## Facts

- Starbucks operated retail stores selling coffee and related products.
- Kevin Keevican and Michael Terrazas worked as Starbucks Store Managers and were paid weekly salaries (about $800 and $750, respectively), far exceeding the pay of other store employees.
- Both plaintiffs claimed they worked long hours (about 70 and 65 hours per week) and spent 70–80% of their time performing barista-level tasks (serving customers, making drinks, operating the register, cleaning, and maintaining equipment).
- Evidence also showed they were the highest-ranking employees at their stores, reporting to district managers, and had responsibility for store operations and results.
- Their duties included supervising and training staff, scheduling, managing inventory and costs, processing payroll, and developing sales and performance strategies.
- They supervised multiple employees (approximately 6 to 30) and had authority or meaningful input regarding hiring, firing, and discipline.
- Starbucks moved for partial summary judgment contending Keevican and Terrazas were exempt executive employees under the FLSA and therefore not entitled to overtime.

## Issues

1. Whether Keevican and Terrazas qualified as “bona fide executive” employees under the FLSA and applicable regulations.
2. Whether performing substantial nonexempt barista work created a triable issue that management was not their “primary duty,” defeating the executive exemption.

## Decision

- The court granted Starbucks’s corrected motion for partial summary judgment as to Keevican’s and Terrazas’s FLSA overtime claims.
- The court held both plaintiffs were exempt executive employees because their primary duty was management under the totality of the circumstances.
- The court rejected the argument that spending most work time on nonexempt tasks precluded the exemption.
- The ruling disposed of their claims for overtime compensation and related relief tied to that theory.

## Legal Principles

- Under the FLSA executive exemption, an employee may be exempt if the employee: (1) is paid on a qualifying salary basis; (2) has a primary duty of managing the enterprise or a recognized department; (3) customarily and regularly directs the work of at least two employees; and (4) has authority, or influential input given particular weight, regarding hiring, firing, or status changes.
- “Primary duty” is a fact-specific determination considering, among other factors: the importance of managerial duties, time spent on exempt work, freedom from supervision, and the salary relationship compared to nonexempt employees.
- Time spent on nonexempt work is not dispositive; management can be the primary duty even when the employee performs nonexempt tasks for more than half of working time.
- In retail settings, managers may perform frontline tasks alongside hourly employees while still primarily managing the store, especially where they remain accountable for operations, supervise staff, exercise discretion, and materially influence personnel decisions.
- Summary judgment is proper where the record shows no genuine dispute of material fact and the employer is entitled to judgment as a matter of law on exempt status.

## Conclusion

The court concluded that the store managers’ high relative salaries, on-site authority, supervision of multiple employees, discretion in daily operations, and meaningful influence over personnel decisions established management as their primary duty, making them executive-exempt and barring FLSA overtime recovery.


Mims v. Starbucks Corp., No. H-05-0791, 2007 WL 10369 (S.D. Tex. Jan. 2, 2007)