Where a salaried employee was paid at a rate of $33,000 per year, she was not entitled to overtime pay under the Fair Labor Standards Act because her primary duties were directly related to management or general business operations.
Serenity C & C Inc. is a Virginia corporation that provides support and training to their clients, individuals with intellectual and developmental disabilities. Serenity offers a sponsored residential program wherein clients live with family sponsors who contract with Serenity to provide the clients with food, lodging, sanitation and a residential home environment. Sponsors must comply with Serenity’s guidelines and regulatory requirements, complete the necessary training and certification and are compensated based on the level of services they provide.
In September 2017, Serenity hired Athena Brown as a program coordinator for the sponsored residential program. In that role, Brown supervised approximately 18-20 clients and 15-20 sponsors at a time and had the authority to remove clients from their sponsors if the sponsor was not fulfilling the program’s criteria.
At some point during her employment, Brown was placed on probation for failing to perform her duties properly and timely and thereafter received performance counseling where she would be reminded of the expectations of her position.
On Aug. 3, 2018, Brown took a leave of absence for medical reasons and did not return to work following her medical leave.
On Sept. 7, 2018, Brown filed a complaint in this court alleging that Serenity violated the Fair Labor Standards Act, or FLSA, by failing to pay her overtime wages while she was employed as program coordinator. Serenity now moves for summary judgment.
As Brown has failed to specifically identify any material facts in dispute, let alone list such facts in a separate section, the court may assume the facts identified by Serenity are admitted pursuant to Local Rule 56(B).
Serenity has shown, and Brown does not dispute, that Brown is compensated on a salary basis at a rate of $33,000 per year. This equals approximately $634 per week, which exceeds the minimum salary rate required for application of the exemption.
The undisputed facts likewise show that Brown’s primary duties were to supervise and oversee sponsor providers and clients. While some of these duties required Brown to make home visits, the majority are performed in the office and, as such, constitute office or non-manual work.
In addition, rather than providing the support and training services offered by Serenity directly, Brown was responsible for supervising and managing the sponsors who provided those services and coordinating with those sponsors and other super third-party service providers to ensure that Serenity’s clients were receiving all the care and services they required. As such, Brown’s work properly falls under the administration side of Serenity’s business, not the production side.
Further, many of Brown’s duties, like auditing, quality control, personnel management and legal and regulatory compliance, fall squarely within the type of work that is directly related to management or general business operations as laid out in the list of examples provided by Department of Labor, or DOL, regulations. In addition, while not used as an example in the regulations, the Fourth Circuit has deemed the development and implementation of training policies, another of Brown’s duties, to fall within the scope of the administrative exception to the FLSA’s overtime pay requirement.
Brown’s supervisory duties, which include ensuring that sponsors are adhering to company standards, licensure requirements, and regulations, are likewise considered exempt from overtime. Such duties are plainly distinguishable from the duties typically performed by a nonexempt employee.
Finally, Brown clearly exercises discretion and independent judgment on matters of significance. Her primary duties of developing and coordinating training necessitates the exercise of precisely the type of judgment and discretion described in DOL regulations. She also has the authority to remove an individual from a sponsor’s home, essentially terminating the sponsor’s contract. Such contracts are hugely significant to Serenity’s business model, and the decision to terminate them plainly requires the exercise of discretion and independent judgment.
Under these circumstances, Serenity has met its burden to prove that all requirements for application of the administrative exemption have been satisfied and, therefore, it is not subject to any liability for failure to pay Brown for her overtime hours because Brown was not entitled to such pay.
Motion for summary judgment granted.
Brown v. Serenity C & C Inc., Case No. 4:18-cv-112, July 17, 2019. EDVA at Newport News (Davis). VLW 019-3-352. 32 pp.