In the case of Madden v. Lumber One Home Ctr., Inc., three former salaried employees of a lumberyard in Mayflower, Arkansas, filed a lawsuit alleging misclassification under the Fair Labor Standards Act (FLSA). Although the company had classified the plaintiffs as exempt executive employees, the plaintiffs argued that their actual job duties did not meet the legal criteria for exemption—particularly the requirement that they have real authority over hiring and firing decisions.
At trial, the jury ruled in favor of the employer. However, the district court set aside the jury’s verdict for two of the plaintiffs, concluding that the evidence showed they were misclassified and entitled to overtime compensation. The district court awarded back pay and attorneys’ fees. The company appealed the decision, but the Eighth Circuit Court of Appeals affirmed the lower court’s ruling in 2014, stating that Lumber One failed to meet its burden of proving that the employees qualified for the executive exemption.
Key lessons from this case:
- Employers must demonstrate that exempt employees meet all criteria under the FLSA, including meaningful authority over personnel decisions.
- A job title alone does not determine exemption status; actual job duties and workplace authority are what matter.
- When misclassification occurs, courts may overturn jury verdicts and award damages if the legal exemption standards are not met.
If you want to know more about salaried employee rights, read our guide on What are my rights as a salaried employee in Arkansas?
