United States District Court, W.D. Virginia, Roanoke Division
MICHAEL F. URBANSKI UNITED STATES DISTRICT JUDGE
This case is an overtime payment dispute under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"). Plaintiff Anthony Smith ("Smith") worked as a store manager for defendant AutoZone, Inc. ("Autozone") from 2005 to 2015. During that time, Smith
frequently worked more man forty hours a week without receiving overtime. Smith now seeks overtime pay on me grounds mat he was misclassified as an exempt employee under the FLSA.
Before the court are cross-motions for summary judgment. Smith argues he lacked authority to perform many of the management duties typically associated with store managers, and spent die majority of his time performing tasks identical to those performed by non-exempt employees. As such, he claims mere can be no genuine dispute mat he was misclassified as exempt from the FLSA's overtime requirements. Conversely, AutoZone claims it is entitled to summary judgment because die undisputed facts show that Smith was die most senior employee stationed in his store, exercised significant discretion to direct his staff, and was ultimately responsible for his store's sales performance. AutoZone believes these facts establish, as a matter of law, that Smith was properly classified as exempt employee under either die executive or administrative exemption to the FLSA. AutoZone also faults Smith for attempting to change his deposition testimony through use of a declaration attached to his motion for summary judgment.
The court held a hearing on April 12, 2016. For the reasons set forth below, the court concludes that AutoZone has demonstrated as a matter of law that Smith qualifies as an exempt executive under the FLSA. Accordingly, Smith's motion for summary judgment, ECF No. 19, is DENIED, and AutoZone's motion for summary judgment, ECF No. 21, is GRANTED.
AutoZone operates approximately 5, 500 retail automotive parts and accessories stores across the United States. Declaration of William Odom, ECF No. 23-1, ¶ 3 [hereinafter "Odom Declar."]. AutoZone organizes its retail operations into six divisions, which are further sub-divided into regions and districts. Id. Regions are headed by a regional manager, and districts are headed by a district manager. Id. at ¶¶ 3-4. Each district contains approximately seven to fifteen stores, which, in turn, employ a store manager and various other employees. Id. at ¶ 3. Store managers are die only exempt, salaried employees physically stationed in a store on a day-to-day basis. Id. at ¶ 5.
AutoZone hired Smith in 2001, and promoted him to store manager in 2005. Deposition of Anthony Smith, ECF No. 23-2, 18:11-13; 20:20-23 [hereinafter "Smith Depo."]. Smith worked at eight AutoZone stores, including five as store manager, before resigning in February 2015. Declaration of Anthony Smith, ECF No. 20-1, ¶¶ 1-2 [hereinafter "Smith Declar."]. All five stores Smith managed-which included stores in Madison Heights, Lynchburg, Roanoke, Martinsville, and Rocky Mount-were located in AutoZone's Richmond, Virginia region. Smith Depo. 21:2-23:9.The number of employees at each store varied, ranging from six employees at the Madison Heights store to twelve employees at the Lynchburg store. Id. at 55:19-61:14. These employees included sales associates-sometimes called "red shirts"-drivers, parts sales managers, and commercial sales managers. LL Over the course of his employment, Smith claims he "frequency worked 50 hours per week, consistently worked more than 55 hours per week, and worked at times, for period of more than 70 hours per week." Smith Declar. ¶ 3. Smith received no overtime pay.
However, Smith's salary increased over the course of his employment with AutoZone. In 2005, he earned an annual salary of $40, 000, which translated to approximately $769 in weekly salary. Smith Depo. 23:23-24:4. By 2015, Smith was earning $45, 000 a year. Id. at 24:5-10. As store manager, Smith was the highest paid employee in his store. Id. at 28:3-5. He was also eligible for an incentive bonus based on the store's sales performance. Id. at 26:16-27:18. The store manager was the only employee eligible for this bonus. Id. at 27:24-28:2.
The record has conflicting evidence about what training, if any, Smith received before becoming store manager. On the one hand, Smith claims he became management certified sometime between 2001 and 2005 as part of an earlier promotion to parts sales manager, and received no additional management training when he became store manager. Id. at 28:6-29:20. On the other hand, Smith later concedes that he completed a training course entitled "A Week in the Life a Store Manager" and received a commercial certification through AutoZone. Id. at 28:16-29:9; 31:3-41:20. He also became certified as a "hiring manager." Id. at 83:20-84:6; 89:5-90:8.
The responsibilities of an AutoZone store manager are varied but extensive. Duties include:
• Staffing and scheduling store personnel;
• Attracting, recruiting, hiring, and training "high caliber store personnel;"
• Managing, analyzing, and reconciling monthly profit and loss statements;
• Monitoring cash flow, inventory, and security control;
• Ensuring all company policies and loss prevention procedures are followed;
• Providing performance counseling and distributing "Autozoner Action Reviews" when required;
• Maintaining sales productivity, store maintenance, store appearance, and merchandising standards; monitoring daily payroll and adjusting schedules accordingly; addressing customer concerns and resolving them "with the goal of turning a complaint into a compliment."
Ex. 14, ECF No. 23-3, at 34. Store managers also perform basic tasks like mopping floors, checking out customers, and addressing other retail-related issues. Smith Declar. ¶ 6; Smith Depo. 35:8-15. Smith represents that he spent only 15% of his time performing personnel management, and spent die "majority" of his time doing "retail-related" duties.
Smith Declar. ¶ 6, ¶ 9. Further, Jeffrey Powers, Smith's former district manager, avers that store managers like Smith spent no more than sixty to ninety minutes per day scheduling workers, visiting with customers, or otherwise directly managing their stores. Declaration of Jeffrey Powers, ECF No. 20-2, ¶ 5 [hereinafter Powers Declar.]. Nevertheless, Smith was still responsible for managing the store even when he was performing non-exempt duties.
Smith Depo. 125:1-6. William Odom, Smith's former regional manager, confirms that Smith helped hourly employees perform non-exempt tasks-including manning the cash register, interacting with customers, stocking shelves, and unloading inventory- but notes
that Smith remained responsible for his store "at all times." Odom Declar. ¶ 16.
To be sure, Smith was subject to significant oversight from his district manager. Smith had at least four district managers and two regional mangers during his time at AutoZone. Smith Depo. 117:4-122:22. District managers made on-site visits to stores under their supervision, but were not physically stationed in any specific store. Some district managers visited Smith's store four to five days out of a five-day week, while others were present only two days out of a five-day week. Id. In addition, Smith had brief phone conversations with his district manager, sometimes as frequently as multiple times a day, and other times as infrequently as a few times per week. Id.; Smith Declar. ¶ 35. The frequency of Smith's contact with his district manager depended on that district manager's management style and whether Smith's store was meeting corporate sales goals. Smith Depo. 118:12-120:20. Regional managers would visit approximately once a month. Id. at 120:9-19; 122:6-22. Each Monday, Smith also participated in a "Management Action Plan" conference call with his district manager and other store managers in his district. Id. at 35:22-36:12. During this call, Smith discussed sales results, identified upcoming store activities, and shared his next-steps to improve store performance. Id. at 36:9-37:10.
Smith acknowledges that his job was to manage his store, that he had discretion to delegate tasks to other employees, and that he was ultimately responsible for his store's performance. Id. at 35:16-18; 61:20-22; 91:1-3. Smith was also evaluated on his store's sales numbers, his ability to manage personnel, and his staffs compliance with AutoZone's corporate policies. Id. at 90:6-101:23. In fact, at least one of Smith's former employees-who was later promoted to store manager-agreed that Smith was a "leader in [his] store." Deposition of Lawrence Harris, ECF No. 23-6, at 29:15-22 [hereinafter Harris Depo.].
However, AutoZone vested considerable authority in its district managers, and many decisions were divided between store managers and their district managers. For example, Smith had authority to identify outside contractors to handle basic maintenance-including snow removal or lawn care-but had to seek approval from his district manager before entering any service agreement. Smith Depo. 70:8-71:13. Similarly, Smith was trained to select and interview new hires, sought out candidates for his store, and conducted initial interviews after reviewing applications on AutoZone's online "E-hire" system. Id. at 83:3-85:24. Yet, he could not hire or promote store employees without approval from his district manager. Id. Further, Smith ensured new hires completed required training on AutoZone's corporate policies, monitored their compliance with those policies, oversaw employees' interactions with customers, resolved customer complaints whenever possible, and filled out performance evaluations on employees he supervised. Id. at 71:15-72:15; 78:22-79:1; 102:21-105:22. Once again, however, the district manager had ultimate authority over employee discipline and pay raises. Id. at 107:13-108:6; 110:4-112:19. Smith recounts several instances in which he notified his district manager of employee misconduct, and was then instructed on how to address the situation with the employee. Id. at 110:4-112:19. He also estimates that his hiring recommendations were accepted over 50% of the time, his recommendations on pay raises were followed 30% of the time, and his recommendations for promotion were followed "less than half the time." Id. at 33:9-34:6; 85:3-13; Smith Declar. ¶ 14. In those instances where his district manager did not follow Smith's recommendation to hire a particular employee, it was often because the applicant failed a background check. Smith Depo. 85:11-86:22.
Responsibility for inventory management was also divided between store managers and their corporate superiors. Using historical sales data, AutoZone determined the type and amount of products to ship to individual stores. Id. at 68:2-6. Store managers had discretion to order additional items from the warehouse if they believed it necessary; for instance, Smith could order extra salt for his store if his location was expecting a snowstorm. Id. at 68:13-22. Smith was required to complete an inventory matrix each week and reviewed profit-and-loss statements detailing the financial status of his store. Id. at 62:6-13. Smith also had authority to approve customer product returns within a certain price amount, though large or unusual returns required district manager approval. Id. at 73:6-76:8. Further, Smith was responsible for reinforcing AutoZone's loss prevention procedures to prevent theft, and monitored employees as they completed transactions at the cash register. Id. at 76:9-20; see also Odom Declar. ¶ 14.
Finally, employee scheduling at AutoZone was largely automated. An advanced computer program called "Z-Task" identified the labor hours required for individual stores each week, taking into account that store's sales growth and historical productivity. Deposition of William Odom, ECF No. 23-5, -7:23-9:11; 17:5-10 [hereinafter "Odom Depo."] Store managers had the ability to upload additional, non-sales assignments into the system-including inventory management or truck unloading-that affected die personnel needed for a store on a particular day. Id. at 8:2-23; 18:17- 19:14; 22:9-23:7; 25:4-19; Smith Depo. 65:10-17.
Once individual employees updated
their availability in die system, Z-Task created a skeleton schedule mat included preliminary shifts for each employee. Odom Depo. 17:11-18:16. The store manager adjusted die schedule to account for employee vacation days, lunch coverage, or other factors affecting coverage. Id. at 14:11-15:17. Store managers men assigned tasks to specific employees. Odom Declar. ¶13. All store schedules were approved by a district manager before
they became final. Odom Depo. 15:20-16:14. In die event an employee called in sick or was unexpectedly absent, die store manger filled die position himself or with whatever staff was available.
Smith Depo. 65:18-66:14. Store managers also handled employee requests for leave. Id. at 66:15-17. However, only a district manager could release employees if a store was not meeting its projected sales on a given day. Id. at 66:18-67:6.
Pursuant to Federal Rule of Civil Procedure 56(a), die court must "grant summary judgment if die movant shows mat there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett. 477 U.S. 317, 322 (1986);
Glynn v. EDO Corp., 710 F.3d 209, 213 (4th Or. 2013). When making this determination, die court should consider "die pleadings, depositions, answers to interrogatories, and admissions on file, together with. . . [any] affidavits" filed by die parties. Celotex. 477 U.S. at 322. Whether a fact is material depends on die relevant substantive law. Anderson v. Liberty Lobby.
Inc., 477 U.S. 242, 248 (1986). "Only disputes over facts mat might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes mat are irrelevant or unnecessary will not be counted." Id. (citation omitted). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex. 477 U.S. at 323. If that burden has been met, the non-moving party must then come forward and establish the specific material facts in dispute to survive summary judgment.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).
In determining whether a genuine issue of material fact exists, the court views the facts and draws all reasonable inferences in the light most favorable to the non-moving party. Glynn. 710 F.3d at 213 (citing Bonds v. Leavitt. 629 F.3d 369, 380 (4th Cir. 2011)). Indeed, "[i]t is an 'axiom that in ruling on a motion for summary judgment, the evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in Pier] favor.'" McAirlaids.
Inc. v. Kimberly-Clark Corp., No. 13-2044, 2014 WL 2871492, at *1 (4th Cir. 2014) (internal alteration omitted) (citing Tolan v. Cotton. 134 S.Ct. 1861, 1863 (2014) (per curiam)). Moreover, "[credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge . . . ." Anderson. 477 U.S. at 255. However, the non-moving party "must set forth specific facts that go beyond the 'mere existence of a scintilla of evidence.'" Glynn. 710 F.3d at 213 (quoting Anderson. 477 U.S. at 252). Indeed, the non-moving party must show that "there is sufficient evidence favoring the non[-]moving party for a jury to return a verdict for that party." Res. Bankshares
Corp. v. St. Paul Mercury Ins. Co., 407 F.3d 631, 635 (4th Cir. 2005) (quoting Anderson. 477 U.S. at 249). "In other words, to grant summary judgment the Court must determine that no reasonable jury could find for the non[-]moving party on the evidence before it."
Moss v. Parks Corp., 985 F.2d 736, 738 (4th Cir. 1993) (citing Perini
Corp. v. Perini Const- Inc., 915 F.2d 121, 124 (4th Cir. 1990)).
First, the court must address Smith's alleged use of a sham declaration to support his motion for partial summary judgment. Smith gave a lengthy deposition in this case. However, Smith's motion for partial summary judgment does not cite his deposition. Instead, Smith cites a five-page declaration he executed in support of his motion. AutoZone objects, claiming Smith's later declaration contradicts his prior deposition testimony. ...