Employers who believe in multitasking could be facing unpaid overtime suits from managers after the California Court of Appeal ruled that a grocery store manager could not simultaneously perform both exempt and nonexempt tasks.
Although Linda Heyen was a manager at the grocery chain and classified as an exempt employee, she alleged that she spent the majority of her time performing nonexempt work like helping out at the cash register, stocking shelves, and doing bookkeeping. She filed suit under state law seeking unpaid overtime.
A trial court awarded her $26,184.60, plus interest. But Safeway appealed, arguing that the court should have considered that Heyen was performing her exempt work concurrently with her nonexempt tasks. For example, while ringing up customers in the checkout line, Heyen was still able to monitor the store as part of her managerial duties.
The court disagreed. Affirming judgment for the employee, the court said that a trier of fact must determine the “primary purpose” of the work being performed in order to correctly classify it on the exempt or nonexempt side of the ledger.
“Although there is some intuitive appeal to Safeway’s contention, it is unsupported by California law,” the court said. Wage Order 7 references regulations issued pursuant to the Fair Labor Standards Act, which “look to the supervisor’s reason or purpose for undertaking the task. If a task is performed because it is ‘helpful in supervising the employees or contribute[s] to the smooth functioning of the department for which [the supervisors] are responsible,’ the work is exempt; if not, it is nonexempt.”
The relevant regulations do not support the “multi-tasking” approach advocated by Safeway, nor had prior case law recognized a “hybrid category” of simultaneous exempt and nonexempt work. The court also found no merit to Safeway’s argument that the primary purpose test is “both vague and unworkable” because jurors will have to “peer into the mind” of the manager to decide which function was top of mind.
Jurors will not need to look into anyone’s mind, the court said. Rather, consistent with the federal regulations incorporated into Wage Order 7, fact finders will be asked to determine “the objective purpose” of a manager’s actions.
As an alternative argument, Safeway argued that the trial court failed to account for the company’s “reasonable expectations” about the work Heyen performed – i.e., whether Heyen performed nonexempt work because she chose to, not because Safeway expected her to.
Again the court declined to follow the chain’s argument. A trial court must inquire “into the realistic requirements of the job,” looking at how the employee actually spends his or her time as well as whether the employee’s practice diverges from the employer’s reasonable expectations.
The trial court found that Safeway stressed the importance of “superior service” to its employees, including a rule that if three customers were in a checkout line, another register must be opened. To keep the checkout lines as short as company policy required, Heyen had to perform nonexempt work like ringing up customers herself. Other testimony documented a need for Heyen to perform nonexempt bookkeeping work because Safeway budgeted too few hours for the bookkeepers hired.
“Considered together, all of this testimony is substantial evidence that Heyen’s practice of doing significant amounts of nonexempt work did not ‘diverge from [Safeway’s] realistic expectations,’” the court concluded.
Because the trial court found that Heyen spent more than 50 percent of her time performing nonexempt tasks, the appellate court upheld her award.
To read the decision in Heyen v. Safeway Inc., click here.
Why it matters: The Heyen decision clarifies for California employers the need to evaluate the “primary purpose” of tasks performed by employees in order to correctly classify workers as exempt or nonexempt. The court rejected the concept of multi-tasking or concurrently performing both exempt and nonexempt tasks, so employers may need to take a closer look at the work being performed by managerial employees before facing similar claims of unpaid overtime.