On January 27, 2012, the United States District Court for the District of Arizona granted AutoZone’s motion for summary judgment in a case brought on behalf of a nationwide class of current and former store managers seeking overtime pay under the Fair Labor Standards Act (FLSA). In so ruling, the court rejected the store managers’ argument that they were not bona fide executive employees under the FLSA.
The store managers contended they spent as much as 90% of their time working on manual (i.e., non-managerial) tasks that required rote compliance with AutoZone’s detailed, standardized policies and procedures. Therefore, the store managers contended, they were not exempt executive employees.
The court, however, rejected the store managers’ contention that their primary duty was customer service and satisfaction. Instead, the court recognized that AutoZone placed significant responsibilities on its store managers: they were the only store-level employees who conducted staff evaluations and hiring interviews; they were the only employees (with the exception of the customer sales manager) eligible for a bonus based on store performance; they were responsible for the completion of manual tasks and coordinating employee scheduling; and how (and when) they completed even manual tasks had an impact on overall store performance, a fact reflected in AutoZone’s criteria for evaluating their performance. The court also rejected the argument that AutoZone had such extensive standardized processes and policies that only their manual labor mattered to store operations, pointing out that the essence of supervisory work is ensuring compliance with corporate policies.
The court noted that even though some store managers may perform manual tasks more than 50% of the time, that factor did not weigh significantly in this matter since many agreed they performed other tasks simultaneously with their manual tasks and retained overall managerial responsibility for store operations while performing manual tasks. The court deemed the store managers to be “relatively free from direct supervision,” pointing out that, regardless of the varying amount of time that district managers spent monitoring stores remotely, “they were the eyes and ears of the [District Managers]” and that they were present and supervising the work in their stores “by their own calculations for hundreds of hours a month without the physical presence of a District Manager.”
Ultimately, the court found that AutoZone had properly classified the store managers as exempt executives, stating in its conclusion that the alleged “lack of creativity and overwork may be an undesirable by-product of working for a national chain in a struggling economy, but this does not entitle plaintiffs to overtime pay.”