Do you remember Jay Leibhempski from the first test? He was the guy who was injured in a gas explosion while smoking a marijuana cigarette as his neighbor was looking for Marcellus shale gas. He received a large settlement from Elizabeth as a result of the injuries sustained in the explosion.

Jay decided to use some of his award to open a kite shop near Shippensburg University. Before hiring any employees, Jay hires Dewey Cheatum, Esquire, to advise him on business matters. Mr. Cheatum explains the Fair Labor Standards Act to Jay, with special emphasis on the overtime rules. Although Jay is a pretty "chill" guy in most respects, he is not a great boss and intends to make his employees work very long hours--at least 50 hours per week. He does not like the idea of paying these individuals overtime. Jay informs Mr. Cheatum that he intends to hire no more than 5 employees. Mr. Cheatum suggests that he can escape the overtime rules by making each employee a "manager." Mr. Cheatum tells Jay to give the employees a title, but not to give them any managerial authority (Jay wants to keep all of the authority for himself). Specifically, Mr. Cheatum advises Jay to give each employee a name tag with the title of "manager," "assistant manager," "special assistant manager to the assistant manager" or similar position. However, each employee will be instructed to refer all questions or decisions to Jay, and each employee will be required to acknowledge that they have no authority to make decisions on behalf of Jay or the company.

Questions:

1. Assume that Jay takes Mr. Cheatum's advice. Has he avoided the overtime "problem?"

2. Is there a better way for Jay to avoid paying overtime in this case? Assume that Jay does not or cannot hire additional employees.

3. Has Mr. Cheatum's advice created any additional problems for Jay? If so, what are they? Please describe each in detail.

4. Has Mr. Cheatum violated any duties to Jay? If so, which one(s)? Please explain your answer completely.