The Fourth Circuit Court of Appeals recently held that the Fair Labor Standards Act’s administrative employee exemption properly applied to a Chief Executive Officer’s (CEO) secretary. Altemus v. Fed. Realty Inv. Trust, 2012 U.S. App. LEXIS 15917 (4th Cir. July 31, 2012).
This case is noteworthy inasmuch as it illustrates that a formulistic approach to classifying positions as exempt or non-exempt, based largely on job titles, will lead to inaccurate classifications. Certainly most secretaries and administrative assistants will not meet the duties test to meet this exemption, but as this case reminds us—some in fact will. And this is great news to executives whose assistants frequently may work in excess of 40 hours a week.
Below are the various facts which, when taken as a whole, lead the court to this conclusion:
- (1) The secretary’s compensation ranged from $84,000 to $86,520 during the period of time relevant to her claims—whereas all other executive assistants made less than $60,000 during this time.
- (2) The secretary participated in the company bonus pool at 15%—whereas all other executive assistants participated at 7%.
- (3) The job description at the time the secretary was hired required that she have five to ten years of experience and listed numerous executive-level support duties, such as (a) providing high, executive-level support to the CEO, (b) managing his day-to-day activities, (c) coordinating trustees meetings and materials preparation, (d) handling confidential information with discretion, (e) handling internal and external correspondence, (f) screening incoming calls, and (g) maintaining coordination of all external board participation activities.
- (4) The CEO spent 30% of his time away on business—thus requiring the secretary to act independently during his absence from the office.
- (5) Performance reviews signed by the secretary contained statements referencing her strong decision-making skills as well as her broad responsibilities. A 2007 review praised her “superior interpersonal skills and intelligence” and stated that she is “truly . . . my right arm when it comes to organizing and administering all aspects of business at Federal” and “critical to the continued success of the overall office environment and my ability to be organized and prioritize.”
The secretary argued that because she spent an alleged 75-80% of her time assisting the CEO with personal and family matters, she did not perform the requisite administrative duties for the company to qualify as exempt. However, the court found little merit in this argument stating that the secretary made no allegation that her time spent assisting the CEO in non-company related tasks supplanted those tasks which she was expected to accomplish on behalf of the company. Furthermore, the court noted that an employee may satisfy the exemption’s primary duty requirement even if less than 50% of the employee’s time is spent performing that “primary duty.”