Vasquez v. MobileShack Inc.

Background

Plaintiffs brought claims against defendants under the Fair Labor Standards Act (FLSA), a federal wage-and-hour law, and New York state law. Defendants moved for partial summary judgment, including on whether plaintiff Andrew Kettle qualified for the FLSA’s overtime exemption for a “bona fide executive.”

Legal standard

The court explained that the executive exemption requires, among other things, compensation on a salary basis at a rate of at least $684 per week. Under the governing regulation, salary-basis pay is a predetermined amount paid weekly or less often that is not reduced based on the quality or quantity of work. The court cited the Supreme Court’s decision in Helix Energy Solutions Group, Inc. v. Hewitt for the rule that a daily-rate worker generally is not salaried merely because the daily rate is high.

A daily-rate worker may satisfy the salary-basis requirement if the employment arrangement guarantees at least the required minimum weekly amount regardless of the number of hours, days, or shifts worked, and if the guaranteed amount reasonably relates to the amount actually earned.

Record concerning Kettle

The court noted that Kettle testified that his pay was “between a hundred and 120 a day.” The record contained nothing suggesting that his pay was guaranteed at a minimum weekly rate, much less that any guaranteed amount had a reasonable relationship to his actual earnings. The court therefore stated that Kettle appeared to be a daily-rate employee who did not meet the salary-basis requirement under the regulation or the Supreme Court’s decision.

Order

The court did not resolve whether Kettle was exempt from the FLSA’s overtime requirement. Instead, each party was directed to file a letter or supplemental brief by May 11, 2023, explaining its position on whether Kettle was paid on a salary basis.