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Summary Judgment Denied in FLSA Case SMITH V. SCHWAN’S HOME SERVICE, INC.; Court Finds Genuine Disputes on Both Administrative and Motor Carrier Exemptions

On November 25, 2014, the United States District Court for Maine denied summary judgment to food delivery giant Schwan’s, accused of denying overtime pay in violation of applicable federal and state regulations.

Starting in June 2007, Mr. Smith held the position of “Facility Supervisor 1 HS” at the company’s Gorham, Maine facility, where he was paid a salary of $38,250 per year. Schwan’s treated Smith’s position as exempt from the overtime requirements of both the Fair Labor Standards Act and Maine overtime statutes, and the case centers around the company’s two arguments for Smith’s exempt status.

First, Schwan’s argued in its motion that its Facility Supervisors like Smith are covered by the Administrative Exemption. To evaluate whether the conditions for exemption had been met, the Court had to consider an array of factors, but in the end decided that the plaintiff could plausibly claim that his principal job duties were menial tasks such as “(1) pulling product from the freezers; (2) loading the delivery trucks with the product pulled from the freezers; (3) cleaning the depot; (4) fueling the trucks and otherwise checking the trucks to make sure they were ready to go in the morning; and (5) performing other manual tasks around the Gorham depot.” In fact, the evidence from the case leading up to the Court’s decision indicated that Smith spent only about 15 to 20% of his work time on exempt tasks. And while he was given responsibility for managing two Material Handlers, he also spent much of his time performing the same tasks as they did. In the end the Court found that “a genuine dispute of material fact exists as to whether the Administrative Exemption applies to Mr. Smith,” so “Schwan’s motion for summary judgment on this point must fail.”

Second, Schwan’s argued that Smith was exempt under the Motor Carrier Exemption (MCE). As amended in 2008, the MCE specifies that employees who “perform(s) duties on motor vehicles weighing 10,0000 pounds or less” are not exempt from overtime protections. The applicability of this exemption tends to be fairly clear in most cases, but the facts of this case make it interesting. It is uncontested that Mr. Smith very regularly drove his personal vehicle, a 7,000 pound pickup truck, in the course of doing his work. The Court noted that federal courts have generally taken “an inconsistent approach in answering the question of whether the MCE Exemption applies to an employee who drives both exempt and non-exempt vehicles,” although the Department of Labor has explicitly addressed how the law applies in such cases and the guidance it has given tends to favor the plaintiff’s position in this case. That is, the DOL’s guidance on the subject states that employees who work on both heavy and light vehicles are entitled to overtime pay under the FLSA, unless their use of the light (less-than-10,000-pound) vehicles is de minimis. in this case, the Court concludes, it is not clear whether Mr. Smith’s use of his personal vehicle was de minimis.

Thus, on both arguments regarding the plaintiff’s exempt status, the Court found that there remained genuine issues of material fact to be decided in further proceedings.

If you believe you have been denied overtime pay in violation of state or federal law, please contact The Harman Firm, LLP.

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