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Walmart pharmacist could pursue claim for promised overtime to straighten out pharmacy

April 28th, 2015  |  Ron Miller

The Department of Labor has unequivocally and consistently declared that additional compensation in the form of hourly overtime payment does not defeat exempt status under the salary basis test. However, a Walmart pharmacist faced a slightly different challenge—prying overtime payments out of the discount retailer that he alleged were promised if he agreed to relocate and straighten out a troubled pharmacy.

In Nightingale v. Wal-Mart Stores, Inc., a federal district court in Ohio found that the employee understood that he was being offered extra pay to address the problems at a store pharmacy in exchange for his promise to move there, and such promise was found to be clear and unambiguous. Further, a jury could find that the employee relied on the promise and reasonably expected to be paid, and that he was injured when Walmart terminated him from his job. As a consequence, the court ruled that the employee could pursue a promissory estoppel claim after the giant retailer allegedly reneged on the deal.

The employee moved to Ohio to work at a Walmart pharmacy that was apparently riddled with problems. Allegedly, he was promised overtime to straighten out those problems if he agreed to relocate, even though he was a salaried pharmacy manager. According to the employee, he was fired after he complained about not receiving additional compensation. Walmart moved for summary judgment, contending that the employee was exempt from overtime under the FLSA as a salaried professional. Importantly, it also asserted that his promissory estoppel claim failed for lack of a specific promise.

Overtime claims. There was no genuine dispute that the employee was an exempt professional employee, and to the extent that he originally pleaded he was not exempt, that contention was wrong.

Accordingly, Walmart was entitled to summary judgment on the FLSA and state-law overtime claims.
While the employee could not maintain a statutory claim for overtime under the FLSA, because he was an exempt professional, the heart of his claim was the promise to pay additional compensation. Because the employee asserted his entitlement to additional compensation based on his understanding that he was promised such compensation during the hiring process; he was not invoking his statutory rights.

Promissory estoppel. The employee’s claim for additional compensation was framed as a cause of action pursuant to the doctrine of promissory estoppel, explained the court. Such a claim requires four elements: (1) there must be a clear and unambiguous promise; (2) the party to whom the promise was made must rely on it; (3) the reliance is reasonable and foreseeable; and (4) the party relying on such promise must have been injured by the reliance.

A review of the record showed that the employee understood that it was promised that he would be entitled to extra pay for overtime hours needed to address the problems at the Walmart pharmacy in exchange for his agreement to move there. Such an alleged promise could be viewed as clear and unambiguous, the court found. Moreover, the employee met the remaining prongs of a promissory estoppel claim: a jury might find that he relied on the promise to be paid to fix the pharmacy, that he relied on such promise by moving to Ohio and working long hours, that he reasonably expected to be paid, and that he was ultimately injured when he lost both the additional pay and his job. As such, the employee’s promissory estoppel claim survived Walmart’s summary judgment challenge.