ConAgra Team Leaders Exempt From FLSA, 8th Cir. Rules

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By Kevin McGowan

Aug. 15 — Salaried “team leaders” at a ConAgra Foods Inc. facility in Arkansas aren't entitled to overtime pay because they fall within the Fair Labor Standards Act's exemption for “executives,” the U.S. Court of Appeals for the Eighth Circuit ruled ( Garrison v. ConAgra Foods Packaged Foods, LLC , 2016 BL 262912, 8th Cir., No. 15-1177, 8/15/16 ).

The decision is a victory for employers, holding that employees who lack power to hire or fire anyone nevertheless may be “executives” for overtime pay purposes.

The Labor Department's final overtime rule would make more employees eligible for overtime pay by adjusting the salary test, but it wouldn't affect the duty standard involved in this case.

The court said that even though the 11 employees in the FLSA collective action lacked hiring and firing authority, the evidence showed ConAgra gave “particular weight” to their recommendations about personnel decisions regarding workers on their teams.

The company therefore properly classified the team leaders as exempt employees under the FLSA and the Arkansas Minimum Wage Act, the court said.

Recommendations Had Influence

The FLSA “white-collar” exemptions, codified at 29 U.S.C. § 213(a)(1), provide that the act's overtime pay requirements don't apply to “any employee employed in a bona fide executive, administrative, or professional capacity.”

The ConAgra team leaders met most of the criteria in a DOL regulation that defines an executive employee, including a salary of at least $455 per week, a primary duty of managing a work area and responsibility to direct the work of at least two other employees.

But the team leaders argued a jury must resolve a factual dispute over whether ConAgra gave “particular weight” to their recommendations about which workers should be hired, fired, disciplined, promoted or otherwise have their status changed.

A federal district court in Arkansas decided the executive exemption applied because team leaders monitored the performance and behavior of hourly workers and could reassign or recommend the reassignment or discipline of such workers.

The team leaders' deposition testimony indicated ConAgra gave weight to their personnel recommendations, the Eighth Circuit said.

The plaintiffs testified plant management followed their advice most, if not all, of the time, Judge Stephen R. Bough wrote in an opinion joined by Judges Steven M. Colloton and Bobby E. Shepherd.

Under a separate DOL regulation, codified at 29 CFR § 541.105, an employee's recommendations may have “particular weight” even if a higher-level manager's recommendation receives greater weight and the employee lacks authority to “make the ultimate decision” about a subordinate worker's status, the court said.

The “undisputed facts” indicated each team leader was involved in at least one personnel decision, if not more, the court said. They therefore were “working in an executive capacity” and are FLSA-exempt, the court said.

ConAgra May Recover Costs

The district court erred, however, by ruling ConAgra couldn't recover its court costs from the employees who sued, the Eighth Circuit said.

The appeals court cited Lochridge v. Lindsey Management Co., 26 WH Cases2d 793 (8th Cir. 2016), which said a prevailing FLSA defendant isn't precluded from recovering its costs even though the act is silent on the matter.

Jon R. Sanford in Russellville, Ark., represented the employees. Husch & Blackwell and Cross & Gunter represented ConAgra.

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

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