Perry v. Randstad General Partner (US) LLC
876 F.3d 191
| 6th Cir. | 2017Background
- Randstad, a national staffing company, required in-house Troy, MI employees to meet a weekly 100-point quota (Work Planning Index) across categories (sales, recruiting, etc.); failure risked discipline up to termination.
- Plaintiffs (Perry, Lane, Dooling) performed a mix of sales, recruiting, placement/matchmaking, post-placement oversight, and administrative tasks and often worked >40 hours weekly.
- Plaintiffs sued under the FLSA for unpaid overtime, alleging Randstad misclassified them as exempt under the administrative exemption; the district court granted summary judgment for Randstad as to three plaintiffs and denied class certification; this appeal followed.
- The key legal question centered on whether plaintiffs’ primary duties included "discretion and independent judgment" sufficient for the administrative exemption, and whether Randstad is protected by the good-faith reliance defense based on a 2005 DOL/WHD opinion letter.
- The Sixth Circuit affirmed in part and reversed in part: it held the administrative exemption applied to Lane and Dooling as Account Managers and Lane as Assistant Branch Manager, but not to Perry and Dooling (and Lane for certain periods) when they served as Staffing Consultants or Talent Acquisition Specialist; it also denied summary judgment on Randstad’s good-faith reliance defense for some periods.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs’ duties meet the administrative-exemption requirement of exercising "discretion and independent judgment" | Matchmaking, recommending, negotiating and post-placement management are discretionary and therefore exempt | Many tasks were routine, tightly supervised, constrained by the WPI system and templates, so primary duties were non-exempt | Exemption applies to Lane and Dooling as Account Managers and Lane as Assistant Branch Manager; does not apply to Perry and Dooling (and Lane in some roles) as Staffing Consultants/Talent Acquisition Specialist — mixed ruling |
| Whether plaintiffs’ sales duties are exempt | Sales work (prospecting, territory decisions, client contacts) involves discretion and should be exempt | Sales duties were carried out under scripts, schedules, quotas and limited authority and are non-exempt | Sales duties held non-exempt for Staffing Consultants (majority); separate partial dissents disagreed on sales exemption |
| Whether Randstad can assert the Portal-to-Portal good-faith reliance defense based on the 2005 WHD letter | Randstad reasonably relied on the WHD letter when classifying employees nationwide | The WHD letter addressed staffing managers with greater authority; Randstad objectively knew duties varied by office and should have inquired further | Good-faith defense rejected as a matter of law for certain periods because the 2005 letter did not clearly conform to plaintiffs’ actual duties and material facts raised inquiry; summary judgment on the defense was improper for affected periods |
| Appropriateness of summary judgment given fact-intensive primary-duty inquiry | Plaintiffs argued disputes of fact about time spent and character of duties preclude summary judgment | Randstad argued record established exemption as a matter of law for most positions | Court reversed parts of summary judgment where factual disputes remained (Staffing Consultant/Talent Acquisition periods); affirmed where evidence supported exemption as a matter of law (Account Manager/Assistant BM periods) |
Key Cases Cited
- Auer v. Robbins, 519 U.S. 452 (interpretation of agency regulations given deference in exemption analysis)
- Foster v. Nationwide Mut. Ins. Co., 710 F.3d 640 (6th Cir. 2013) (summary judgment/administrative-exemption standards)
- Schaefer v. Ind. Mich. Power Co., 358 F.3d 394 (6th Cir. 2004) (focus on actual day-to-day activities over job descriptions)
- Renfro v. Ind. Mich. Power Co., 497 F.3d 573 (6th Cir. 2007) (employer bears burden to prove exemption; narrow construction)
- Smith v. Johnson & Johnson, 593 F.3d 280 (3d Cir. 2010) (pharmaceutical sales rep analyzed as exercising discretion)
- Schaefer-LaRose v. Eli Lilly & Co., 679 F.3d 560 (7th Cir. 2012) (pharmaceutical sales representatives’ strategic discretion supports exemption)
- Marshall v. Baptist Hosp., Inc., 668 F.2d 234 (6th Cir. 1981) (good-faith reliance defense where employer reasonably relied on specific WHD guidance)
- Cole v. Farm Fresh Poultry, Inc., 824 F.2d 923 (11th Cir. 1987) (explaining conformity and good-faith components of §259 defense)
- Home Ins. Co. v. EEOC, 672 F.2d 252 (2d Cir. 1982) (Portal-to-Portal Act protects employers relying on agency interpretations)