Washington, DC
U.S. Office of Personnel Management
Fair Labor Standards Act Decision
Under section 204(f) of title 29, United States Code
Elmendorf Air Force Base (AFB)
Army & Air Force Exchange Service (AAFES)
Department of Defense (DOD)
Elmendorf AFB, Alaska
Robert D. Hendler
Classification and Pay Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
05/22/2014
Date
As provided in section 551.708 of title 5, Code of Federal Regulations (CFR), this decision is binding on all administrative, certifying, payroll, disbursing, and accounting officials of agencies for which the U.S. Office of Personnel Management (OPM) administers the Fair Labor Standards Act (FLSA). The agency should identify all similarly situated current and, to the extent possible, former employees, and ensure that they are treated in a manner consistent with this decision, and inform them in writing of their right to file an FLSA claim with the agency or OPM. There is no right of further administrative appeal. This decision is subject to discretionary review only under conditions and time limits specified in 5 CFR 551.708 (address provided in section 551.710). The claimant has the right to bring action in the appropriate Federal court if dissatisfied with the decision.
The agency is to compute the claimant’s overtime pay in accordance with instructions in this decision, then pay the claimant the amount owed her. If the claimant believes that the agency has incorrectly computed the amount owed her, she may file a new FLSA claim with this office.
Introduction
On May 18, 2012, OPM’s Merit System Accountability and Compliance, received a Fair Labor Standards Act (FLSA) claim from Ms. Virginia D. Carlson to retroactively correct her exemption status under the FLSA regarding the time she served as Assistant Restaurant Manager (CS), 03C at Charley’s Grilled Subs, Elmendorf Air Force Base (AFB), Army & Air Force Exchange Service (AAFES), Department of Defense (DOD), Elmendorf AFB, Alaska. We received the agency administrative report (AAR) on December 6, 2012. We have accepted and decided this claim under section 4(f) of the FLSA of 1938, as amended, codified at section 204(f) of title 29, United States Code (U.S.C.).
In reaching our FLSA decision, we have carefully reviewed all information furnished by the claimant and the agency, including information obtained from a separate and extensive telephone interview with the claimant. Both the claimant’s immediate supervisor and second level manager during the claim period (i.e., Restaurant Manager and Food Court Manager) have retired. Although several attempts to contact these individuals were made, forwarding contact information provided by agency human resources staff is no longer valid thus we were unable to locate them for interview. However, despite the lack of supervisory interviews, we were able to locate and interview a former co-worker of the claimant who worked as another Assistant Restaurant Manager at Charley’s Grilled Subs from June 3, 2006, to December 22, 2012, when she was reassigned to a different food court restaurant at the installation, i.e., Popeye’s. This employee worked with the claimant during the claim period identified later in our decision, was assigned to the same position description (PD) job code number as the claimant, and corroborated during our interview that she performed the same duties as the claimant discussed in this decision.
General Issues
The claimant believes the exemption status of her former position as Assistant Restaurant Manager (CS), 3C, which she held from December 13, 2008, to September 1, 2012, was miscoded as exempt from the overtime provisions of the FLSA. She believes the position should have been designated as nonexempt, and asserts that while assigned to the position she worked 312 hours of uncompensated overtime from May 15, 2010, to September 1, 2012, for which she should have been paid under the FLSA. However, she states she was instructed not to clock-in or out during that time because “managers were paid for only 80 hours per pay period.” Nevertheless, during the period in question the claimant began keeping a record of the number of hours worked outside her scheduled tour of duty, and requests FLSA overtime back pay for the 312 hours noted above. She notes that when assigned to her former position, she discussed with her immediate supervisor and human resources staff her concerns regarding the position’s exemption status, but was told by both parties that as a manager she was not entitled to overtime pay. Effective September, 1, 2012, the appellant was downgraded to the position of Food Service Foreman, HPP-02 (Supervisory) as a result of a Food Volume Review of her unit. However, she indicates her duties in her current job are the same as her previous position but the agency has designated it as nonexempt from the overtime provisions of the FLSA.
The claimant makes various statements about her agency’s review of her FLSA exemption status. In adjudicating this claim, our only concern is to make our own independent decision about the exemption status of the claimant’s position during the time of the claim. We must make that decision by comparing the facts in the case to criteria in Federal regulations and other Federal guidelines. Therefore, we have considered the claimant’s statements only insofar as they are relevant to making that comparison.
Evaluation
Period of the Claim
As provided for in 5 CFR 551.702(b), all FLSA claims filed after June 30, 1994, are subject to a two-year statute of limitations (three years for willful violation). A claimant must submit a written claim to either the employing agency or to OPM in order to preserve the claim period. The date the agency or OPM receives the claim is the date which determines the period of possible pay back entitlement. The claimant indicates she did not file a claim with her agency before filing with OPM. Therefore, we find the claim was preserved effective May 18, 2012, when it was received by OPM.
The next issue normally examined in establishing the claim period is if it should be extended to three years based on if the agency’s actions met willful violation criteria. Although the claimant does not allege her agency committed a willful violation, we have addressed the issue below. “Willful violation” is defined in 5 CFR 551.104 as follows:
Willful violation means a violation in circumstances where the agency knew that its conduct was prohibited by the Act or showed reckless disregard of the requirements of the Act. All of the facts and circumstances surrounding the violation are taken into account in determining whether a violation was willful.
A willful violation requires that either the agency knew that its conduct was prohibited or showed reckless disregard of the requirements of the FLSA. The regulation further instructs that all circumstances surrounding the violation must be taken into account. The agency’s supporting rationale in their administrative report to OPM concerning the FLSA exemption status of the position indicates they believe the claimant’s primary duties were supervisory in nature and were expected to be performed. Therefore, they applied the executive exemption criteria concluding the position was not covered by the overtime pay provisions of the FLSA.
There is no question the agency erred in continuing to designate the claimant’s position as exempt during the claim period. The agency’s analysis was limited to reviewing and citing the supervisory tasks described in the claimant’s official PD, and interviewing the Food Court Manager at the time of the claim, who subsequently retired. However, information gathered from that interview is not addressed in the agency record. No additional fact-finding was performed, e.g., interviews of other witnesses. Moreover, the record shows the agency did not conduct more fact-finding when reviewing the points made in the claimant’s rebuttal of December 20, 2012, to their administrative report to OPM. However, error alone does not reach the level of “willful violation” as defined in the regulations. Therefore, we find that the agency’s actions do not meet the criteria for willful violation as defined in 5 CFR 551.104. Consequently, because we received the claim on May 18, 2012, it is subject to a two-year statute of limitations commencing on May 18, 2010, and any time prior to that date falls outside the claim period.
Position Information
The claimant does not certify to the accuracy of the official PD of her former position (Job Code Number 551VU3CECK). Our review disclosed the claimant did not perform most of the major duties listed in the PD of her former position. She was not involved in planning and budgeting facility resources, local and brand marketing, administrative/financial duties and monitoring day–to-day facility performance. Furthermore, as discussed later, she did not perform any supervisory personnel management activities. Rather, the claimant performed what she described as “front-line” duties consisting of generally training and overseeing 3 to 4 Food Service Workers, HPP-2 (i.e., part time student employees) while working the “front-line” during her assigned shift. Her “front-line” duties entailed cooking, cashiering, food preparation and cleaning; and ensuring service, quality and sanitation standards and food safety guidelines were followed. Employee work hours were assigned by the Restaurant Manager and the claimant was responsible for assigning employees their tasks. The employees she oversaw and trained were not necessarily assigned to a specific shift or supervisor. Therefore, she was responsible for overseeing and training employees who were scheduled to work any time during her shift. For instance, some employees would begin their shift a couple hours before the start of the claimant’s shift, overlapping and completing their shift during hers.
The claimant also provided verbal feedback to her immediate supervisor on trainee progress and employee performance. However, she was infrequently tasked to actually rate and sign annual performance evaluations, doing so only on an as needed basis when requested by the restaurant manager. She was never requested by her supervisor to attend performance evaluation conversations with the employees. If the claimant rated and employee, the manager had the authority to change her initial rating, and when this was done the claimant did not sign the performance evaluation. The number of employee performance evaluations prepared by the claimant varied each year. If needed, the manager would generally distribute employee performance evaluations to be rated by all assistant restaurant managers, but also rated employees herself. During her tenure in her former position if requested to do so, the claimant recalled doing about two performance appraisals a year.
The claimant did not have a set work schedule and worked either the morning or night shift, generally from 8:00 a.m. to 5:00 p.m. or from 12:00 p.m. to 8:30 p.m. respectively, with a half an hour for lunch. When working the night shift, she was responsible for closing activities consisting of counting the money in the cash register, securing it in the safe, and sometimes setting the alarm to the restaurant. The restaurant’s manager usually worked during the morning shift. It was the manager’s responsibility to perform all administrative and financial duties related to the restaurant, such as interviewing and selecting job applicants; drafting employee work schedules; taking inventory; ordering food and supplies; paying bills; completing accident reports; approving leave; and taking disciplinary actions. The claimant infrequently assisted the restaurant the manager in drafting employee work schedules, usually only when the manager was too busy with other tasks. Upon the restaurant manager’s retirement in June 2012, when the Food Court Manager temporarily took over supervision, she began assisting with inventory and ordering produce.
The claimant could take minor disciplinary actions and attempt to resolve employee disagreements informally. For instance, she could give verbal warnings to employees for being late to their shifts, or listen to customer complaints. She could “write up” employees for minor violations, e.g., consistent tardiness or not following instructions. However, most if not all complaints were forwarded to and handled by the Restaurant Manager and in the manager’s absence by the Food Court Manager. The claimant was not involved in more serious problems such as making decisions on disciplinary actions (e.g., removals, suspensions) or handling employee grievances.
Evaluation of FLSA Coverage
Sections 551.201 and 551.202 of title 5 CFR require an employing agency to designate an employee FLSA exempt only when the agency correctly determines that the employee meets one or more of the exemption criteria. In all exemption determinations, the agency must observe the following principles: (a) Each employee is presumed to be FLSA nonexempt. (b) Exemption criteria must be narrowly construed to apply only to those employees who are clearly within the terms and spirit of the exemption. (c) The burden of proof rests with the agency which asserts the exemption. (d) If there is a reasonable doubt as to whether an employee meets the criteria for exemption, the employee should be designated FLSA nonexempt. (e) The designation of a position’s FLSA status ultimately rests on the duties actually performed by the employee. Our analysis of the claimant’s duties follows. Neither the claimant nor the agency asserts the claimant’s work was covered by the professional exemption as detailed in 5 CFR 551.207 and, based on careful review of the record, we agree. Therefore, our analysis is limited to the executive and administrative exemptions in effect during the period of the claim.
I. Executive Exemption Criteria
Under the current FLSA regulations, 5 CFR 551.205 (2007) provides:
(a) an executive employee is defined as an employee whose primary duty is management (as defined in 5 CFR 551.104) of a Federal agency or any subdivision thereof (including the lowest recognized organizational unit with a continuing function) and who:
(1) Customarily and regularly directs the work of two or more other employees; and
(2) 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.
(b) Particular weight. Criteria to determine whether an employee’s suggestions and recommendations are given particular weight by higher-level management include, but are not limited to: Whether it is part of the employee’s job duties to make such suggestions and recommendations; the frequency with which such suggestions and recommendation are made or requested; and the frequency with which the employee’s suggestions and recommendations are relied upon. Generally, an executive’s suggestions or recommendations must pertain to employees whom the executive customarily and regularly directs. Particular weight does not include consideration of an occasional suggestion with regard to the change in status of a co-worker. An employee’s suggestions and recommendations may still be deemed to have particular weight even if a higher level manager’s recommendation has more importance and even if the employee does not have authority to make the ultimate decision as to the employee’s change in status.
As defined in 5 CFR 551.104, management means performing activities such as interviewing, selecting, and training of employees; setting and adjusting their rates of pay and hours of work; directing the work of employees; maintaining production or financial records for use in supervision or control; appraising employees’ productivity and efficiency for the purpose of recommending promotions or other changes in status; handling employee complaints and grievances; disciplining employees; planning the work; determining the techniques to be used; apportioning the work among the employees; determining the type of materials, supplies, machinery, equipment, or tools to be used or merchandise to be bought, stocked and sold; controlling the flow and distribution of materials or merchandise and supplies; providing for the safety and security of the employees or the property; planning and controlling the budget; and monitoring or implementing legal compliance measures.
The claimant’s work does not meet the executive exemption criteria. Her primary duties did not constitute management as defined in 5 CFR 551.104 because she did not perform on a regular basis most of the activities listed, which was confirmed by her former assistant manager co-worker. Also, the claimant did not customarily and regularly direct the work of two or more employees as defined for purposes of the FLSA. Although she provided on-the-job training for new hires; ensured employee assigned tasks were completed in accordance with restaurant policies and procedures; and upon request rated their performance, the claimant did not have operating/delegated authority over these employees (i.e., Food Service Workers). Instead, as previously mentioned and confirmed by her former assistant manager co-worker, the claimant had shared responsibility for the oversight and training of these employees with other assistant restaurant managers. These employees were not always assigned to the same shift hours as she was, nor were they necessarily the same employees. As previously noted, an employee could have begun his or her shift an hour or two before the claimant’s shift began, overlapping with her shift, thus being under the direction of the Restaurant Manager or the Assistant Restaurant Manager on duty before the claimant’s shift began.
Under 5 CFR 551.205 (a)(1), an employee who merely assists the manager of a particular department and supervises two or more employees only in the actual manager’s absence does not satisfy this requirement. Additionally, hours worked by an employee cannot be credited more than once for different executives. Therefore, the shared nature of her duties with other assistant managers, and the fact she carried out some supervisory duties only in the restaurant manager’s absence, did not allow her to customarily and regularly direct the work of two or more employees for purposes of the FLSA. Moreover, in contrast to the criteria in 5 CFR 551.205(a)(2), the claimant did not have direct supervisory responsibility for any employee on her shift, and did not have the authority to hire or fire other employees or make suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees, which were given particular weight.
For the preceding reasons, we conclude the claimant did not meet the executive exemption.
II. Administrative Exemption Criteria
The current regulation under 5 CFR 551.206 (2007), describes the administrative exemption criteria, in relevant part, as follows:
An administrative employee is an employee whose primary duty is the performance of office or non-manual work directly related to the management or general business operations, as distinguished from production functions, of the employer or the employer’s customers and whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
(a) In general, the exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered. The term “matters of significance” refers to the level of importance or consequence of the work performed.
(b) The phrase discretion and independent judgment must be applied in light of all the facts involved in the particular employment situation in which the question arises. Factors to consider when determining whether an employee exercises discretion and independent judgment with respect to matters of significance include, but are not limited to, whether the employee:
(1) Has authority to formulate, affect, interpret, or implement management policies or operating practices;
(2) Carries out major assignments in conducting the operation of the organization;
(3) Performs work that affects the organization’s operations to a substantial degree, even if the employee’s assignments are related to operation of a particular segment of the organization;
(4) Has the authority to commit the employer in matters that have significant financial impact;
(5) Has authority to waive or deviate from established policies and procedures without prior approval;
(6) Has authority to negotiate and bind the organization on significant matters;
(7) Provides consultation or expert advice to management;
(8) Is involved in planning long-or short-term organizational objectives;
(9) Investigates and resolves matters of significance on behalf of management;
(10) Represents the organization in handling complaints, arbitrating disputes, or resolving
grievances.
(c) The exercise of discretion and independent judgment implies the employee has authority to make an independent decision, free from immediate direction or supervision. However, an employee can exercise discretion and independent judgment even if the employee’s decisions or recommendations are reviewed at a higher level. Thus, the term discretion and independent judgment does not require that decisions made by an employee have a finality that goes with unlimited authority and a complete absence of review. The decisions made as a result of the exercise of discretion and independent judgment may consist of recommendations for action rather than the actual taking of action. The fact that an employee’s decision may be subject to review and that upon occasion the decisions are revised or reversed after review does not mean that the employee is not exercising discretion and independent judgment.
(d) An organization’s workload may make it necessary to employ a number of employees to perform the same or similar work. The fact that many employees perform identical work or work of the same relative importance does not mean that the work of each such employee does not involve the exercise of discretion and independent judgment with respect to matters of significance.
(e) The exercise of discretion and independent judgment must be more than the use of skill in applying well-established techniques, procedures, or specific standards described in manuals or other sources.
The claimant’s work does not meet the administrative exemption criteria. Although during the claim period she performed office or non-manual work related to the restaurant’s operations, her primary duties did not include the exercise of discretion and independent judgment with respect to matters of significance. For example, she had no authority to formulate, affect, interpret, or implement management policies at her level or commit her employer in matters having significant financial impact; she carried out short-term assignments rather than major ones related to immediate food service activities during her tour of duty; she had no authority to waive or deviate from established policies and procedures without prior approval because all her activities were managed in accordance food safety guidelines and specific procedures; and she was not authorized to negotiate and bind her organization on significant matters. Unlike the exemption criteria, the claimant was not involved in planning long-or short-term organizational objectives; did not investigate and resolve matters of significance on behalf of management; and was not authorized to represent the organization in handling complaints, arbitration disputes or resolving grievances.
While the claimant worked independently, free of immediate supervision and direction, in contrast to the application of discretion and independent judgment she used knowledge and skill in applying well-established rules, regulations and procedures governing Name Brand Fast Food (NBFF) and AAFES standards in accordance with food safety guidelines. In doing so, she relied on technical skills acquired through specialized training and work experience.
Thus, we conclude the claimant did not meet the administrative exemption.
Decision on FLSA Coverage
The claimant’s work does not meet the executive, administrative, or professional exemption criteria. Therefore, her work is nonexempt and covered by the overtime pay provisions of the FLSA. She is entitled to compensation for all overtime hours worked at the FLSA overtime rate. The claim was received by OPM on May 18, 2012 and the claimant can receive back pay for two years prior to that date. We find no indication of willful violation by the agency. The agency must follow the compliance requirements on page ii of this decision.
The claimant provided the number of overtime hours worked in a given period. The agency must reconstruct the claimant’s pay records for the period of the claim and compute back pay for FLSA overtime pay owed and any interest on the back pay, as required under 5 CFR 550.805 and 550.806, respectively. If the claimant believes the agency incorrectly computed the amount, she may file a new FLSA claim with this office.