38 F.4th 103
11th Cir.2022Background
- OSP contracted with Comcast to investigate damage to broadband infrastructure; Fowler and Swans were OSP damage investigators in Georgia.
- Their primary duties: onsite factfinding (photos, interviews, measurements), apply Georgia "dig laws," determine liability, and enter Comcast-provided repair inputs into a cost database.
- Investigators followed OSP-mandated procedures and manuals, submitted reports to managers, and did not perform subrogation, recovery, settlement, or invoicing.
- OSP classified them as administratively exempt salaried employees and did not pay overtime; Fowler and Swans sued under the FLSA for unpaid overtime.
- The district court granted summary judgment for OSP under the administrative exemption; the Eleventh Circuit vacated and remanded, holding the exemption was not shown as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FLSA administrative exemption applies | Fowler & Swans: their primary duty was production — factfinding investigations, the core product OSP sells | OSP: investigators perform non-manual office work related to business operations and exercise independent judgment | Exemption not met — investigators' primary duty was production/factfinding not "directly related" to management or general business operations (29 C.F.R. §541.200(a)(2)) |
| Whether investigators exercised discretion and independent judgment on matters of significance | Fowler & Swans: limited discretion, followed prescribed steps, no authority to settle or set policy | OSP: investigators used judgment in conducting investigations and drawing inferences | Court did not decide this prong (not reached) because the "directly related" requirement failed and both prongs are conjunctive |
| Whether the importance of the work converts it to administrative work | Fowler & Swans: importance to revenue does not make production work administrative | OSP: investigative work is essential and thus supports exemption | Court: importance alone insufficient; being essential to the company’s marketplace offering does not make employees administrative |
| Whether DOL regs/opinion letters and precedent permit treating investigators as administrative | Fowler & Swans: DOL guidance and precedent treat similar factfinding investigators as production/employees not administratively exempt | OSP: relied on analogies (e.g., claims adjusters) and managerial characterizations | Court relied on DOL regs/opinions and circuit precedent (e.g., Calderon) and found investigators align with non-exempt factfinding roles |
Key Cases Cited
- Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134 (Sup. Ct. 2018) (FLSA exemptions given a fair reading; rejects mandatory "narrow" construction rule)
- Kisor v. Wilkie, 139 S. Ct. 2400 (Sup. Ct. 2019) (courts must give effect to unambiguous agency regulations)
- Corning Glass Works v. Brennan, 417 U.S. 188 (1974) (employer bears burden to prove exemption affirmative defense)
- Calderon v. GEICO Gen. Ins. Co., 809 F.3d 111 (4th Cir. 2015) (factfinding investigators are not administratively exempt)
- Bothell v. Phase Metrics, Inc., 299 F.3d 1120 (9th Cir. 2002) (distinguishing production work that creates the employer's product from administrative work that runs the business)
- Desmond v. PNGI Charles Town Gaming, L.L.C., 564 F.3d 688 (4th Cir. 2009) (non-manufacturing employees can be "production" if they produce the services the business offers)
- Dalheim v. KDFW-TV, 918 F.2d 1220 (5th Cir. 1990) (administrative exemption separates business-administration duties from production duties)
- Huff v. Dekalb Cnty., 516 F.3d 1273 (11th Cir. 2008) (summary-judgment review is de novo)