks.” Morgan, 551 F.3d at 1271.
Here, the record contains all of the evidence listed by the Morgan Court:
First, the record contains ample evidence of corporate oversight and micro-management, as indicated by, inter alia, detailed emails from company executives, office schematics, weekly action items, store schematics, promotional planners, and thousands of pages of directives and guidelines. See pp. 16-19. The detailed nature of these materials is extraordinary, enabling a reasonable jury to easily conclude that such corporate directives impeded Itterly’s ability to supervise as he saw fit. See id. Moreover, Itterly had no say over the most fundamental aspects of retail management, including, inter alia, scheduling employees, setting employee pay rates, training employees, ordering store merchandise, pricing store merchandise, and arranging merchandise within the store. See pp. 16-20 supra. Various courts – in addition to the Morgan Court – have deemed such evidence of corporate oversight significant in addressing the “relative freedom from direct supervision” factor. See, e.g., Johnson, 604 F. Supp. 2d at 917; Davis v. Wal-Mart Stores, Inc., No. 10-00068, 2010 U.S. Dist. LEXIS 95172, *20 (M.D. Ala. Sept. 13, 2010); Hale v. Dolgencorp, Inc., No. 09-00014, 2010 U.S. Dist. LEXIS 62384, *14 (W.D. Va. June 23, 2010).
Second, as in Morgan, the record contains detailed evidence of close DM oversight. Indeed, FD’s own company policies state that the DM is generally responsible for overseeing the stores and ensuring their profitability. See pp. 14-15 supra. Moreover, the evidence reveals that Itterly’s DM closely managed Itterly through a combination of verbal dress-downs, aggressively-worded emails, and weekly “Anytime 5 Visits” to Itterly store. See pp. 15-16, 19 supra. As Itterly’s own DM instructed: “you’re not paid to think, you’re paid to do.” See p. 19 supra. Such evidence of DM oversight clearly favors Itterly under the “freedom from supervision” factor. See, e.g., Jones, 789 F. Supp. 2d at 1108-09; Kanatzer v. Dolgencorp, Inc., No. 09-00074; 2010 U.S. Dist. LEXIS 67798, *15-16 (E.D. Mo. July 8, 2010); Hale, No. 09-00014, 2010 U.S. Dist. LEXIS 62584 at *16; Myrick, No. 09-00005, 2010 U.S. Dist. LEXIS 1781 at *19-22; Smith v. Heartland Automotive Services, Inc., 418 F. Supp. 2d 1129, 1137-38 (D. Minn. 2006).
Third, as in Morgan, the fixed payroll budget left Itterly with very limited ability to assign non-managerial work to hourly employees. See pp. 19-20 supra.
In sum, the “relative freedom from direct supervision” factor, when viewed through the lens of summary judgment, can favor Itterly.
4. Fourth Factor: “The Relationship Between the Employee’s Salary and the Wages Paid to Other Employees.”
The fourth factor – “the relationship between the employee’s salary and the wages paid to other employees” – was mentioned but not analyzed by the district court. See JA at 14a. As discussed below, an actual analysis would have revealed that a reasonable jury could find in Itterly’s favor regarding this factor.
In Guthrie, this Court’s primary duty analysis required a comparison between the salaries paid to allegedly exempt foremen and the day-rates paid to non-exempt crew members. See Guthrie, 722 F.2d at 1146. In performing this analysis, the Guthrie Court determined the amount of pay (including overtime) the crew members would have made if they worked as many hours as the foremen. See id. The Court then compared this amount to the salaries received by the foremen. See id.
Guthrie’s general approach, which accounts for the overtime hours actually worked by the plaintiff, is consistent with the approach taken by other courts. See Morgan, 551 F.3d at 1271; In re: Enterprise Rent-a-Car Wage & Hour Litig., MDL No. 2056, 2012 U.S. Dist. LEXIS 100445, *61-64 (W.D. Pa. July 19, 2012); Plaunt, No. 09-00084, 2010 U.S. Dist. LEXIS 132135, at *37-41; Davis, No. 10-00068, 2010 U.S. Dist. LEXIS 95172, at *21; Hale, No. 09-00014, 2010 U.S. Dist. LEXIS 62584, at *17-18.
According to FD, Itterly was employed at the Allentown store for the 18-week period between July 21, 2007 and November 24, 2007, worked an average of 63.5 hours per week, received a weekly salary of $930, and received a $904.75 bonus. See JA at 173a, ¶¶ 5-7. Assuming that the entire $904.75 bonus is attributable to Itterly’s 18 weeks at the Allentown store, the bonus enhances Itterly’s salary by approximately $50 per week [$904.75/18 = $50.26]. This elevates Itterly weekly salary to $980 [$930 + $50].
It is undisputed that the hourly, non-exempt ASMs working with Itterly at the Allentown store were paid $10/hour. See p. 11 supra. Thus, if an ASM worked Itterly’s average workweek of 63.5 hours, he would have been paid $752.50 [($10 X 40 regular hours) + ($15 X 23.5 overtime hours)]. Based on this analysis, during an average workweek, Itterly’s pay of $980 equals 130% of the ASM’s pay of $745.
Itterly’s weekly pay of $980 also converts to an “effective” hourly rate of $13.02 during an average 63.5-hour workweek. See In re: Enterprise, MDL No. 2056, 2012 U.S. Dist. LEXIS 100445, *61-64 (discussing methodology and formula for converting salary to effective hourly rate). This makes Itterly’s effective hourly rate $3.02 greater than the $10/hour rate paid to ASMs.
Whether analyzed as a weekly salary of as an effective hourly rate, a reasonable jury can conclude that the fourth primary duty factor weighs in Itterly’s favor. For example, in Morgan, the Eleventh Circuit characterized as “relatively small” a “two or three dollar[]” difference between the effective hourly rates paid by FD to SMs and ASMs. See Morgan, 551 F.3d at 1271; see also Smith, 418 F. Supp. 2d at 1139-40 (finding that, under fourth primary duty factor, jury could find in favor of store managers whose effectively hourly wage exceeded pay of non-exempt assistant store managers by up to $5.68); Jones, 789 F. Supp. 2d at 1110-11 (same where hourly wage difference was $2.20); Ely, 827 F. Supp. 2d at 892-93 (same where plaintiff store manager made 27% more than non-exempt assistant store manager).
It is unclear how a reasonable jury might view the difference between Itterly’s compensation and the compensation that hourly ASMs would have received for working the same hours. This will be a hotly disputed issue at trial, and the outcome will depend on the persuasiveness of each party’s evidence, their presentation, and the jury members’ predilections and life experiences. But that is the whole point of a jury trial.
For purposes of summary judgment, the question is whether, based on Itterly’s evidence, a reasonable jury could possibly weigh the fourth factor in Itterly’s favor. Because the answer to this question is “yes,” the fourth factor weighs against summary judgment.[14]
5. Summary of the Primary Duty Factors.
In sum, viewing this case through the lens of summary judgment, Itterly’s evidence – as well as the legitimate inferences drawn from such evidence – is sufficient to enable a reasonable jury to conclude that Itterly’s primary duty was not management. As such, summary judgment was not warranted.
G. The Western District of North Carolina Decisions Should Carry Little Weight.
At the end of its memorandum, the district court observed that, in the MDL proceeding, WDNC Judge Graham Mullen routinely grants summary judgment in favor of FD. See JA at 15a-16a. As discussed below, these decisions should carry little weight here in the Third Circuit.
Judge Mullen routinely grants FD’s summary judgment motions based on the general viewpoint that, under the Fourth Circuit’s decision in In re Family Dollar FLSA Litig., 637 F. 3d 508 (4th Cir. 2011), it is virtually impossible for a SM to get to trial. When this Court reads some of Judge Mullen’s decisions, it will see that the amount of time SMs spend performing manual labor at their stores does not matter. Even SMs who spend over 90% of their time performing manual labor cannot take their case to a jury. This is because Judge Mullen generally adopts the draconian position that SMs, by virtue of their position as the store’s highest-ranking employee, are always managing the store regardless of their actual activities. This viewpoint essentially renders the second primary duty factor meaningless. Likewise, Judge Mullen always finds the other factors to favor FD regardless of the particulars. Facts that sway other judges – e.g. the existence of DM oversight or the application of directives that routinized the SM position – are inconsequential in the WDNC.[15]
More importantly, Judge Mullen’s approach to the primary duty analysis cannot be squared with the approach this Court articulated in Guthrie. See p. 30 supra. Nor can the analysis be reconciled with the Eleventh Circuit’s Morgan opinion. In fact, in almost every opinion, Judge Mullen explicitly states that he gives Morgan absolutely not weight. Meanwhile, other judges from throughout the country – including Judge Munley in the Pierce and Plaunt cases and Chief Judge Conti in the Enterprise cases – continue to rely upon Morgan as pursuasive authority.
It also is notable that FD does not fare nearly so well outside of the WDNC. For example, a Connecticut state court recently denied FD’s summary judgment motion in an SM misclassification lawsuit. See Cook v. Family Dollar Stores of Conn., Inc., No. 116011946, 2013 Conn. Super. LEXIS 1016 (Conn. Super. May 22, 2013). In other cases, FD has reached class action settlements with the SM plaintiffs. See, e.g., Farley v. Family Dollar Stores, Inc., No. 12-00325 (D. Colo. July 21, 2014) at Doc. 128 (preliminarily approving class action settlement in misclassification lawsuit covering Colorado SMs); Youngblood v. Family Dollar Stores, Inc., No. 09-cv-03176 (S.D.N.Y. June 7, 2013) at Doc. 162 (approving class action settlement in misclassification lawsuit covering New York SMs).
In sum, the district court should not have been influenced by Judge Mullen’s various opinions.
VIII. CONCLUSION
For the above reasons, the district court’s summary judgment order should be reversed, FD’s summary judgment motion should be denied, and this lawsuit should be remanded to the district court for further proceedings.
Respectfully submitted,
/s/ Peter Winebrake
Peter Winebrake
R. Andrew Santillo
Mark Gottesfeld
Winebrake & Santillo, LLC
715 Twining Road, Suite 211
Dresher, PA 19025
Attorneys for Plaintiff/Appellant
[1] In a nutshell, FD’s factual statement made little effort to present “undisputed” facts in a fair, complete, or accurate manner. Instead – as is often the case in federal summary judgment practice – the factual statement included many conclusory assertions that were not supported by the referenced evidence and/or were contradicted by competing record evidence.
[2] The PMWA’s “executive” exemption also requires that the employee’s work “includes the customary and regular direction of the work of two or more other employees.” See JA at 9a-10a (quoting 34 Pa. Code § 231.82(6)). At page 9 of its memorandum, the district court held that FD satisfied this requirement. See id. at 15a. Itterly does not appeal from this holding. This requirement generally is satisfied by retail employers, since it merely requires that the exempt employee’s store location be staffed with two or more other employees who worked a total of over 80 hours per week. See id.
[3] Nor are there any significant factual findings in the first six pages of the memorandum. See JA at 7a-12a.
[4] See JA at 184a-188a, ¶ 11(d)(citing JA at 280a; 281a; 283a; 287a; 290a-292a; 332a; 418a-419a; 423a; 424a; 425a; 428a; 429a; 430a; 431a-432a; 440a; 502a; 525a-527a; 542a; 546a; 548a; 557a; 585a; 587a; 602a; 610a-611a; 619a; 630a; 631a; 632a; 634a; 655-660a; 730a; 733a; 738a; 756a; 1397a-1399a; 1399a-1400a; 1404a-1405a; 1408a; 1417a; 1441a; 1451a; 1459a; 1461a; 1467a-1478a; 1485a-1486a; 1487a-1490a; 1491a-1492a; 1493a; 1494a; 1498a-1500a; 1501a; 1512a; 1534a; 1547a; 1581a; 1591a-1592a).
[5] See JA at 196a-199a, ¶ 24(c) (citing JA at 280a; 281a; 282a; 284a; 312a; 313a; 320a; 327a; 339a; 347a; 356a; 358a-359a; 361a-362a; 380a; 398a; 428a; 429a; 441a; 450a; 451a; 468a; 490a; 532a; 533a; 539a-540a; 542a; 550a; 631a; 647a; 649a; 652a; 664a; 675a-676a; 691a; 745a; 763a; 962a; 966a; 1112a; 1197a; 1203a; 1204a; 1541a; 1543a; 2205a).
[6] See JA at 205a-210a, ¶ 24(p) (citing JA at 280a; 281a-284a; 285a-286a; 287a-288a; 290a-307a; 307a-324a; 325a-327a; 328a; 329a-331a; 331a-332a; 332a-349a; 337a-339a; 339a; 342a; 344a-345a; 345a-346a; 353a-364a; 366a-381a; 376a-377a; 383a-391a; 393a-398a; 401a-413a; 418-422a; 423a-432a; 428a-429a; 433a; 440a-445a; 446a-448a; 449a-450a; 451a-452a; 455a; 456a; 457a; 458a-460a; 465a-480a; 499a- 501a; 522a-532a; 532a-540a; 541a-546a; 547a-549a; 550a-551a; 575a-582a; 585a-598a; 610a-612a; 614a-625a; 630a; 632a; 634a; 673a-685a; 686a-694a; 698a-713a; 723a; 726a-747a; 750a-765a; 770a-846a; 850a-939a; 943a-952a; 955a-986a; 991a-994a; 995a-1005a; 1007a-1068a; 1079a-1092a; 1095a-1106a; 1108a-1121a; 1124a-1139a; 1144a-1152a; 1156a-1169a; 1172a-1183a; 1188a-1206a; 1208a-1229a; 1232a-1242a; 1244a-1255a; 1256a-1282a; 1284a-1302a; 1306a-1367a; 1323a; 1359a-1367a; 1380a; 1393a-1510a;1406a; 1407a; 1418a-1419a; 1428a-1440a; 1437a-1440a; 1465a-1478a; 1479a-1480a; 1487a-1490a; 1502a-1506a; 1511a-1514a; 1515a-1518a; 1519a-1539a; 1547a-1549a; 1553a-1562a; 1561a-1566a; 1563a; 1589a; 1590a-1592a; 1593a-1595a; 1599a-1615a; 1616a-1624a; 1625a-1688a; 1640a-1641a; 1642a-1643a; 1645a; 1671a-1673a; 1674a-1677a; 1681a; 1689a-1695a; 1696a-1710a; 1719a-1725a; 1726a-1735a; 1736a-1755a; 1756a-1783a; 1793a-1802a; 1803a-1820a; 1821a-1829a; 1840a-1871a; 1850a-1872a; 1874a-1881a; 1885a-1895a; 1937a-1949a; 1951a-1956a; 1966a-1993a; 1996a-2002a; 2003a-2021a; 2103a-2107a; 2023a-2039a; 2042a-2076a; 2077a-2092a; 2109a-2115a; 2117a-2131a; 2124a-2131a; 2133a-2182a; 2159a-2182a; 2179a-2219a; 2183a-2186a; 2187a-2202a; 2203a-2216a; 2222a-2246a; 2234a-2236a; 2237a-2246a; 2312a-2415a; 2337a-2460a; 2355a-2361a; 2417a-2426a; 2463a-2515a).
[7] For an insightful discussion of the overuse of summary judgment in employment rights lawsuits, the Court is referred to Northern District of Iowa Judge Mark W. Bennett’s 2013 essay: From the “No Spittin’, No Cussin’ and No Summary Judgment” Days of Employment Discrimination Litigation to the “Defendant’s Summary Judgment Affirmed Without Comment” Days: One Judge’s Four-Decade Perspective, N.Y.L. Sch. L. Rev. 685 (2012-13). Also, the Court might be interested in three recent decisions in which circuit courts have used especially strong language in reversing imprudently granted summary judgment motions. See Suchanek v. Sturm Foods, Inc., No. 13-3843, 2014 U.S. App. LEXIS 16259, *27-33 (7th Cir. Aug. 22, 2014); Malin v. Hospira, Inc., No. 13-2433, 2014 U.S. App. LEXIS 15243, *30-32 (7th Cir. Aug. 7, 2014); Feliciano v. City of Miami Beach, 707 F.3d 1244, 1252-54 (11th Cir. 2013).
[8] Where the PMWA’s statutory or regulatory language differs from the FLSA’s language, courts do not automatically apply the FLSA language to PMWA claims. See, e.g., Bayada Nurses, Inc. v. Pennsylvania, 8 A.3d 866 (Pa. 2010). All agree that the instant appeal is not present such a case.
[9] Indeed, circuit courts do not hesitate to reverse summary judgment rulings where the evidence enables a reasonable jury to weigh the primary duty factors in the employee’s favor. See, e.g., Taylor v. AutoZone, Inc., No. 12-15378, 2014 U.S. App. LEXIS 8852, *2-4 (9th Cir. May 12, 2014); Barreto, 331 Fed. Appx. at 673-76; Ward v. Park Avenue Exploration Corp., No. 94-6157, 1994 U.S. App. LEXIS 36093, *4-10 (10th Cir. Dec. 21, 1994).
[10] In reviewing Guthrie and some of the other “primary duty” decisions, the Court will note that, prior to 2004, there were five primary duty factors, which were described at 29 C.F.R. § 541.103. After the 2004 regulatory revisions, the primary duty factors were reduced to four and moved to 29 C.F.R. § 541.700(a).
[11] Also, the district court’s assertion that “overall management” is the “key factor” in the primary duty analysis ignores the plain language of the primary duty regulation, which makes absolutely no mention of a fifth “overall management” factor. See 29 CFR § 541.700(a).
[12] Although not referenced in the district court’s memorandum, FD’s summary judgment papers included a copy of Itterly’s resume, which contains a general description of his role as an SM in various different states during a five-year time-span. See JA at 48a, ¶ 7 (citing JA at 176a-178a). The district court was correct to put little or no weight on this resume. Courts in overtime rights lawsuits repeatedly hold that job descriptions in resumes are not particularly relevant to determining the primary duty of a plaintiff’s job. See, e.g., Schaefer v. Indiana Michigan Power Co., 358 F.3d 394, 400-01 (6th Cir. 2004); Ale, 269 F.3d at 689 n. 2 (6th Cir. 2001); Morrison v. Ocean State Jobbers, Inc., No. 09-01285, 2013 U.S. Dist. LEXIS 40010, at *45 n.10 (D. Conn. Mar. 22, 2013); Boring v. World Gym-Bishop, Inc., No. 06-03260, 2009 U.S. Dist. LEXIS 21061 (N.D. Ill. Mar. 17, 2009); Wolfslayer v. IKON Office Solutions, Inc., No. 03-06709, 2005 U.S. Dist. LEXIS 1106, *29 (E.D. Pa. Jan. 26, 2005).
[13] In its summary judgment brief, FD asserted that Itterly “concurrently” managed while he performed some of his non-managerial work. However, FD’s entire factual basis for this assertion turned out to be a reference to purported testimony that, while unloading the truck, Plaintiff would be on the lookout for drivers stealing merchandise. See JA at 214a, ¶ 33 (citing JA at 126a). This was not too significant, since all FD store employees are required to prevent theft. See JA at 194a-195a at ¶¶ 19(b)-(c).
[14] Moreover, even of this Court holds that no reasonable jury could weigh the “pay comparison” factor in Itterly’s favor, disputed facts with respect to the other three factors would still preclude summary judgment. See Barreto, 331 Fed. Appx. at 676; Tamas, No. 11-01024, 2013 U.S. Dist. LEXIS 44313, at *24; Enterprise, MDL No. 2056, 2012 U.S. Dist. LEXIS 136252, at *52.
[15] This brief references various store manager cases in which employers’ summary judgment motions have been denied. Itterly submits that, under Judge Mullen’s approach to the evidence, the great majority of these cases would be decided in favor of summary judgment. As a general matter, there simply is no way to reconcile the WDNC decisions with these other decisions from throughout the country.