First Circuit Holds that Banquet Sales Managers Qualify for the Administrative Exemption
By Christopher Kaczmarek and Joseph Lazazzero
The First Circuit Court of Appeals recently held that banquet sales managers qualified for the administrative exemption to the Fair Labor Standards Act (FLSA). The court reached this holding in the case of Hines v. State Room, Inc. even though the banquet sales managers were bound by a price schedule established by their employer and therefore had virtually no authority to make financial decisions.
In this case, the banquet sales managers were responsible for contacting potential clients, assisting clients in selecting the appropriate venue, and designing a function so as to meet the client’s objectives and budgetary constraints. The “vast majority” of their work involved “unscripted conversations” with current and potential customers regarding the details of the event.
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Judge Gertner of the U.S. District Court for the District of Massachusetts recently issued an opinion rejecting the Klinghoffer rule, potentially making it easier for a plaintiff to prevail on claims that his or her employer failed to pay the minimum wage. Under the Klinghoffer rule, which takes its name from the case of United States v. Klinghoffer Bros. Realty Corp., 285 F.2d 487 (2d Cir. 1980), courts apply a weekly-average method to determine whether an employer is in compliance with the minimum wage requirement of the Fair Labor Standards Act. Applying this rule, courts have declined to find a minimum wage violation as long as the total weekly average wage divided by the hours actually worked is at least equal to the applicable minimum wage. For example, assume an employee works 26 hours per week at a rate of $10 per hour, earning $260 each week. Even if this employee worked an additional four hours for which she was not paid, her average hourly wage would equal $8.67, exceeding the minimum wage.
In July 2008, Massachusetts amended its state wage and hour laws to provide for mandatory awards of treble damages for plaintiffs who prevailed under those statutes. Since then, lawyers have disagreed as to whether this treble damages provision should apply retroactively. On August 31st, the Massachusetts Supreme Judicial Court resolved this dispute by unanimously holding that the treble damages provision does not apply retroactively.
In a significant victory for Massachusetts healthcare employers, on December 20, 2010, the Massachusetts federal court applied the state overtime exemption available to hospitals, nursing homes, and certain other healthcare employers, and dismissed all 13 state wage-law claims in Cavallaro v.UMass Memorial Health Care. Plaintiffs in the case, a class action filed on behalf of 13,000 current and former employees of UMass Healthcare and its subsidiaries, claimed the hospital did not compensate them for time worked: (1) during meal breaks that were automatically deducted from wages; (2) before and after scheduled shifts; and (3) time spent in training sessions. To learn more about the Cavallaro decision and its implications for employers, please 
A court recently held that the Massachusetts overtime law, 
On August 21, 2009, the Massachusetts Supreme Judicial Court unanimously ruled that a worker who has been misclassified as an independent contractor may seek damages from his former employer even if the employer establishes that the worker would have been paid less had he been classified as an employee.