Pharmacy Manager Entitled to Overtime Pay

A pharmacy manager was entitled to overtime pay because the pharmacy did not show that the pharmacist spent more than 50 percent of his time engaged in managerial tasks; therefore, it failed to meet its burden of proving that the executive exemption to California's wage and hour law applied, the California Court of Appeal ruled.

The court affirmed an award to the pharmacist of $79,341 in damages based on unpaid overtime wages and the applicable interest. 

The plaintiff was employed as a "pharmacist-in-charge" of Komoto Pharmacy from 2002 until his termination on Nov. 6, 2012. The pharmacy viewed the pharmacist-in-charge as a manager.

[SHRM members-only toolkit: Complying with California Overtime Payment Law]

The plaintiff performed duties that were managerial in nature. He also performed many of the same tasks as the staff pharmacists, such as filling prescriptions, checking prescriptions filled by pharmacy technicians, answering telephones, talking to doctors and patients, ordering drugs, putting away orders, greeting customers, taking out trash and vacuuming the floor.

The job description of the pharmacist-in-charge position spelled out assigned tasks that included but were not limited to:

• Responsibility for the day-to-day operations of the pharmacy.
  
• Ensuring the staff was providing safe and efficient pharmaceutical services to customers.
  
• Maintaining pharmacy practice standards as required by state and federal laws.
  
• Hiring and developing staff.
  

There was no specific mention of the pharmacist-in-charge checking and filling prescriptions or performing other routine tasks.

The pharmacy treated staff pharmacists as hourly employees and paid them overtime wages. The plaintiff did not receive overtime pay, and following his firing, he sued the pharmacy for unpaid overtime. The trial judge found in the plaintiff's favor, and the pharmacy appealed.

The appellate court affirmed the award of damages.

Executive Exemption

California's Wage Order No. 7, which applies to pharmacists, generally requires employers to pay overtime compensation to employees but exempts from this requirement "persons employed in administrative, executive, or professional capacities."

It is up to an employer claiming that an employee is exempt from overtime pay to prove that one of the exemptions applies.

Pharmacists are statutorily excluded from the professional exemption, and the pharmacy raised no issue regarding the administrative exemption. It did, however, claim that the plaintiff was an executive employee and so was not entitled to overtime pay.

Under California law, a person employed in an executive capacity means any employee:

• Whose duties and responsibilities involve managing the business in which he or she is employed.
  
• Who regularly directs the work of two or more other employees.
  
• Who has the authority to hire or fire other employees.
  
• Who customarily exercises discretion and independent judgment.
  
• Who is primarily engaged in duties that meet the test of the exemption.
  

"Primarily engaged" means that the employee spends more than half of his or her work time on executive duties, the court noted.

In this case, the trial court expressly held that the pharmacy failed to meet its burden of proving that the plaintiff spent more than 50 percent of his time engaged in exempt activity, and the appellate court agreed.

Despite presenting evidence that the plaintiff did perform exempt tasks, the pharmacy presented little evidence to quantify the amount of time he spent on such tasks, the appeals court said. There was no evidence of how much time he spent on the managerial duties outlined in his job description or on the more routine tasks he performed. In addition, multiple witnesses testified that the plaintiff spent substantial time performing nonexempt tasks, including filling prescriptions, answering telephones and attending to routine customer service.

The pharmacy tried to rely on the plaintiff's job title and job description, but in the face of the witness testimony as to how the plaintiff actually spent his time, a job title and description were insufficient to satisfy the pharmacy's burden of proving that he in fact spent more than half of his time on exempt activities, the appeals court concluded.

Davis v. Komoto Pharmacy Inc., Calif. Ct. App., No. F073753/F074361 (Aug. 1, 2018).

Professional Pointer: This is a case in which accurate record-keeping would have immensely helped the pharmacy prove its argument that the plaintiff was an exempt employee. The pharmacy had no records documenting how he actually spent his time.

Joanne Deschenaux, J.D. is a freelance writer in Annapolis, Md.