*1 question According- not before us. judgment I would affirm the ly, respects. in all court
district
Gary Gerber, CLEMENTS and David
Plaintiffs-Appellees/Cross-
Appellants,
SERCO, INC., Defendant-
Appellant/Cross-
Appellee, County Commerce,
Fairfax Chamber of
Amicus Curiae. 06-4316,
Nos. 07-4005. Appeals,
United States Court of
Tenth Circuit.
July *2 (“Employees”), cross-appeal
David Gerber back-pay the district court’s calculation of “fluctuating ap- based on the workweek” proach, ask this court to remand for calculation under “time-and-a-half’ jurisdiction Exercising pursuant method. we affirm the to U.S.C. district summary judgment ruling court’s and its of back-pay. calculation Background I. Factual Army The United States contracted with in provide 2002 to recruiting Serco1 ser- Army Army vices to Reserves. contract, Army-Serco Under Serco (Herbert paid every recruiting time its was efforts L. Lipinsky Lino de Orlov S. (1) in following: Campopiano Rob- resulted one Fenster and Jennette briefs), prior military experience erts with him on the McKenna with no recruit CO, LLP, Denver, Long Aldridge & in Army enlisted the U.S. or the U.S. Defendanti-Appellant/Cross-Appellee. (2) Reserves; Army member the U.S. Army Reserves transferred to the U.S. (Erin Hymas T. Richard M. Middleton (3) Army; a former mili- member briefs), Durham & with him on the Jones tary Army in the enlisted U.S. U.S. UT, Plain- Pinegar, City, Lake Salt (4) Reserves; Army an applicant tiffs-Appellees/Cross-Appellants. shipped assigned or her training his D. Daniel B. Abrahams and Shlomo center. Both Clements and Gerber were Green, P.C., Katz, Epstein Becker & September hired in re- D.C., on the brief Amicus Washington, potential applicants cruit Curiae. Army Army and U.S. Reserves. Gerber’s MURPHY, SEYMOUR, and Before employment in ended June 2003 Clem-
McCONNELL, Judges. Circuit August in ents’ parties describe MURPHY, Judge. Circuit differently. Employees duties charac- (“Serco”) Serco, appeals Inc. the district jobs cold-calling terize individuals summary judgment that ruling court’s opportunities to inform them about employed civilian recruiters in Army serve the U.S. or U.S. to overtime com- company are entitled Reserves. The testified that pensation under Fair Labor Standards they spent most of their time Serco’s (“FLSA”). Act that because We conclude phone making prospective office calls not obtain commit- Serco’s hand, Serco, recruits. on the other cites to recruits, they were not en- ments from deposition testimony and affidavits de- fall They therefore do not gaged sales. scribing job nature of the exemp- one under salesmen” FLSA’s “outside Gary expected to be employees, tion. The Clement which signed by Re- original 1. The was Re- Serco. Serco was then substituted for contract Consultants, litigation. source Inc. On December source Consultants merged into Resource Consultants actively community, recruiting appli- then returned at the day give end of the job description required cants.2 The re- them a ride home. cruiters to a working relationship establish enlisted, After a recruit *3 educational, representatives paren-
with
of
regularly.
met with recruits
They provid-
tal, civic,
social,
military, religious,
and fra-
training
ed additional
and often made tele-
organizations
give
ternal
and to
formal and phone calls to the recruits to reinforce
presentations
advantages
informal
on the
join
their decision to
Army
the U.S.
serving
Army.
in the
Recruiters were
Reserves.
goal
of this
display publicity
also to distribute and
ma-
continued contact
keep
was to
the recruits
high
terials to
school and
students.
enthused about their decision to enlist.
interest,
expressed
Once
recruit
paid
Serco
the Employees a starting
Employees
up
set
an initial interview and
salary of
per week. The Employ-
$600.00
administered
math
pre-screening
and En-
nominally
ees’ salaries were
increased in
glish
to determine if
tests
the recruit met
February 2003. Additionally,
paid
requirements
the minimum
for enlistment.
if
Employees
commission
reached es-
If
requirements
met,
the Em-
quotas
tablished
for recruits who enlisted
ployees maintained contact with the re-
and reported to
assigned
training
cruit and
other follow-up activi-
center. The
kept time cards
ties,
obtaining
checks,
such as
background
which were
supervisor
submitted to a
at
records,
certificates,
court
birth
health rec-
the end of each
pay period.
week or
ords, and other
required
documents
Clements worked 480 overtime hours and
enlistment.
Gerber worked 596.5 overtime hours. Ser-
had no
to en-
co, however,
pay
did not
either
Instead,
list a recruit.
recruits were en-
overtime.
listed at Military
Entrance Processing
(“MEPS”),
Station
operated by
owned and
Analysis
II.
MEPS,
United States. At the
a re-
Congress enacted the
FLSA order to
cruit first underwent a physical exam.
If
improve “labor conditions detrimental
passed,
she
she interviewed with U.S.
the maintenance of the minimum standard
Army officials and decided whether to en-
living necessary
health,
efficien-
list. Recruits also
guidance
met with
cy,
general
and
well-being of workers.” 29
counselors to
jobs
discuss the various
202(a).
§
U.S.C.
To further this remedial
available to the recruit.
spent
Recruits
an
aim, the
requires
FLSA
employers
pay
day
MEPS,
entire
at
usually
starting
time and one-half
who work
at six o'clock in the morning
ending
at
more
hours a week and
three or four
who are
o'clock
the afternoon. A
exempt.
207(a)(2)(C).
§
recruit
29
only sign
could
U.S.C.
Oath of Enlist-
ment in the
The FLSA exempts employees
Armed Forces of the United
who are
States
Employees,
MEPS. The
classified as
al-
“outside salesmen” from the
though
recruit,
unable to enlist a
overtime-pay
often
requirement.
29 U.S.C.
drove their
MEPS,
213(a)(1).
recruits to
Congress delegated authority
government
Serco included two
documents
will
court
not consider material outside discussing military recruiting
portions
court.”);
record before the district
Tamari v.
Army-Serco
contract
appendix.
in their
S.A.L.,
(Lebanon)
904,
Bache & Co.
838 F.2d
These materials were not before the district
(7th Cir.1988) ("A litigant
907
put
cannot
such,
court. As
we decline to consider them
then,
part of his case in the trial court and
if
in our
Kennedy,
review. See United States v.
loses, put
he
appeal.”).
in the rest on
(10th Cir.2000) (“This
225 F.3d
to define this
evidence and reasonable inferences
Secretary
light
nonmoving par
most favorable
exemption.
Comm’n,
ty. Fye
Corp.
v. Okla.
516 F.3d
authority, the
Exercising
delegated
(10th Cir.2008).
light
“[I]n
Secretary
promulgated
C.F.R.
aims,
remedial
ex
FLSA’s broad
541.500, defining
salesman”
“outside
narrowly
emptions must be
construed.”
any employee:
Enters.,
Ackerman v. Coca-Cola
179 F.3d
(a)
purpose
employed
Who
(10th Cir.1999).
Further,
customarily
regularly
and who is
employer,
Serco bears
burden of
employer’s place
from his
engaged away
fit
proving
“plainly
*4
places
in:
or
of business
unmistakably
exemption’s
within the
(1)
meaning
Making sales within the
(quotation
Id.
and alteration
terms.”
3(k)
Act;
of
or
of
the
section
omitted);
Ben
see also Arnold v.
Kanow
(2)
for
Obtaining orders or contracts
388, 392,
453, 4
sky,
361 U.S.
80 S.Ct.
for the use of facilities for
services or
(1960).
L.Ed.2d
“The
of
393
paid by
will be
which a consideration
regulations are
judicial
Labor
entitled to
customer; and
the
or
client
are the primary
deference and
source of
(b)
of
hours of work
a nature
Whose
determining
scope
the
guidance for
of ex
in paragraph
that described
other than
Ackerman,
the
emptions to
FLSA.”
179
(a)(1)
(2)
do
of this section
not exceed
or
(quotation
at
F.3d
1264
and alteration
of the hours worked in
percent
omitted);
U.S.A.,
see also Chevron
Inc. v.
nonexempt
by
workweek
Council,
Natural Res.
Def.
Provided,
per-
that work
employer:
843-44,
104 S.Ct.
quirement spelled potential numerous De- solicited orders from regulations. customers, partment For ex- in making of Labor their role the sale § 541.504 ample, explains 29 C.F.R. that was limited. The door-to-door student promotional exempt, work is unless it salesmen were instructed ascertain actually performed incidental to and in whether met prospect qualifica- certain conjunction outside employee’s with an tions but were prohibited collecting illustration, By way money. own sales. All Id. order forms col- regulation distribution lected describes scenario the salesmen were turned over to representative managers subsequently in which a manufacturer’s student con- prospect, visits retailer: tacted the pros- confirmed the pect qualifications, met the and explained representative may This manufacturer’s payment plan. Only then was a perform types promotional various ac- contract Fifth executed. The Circuit held putting up displays tivities such as student salesmen were posters, engaged in removing damaged spoiled promotional work; they gathered a list of stock from the merchant’s shelves or *5 potential were “receptive customers who to rearranging the merchandise. Such purchasing magazine the idea of subscrip- persons only can considered salesmen tions.” actually Id. at 260-61. The employed if are salesmen’s paved work way the for sale purpose engaged by of and are in made making someone else: manager. sales or To the student contracts. extent that Id. Narrowly promotional construing exemption, in engaged activi- court explained ties designed to stimulate sales which the student salesmen were by nothing will “pseudo-salesmen” be made someone else the work more than nonexempt. coverage must be considered thus not within the of the outside salesmen at exemption. Id. 261. 541.504(b)(2). Id. The regulation fur- explains, ther test “the whether a civilian recruiter is engaged in actually activities di- many ways in a student selling mag- unlike rected toward the consummation of his door, parallels azines door to between sales, own at least to extent of obtain- these two cases lead us to conclude the ing buy a commitment to from the person Employees engaged in promotion- likewise to selling. whom he is If his efforts are work, al paving way for someone stimulating directed toward the sales of his else—the United States make —to company generally rather the con- the sale. Sereo contests this characteriza- summation specific of his own sales his tion, arguing at no one the MEPS could exempt.” activities are not Id. (emphasis have “sold” the recruit on joining the added); see also id. 541.503 (explaining Army. viewing Even when the evidence in “any sales work includes other work per- light Serco, most favorable to the rec- formed furthering his ord does not support this contention. It efforts”). own sales only that the MEPS a recruit could concept pass
This
is illustrated in
enlist,
Wirtz v.
physical
needed
to
choose a
Serv., Inc.,
Keystone
job,
Readers
1229
however,
sup
argues its employees,
is further
This conclusion
akin
representa-
are more
to
“field
opin
Department of
ported
two
DeVry,
v.
tives”
Nielsen
302
from the Western
ion letters and
case
(W.D.Mich.2003).
F.Supp.2d
750
Michigan examining whether
District of
recruiters,
rep-
Much like
civilian
field
the outside
qualify
recruiters
college
are assigned specific
resentatives
territo-
Agency opinion let
exemption.
salesman
calls,
ry
through
high
phone
school
Chevron-style defer
not warrant
ters “do
visits,
appointments,
seek
student
529
County,
v. Harris
ence.” Christensen
DeVry,
recruit students to enroll at
for-
576, 587,
120
146 L.Ed.2d
S.Ct.
higher
profit, technology-based
education
(2000).
are, however,
They
“entitled
Id.
identifying eligible
institution.
After
&
respect
[
under
Skidmore
]
Swift
candidates,
representatives
the field
assist
Co.,
134, 140,
S.Ct.
323 U.S.
potential
completing
candidates
(1944),
but
extent
L.Ed.
Id.
application.
college
Unlike the
recruit-
interpretations
power
those
have
ers discussed in the
La-
omitted).
(quotations
persuade.”
letters, however, DeVry’s
opinion
bor’s
opinion
of Labor’s
letters
representatives
field
have
college
recruiters each state:
a prospective
obtain a commitment from
regularly
who
Ordinarily,
DeVry
strictly
individual
student.
Id. at 756.
uses
objective
performs recruitment for a
is not
criteria
admission.
DeVry
any-
district court
concluded “[i]f
making
college’s
sales of the
pertaining
one made a decision
to admis-
services,
obtaining contracts for its
sions,
representatives,
it was the field
*6
Rather, college recruitment
services.
responsible
sorting
from
out
the
activity
analogous
pro-
to
appears
sales
general population
prospective
students
work, since,
promotion
motion
like
DeVry
which
material.”
ones were
Id.
who solicits customers
a busi-
ness,
job
the
in
college
engaged
recruiter is
the
ap-
duties
customers,
quite
i.e.,
pear
similar to those of the
qualified
stu-
field
identifying
representatives
they
DeVry,
differ
an
dents,
inducing
application
to
important aspect.
repre-
Unlike the field
in turn
college,
the
which
decides wheth-
sentatives,
a prospective
who could offer
offer of its
er to make
contractual
DeVry,
to
student admission
Serco’s civil-
applicant.
educational services to the
only lay
ian
recruiters could
the
Labor,
Opinion
Dept.
Wage
from
Letter
Army
groundwork.
only
It was the
—and
(Feb. 19, 1998),
and Hour Div.
1998 WL
could enlist a recruit.
—who
852683; Opinion
Dept.
from
of La
Letter
Thus,
Employees operated
more like
20, 1999),
bor, Wage
(Apr.
and Hour Div.
college
recruiters described in the De-
Thus,
college
re
III. per week. The district court found the parties such had an understanding, and requires eligible FLSA em therefore calculated pay pursuant back ployees compensated to be at one and one- fluctuating workweek method. The hourly wages half their for overtime hours Employees cross-appeal ruling this 207(a)(1). Where, § worked. U.S.C. ask this court to hold the are however, met, certain conditions pay entitled to pursuant back calculated rate is reduced “half time.” 29 C.F.R. the time-and-a-half formula. (2003). § 778.114 This is referred to as “fluctuating workweek” method. Pur The Employees contend 778.114 re- suant to regu quires of Labor’s that the “clear mutual understand- lations, fluctuating ing” workweek method must extend to how premi- overtime is to be when used “there is clear mutual ums parties would calculated. understanding of the parties initially that the agreed fixed that no overtime would salary compensation thus, (apart paid; from over be agreement no as to the premiums) time for the hours payment worked each of overtime ever existed. The workweek, number, however, whatever their regulation, rather “calls no such working than for hours some enlarged other understanding.” v. Valerio Put- weekly fixed work period.” (1st nam Assoc. 173 F.3d 778.114(a). Cir.1999). Under kind of compen parties “The must have structure, sation salary “is intended to reached a ‘clear mutual understanding’ compensate employee straight time while the employee’s may hours rates for whatever vary, hours are worked in the his or her salary base will not.” Id.; workweek.” Id. regardless of the see Bailey County also George- town, fluctuating (4th nature of the an employ Cir.1996) hours 94 F.3d work, may ee be it sixty, (rejecting proposition that “an em- salary is intended pay for all ployee hours must also understand the manner contrast, worked. In an who is which pay his or her overtime is calcu- compensated on hourly basis is contrary entitled lated” as regulation). to the *7 to overtime calculated the time-and-a- our inquiry is the Employ- whether half method. ees and Serco had a clear and mutual that understanding they paid would be on By terms, § its own applies 778.114 salary a basis for all hours worked. if there “a clear mutual understanding of the parties” that salary the fixed is com- We agree with the district court that the pensation for however many parties hours the em- had this clear mutual under- ployee may work particular week, in a standing. plaintiffs The in deposi- stated rather than for a fixed number of tion testimony hours that they were hired on a ployees buyers.” acted "outside employer’s It is the "service” to the from recruit, Army, offering not the who is a ser- they whom goods. obtain their It is obvi- buyer”
vice. An exempt "outside is not relationship ous that the is the here reverse the FLSA: of that of salesman-customer. The inclusion word "services” is not 541.501(e) (2003). 29 C.F.R. In a loose who, exempt persons intended to very in a sense, Employees selling Army’s were sense, loose are sometimes described as services; they promoting were the idea of a selling example, "services.” For it does not however, Army, career. The appears persons include such as servicemen even customer, paying be the for services of though they may sell the they service which parties the recruits who enlist. The do not perform. themselves does it Nor include raise buyers, argument very outside we decline to sua in a loose sense selling sometimes sponte described as ground. decide case on this This they routinely forty that hours. is sufficient establish salaried basis forty they hours a week. re- Employees than understood would more worked working Second, for less They salary. were neither docked the Employ- ceive a fixed paid nor more hours a week forty inquiries ees numerous cite their to Serco hours a they more than worked when management and to Wells, 125 F.3d Mayhew See week. they receive Labor about whether should (4th Cir.1997) employee (explaining sup- this evidence overtime. docked where he was neither was salaried ports Employees the conclusion that paid personal errands nor running a and mutual did not have clear extra hours a he worked ten more when pay, overtime it is understanding week). In sent to the letters Employees to whether the irrelevant as Labor, plaintiffs salary, described they being paid understood were on a sala- fully This hourly, wage agreements. not hourly ried or basis. Employ- the conclusion that supports the fluctuating Based on workweek for all paid a salaried basis ees method, court the district awarded Clem- they that had clear worked and hours $3,006.82 in pay back and Gerber ents arrange- understanding of this and mutual $3,651.02. affirm this award. We ment. point pieces to two The IV. Conclusion understanding suggest such an evidence to reasons, foregoing For the we affirm First, testified not Clements exist. the district court. Hixon, stated manager, that Serco’s Steve salary paid be “would McCONNELL, Judge, Circuit work per week and that this would $600.00 concurring. A close examina- per hour.” out $15.00 agree majority plain- I with the that the statement, however, reveals tion of this be- tiffs here were “outside salesmen” under- Clements testified that his they did not have the cause standing was that the effective re- complete signing the transaction of hour, not that pay rate of $15.00 Army. funda- up cruits The more the hour. paid would must plaintiffs prevail, mental reason affidavits, subsequent Employees, however, recruiting activity that the Hixon’s expressed that understood is not “sales” within the mean- would be com- statements to mean ing Fair Labor Standards Act. pensated forty hours of work a week. governing regulations define the term testimony disputed This does create as an “en- “outside salesman” existence of clear and material fact. The *8 employer’s gaged away place, irom his “may be understanding mutual based on places, “making of sales” or business” implied employment terms of one’s “obtaining orders or contracts for ser- employ- if it agreement is clear from the A 541.500. recruiter vices.” C.F.R. actions that he or she understood ee’s goods or services or obtain does sell of ver- payment plan spite after-the-fact goods or orders or contracts for services. Mayhew, contentions otherwise.” bal (or Rather, purchases in this the recruiter omitted). Evidence (quotation at 219 F.3d case, engages promotional activities under- presented that of) purchase services from leading they not be docked when they stood would A is more like a recruit. recruiter hours and would worked fewer buyer than a seller.1 paid they worked over not be more when prospective college persuades students to is different. A recruiter 1. A recruiter Letter, Opinion A of Labor America, UNITED STATES of plaintiffs (Appellees’ Br. at
cited Plaintiff-Appellee, 17), closely point. Opinion on See Let Labor, Dept. Wage of and Hour ter (Oct. 4, 1982), 1982 DOL Div. WH LEXIS Stacy ANDREWS, Defendant, Bobbie that 28. The letter holds recruiters cannot salespersons” be “outside because “[w]ork Lathrop; Lathrop; Richard Camela recruiting such Laumer, Joe Claimants- of part client would not be considered Appellants. activity sales of the recruiter.” Id. at *4. regulations No. 07-6092. buy make that those goods clear Appeals, United States Court employers services on behalf their Tenth Circuit. “sales,” though they even a very “in loose sense are sometimes de July selling employer’s scribed as ‘service’ to the from whom obtain their
goods. It obvious that the relationship is the
here reverse salesman- 541.501(e) (2003).
customer.” 29 C.F.R.
Presumably, majority place does not rationale,
primary Maj. reliance this on see
Op. n. because in their briefs in appellees Court the focused on other arguments. I
legal quarrel have no with
that, opinion but the should not be miscon- implying
strued as that recruiters would
be “salesmen” if had the plain-
finalize the enlistments. Even if the
tiffs in accompanied this case had the re- recruiting
cruits into the station and
signed paperwork the final behalf
Army, this would not make them “sales- salesmen,
men.” To the employee’s
job must be to Hiring, recruiting sell. hire, is not sales. *9 services;
purchase college’s (W.D.Mich. ry, F.Supp.2d he not at tempting persuade students to sell their 2003), inapposite. college. services to the v. DeV Nielsen