Marzuq v. Cadete Enterprises, Inc.

United States Court of Appeals
For the First Circuit

No. 14-1744

GASSAN MARZUQ, et al.,

Plaintiffs, Appellants,

v.

CADETE ENTERPRISES, INC., et al.,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. F. Dennis Saylor, District Judge]

Before

Howard, Chief Judge,
Souter, Associate Justice,*
and Lipez, Circuit Judge.

Shannon Liss-Riordan, with whom Benjamin J. Weber, Lichten &
Liss-Riordan, P.C., and Elayne N. Alanis were on brief, for
appellants.
Nicholas B. Carter, with whom Maria T. Davis and Todd & Weld
LLP were on brief, for appellees.
Peter Winebrake, Mark J. Gottesfeld, and Winebrake &
Santillo, LLC on brief for amici curiae National Employment Law
Project, Economic Policy Institute, and National Employment
Lawyers Association; Audrey Richardson and Greater Boston Legal
Services on brief for amicus curiae Massachusetts Fair Wage
Campaign; Catherine Ruckelshaus, Anthony Mischel, National

* Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
Employment Law Project, Roberta L. Steele, and National Employment
Lawyers Association on brief for amicus curiae National Employment
Lawyers Association; and Ross Eisenbrey and Economic Policy
Institute on brief for Economic Policy Institute.

December 9, 2015
 LIPEZ, Circuit Judge. Two former managers of Dunkin'

Donuts stores in Massachusetts brought this action claiming they

were improperly denied overtime pay in violation of the Fair Labor

Standards Act ("FLSA"). See 29 U.S.C. § 207(a)(1). Based on facts

it deemed undisputed, the district court rejected the

recommendation of the magistrate judge and granted summary

judgment for the defendant employers, finding that plaintiffs were

"bona fide executive[s]" excluded from the statute's overtime pay

requirement. Id. § 213(a)(1). Our review of the law and the

record persuades us that material factual disputes remain

concerning the exemption's applicability to plaintiffs and, hence,

we vacate the summary judgment and remand for further proceedings.

I.

A. Factual Background

In this appeal from a summary judgment, we present the facts

in the light most favorable to the plaintiffs, the nonmoving party.

See Ray v. Ropes & Gray LLP, 799 F.3d 99, 112 (1st Cir. 2015).

Here we provide a brief recital of facts to set the stage for the

analysis that follows. We provide additional detail later as part

of that analysis.

Plaintiff Gassan Marzuq worked as a manager at a Dunkin'

Donuts store in Massachusetts from 2007 until his termination in

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2012,1 and plaintiff Lisa Chantre was a manager at another

Massachusetts store from 2009 until her termination in 2010.2 Both

stores are among multiple Dunkin' Donuts franchises owned and

operated by three related corporate entities -- Cadete

Enterprises, Inc., T.J. Donuts, Inc., and Samoset St. Donuts, Inc.

-- whose common president is John Cadete.

Pursuant to manager agreements they signed with Cadete

Enterprises, Marzuq and Chantre were expected to work "no less

than a six day, 48 hour work week." (Emphasis in original.)

Often, however, store managers work more than sixty hours, in part

because they substitute for crew members who are out sick or miss

a shift for other reasons. Marzuq testified in his deposition

that his regular schedule added up to sixty-six hours over six

days, but that he was in fact "there all the time, seven days a

week."3 Managers' responsibilities include calibrating the

1 In addition to managing the regular store, Marzuq also
managed for a period a separate drive-up kiosk that opened in 2009
at a nearby gas station. The kiosk served a limited menu and was
open only during daytime hours. The regular store is open 24
hours, seven days a week.
2 Chantre died after the complaint was filed, and the personal
representative of her estate, Tanisha Rodriguez, was substituted
as a plaintiff. For convenience, we, like the district court,
refer to Chantre as the plaintiff rather than Rodriguez.
3 For purposes of our analysis, we must rely on Marzuq's
description of his work, as there is no deposition in the record
from Chantre. She died four months before Marzuq's deposition was
taken, in late November 2012. The record also contains a
deposition of Marzuq taken in November 2011, in a separate state

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equipment to Dunkin' Donuts specifications, handling cash, keeping

the store and grounds properly maintained, training and

supervising the employees, periodic counting of every non-

perishable item in the store, and substantial paperwork.

Marzuq and Chantre were supervised by a district manager,

Aaron Dermandy, who oversaw at least seven stores during the time

plaintiffs were managers. Among other duties, Dermandy determined

staffing levels, arranged maintenance, and ordered the baked goods

for the stores. He visited each store every week, and was involved

in both the hiring and firing of crew members.

Marzuq viewed himself as "in charge" and "the captain" of his

store, and his sons, both of whom worked at Marzuq's store,

likewise saw him that way. Sarmad Marzuq testified that "[i]t was

always expected that if [his father] wasn't around that he would

be always on call," and Ahmad Gassan Marzuq reported that no one

else was in charge when his father was not at the store: "If anyone

had questions, we would just call my father and he usually would

come in . . . [a]nd solve the problem for us."

The record, however, also contains evidence of Marzuq's

difficulty in fulfilling his role as "leader of th[e] team." In

addition to reporting that he worked on Sundays because his regular

six-day schedule was insufficient to get the necessary work done,

court proceeding.

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Marzuq testified that he "did not have [] time actually to be the

manager as required to be a manager." He elaborated as follows:

I'm always on the floor 90 percent of my time,
serving customers, cleaning, cleaning the
outside, doing the landscaping, cleaning the
papers out of the bushes, cleaning the
bathroom, serving customers, covering shifts,
employees that they call in, I have to cover.
So really I don't have time to be 100 percent
manager.4

He explained that he could not routinely delegate the clean-up to

crew members "because you're always short on staff." When asked

about the company policy that employees take a day off, he

responded: "How [are] you going to run . . . the operation with no

management to take care of that location? So you have to work."

B. Procedural Background

Marzuq and Chantre filed this action in February 2011 seeking

overtime compensation under the FLSA,5 and the defendants filed a

motion for summary judgment two years later that relied heavily on

the depositions of Marzuq and Dermandy. In recommending that the

motion be denied, the magistrate judge found a genuine issue of

4
At another point, Marzuq stated that he did not "spend
enough time actually to be in the office or directing employees
the proper way because I'm always working on the floor, if you
want to say the counter, as any other employees and I'm putting a
lot of -- a lot of hours on the floor."
5
Marzuq was fired in April 2012, and he subsequently filed
an amended complaint that added retaliation claims under the FLSA
and state law. The district court denied the defendants' motion
for summary judgment on those claims, but the parties resolved
them before trial and, hence, they are not part of this appeal.

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material fact as to whether plaintiffs fell within the FLSA's

overtime-pay exclusion for employees serving in a "bona fide

executive" capacity. 29 U.S.C. § 213(a)(1).

As described more fully below, the district court disagreed

that a jury could find in plaintiffs' favor. It concluded that

the facts in this case are "in substance indistinguishable" from

those we encountered in Donovan v. Burger King Corp., 672 F.2d 221

(1st Cir. 1982) ("Burger King"), where we held that certain

assistant managers were exempt from the overtime provision. The

court thus granted summary judgment for defendants, and this appeal

followed.

II.

Before examining the district court's conclusion that Burger

King "controls the disposition of plaintiffs' FLSA claims," we

review the governing law and the reasoning in Burger King that led

us to find the overtime exemption applicable there.

A. The FLSA Executive Exemption

The FLSA requires employers to pay their employees at least

"one and one-half times the regular rate" for any hours worked in

excess of a forty-hour workweek. 29 U.S.C. § 207(a)(1). The

overtime requirement has multiple exceptions. The one at issue in

this case excludes "any employee employed in a bona fide executive

. . . capacity." Id. § 213(a)(1). Pursuant to regulations issued

by the Secretary of Labor, an employer seeking to establish that

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an employee is an exempted "executive" must show: (1) the

employee's salary is at least $455 per week, (2) the employee's

"primary duty" is management, (3) the employee "customarily and

regularly directs the work of two or more other employees," and

(4) the employee "has the authority to hire or fire other employees

or whose suggestions and recommendations as to the hiring, firing,

advancement, promotion or any other change of status of other

employees are given particular weight." 29 C.F.R. § 541.100(a)

(2009).6 Each of these requirements must be met for the exemption

to apply.

The regulations explicitly address the situation of an

employee who concurrently performs exempt and nonexempt work --

i.e., one who supervises other employees while also doing non-

supervisory tasks along with those subordinates -- stating that

such an employee may fall within the exemption so long as the four

requirements of § 541.100 listed above are otherwise met. See id.

§ 541.106. Whether an employee who concurrently performs both

types of duties meets the requirements is determined on a case-

by-case basis. Id. For example, a manager "can supervise

6"Although the regulations merely state the Secretary's
official position on how the statutes should be interpreted, a
court must give them 'controlling weight unless [the court finds
them] to be arbitrary, capricious, or contrary to the statute."
Cash v. Cycle Craft Co., 508 F.3d 680, 683 (1st Cir. 2007)
(alteration in original) (quoting Reich v. John Alden Life Ins.
Co., 126 F.3d 1, 8 (1st Cir. 1997) (citing Chevron U.S.A., Inc. v.
Nat. Res. Def. Council, 467 U.S. 837, 843-44 (1984))).

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employees and serve customers at the same time without losing the

exemption." Id. § 541.106(b). Hence, even a substantial overlap

in the performance of non-managerial and managerial work will not

disqualify an employee from the exemption if the executive duties

are his or her "primary duty." Id.

The regulations provide guidance on how to determine an

employee's "primary duty," including a set of non-exclusive

factors (in boldface below) to consider. See id. § 541.700.

Because the primary duty inquiry is central to this case, we

reproduce all but the introductory line of the pertinent

regulation:

(a) . . . The term "primary duty" means
the principal, main, major or most important
duty that the employee performs.
Determination of an employee's primary duty
must be based on all the facts in a particular
case, with the major emphasis on the character
of the employee's job as a whole. Factors to
consider when determining the primary duty of
an employee include, but are not limited to,
the relative importance of the exempt duties
as compared with other types of duties; the
amount of time spent performing exempt work;
the employee's relative freedom from direct
supervision; and the relationship between the
employee's salary and the wages paid to other
employees for the kind of nonexempt work
performed by the employee.
(b) The amount of time spent performing
exempt work can be a useful guide in
determining whether exempt work is the primary
duty of an employee. Thus, employees who
spend more than 50 percent of their time
performing exempt work will generally satisfy
the primary duty requirement. Time alone,
however, is not the sole test, and nothing in

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 this section requires that exempt employees
spend more than 50 percent of their time
performing exempt work. Employees who do not
spend more than 50 percent of their time
performing exempt duties may nonetheless meet
the primary duty requirement if the other
factors support such a conclusion.
(c) Thus, for example, assistant managers
in a retail establishment who perform exempt
executive work such as supervising and
directing the work of other employees,
ordering merchandise, managing the budget and
authorizing payment of bills may have
management as their primary duty even if the
assistant managers spend more than 50 percent
of the time performing nonexempt work such as
running the cash register. However, if such
assistant managers are closely supervised and
earn little more than the nonexempt employees,
the assistant managers generally would not
satisfy the primary duty requirement.

Id. (emphasis added). Briefly stated, the regulation explains

that an employee's "primary" duty is not determined solely by the

amount of time he or she devotes to the different categories of

tasks -- i.e., exempt vs. nonexempt -- but on the overall character

of his or her position.

B. The Burger King Decision

In Burger King, the district court had found after a bench

trial that the restaurant chain's assistant managers did not have

management as their primary duty and, hence, were entitled to

overtime under the FLSA. See 672 F.2d at 224. Among other tasks,

the Burger King assistant managers scheduled employees, oversaw

product quality, spoke with customers, trained employees, and

"perform[ed] various recordkeeping, inventory, and cash

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reconciliation duties." Id. at 223. However, the assistant

managers also spent a substantial portion of their time -- more

than 40 percent of their weekly work hours, id. at 224 --

"performing many of the same tasks as hourly employees, such as

taking orders, preparing food, and 'expediting' orders." Id. at

223. The district court found that, "in the absence of the

manager, the assistant manager on duty was 'de facto in charge of

the store,'" id. at 225, but the court nonetheless concluded that

assistant managers did not work primarily as managers as required

for the FLSA overtime exemption.

In reversing, we stated that, "[i]n light of the district

court's finding here that the assistant managers were 'in charge'

of the restaurant during their shifts, its conclusion that they do

not have management as their primary duty cannot stand." Id. at

227. We noted that employees may concurrently perform exempt and

nonexempt tasks, and we observed that the regulation "makes it

quite clear that an employee can manage while performing other

work, and that this other work does not negate the conclusion that

his primary duty is management." Id. at 226. We found applicable

"the proposition that the person 'in charge' of a store has

management as his primary duty, even though he spends the majority

of his time on non-exempt work and makes few significant

decisions." Id. at 227.

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 Because the issue of primary duty was the only disputed factor

for certain of the Burger King assistant managers, our rejection

of the district court's finding on that issue meant that those

managers fell within the FLSA's "bona fide executive" exemption.

Id. at 224.7 Accordingly, we vacated the district court's judgment

insofar as it ordered Burger King to pay back overtime wages to

the group of assistant managers earning at least $250 per week.

Id. at 229.8

C. The District Court's Dunkin' Donuts Decision

The role played by the Burger King assistant managers, as

described in our decision, appears to largely coincide with the

responsibilities of Marzuq and Chantre as depicted by the evidence

7 This holding covered only assistant managers earning at
least $250 per week. Pursuant to the regulations then in effect,
the eligibility of such employees for the exemption was evaluated
under a "short test" consisting of only two requirements: the
employee's "primary duty" must be management, and he or she must
regularly direct the work of at least two other employees. See
Burger King, 672 F.2d at 223. The "long test" applicable to
employees earning between $155 and $250 per week included, inter
alia, a time limitation on work "not 'closely related' to their
management duties" (no more than 40 percent). Id. at 223-24. As
revised in 2004, and as described above, the regulations now set
out a single test applicable to employees earning at least $455
per week. See supra Section A; see also Morgan v. Family Dollar
Stores, Inc., 551 F.3d 1233, 1265-66 & n.48 (11th Cir. 2008)
(explaining the shift from two tests to one).
8 We affirmed the district court's judgment that assistant
managers earning less than $250 were entitled to overtime pay
because of the 40 percent limit -- under the long test -- on the
amount of non-managerial work they could perform. See 672 F.2d at
228.

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recounted in Section I above. Given that factual similarity, the

district court unsurprisingly looked to our analysis in Burger

King for guidance. The court stated that, like the Burger King

assistant managers, it is "clear" that "plaintiffs were at all

times 'in charge' of their respective stores," including while

"serving customers like normal hourly employees." Dist. Ct. Op.

at 9; see also id. at 8 (noting that "[t]he Burger King court found

that an employee can still be 'managing' even while physically

doing something else"). The district court also expressly invoked

the FLSA regulation that provides that "employees who perform

exempt and nonexempt work concurrently are not disqualified from

the executive exemption." Id. at 9 (citing 29 C.F.R.

§ 541.106(a)).

Hence, echoing our holding in Burger King, the district court

found it undisputed that plaintiffs had management as their primary

duty, even though they spent "much of their time" on nonexempt

work and "had little discretion to make significant decisions."

Id. In addition, despite their limited authority overall, the

court found that plaintiffs wielded influence over personnel

decisions -- the other contested requirement for the exemption.9

9
The parties do not dispute that plaintiffs satisfy the
remaining two factors for the executive exemption. They earned at
least $455 per week, 29 C.F.R. § 541.100(a)(1) (2009), and they
"customarily and regularly direct[ed] the work of two or more other
employees," id. § 541.100(a)(3).

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Id. at 11. Accordingly, the court held that "the undisputed facts

show that plaintiffs were employed in a bona fide executive

capacity," and thus not entitled to overtime pay. Id.

III.

On appeal, plaintiffs contend that the district court failed

to perform the multi-factor analysis required by the FLSA

regulations to determine an employee's "primary duty" and

improperly "gloss[ed] over a clear factual dispute" as to whether

Marzuq was able to manage his store while also serving customers

and completing other non-managerial tasks. They further assert

that the court's reliance on Burger King was misplaced, as that

case involved a verdict entered after a bench trial rather than a

ruling on summary judgment for which they are entitled to the

benefit of favorable factual inferences. All told, plaintiffs

contend that summary judgment was improper because the evidence in

the record would permit a reasonable factfinder to conclude that

the overtime exemption does not apply to them.

A. Standards of Review

We review the district court's summary judgment ruling de

novo, assessing the facts in the light most advantageous to

plaintiffs and also drawing all reasonable inferences in their

favor. Ray, 799 F.3d at 112.

The burden is on the employer to prove an exemption from the

FLSA's requirements, Cash v. Cycle Craft Co., 508 F.3d 680, 683

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(1st Cir. 2007), and "the remedial nature of the statute requires

that [its] exemptions be 'narrowly construed against the employers

seeking to assert them,'" Reich v. John Alden Life Ins. Co., 126

F.3d 1, 7 (1st Cir. 1997) (quoting Arnold v. Ben Kanowsky, Inc.,

361 U.S. 388, 392 (1960)); see also Hines v. State Room, Inc., 665

F.3d 235, 240 (1st Cir. 2011) (stating that exemptions must be

"drawn narrowly against the employer"); Wirtz v. Keystone Readers

Serv., Inc., 418 F.2d 249, 261 (5th Cir. 1969) (noting the FLSA's

"dual mandates of broad coverage and narrow exemptions").

B. Discussion

As noted above, it is undisputed that plaintiffs meet two of

the four criteria for the "bona fide executive" exemption from

overtime pay: they earned more than $455, and they "customarily

and regularly direct[ed] the work of two or more other employees."

29 C.F.R. § 541.100(a) (2009). We thus begin with an examination

of one of the remaining requirements: that management be an

exempted executive's primary duty.

1. Primary Duty

Appellants argue that the district court improperly failed to

consider the four non-exclusive factors listed in the governing

regulation as pertinent to the primary-duty determination: "the

relative importance of the exempt duties as compared with other

types of duties; the amount of time spent performing exempt work;

the employee's relative freedom from direct supervision; and the

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relationship between the employee's salary and the wages paid to

other employees for the kind of nonexempt work performed by the

employee." 29 C.F.R. § 541.700(a)(2009). They further assert that

the record evidence on these factors, viewed in their favor, does

not lead inevitably to the conclusion that management was their

primary duty -- thus taking this case outside the scope of our

holding in Burger King.

As an initial matter, we agree that Burger King is not on all

fours with this case. Our analysis there rested on findings made

by the district court after a bench trial, while on summary

judgment we must construe the facts in plaintiffs' favor.

Moreover, the reported facts in the two cases are not identical.

In Burger King, for example, the district court found that the

assistant managers "devoted more than 40 percent of their time to

non-managerial duties," 672 F.2d at 224, while Marzuq testified

that he was "on the floor 90 percent of [the] time" doing nonexempt

tasks like serving customers and cleaning. The difference between

performing nonexempt work most of the time -- i.e., 90 percent --

and possibly less than half the time -- i.e., "more than 40

percent" -- could be significant in evaluating whether a manager

is able to perform supervisory and nonexempt tasks concurrently.

At least in some settings, a nominal "manager" who spends nearly

his entire shift doing the same work as his subordinates might not

be able to simultaneously manage the store. See Morgan v. Family

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Dollar Stores, Inc., 551 F.3d 1233, 1272 (11th Cir. 2008) (noting,

in a decision affirming jury's finding that store managers did not

have management as their primary duty, a distinction between

managers who spent "80 to 90% of the time performing manual labor"

and those who spent 60% or "'more than fifty percent'" of their

time on nonexempt tasks). As discussed below, other differences

also exist, including comparative pay rates.

Importantly, when an employee performs both exempt and

nonexempt work, the question of primary duty "is determined on a

case-by-case basis" in light of the factors specified by regulation

and identified above. 29 C.F.R. § 541.106. Appellants correctly

observe that the district court did not expressly examine those

factors. Instead, the court treated Burger King as dispositive on

the primary duty inquiry based on the court's assessment that

plaintiffs indisputably were "in charge" of their stores at all

times.

Notwithstanding the procedural and factual differences

between the cases, Burger King does articulate a principle that is

relevant here: a manager who is "in charge" when on the job "can

still be 'managing' . . . even while physically doing something

else," id. at 226, and may have management as his primary duty

"even though he spends the majority of his time on non-exempt work

and makes few significant decisions," id. at 227. However, Burger

King was anchored in factual findings that the assistant managers

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were "'in charge' of the restaurant during their shifts," id., and

that they spent substantial time on managerial duties, see id. at

224. Hence, our analysis implicitly assumed that being "in charge"

is not merely a label belied by the realities of the workplace.

We also observed that some of the pertinent regulatory factors

"quite clearly cut in favor of Burger King's contention [that the

plaintiffs' primary duty was management], especially those related

to freedom from supervision and a comparison of wages with other

employees." Id. at 226.

Although this case resembles Burger King in certain respects,

the primary duty question cannot be answered without the case-

specific inquiry contemplated by regulation. Whether plaintiffs

are similarly situated to the Burger King assistant managers

depends both on whether they were in fact "in charge" while at

their stores and whether, in the particular circumstances of this

case, their being "in charge" compels the conclusion that

management was their primary duty. To fully engage those issues,

it is necessary to closely examine the record evidence on the

factors specified in § 541.700(a) as pertinent to the primary duty

determination. We thus consider each factor in turn.

a. Relative importance of plaintiffs' exempt and other
duties

The record contains evidence that plaintiffs' managerial and

non-managerial duties were both essential for the smooth

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functioning of their restaurants. Marzuq testified to multiple

tasks that only he performed, including recordkeeping, depositing

cash, calibrating equipment, and setting schedules. In his

supervisory role, he also interviewed potential employees, trained

new hires, and generally oversaw the day-to-day operation of the

stores. These responsibilities reflected the expectations set in

Cadete's formal employment documents, which portray the manager's

duties as almost exclusively supervisory. The "Cadete Enterprises

Position Profile" lists more than two dozen managerial tasks

expected of a restaurant manager, only one of which directly

anticipates a manager's assistance with nonexempt tasks

("Supervise & assist in quality Customer Service").10 Similarly,

the "Restaurant Manager Position Agreement" states that "[t]he

Restaurant Manager's majority of time is spent leading the team to

meet Guest expectations, recruiting, hiring, and training new crew

members as required."

10
The position profile states that the purpose of the
restaurant manager position is to "[i]ncrease Franchise sales and
profitability through proper implementation of Cadete Enterprises
and Dunkin Brands policies & procedures." The document provides
that the "Primary Contributions" of a manager include: "Increase
Franchise sales"; "Improve Franchise operating standards";
"Delegate tasks and ensure Restaurant Employees remain engaged";
"Ensure proper implementation of Restaurant Sanitation program";
"Properly deploy staff during peak and non-peak hours of
operation"; and "Monitor and properly handle all customer
complaints & concerns."

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 Despite the corporate emphasis on supervisory

responsibilities, Marzuq's testimony permits the conclusion that,

as a factual matter, his non-managerial work also was "critical to

the success of the restaurant." Donovan v. Burger King Corp., 675

F.2d 516, 521 (2d Cir. 1982). The bulk of Marzuq's workweek was

spent performing nonexempt work, including serving customers and

cleaning. As recounted above, he reported routinely substituting

for hourly employees who were sick or absent for other reasons,

explaining that "every day it's a challenge." He had particular

difficulty finding replacements for certain shifts -- "especially

the midnight shift and the night shift on the weekend" -- and would

fill those slots himself.11 He needed to do that nonexempt work,

he explained, because he rarely was fully staffed with hourly

employees -- "[o]nce every five, six months." Indeed, he stated

11Marzuq testified that he regularly covered shifts when
employees "call[ed] in":
[I]f there's a call in, somebody calls in, for
example, the midnight to six in the morning,
I'm there. If somebody calls in six to
midnight shift, I'm there. If somebody calls
in in the afternoon shift, I'm there. And, of
course, when they call in the morning, I'm
there anyhow, so --

Marzuq stated that he also called Dermandy for assistance in
finding substitutes, and Dermandy sometimes provided an employee
from another store.

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that he had no choice but to come in on Sundays -- the seventh day

of his workweek -- to complete the paperwork required of him.12

If, contrary to their job descriptions, managers could not

prioritize their supervisory duties because "quality Customer

Service" demanded that they regularly perform tasks ordinarily

assigned to hourly employees, a factfinder could reasonably

conclude that plaintiffs' exempt and nonexempt duties were equally

important to the successful operation of their restaurants. See,

e.g., Morgan, 551 F.3d at 1270 (upholding jury's verdict that store

managers are not exempt executives where "ample evidence supported

a finding that the non-managerial tasks not only consumed 90% of

a store manager's time but were of equal or greater importance to

a store's functioning and success"). Hence, whether the "relative

importance" of duties factor supports the overtime exemption

cannot be determined without a factfinder's judgment on the impact

of the plaintiffs' varied undertakings. See id. ("The jury was

free to weigh the relative importance of the store managers'

managerial and non-managerial duties . . . .").

b. Amount of time spent on exempt work

Marzuq reported that his daily managerial activity included

checking calibration on the equipment for about thirty minutes

12Marzuq's son, Sarmad, testified that he "rarely" saw his
father in his office or doing paperwork "because he was always
on the floor with us," including afternoons and Sundays.

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every morning, counting the cash at the end of the morning shift

(between 11 AM and noon),13 entering sales and cash data into the

computer, and depositing money at the bank. Once a week, he also

prepared employee schedules,14 and twice a week he spent five or

ten minutes placing an order for dry goods and frozen food items.

In addition, he spent between ninety minutes and three hours on

training when new employees were hired. More generally, he

reported that he did his "office work" -- the money counting and

deposit, schedules, payroll, inventories, ordering, customer count

-- between 1 and 3 PM on weekdays, and from about noon to 1 or 2

PM on Saturdays, and he completed paperwork on Sunday mornings and

evenings.

For Marzuq, however, those administrative tasks added up

to a relatively small portion of his workweek because he estimated

that he was "on the floor," supplementing the crew, for 90 percent

of his work hours. Of course, working alongside the hourly

employees "on the floor" does not necessarily signify that Marzuq

was engaged only in non-managerial activity during those times.

As explained above, the regulations contemplate the concurrent

13The regular store shifts were from 6 AM to noon, noon to
3 PM, 3 PM to 6 PM, 6 PM to midnight, and midnight to 6 AM.
14Although the schedules were supposed to remain largely the
same from week to week, Marzuq testified that creating a schedule
could "take[] a while" because of employee absences and a
persistent staff shortage.

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performance of exempt and nonexempt tasks. See, e.g., In re Family

Dollar FLSA Litig., 637 F.3d 508, 516 (4th Cir. 2011) ("Family

Dollar") ("Thus, while [plaintiff] unloaded freight or swept the

floors, she was also the manager, and no one else was directly

supervising her work."). Indeed, certain of Marzuq's managerial

responsibilities would appear to be advanced by his working side-

by-side with his subordinates, including coaching them and

correcting their mistakes.

Nonetheless, the record contains evidence indicating

that Marzuq's supervisory role was, at least at times, overwhelmed

by his non-managerial tasks. More than once, he clarified that he

"tried" to exercise his managerial duties,15 and he reported

needing to do various tasks that would take him away from the

customer service area of the store (cleaning the bathroom, cleaning

up outside the store, landscaping) and, hence, appear inconsistent

with employee supervision. By contrast, in Family Dollar, where

the appellate panel affirmed summary judgment for the employer on

an FLSA overtime claim, the plaintiff acknowledged that, "while

[she] performed nonmanagerial tasks around the store as she

determined necessary, she concurrently performed the managerial

15
For example, Marzuq was asked, "[W]hile you were in the
store helping to serve customers, you continued to act in your
managerial capacity, right?" He responded: "I tried, yes."
Similarly, he immediately followed up his acknowledgement that he
was "the captain" of his store by noting that he "tried to be" the
captain.

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duties of running the store." 637 F.3d at 515-16 (emphasis

omitted).16

The time factor is particularly complex in this case because

Marzuq routinely worked far in excess of the forty-eight-hour

threshold required by the Cadete manager agreement. His regular

schedule called for sixty-six hours over seven days,17 but because

he substituted for absent employees, his average workweek was

seventy to eighty hours. In addition, he acted as "captain" of

the store even when he was off duty, fielding phone calls from

16The Fourth Circuit elaborated on the plaintiff's multi-
tasking:
As she explained, "whether or not [she]
happened to be putting up stock at a given
moment or running a register or talking to a
customer, at the same time [she was]
responsible for making sure the whole store
ran successfully." Similarly, she stated,
"When [she was] running a cash register, [she
was] at the same time looking at the condition
of the front end and keep [sic] an eye out for
theft, etc." She explained, "When [she was]
doing [her] paperwork for [her] cash registers
and [her] money, [she was] thinking about what
had to be done later with regard to that money
and all that paperwork for that and store
deliveries."

637 F.3d at 516 (alterations in original); see also id. at 517
(noting that "she testified plainly, 'I ran the store when I was
in the building,' and, according to her, she was in the building
most of the time, as she spent between 50 and 65 hours per week
at the store").
17He was scheduled Monday through Saturday from 4 AM to 2:30
PM, and Sunday from 5 AM to 8 AM. He also reported working Sunday
evenings to finish his paperwork.

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employees and going into work if necessary to resolve problems.

Yet, given the competing demands routinely placed on Marzuq, a

factual dispute exists as to how much of his workweek he actually

was "in charge" of the store. Allocating percentages of Marzuq's

work hours to exempt and nonexempt duties is thus not a

straightforward calculation.

Hence, the second factor -- like the first -- does not point

decisively in either direction. Cf. Donovan, 675 F.2d at 522

(affirming district court's finding, after a bench trial, that

Burger King assistant managers were exempt from overtime where

"[t]he record [] shows that for the great bulk of their working

time, Assistant Managers are solely in charge of their restaurants

and are the 'boss' in title and in fact" (emphasis added)).

c. Freedom from direct supervision

Testimony from both Marzuq and his district manager,

Dermandy, suggests that Dunkin' Donuts managers have some autonomy

over the day-to-day operation of their stores, though -- like the

Burger King assistant managers -- they are "unable to make any

significant or substantial decisions on [their] own." Burger King,

672 F.2d at 227. Managers create weekly schedules and decide how

many hours to assign particular employees, but company directors

(ranked above Dermandy in the Cadete hierarchy) set the store

budgets and Dermandy determines the overall staffing levels for

his district's stores. Managers in all Cadete stores are expected

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to follow uniform procedures. Dermandy testified that the primary

tools used to instruct new managers in his district are an online

training course provided by Dunkin' Brands and two to eight weeks

of "hands-on," in-store training, sometimes supervised by him and

sometimes conducted at a Cadete "training store." That training

covers, inter alia, customer service skills, leadership, equipment

calibration, scheduling, and paperwork.

Regular supervision continues throughout a manager's tenure.

Dermandy spends between fifteen minutes and four hours at each

store in his district each week. He explained that his weekly

agenda depends on "whether I have new managers that . . . need

more attention, more of my help, whether or not certain stores are

up or down in sales, whether or not they have budget concerns and

about 10 million other things." Marzuq agreed that Dermandy was

at his store at least once a week, and sometimes more frequently.18

Store managers' authority to problem solve is limited.

Dermandy's managers are required to call him if they need

maintenance work they are unable to perform themselves, and he

will then place the reported malfunction on a repair list for an

outside maintenance person. Managers appear to have little

flexibility in resolving customer complaints. In response to "my

18Marzuq reported Dermandy's visits as follows: "Some weeks
every day, some weeks every other day, some weeks once. It all
depends on his own schedule, and all depends on what kind of
problems that I have at the store."

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coffee was cold yesterday," for example, a manager may "buy" the

customer a new cup of coffee, but the manager may not issue a gift

card without Dermandy's approval.

The record contains inconsistent evidence on personnel

decisions. For example, Dermandy stated that a store manager has

authority to terminate a crew member for some reasons -- such as

tardiness -- while the district manager needs to be involved for

"big" issues, such as theft or verbal abuse between employees.

Marzuq, however, said that Dermandy had to approve any termination,

adding: "He ha[s] to know everything that's going on." Managers

also need permission to hire additional crew members when they are

short staffed, as well as to add an assistant manager position.

From Marzuq's perspective, managers have little independence.

When asked how Dermandy supervised his work, he stated: "From every

way, from the records that I send him weekly, from coming down

[to] the store or from the office if he heard anything, from phone

calls, from e-mails, or from showing up different times. . . . I

. . . have to go through my bosses for anything that I have to

do."

In sum, the record depicts a dynamic that, at least in broad

strokes, appears typical for a fast-food franchise manager:

limited decision-making authority, particularly when a matter

involves spending money; close monitoring by an off-site superior

to ensure compliance with the company's policies, practices, and

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expectations; and everyday responsibility for the smooth operation

of a clean, adequately staffed restaurant. This scenario is

similar to our description of the circumstances in Burger King,

where the assistant managers' equivalent tasks were "governed by

highly detailed, step-by-step instructions contained in Burger

King's 'Manual of Operating Data,' and admit of little or no

variation." 672 F.2d at 223; see also Morgan, 551 F.3d at 1271

(concluding that "[s]tore managers had little freedom from direct

supervision," where, inter alia, district managers "were

responsible for enforcing the detailed store operating policies;"

closely reviewed each store's inventory, orders, and net sales

figures; monitored weekly payroll; controlled employee pay rates

and raises; and "routinely sent to-do lists and emails with

instructions to store managers").

The record thus shows that Dermandy closely supervised

plaintiffs. On its own, this factor tends to favor plaintiffs.

Burger King, however, accepted a confined level of authority as

consistent with a conclusion that the assistant managers had

management as their primary duty. Hence, this factor, like the

two factors already discussed, does not decisively point one way

or the other on the primary duty question.

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 d. The relationship between plaintiffs' salaries and the
wages paid hourly employees for similar nonexempt work

The parties' combined statement of undisputed facts gives

Marzuq's weekly salary as $825 and Chantre's as $600, and reports

that crew members are paid $8 per hour. If, on an hourly basis,

a manager's salary for performing a high percentage of nonexempt

work is about the same as the wages of crew members for such work,

the justification for exempting the manager from overtime pay is

weakened. See generally, e.g., Donovan, 675 F.2d at 520 ("Where

salary is low and a substantial amount of time is spent on non-

exempt work, the inference that the employee is not an executive

is quite strong . . . ."); Marshall v. W. Union Tel. Co., 621 F.2d

1246, 1251 (3d Cir. 1980) (noting that "granting managerial

employees exempt status must have been a recognition that they are

seldom the victims of substandard working conditions and low

wages"). An accurate comparison of weekly and hourly wages

necessarily depends on the number of hours attributed to the

salaried employees, yet -- as described above -- it is difficult

on this record to fix a number of hours worked by the managers.

Taking the facts in the light most favorable to plaintiffs,

however, we at a minimum must presume that Marzuq regularly worked

sixty-six hours per week. Based on their salaries, that would be

an hourly rate of $12.50 for Marzuq and roughly $9 for Chantre.

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 Two other factors also must be considered. First, the hourly

employees also received tip income, increasing their earnings by

some margin. We thus must determine how much tip income to add to

the crew members' $8-per-hour base rate to make a fair comparison

with plaintiffs' salaries. The record contains evidence

indicating that tips may have been as low as fifty cents per hour

or as much as $2.70 per hour.19 In their brief, appellants propose

a $2-per-hour tip estimate, which we conclude is adequately

supported by the record for purposes of summary judgment.

Second, a fair comparison of wages also needs to take into

account that, if managers were compensated like hourly employees,

hours worked over forty would be paid at the overtime rate of time-

and-a-half. Hence, taking a sixty-six-hour workweek, compensated

at $8 per hour for the first forty hours ($320) and $12 per hour

for the remaining twenty-six hours ($312), supplemented by $2-per-

hour in tips ($132), a non-managerial crew member would earn $764

-- significantly more than Chantre and insignificantly less than

Marzuq. See, e.g., Morgan, 551 F.3d at 1271 (describing as

"relatively small" a two- or three-dollar difference between

19
Cadete assumed employees earned fifty cents per hour in tip
income, but Marzuq testified that, when he shared in tips, he
received roughly $180 per week in such income. Based on a sixty-
six-hour week, $180 would amount to about $2.70 per hour. At some
point during Marzuq's tenure with Cadete, the company changed its
policy to prohibit managers from receiving tips.

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hourly rates of salaried store managers and hourly assistant

managers).

At least at this juncture, the equivalence in pay shown

by this calculation means that the salary vs. hourly wages factor

is squarely in plaintiffs' favor.

e. The primary duty inquiry as a whole

As our discussion of the factors listed in § 541.700(a)

demonstrates, the evidence in the record does not lead inevitably

to a conclusion that, in practice, Marzuq and Chantre's primary

duty was management. To evaluate at least two of the factors --

the time spent on exempt work and the wage comparison -- a

factfinder would need to determine the number of hours plaintiffs

regularly worked, the percentage of time they were engaged in

nonexempt work, and the portion of that nonexempt time in which

they were concurrently performing managerial duties. See, e.g.,

Reich v. Stewart, 121 F.3d 400, 404 (8th Cir. 1997) ("[T]he amount

of time an employee works and the duties he or she performs present

factual questions[.]").

Indeed, if a factfinder determined that plaintiffs' nonexempt

duties regularly consumed more than forty hours per week,20 and

that plaintiffs did not, in fact, simultaneously perform

20
Ninety percent of his scheduled sixty-six hours -- the
amount of time Marzuq said he was "on the floor" -- would be
about 59 hours.

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managerial duties during a substantial portion of that time, a

conclusion that management was plaintiffs' primary duty seems

unlikely -- even if, as Marzuq testified, he spent at least another

twenty to thirty hours each week on exempt work. Taken as true,

the fact that Marzuq worked seven days a week, logging a minimum

of sixty-six hours and often more, together with a finding that

most of those hours were exclusively devoted to nonexempt work,

would suggest that he effectively was doing two jobs, for one

salary: a fulltime nonexempt position and a part-time exempt one.

In that scenario, a reasonable factfinder might be reluctant to

characterize the "part-time" managerial position as his primary

duty for the company.

Moreover, such a scenario would appear to conflict with one

of the principal goals of the FLSA's overtime provision: "to spread

employment more widely through the work force by discouraging

employers from requiring more than forty hours per week from each

employee." Marshall v. Chala Enters., Inc., 645 F.2d 799, 803

(9th Cir. 1981); see also Overnight Motor Transp. Co. v. Missel,

316 U.S. 572, 578 (1942) ("In a period of widespread unemployment

and small profits, the economy inherent in avoiding extra pay was

expected to have an appreciable effect in the distribution of

available work. Reduction of hours was a part of the plan from

the beginning."), superseded on other grounds by statute, Portal-

to-Portal Pay Act, 61 Stat. 84, 86-87 (1947), as stated in Trans

- 32 -
World Airlines, Inc. v. Thurston, 469 U.S. 111, 128 n.22 (1985);

Mechmet v. Four Seasons Hotels, Ltd., 825 F.2d 1173, 1176 (7th

Cir. 1987) (noting that one purpose of the FLSA overtime

requirement was "to spread work and thereby reduce unemployment,

by requiring an employer to pay a penalty for using fewer workers

to do the same amount of work as would be necessary if each worker

worked a shorter week"); "Defining and Delimiting the Exemptions

for Executive, Administrative, Professional, Outside Sales and

Computer Employees," 69 Fed. Reg. 22,122, 22,124, 2004 WL 865626

(Apr. 23, 2004) (hereafter "Defining and Delimiting the Exemptions

2004") (noting "the potential job expansion intended by the FLSA's

time-and-a-half overtime premium").

Managers, of course, typically work more than a forty-hour

week without entitlement to overtime compensation under the FLSA,21

21
The regulations do not address executive employees whose
managerial responsibilities require an extraordinary number of
work hours, apparently reflecting an assumption that such
employees are adequately compensated in other ways. See "Defining
and Delimiting the Exemptions 2004," 69 Fed. Reg. at 22,123-24
(stating that "[t]he legislative history indicates that the
. . . exemptions were premised on the belief that the workers
exempted typically earned salaries well above the minimum wage,
and they were presumed to enjoy other compensatory privileges such
as above average fringe benefits and better opportunities for
advancement"); Dep't of Labor, Wage and Hour Division, "Defining
and Delimiting the Terms 'Any Employee Employed in a Bona Fide
Executive, Administrative, or Professional Capacity . . . or in
the Capacity of Outside Salesman,'" 46 Fed. Reg. 3010, 3016 (1981)
(stating that the executive exemption "stemmed from the
recognition that such personnel have special work
responsibilities, compensatory privileges and benefits which are
superior to those of other employees").

- 33 -
and the Secretary's regulations expressly reject a percentage

threshold for triggering overtime pay. See 29 C.F.R. § 541.700(b)

("[N]othing in this section requires that exempt employees spend

more than 50 percent of their time performing exempt work.");22 see

also Family Dollar, 637 F.3d at 515 ("There is no per se rule that

once the amount of time spent on manual labor approaches a certain

percentage, satisfaction of [the time] factor is precluded as a

matter of law."). Yet, the percentages may have an impact when

combined with other factors. Under the regulations, managers who

"spend more than 50 percent of the time performing nonexempt work

such as running the cash register" would generally not fulfill the

primary duty requirement if they are "closely supervised and earn

little more than the nonexempt employees." 29 C.F.R. § 541.700(c).

In short, as explained above, the evidence is inconclusive on

multiple factors in the primary-duty inquiry. Hence, the

plaintiffs' primary duty cannot be determined as a matter of law

at this stage of the case.

22 The FLSA "Exemptions" provision anticipates that a
managerial employee in "a retail or service establishment" will
spend some time on nonexempt duties, and thus provides that exempt
status should not be denied based on "the number of hours in his
workweek which he devotes to activities not directly or closely
related to the performance of executive or administrative
activities, if less than 40 per centum of his hours worked in the
workweek are devoted to such activities." 29 U.S.C. § 213(a)(1).
Under the regulations, the number of nonexempt hours can exceed 40
percent so long as the employee otherwise satisfies the exemption
requirements.

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 2. Authority or Influence on Personnel Decisions

The open question of primary duty means that it is unnecessary

for us to address the remaining element of the "bona fide

executive" inquiry: plaintiffs' role in changing the status of

other employees, including hiring, firing, and promotion. The

factual dispute concerning primary duty suffices to foreclose

summary judgment.

IV.

Viewing the record in the light most favorable to plaintiffs,

a reasonable factfinder could conclude that defendants have failed

to meet their burden of showing that Marzuq and Chantre fell within

the "bona fide executive" exception to the FLSA's overtime pay

requirement. Hence, we vacate the summary judgment for defendants

and remand the case for further proceedings.

So ordered. Costs to appellants.

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