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Aug 23

Do Employees Need to Have Final Hiring and Firing Authority to Qualify for the FLSA’s Executive Exemption? – Lexology

 

(DMC Note: This correlates with a pending paper I have coming out in The Journal of Compensation and Benefits, covering the Graziadio decision which can be found here: Graziadio_20v._20Culinary. When the two cases are read together, under FMLA and FLSA rules, almost anyone involved in the HR, Compensation, or Benefits process can be found to be personally liable for violations of said regulations, and are also exempt from overtime requirements, if their recommendations are given, “great weight.” This is bad news for any HR, Compensation, or Benefits managers.)

999904Do Employees Need to Have Final Hiring and Firing Authority to Qualify for the FLSA’s Executive Exemption?

Not necessarily – a recent decision from the Eighth Circuit Court of Appeals illustrates that employees may qualify for the executive exemption under the Fair Labor Standards Act (FLSA) even if they do not have final authority over hiring and firing decisions.

In Garrison v. ConAgra Foods Packaged Foods, LLC, the issue before the court was whether the plaintiffs’ recommendations relating to hiring and firing decisions were given sufficient weight to qualify for the executive exemption. Nos. 15-1177, 15-1428 (8th Cir. Aug. 15, 2016). It was undisputed that the other requirements of the executive exemption were satisfied.

The parties agreed that the plaintiffs did not have final authority over hiring and firing decisions, but disputed whether they nevertheless qualified as exempt because their “recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.” 29 C.F.R. § 541.100(a)(4). The court held that the evidence established that the plaintiffs’ recommendations concerning hiring and firing decisions were given “particular weight” because:

  • The plaintiffs were responsible for appraising performance and reporting good or poor performance for probationary employees;
  • Two of the plaintiffs recommended the discharge of one probationary employee and that recommendation was followed;
  • Some employees were demoted based on evaluations and feedback from the plaintiffs;
  • The plaintiffs were able to fill temporary vacancies by moving employees from one classification to another; and
  • The plaintiffs recommended discipline for employees and management followed those recommendations most, if not all, of the time.

Because the Eighth Circuit agreed that the plaintiffs’ recommendations concerning hiring and firing decisions were given particular weight, the court affirmed summary judgment in favor of the employer on the grounds that the employees were exempt from the FLSA.

Takeaway: Employees may qualify for the FLSA’s executive exemption even if they do not have final authority over hiring and firing decisions, provided that their recommendations concerning hiring and firing are given particular weight.

Source: Do Employees Need to Have Final Hiring and Firing Authority to Qualify for the FLSA’s Executive Exemption? – Lexology

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