This alert addresses a recent 6th Circuit Court of Appeals decision, Perry v. Randstad Gen. Partner (US) LLC, 2017 WL 5560160 (6th Cir. Nov. 20, 2017) (See link to decision below), concerning classification of employees as exempt versus nonexempt. “Exemption” classification, much like independent contractor classification, is highly fact intensive, nuanced and specific. And, as with independent contractor classification where workers are presumed to be employees unless proven otherwise, employees are presumed to be nonexempt unless proven otherwise by the employer. So, exemption misclassification is another of the many areas of employment law providing legal risk and uncertainty to employers.
Amidst an environment of legal uncertainty, staffing firms seeking to classify their account managers as exempt now have some instructive case law. Specifically, the Perry v. Randstad decision held that certain account managers working for temporary staffing firm, Randstad, performing the “primary duties” of matching and placing workers with clients and overseeing placements (which the court called “exempt matchmaking duties”) exercised discretion and independent judgment sufficient to meet the FLSA’s administrative exemption. However, the court also held that another category of employees at the company, called staffing consultants, were nonexempt because their “primary duties”- – described as “sales and routine recruiting tasks”- -lacked sufficient discretion and independent judgment.
This case is not binding on California state or federal courts as the 6th Circuit has jurisdiction over Michigan, Ohio, Kentucky and Tennessee. And, California has its own exemption test that differs from federal law. Nevertheless, this decision may be useful as persuasive authority in other courts. Here is the link to the Randstad decision: https://www.leagle.com/decision/infco20171120106.
Please contact Denis Kenny at (firstname.lastname@example.org), Ryan Stahl at (email@example.com), or John Lough, Jr. at (firstname.lastname@example.org) for more information on upcoming laws that may affect your workforce, scheduling a mandatory harassment training, or assessing and updating your workplace policies to ensure compliance with controlling law.
– Written by Denis S. Kenny