AO 2010-04: Determining composition of corporation's restricted class
Five managers working at Wawa Inc.’s (Wawa) corporate headquarters may be considered members of Wawa’s “executive or administrative personnel,” even though two of them directly supervise only hourly employees, and one of them directly supervises one hourly employee. The five managers are salaried managerial employees who have policymaking, managerial or supervisory responsibilities, such that they exercise discretion and independent judgment on matters of significance in the performance of their duties. Therefore, the fact that three of the managers supervise hourly employees does not preclude them from qualifying as “executive and administrative personnel.” Further, the hourly employees whom these three managers supervise are similar in many respects to salaried employees.
Background
Among the salaried managerial employees working at Wawa’s corporate headquarters are the Loss Prevention Manager, the Payroll Manager, the Retail Accounting Manager, the Retail Accounting Assistant Manager and the Inventory Accounting Manager. All five individuals are division or section managers who run the corporation’s business and manage Wawa units that have a permanent status and function within Wawa’s corporate hierarchy. However, the Retail Accounting Manager directly supervises five salaried employees and one hourly employee, and the Payroll Manager and the Retail Accounting Assistant Manager directly supervise only hourly employees. These hourly employees are fulltime “at will” employees who are eligible for Wawa benefits, and there is an expectation of their continued employment.
Wawa’s separate segregated fund (SSF) is the Wawa Political Action Committee. Wawa asked if the five managers qualify as “executive and administrative personnel” under the Federal Election Campaign Act (the Act) and Commission regulations.
Analysis
A corporation’s restricted class includes its executive and administrative personnel, the corporate stockholders and the families of each. 11 CFR 114.1(j). The corporation’s “executive and administrative personnel” are: (1) employees of the corporation, who (2) are paid on a salary rather than hourly basis and (3) who have policymaking, managerial, professional or supervisory responsibilities. 11 CFR 114.1(c). Employees considered “executive and administrative personnel” include the individuals who run the corporation’s business, such as officers, other executives and plant, division and section managers, and also include recognized professionals, such as lawyers and engineers, provided they are not represented by a labor organization. 11 CFR 114.1(c)(1) and (2). Salaried foremen and other salaried lower level supervisors having direct supervision over hourly employees are not considered “executive and administrative personnel” under 11 CFR 114.1(c)(2)(ii).
Questions of whether managers who supervise hourly employees meet the definition of “executive and administrative personnel” depend on whether the managers meet the three criteria of the definition in 11 CFR 114.1(c), summarized above. Because the managers are salaried employees of the corporation, the question turns on whether the managers have policymaking, managerial, professional or supervisory responsibilities under 11 CFR 114.1(c). The Fair Labor Standards Act (FLSA) and its regulations may serve as a guideline regarding whether individuals have such responsibilities.
In this case, the Commission determined that the five employees qualify as “executive and administrative personnel” because they are salaried employees who have policymaking, managerial or supervisory responsibilities. The Commission concluded that the employees perform duties typical of those performed by managers: they supervise and direct the work of other employees, including other managers and supervisors; they manage staffing, including recruiting, hiring and training employees; and they plan and control the dayto-day activities of their departments and sections. The Commission also found that, under FLSA regulations, the employees run the corporation’s business by working at corporate headquarters, and by managing departments or sections that affect Wawa’s general business operations. The employees also manage departments that are “customarily recognized” as typically managed by salaried executive employees. Therefore, the managers qualify as “executive and administrative personnel” under 11 CFR 114.1(c).
Next, the Commission considered whether the managers who supervise one or more hourly employees could be deemed salaried foremen or other lower level supervisors. Under the Act, “salaried foremen and other salaried lower level supervisors having direct supervision over hourly employees” are specifically excluded from the definition of “executive or administrative personnel.” 114.1(c)(2)(ii).
The Commission concluded that the Wawa managers did not become foremen or other lower level supervisors simply because they supervised hourly employees. In fact, the managers exercise discretion and independent judgment on significant Wawa business matters; carry out major assignments; provide expert advice to senior management; interpret or implement corporate policies or operating practices; and investigate and resolve matters of significance to Wawa business. In addition, the Commission noted that the hourly employees that the managers supervise are similar to salaried employees in that they are eligible for Wawa benefits and manage or supervise other employees themselves. Finally, the legislative history shows that, although Congress intended to exclude foremen and other lower level supervisors from the definition of “executive and administrative personnel,” it did not intend to exclude all supervisors who oversee hourly employees from the definition. Therefore, the fact that the Wawa managers supervise hourly employees does not negate their status as executive or administrative personnel.
AO 2010-04: Date issued: April 30, 2010; Length: 6 pages.