Costello v. Home Depot USA, Inc.

Majority - Janet C. Hall

No, a genuine issue of material fact exists as to whether Home Depot Merchandising Assistant Store Managers (MASMs) James Costello and Aron Moore were properly classified as exempt executive employees under the Fair Labor Standards Act, thereby precluding summary judgment. The court denied Home Depot's motions for summary judgment, emphasizing that the burden is on the employer to prove an employee is exempt, and exemptions are narrowly construed. The determination is a 'highly fact intensive inquiry' that is often inappropriate at summary judgment. The court applied the four-factor test for the executive exemption under 29 C.F.R. § 541.100(a): 1. Compensated on a salary basis of not less than $455 per week. 2. Primary duty is management of the enterprise or a recognized department. 3. Customarily and regularly directs the work of two or more other employees. 4. Has authority to hire/fire or whose suggestions on employment status are given 'particular weight.' For both Costello and Moore, the court found the first and third factors were satisfied (salary and directing two or more employees). For the fourth factor (authority to hire/fire or particular weight given to recommendations), the court found disputed material facts, noting the absence of affidavit testimony corroborating the impact of their recommendations, despite a high acceptance rate for Costello, and less compelling evidence for Moore. The court explicitly found that for both plaintiffs, material issues of fact existed concerning the 'primary duty' factor. Regarding 'primary duty,' the court examined: Relative importance of exempt duties: Home Depot argued both plaintiffs performed critical managerial tasks. However, the court noted the absence of direct testimony from Home Depot officials on the importance of these tasks, unlike in Donovan v. Burger King Corp.. It highlighted the disputes over the frequency of managerial tasks, whether they were shared with other employees, and the plaintiffs' testimony that customer service and manual labor were their primary functions. The court distinguished this case from Guinup v. Petr-All Petroleum Corp. and Thomas v. Speedway SuperAmerica, LLC, where managerial functions were clearly critical. Time spent performing non-exempt work: While employees spending over 50% of time on exempt work generally satisfy the primary duty, this is not dispositive. Both plaintiffs claimed to spend a majority of their time on non-managerial tasks. The court noted the significant dispute in the actual time spent on managerial tasks (ranging from less than 10% to nearly 50% for Costello) and the lack of evidence regarding simultaneous performance of managerial and non-managerial tasks, as seen in Donovan. Freedom from direct supervision: This factor appeared to weigh in favor of Home Depot for both plaintiffs, as they exercised discretion and were relatively free from micromanaging, especially when serving as Manager on Duty (MOD). However, the court noted that ultimate decision-making power for certain areas lay elsewhere and corporate policies constrained some discretion. Salary: While both earned substantially more than hourly employees and received bonuses/stock options, the court found the compensation disparity insufficient to determine primary duty as a matter of law, particularly when considering the plaintiffs' claims of working 55-80 hours per week, which could result in an hourly rate comparable to or less than some hourly supervisors when overtime for the latter is considered. Given these significant factual disputes, particularly regarding the 'primary duty' element, the court concluded that summary judgment was inappropriate, as a jury would need to resolve these issues.