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HR Solutions

Seasonal Lull in hours of supervision  no help for Radio Shack in OT Case

12/06/05

 

    A federal district judge in Chicago rejected arguments from the electronics retailer

that its managers should be exempt from overtime even if the hours worked by their subordinates intermittently dipped below 80 hours a week.  The law's recognition of special cases was not extended to the retailer's employees.  Perez v. Radioshack Corporation, 386 FSupp2nd 979 (N.D. Ill. 2005).

 

    A supervisor is an "executive exempt" if he customarily and regularly supervises two or more individuals "or the equivalent".  This test is met if the supervisor is responsible for not just two full-timers but also a combination of work hours of the subordinates, such as several part-timers whose hours meet the 80 hour minimum.  US Department of Labor regulations address this at 29 CFR Sec. 541.104(a), and the agency's field manual provides that any number of part-timers will be the equivalent of two full timers, so long as the total number of hours supervised exceeds 80.

 

    An "unusual circumstances" exception to the 80 hour rule applies in certain industries with a recognized work week that is generally less than 40 hours, e.g., banking and insurance. Radioshack asked the court to extend this exception to the fluctuating work hours caused by seasonal dips in business.  The court refused to do so, noting that the defendant's stores are generally open more than forty hours a week.