Murray v. Stuckey's, Inc.

939 F.2d 614
CourtCourt of Appeals for the Eighth Circuit
DecidedJuly 25, 1991
DocketNos. 90-2375, 90-2376 and 90-2897
StatusPublished
Cited by1 cases

This text of 939 F.2d 614 (Murray v. Stuckey's, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Murray v. Stuckey's, Inc., 939 F.2d 614 (8th Cir. 1991).

Opinion

LOKEN, Circuit Judge.

Stuckey’s, Inc. and its parent, Pet, Incorporated (“Stuckey’s”), appeal from the district court’s judgment after a bench trial awarding more than $900,000 in compensatory and liquidated damages and $142,000 in attorneys’ fees to forty-five of its former store managers and hourly employees for violations of the maximum hours (overtime) requirements of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 207. Stuckey’s argues that the district court erred in rejecting Stuckey’s defense that the store managers were exempt executive employees, in concluding that Stuckey’s violations were willful for statute of limitations purposes, in awarding liquidated damages, in failing to require adequate proof of com[616]*616pensatory damages by each plaintiff, and in its award of attorneys’ fees. Plaintiffs have cross-appealed challenging the district court’s calculation of the store managers’ compensatory damages and the attorneys’ fee award. For the reasons discussed below, we affirm the damage awards to the hourly employees, reverse the district court’s resolution of the executive, exemption issue, and remand to the district court for further proceedings.

I. Facts and Proceedings Below

During 1982-1985, the period at issue in this proceeding, Stuckey’s operated roadside stores along interstate and other major highways across the United States. These stores were combination gasoline stations, convenience stores, and restaurants. Pet had acquired Stuckey’s, Inc. just prior to 1982 and was attempting to reverse its lack of competitive success in the 1970’s. The attempted turn-around failed, and Stuckey’s stores were closed sometime after 1985.

Each Stuckey’s store had an on-site store manager responsible for its day-to-day operations. Where possible, Stuckey’s hired married couples who were required to live on the premises. One spouse was hired as the store manager and received compensation on a salary basis, with the opportunity for a profit-oriented bonus; the other worked as an hourly employee, typically at or near the minimum wage. Each store manager reported to a regional manager who was responsible for 10 to 20 stores. Regional managers visited their various stores periodically and communicated with the store managers by telephone on at least a weekly basis.

In addition to managing the store’s day-to-day operations, each store manager was responsible for hiring sufficient additional workers to staff the store in accordance with a labor budget furnished by Stuck-ey’s. Stuckey’s based these labor budgets on the projected volume of business in each store, which varied seasonally as well as from store to store. In these budgets, the manager was scheduled to work 60 hours per week, and his or her spouse was scheduled to work 40, or in some cases 44 hours per week.

Plaintiffs Sidney and Gladys Murray filed this action alleging that Stuckey’s unlawfully failed to compensate them for the overtime that each of them worked at Stuckey’s stores in Randall and Little Sioux, Iowa. Pursuant to 29 U.S.C. § 216(b), the other, similarly situated plaintiffs filed written consents and became additional parties. During the lengthy court trial, numerous plaintiffs’ witnesses testified that Stuckey’s labor budgets were unrealistic, so that store managers and their spouses in fact worked many additional unpaid hours “off the clock.” The store manager plaintiffs testified that they were required to work as many as 120 hours per week, so that they received less than the minimum wage, in order to meet Stuckey’s stated requirement that they work “as long as it took to get the job done.” The hourly employee spouses testified that they worked far more than the 40 or 44 hours for which they were scheduled and paid, and that Stuckey’s regional managers refused to allow them to work paid overtime and in fact knew that these plaintiffs were working many unpaid hours to help their manager spouses “get the job done.”

Stuckey’s defended its practices as lawful under the FLSA. Stuckey’s presented evidence intended to show that its store managers were, executive employees for FLSA purposes and thus were not subject to FLSA’s minimum wage and overtime requirements. In addition, numerous Stuckey’s witnesses testified that the schedules were reasonable, that hourly employees were properly paid for all recorded hours, and that plaintiffs’ claims of additional hours worked were grossly exaggerated. Stuckey’s supervisory witnesses denied any knowledge that managers’ spouses had in fact worked unpaid overtime.

After trial, the district court initially determined that the plaintiff store managers had worked more than their scheduled 60 hours per week, and that they were not exempt executives and therefore were entitled to FLSA overtime compensation for all hours worked over 40 per week. The court [617]*617found that the hourly paid plaintiffs had worked substantial unpaid overtime, and that Stuckey’s had discouraged these plaintiffs from reporting overtime hours and therefore knew or should have known of the overtime violations. Having concluded that Stuckey’s violations were willful, the court held that the three year statute of limitations applied and that Stuckey’s was liable to each plaintiff for liquidated damages in an amount equal to the compensatory damages (the amount of the unpaid overtime).

Following further factual submissions and argument concerning the amount of damages, the district court entered two additional orders, first determining the maximum number of unpaid overtime hours worked by each group of plaintiffs, and then fixing a specific amount of damages for each plaintiff and the attorneys’ fees to be awarded in favor of all plaintiffs. This appeal followed.

II. The Store Managers

Stuckey’s store managers were paid a flat weekly salary, were scheduled to work a 60-hour week, and were told to work for as long as it took to “get the job done.” The district court determined that this compensation arrangement was inconsistent with the FLSA’s core requirement that covered employees be paid 1V2 times their regular rate for hours worked in excess of 40 per week.1 Stuckey’s principal argument on appeal is that the evidence established that the store managers were “bona fide executive” employees and were therefore exempt from FLSA’s overtime requirements under Section 13(a)(1) of the Act, 29 U.S.C. § 213(a)(1).

Section 13(a)(1) expressly provides that the term “bona fide executive” shall be “defined and delimited from time to time by regulations of the Secretary” of Labor. The Secretary’s regulations provide a complicated definition of an “executive employee.” To establish that an employee is an exempt executive, the employer must show that the employee:

— is one whose “primary duty” consists of the management of a recognized subdivision of the employer’s enterprise;
— “regularly .directs the work of two or more other employees”;
— “has the authority to hire or fire other employees” or makes recommendations as to hiring, firing, and promoting that are “given particular weight”;
— “regularly exercises discretionary powers”; and

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Murray v. Stuckey's, Inc.
939 F.2d 614 (Eighth Circuit, 1991)

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939 F.2d 614, Counsel Stack Legal Research, https://law.counselstack.com/opinion/murray-v-stuckeys-inc-ca8-1991.