Employment -Second Circuit Rules That Warehouse Captains Are Exempt From Overtime Pay Requirements

In Ramos v. Baldor Specialty Foods, Inc., Docket No. 11-2616-cv (2nd Cir. 2012), the plaintiffs were individuals who were working the night shift in a warehouse operated by defendant Baldor Special Foods, Inc. (“Baldor”). The plaintiffs were suing Baldor for (among other things) overtime pay under the FLSA and New York State law. The district court granted summary judgment for Baldor on the overtime issue, concluding that as “captains” employed in Baldor’s warehouse, the plaintiffs fell within the FLSA’s “executive exemption” and therefore were not entitled to overtime pay. The plaintiffs appealed.

In analyzing the case, the Second Circuit Court of Appeals (the “Court”) said that the plaintiffs clearly satisfy all but one of the criteria for the FLSA’s executive exemption. The criteria at issue is whether the teams of employees that plaintiffs supervise constitute “customarily recognized department[s] or subdivision[s]” of Baldor (29 C.F.R. § 541.100(a)(3)), defined by Department of Labor regulations as units with “a permanent status and a continuing function” (29 C.F.R. § 541.103(a)). After reviewing the record, the Court concluded that these teams of employees constitute units with a permanent status or function. The Court looked at all facts and circumstances, and based its conclusion on the following facts: each team has a defined membership; each captain leads the same team on each shift; members do not change teams without being transferred by the night warehouse manager, often at the request of a captain; at the start of every shift, each team meets at its assigned work area in the warehouse; and each captain is in charge of supervising his team, evaluating their work, and making promotion recommendations to the night warehouse manager. The Court reached its conclusion, even though the teams in question did not operate in different locations, work different shifts, or perform distinct functions from other teams.

As such, the Court ruled that the plaintiffs fall within the FLSA’s executive exemption, and are not entitled to overtime pay. Consequently, the Court affirmed the district court’s grant of summary judgment on the overtime issue to Baldor