Madden v. Lumber One Home Ctr., Inc.

• Decision Date: 17 March 2014
• Docket Number: No. 13–2214.,13–2214.
• Citation: 745 F.3d 899
• Parties: Terry MADDEN, Individually and on behalf of others similarly situated; Doug Wortman, Individually and on behalf of others similarly situated; Rebecca O'Bar, Individually and on behalf of others similarly situated, Plaintiffs–Appellees v. LUMBER ONE HOME CENTER, INC., Defendant–Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

745 F.3d 899

Terry MADDEN, Individually and on behalf of others similarly situated; Doug Wortman, Individually and on behalf of others similarly situated; Rebecca O'Bar, Individually and on behalf of others similarly situated, Plaintiffs–Appellees

v.LUMBER ONE HOME CENTER, INC., Defendant–Appellant.

No. 13–2214.

United States Court of Appeals,

Eighth Circuit.

Submitted: Jan. 14, 2014.

Filed: March 17, 2014.

Harold Wayne Young, Jr., argued, Little Rock, AR, for Plaintiffs–Appellees.

Timothy A. Steadman, John T. Holleman, Maryna O. Jackson, argued Little Rock, AR, for Defendant–Appellant.

Before GRUENDER, BRIGHT, and MELLOY, Circuit Judges.

MELLOY, Circuit Judge.

In August 2010, three former employees of Lumber One Home Center, Inc., a lumberyard in Mayflower, Arkansas, filed suit against the company. The employees claimed Lumber One incorrectly classified them as executive employees who were exempt from overtime pay regulations under the Fair Labor Standards Act (FLSA). See29 U.S.C. § 207(a)(1) (requiring pay of at least one and one-half times the regular rate for time worked in excess of forty hours per week). After a two-day trial, a jury returned a verdict in favor of Lumber One. The jury found that all three plaintiff-employees worked in an executive capacity and were therefore not entitled to recover overtime wages. Following trial, the plaintiffs moved for judgment as a matter of law, which the district court granted. After overturning the jury verdict, the district court awarded the plaintiffs overtime pay and attorneys' fees. Lumber One appealed. We affirm the district court's judgment as to two employees, reverse as to one employee, and remand for a recalculation of attorneys' fees in light of our holdings.

I.

Plaintiffs Terry Madden, Rebecca O'Bar, and Doug Wortman are former employees of Lumber One Home Center, a small lumberyard in Mayflower, Arkansas. Lumber One is owned and managed by John Morton. Morton operated a lumberyard in Stuttgart, Arkansas, and opened his second store—the store in Mayflower—in November 2008. In the months prior to the Mayflower store opening, Morton hired Madden, O'Bar, and Wortman. Morton intended for the plaintiffs to serve as supervisors and managers once the store opened. The employees were salaried, labeled as executives, and classified by Lumber One as exempt from overtime pay under the FLSA. See29 U.S.C. § 213(a)(1) (exempting “any employee employed in a bona fide executive, administrative, or professional capacity” from overtime pay requirements).

Morton hired Madden in May 2008 to work in shipping and receiving. In anticipation of the November store opening, Madden assembled shelves and received merchandise. Once the store opened, Madden completed data entry tasks and helped out in the lumberyard by assisting customers, unloading trucks, and collecting trash when needed. Madden stopped working at Lumber One in July 2010.¹

Morton hired O'Bar in July 2008. Prior to the store opening, O'Bar also assembled shelves and stocked merchandise. Once the store opened, O'Bar worked in the lumberyard and in shipping and receiving. O'Bar stopped working at Lumber One in February 2009.

Wortman worked in the lumberyard from September 2008 until March 2009, and then again from mid-June 2009 until September 2009. Wortman waited on customers, helped load trucks, and on occasion would direct the truck drivers regarding where to make deliveries.

The parties agree that the plaintiffs worked overtime throughout their employment at Lumber One. Because the plaintiffs worked in excess of forty hours per week, the FLSA required Lumber One to pay them overtime unless they fit one of the FLSA's exemptions. See29 U.S.C. § 207(a)(1) (overtime pay requirements); 29 U.S.C. § 213(a)(1) (exemptions to overtime pay requirements). Morton classified the plaintiffs as executives under one such exemption in the FLSA. 29 U.S.C. § 213(a)(1) (exemptions for employees “employed in a bona fide executive, administrative, or professional capacity”).

To qualify for an executive exemption, Lumber One must show, among other things, that the plaintiffs were involved in making personnel decisions. Morton made all of the hiring and firing decisions at Lumber One. When preparing to hire a new employee, Morton generally asked all of the existing employees—supervisors as well as hourly employees—if they knew the applicant. Morton said he did this because he was new to Mayflower and did not know the local applicants as well as some of the existing employees, including the plaintiffs. Morton hired roughly six to eight employees at the Mayflower store in 2008 and 2009. According to Morton, the economy was worse than expected in 2008, and as a result, he hired fewer employees than he originally intended.

The plaintiffs ended their employment with Lumber One on the dates listed above. In 2010, the U.S. Department of Labor investigated allegations of FLSA violations at Lumber One regarding the plaintiffs and other employees. In July 2010, the Department of Labor notified the plaintiffs that Lumber One may have wrongfully denied them overtime pay.

In August 2010, the plaintiffs sued Lumber One to recover overtime wages, claiming that Lumber One erroneously classified them as exempt executives under the FLSA. See29 U.S.C. § 216(b) (“Any employer who violates the provisions of ... section 207 of this title shall be liable to the employee or employees affected in the amount of ... their unpaid overtime compensation ... and in an additional equal amount as liquidated damages.”). After a two-day trial in March 2012, a jury found in favor of Lumber One and against all three plaintiffs. The plaintiffs moved for judgment as a matter of law, claiming that Lumber One had not presented sufficient evidence to meet its burden of showing that the plaintiffs were indeed executive employees under the FLSA. In April 2012, the district court overturned the jury verdict and granted the plaintiffs' motion, finding that Lumber One had failed to prove the fourth element necessary to qualify for the executive employee exemption. The fourth element required Lumber One to prove that the plaintiffs had the authority to hire or fire employees, or that their recommendations regarding personnel decisions were given “particular weight” by the decisionmaker. See29 C.F.R. § 541.100(a)(4).

After reversing the jury verdict, the district court awarded the plaintiffs their unpaid overtime wages and also awarded statutorily-provided liquidated damages. 29 U.S.C. § 216(b). The district court awarded a total of $7,555.20 to Madden, $1,234.80 to O'Bar, and $2,339.20 to Wortman, for a combined total award of $11,129.20. The district court also awarded the plaintiffs $50,696.74 in attorneys' fees and costs. Lumber One appeals and argues that the jury had sufficient evidence to conclude that the plaintiffs were executive employees at Lumber One and thus were not illegally denied overtime pay. Lumber One separately appeals the attorneys' fee award.

II.

We review de novo a district court's grant of a motion for judgment as a matter of law. Hortica–Florists' Mut. Ins. Co. v. Pittman Nursery Corp., 729 F.3d 846, 854 (8th Cir.2013). A court may grant judgment as a matter of law if “the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party[.]” Fed.R.Civ.P. 50(a)(1); Am. Bank of St. Paul v. TD Bank, N.A., 713 F.3d 455, 462 (8th Cir.2013). “A jury verdict should not be overturned unless there is a complete absence of facts to allow a jury to reach its conclusion.”Wilson v. Brinker Int'l, Inc., 382 F.3d 765, 770 (8th Cir.2004) (internal quotation marks and citations omitted); see also Athey v. Farmers Ins. Exch., 234 F.3d 357, 362 (8th Cir.2000) (“Judgment as a matter of law is appropriate only when the record contains no proof beyond speculation to support the verdict.”).

The employer has the burden to prove that its employee is an executive and therefore exempt from the FLSA's overtime pay requirements. Fife v. Harmon, 171 F.3d 1173, 1174 (8th Cir.1999). Exemptions to the FLSA are narrowly construed to protect workers. See, e.g., Spinden v. GS Roofing Prods. Co., 94 F.3d 421, 426 (8th Cir.1996). In addition, the Office of Personnel Management has promulgated a regulation requiring that “the designation of an employee as FLSA exempt or nonexempt must ultimately rest on the duties actually performed by the employee.” 5 C.F.R. § 551.202(e). While not binding on this court, we find the regulation instructive. See Folger v. Medicalodges, Inc., No. 13–1203–MLB, 2013 WL 6244155, at *4 (D.Kan. Dec. 3, 2013).

We determine whether an employee meets the executive exemption by applying Department of Labor regulations. See Fife v. Bosley, 100 F.3d 87, 89 (8th Cir.1996). The Department of Labor defines an “executive” employee—that is, one exempt from FLSA requirements relating to overtime pay—as follows:

(a) The term ‘employee employed in a bona fide executive capacity’ in section 13(a)(1) of the Act shall mean any employee:

(1) Compensated on a salary basis at a rate of not less than $455 per week (or $380 per week, if employed in American Samoa by employers other than the Federal Government), exclusive of board, lodging or other facilities;

(2) Whose primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;

(3) Who customarily and regularly directs the work of two or more other employees; and

(4) Who has the authority to hire or fire other employees or whose suggestions and 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. At issue in this case is whether the plaintiffs' job duties met the requirements of the fourth element.² In other words, we must determine whether the jury was presented with evidence that...