956 F.3d 681
5th Cir.2020Background
- Daniel Smith was an organ procurement coordinator at Ochsner Health System; duties included taking donation calls, reviewing donor charts/consent, entering provisional acceptances, arranging transport, attending recoveries in the OR, and recording reports.
- Smith never completed high school and had no advanced credentials; from 2014–2017 his salary exceeded $120,000 after a 2012 pay change that eliminated overtime pay but kept his overall compensation similar.
- Smith alleged intolerable working conditions, sought unpaid overtime under the FLSA, and sued Ochsner in Sept. 2017 (complaint did not specify a time period).
- Ochsner moved for summary judgment asserting the FLSA "highly compensated employee" (HCE) administrative exemption; the district court found the standalone administrative exemption was not proved but held Smith met the HCE exemption and granted summary judgment for Ochsner.
- On appeal the Fifth Circuit reviewed de novo, focusing on whether Smith (1) customarily and regularly performed an exempt administrative duty, and (2) whether his primary duty was office or non-manual work (an argument the court found waived).
Issues
| Issue | Smith's Argument | Ochsner's Argument | Held |
|---|---|---|---|
| Whether Smith performed an exempt administrative duty under the HCE rule | Smith contended his procurement/coordination work was routine and not an exempt management/business operation duty | Ochsner argued Smith performed procurement and related duties "directly related" to management/business operations (procurement, transport, coordination) | Held: Smith performed procurement duties that fall within §541.201(b) examples; that satisfies an exempt duty for the HCE exemption |
| Whether Smith "customarily and regularly" performed those duties | Smith did not dispute the regularity of intake, relaying organ info, and transport planning but argued those duties were not exempt | Ochsner emphasized Smith repeatedly performed those duties | Held: No genuine dispute — Smith conceded regular performance of the relevant duties; element satisfied |
| Whether Smith's primary duty was office or non-manual work (necessary for HCE/substandalone) | Smith argued facts showed he performed manual tasks and thus primarily manual work | Ochsner relied on the record showing substantial non-manual/office components and argued Smith waived the primary-manual argument | Held: Court found Smith waived the primary-manual argument by not raising it below; treated the element as satisfied on the record |
| Whether the standalone administrative exemption was proven | Smith argued he did not meet the standalone administrative elements | Ochsner argued alternatively the standalone exemption applied | Held: District court declined standalone exemption on summary judgment, but the Fifth Circuit affirmed summary judgment based on the HCE exemption (alternate basis sufficient) |
Key Cases Cited
- Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134 (2018) (courts must give a fair reading to FLSA exemptions)
- Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709 (1986) (distinguishes legal question of exemption from factual questions about how employee spends time)
- Dalheim v. KDFW-TV, 918 F.2d 1220 (5th Cir. 1990) (treats inferences about nature of work as factual questions)
- Dewan v. M-I, L.L.C., 858 F.3d 331 (5th Cir. 2017) (discusses distinction between production work and work directly related to business operations)
- Fontenot v. Upjohn Co., 780 F.2d 1190 (5th Cir. 1986) (moving party relying on affirmative defense must establish all essential elements beyond peradventure)
- Zannikos v. Oil Inspections (U.S.A.), Inc., [citation="605 F. App'x 349"] (5th Cir. 2015) (nonprecedential analysis of HCE context showing an employee can satisfy the HCE by performing duties "directly related" to customers/business operations)