DANIEL G. SMITH, Plaintiff - Appellant v. OCHSNER HEALTH SYSTEM; OCHSNER CLINIC FOUNDATION, Defendants - Appellees
No. 18-31264
United States Court of Appeals, Fifth Circuit
April 17, 2020
Lyle W. Cayce Clerk
Appeal from the United States District Court for the Eastern District of Louisiana
Before SOUTHWICK, GRAVES, and ENGELHARDT, Circuit Judges.
The plaintiff sued his former employer for unpaid overtime wages under the
FACTUAL AND PROCEDURAL BACKGROUND
In April 2001, Daniel Smith was hired as an оrgan procurement coordinator at Ochsner Health System, a nonprofit health care provider in Louisiana. Smith never graduated from high school. He has no advanced degrees, licenses, or certifications. As a procurement coordinator, Smith acted as the first line of communication between the hospital and the Louisiana Organ Procurement Agency when organs became available. His job duties included responding to сalls at any time of the day or night regarding organs being offered to the hospital for transplant purposes, evaluating the medical charts and medical history of the donors, verifying the donors’ consent, communicating pertinent information about the donors to the surgeons and
When relaying organ information to surgeons, an organ procurement coordinator provides basic information about potential recipients. When an organ is first offered, the coordinator has the authority to enter a “provisional yes” into the online system to accept the organ for a patient, before talking to a surgeon. Organ procurement coordinators also organize the transportation of the organs. The сoordinator gathers all needed supplies and drives the team to the airport, then goes into the operating room where the organ recovery takes place. Afterward, the coordinator records pertinent information related to the procedure and travels back to Ochsner with the organ. As a group, the organ procurement coordinators are responsible for taking their own inventory and ordering supplies bаsed on expected need.
Smith testified in a deposition that when he started at Ochsner, he was paid a salary, a set hourly rate for the on-call time, and his regular hourly rate for hours worked above 40 per week as opposed to time and a half. In 2012, Smith‘s base salary was significantly raised, and the method for computing his payments changed as well. Smith did not receive overtime or on-call pay, but the result was that he received about the same amount of pay as before. From 2014 until he resigned in 2017, his annual salary surpassed $120,000. Smith alleges that “[t]he physical demands and stress caused by the abusive workloads and intolerable conditions caused Mr. Smith to seek medical attention, be put on short and long-term leave, and eventually forced Mr. Smith to resign his employment.”
Smith‘s complaint asserts that in mid-September 2017, he sent Ochsner a letter that demanded “all of his owed wages and overtime,” but Ochsner did not respond. On September 29, 2017, Smith filed suit in the United States District Court for the Eastern District of Louisiana, claiming violations of the
On September 26, 2018, Ochsner moved for summary judgment on its affirmative defense that it was not required to pay Smith overtime because Smith was statutorily exempt as a “highly compensated” and “administrative” employee. The district court concluded that Ochsner did not cаrry its burden to establish Smith was an “administrative” employee, but the court determined Smith was a “highly compensated” employee. Consequently, it granted summary judgment in favor of Ochsner. Smith timely appealed.
DISCUSSION
We review a summary judgment de novo, applying the same standards as the district court. United States v. Lawrence, 276 F.3d 193, 195 (5th Cir. 2001). To succeed on summary judgment in reliance on an affirmative defense, the moving party “must establish beyond peradventure all of the essential elements of the claim or defense to warrant judgment in his favor.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986).
The outcome of this appeal turns on whethеr the district court properly held that Smith was exempt from the statutory mandate that employers provide overtime compensation for employees.
Whether an employee is
I. The administrative capacity exemptions
An individual “employed in a bona fide executive, administrative, or professional capacity” is exempt.
An employee is exempt under the highly compensated category if he or she (1) is annually compensated at least $100,000;1 (2) “customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee,”
In contrast to the HCE exemption, the standalone administrative exemption depends only on the employee‘s primary duty rather than the employee‘s customary duties.
Smith grounds his argument for error in the burden of proof and the summary judgment standard. He argues that the district court impermissibly weighed the evidence and drew inferences from the facts in favor of movant Ochsner. Smith claims there were three specific errors in the district сourt‘s decision. First, there is a genuine factual dispute over whether he customarily and regularly performed exempt duties. Second, there is a genuine factual dispute over whether he primarily performed non-manual labor. Third, there is a genuine factual dispute over whether his work was directly related to Ochsner‘s
Ochsner emphasizes that the HCE exemption dоes not require the same level of job-duty scrutinizing as the standalone exemption,
II. The Highly Compensated Employee exemption
A. Performance of an exempt administrative employee duty – generally
To qualify for the HCE exemption, Smith must have performed “any one or more of the exempt duties or responsibilities of an . . . administrative . . . employee.”
The breadth of the HCE exemption is shown by the statement that an employee may be exempt even if “the employee does not meet all of the other requirements” for the underlying administrative, executive, or professional exemption.
We examine the record here to determine if there is any genuine dispute of
The question before us is narrower than the one we often face, which is the primary-duties question for these overtime exemptions. E.g., Dewan v. M-I, L.L.C., 858 F.3d 331, 335 (5th Cir. 2017). Indeed, little caselaw has addressed exempt duties in the HCE context. Although the two contexts are distinguishable in key respects, we draw from our standalone-exemption precedents where the exemptions overlap.
Ochsner argues the facts are undisputed that Smith regularly performed several administrative duties that were “directly related to management or general business operations.”
For context, Section 201(b) provides in its entirety:
(b) Work directly related to management or general business operations includes, but is not limited to, work in functional areas such as tax; finance; accounting; budgeting; auditing; insurance; quality control; purchasing; procurement; advertising; marketing; research; safety and health; personnel managemеnt; human resources; employee benefits; labor relations; public relations, government relations; computer network, internet and database administration; legal and regulatory compliance; and similar activities. Some of these activities may be performed by employees who also would qualify for another exemption.
Ochsner argues that Smith, as an organ procurement coordinator, engaged in literal procuremеnt for the company. We recognize, though, that job titles are “insufficient to establish the exempt status of an employee.”
Only a nonpreсedential opinion of this court has analyzed whether an employee performed exempt duties in the context of the HCE exemption. See Zannikos v. Oil Inspections (U.S.A.), Inc., 605 F. App‘x 349 (5th Cir. 2015). We examine the opinion for its ability to persuade. The Zannikos plaintiffs were marine superintendents who oversaw oil transfers, “monitored the loading and unloading of cargo,” and reported on the transfers’ compliance with company policies and national safety standards. Id. at 351. The plaintiffs also oversaw independent inspectors and the “line blending” process in which oil and gas “are combined and moved onto a ship based on specifications.” Id. We held that the plaintiffs were not administratively exempt because their “primary duties did not include
In Dewan, we considered only the standalone administrative exemption, reviewing whether summary judgment for the defendants was appropriate. 858 F.3d at 335–40. The plaintiffs, a group of “mud engineers,” argued that they did not perform non-manual work for the business or its customers. Id. at 336. We recognized the distinction between producing a commodity, whether it be a good or service, and administering business affairs. Id. Applying that principle, we held that material facts were in dispute over whether the mud engineers’ primary duties were directly related to management, business operations, or customers. Id. at 336–37. Unlike the employees in Zannikos, the mud engineers in Dewan did not oversee “work performed by the customers’ employees, contractors, and equipment.” Id. at 338. Additionally, the mud engineers’ jobs did not involve “compliance with health and safety standards,” and the mud engineers did not “engage[] in tasks likely to qualify as the general administrative work applicable to the running of any business.” Id. (quotation marks omitted).
It is undisputed that Smith spent substantial time in the donor coordinator role. It is also undisputed that a regulаr part of his job was receiving calls about potential donations, intaking information, and presenting the information to the surgeon, although the parties dispute how much Smith curated the information he shared with surgeons. This was the first step in the organ procurement process.
In another one of Smith‘s main roles, he managed the literal procurement of the organs by transporting them. Smith agrees that his “job was to retrieve organs to sell to transplant custоmers.” Smith testified that based on the organ‘s location, a procurement coordinator would decide whether to use ground or air transportation. Smith did not play a role in negotiating the contracts with the transport companies to set prices, but when it was time to transport an organ, it was the coordinator‘s role “to make [the transport] happen.” This included calling the transport company to see if a limousine or airplanе was available. Relatedly, Smith spent literal procurement time on the ground, taking the team to the airport, going into the operating room, and reporting back to the coordinator and surgeon in Louisiana.
Both the donor coordinator and transportation job duties were directly related to Ochsner‘s business operations. By that, we mean the duties were “directly related to assisting with the running or servicing of the business.”
In crafting the highly compensated employee exemption, the Department of Labor made it easier on both employers and courts.
B. Customarily and regularly performs the duties
“Customarily and regularly” is defined by regulation and “means a frequency that must be greater than occasional but which, of course, may be less than constant. Tasks or work performed ‘customarily and regularly’ includes work normally and recurrently performed every workweek; it does not include isolated or onе-time tasks.”
A review of Smith‘s appellate brief reveals that Smith concedes he customarily and regularly took calls about organ donations, relayed the information to surgeons, and planned for the transport of those organs. As discussed, Smith focuses his argument on whether those are exempt duties rather than whether he performed them with sufficient regularity. Smith does argue that he did not customarily and regularly perform other relevant job duties such as interviewing job candidates and ordering supplies. We need not examine other job duties, though, because just one exempt duty suffices.
C. Office or non-manual work
To fall under either the standalone or HCE exemption, an employee‘s primary duty must include office or non-manual work.
Ochsner argues that Smith waived this argument by not presenting it to the district court. Smith replies that there was no waiver beсause the burden of proof was on Ochsner to establish this element of the administrative exemptions. Smith declares it would be “absurd” to find that he waived an element of Ochsner‘s affirmative defense “where Ochsner itself made no competent argument, and where Ochsner pointed to no undisputed evidence to rebut, regarding a required, essential element of its affirmative defense.”
In examining a waiver argument, we start with the rule that “the scope of appellate review on a summary judgment order is limited to matters presented to the district court.” Keelan v. Majesco Software, Inc., 407 F.3d 332, 339 (5th Cir. 2005). Therefore, “if a party fails to assert a legal reason why summary judgment should not be granted, that ground is waived and cannot be considered or raised on appeal.”2 Keenan v. Tejeda, 290 F.3d 252, 262 (5th Cir. 2002) (quotation marks and citation omitted).
Although Smith is correct that the burden to prove exempt status is on Ochsner, Smith never made the argument before the district court that his work was primarily manual. In fact, he seems to have admittеd that much of his work is non-manual in his briefing to the lower court. Arguing that he engaged in non-exempt production work, he stated, “Production work covers much non-manual work.” Smith argued to the district court that his work was not directly related to management or to general business operations. That argument concerned whether Smith met the qualifications in Section 541.601(a). The office or non-manual work element, though, is set out separately in Subsection (d).
As a matter of law, Smith was an exempt highly compensated employee.
AFFIRMED.