Stofer v. James Greene & Associates Inc

THE UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF ARKANSAS

CENTRAL DIVISION

ROBERT STOFER PLAINTIFF

v. Case No. 4:20-cv-00027-KGB

JAMES GREENE & ASSOCIATES, INC., and

JEFFREY BRANTLY DEFENDANTS

OPINION AND ORDER

Before the Court is defendants James Greene & Associates, Inc. (“JGA”) and Jeffrey

Brantly’s (jointly “defendants”) motion to dismiss for failure to state claim, or, in the alternative,

motion for summary judgment (Dkt. No. 6).1 The Court has reviewed all parties’ filings regarding

the pending motion (Dkt. Nos. 6-8, 12, 13, 16, 17, 20, 24, 37).

I. Statement of Facts

Unless otherwise stated, the facts are drawn from the defendants’ statement of fact, plaintiff

Robert Stofer’s response to defendants’ statement of fact, and defendants’ reply to plaintiff’s

response to defendants’ statement of undisputed material facts in support of motion for summary

judgment (Dkt. Nos. 7, 13, 17).

Mr. Stofer was hired to work for JGA as its Sales Manager on August 4, 2016 (Dkt. No. 7,

¶ 1). In this capacity, Mr. Stofer reported directly to Kurt Hetherington, JGA’s President (Id., ¶

2). According to JGA, Mr. Stofer in this position was responsible for supervising and managing

JGA’s Territory Managers—insurance sales agents who work on a full-time basis exclusively

within the Company’s Sales Division within their assigned territories (Id., ¶¶ 2-3). Mr. Stofer

1 On February 17, 2020, defendants filed a motion to dismiss for failure to state claim, or,

in the alternative, motion for summary judgment (Dkt. No. 6). On September 29, 2020, this Court

converted defendants’ motion to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6)

into a motion for summary judgment pursuant to Federal Rule of Civil Procedure 56 (Dkt. No. 23).

objects to JGA’s characterization of his duties as “supervising” or “managing” and instead admits

only that he was assigned “to support” Territory Managers (Dkt. No. 13, ¶¶ 2-3). Immediately

upon assuming the responsibilities of the Sales Manager position, Mr. Stofer—because he was

subject to a non-compete agreement through his former employment—was initially assigned to

support six Territory Managers who worked in areas beyond the geographic scope of his restrictive

covenants (Dkt. No. 7, ¶ 3). When those restrictions expired and beginning on June 1, 2018, Mr.

Stofer supported the remaining Territory Managers or up to 15 subordinate employees in total (Id.,

¶ 4). JGA maintains that Mr. Stofer supervised and managed these employees while Mr. Stofer

asserts that these employees were Mr. Hetherington’s subordinates, not his (Dkt. No. 13, ¶ 4).

According to JGA’s organizational chart, JGA’s Sales Division is a permanent and recognized

Department within JGA’s organizational structure (Dkt. No. 7, ¶ 5, Ex. 2). Mr. Stofer asserts that

JGA’s organizational chart reflects JGA’s communication structure, rather than management

structure (Dkt. No. 13, ¶ 5).

In exchange for his employment, Mr. Stofer was paid on a salary basis at an initial annual

rate of $55,000.00 (Id., ¶ 6). Mr. Stofer’s understanding is that $5,000.00 of the total compensation

was paid specifically for signing a non-compete and that the remaining $50,000.00 was paid for

employment (Dkt. No. 13, ¶ 6). Beginning with the July 1, 2018, pay period, Mr. Stofer’s salary

increased to $60,000.00 per year (Dkt. No. 7, ¶ 7). In addition, according to JGA, Mr. Stofer as a

member of JGA’s senior leadership was eligible to receive two additional bonuses: a $5,000.00

bonus every six months if the Sales Division satisfied its sales goals, and a year-end discretionary

management bonus for his supervision of JGA’s sales team (Id., ¶ 8). Mr. Stofer denies that the

bonuses were discretionary, that they were paid because Mr. Stofer was a member of “senior

leadership,” or that they were paid because of Mr. Stofer’s “supervision” of the sales team (Dkt.

No. 13, ¶ 8). Mr. Stofer asserts that the bonuses were paid as a matter of course based on certain

pre-established performance markers and are therefore non-discretionary (Id.).

JGA asserts that, as Sales Manager, Mr. Stofer’s primary function was to supervise the

Territory Managers to ensure that the JGA Sales Division met its sales objectives (Dkt. No. 7, ¶

9). Mr. Stofer denies this statement and asserts that he did not supervise or mange the sales team;

Mr. Stofer maintains his “primary function” was to collect, organize, and disseminate information

by collecting goals and directives from Mr. Hetherington to communicate to the Territory

Managers and collecting sales data and communications from the Territory Managers and relaying

that to Mr. Hetherington. (Dkt. No. 13, ¶ 9). JGA defines Mr. Stofer’s duties as including

motivating, developing, and coaching his team of Territory Managers; managing their day-to-day

activities; and helping them address problems and improve the strategies and processes through

which they made their sales (Dkt. No. 7, ¶ 10). In this respect, Mr. Stofer monitored the Territory

Managers’ performance and work activities (Id., ¶ 11). Mr. Stofer opposes use of the word

“managing” but acknowledges that his duties included “coaching” (Dkt. No. 13, ¶ 10). As a coach,

Mr. Stofer would encourage the Territory Managers to achieve their own personal goals; check in

routinely with them; visit them once a month; and work with them and provide feedback (Id.).

JGA maintains that Mr. Stofer also supervised and managed the Territory Managers by:

• Calling Territory Managers to review their active pipeline reports every other week,

• Training Territory Managers in the field,

• Auditing Territory Managers’ accounts,

• Holding quarterly sales meetings for Territory Managers to provide updated sales

information, discuss current issues, and to, among other things, present positive sales

strategies,

• Ensuring that Territory Managers complete insurance renewal applications in a timely

manner,

• Counseling territory managers by setting the rules of the game and by helping determine

those accounts that may not be a fit for JGA,

• Directing the Territory Managers, to whom Mr. Stofer referred as “Team Stofer,” to focus

on prospecting and quoting activities and to push them to write five quotes per month,

• Observing Territory Managers’ performance through the course of “ride-alongs,”

• Requiring Territory Managers to post details regarding their day-to-day activities, which—

as Mr. Stofer stated in his own words—was “a new exercise that he monitored,”

• Providing instruction to Territory Managers regarding the submission of expense

reimbursement requests, and

• Monitoring his employees’ progress to ensure that they stayed caught up and otherwise in

the course of day-to-day instruction.

(Dkt. No. 7, ¶ 13). Mr. Stofer denies ever performing any audits, denies determining which

accounts were not “a fit for JGA,” and argues that he performed many of these actions as clerical

tasks, not in a decision-making role (Dkt. No. 13, ¶ 13).

In addition to these duties, JGA states that Mr. Stofer was also responsible for counseling

employees and implementing corrective action measures where necessary (Dkt. No. 7, ¶ 14). Mr.

Stofer denies that he was permitted to discipline any Territory Managers or have any input

regarding discipline of Territory Managers (Dk. No. 13, ¶ 14). With respect to one Territory

Manager, Mr. Stofer implemented the following corrective action, an email to a JGA employee,

on September 27, 2018:

From 10/1/18 to 11/15/18 you should complete thirty-five prospect “touches” per week

(238 total touches) and enter each “touch” in EPIC in the prospect record as an activity

(making Mike Stofer the owner of the activity). As we discussed on Sept. 27, we need to

see significant improvement in your activity, proposals, and booked sales during this time

period.

/s/ Mike Stofer

Supervisor

(Dkt. Nos. 7, ¶ 15; 6-14 ). Mr. Stofer argues that, without any input from him, Mr. Hetherington

arranged a meeting involving Mr. Hetherington, Mr. Stofer, and the JGA employee that occurred

on September 27, 2018 (Dkt. No. 13, ¶ 15). Mr. Stofer states that Mr. Hetherington made all of

the decisions at that meeting and that Mr. Stofer was given instructions after the meeting to

“document the terms of the meeting” and to have the JGA employee sign a counseling report (Id.).

Mr. Stofer asserts that this employee was later terminated by Mr. Hetherington without consulting

Mr. Stofer (Id.).

Mr. Stofer was responsible for assessing the performance of the employees who worked

directly under his command, according to JGA (Dkt. No. 7, ¶ 16). Mr. Stofer admits that he

completed assessment forms by recording observations, but he denies that any employees were

under his “command” in that he contends that Mr. Hetherington had all control over Territory

Managers, their goals, compensation, and terms of employment (Dkt. No. 13, ¶ 16). Mr. Stofer

states that he considered the Territory Managers to be “included on [his] sales team, and as the

coach of th[e] team”; Mr. Stofer acknowledged that he was responsible for “build[ing] the

strongest and most productive team of territory managers at JG&A.” (Dkt. Nos. 7, ¶ 17; Ex. 6-16).

According to JGA, in order to build his team and to serve as an effective and self-proclaimed

“coach,” Mr. Stofer communicated that he would “establish clear and measurable objectives” and

“expect [Territory Managers’] best effort” (Dkt. Nos. 7, ¶ 18; Ex. 6-16). Mr. Stofer objects to the

phrase “build his team” and maintains that he did not do this nor did he set any objectives or goals

(Dkt. No. 13, ¶ 18).

On a day-to-day basis, according to JGA, Mr. Stofer’s supervision of the Territory

Managers ranged from providing advice and guidance regarding insurance renewal quotes to

providing direction with respect to prospecting campaigns for new business through his individual,

one-on-one observations of Territory Managers’ performance in the field (Dkt. No. 7, ¶ 19). Mr.

Stofer denies this and denies that he was permitted to give direction to sales agents without Mr.

Hetherington’s express permission (Dkt. No. 13, ¶ 19). JGA asserts that, in addition to his day-to-

day supervision, Mr. Stofer established individualized yearly sales goals for each Territory

Manager (Dkt. No. 7, ¶ 20). These individualized yearly sales goals directly affected the Territory

Managers’ compensation, and Mr. Stofer’s recommendations regarding their terms, conditions,

and privileges of employment—including with respect to compensation—was afforded particular

weight based on JGA’s representation to the Court (Id., ¶ 21). After discussing a Territory

Manager’s annual goals, the employee and Mr. Stofer would memorialize their understanding on

a spreadsheet initialed by each of them (Id., ¶ 22). Mr. Stofer argues that, although he

communicated with Territory Managers and signed goal sheets provided by JGA, “all goals were

set by Mr. Hetherington or Mr. Brantley” before that communication (Dkt. No. 13, ¶¶ 20-22).

JGA maintains that, as their Sales Manager, Territory Managers reported their problems,

challenges, and grievances directly to Mr. Stofer, who was responsible for helping them to develop

effective solutions and strategies to address those issues (Dkt. No. 7, ¶ 24). Although he admits

that sales agents would sometimes conference with him on simple matters, that his responses may

have helped the sales agents develop problem solving skills, and that he was intended to be the

first line of communication, Mr. Stofer denies that he had authority to solve all issues that sales

agents may run into and denies that he had authority to execute decisions that would affect the

Territory Managers’ schedule, pay, day-to-day activities, expenses, status within the JGA, or

anything else (Dkt. No. 13, ¶ 24). JGA states that Mr. Stofer was also responsible for overseeing

Territory Managers’ compliance with JGA’s policies and procedures, and in some cases, policies

and procedures that Mr. Stofer personally developed, implemented, and enforced (Dkt. No. 7, ¶

25). Mr. Stofer denies that he “developed any policies or procedures, that he successfully

implemented any policies or procedures, or that he had any authority to enforce any policies of

procedures” (Dkt. No. 13, ¶ 25). Likewise, if Territory Managers were unable to work due to

illness or personal concerns, or if they were going to be away from work on vacation, they were

required to notify Mr. Stofer (Dkt. No. 7, ¶ 26). Mr. Stofer denies that Territory Managers were

ever required to report their absences (Dkt. No. 13, ¶ 26).

When Territory Managers’ performance did not meet his expectations, Mr. Stofer was

responsible for addressing those issues according to JGA (Dkt. No. 7, ¶ 27). Mr. Stofer would

address these issues, including poor group performance, during quarterly sales teleconferences

(Id., ¶ 30). JGA contends that upper management became involved only on the rare occasion that

Mr. Stofer failed to address a problem adequately or otherwise if Mr. Stofer requested advice and

guidance from Mr. Hetherington (Id., ¶ 31). Mr. Stofer argues that he had no authority to discipline

Territory Managers and that Territory Managers were not required to follow any suggestions that

he made regarding how to improve performance; he claims that the communications were merely

reminders of the goals and the potential rewards and consequences for meeting or not meeting

those goals, given that he claims he had no authority to discipline, offer incentives, or implement

consequences (Dkt. No. 13, ¶¶ 27, 30-31).

Mr. Stofer also conducted research and long-term strategic planning to further grow the

Sales Division, according to JGA (Dkt. No. 7, ¶ 32). On his own initiative, Mr. Stofer developed

a survey for his Territory Managers’ completion so that he could research, analyze, and identify

opportunities to improve JGA’s sales (Id., ¶ 33). After completing that survey and synthesizing

its results, Mr. Stofer then created a presentation to summarize his research (Id., ¶ 34). The

PowerPoint includes responses from 13 Territory Managers, all of whom Mr. Stofer directly and

exclusively supervised (Id., ¶ 35). The PowerPoint document identification page demonstrates

that the “author” of the presentation is “RMS,” which are Mr. Stofer’s initials (Id., ¶ 36). In

response, Mr. Stofer argues that these assertions do not establish independence, discretion, or

control by Mr. Stofer (Dkt. No. 13, ¶ 32).

As Sales Manager, Mr. Stofer was instrumental in developing JGA’s new online sales

processing system known as “Epic Opportunities” and was “the driving force” behind JGA’s

implementation of the system (Dkt. No. 7, ¶¶ 37, 39). Specifically, after attending a related

training conference, Mr. Stofer used his own discretion and expertise to create and implement

JGA-specific policies and procedures as a guide for the Territory Managers’ use (Id., ¶ 38). Mr.

Stofer argues that he “merely summarized the training and [] was not permitted to create or

implement any policies” (Dkt.No. 13, ¶¶ 37-39).

Mr. Stofer acknowledges that he was paid on a salary basis and that his “duties included

coaching and training territory managers” (Dkt. Nos. 7, ¶ 42; 13, ¶ 42).

Only JGA’s CEO, Jeffrey Brantly, has the final authority to hire and fire employees (Id., ¶

43). No JGA manager can hire or fire without the CEO’s involvement, according to JGA (Dkt.

No. 7, ¶ 44). JGA represents that Mr. Stofer’s recommendations regarding personnel matters were

afforded considerable weight and that Mr. Stofer was expected to make suggestions regarding

hiring and firing, as well as to make recommendations regarding sales goals and related

compensation-based decisions (Id., ¶ 45). Mr. Stofer participated in interviews for Territory

Managers and provided his recommendations with respect to hiring decisions (Id., ¶ 46). JGA

represents that these recommendations were relied upon extensively by JGA, and JGA’s President

could not recall any instance in which Mr. Stofer recommended that JGA hire an individual who

was not ultimately extended an offer of employment (Id., ¶ 47). Mr. Stofer denies these assertions

and states that he was only “invited to talk” with a prospective Territory Manager once and that he

was never asked to give any opinions on hiring decisions (Dkt. No. 13, ¶¶ 45-47).

Mr. Stofer’s business card, which he approved and distributed, identified him as “Sales

Manager” (Dkt. Nos. 7, ¶ 49; 13, ¶ 49). Each of Mr. Stofer’s pay stubs, generated by JGA’s payroll

system, described Mr. Stofer’s compensation as “Management Salary,” and he received multiple

bonuses designated exclusively for JGA’s management staff (Id., ¶ 50). JGA paid extensively for

Mr. Stofer’s travel-related expenses—typically incurred on a corporate credit card entrusted to Mr.

Stofer—to coach employees, to conduct sales and new hire training with his employees, and

otherwise to supervise Territory Managers’ work and performance through ride-alongs and one-

on-one in-person visits; Mr. Stofer does not deny these factual allegations but disputes their

connotation (Id., ¶ 51). Only JGA managers are entrusted with corporate credit cards; Mr. Stofer

does not deny this factual allegation but disputes its connotation (Id., ¶ 52).

After his employment was terminated on October 24, 2019, Mr. Stofer represented to the

Arkansas Department of Workforce Services on November 4, 2019, that his previous job duties at

JGA had been “[c]onsulting and coaching territory managers in six states, reporting to President”

(Id., ¶ 53).

II. Analysis

A. Legal Standard For Summary Judgment

Pursuant to the Federal Rules of Civil Procedure, the Court may grant summary judgment

“if the movant shows that there is no genuine dispute as to any material fact and the movant is

entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A dispute is genuine if a reasonable

jury could render its verdict for the non-moving party. See Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 248 (1986). “The mere existence of a factual dispute is insufficient alone to bar summary

judgment; rather, the dispute must be outcome determinative under prevailing law.” Holloway v.

Pigman, 884 F.2d 365, 366 (8th Cir. 1989). Mere denials or allegations are insufficient to defeat

an otherwise properly supported motion for summary judgment. See Commercial Union Ins. Co.

v. Schmidt, 967 F.2d 270, 271-72 (8th Cir. 1992); Miner v. Local 373, 513 F.3d 854, 860 (8th Cir.

2008).

First, the burden is on the party seeking summary judgment to demonstrate an absence of

a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Farver v.

McCarthy, 931 F.3d 808, 811 (8th Cir. 2019). If the moving party satisfies its burden, the burden

then shifts to the non-moving party to establish the presence of a genuine issue that must be

determined at trial. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587

(1986); Prudential Ins. Co. v. Hinkel, 121 F.3d 364, 366 (8th Cir. 1997). The non-movant “‘must

do more than simply show that there is some metaphysical doubt as to the material facts,’ and must

come forward with ‘specific facts showing that there is a genuine issue for trial.’” Torgerson v.

City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc) (quoting Matsushita, 475 U.S. at

586, 587). “The evidence of the non-movant is to be believed, and all justifiable inferences are to

be drawn in his favor.” Anderson, 477 U.S. at 255. “[I]n an FLSA exemption case such as this,

the employer . . . has the burden of proving the employee fits within one of the FLSA exemptions.

Grage v. N. States Power Co.-Minnesota, 813 F.3d 1051, 1054 (8th Cir. 2015) (citing Fife v.

Harmon, 171 F.3d 1173, 1174 (8th Cir.1999)). “[W]hether [employees’] particular activities

excluded them from the overtime benefits of the FLSA is a question of law.” Grage, 813 F.3d at

1054 (citing Spinden v. GS Roofing Prods. Co., 94 F.3d 421, 426 (8th Cir.1996)).

B. Legal Standard For FLSA Claims

In his complaint, Mr. Stofer argues that JGA incorrectly classified him as exempt from the

overtime requirements of the Fair Labor Standards Act (“FLSA”) and the Arkansas Minimum

Wage Act (“AMWA”) and did not pay him an overtime premium for the hours he worked in excess

of 40 hours in a week (Dkt. No. 1, ¶ 28).

“The FLSA requires employers to pay overtime of at least one and one-half times the

regular pay rate for employees who work over forty hours in one workweek.” Grage, 813 F.3d at

1054 (citing 29 U.S.C. § 207(a)(2)). Some employees are exempt from the FLSA’s overtime

requirements. Id. § 213(a)(1). Such exempt employees include “any employee employed in a

bona fide executive, administrative, or professional capacity. . . .” 29 U.S.C. § 213(a)(1).

“The FLSA and the AMWA impose similar minimum wage and overtime requirements on

employers and, in cases involving claims brought under both acts, the courts have concluded that

their parallel provisions should be interpreted in the same manner.” Cummings v. Bost, Inc., 218

F. Supp. 3d 978, 985 (W.D. Ark. 2016) (quoting Carter v. Primary Home Care of Hot Springs,

Inc., Case No. 6:14-cv-6092, 2015 WL 11120563, at *2 (W.D. Ark. May 14, 2015)).

“[W]hether an employee is exempt under the FLSA is an issue of law.” Jarrett v. ERC

Props., Inc., 211 F.3d 1078, 1081 (8th Cir. 2000) (citing Icicle Seafoods, Inc. v. Worthington, 475

U.S. 709, 714 (1986)). The Eighth Circuit has held that “[c]ourts should broadly interpret and

apply the FLSA to effectuate its goals because it is remedial and humanitarian in purpose.” Specht

v. City of Sioux Falls, 639 F.3d 814, 819 (8th Cir.2011) (internal quotation omitted). To promote

this goal, the Department of Labor (“DOL”) has provided regulations that include factors to guide

the Court in determining whether an employee qualifies for an exemption. See Fife v. Bosley, 100

F.3d 87, 89 (8th Cir.1996) (citing 29 C.F.R. pt. 541).

With regard to the “executive exemption,” these regulations state:

(a) The term “employee employed in a bona fide executive capacity” in section

13(a)(1) of the Act shall mean any employee:

(1) Compensated on a salary basis pursuant to § 541.600 at a rate of not less

than $684 per week . . . exclusive of board, lodging or other facilities;

(2) Whose primary duty is management of the enterprise in which the

employee is employed or of a customarily recognized department or

subdivision thereof;

(3) Who customarily and regularly directs the work of two or more other

employees; and

(4) Who has the authority to hire or fire other employees or whose

suggestions and recommendations as to the hiring, firing, advancement,

promotion or any other change of status of other employees are given

particular weight.

29 C.F.R. § 541.100. 2

The U.S. Department of Labor’s regulations define the term “management” to include:

activities such as interviewing, selecting, and training of employees; setting and

adjusting their rates of pay and hours of work; directing the work of employees;

maintaining production or sales records for use in supervision or control; appraising

employees’ productivity and efficiency for the purpose of recommending

promotions or other changes in status; handling employee complaints and

grievances; disciplining employees; planning the work; determining the techniques

to be used; apportioning the work among the employees; determining the type of

materials, supplies, machinery, equipment or tools to be used or merchandise to be

bought, stocked and sold; controlling the flow and distribution of materials or

merchandise and supplies; providing for the safety and security of the employees

or the property; planning and controlling the budget; and monitoring or

implementing legal compliance measures.

29 C.F.R. § 541.102. “The phrase ‘two or more other employees’ means two full-time employees

or their equivalent.” 29 C.F.R. § 541.104(a). “The phrase ‘customarily and regularly’ means a

frequency that must be greater than occasional but which, of course, may be less than constant.

2 The minimum salary basis required to qualify for the executive and administrative

exemptions rose from $455.00 to $684.00 per week on January 1, 2020. 29 C.F.R. §§ 541.100,

541.200. The change does not affect this lawsuit, as Mr. Stofer’s salary exceeded both the pre-

2020 and post-2020 limits throughout his employment at JGA.

Tasks or work performed ‘customarily and regularly’ includes work normally and recurrently

performed every workweek; it does not include isolated or one-time tasks.” 29 C.F.R. § 541.701.

Factors to consider when determining whether an employee’s suggestions and

recommendations are given “particular weight,” “include, but are not limited to, whether it is part

of the employee’s job duties to make such suggestions and recommendations; the frequency with

which such suggestions and recommendations are made or requested; and the frequency with

which the employee’s suggestions and recommendations are relied upon.” 29 C.F.R. § 541.105.

With regard to the “administrative exemption,” these regulations state:

(a) The term “employee employed in a bona fide administrative capacity” in

section 13(a)(1) of the Act shall mean any employee:

(1) Compensated on a salary or fee basis pursuant to § 541.600 at a rate of

not less than $684 per week . . . exclusive of board, lodging or other

facilities;

(2) Whose primary duty is the performance of office or non-manual work

directly related to the management or general business operations of the

employer or the employer’s customers; and

(3) Whose primary duty includes the exercise of discretion and independent

judgment with respect to matters of significance.

29 C.F.R. § 541.200.

“The term ‘primary duty’ means the principal, main, major or most important duty that

the employee performs. Determination of an employee’s primary duty must be based on all the

facts in a particular case, with the major emphasis on the character of the employee’s job as a

whole.” 29 C.F.R. § 541.700. With regard to discretion and independence under the

administrative exemption:

The exercise of discretion and independent judgment implies that the employee has

authority to make an independent choice, free from immediate direction or

supervision. However, employees can exercise discretion and independent

judgment even if their decisions or recommendations are reviewed at a higher level.

Thus, the term “discretion and independent judgment” does not require that the

decisions made by an employee have a finality that goes with unlimited authority

and a complete absence of review.

29 C.F.R. § 541.202

“The employer has the burden to prove that its employee is an executive and therefore

exempt from the FLSA’s overtime pay requirements.” Madden v. Lumber One Home Ctr., Inc.,

745 F.3d 899, 903 (8th Cir. 2014) (citing Fife v. Harmon, 171 F.3d 1173, 1174 (8th Cir.1999)).

However, the Supreme Court has rejected the principle that the FLSA’s exemptions should be

construed narrowly and instead determined that they are to be given a “fair reading.” Encino

Motorcars, LLC v. Navarro, 138 S. Ct. 1134, 1142 (2018).

Mr. Stofer brings claims under both the FLSA and the AMWA (Dkt. No. 1, at 1).

Defendants move for summary judgment on all claims, FLSA and AMWA (Dkt. No. 6, ¶ 1). In

their briefing, the parties do not argue to the Court any differences in interpreting these laws or

their exemptions. Generally, “[t]he FLSA and the AMWA impose similar minimum wage

and overtime requirements on employers and, in cases involving claims brought under both acts,

the courts have concluded that their parallel provisions should be interpreted in the same manner.”

Cummings v. Bost, Inc., 218 F. Supp. 3d 978, 985 (W.D. Ark. 2016) (quoting Carter v. Primary

Home Care of Hot Springs, Inc., Case No. 6:14-cv-6092, 2015 WL 11120563, at *2 (W.D. Ark.

May 14, 2015)).3

3 The Court notes that the AMWA states that its overtime requirements “shall not apply to

any employee exempt from the overtime requirements of the federal [FLSA] pursuant to the

provisions of 29 U.S.C. § 213(b)(1)-(24) and (b)(28)-(30), as they existed on March 1, 2006.” Ark.

Code Ann. § 11-4-211(d). Furthermore, the Arkansas Department of Labor “may rely on the

interpretations of the U.S. Department of Labor and federal precedent established under the

[FLSA] in interpreting and applying the provisions of the Act and Rule 010.14-100 through -113,

except to the extent a different interpretation is clearly required.” Ark. Admin. Code § 010-14.1-

112.

C. Analysis Of FLSA “Executive” Exemption

It is undisputed that Mr. Stofer was paid on a salary basis and received above the minimum

salary of $455.004 per week, thereby meeting the first requirement of the executive exemption. 29

C.F.R. § 541.100. Further, at all times during his employment at JGA, Mr. Stofer directed two or

more employees (Dkt. Nos. 7, ¶¶ 3-4; 6-8). Therefore, the Court considers if there is a genuine

dispute that remains for trial regarding whether Mr. Stofer’s “primary duty” was management as

would qualify him under the executive exemption and whether his suggestions or

recommendations regarding personnel decisions were given “particular weight.”

Mr. Stofer argues that he did not exercise independent judgment in carrying out his duties

and that his role primarily involved acting as the communication link between Mr. Hetherington

and the Territory Managers, tracking sales agent activity, collecting and reporting data at the

direction of Mr. Hetherington, and coaching Territory Managers in order to assist and encourage

them to be more productive (Dkt. Nos. 1, ¶ 26; 12, at 4). Mr. Stofer characterized his role as

“collect[ing], organiz[ing], and disseminat[ing] information.” (Dkt. No. 13, ¶ 9).

However, JGA points to Mr. Stofer’s role in supervising the Territory Managers. Based

upon undisputed record evidence, Mr. Stofer was over “JGA’s Sales Division, which is a

recognized department and subdivision of JGA’s enterprise.” (Dkt. No. 6-1, ¶¶ 12-14). Mr. Stofer

would encourage the Territory Managers to achieve their individual sales goals, check in routinely

with them, visit them monthly, and provide feedback (Dkt. No. 13, ¶ 10). When Territory

Managers entered their information in JGA’s reporting system, Mr. Stofer would review that

4 During Mr. Stofer’s employment at JGA, the minimum salary for the executive and

administrative exemptions was $455.00 per week. See 29 C.F.R. § 541.100. As of January 1,

2020, the limit rose to $684.00 per week. This change does not affect this suit, as Mr. Stofer’s

salary was always greater than either requirement.

information and follow up if the information was not timely entered (Dkt. No. 6-5, ¶ 11). Eric

Townsend, a Territory Manager at JGA, stated that he would go to Mr. Stofer for advice and

guidance in regard to sales and that, when Mr. Townsend wanted to change his territory, he went

to Mr. Stofer with that request (Dkt. No. 6-5, ¶¶ 12-3). Further, Mr. Stofer engaged in “drive

alongs” with JGA’s Territory Managers to observe them in the field and to provide feedback and

guidance. See Declaration of Eric Townsend (Dkt. No. 6-5); Declaration of Travis Weaver (Dkt.

No. 6-6). Mr. Stofer also “admits that he authored the training aid for the Epic software that JGA

wished to implement for the sales agents.” (Dkt. No. 13, ¶ 25).

While Mr. Stofer denies that his primary duty involved the management of the Territory

Managers, “mere denials” are insufficient. Commercial Union Ins. Co. v. Schmidt, 967 F.2d at

271-72. Mr. Stofer does not deny performing many of the actions attributed to him by JGA, but

he argues that he performed those actions in a “clerical role.” However, the undisputed record

evidence before the Court, even construing all reasonable inferences in favor of Mr. Stofer,

demonstrates that Mr. Stofer’s primary duty was in fact management. Mr. Stofer was involved in

establishing Territory Manager’s annual goals, which impacted their compensation. He was

involved in maintaining and monitoring sales records for use in supervision of employees through

the Epic system. He answered Territory Manager’s questions and provide feedback and guidance

on their insurance sales. He monitored Territory Manager’s sales and intervened when employees

were falling short. He prepared training materials and ensured compliance. Each of these actions

bring him squarely under the DOL’s definition of “management” and demonstrate that his role

was more than one of “collecting and disseminating information.” The fact the Mr. Stofer was not

the ultimate authority at JGA does not negate that his primary duty was management of those

Territory Managers under his supervision. Therefore, the Court finds that, on the undisputed

record evidence before the Court even construing all reasonable inferences in favor of Mr. Stofer,

JGA has met its burden of demonstrating the “primary duty” prong of the executive exemption.

Regarding the final element necessary for the executive exemption to apply, that the

employee be given “particular weight” in hiring/firing decisions, “more than informal input,

solicited from all employees, is needed to prove applicability of the executive exemption.”

Madden v. Lumber One Home Ctr., Inc., 745 F.3d 899, 904 (8th Cir. 2014). In Madden, the court

held that in order to determine if an employee satisfies the hiring/firing component of the executive

exemption, the court must look to an employee’s “actual job functions, not intended

responsibilities.” 745 F.3d at 906 (citing 5 C.F.R. § 551 .202(e) (noting that FLSA exemptions

are based on “duties actually performed by the employee”)). However, the employee need not be

the final decisionmaker. See 29 C.F.R. § 541.105 (“An employee’s suggestions and

recommendations may still be deemed to have ‘particular weight’ even if a higher level manager’s

recommendation has more importance and even if the employee does not have authority to make

the ultimate decision as to the employee’s change in status.”).

It is undisputed that Mr. Stofer lacked the authority to hire and fire other JGA employees

(Dkt. No. 8, at 14). Only JGA’s Chief Executive Officer, Jeffrey Brantly, had the final authority

to hire and fire employees (Dkt. No. 6-1, ¶ 56). JGA asserts that Mr. Stofer’s “recommendations

regarding personnel matters were afforded considerable weight” and that Mr. Stofer “was expected

to make suggestions regarding hiring and firing, as well as his recommendations regarding sales

goals and related compensation based decisions.” (Dkt. Nos. 6, ¶¶ 56-57; 7, ¶ 45). “JGA’s

President could not recall any instance in which [Mr. Stofer] recommended that JGA hire an

individual who was not ultimately extended an offer of employment.” (Dkt. No. 13, ¶ 47). While

Mr. Stofer argues that he was only “invited to ‘talk with’ a prospective Territory Manager once,”

JGA states that “there was not a substantial amount of turnover within his Department” during his

time at JGA (Dkt. No. 13, ¶¶ 45-6). Mr. Stofer also argues that he was never asked to “make any

opinions on hiring decisions” and that his “suggestions regarding hiring, termination, or

compensation-based decisions were turn down 100% of the time.” (Dkt. No. 13, ¶ 45). Further,

he states that none of the individuals he recommended to Mr. Hetherington were either interviewed

or seriously considered (Dkt. No. 13, ¶ 47).

Despite Mr. Stofer’s arguments to the contrary, he has not presented record evidence to

contradict the claim that JGA did place “particular weight” on his suggestions. Final hiring and

firing authority rested with JGA’s President, according to record evidence, and a refusal to

interview or hire an individual does not necessarily imply that Mr. Stofer’s suggestions were not

duly considered. Rather, Mr. Stofer’s involvement in JGA’s personnel decisions, including his

presence in at least one hiring discussion, suggests that JGA has met its burden on the undisputed

record evidence before the Court of satisfying the fourth element of the executive exemption to

the FLSA.

Therefore, the Court concludes that Mr. Stofer was properly classified as exempt from the

FLSA and AMWA’s overtime requirements as an executive employee.

D. Analysis Of FLSA “Administrative” Exemption

The same salary requirements apply to the administrative exemption as to the executive

exemption. 29 C.F.R. § 541.200(a)(1). Therefore, Mr. Stofer also meets the first prong of the

administrative exemption to the FLSA.

Much of the same work that brings Mr. Stofer under the executive exemption to the FLSA

also relates to the JGA’s “management or general business operations.” 29 C.F.R. § 541.200(a)(2);

Auer v. Robbins, 65 F.3d 702, 720 (8th Cir. 1995), aff’d, 519 U.S. 452 (1997) (“The principles

utilized in determining whether an employee’s primary duty is management also apply to

determine whether an employee’s primary duty is administration, albeit focused on administrative

rather than managerial duties.”). Mr. Stofer was not responsible for making insurance sales.

Rather, he provided administrative support for the Territory Managers that made those sales by

monitoring their sales records and working with the Territory Managers to develop sales strategies.

In other words, Mr. Stofer “engage[d] in work that [was] ‘ancillary to [his] employer’s principal

production activity,’” which functions the courts have determined to be administrative work.

Grage, 813 F.3d at 1056.

Similar to those officers in Auer who provided “a ‘first line response’” for those

subordinate officers whose job performance may be struggling, there is undisputed record evidence

that Mr. Stofer served as the first line of communication and advice for the Territory Managers in

the field. Auer, 65 F.3d at 720. Mr. Stofer’s role was also similar to those quality control officers

whose job it was to ensure that “personnel are functioning in a manner consistent with department

policies.” Id., at 721. Based on the undisputed record evidence before the Court, construing all

reasonable inferences in favor of Mr. Stofer, Mr. Stofer’s primary duty was administration, as

understood in the FLSA exemption.

As to whether Mr. Stofer’s “primary duty” included the “exercise of discretion and

independent judgment with respect to matters of significance,” Mr. Stofer argues that his actions

“were explicitly dictated by Mr. Hetherington.” (Dkt. No. 12, at 36-7). However, the DOL has

explicitly stated that “the term ‘discretion and independent judgment’ does not require that the

decisions made by an employee have a finality that goes with unlimited authority and a complete

absence of review.” 29 C.F.R. § 541.202. Through developing training and protocols, and through

his one-on-one management of the Territory Managers, specifically during their ride-alongs, Mr

Stofer was able to exercise discretion and judgment in the ways that sales were made at JGA. The

fact the Mr. Hetherington or Mr. Brantley were involved in reviewing his decisions or had the final

say over outcomes, does not strip Mr. Stofer of his independent judgment.

The Court is not persuaded by Mr. Stofer’s reference to Beauford v. ActionLink, LLC, 781

F.3d 396 (8th Cir. 2015). Unlike the “Brand Managers” in Beauford, Mr. Stofer was not “simply

follow[ing] set scripts and well-established techniques, procedures or specific standards described

in manuals or other sources.” 781 F.3d at 404 (quotations omitted). The undisputed record

evidence before the Court indicates that Mr. Stofer exercised his discretion and independent

judgment by developing training materials and protocols and by surveying the Territory Managers

under his supervision in order to determine ways to increase sales.

Accordingly, and in the alternative, the Court concludes that Mr. Stofer falls under the

administrative exemption to the FLSA and AMWA’s overtime requirements.

Ii. Conclusion

For these reasons, the Court grants summary judgment in favor of JGA and determines on

the undisputed record evidence before the Court the Mr. Stofer was correctly classified as exempt

during his employment at JGA, under either the executive or administrative exemptions to the

FLSA and the AMWA. 29 U.S.C. § 201, et seg. (“FLSA”); Ark. Code Ann. § 11-4-201, et seq.

The Court accordingly dismisses with prejudice Mr. Stofer’s complaint. His requests for relief as

to JGA and Mr. Brantly are denied.

It is so ordered this 25th day of March, 2021.

Kush A Palin

Kristine G. Baker

United States District Judge

20