8th Cir. Executive Exemption Ruling Turned on a Single Hiring Recommendation

Author: Michael Cardman, XpertHR Legal Editor

March 18, 2014

To be exempt from the overtime requirements of the Fair Labor Standards Act (FLSA), executives must have the authority to hire or fire employees or have their suggestions about personnel decisions be given particular weight.

In a ruling issued March 17, a federal appeals court held that this particular weight requirement could be satisfied if an executive's recommendation to hire even one single applicant is relied on by his or her employer.

The ruling in Madden v. Lumber One Home Ctr., 2014 U.S. App. LEXIS 4929 (8th Cir. 2014) could help an employer in the jurisdiction of the 8th Circuit Court of Appeals - Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota - defend against claims of FLSA misclassification.

The 8th Circuit did not rule that plaintiff Doug Wortman qualified for the FLSA's executive exemption. Rather, it held that Wortman's "involvement in at least one personnel decision" was enough evidence for a jury to reasonably conclude that he was exempt; therefore, it reversed a lower court's ruling overturning a jury verdict finding Wortman was exempt.

The court noted that "many different employee duties and levels of involvement can work to satisfy" the particular weight requirement. However, "informal input, solicited from all employees" is not enough, according to the 8th Circuit.

For this reason, the appeals court held that two other plaintiffs did not qualify for the exemption. Because the employer could not recall the other two plaintiffs providing a single personnel recommendation, the court said it failed to present evidence that would allow a jury to determine that they had satisfied the particular weight clause.