ITTERLY v. FAMILY DOLLAR STORES, INC. et al

Filing 39

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE LAWRENCE F. STENGEL ON 1/30/14. 1/31/14 ENTERED AND COPIES MAILED AND E-MAILED.(mbh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
ALBERT ITTERLY, on behalf of
himself and similarly situated
employees,
Plaintiff
vs.
FAMILY DOLLAR STORES, INC.
and FAMILY DOLLAR STORES OF
PENNSYLVANIA, INC.,
Defendants

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CIVIL ACTION

NO. 08-1266

MEMORANDUM
STENGEL, J.

January 30, 2014

Albert Itterly brought this action under the Fair Labor Standards Act (FLSA), 29
U.S.C. §§ 201–219, and the Pennsylvania Minimum Wage Act (PMWA), 43 PA. STAT.
§§ 333.101–333.115.1 The plaintiff worked as a store manager for the Family Dollar
Store in Allentown, Pennsylvania from July 21, 2007 until November 24, 2007. The
plaintiff alleged that the defendants acted unlawfully in failing to compensate him for
overtime hours worked during this period. The defendants have filed a motion for
summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the
reasons that follow, I will grant the motion in its entirety.
I. BACKGROUND
Albert Itterly was the store manager at the Family Dollar Store in Allentown
between July and November of 2007. During this period, he was compensated by a set
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The complaint alleged individual and collective claims under the FLSA and individual and
class claims under the PMWA. The MDL transferee court dismissed all of the FLSA claims.

weekly salary of $930. In addition, he received a $904.75 bonus in November of 2007.
The plaintiff alleges that during his employment as store manager he was misclassified as
an exempt employee under the PMWA, and thus not given the overtime pay to which he
claims he was entitled. On average, the plaintiff worked sixty-three hours per week. The
defendants claim that the plaintiff is not entitled to overtime pay, as he fits into the
executive exemption of the PMWA.
II. STANDARD OF REVIEW
Summary judgment is appropriate where “the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter
of law.” FED. R. CIV. P. 56(a). A dispute is genuine “if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is “material” if it might affect
the outcome of the case under governing law. Id.
A party seeking summary judgment bears the initial responsibility of informing
the court of the basis for its motion and for identifying those portions of the record which
it believes demonstrates the absence of a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). Where the non-moving party bears the burden of
proof on a particular issue at trial, the movant’s initial Celotex burden may be met by
“pointing out to the district court that there is an absence of evidence to support the nonmoving party’s case.” Id. at 325. Summary judgment is appropriate when the nonmoving party fails to rebut by making a factual showing “sufficient to establish the

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existence of an element essential to that party’s case, and on which that party will bear
the burden of proof at trial. Id. at 322.
Rule 56 requires the court to view the evidence presented on the motion in the
light most favorable to the opposing party. Anderson, 477 U.S. at 255. The court must
decide whether a fair-minded jury could return a verdict for the plaintiff on the evidence
presented. Id. at 252.
III. DISCUSSION
The PMWA requires an employer to pay overtime to an employee working over
forty hours in a week at no less than one and one-half times their regular rate. 43 PA.
STAT. § 333.104(c). However, certain categories of employees are exempt from the
overtime provisions of the PMWA, including those employees “in a bona fide executive,
administrative, or professional capacity.” 43 PA. STAT. § 333.105(a)(5). Employment in
a bona fide executive capacity has been defined by the Pennsylvania Bureau of Labor
Standards to mean work by an individual:
(1)

Whose primary duty consists of the management of the
enterprise in which he is employed or of a customarily
recognized department or subdivision.

(2)

Who customarily and regularly directs the work of two
or more employees.

(3)

Who has the authority to hire or fire other employees
or whose suggestions and recommendations as to the
hiring or firing and as to and advancement and
promotion or any other change of status of other
employees will be given particular weight.

(4)

Who customarily and regularly exercises discretionary
powers.
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(5)

Who does not devote more than 20%, or, in the case of
an employee of a retail or service establishment, who
does not devote as much as 40% of his hours of work
in the workweek to activities which are not directly
and closely related to the performance of the work
described in paragraphs (1)-(4) . . . .

(6)

Who is compensated for his services on a salary basis
at a rate of not less than $155 per week . . . provided
that an employee who is compensated on a salary basis
at a rate of not less than $250 per week . . . and whose
primary duty consists of the management of the
enterprise in which he is employed or of a customarily
recognized department or subdivision thereof, and
includes the customary and regular direction of the
work of two or more other employees therein shall be
deemed to meet all the requirements of this section.

34 PA. CODE § 231.82. Courts look to the FLSA for guidance in applying the PMWA, in
particular to determine definitions of “primary duty” and “management.” See, e.g.,
Baum v. AstraZeneca LP, 372 F. App’x. 246, 248 n.4 (3d Cir. 2010) (“According to the
Pennsylvania courts, ‘it is proper to give deference to federal interpretation of a federal
statute when the state statute substantially parallels it.’”) (quoting Commonwealth, Dep’t
of Labor & Indus., Bureau of Labor Law Compliance v. Stuber, 822 A.2d 870, 873 (Pa.
Commw. Ct. 2003), aff’d, 859 A.2d 1253 (Pa. 2004)); Jean-Louis v. RGIS Inventory
Specialists, LLC, C.A. No. 08-2662, 2011 WL 3678532, at *12 (E.D. Pa. Aug. 22, 2011);
King v. Dolgencorp, Inc., No. 3:09–CV–00146, 2010 WL 9475736, at *10 (M.D. Pa.
May 6, 2010); Paul v. UPMC Health Sys., C.A. No. 06–1565, 2009 WL 699943, at *8
n.1 (W.D. Pa. Mar. 10, 2009) (stating that “[t]he exemptions under both the FLSA and
PMWA are identical”).

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The parties do not separately address plaintiff’s overtime
claim pursuant to the PMWA, instead arguing that because
the executive and administrative exemptions under the
PMWA substantially parallel the FLSA exemptions, the same
analysis should apply under both statutes. Although the
criteria for these exemptions under the PMWA are not
identical to FLSA’s criteria, the court agrees that the tests are
sufficiently similar that the court’s analysis regarding the
FLSA exemptions also applies to the PMWA exemptions.
Vanstory-Frazier v. CHHS Hosp. Co., C.A. No. 08–3910, 2010 WL 22770, at *9 (E.D.
Pa. Jan. 4, 2010).
The PMWA executive exemption consists of a long test for employees making
greater than $155 per week under subsections (1)–(5), and a short test under subsection
(6) for employees making greater than $250 per week. 34 PA. CODE § 231.82. The
plaintiff was making $930 per week, so the proper analysis includes the short test under
subsection (6). There are two steps that must be met using the short test. An employee
will qualify as an executive only if: (1) he has a primary duty consisting of management
of the enterprise; and (2) this work includes the customary and regular direction of the
work of two or more other employees.
A. Primary Duty of Management
Under the facts of this case, the defendants meet the burden of proving that the
plaintiff’s primary duty was management of the store. “The term ‘primary duty’ means
the principal, main, major or most important duty that the employee performs.
Determination of an employee’s primary duty must be based on all the facts in a
particular case, with the major emphasis on the character of the employee’s job as a
whole.” Dept. of Labor Regulations, 29 C.F.R. § 541.700(a). The regulations set forth a
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list of non-exhaustive factors to consider when determining an employee’s primary duty,
including: “the relative importance of the exempt duties as compared to other types of
duties; the amount of time spent performing exempt work; the employee’s relative
freedom from direct supervision; and the relationship between the employee’s salary and
the wages paid to other employees for the kind of nonexempt work performed by the
employee.” Id. The regulation goes on to state that while the amount of time spent
performing exempt work is a useful guide in determining primary duty, it is not the sole
test; though employees spending more than fifty percent of their time performing exempt
work will generally satisfy this requirement. Id. at § 541.700(b).
The regulations also provide a non-exhaustive list of factors to consider when
determining whether an employee was involved in “management.” 29 C.F.R. § 541.102.
Generally, “management” includes, but is not limited to,
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 sales records for use in supervision or control;
appraising employees’ productivity and efficiency for the
purpose of recommending promotions or other changes in
status; handing 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.
Id.

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The plaintiff and defendants disagree on each prong of the primary duty test. The
plaintiff argues that he frequently performed non-exempt work; that many of the
purportedly managerial duties performed by him were also performed by non-exempt
employees; that it was the district manager who really was managing the store; and that
the plaintiff barely performed any of the managerial activities listed in 29 C.F.R. §
541.102. The defendants argue that the plaintiff was the individual actually managing the
store on a daily basis, and so his exempt duties were more important than any other duties
he was performing as they were essential to the successful operation of the store.
Plaintiff was performing some non-exempt work in addition to his managerial
duties. An employee may be found exempt even when a good portion of his day is spent
performing non-exempt work. See Soehnle v. Hess Corp., 399 F. App’x. 749, 750–51
(3d Cir. 2010) (The plaintiff qualified as an exempt employee despite spending eightyfive percent of her time operating a cash register. She was the sole store manager, was
held accountable for profit and loss, was subject to minimal supervision but was fully
responsible for the supervision of several employees, and was making forty percent more
than the hourly-wage employees.). It is clear that the plaintiff performed non-exempt
work when he operated cash registers, unloaded freight, arranged merchandise on
shelves, and cleaned the store. It is also clear that the plaintiff was ultimately responsible
for the overall management of the store at all times when he was working. This
responsibility of overall management is the key factor or outweighs the fact that the
plaintiff performed some non-managerial work.

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The plaintiff argues that he was not free from direct supervision in managing the
store, as there was close oversight by the district manager. The defendants note that the
district manager did not work in the store and was not present in the store on a daily
basis. A district manager was present at the store about once a week. They would
remain in contact with the store manager through phone and email. It is not necessary for
an employee to be free from all supervision in order for a court to find that he is free from
direct supervision. See Ward v. Family Dollar Stores, Inc., No. 3:08 MD 1932, 2012 WL
5361482, at *5 (W.D.N.C. Oct. 30, 2012) (“Relative freedom from supervision does not
demand complete freedom from supervision.” In this case, the plaintiff was found to be
free from direct supervision despite a district manager visiting the store weekly.)
The plaintiff was the highest paid employee at the store, making $930 per week.
The parties argue over the formulation to be used to calculate the plaintiff’s hourly rate,
and to whom his salary should be compared.2 However you compute the plaintiff’s
hourly wage, his compensation was greater than that of his subordinates. The plaintiff
also received a bonus of $904.75, for which none of the nonexempt employees were
eligible.

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The defendants computed the plaintiff’s hourly rate to be $14.65. (Defs’ Mot. at 17).
The nonexempt workers received an hourly wage of $8.21, according to the defendants.
(Defs’ Mot. at 17). The plaintiff computed his hourly rate to be $12.36. (Pl.’s Mem. of
Law in Opp’n at 23–24). The plaintiff argued the comparison should be made against the
employee making the next highest salary at the store, which was an hourly rate of $10.00.
(Pl.’s Mem. of Law in Opp’n at 23–24).
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B. Customary and Regular Direction of Two or More Employees
Under the facts of this case, the defendants meet the burden of proving that the
plaintiff’s work consisted of the customary and regular direction of the work of two or
more employees. “Customarily and regularly” means “a frequency that must be greater
than occasional but which, of course, may be less than constant.” Dept. of Labor
Regulations, 29 C.F.R. § 541.701. This does not include isolated or one-time tasks. Id.
The plaintiff argues he spent significant time working alone or with one other person.
The defendants argue that the plaintiff regularly supervised at least two employees, and
that the store manager does not need to be physically present with subordinates in order
to satisfy this prong. The defendants submitted a table showing that the store reported at
least eighty hours of work by hourly employees for each week that the plaintiff managed
the store. (Defs.’ Reply Mem. at 11). This satisfies the requirements. See, e.g., Ward,
2012 WL 5361482, at *7 (“Family Dollar’s records reflect that [the store manager]
managed at least 80 employee hours 100% of the time he was a store manager during the
relevant time period.”).
C. Additional Family Dollar Stores Cases
There are twenty-one cases in the Western District of North Carolina, with Family
Dollar Stores, Inc. as the defendant, which were decided on summary judgment favoring
the defendant.3 The North Carolina cases all involved plaintiffs who were store managers

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See Ward v. Family Dollar Stores, Inc., No. 3:08 MD 1932, 2012 WL 5361482
(W.D.N.C. Oct. 30, 2012); Ward v. Family Dollar Stores, Inc., No. 3:08 MD 1932, 2012
WL 3745285 (W.D.N.C. Aug. 28, 2012); Ward v. Family Dollar Stores, Inc., No. 3:08
MD 1932, 2012 WL 3637271 (W.D.N.C. Aug. 22, 2012); Ward v. Family Dollar Stores,
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and are very factually similar to Itterly’s case. See, e.g., Ward v. Family Dollar Stores, Inc.,
No. 3:08 MD 1932, 2012 WL 5361482 (W.D.N.C. Oct. 30, 2012) (The plaintiff was the store

manager and received a weekly salary of $850. He was eligible for a bonus based on
store performance which other nonexempt employees could not receive. The plaintiff
claimed to have spent ninety percent of his time performing nonexempt work, but he was
the person responsible for running and managing the store. The district manager would
visit the store weekly. The court concluded that the plaintiff was an exempt executive
under the FLSA). In each circumstance, the court granted the defendant’s motion for
summary judgment. There have been no compelling reasons presented that would justify
ruling differently in this case. A reasonable jury could not find that the plaintiff falls

Inc., No. 3:08 MD 1932, 2012 WL 3614423 (W.D.N.C. Aug. 21, 2012); Ward v. Family
Dollar Stores, Inc., No. 3:08 MD 1932, 2012 WL 3542612 (W.D.N.C. Aug. 16, 2012);
Ward v. Family Dollar Stores, Inc., 830 F. Supp. 2d 102 (W.D.N.C. 2011); Ward v.
Family Dollar Stores, Inc., No. 3:08 MD 1932, 2011 WL 5439490 (W.D.N.C. Nov. 9,
2011); Grace v. Family Dollar Stores, Inc., No. 3:08 MD 1932, 2012 WL 5929993
(W.D.N.C. Nov. 27, 2012); Grace v. Family Dollar Stores, Inc., No. 3:08 MD 1932, 2012
WL 5930140 (W.D.N.C. Nov. 27, 2012); Grace v. Family Dollar Stores, Inc., No. 3:08
MD 1932, 2012 WL 5363320 (W.D.N.C. Oct. 30, 2012); Grace v. Family Dollar Stores,
Inc., No. 3:08 MD 1932, 2012 WL 3528007 (W.D.N.C. Aug. 15, 2012); Grace v. Family
Dollar Stores, Inc., No. 3:08 MD 1932, 2012 WL 3528094 (W.D.N.C. Aug. 15, 2012);
Grace v. Family Dollar Stores, Inc., No. 3:08 MD 1932, 2012 WL 3202169 (W.D.N.C.
Aug. 3, 2012); Grace v. Family Dollar Stores, Inc., No. 3:08 MD 1932, 2012 WL
3191354 (W.D.N.C. Aug. 3, 2012); Grace v. Family Dollar Stores, Inc., No. 3:08 MD
1932, 2012 WL 3112037 (W.D.N.C. July 31, 2012); Grace v. Family Dollar Stores, Inc.,
845 F. Supp. 2d 664 (W.D.N.C. 2012); Grace v. Family Dollar Stores, Inc., 845 F. Supp.
2d 653 (W.D.N.C. 2012); Grace v. Family Dollar Stores, Inc., No. 3:08 MD 1932, 2011
WL 6020051 (W.D.N.C. Dec. 2, 2011); Grace v. Family Dollar Stores, Inc., No. 3:08
MD 1932, 2011 WL 3515860 (W.D.N.C. Aug. 11, 2011); Grace v. Family Dollar Stores,
Inc., No. 3:08 MD 1932, 2011 WL 3241455 (W.D.N.C. July 29, 2011); Grace v. Family
Dollar Stores, Inc., No. 3:08 MD 1932, 2009 WL 2045784 (WD.N.C. July 9, 2009).
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outside of the executive exemption and therefore be entitled to overtime under the
PMWA. I will grant summary judgment in favor of the defendants.
An appropriate Order follows.

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