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NO REWARD FOR GOOD DEEDS: MANAGER SACKED AFTER TRYING TO HELP CO-WORKERS AND EMPLOYER

QUESTION:  Until recently, I managed a small business with two separate locations. I oversaw two assistant managers, one at each shop, who were in charge of staff when I was off the premises. They typically worked at least 50 hours per week and were paid a salary of $30,000 per year. I told the owners that, based on things I had read, my two assistant should be paid at least $35,000 per year, or be paid time and a half for their overtime. My concern was that the company could get in trouble for underpaying my co-workers. I also shared my concerns with my co-workers. Two weeks after I talked to the owner and the assistant managers, I was told I was being terminated. No reason was given. I think I was retaliated against for raising the issue of pay, but I was only trying to protect my employer.

ANSWER:     Whew! You certainly opened a can of worms. Unfortunately, although your employers may have been violating the law, it is not clear that they violated the law when you were discharged.

Under the Fair Labor Standards Act (FLSA), the law that establishes minimum wage, overtime and record-keeping requirements, all employees must be paid at time and a half for all hours worked over 40 in any week, unless the employees are exempt. Exempt employees – as the name indicates – are exempt from overtime and minimum wage requirements. But employers cannot avoid paying overtime simply by calling employees exempt. The kind of work the employees perform has to satisfy FLSA requirements.

One way workers can be classified as exempt is if they are managers, who “regularly direct the work of at least two or more other full-time employees” and who have authority to hire and fire, or must have a say in who is hired, fired, promoted, demoted, etc. Workers can also be classified as exempt if they are “administrative employees” whose “primary duties are directly related to the management or business operations of the employer” and their primary duty “includes the exercise of discretion and independent judgment with respect to matters of significance.” If workers are eligible for either exemption, they must receive a salary or fee of at least $684 per week, or $35,568 per year (before January 2020, the minimum salary requirement was just $455 per week). Employers are allowed to include bonuses or commissions as 10 percent of the minimum salary, and can even make catch-up payments before the end of the year if the salary paid doesn’t meet the minimum.

The government takes a very dim view of employers who misclassify their employees. Employers can be required to pay their employees an amount equal to two times their unpaid overtime hours (at time and a half) and, if the misclassification is viewed as willful, the employers can be fined.

Because your former employers paid the assistant managers less than the minimum salary, they did not meet the “exempt-employee” test, even if the work the assistants performed would otherwise have passed FLSA muster.

So, the question becomes, did your employers improperly retaliate against you when you were discharged? And, here’s the bad news: probably not.

The FLSA punishes employers who retaliate against an employee but only when “such employee has filed any complaint or instituted or caused to be instituted any proceeding … or has testified or is about to testify in any such proceeding.” Based on what you’ve written, you weren’t getting ready to make any kind of complaint to any government entity: You told your employers (and your co-workers) about a possible problem. It is also possible that your employers were not upset about what you told them, but that you shared the information with the assistant managers. Who knows – maybe one of them made a complaint to your boss.

That said, your discharge might possibly have violated the National Labor Relations Act, which prohibits employers from preventing workers from discussing the terms and conditions of employment.

To determine if you have any legal remedies for your discharge, you should probably talk to an attorney. Be prepared to give a complete account of what occurred, and bring any relevant documents so the attorney can make suggestions based on the whole story.

The lawyers at GWINN LEGAL PLLC are experienced attorneys and are happy to answer your questions. Give us a call for a free initial telephone consultation about your legal needs. For consideration of your questions in our web column, please submit your inquiry on the “Contact Us” page of our website at www.gwinnlegal.com.

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ASK THE LAWYER
By: Daniel A. Gwinn, Esq
.Attorney and Counselor at Law
GWINN LEGAL PLLC
901 Wilshire Drive, Suite 550
Troy, MI 48084
(248) 247-3300
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[email protected]
www.gwinnlegal.com