Best Buy Motion to Dismiss Denied in California Labor Lawsuit

Los Angeles, CA Best Buy, which finds itself the defendant in a California labor lawsuit, has had its motion to dismiss said lawsuit denied. The lawsuit, which alleges violations of federal and California labor law, claims plaintiffs were misclassified as exempt from overtime pay. The judge, in ruling on the California labor law motion to dismiss, found that it was inappropriate to dismiss the lawsuit at this time.

The lawsuit (case number SACV 12-1377 AG [ANx], in the U.S. District Court, Central District of California) alleged plaintiffs Kurt Swanson and Tawny Perez were assistant managers at Best Buy and were classified as exempt from overtime pay, according to court documents. The lawsuit alleges that although the plaintiffs were involved in managerial activities, they were also regularly involved in non-managerial activities including, “selling product, organizing shelves, and unloading inventory from trucks alongside other employees.”

Best Buy filed a motion to dismiss the lawsuit, arguing that the plaintiffs’ testimony established their exemption from overtime pay requirements. The judge rejected the motion to dismiss, however, noting that “a reasonable juror could find that both Swanson and Perez were not ‘primarily engaged’ in duties exempt from the overtime requirements.”

Under California law, a person is exempt from overtime pay if he or she meets administrative or executive requirements. Included in those are managing a “customarily recognized department or subdivision,” regularly directing the work of two or more other employees, having the authority to hire or fire employees, and primarily performing duties that meet the exemption test. Such exempt duties include training employees, directing employees, handling employee complaints and planning work.

According to Swanson’s testimony, he spent approximately 70 percent of his time in managerial duties, which would exempt him from overtime pay. But the judge found that there was some overlap between Swanson’s time working in exempt and non-exempt activities, such as when as a sales floor leader he would organize shelves or sell merchandise. The judge further noted that although Best Buy recognized the time Swanson spent selling merchandise as a non-exempt activity, it did not record his time in other non-exempt activities.

For employees to be exempt from overtime pay, they must meet the administrative or executive requirements. It is not enough that they be given a managerial job title or even that they spend some time involved in managerial activities. To be exempt, they must spend more than half their time involved in managerial or executive activities.