Summary of a Recent
Judicial Development in
Labor

Employees with Authority to Hire or Fire Not Entitled to Overtime

Walt McCarter
National AgLaw Center Research Associate

Summary of Decision

In Davis v. Mountaire Farms, Inc., 598 F. Supp. 2d 582, 2009 WL 159173 (D. Del. 2009), the United States District Court for the District of Delaware held that plaintiffs were entitled to recover for unpaid overtime accrued while they were hourly employees working in excess of 40 hours per week, but denied the plaintiffs' motion for a new trial on the issue of whether they were entitled overtime for the period after they became salaried employees because they had failed to prove that the trial court's evidentiary holdings were erroneous and that the defendant's peremptory strike of an African-American juror was racially motivated.

Background

Employees who worked as crew leaders of chicken catchers for Mountaire Farms brought this action for violations of the Fair Labor Standards Act (FLSA) and the Delaware Wage Payment and Collection Act, 19 Del. C. § 1101 et. seq., seeking unpaid overtime compensation for the time they spent picking up and dropping off their crew before and after work each day. Id. at *1. The plaintiffs had become salaried employees in 2002, at which point Mountaire stopped paying them overtime although their duties remained the same. Id. Employers are generally required to pay overtime compensation to employees who work over 40 hours per week pursuant to FLSA, 29 U.S.C. § 207(a)(1); however, § 213(a)(1) provides an exemption for those who are employed in a "bona fide executive, administrative, or professional capacity." Id. An "executive employee" is one "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." Id. (quoting 29 C.F.R. 541.100, which was enacted in 2005).

The district court granted summary judgment to Mountaire after finding that the plaintiffs met the "hire or fire" requirement of newly-enacted 29 C.F.R. 541.100. Id. The appellate court reversed and remanded for a determination of whether 29 C.F.R. 541.100 applied to all the overtime at issue because regulations generally are not given retroactive effect. Id. at *2. The trial court then ordered the case to proceed based on whether the plaintiffs had the authority to "hire or fire." Id. A jury found that they did have such authority, and so judgment was again entered in favor of Mountaire. Id. The plaintiffs moved for a judgment as a matter of law as to the time period from June 2001 to June 2002, and moved for a new trial as to the remaining time period at issue. Id.

Arguments

The plaintiffs argued that the trial court's evidentiary holdings (suppressing certain evidence and witness testimony, and overruling the plaintiffs' challenge to the defendant's use of peremptory strikes in voir dire) were erroneous and necessitated a new trial. Id. at *6-8.

Analysis and Holdings

The court began by awarding judgment to the plaintiffs as to the unpaid overtime sought from June 2001 to June 2002 because it was undisputed that they were not yet salaried employees and that they had worked in excess of 40 hours per week during that time period. Id. at *5. Turning to the remaining time period beginning in June 2002, the court considered the plaintiffs' motion for new trial. Id. at *6. The court pointed out that the plaintiffs' motion was filed eleven days after the jury verdict, and therefore denied the motion as untimely, but for purposes of compiling a complete record for appeal it explained that it would have denied the motion regardless of its timeliness. Id. at *6. The court found that the trial court's evidentiary rulings were not erroneous; the evidence excluded by the court was irrelevant as to the issue of whether the plaintiffs could "hire or fire" employees. Id. at *6-7. Furthermore, the court found that the plaintiffs had failed to prove that Mountaire's peremptory strike of an African-American juror was racially motivated. Id. at *8. Therefore, the court granted the plaintiffs' motion for partial summary judgment as to the unpaid overtime accrued from June 2001 to June 2002, but denied the plaintiffs' motion for new trial. Id. at *9.

The case was decided on January 22, 2009.