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Restaurant Waives Overtime Defense Under FLSA

By: Kara M. Maciel and Forrest G. Read, IV

The U.S. Court of Appeals for the Eleventh Circuit’s recent decision in Diaz v. Jaguar Rest. Group, LLC underscores the importance for hospitality employers to know which job duties their employees are performing in order to assert every potentially applicable affirmative defense when answering an employee’s FLSA lawsuit for non-payment of overtime. In Diaz, the Eleventh Circuit reversed the trial court’s decision that a restaurant, which failed to raise the administrative exemption to the overtime requirement at any point until shortly before trial, was permitted to amend its Answer and include that defense at the close of its case at trial.

The jury determined that Diaz, a formerly employed bookkeeper, “was an administrative employee” who “performed numerous administrative tasks in addition to her bookkeeping duties.” Diaz “managed the cash register, distributed tips, opened bank accounts, maintained menus, processed new employees into the system, ran errands, managed liquor orders, and occasionally opened the restaurant.” However, the Eleventh Circuit concluded that those facts could not help the restaurant in the absence of its earlier assertion of the administrative exemption.

Hospitality employers should carefully track which duties their employees are performing. Armed with that knowledge, they can better assess whether a bookkeeper, a bartender, a bellhop, or any other employee who may “wear different hats” can be deemed to have performed duties involving the management of some part or function of the hotel’s operations. They should also remember that the administrative exemption is subject to a fact-intensive inquiry into job duties and not applicable based merely on job title. Even if at first blush an employee’s job title may not seem administrative, it is wise to assert the administrative exemption when answering an overtime complaint under the FLSA if the job duties actually performed can be construed as managerial or involving discretion. Otherwise, the hotel may be left wondering “what might have been?”