Opinion ID: 422029
Heading Depth: 1
Heading Rank: 3

Heading: Managerial Employees

Text: 44 Finally, we review the Secretary's contention that appellants are also liable under the FLSA for failure to pay minimum wages to eight managerial employees. Section 13(a)(1) of the FLSA, 29 U.S.C. § 213(a)(1), exempts from coverage any employee engaged in a bona fide executive, administrative, or professional capacity. The parties stipulated that eight named managerial employees were exempt under the provision except to the extent, if any, that their failure to be paid subsequent to January 10, 1981 may have affected their exempt status.In arguing that employees' exempt status terminated through nonpayment the Secretary relies on 29 C.F.R. 541.1(f), which requires that in order to be exempt as an executive an employee must, inter alia, be compensated for his services on a salary basis at a rate not less than $155 per week. The Secretary cites no precedent, however, for applying that regulation to protect under the FLSA previously exempt employees whose contractual salaries are not paid. 45 The Secretary's reliance on Tripp v. May, 189 F.2d 198 (7th Cir.1951), is misplaced. The court there held that an employee who performed work of the type specified in the regulations and who received at least the required minimum salary or considerably more in most pay periods was nevertheless not exempt because his salary was less than the required minimum during two pay periods and because his contract did not guarantee him the required salary for all his work assignments. Id. at 201-02. But there is no question that the employees here were guaranteed by contract a rate [of salary] not less than $155 per week. That contractual obligation was simply not met during the final two to three weeks of the company's operation. 46 The FLSA was enacted by Congress to remedy labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well being of workers, 29 U.S.C. § 202, by eliminating low wages and long hours. Rutherford Food Corp. v. McComb, supra, 331 U.S. at 727, 67 S.Ct. at 1475. We find no basis for holding that Congress intended to extend the minimum wage protections of the Act to highly salaried employees whenever their employment contracts are breached. 47 We retain jurisdiction and remand to the district court for the limited purpose of making findings of fact as to enterprise coverage in accordance with the opinion filed this day.