Little v. Belle Tire Distributors, Inc.

Filing 60

DECISION Signed by District Judge Avern Cohn. (MVer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
JOSEPH LITTLE,
Plaintiff,
Case No. 13-10311
-vsHon. AVERN COHN
BELLE TIRE DISTRIBUTORS, INC.,
Defendant.
________________________________________/

DECISION
I. Introduction
This is a wage hour case implicating the executive exemption of the Fair Labor
Standards Act, 29 USC §213(a) (“The provision[.] . .shall not apply with respect to (1)
any employee employed in a bona fide executive. . .capacity. . .”) tried to the Court over
three (3) days in May, 2015. The background of the case is reflected in the decision
granting summary judgment to defendant, a retail tire distributor in southeast Michigan,
Little v. Belle Tire Distributors, Inc., 2013 WL 6328849 (E.D. Mich. 2013), and reversed
on appeal, 588 F. Appx. 424 (6th Cir. 2014). In reversing the dismissal, the Court of
Appeals said:
Though it is clear Little played some role in interviewing job
candidates, preparing work schedules, and conducting
training, questions remain concerning the exact nature of the
work Little performed and the level of discretion that Little
exercised. Such questions are suitable for a factfinder’s
determination.
588 F. Appx. at 426.
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The decision dismissing the case adequately describes in general plaintiff’s work
history as a First Assistant Store Manager with defendant, as well as the nature of
defendant’s business, and will not be repeated here.
Based on the record at trial, the Court is satisfied that defendant has proven by
“clear and affirmative evidence” that plaintiff falls within the executive exemption. Id. at
426. Plaintiff’s primary duties as a First Assistant Store Manager while in the employ of
defendant is in a management position under the statute.
As the Court said in granting defendant summary judgment, and now repeats
here, “[defendant] has shown that [plaintiff] exercised [during his workday] his discretion
and independent judgment on matters of importance to it.” 2013 WL 6328849 at 8.
II. The Law
The case law interpreting the executive exemption in the Act was fully discussed
in the decision granting summary judgment and its reversal and will not be repeated
here. What is important to the decision here and bears repeating are the Department of
Labor regulations relating to the executive exemption. The relevant regulations are
attached as Exhibit A.
III. The Trial1
A. The Witnesses
Five witnesses testified.
•

Joseph Little

Little described his work history with defendant,

beginning as a tire technician and his promotion to First Assistant Store
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The trial was limited to liability. There is a Stipulation Regarding Damages in
place (Doc. 46).
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Manager. He described in detail his daily activities in several of
defendant’s retail stores over his nine (9) years of employment. He
participated in hiring, discipline, training, oversight of the tire technicians’
work, including apportioning the work, scheduling work hours, adjusting
time records, operating the Medalia system (a website that handles
customer satisfaction surveys), responding to customer complaints,
adjusting prices for goods sold, issuing purchase orders to vendors for
miscellaneous store items, and being in charge of the store when the
manager was not present. His testimony that 80% of his workday was
sales and 20% was management was not supported by any other
testimony.
•

Joseph Prior

Prior was a seven (7) year employee of defendant.

He was initially a First Assistant Store Manager, and then for four (4)
years a Store Manager. He was personally acquainted with plaintiff’s
workday as a First Assistant Store Manager. Plaintiff worked as a First
Assistant Store Manager under him for one (1) year. Prior described the
workday of a First Assistant Store Manager, and also the workday of a
Store Manager.
•

Ryan Scaglione

Scaglione was an eight (8) year employee of

defendant. He is now a Regional Director of Retail Operations. He had
ten (10) years experience as a Store Manager. He was personally
acquainted with plaintiff’s work as a First Assistant Store Manager; plaintiff

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worked as a First Assistant Store Manager under him for two (2) years.
He described the workday of a First Assistant Store Manager.
•

David LaBounty

LaBounty was a 20 year employee of defendant. He

is now a Regional Director of Retail Operations. Plaintiff worked under
him as a First Assistant Store Manager for one (1) year. His testimony
was cumulative of Scaglione.
•

James Tyson

Tyson is a consultant to defendant. He was formerly

chief financial officer and general counsel of defendant, and then chief
operating officer between 2009 and 2014. He had daily contact with Store
Managers and First Assistant Store Managers. He testified as follows:
•

First Assistant Store Managers had the right to hire and fire store
employees on their own.

•

He had analyzed the position of First Assistant Store Manager, and
had concluded that the position fell under the executive exemption
since the primary duty of the position was management. He came
to this conclusion from his observations while in the stores, the job
description for First Assistant Store Manager, and his personal
interactions with employees.

•

First Assistant Store Managers had their own training meetings.
Tyson was a credible witness; cross-examination did not diminish

the credibility of his answers. For the most part, cross-examination was
directed to his testimony on training meetings.

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B. The Exhibits
A multitude of exhibits were introduced into evidence at trial and post-trial. They
included plaintiff’s job application, e-mails, job descriptions, discipline cards, training
records, purchase orders and summaries of training meetings. Some of the exhibits
were particular to plaintiff, and others generic to the operation of a store. Particularly
pertinent exhibits and what they say of plaintiff’s management duties follow. These
exhibits flesh out, in the words of the Court of Appeals, “the exact nature of the work
Little performed.” Little, 588 F. Appx. At 426.
•

Exhibit 6

Job description of First Assistant Store Manager. The

exhibit describes plaintiff’s duties. Plaintiff testified (Tr., Vol. 1, p. 62) as to
this exhibit as follows
Q.

Let’s take a look at Exhibit Number 6. . .this is a job
description of your job as first assistant; is that
correct?

A.

Yes.
***

Q.

Do you disagree with any of the description items in
that description?
***

A.

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I don’t see anything that I would disagree with other
than possibly the fully knowledgeable part of 4
regarding hiring and termination procedures. Other
than that, pretty accurate, yes.

Exhibit 7

Job description of Store Manager.

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•

Exhibit 8

Plaintiff’s Employee Training Record dated October 17,

2012. This exhibit establishes that plaintiff was deemed Proficient or
Master in a multitude of managerial tasks.
•

Exhibit 9

Plaintiff’s Performance Appraisal dated October 17, 2012.

This exhibit establishes that plaintiff performed “Expected” or “More Than
Expected” in performing his responsibilities, and particularly “Expected” in
Planning & Organizing, Delegation, Decision Making and Subordinate
Development, all managerial tasks.
•

Exhibit 10

Employee Corrective Action Record dated August 09, 2012.

This exhibit is an example of plaintiff disciplining a tire technician for
deficient performance.
•

Exhibit 13

Medallia, Inc. records. This exhibit is a multi-page listing of

customer complaints plaintiff responded to over the years he was a First
Assistant Store Manager.
•

Exhibit 16

The work order board. Plaintiff had the responsibility of

seeing that the tire technicians took down work orders in the sequence
posted.
•

Exhibit 17

Total Annual Compensation Comparison. This exhibit

displays plaintiff’s compensation annually for the years 2011 to 2014,
compared to Second Assistant Store Managers, Third Assistant Store
Managers and Sales Associates, all inferior positions to the First Assistant

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Store Manager, and all of whom were paid hourly. On average, plaintiff’s
compensation was ten percent (10%) to twenty percent (20%) higher.
•

Exhibit 17A

Total Annual Compensation Comparison. This exhibit

is a detailed comparison of plaintiff’s annual compensation for 2011 to
2014, compared to Store Managers, Second and Third Assistant Store
Managers and Sales Associates. It shows that plaintiff was paid less than
Store Managers and more than Second and Third Assistant Store
Managers and Sales Associates.
•

Exhibit 18

A graphic which displays in percentages the amount of time

between January 01, 2010, and May 12, 2015, plaintiff was in a store with
the Store Manager present, present in a store by himself without a Store
Manager present, and present in a store without a Store Manager present,
but with another First Assistant Store Manager present.
•

Exhibit 34

Schematic of personnel of Belle Tire Store 63, White Lake,

Michigan. This exhibit displays the employees working in a store on a
typical day. (A copy is attached as Exhibit B.)
IV. Findings of Fact2
What follows are the essential facts as required by Fed.R.Civ.P. 52. These
findings are based on an assessment of the credibility of the witnesses, weighing the
testimony and exhibits, and drawing such inferences as is appropriate.

2

The findings include the descriptions of the testimony of the witnesses and the
exhibits, supra.
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Plaintiff, because of his self-interest, as well as incidents during his years with
defendant was not a particularly credible witness. Plaintiff downplayed his workday as a
manager, and exaggerated his workday as a salesperson.
1.

Defendant operates 86 retail stores; 65% have a single First Assistant

Store Manager, while 35% have more than one (1) First Assistant Store Managers.
2.

Plaintiff began working for defendant in June, 2006, as a tire technician.

Six (6) months after being hired, plaintiff transferred to sales. Both jobs called for hourly
pay. In February, 2009, plaintiff was promoted to First Assistant Store Manager, a
salaried position. Plaintiff continues to work for defendant.
3.

Plaintiff, in addition to a regular annual salary, receives a bonus at year’s

end. Store Managers and First Assistant Store Managers receive a bonus based on
store performance.
4.

In the aggregate during a workday, plaintiff works both as a manager and

as a sales person. His sales work is less than 50% of his workday.
5.

Plaintiff monitors the work performance in the shop, and regularly directs

the tire technicians.
6.

When bringing tire technicians together to address specific problems,

plaintiff is correcting behavior and training the tire technicians.
7.

Plaintiff exercises supervisory responsibility over the tire technicians in the

shop of the store in which he works. Plaintiff has the responsibility of placing work
orders generated by the sales persons in the store on a board in the sequence in which
they are written up. The work order describes to the tire technician the work to be done

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on an automobile brought to the store by a customer. The work particularly relates to
tires, both new and to be repaired, oil changes, brake adjustments and the like.
8.

The order board effectively directs the traffic in the shop. Plaintiff monitors

the tire technicians’ work. Plaintiff reassigns work when necessary and resolves
disputes among the tire technicians.
9.

Plaintiff has the responsibility for ensuring there is an adequate number of

tire technicians to do the work of the day. This includes sending the tire technicians
home when work slackens off. Plaintiff advises tire technicians when they run into
problems. On occasion, plaintiff has to resolve disputes among the tire technicians.
10.

Plaintiff’s responsibility for the work of the tire technicians requires

supervisory skill and judgment.
11.

Plaintiff regularly participates in the hiring process in a store. On occasion

plaintiff interviews job applicants and makes recommendations as to who to hire. The
Store Manager gives consideration to plaintiff’s recommendations. The record contains
specific examples of plaintiff exercising judgment during the hiring process.
12.

Plaintiff regularly trains sales staff on computer systems, point of sale

systems, national account systems and writing work orders.
13.

Plaintiff’s level of sales activity is substantially less than his management

responsibilities. Plaintiff is regularly in charge of a store where a Store Manager is not
on the premises. As to the days when a Store Manager is in the store, plaintiff and the
Store Manager work opposite ends of the workday. Plaintiff has the responsibility for
opening the store, while the Store Manager has the responsibility for closing the store.

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14.

When more than one (1) Assistant Store Manager is present without a

Store Manager present, the Assistant Store Managers share responsibilities.
15.

Plaintiff has worked 18% of his hours without a Store Manager present,

and without another First Assistant Store Manager present. Plaintiff has worked 9% of
his hours without a Store Manager present and with another First Assistant Store
Manager present. This totals 27% of all work hours without a Store Manager present.
16.

First Assistant Store Managers have met separately on several occasions

in recent years for training purposes.
17.

The responsibilities of a Store Manager, including hiring, training,

employee maintenance and inventory management as described in the job description
for Store Manager (Exhibit 7) are incorporated into Sec. 4.5 and 4.6 of Exhibit 6, the job
description for First Assistant Store Manager.
V. Discussion
A.
The FLSA’s administrative exemption states that plaintiff is exempt from overtime
pay. 29 C.F.R. §541.100(a) defines an exempt employee as follows:
(1) Compensated on a salary basis at a rate of not less than
$455 per week. . .(2) Whose primary duty is management of
the enterprise in which the employee is employed. . .(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.
Plaintiff satisfies these elements. Plaintiff is paid a base salary of $550.00 per
week.
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Plaintiff’s primary duties are management of a store.
There is no dispute that plaintiff performs sales duties as part of his workday.
While plaintiff says that these duties occupy 80% of his time, there is no support in the
record other than plaintiff’s testimony for the 80% figure. On the contrary, given the
variety of his management tasks on a workday and the significant amount of time
plaintiff was in charge of the store while the Store Manager was absent, plaintiff’s
workday is principally managerial.
The Court discusses the “administrative production dichotomy” in its summary
judgment decision, and will not repeat it here. See, 2013 WL 6328849 at 7.
Plaintiff customarily and regularly directs the work of two (2) or more other
employees; he is in charge of the tire technicians.
Finally, plaintiff’s suggestions as to hiring and firing other employees are
seriously considered by the Store Manager, and the record supports a finding that
plaintiff sometimes exercises that function directly.
B.
Some discussion of plaintiff’s workday in addition to what was said above is in
order.
1.
As to the division between hours plaintiff works in a managerial capacity and
hours he works in sales, there was no direct testimony at trial except plaintiff’s
unsupported testimony of a 20% to 80% split. However, there was documentary
evidence in the form of two (2) pie charts, Exhibit 18, previously described.

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•

Plaintiff worked 18% of all hours without a Store Manager present
and without another First Assistant Store Manager present

•

Plaintiff worked 9% of all hours without a Store Manager present
and with another First Assistant Store Manager present

•

Thus, plaintiff worked 27% of all hours without a Store Manager
present

Also, when plaintiff works together with another First Assistant Store Manager
present, both are equally responsible for running the store. There is no seniority
between the two (2) so far as responsibilities were concerned.
2.
The Store Managers who testified as to the amount of time spent on sales
activities opined that each sold as many tires and services as plaintiff, and in the case of
Prior, more than plaintiff. This disparity was not explained. The Store Manager further
explained that they and plaintiff spend between 20% and 30% of their time selling.
The Court is satisfied that the proofs at trial show that plaintiff spends at a
minimum less than 50% of his workday selling and more than 50% of his workday in
managerial duties.
C.
When exempt and non-exempt duties overlap, the importance of the time factor
diminishes, and may in the words of the Sixth Circuit “be somewhat misleading,”
Thomas v. Speedway Superamerica, LLC, 506 F.3d 496, 504 (6th Cir. 2007); see also,
Jackson v. Advance Auto Parts, Inc., 362 F.Supp.2d 1323, 1335 (N.D. Ga. 2005). In

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this case, the executive exemption was applied to the assistant manager of an auto
parts store who performed sales and management duties “simultaneously.”
D.
What plaintiff does as a First Assistant Store Manager is what is important to
Belle Tire. As explained in Defendant’s Post-Trial Brief (Doc. 49, p. 12):
The Belle Tire store would not have operated effectively (if at
all) without Little’s management duties. Little ensured
adequate staffing levels in the shop. He then directed work
in the shop to ensure that jobs were completed correctly and
on time. He also ran the entire store, supervised its
employees, and handled any and all issues that arose for
substantial periods of time. This was of major importance to
Belle Tire. (Citations omitted)
VI. Conclusion
In the first round of the case, the Court found effectively that there were no
genuine issues over the facts to support the conclusion that plaintiff is exempt from the
overtime provisions of the FLSA because he is part of management. That conclusion
was held to be in error, because the affidavits in support were insufficient in the view of
the Court of Appeals to support this conclusion.
The second round of the case consisted of testimonial and documentary
evidence. The evidence and the inferences reasonable to be drawn from it supports

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the conclusion that plaintiff is a manager and is exempt from the overtime provision of
the FLSA.
Accordingly, this case is DISMISSED.
SO ORDERED.

Dated: October 20, 2015

s/Avern Cohn
AVERN COHN
UNITED STATES DISTRICT JUDGE

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