#WandH

ACI’s 22nd National Forum on Wage & Hour Claims and Class Actions

Lawrence Peikes

Wiggin and Dana

EXEMPT EMPLOYEE DETERMINATIONS AND

MISCLASSIFICATION OF WORKERS

Ellen Kearns

Constangy, Brooks & Smith

Scott J. Witlin

Barnes & Thornburg

September 29 - 30, 2014

Robert Crandall

Resolution Economics

Tweeting about this conference?

#WandH

“I direct the

[DOL] to

propose

revisions to

modernize and

streamline the

existing

overtime

regulations.”

President

Obama Mar. 13, 2014

Changes on the Horizon

#WandH

“I will work around Congress”

Obama has repeatedly

said he will not be waiting

for legislation to enact his

administration’s policies,

but instead will work

around Congress through

executive order and

agency actions.

#WandH

• Section 13(a)(1) of the Fair Labor Standards Act provides

an exemption from both minimum wage and overtime

for “any employee employed in a bona fide executive,

administrative, or professional capacity…or in the

• capacity of an outside salesman (as such terms are

defined and delimited from time to time by regulations

of the Secretary…)”

White Collar Exemptions

#WandH

• Executive

• Administrative

• Professional

• Outside Sales

Congress did not define the terms

#WandH

541 Regulations

• Department of Labor has issued regulations defining the scope of the Section 13(a)(1) exemptions

• These regulations cannot be set aside unless the Secretary exceeds his authority, or if the regulations are “arbitrary, capricious, or an abuse of discretion.”

#WandH

• The exempt employee must receive a

certain minimum salary.

• The exempt employee must be paid on a

salary basis.

• The exempt employee must meet certain

tests regarding his/her job duties.

Three Basic Tests to Qualify for the White Collar Exemptions

#WandH

Likely Changes to 541 Regulations at Obama DOL

• The minimum salary level will be increased.

• The minimum salary level MAY be indexed to cost of living indicators.

• The “duties” test will require an exempt employee to spend 50% of his/her time on exempt duties.

#WandH

Salary Levels

• Salary levels have been included as part of the exemption requirements since 1938.

• No salary level test needed for outside sales employees, teachers, doctors or lawyers.

• Only computer professionals can be paid hourly (at least $27.63/hour).

#WandH

Salary Levels Under the 541 Regulations

Date Mandated

Executive Administrative Professional Short Test/ Highly Compensated

1938 $30 $30 -- --

1940 $30 $50 $50 --

1949 $55 $75 $75 $100

1959 $80 $95 $95 $125

1963 $100 $100 $115 $150

1970 $125 $125 $140 $200

1975 $155 $155 $170 $250

2004 $455 $455 $455 $1,923.08

#WandH

2004 Methodology for Setting the Minimum Salary Level

• Reviewed actual salary levels of all full-time salaried workers age 16 and above broken out by broad industry categories and geographic areas.

• Looked at the salary levels of the bottom 10 percent, 15 percent and 20 percent of all salaried employees, salaried employees in the lower-wage South and salaried employees in the retail sectors.

#WandH

2004 Methodology for Setting the Minimum Salary Level

• The DOL selected the salary that marked the lowest 20% of salaried employees in the South and in the retail sector, rather than the lowest 10%, because the data it reviewed included all “nonexempt” salaried employees.

#WandH

Likely Proposal #1

Increase the

Minimum Salary Level for

Exempt Employees

#WandH

Possible Salary Levels: 1. Adjust for Inflation

• Take the $250 weekly salary level of 1975 and adjust for inflation, which would bring it to $970 in 2012 dollars

• Take the $455 weekly salary level of 2004 and adjust for inflation, which would bring it to $553 in 2012 dollars.

• $970/week = $50,440/year

• $553/week = $28,756/year

#WandH

Changes on the Horizon: Salary Levels

• Adjust minimum salary to >$50,000

• Adjust salary level annually, indexed to inflation

#WandH

Possible Salary Levels: 2. Adopt CA Model

• Exempt employees must earn a monthly fixed salary equivalent to no less than two times the state minimum wage

• July 1, 2014: $9/hour

• Jan. 1, 2016: $10/hour

• That would bring the exempt salary level to $800/week or $41,600/year.

• July 1, 2014: $720/week ($32,440/year)

• Jan. 1, 2016: $800/week ($41,600/year)

#WandH

Possible Salary Levels: 3. Index For Inflation

• In 2004, the DOL found nothing in the regulatory history that would support indexing or automatic increases of minimum salary levels.

• Unions and employee groups are pushing for some kind of indexing system.

• The problem with a national inflationary measure is that it ignores COL differences by geographic region, urban versus rural areas and industries.

#WandH

Likely Proposal #2

Create a Percent Limitation

on Non-Exempt Work

#WandH

Percent Limitation on Non-Exempt Work

Current Rule:

• Primary Duty means principal, main, major or most

important duty.

• Time spent on exempt duties is a “useful guide” but

not determinative.

Likely Change:

• Adopt California rule: Must spend 50% of time on

exempt duties

• May adopt 80% rule: Must spend 80% of time on

exempt duties

#WandH

Likely Proposal #3

Individual Changes to

Executive, Administrative,

Computer Professional

and Outside Sales Duties

#WandH

Executive Exemption

Current Rule:

• Concurrent performance of exempt and non-exempt work does not disqualify an employee from exemption.

• Requires executives to supervise at least two full-time employees, but does not define “full-time”.

Likely Changes:

• Managers cannot spend any more than 50% of their time performing non-exempt tasks

• Eliminate “concurrent” rule; work performed must be exempt or non-exempt

• “Full-time” may be defined as 80 hours of FLSA compensable work.

#WandH

Administrative Exemption Current Rule:

• 541.203(b) provides that employees in the financial services industry ‘‘generally meet the duties requirements for the administrative exemption if their duties include work such as collecting and analyzing information regarding the customer’s income, assets, investments or debts; determining which financial products best meet the customer’s needs and financial circumstances; advising the customer regarding the advantages and disadvantages of different financial products; and marketing, servicing or promoting the employer’s financial products.’

Likely Outcome:

• This example may be significantly modified to provide that the exemption is not available to employees involved in any selling activity.

• DOL is likely to incorporate Administrator's Interpretation No. 2010-1, stating that mortgage loan officers are not exempt – as this AI was recently held invalid by the D.C. Circuit Court because it was issued without notice and comment rulemaking

#WandH

The Computer Exemption

• Because the duties test for exempt computer employees is found in the FLSA itself, the DOL’s discretion to change those duties is limited and more subject to challenge.

• Therefore the DOL is likely to set forth examples of employees who do not meet the computer exemption.

#WandH

Outside Sales Exemption

Current Rule:

• Employee must be engaged in “making sales” “customarily and regularly away from the employer’s places of business”.

• “Customarily and regularly” means “work normally and recurrently performed every workweek”.

Likely Changes:

• Adopt the California test: employee must sell away from the employer’s places of business more than 50% of the time.

• DOL may also attempt to moderate or overrule Supreme Court’s decision regarding the term “sale” described in Christopher v. SmithKline.

#WandH

Regulatory Process

• Fact Finding – Listening Sessions

• Notice of Proposed Rule Making

• Comment Period

• Final Rule

• Effective Date

#WandH

2004 Process

• Jan. 2002 – Mar. 2003: Listening sessions and drafting of NPR

• Mar. 31, 2003: Issued proposed rule

• June 30, 2003: Comments due on proposed rule

• July – Apr. 2004: Revised rule

• Apr. 23, 2004: Final rule issued

• Aug. 23, 2004: Effective date of new rule

#WandH

2014-2015 Possible Outcomes

• Mar. – Oct. 2014: Listening sessions and drafting of NPR

• Nov. 2014: Issue proposed rule

• Feb. 1, 2015: Comments due on proposed rule

• Mar. – Aug. 2015: Revise rule

• Sept. 2015: Issue final rule

• Dec. 2015: Effective date of new rule

#WandH

• Killion v. KeHE Distributors, LLC, __F.3d __, 2014 WL 3733686 (6th Cir. July 30, 2014) (outside sales exemption)

• Pippins v. KPMG, LLP, __ F.3d __, 2014 WL 3583899 (2d Cir. July 22, 2014) (professional exemption)

• Taylor v. AutoZone, Inc., __ Fed. Appx. __, 2014 WL 1877057 (9th Cir. May 12, 2014) (executive exemption)

• Bacon v. Eaton Corp., __ Fed. Appx. __, 2014 WL 1717016 (6th Cir. May 1, 2014) (executive exemption)

• Madden v. Lumber One Home Center, Inc., 745 F.3d 899 (8th Cir. 2014) (executive exemption)

White Collar Exemptions: The Latest Word From the Courts of Appeal

#WandH

• Sales representatives for food distributor. • Provide store support by determining the quantities of

products to be ordered.

• Write and transmit orders for subsequent delivery so as to maintain proper inventory levels.

• Cold-call independent stores and choose mix of products sold there.

• Sixth Circuit reverses grant of summary judgment in favor of employer.

• Factual dispute as to whether plaintiffs made sales.

• Although plaintiffs input orders, evidence showed that account managers actually controlled volume and restrictions on reordering.

• “The fact that the plaintiffs hit the order buttons on their electronic devices, in other words, is not enough to magically transform their jobs from inventory management to ‘sales.’”

Killion v. KeHE Distributors, Inc. (Outside Sales Exemption)

#WandH

• Factual dispute as to whether making sales was plaintiffs’ primary duty.

• Vast majority of time spent stocking and clearing shelves.

• Compensation primarily based on stocking shelves and store maintenance.

• Even if duties constituted “promotional work,” it was in furtherance of sales made by account managers, not plaintiffs.

• District court failed to consider nine factors identified in “drivers who sell” regulation, certain of which militated against exemption.

Killion v. KeHE Distributors, Inc. (Outside Sales Exemption)

#WandH

• Audit associates employed by major accounting firm. • Received substantial specialized education as accountants

and designated by KPMG as accountants.

• Performed entry-level accounting tasks.

• Automatically promoted to more senior accounting position after two years of satisfactory performance.

• Second Circuit affirmed grant of summary judgment in favor of employer.

• To qualify as exempt professionals, primary duty of accountants “must be the deployment of [professional] skepticism to ensure the integrity of the financial accounting process, and their individual tasks must typically involve… substantive attention to, and awareness of, the content of audit and financial materials, and the duty and ability to identify irregularities therein.”

Pippins v. KPMG, LLP (Professional Exemption)

#WandH

• “The critical question is whether the workers act in a manner that reflects knowledge and requires judgments characteristic of a worker practicing that particular profession. Here, by testing controls, performing inventory reviews, and ultimately replicating the audit process in each work paper, audit associates clearly did so by engaging with the audit process in a critical manner.”

• Prolonged course of specialized intellectual instruction requirement satisfied because audit associates hired by KPMG are generally required to be eligible or nearly eligible to become licensed as CPAs and the vast majority had accounting degrees and were, in actual fact, eligible to take the CPA exam.

Pippins v. KPMG, LLP (Professional Exemption)

#WandH

• Store Managers employed by AutoZone classified as exempt executives.

• Ninth Circuit reversed district court order entering summary judgment in favor of employer, finding factual dispute as to whether (i) plaintiffs’ primary duty was management, and (ii) plaintiffs had authority to make or recommend personnel decisions.

• Conflicting evidence concerning the importance of Store Managers’ management duties as compared to non-exempt duties, the extent to which Store Managers are supervised, and the difference in pay between Store Managers and non-exempt employees.

• Conflicting evidence as to the frequency with which Store Managers make hiring, firing, and promotion-related recommendations and extent to which their supervisors relied on these recommendations.

Taylor v. AutoZone, Inc. (Executive Exemption)

#WandH

• Front line shift supervisors with direct oversight of 20 hourly workers reporting to second-level managers.

• Sixth Circuit reversed grant of summary judgment in favor of employer on applicability of executive exemption.

• Dispositive issue was whether plaintiffs had sufficient influence over personnel decisions to qualify as exempt executives, and as to that issue Court of Appeals concluded there was a material factual dispute.

• Evidence offered tending to show plaintiffs did not have significant influence over subordinate employees’ change of status.

• Plaintiffs claimed their personnel recommendations were disregarded and rejected, they were not trained to participate in personnel recruitment and intake, and their job descriptions did not include decision-making regarding personnel.

Bacon v. Eaton Corp. (Executive Exemption)

#WandH

• Three plaintiffs employed by lumber yard and designated as exempt executives.

• Madden completed data entry tasks, assisted customers, unloaded trucks and collected trash.

• O’Bar worked in the lumber yard and in shipping and receiving.

• Wortman waited on customers, helped load trucks, and on occasion would direct truck drivers regarding delivery destinations.

• Jury verdict in favor of employer reversed by Eighth Circuit as to Madden and O’Bar, affirmed as to Wortman.

• Owner’s testimony that his general policy was to consult plaintiffs before making any hiring decision was insufficient to satisfy requirement of active involvement in personnel matters where he could not recall any specific recommendations and hiring decisions involving Madden or O’Bar.

Madden v. Lumber One Home Center, Inc. (Executive Exemption)

#WandH

• Owner’s testimony that Wortman knew two applicants, appreciated his input as to their qualifications, and would not have hired one if Wortman provided a bad recommendation sufficed to sustain jury finding that owner gave particular weight to Wortman’s recommendation at least once.

Madden v. Lumber One Home Center, Inc. (Executive Exemption)

#WandH

• Restaurant/Hospitality • Lema v. Mugs Ale House Bar, 2014 WL 2917031 (E.D.N.Y. June 26,

2014) (factual dispute as to extent of plaintiff’s control over kitchen, hiring and firing authority and freedom from supervision precluded summary judgment as to applicability of executive exemption).

• DiDonna v. Village Farms IGA, LLC, 2014 WL 2739418 (E.D.N.Y. June 16, 2014) (denying motion for summary judgment due to disputed facts control to determination of whether Deli Manager qualified for executive exemption including whether plaintiff had authority to hire, fire and impose discipline, took inventory and ordered product, had responsibility for ensuring catering orders were properly filled and creating employee schedules, and regularly supervised two or more employees).

Frequently Targeted Industries: Recent Examples

#WandH

• Retail Stores • Amash v. Home Depot U.S.A., Inc., 2014 WL 4119409 (N.D.N.Y.

Aug. 21, 2014) (Assistant Store Manager’s primary duty was management, and he was therefore properly classified as an exempt executive, where his managerial duties were of paramount importance, he enjoyed relative freedom from direct supervision, and he was paid more than subordinate employees and eligible for stock options).

• Trimmer v. Barnes & Noble, Inc., __ F. Supp. 2d __, 2014 WL 3537867 (S.D.N.Y. July 18, 2014) (material factual disputes precluded finding that Assistant Store Managers qualified for either administrative or executive exemption as a matter of law).

Frequently Targeted Industries: Recent Examples

#WandH

• Computer Professional Exemption: Applies to employees earning at least $455/week in salary or $27.63/hour whose primary duty consists of:

• (1) application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;

• (2) design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;

• (3) design, documentation, testing, creation or modification of computer programs related to machine operating systems; or

• (4) a combination of these duties, the performance of which requires the same level of skill.

IT & Technical Employees

#WandH

• Recent examples • Mock v. Federal Home Loan Mortgage Corp., 2014 WL

3545096 (E.D. Va. July 15, 2014) (Engineering Tech Lead qualified for computer professional exemption, even though he did not create or write software code, where undisputed facts showed he upgraded the software, modified the software to adapt it to employer’s complex operating systems, and tested upgrades and modifications).

• Ross v. Creative Image Technologies, LLC, 2014 WL 2890467 (W.D. Ky. June 25, 2014) (Sales Engineer responsible for designing and modifying AV systems controlled by computers utilizing computer software was properly classified as computer professional).

IT & Technical Employees

#WandH

• Scope of exemption: An employee is exempt from the FLSA’s overtime requirements if s/he is:

• (1) employed by a motor carrier subject to the Secretary of Transportation’s jurisdiction;

• (2) engaged in activities directly affecting the operational safety of motor vehicles (i.e., driver, driver’s helper, loader or mechanic); and

• (3) engaged in activity that affects the safe operation of motor vehicles in the transportation of passengers in interstate commerce.

• “Motor carrier” = commercial motor vehicles = vehicles weighing over 10,000 pounds.

• The “mixed fleet” problem: employer’s fleet consists of vehicles weighing over and less than 10,000 pounds.

Motor Carrier Act Exemption

#WandH

• One view is that when employee’s activities are divided between commercial and non-commercial vehicles, the Motor Carrier Act favors coverage so long as the time an employee spends operating or servicing commercial motor vehicles is more than de minimis. See, e.g., Wells v. FedEx Ground Package System, Inc., 979 F. Supp. 2d 1006, 1033-34 (E.D. Mo. 2013) (citing cases).

• Alternative view supported by DOL (see Field Assistance Bulletin No. 2012-2), holds that any driver, driver’s helper, loader or mechanic whose work with small vehicles weighing less than 10,000 pounds is more than de minimis is covered by the FLSA. See, e.g., Garcia v. Western Waste Services, Inc., 969 F. Supp. 2d 1252, 1259-60 (D. Idaho 2013); Botera v. Commonwealth Limousine Services, Inc., 2013 WL 3929785, at *12-13 (D. Mass. July 25, 2013).

Motor Carrier Act Exemption

#WandH

Exempt Status Class Action Litigation Strategies

#WandH

Ramirez Decision

• California‘s wage order definition ―takes a purely quantitative approach and focuses exclusively on whether the employee spends more than half of the workday engaged in sales activities outside the office. (Id. at p. 797.)

• The exemption requires scrutiny of both the job description and an employee‘s own work habits. (Id. at pp. 801-802.)

• The trial court must inquire ―first and foremost, how the employee actually spends his or her time.‖ (Id. at p. 802, italics added.)

• Ancillary questions include―whether the employee‘s practice diverges from the employer‘s realistic expectations, whether there was any concrete expression of employer displeasure over an employee‘s substandard performance, and whether these expressions were themselves realistic given the actual overall requirements of the job.‖ (Ibid.)

#WandH

Ramirez Decision

• “Their conclusion was based on a reading of federal regulations that differ substantially from the state regulations applicable in this case: the former regulations define the term by determining the employees’ ‘primary purpose,’ rather than by calculating how they spend their time.”

• “On remand, the trial court should, as Ramirez requested, itemize the types of activities that it considers to be sales related, and the approximate average times that it finds the employee spent on each of these activities.”

• “Because the question whether a particular activity is sales related is a mixed one of law and fact, this itemization will enable an appellate court to review whether the trial court's legal classifications are correct, and whether its factual findings are supported by substantial evidence.”

#WandH

Duran v. US Bank Case Facts

• Loan officers for U.S. Bank National Association (USB) sued for unpaid overtime, claiming they had been misclassified as exempt employees under the outside salesperson exemption

• After certifying a class of 260 plaintiffs, the trial court devised its own plan to determine the extent of USB‘s liability to all class members by extrapolating from a “random” sample of only 20 “representative witness” plaintiffs plus the 2 named plaintiffs

• USB was not permitted to introduce evidence about the work habits of any plaintiff outside this sample (including over 70 declarations stating the declarant spent more than 50% of his or her time on outside sales)

• No experts were involved in creating the trial court’s plan

• The trial court found that the entire class had been misclassified based on testimony from the small sample group and two named plaintiffs

• The judgment must be reversed because the trial court‘s flawed implementation of sampling prevented USB from showing that some class members were exempt and entitled to no recovery

#WandH

Duran v. US Bank – Statistical Issues With Court’s Trial Plan

• The California Supreme Court decision notes that there was no precedent for using random sampling to establish liability in a class action involving the outside sales exemption and notes that the Trial Court’s approach had numerous technical problems

• The sample of 20 was too small

• Sample became self-selected due to opt-outs (Plaintiffs’ counsel manipulated the sample in that people who testified that they spent more than 50% of their time on sales related duties were asked to drop out)

• Margin of error on liability - Plaintiffs’ expert’s extrapolation from a small and not entirely random sample determined that up to 13% of the class was properly classified as exempt (A class-wide decision will be wrong for a portion)

• Margin of error on damages - Plaintiffs’ expert calculated that sample members reported working an average of 11.87 hours of overtime per week plus or minus 5.14 hours per week, or 43.3% (higher than the 30% margin of error benchmark for Bell v. Farmers II)

#WandH

Duran v. US Bank – Variability Impacts the Potential Use of Statistical Sampling

• First, consideration of individual issues should inform the design of any sampling or similar statistical approach. As today‘s opinion notes, ―[i]t is impossible to determine an appropriate sample size without first learning about the variability in the population. In other words, a valid sampling plan must take into account individual variation within the population, and in that sense, consideration of individual issues is ―baked into‖ the plan‘s design.

• The degree or nature of variability in the population may result in a determination that no valid sampling plan would be practical or efficient, that multiple samples must be used in order to capture heterogeneity within the class, or that a sampling plan is viable only for a certain subset of the class.

• Second, even when a trial court has settled on a valid sampling plan, the defendant is entitled to raise individual issues that challenge the results of the plan as implemented.

• The defendant may introduce evidence, such as individual declarations, suggesting that the sample was not truly representative or that the margin of error admits substantial variation around an average or generalized finding.

#WandH

Duran v. US Bank – Variation in How Time is Allocated Matters

• The Court notes, “Depending on the nature of the claimed exemption and the facts of a particular case, a misclassification claim has the potential to raise numerous individual questions that may be difficult, or even impossible, to litigate on a classwide basis.”

• “At the certification stage, it should have been apparent that litigation of the outside salesperson defense would also involve significant inquiry into how each of the class‘s 260 members ―actually spen[t] his or her time.‖ (Ibid.)”

• “Declarations offered by both sides showed significant variation in the time individual BBOs worked outside the office. The trial court was of course entitled to discredit USB‘s declarations. However, it received no evidence establishing uniformity in how BBOs spent their time. (See Ramirez, supra, 20 Cal.4th at p. 802.)”

• “If the variability is too great, individual issues are more likely to swamp common ones and render the class action unmanageable.”

• Wide variation among class members is a factor informing whether the exemption question can be resolved by a simple ―yes‖ or ―no‖ answer for the entire class.

#WandH

Overview of Approaches to Collect Data on the Extent of Variation • Approaches to creating data related to the case

• Surveys • Observation studies • Time diaries • Representative sample - depositions / declarations

• Approaches to analyzing existing data

• Electronic data • Indirect measures – computer log-in/log-out, phone data, business

transaction data, building access data • Ordinary course of business data documenting decisions or

productivity • Videotape / Audiotape • Paper records

• Sampling

50

#WandH

Results Obtained From an Observation Study of 40 Randomly Selected Managers Shows Wide Variation in

Time Spent on Exempt Duties

51

0

1

2

3

4

5

6

7

8

9

10

Lessthan5%

5% -10%

10% -15%

15% -20%

20% -25%

25% -30%

30% -35%

35% -40%

40% -45%

45% -50%

50% -55%

55% -60%

60% -65%

65% -70%

70% -75%

75% -80%

80% -85%

85% -90%

90% -95%

Over95%

Co

un

t

Percent of Time Spent on Managerial Work

Distribution of Managerial Time Estimates for Observed Managers

#WandH

Results Obtained From an Observation Study of 40 Randomly Selected Managers Shows Wide Variation Across Managers in

Terms of the Time Spent on Exempt Duties During a Work-Week

52

56%

37%

61%

40%

47% 47%

69%

59% 57%

43%

60%

71%

41%

46%

56%

42%

53%

43%

68%

48%

65%

49%

63%

45%

54% 56%

50%

65%

44%

51% 51% 50%

59%

63%

55%

58% 61%

33%

58%

52%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

4457 4291 4155 4090 4426 4052 1957 4238 4251 4350 4267 1916 1987 1946 4088 4087 4310 4335 4268 4292 4191 4257 4038 4122 4327 4431 4076 4098 4158 4025 4320 4137 4171 4300 4336 4288 4313 4105 1942 4445

Pe

rce

nt

of

Tota

l Tim

e W

ork

ed

Store

Percentage of Total Time Worked Spent Performing Managerial Tasks by Manager Week

#WandH

Results Obtained From an Observation of 40 Randomly Selected Managers There is Wide Variation Across Shifts in Terms of the

Percentage of Time Managers Allocated to Exempt Duties

53

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Pe

rce

nt

of

Tim

e W

ork

ed

Day Observed

Percentage of Total Time Worked Spent Performing Managerial Tasks by Manager Shift

#WandH

Experiences Reported by Plaintiffs’ Group of Self-Selected Declarations Tell One Side of the Story

54

0

5

10

15

20

25

30

Lessthan5%

5% -10%

10% -15%

15% -20%

20% -25%

25% -30%

30% -35%

35% -40%

40% -45%

45% -50%

50% -55%

55% -60%

60% -65%

65% -70%

70% -75%

75% -80%

80% -85%

85% -90%

90% -95%

Over95%

Co

un

t

Percent of Time Spent on Managerial Work

Distribution of Managerial Time Estimates for Plaintiffs' Declarants

#WandH

Experiences Reported by Defendant’s Declarants Present Another Side of the Story

55

0

5

10

15

20

25

30

Lessthan5%

5% -10%

10% -15%

15% -20%

20% -25%

25% -30%

30% -35%

35% -40%

40% -45%

45% -50%

50% -55%

55% -60%

60% -65%

65% -70%

70% -75%

75% -80%

80% -85%

85% -90%

90% -95%

Over95%

Co

un

t

Percent of Time Spent on Managerial Work

Distribution of Managerial Time Estimates for Defendant's Declarants

#WandH

Plaintiffs’ and Defendant’s Declarations Capture the Tails of the Distribution While Class Result is Likely to be in the Middle

56

0

5

10

15

20

25

30

Lessthan5%

5% -10%

10% -15%

15% -20%

20% -25%

25% -30%

30% -35%

35% -40%

40% -45%

45% -50%

50% -55%

55% -60%

60% -65%

65% -70%

70% -75%

75% -80%

80% -85%

85% -90%

90% -95%

Over95%

Co

un

t

Percent of Time Spent on Managerial Work

Combined Distribution of Managerial Time Estimates for Observed Managers, Plaintiffs' Declarants and Defendant's Declarants

Observed Managers Plaintiffs' Declarants Defendant's Declarants

#WandH

Using Statistical Approaches to Predict Exempt Time Can Lead to a Legally Ambiguous Results

57

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

4158 4090 4052 4327 4098 4087 4076 4291 4088 4426 4320 4335 4025 4268 4292 4300 4122 4310 4251 4288 4313 4350 4431 4105 4336 4267 4445 1946 4457 4238 4191 4257 1916 1987 4155 1942 4038 1957 4171 4137

Pe

rce

nt

of

Tota

l Tim

e W

ork

ed

Store

36 Out of 40 of the 95% Confidence Intervals Fall Within the 50% Mark

Actual Managerial Pct Predicted Managerial Pct Upper and Lower 95% Confidence Intervals