Employers have forever tended to throw job titles around, thinking they will protect them from liability in a wage and hour lawsuit. It happens in HR departments as well; but as HR professionals know, substance will rule over form. Lowe’s has now been hit with two different lawsuits by its own store-level HR managers, alleging violations of different aspects of the Fair Labor Standards Act (FLSA).

The first lawsuit was filed in 2012. (Ms.) Lizeth Lytle worked as an HR Manager at a Lowe’s store in Florida.  Lowe’s classified her as exempt under the administrative exemption. This exemption requires meeting the following tests:

1.     The employee must be compensated at a rate not less than $455 per week;

2.     The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and

3.     The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Lytle alleged that the exemption failed with respect to the third requirement.  She alleged that she did not exercise the necessary level of independent discretion and judgment necessary because, according to the complaint, “[e]ach store [Human Resources] Manger required the approval of the Area Manager or the Store Manager when it came to making any decisions affecting the store or Lowe’s.”  She also alleged that she and other Human Resources Managers did not supervise any employee; therefore, the Executive Exemption would also not apply.

In 2014 a Florida Federal District Court conditionally certified Lytle’s suit as a collective action to include as many as 1,745 other Lowe’s Human Resource Managers. In November 2014, the judge approved a $3.5 million settlement between Lowe’s Home Centers Inc. and the class of HR managers.

And just recently, another group of Lowe’s HR Managers filed a class action against Lowe’s alleging that they were misclassified as managerial employees and thus were not paid overtime.  The executive exemption requires meeting the following tests 

1.       The employee must be compensated at a rate not less than $455 per week;

2.       The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;

3.       The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and

4.       The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

In this case, the complaint alleged that Lowe’s HR Managers are responsible for processing clerical paperwork for payroll, benefits and new hires while also working as needed in other departments, including sales, customer service and cleaning break rooms and bathrooms. They alleged that they managed no employees. They also alleged that that they had no decision-making authority. For example, HR Managers conducted interviews for job applicants but they could only could ask a defined set of questions and grade the responses. They could not even make recommendations for new hires. But allegedly they were scheduled to work at least 50 hours per week for which they received no overtime pay.

As of this writing, the second suit awaits further action. Depending on how discovery plays out, these HR managers could fall under the professional exemption. That test includes, in part, that the employee’s primary duty must be the performance of work requiring “advanced knowledge,” defined as work that is predominantly intellectual in character and which requires the consistent exercise of discretion and judgment. Also, the job must require advanced knowledge a field of science or learning; and the advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction. 

Oftentimes HR practitioners are given the “Manager” title in the belief that other managers will feel that they are talking to a peer when asking for advice. Unfortunately, that carries no weight with the FLSA.

Employers who bestow the title HR Manager on one or more of their employees need to scrutinize the position carefully to make sure it is legitimately exempt from the minimum wage and overtime rules. 

Sources: National Overtime Lawyer 1/16/14; Chicago Overtime Lawyer Blog Chicago Overtime Lawyer Blog 2/4/14; Employment Law360 11/14/14; Employment Law360 1/20/16; Lytle v. Lowe's Home Centers Inc., No: 8:12-cv-01848; Lewis et al., v. Lowe’s Home Centers LLC et al.