Here is another exemption misclassification lawsuit, but this time coming from a different angle. This time, it is a group of human resources employees who work for Lowe’s have filed a putative class action on the theory that they were misclassified as managers and are thus entitled to overtime. This is very dangerous because the suit comes from people who are supposed to help the employer in making exempt and non-exempt determinations. The case is entitled Lewis et al. v. Lowe’s Home Centers LLC and was filed in federal court in the Southern District of New York.
The five named plaintiffs, all Human Resource Managers (HRMs), allege that they worked at least fifty hours per week and were labeled exempt, even though their duties were not managerial in nature. They estimate there are possibly 250 possible opt-in members of the class. They seek damages that their attorney estimates could reach $15 million. The Complaint alleges that “the policy of underpayment was a business decision to purposefully evade the provisions of the New York Labor Law and applicable regulations and saved the defendants tens of millions of dollars.”
The plaintiffs claim (as in many of these cases) that all they did was process clerical paperwork for payroll, benefits and new hires; they allege they also worked in other departments, including sales, customer service and cleaning break rooms and bathrooms. They maintain that they had no supervisory responsibilities or decision-making authority. According to their lawyer “they are store-level, low-level personnel employees.”
Although the lawyer conceded that these individuals conducted interviews for job applicants, they could only ask a designated series of questions, very well defined and limited, and then grade the answers. He claims that they could not make recommendations on hiring decisions, but asserted rather cavalierly, that “a 10-year-old schoolgirl could ask these questions and mark down a score on the interview sheet.”
Significantly, a similar class action was filed against Lowe’s in Florida in 2012 and the Company settled that case for $3.5 million. There were 900 HRMs involved in that matter and they made identical claims of misclassification.
Human Resource Directors are clearly exempt under the administrative exemption (the toughest one to prove, by the way). However, people with HR type responsibilities, such as “personnel clerks,” or classifications like that, often times are non-exempt. The flashpoint issue is discretion and independent judgment, or lack of same. If these folks are simply following a prescribed script or menu and then just adding numbers, without being able to evaluate the candidates to any extent, that is problematic. The earlier, big, settlement does not help either!
I believe, however, that an employer can enhance the exempt duties of perhaps otherwise non-exempt employees, or that non-exempts can “evolve” into exempt employees. Some strategic, proactive planning can accomplish this worthy goal.