[UPDATE: Originally post below was in April. This week, as predicted, the Minnesota Supreme Court affirmed the Minnesota Court of Appeals (here) Plaintiffs lost.]
At issue in this case, Life Time Fitness paid employees base salaries and also a bonus based on performance of various segments of the company. Life Time would advance the bonus through the year but, if, nearing year-end, the goals for the year were not being met, then LifeTime would make deductions to paychecks at the end of the calendar year (Happy Holidays?!).
By year end, however, the net pay would always meet or exceed the base annual salary. But some of those paychecks toward the end of the year, if annualized, would not amount to the base salary. Put another way, Life Time would have “front-loaded” the base salaries for some employees under certain circumstances. The statute provides, however, that each week’s pay must be “guaranteed…”
The question, then, is whether Life Time’s compensation plan violated the Minnesota Fair Labor Standards Act (MFLSA).
LifeTime was denied summary judgment at the trial court, but won interlocutory appeal and won reversal at the Court of Appeals. The Court of Appeals decision is here.
From the questions at oral argument before the Minnesota Supreme Court (particularly questions from Chief Justice Eric Magnuson), it seems that plaintiffs are likely to lose.