Seyfarth Shaw LLP | www.seyfarth.com Litigating CA Wage & Hour and Labor Code Class Actions (22nd Edition) 7 As later decisions have recognized, this is not to say that certain tasks are always considered exempt or nonexempt - the purpose for which the task is performed must be analyzed. For example, in Bates v. Safeway, Inc.,30 the Court of Appeal explained that Heyen “did not state ... that the same task must always be labeled exempt or nonexempt: “[I]dentical tasks may be ‘exempt’ or ‘nonexempt’ based on the purpose they serve within the organization or department. Understanding the manager’s purpose in engaging in such tasks, or a task’s role in the work of the organization, is critical to the task’s proper categorization. A task performed because it is ‘helpful in supervising the employees or contribute[s] to the smooth functioning of the department’ is exempt, even though the identical task performed for a different, nonmanagerial reason would be ‘nonexempt.’”31 While California’s standard is more difficult to satisfy than the federal standard—which credits as non-exempt work the “hybrid” performance of exempt and non-exempt tasks—the California standard nonetheless allows for strategic arguments to oppose class certification. For example, Seyfarth defeated certification of putative class claims where the plaintiff had relied on Heyen and its progeny to argue that hybrid performance of exempt and non-exempt tasks could not support exempt status.32 In denying certification, the court found that the Heyen test created individualized inquiries: [C]ategorizing the activity will depend on the purpose for which the manager undertook the sale. It will be exempt if it was helpful in supervising the employees or contributed to the smooth functioning of the department. It will be nonexempt if the manager simply was performing work of the same kind as her subordinates. The upshot of this discussion is that misclassification under this theory cannot be determined on a classwide basis simply by looking to the overlap in tasks performed by managers and subordinates.33 C. The Administrative Exemption 1. General Overview Like the FLSA, California wage and hour law recognizes an administrative exemption to overtime requirements.34 To qualify for this exemption in the most common circumstances,35 the employer must establish the following four elements: (1) More than 50% the employee’s work time involves the performance of office or non-manual work directly related to the employer’s management policies or general business operations. 30 10 Cal. App. 5th 440 (2017). 31 Bates, 10 Cal. App. 5th at 474 (citing Heyen, 216 Cal. App. 4th at 822-823). 32 Patel v. Nike Retail Servs., Inc., Case No. 14-cv-4781-RS, 2016 WL 1241777 (N.D. Cal. Mar. 29, 2016). 33 Id. at *11. 34 See, e.g., Wage Order 7-2001 § 1(A) (2). 35 There are alternative bases to qualify for the administrative exemption such as through regularly and directly assisting a proprietor or performing administrative function in a school system, but those alternative bases rarely lead to class litigation.
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