2015 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

4-9-2015

Albert Itterly v. Family Dollar Stores

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Recommended Citation

"Albert Itterly v. Family Dollar Stores" (2015). 2015 Decisions. Paper 357.

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 14-1274

_____________

ALBERT ITTERLY, 

on behalf of himself and similarly situated employees,

 Appellant

v.

FAMILY DOLLAR STORES, INC.; 

FAMILY DOLLAR STORES OF PENNSYLVANIA, INC. 

______________

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR 

THE EASTERN DISTRICT OF PENNSYLVANIA

(D.C. Civ. Action No. 5-08-cv-01266)

District Judge: Honorable Lawrence F. Stengel

______________

Submitted Under Third Circuit L.A.R. 34.1(a)

January 22, 2015

____________________________

Before: FISHER, JORDAN, and GREENAWAY, JR., Circuit Judges.

(Opinion Filed: April 9, 2015)
2

______________

OPINION*

______________

GREENAWAY, JR., Circuit Judge.

Albert Itterly (“Appellant”) appeals the District Court’s grant of summary 

judgment to Family Dollar Stores, Inc. and Family Dollar Stores of Pennsylvania, Inc.

(“Family Dollar” or “Appellees”) on Appellant’s claims under the Pennsylvania 

Minimum Wage Act (the “PMWA”). Appellant argues that there is a genuine dispute of 

material fact as to whether he is an executive employee exempt from overtime payments 

under the PMWA. We find there is no basis to upset the District Court’s determination 

that summary judgment on this issue is appropriate. We will affirm.1

I. Factual and Procedural History

Appellant worked as the Store Manager at the Family Dollar store in Allentown, 

Pennsylvania (the “Allentown Store”) between July and November of 2007. Appellant’s 

responsibilities included supervision of other employees, scheduling of employees, 

delegating duties to site employees, disciplining employees, and hiring. Appellant also 

spent much of his time unloading freight, stocking shelves, and working a register. He 

worked an average of 63.5 hours per week. He was paid a weekly salary of $930.00 and 

received a single bonus of $904.75. He was not paid for overtime work.

 

*This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does 

not constitute binding precedent.

1 The District Court exercised jurisdiction pursuant to 28 U.S.C. §§ 1331 and 

1367; we have jurisdiction under 28 U.S.C. § 1291.
3

Appellant filed a complaint in the District Court alleging that the denial of 

overtime pay for his work in excess of forty hours per week violated the Fair Labor 

Standards Act (the “FLSA”), 29 U.S.C. § 201 et seq.,

2

and the PMWA, 43 PA. CONS.

STAT. ANN. § 333.101 et seq. Appellant argued that because he spent “virtually all of his 

time” performing nonmanagerial tasks and physical labor, his “primary duty” as Store 

Manager was not management. As such, he was not an “executive” employee exempt 

from overtime payments under the PMWA. Appellant also argued that management was 

not his primary duty because (1) he shared responsibility for many of his managerial 

duties with nonexempt Assistant Store Managers (“ASMs”) and (2) Family Dollar’s

corporate policies and his supervising District Manager limited any discretion he had to 

manage the store. 

The District Court held that there were no genuine disputes of material fact and 

that Family Dollar was entitled to summary judgment as a matter of law. The District 

Court rejected Appellant’s arguments, concluding that Appellant was an executive 

employee exempt from overtime payments under the PMWA. 

II. Analysis

“[W]e employ a plenary standard in reviewing orders entered on motions for 

summary judgment . . . .” Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 265 (3d Cir. 

2014). We employ the same standard as the District Court, and “‘view the underlying 

facts and all reasonable inferences therefrom in the light most favorable to the party 

 

2 Appellant withdrew his FLSA claim in September 2011, leaving only his 

individual and class claims under the PMWA.
4

opposing the motion.’” Id. (quoting Pa. Coal Ass’n v. Babbitt, 63 F.3d 231, 236 (3d Cir. 

1995)). “‘[A] factual dispute is material if it bears on an essential element of the 

plaintiff’s claim, and is genuine if a reasonable jury could find in favor of the nonmoving 

party.’” Id. (quoting Natale v. Camden Cnty. Corr. Facility, 318 F.3d 575, 580 (3d Cir. 

2003)). 

Under the PMWA’s executive employee exemption, anyone employed in a “bona 

fide executive . . . capacity” is exempt from the PMWA’s overtime protections. 43 PA.

CONS. STAT. ANN. § 333.105(a)(5). The employer has the burden of establishing an 

exemption, and such exemptions are narrowly construed against the employer. Pignataro 

v. Port Auth., 593 F.3d 265, 268 (3d Cir. 2010). It is undisputed that Appellant earned 

more than $250 per week and is thus subject to the “short test” for determining whether 

he is an exempt executive employee pursuant to Pennsylvania regulations. 34 PA. CODE

§ 231.82(6). Under the short test, the exemption applies only to employees “whose 

primary duty consists of the management of the enterprise in which he is employed . . . 

and includes the customary and regular direction of the work of two or more other 

employees.” Id. 

Appellant concedes that he regularly directed the work of two or more employees. 

The only issue on appeal is whether Appellant’s “primary duty” as a Store Manager at 

Family Dollar was “management of the enterprise.” Appellant argues that where: (1) he

spent nearly all of his time performing manual labor, (2) the nonexempt ASMs performed

the same managerial duties as he did, (3) his District Manager micro-managed the store, 
5

and (4) Family Dollar’s detailed corporate policies limited Appellant’s discretion to such 

an extent that he did not actually “manage” the store, there was a genuine dispute of 

material fact as to whether Appellant’s primary duty was management and summary 

judgment was thus inappropriate. We reject this argument.3

A. Appellant Performed Managerial Duties.

The record demonstrates that Appellant performed managerial tasks as the Store 

Manager of the Allentown Store. The federal regulations implementing the FLSA4

define “management” to include activities such as: 

[I]nterviewing, selecting, and training of employees . . . directing the work 

of employees; . . . appraising employees’ productivity and efficiency for the 

purpose of recommending promotions or other changes in status; 

disciplining employees; . . . apportioning the work among the employees; 

 

3 To the extent Appellant argues that Morgan v. Family Dollar Stores, Inc., 551 

F.3d 1233 (11th Cir. 2008) (holding that sufficient evidence supported jury’s

determination that Family Dollar Store Managers were nonexempt employees) compels a 

different result, his reliance is misplaced. The Morgan court expressly found that the 

Store Managers in that case did not perform exempt and non-exempt activities 

concurrently. Id. at 1272-73. We find the Fourth Circuit’s decision in In re Family 

Dollar FLSA Litigation, 637 F.3d 508 (4th Cir. 2011) (affirming a district court’s grant of 

summary judgment in favor of Family Dollar) more persuasive. There, the Fourth Circuit 

noted that even though the appellant performed nonmanagerial tasks 99% of the time, she 

performed them concurrently with her managerial duties and “in the context of her 

overall responsibility to see that the store operated successfully and profitably.” Id. at 

516. This emphasis on the importance of the Appellant’s managerial duties rather than on 

the amount of time spent performing nonexempt tasks is consistent with our own 

precedent. See, e.g., Guthrie v. Lady Jane Collieries, Inc., 722 F.2d 1141 (3d Cir. 1983).

4 The parties agree that the FLSA’s definitions of “primary duty” and 

“management” apply to Appellant’s claim. Pennsylvania courts have looked to federal 

law regarding the FLSA for guidance in applying the PMWA. See Commonwealth v. 

Stuber, 822 A.2d 870, 873 (Pa. Commw. Ct. 2003), aff’d, 859 A.2d 1253 (Pa. 2004) 

(applying “federal case law” regarding the FLSA to a PMWA claim).
6

. . . [and] providing for the safety and security of the employees or the 

property . . . . 

29 C.F.R. § 541.102. 

Appellant admitted in his deposition to performing many of these activities during 

the course of his employment as Store Manager of the Allentown Store. He 

acknowledged that he (i) determined which employees worked which shifts; (ii) assigned 

work to employees; (iii) interviewed and hired cashiers, (iv) recommended hiring of 

assistant store managers; (v) trained employees on store policies and procedures; (vi) 

evaluated employee performance; (vii) disciplined an employee for a rule violation; (viii) 

reviewed daily sales; (ix) worked to increase sales; (x) adjusted his staff schedules to stay 

within the allocated payroll budget; and (xi) maintained the security of the store and 

reported any concerns to the police. 

B. Appellant’s Primary Duty was Management.

Appellant’s responsibility for the tasks above and the general character of his 

position demonstrate that management was his “primary duty” as a Family Dollar Store 

Manager. The regulations define the “primary duty” as the “principal, main, major or 

most important duty that the employee performs.” 29 C.F.R. § 541.700(a). Further, we 

should specifically consider: 

[T]he 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.

Id.
7

Consideration of each factor yields the conclusion that Appellant’s primary 

duty was management.

1. Relative Importance of Exempt Duties and Time Spent Performing 

Exempt Work

Appellant’s primary contention on appeal is that because he spent the vast 

majority of his time performing nonexempt tasks such as unloading freight, stocking 

shelves, and ringing a register, management was not his “primary duty.” We, however, 

have recognized that an employee need not spend the majority of his time performing 

managerial tasks in order to be considered exempt. See, e.g., Guthrie v. Lady Jane 

Collieries, Inc, 722 F.2d 1141 (3d Cir. 1983) (holding that foremen who spent no more 

than 44% of their time performing managerial work were exempt executives under the 

FLSA). Indeed, § 541.700(b) specifically notes that “time [allocation] alone . . . is not 

the sole test, and nothing in this section requires that exempt employees spend more than 

50 percent of their time performing exempt work.”

Rather, the regulations set out a qualitative standard that considers the relative 

importance of the managerial duties as compared with the employee’s nonexempt duties. 

In making this determination, we look to “whether the management activities are critical 

to the successful operation of the enterprise.” Guthrie, 722 F.2d at 1145 (citing Donovan 

v. Burger King Corp., 675 F.2d 516, 521 (2d Cir. 1982)). 

According to Family Dollar’s policies, a Store Manager’s first “essential job 

function[]” is to “[s]upervise all store personnel, including assigning tasks [and] ensuring 

compliance with merchandising and operational policies.” App. 2584a. Appellant
8

managed the Allentown Store on a daily basis, preparing the store cash and sales book,

maintaining store safety and security, assigning work, scheduling store associates, and 

ensuring that an ASM was scheduled to assist with these duties if he was not in the store. 

Appellant’s performance of these managerial duties was essential to the success of the 

Allentown Store. See Thomas v. Speedway SuperAmerica, LLC, 506 F.3d 496, 505 (6th 

Cir. 2007) (noting that store “would not function at all” had manager failed to perform 

managerial duties such as hiring, scheduling, and training employees).

Moreover, Appellant performed many of these managerial responsibilities 

concurrently with nonexempt duties such as unloading freight, stocking shelves, and 

operating a register.5 See Guthrie, 722 F.2d at 1145 (“[T]o the extent that these 

[managerial] functions are carried out simultaneously with the performance of nonexempt 

work, we are not persuaded that they must be regarded as nonmanagerial.”); 29 C.F.R. 

§ 541.106(a) (“Concurrent performance of exempt and nonexempt work does not 

disqualify an employee from the executive exemption . . . .”). Federal regulations 

recognize that “[g]enerally, exempt executives . . . remain responsible for the success or 

failure of business operations under their management while performing the nonexempt 

work.” 6 29 C.F.R. § 541.106(a). Thus, even while stocking shelves or operating a 

 

5 For instance, Appellant testified that he maintained security while unloading 

freight. See App. 130-31a (“It was a way of the manager still having control of that 

situation in the back and still unloading the truck . . . .”).

6

Indeed, the regulations specifically cite retail managers as exempt executive 

employees who perform many nonexempt tasks. See 29 C.F.R. § 541.700(c) (retail 

managers “may have management as their primary duty even if the . . . managers spend 
9

register, Appellant remained responsible for supervising and directing his employees, 

among other things. See In re Family Dollar FLSA Litig., 637 F.3d 508, 515 (4th Cir. 

2011) (noting that even when performing nonmanagerial tasks, Store Manager was 

responsible for running the store).

 Appellant’s argument that management was not his primary duty because 

nonexempt ASMs performed the same managerial tasks as he did is also unavailing. 

Family Dollar’s policies demonstrate that the Store Manager had primary responsibility 

for management of the store and that the ASMs assisted him in that role. The fact that 

nonexempt ASMs assisted Appellant with many of his managerial duties does not render 

these duties nonmanagerial for the purposes of our primary duty analysis. See Baldwin v. 

Trailer Inns, Inc., 266 F.3d 1104, 1115 (9th Cir. 2001).

2. Relative Freedom from Direct Supervision

Appellant’s argument that the active supervision of a District Manager renders 

him nonexempt also fails. The record does not show that Appellant was micro-managed

by a District Manager; rather, the District Manager oversaw 19 Family Dollar stores and 

visited the Allentown Store roughly once or twice a week. See In re Family Dollar, 637 

F.3d at 517 (noting that Family Dollar Store Manager was relatively free from 

supervision where District Manager supervised 17 stores, “which would hardly permit 

him to micro-manage all 17”). Although Appellant often received instructions from the 

 

more than 50 percent of the time performing nonexempt work such as running the cash 

register”); 29 C.F.R. § 541.106(b) (“An exempt employee can also simultaneously direct 

the work of other employees and stock shelves.”).
10

District Manager and consulted with the District Manager regarding hiring and 

disciplinary decisions, Appellant retained discretion to manage the store. For the vast 

majority of the time, Appellant was the highest-ranking employee at the Allentown Store 

and managed it with little direct supervision. See Guthrie, 722 F.2d at 1146 (noting that 

section foremen were the persons on the property with the highest authority about half the 

time, supporting their classification as exempt employees); see also Murray v. Stuckey’s, 

Inc., 50 F.3d 564, 570 (8th Cir. 1995) (“[A]ctive supervision and periodic visits by a 

regional manager do not eliminate the day-to-day discretion of the onsite store 

manager.”). 

The existence of detailed corporate policies likewise does not render Appellant’s 

managerial work any less important. Courts have recognized that such corporate policies 

are commonplace, particularly in large retail chains, and do not render the managers 

subject to those policies nonexempt.

7

Appellant was subject to Family Dollar’s detailed corporate policies, but still 

exercised discretion in applying those policies. For example, though Appellant was 

bound by the pre-made Family Dollar staff scheduler, he testified that he was responsible 

for assigning a staff member to each shift and for adjusting the employee schedules to fit 

 

7 See, e.g., Murray, 50 F.3d at 570 (“[N]ationwide companies . . . establish 

standardized procedures and policies to guide individual store managers. This practice 

may circumscribe[,] but it does not eliminate[,] the discretion of the on-site manager of 

an isolated store . . . .”); In re Family Dollar, 637 F.3d at 517 (Store Manager subject to 

Family Dollar company policies was relatively free from supervision). 
11

his payroll budget. Further, the Family Dollar corporate policies themselves vested 

Appellant with discretion in hiring, evaluating, and disciplining personnel.

3. Appellant’s Salary Relative to Non-Exempt Employees’ Wages

Finally, the regulations call for an analysis of the relationship between Appellant’s 

salary and the wages paid to nonexempt employees. Ultimately, this factor favors Family 

Dollar because Appellant received significantly greater compensation than Family 

Dollar’s nonexempt employees in addition to his bonus of $904.75 that the nonexempt 

employees were ineligible to receive. 8 Appellant received $930 per week compared with 

the $400 per week received by the hourly ASMs (assuming a forty hour work-week). 

Even if the ASMs had worked as many hours as Appellant, they would only have 

received $752.50 per week (including overtime). Thus, even accounting for overtime 

compensation, Appellant still received roughly 24% more than the next highest paid 

Family Dollar employees (not including his bonus).9

Based on our de novo review, there are no genuine disputes of material fact. 

Appellant is an exempt employee under the PMWA as a matter of law. Appellant

 

8 Further, Store Manager bonuses are tied to the managerial task of controlling the 

store’s expenses. 

9 The parties dispute which formulation should be used to calculate and compare 

Appellant’s salary with that of nonexempt employees. Appellees argue that Appellant’s 

salary should be compared to the average hourly wage received by nonexempt 

employees, $8.21, and Appellant argues that his salary should be compared to the ASMs’ 

hourly wage of $10.00. Appellant also argues that his “effective” hourly rate is only 

$13.02. We note, however, that under any method of comparison, Appellant is better 

compensated than the nonexempt employees. 
12

performed managerial duties critical to the success of the Allentown Store with minimal 

direct supervision. The fact that he consistently performed nonexempt tasks the majority 

of the time does not alter our analysis.

III. Conclusion

For the foregoing reasons, we will affirm the order of the District Court.