In Guilfoyle v. Dollar Tree Stores, Inc., a federal district court in California held that an employer was unable to meet the "primarily engaged in" requirement of the executive exemption test where the employee spent more than half of his working time performing non-exempt work and there were factual disputes about whether the employer had a realistic expectation that the employee would spend more than half his time performing exempt duties.
California's wage orders contain an executive exemption for an employee: (a) whose duties and responsibilities involve the management of the enterprise, or a recognized department or subdivision, in which he or she is employed; (b) who customarily and regularly directs the work or two or more employees; (c) who has the authority to hire and fire; (d) who customarily and regularly exercises discretion and independent judgment; (e) who is primarily engaged in duties which meet the test of the exemption; and (f) who earns at least 2 times the state minimum wage for full time employment.
The dispositive issue in this case was whether the plaintiff—a store manager at Dollar Tree—was primarily engaged in duties which meet the test of the exemption. The wage orders impose a strict time test in this regard, such that the term "primarily" means more than one-half (50%) of the employee's work time. However, the employer's realistic expectations are also considered in determining whether the employee satisfies the "primarily engaged in" requirement, i.e., did the employer realistically expect the employee to spend more than half of his time performing exempt duties, even if the employee—because of poor performance or otherwise—does not actually do so.
Although Dollar Tree conceded that the plaintiff spent more than 50% of the time performing non-exempt work such as cashiering, stocking and cleaning, it argued that the requirement was still met because its expectations that the plaintiff would spend more than half of his time performing exempt work were "realistic." The court concluded that a jury must decide the issue, and refused to dismiss the lawsuit, based in part on evidence that the plaintiff was pressured by Dollar Tree, through threats of termination, into certifying in writing that he spent more than 50% of the time performing exempt work.
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