Federal Court Denies Long Island Restaurant’s Bid to Dismiss Executive Chef’s Overtime Claims

A decision issued last week by the Federal Court in Brooklyn breaks new ground in wage and hour law by imposing a hefty evidentiary burden on employers who try to deprive their employees of overtime by classifying them as “executives”. The decision was issued by Eastern District Judge Arthur D. Spatt in the case Karropoulos v. Soup Du Jour, Ltd. Judge Spatt concluded that despite having the title “executive chef”, plaintiff Emanuel Karropolous raised factual issues as to whether he was really an “executive” under U.S. Labor Department regulations. In his complaint, Mr. Karropolous claimed that he “spent 95% of his time cooking meals” and performing other mundane duties that are not usually associated with executive-level positions. In finding that there were issues of act which precluded the dismissal of Karropoulos’ overtime claims, Judge Spatt noted that: (a) the restaurant failed to provide the court with any documents, such as a job description, which defined Karropolous’ job duties; and (b) the burden of proving that an employee is exempt from overtime rests on the employer.

The 4-Part Bona Fide Executive Test:

Under Department of Labor (“DOL”) regulations, an employee is employed in a “bona fide executive capacity” if the employee is:

(1) Compensated on a salary basis at a rate of not less than $455 per week …;
(2) Whose the primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;
(3) Who customarily and regularly directs the work of two or more other employees; and
(4) Who 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.

Many employers classify certain employees as “executives” as a way to avoid paying overtime. Under the Fair Labor Standards Act (FLSA), an employee is deemed “exempt” from overtime if he or she is employed in a “bona fide executive capacity”. The mere fact that an employer decides to call someone an “executive” is not controlling. As shown by Judge Spatt’s decision in the Karropoulos case, the issue of whether an employee is considered an executive for purposes of wage and hour law is a fact-intensive question that is often decided by courts in favor of employees. In assessing whether a particular employee is an “executive” (and thus exempt from overtime), a court must consider whether an “exempt” duty (i.e., one that involves managerial functions) is “more important” than non-managerial tasks.

The New York wage lawyers at Rapaport Law Firm urge NYC restaurant workers to consult with experienced employment counsel to determine whether they have been misclassified as “exempt” or are otherwise being unlawfully deprived of overtime compensation. Rapaport Law Firm is located in downtown Manhattan, in the heart of New York City’s financial district. If you believe that you have been unlawfully deprived of overtime pay, call attorney Marc Rapaport at ph: (212) 382-1600.

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