Sаndra ELLIS, on behalf of herself and others similarly situated, Plaintiff-Appellant, v. J.R.‘S COUNTRY STORES, INC., a Colorado corporation, Defendant-Appellee.
No. 13-1346
United States Court of Appeals, Tenth Circuit.
March 9, 2015.
779 F.3d 1184
III. CONCLUSION
We REVERSE the district court‘s grant of habeas relief.
Christian D. Hammond (Lawrence D. Stone, Dufford & Brown, P.C., Denver, CO, with him on the brief), Dufford & Brown, P.C., Denver, CO, for Defendant-Appellee.
Before HOLMES, McKAY, and BACHARACH, Circuit Judges.
HOLMES, Circuit Judge.
Sandra Ellis appeals from the district court‘s grant of summary judgment in favor of J.R.‘s Country Stores, Inc., her former employer, on her claim for violation of the Fair Labor Standards Act of 1938 (“FLSA“),
I
We offer at the outset an overview of the applicable statutory framework. We then provide the factual background and procedural history of this case, reciting all summary-judgment evidence in the light most favorable to Ms. Ellis as the nonmovant. See Salazar v. Butterball, LLC, 644 F.3d 1130, 1136 (10th Cir.2011); Gwinn v.
A
Congress enacted the FLSA in order to “protect all covered workers from substandard wages and oppressive working hours, ‘labor conditions [that are] detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers.‘” Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 739 (1981) (alteration in original) (quoting
But despite “the remedial nature of [the] FLSA,” Pacheco v. Whiting Farms, Inc., 365 F.3d 1199, 1206 (10th Cir.2004), “not all workers require[] the same kind of protection” under the statute, Ackerman v. Coca-Cola Enters., Inc., 179 F.3d 1260, 1263 (10th Cir.1999). Notably, as is relevant here, “employee[s] employed in a bona fide executive, administrative, or professional capacity ... as such terms are defined ... by regulations of the Secretary [of Labor],”
Exercising its delegated authority on behalf of the U.S. Department of Labor (“DOL“), the Secretary of Labor (“Secretary“) has promulgated several implementing regulations for the FLSA, one of which defines the term “employee employed in a bona fide executive capacity” as an employee who is:
- Compensated on a salary basis at a rate of not less than $455 per week ...;
- Whose primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;
- Who customarily and regulаrly directs the work of two or more other employees; and
- Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.
Pursuant to the FLSA‘s regulatory framework, an employee must be paid on a salary basis to satisfy the requirements of an “executive” exempt from the
An employer may lose the right to treat otherwise eligible employees as exempt “executives” in certain situations. For instance, “[a]n employer who makes improper deductions from salary shall lose the exemption if the facts demonstrate that the employer did not intend to pay employees on a salary basis.”
The factors to consider when determining whether an employer has an actual practice of making improper deductions include, but are not limited to: the number of improper deductions, particularly as compared to the number of employee infractions warranting discipline; the time period during which the employer made improper deductions; the number and geographic location of employees whose salary was improperly reduced; the number and geographic location of managers responsible for taking the improper dеductions; and whether the employer has a clearly communicated policy permitting or prohibiting improper deductions.
On the face of subsection (a), it is evident that one variable which may inform courts as to the existence vel non of an “actual practice of making improper deductions” is whether the employer has promulgated a “clear[ ]” policy concerning improper deductions. Id. The Secretary provides helpful explication regarding this final salary-basis-test factor in another subsection of the same regulation, noting that a “clearly communicated policy” is one “that prohibits the improper pay de-
[t]he best evidence of a clearly communicated policy is a written policy that was distributed to employees prior to the improper pay deductions by, for example, providing a copy of the policy to employees at the time of hire, publishing the policy in an employee handbook or publishing the policy on the employer‘s Intranet.
Id.
In sum, under the rubric of subsection (a)—as informed by subsection (d)—“if the facts demonstrate that” the employer maintained “[a]n actual practice of making improper deductions,” the default conclusion is that the employer “shall lose the exemption.” Id.
However, the Secretary has carved out a savings provision for “[i]mproper deductions that are either isolated or inadvertent,” which allows the exemption to stand “if the employer reimburses the employees for such improper deductions.”
B
Having explained the legal standards material to the disposition of this appeal, we proceed to the salient background facts, viewed in the light most favorable to Ms. Ellis.
J.R.‘s Country Stores, Inc. (“J.R.‘s” or “the Company“) is a chain of convenience markets located throughout Colorado. Its individual shops, which sell gas, groceries, and sundries, are operated by store managers. As set forth in the Company‘s Store Manager Base Pay Plan (“the Pay Plan“), each manager is considered a “salaried employee” and is expected to work “a minimum of 50 hours per week and a minimum 5 day work week.” Aplt.App. at 378 (2011 Pay Plan, filed Jan. 11, 2013). The Company also requires every store manager to “work whatever number of hours per week is necessary to effectively run [her] store.” Id.
In December 2007, Ms. Ellis began working as the manager of a J.R.‘s store in Holly, Colorado. The Company classified her as an exempt, salaried employee and paid her $600 on a weekly basis (an amount that increased to $625 in February 2011), as well as a monthly bonus commensurate with her store‘s performance. While Ms. Ellis was employed in this capacity, she generally2 worked fifty-hour (and sometimes closer to sixty-hour) weeks, which was consistent with the terms of the Pay Plan.
Ms. Ellis resigned on April 6, 2012. Soon afterward, she sent the Company a letter “claim[ing] that she [was] owed $42,187.50 in unpaid overtime wagеs.” Aplt.App. at 284 (Letter, dated May 18, 2012). In lodging that request, Ms. Ellis opined that she had “lost her exempt status under the [FLSA] ... when J.R.‘s made a one-time deduction from [her] pay for not working fifty hours during a work-week,” which, in turn, entitled her to three years’ worth of retroactive overtime pay. Id. This was the correct result, according to to Ms. Ellis, because the paycheck in question demonstrated a “willful” “practice of making improper deductions” by the Company. Id. (internal quotation marks omitted).
The Company initially denied both that this singular deduction was improper and that it constituted an actual practice of improper deductions under the applicable regulatory provisions. Nonetheless, the Company informed Ms. Ellis by letter that it would “take the high road ... and pay [her] for the overtime she worked during the time period in which the deduction occurred.” Id. at 285 (internal quotation marks omitted). To explain the amount of the accompanying check, $332.88—which was more than ten times the amount of the deduction—the Company stated:
During the workweek in which the deduction was made, [you] worked a total of 56.42 hours.... [Your] hourly rate was $12.50, meaning [your] overtime rate is $18.75. [Your] $625 weekly salary was based on a fixed 50 hour workweek. By reimbursing [you] the $150 that was deducted ... J.R.‘s has now made [you] whole for that workweek and has therefore paid [you] for the first 50 hours for purposes of the overtime calculation. What remains is (1) [your] regular pay for the additional 6.42 hours, and (2) the “and a half” for the 16.42 hours of overtime. Thеrefore, the calculation is as follows:
(1) 6.42 hours × $12.50 (regular time) = $80.25
(2) 16.42 hours × $6.25 (half time) = $102.63
Total = $182.88.
Therefore, on behalf of J.R.‘s, enclosed please find a check ... in the amount of $332.88 ($150 + $182.88).
Id. (emphasis omitted) (footnote omitted). The Company further noted that it had “use[d] the hours worked during the March 23, 2012 workweek for purposes of the overtime calculation” for two reasons: (1) to comport with the regulatory language “during the time period in which the
On July 23, 2012, Ms. Ellis filed a lawsuit against her former employer in the United States District Court for the District of Colorado, bringing one claim under the FLSA. Alleging that her “compensation was reduced when she did not work at least 50 hours” per week, Ms. Ellis urged that she “was not an exempt employee [under the FLSA] because she was not paid on a true salary basis.” Id. at 11 (Compl., filed July 23, 2012). Thus, reasoned Ms. Ellis, the Company‘s failure to classify her as an hourly employee entitled her to recoup retroactive overtime pay “for all hours worked in excess of forty hours in a single work week” during her term of employment. Id. at 12. Ms. Ellis also signaled her intent to certify a class of similarly situated store managers.
The Company filed a motion for summary judgment, attaching as exhibits all time sheets and payroll records pertaining to Ms. Ellis‘s employment. Instead of responding to the Company‘s motion, Ms. Ellis filed a “Mоtion to Certify Conditionally a Collective Action Under the [FLSA] and for Court Assisted Notice,” id. at 289 (Mot. to Certify, filed Oct. 18, 2012) (capitalization altered), and, shortly thereafter, also a motion to deny or defer judgment under
For its part, the Company then sought a temporary stay of class certification, pending the district court‘s summary-judgment determination. The district court, in an order dated December 11, 2012, denied Ms. Ellis‘s
Then, on July 12, 2013, the district court granted summary judgment in favor of the Company. The substance of the court‘s ruling was twofold. First, the court determined that the undisputed material facts demonstrated the Company‘s intent to pay Ms. Ellis a salary and that the one-time pay deduction did not change that intent. Stated otherwise, the district court ruled that the Company‘s deduction did not constitute a violation of the salary-basis test. Second, the court reasoned, even if Ms. Ellis could demonstrate that the Company did not intend to pay her a salary, her FLSA claim would still founder because the Company was entitled to rely on the protection of the window-of-correction defense detailed in the FLSA‘s implemеnting regulations.
In light of the foregoing findings, the district court awarded summary judgment to the Company and denied Ms. Ellis‘s motion for class certification as moot. The court entered judgment on July 15, 2013, dismissing the lawsuit with prejudice. Ms. Ellis timely appealed from the district court‘s judgment.
II
On appeal, Ms. Ellis challenges the district court‘s summary-judgment order on several fronts. “We review the district court‘s summary judgment decision de novo, applying the same standard as the district court.” Brammer-Hoelter v. Twin Peaks Charter Acad., 602 F.3d 1175, 1184 (10th Cir.2010); accord Colo. Cross-Disability Coal. v. Abercrombie & Fitch Co., 765 F.3d 1205, 1218 (10th Cir.2014). Sum-
Ms. Ellis also seeks review of the district court‘s denial of deferment for expanded discovery pursuant to
III
Ms. Ellis presеnts two overarching questions for our review of the district court‘s summary-judgment ruling: (1) whether the court misapplied the salary-basis test associated with her FLSA exemption (i.e., subsection (a)), and (2) whether the court incorrectly permitted the Company to avail itself of the window-of-correction defense (i.e., subsection (c)) to rectify any improper deduction to her pay. Not surprisingly, Ms. Ellis answers both questions in the affirmative and urges us to find that the district court committed error in awarding summary judgment to the Company. We are not persuaded by any of Ms. Ellis‘s appellate arguments and, in point of fact, find ourselves in substantial agreement with the district court in all respects.
Before commencing our substantive discussion, however, we note the Company‘s suggestion that we cabin our affirmance to the issue of whether the window-of-correction defense was satisfied. The Company reasons that such an approach “would forestall the need to address most of [Ms.] Ellis‘s arguments,” Aplee. Br. at 6—most notably, her contention that the district court‘s reading of subsections (a) and (c) contravenes settled principles of statutory interpretation. Although we recognize that, under certain circumstances, the task of reconciling subsections (a) and (c) could potentially be difficult,4 on this record, Ms. Ellis‘s statutory-interpretation argument does not give us cause to shrink from our
A
We first address Ms. Ellis‘s contention that the district court incorrectly found no genuine issues of material fact concerning the Company‘s intent to pay her a salary; instead, reasons Ms. Ellis, the court should have considered her “an hourly employee in every sense.” Aplt. Opening Br. at 20. According to Ms. Ellis, the terms of the Pay Plan ineluctably yield this conclusion. The Pay Plan, she says, is “unlike any other to be examined by a federal court for conformance to the salary basis test,”5 id., due to a “combination of unique factors“: a “hard floor” of fifty hours per week, a requirement to log the number of hours worked, and an alleged “stated policy of deducting pay for less than a day‘s absence,” Aplt. Reply Br. at 18. For this reason, among others that we address below, Ms. Ellis argues that the district court‘s ruling constitutes reversible error. Though Ms. Ellis strives mightily on multiple fronts to attack the salary-basis aspect of the district court‘s decision, we reject each of her arguments. We conclude that the Company did not lose this exemption as regards Ms. Ellis.
1
Under subsection (a), an “actual practice of making improper deductions demon-
The factors to consider when determining whether an employer has an actual practice of making improper deductions include, but are not limited to: [1] the number of improper deductions, particularly as compared to the number of employee infractions warranting discipline; [2] the time period during which the employer made improper deductions; [3] the number and geographic location of employees whose salary was improperly reduced; [4] the number and geographic location of managers responsible for taking the improper deductions; and [5] whether the employer has a clearly communicated policy permitting or prohibiting improper deductions.
Id.
Ms. Ellis argues that the district court rendered an erroneous decision by focusing exclusively on the first factor of the salary-basis test—the number of improper deductions. We disagree. On the contrary, we believe the district court‘s ruling can be fairly read to address all of the salary-basis factors in some appreciable manner. First, the district court noted that the Company “reduced [Ms. Ellis‘s] pay on only one occasion,” Aplt.App. at 452, even though—as the time sheets reflected—“[Ms.] Ellis worked less than 50 hours on 13 separate occasions, not counting holidays or days when [she] was sick or on vacation,” id. at 454. Next, with regard to the time period during which the Company made the improper deduction (i.e., the second factor), the court observed that Ms. Ellis‘s pay was improperly reduced on April 3, 2012, which impacted one week-long pay cycle. As to the third and fourth factors, the court stated:
[W]ith respect to the number and geographic location of additional employees whose salary was improperly reduced, the Court stayed proceedings on that issue because, having experienced only one allegedly improper deduction, Ellis appeared to lack a viable claim, which could not be salvaged by recourse to evidence relating to other individuals.... [F]or substantially the same reason, the number and geographic location of managers respоnsible for taking the improper deductions does not support Ellis‘s position. No such “deductions” (plural), occurred—only the singular deduction that Ellis acknowledges.
Id. at 456 (internal quotation marks omitted). And, finally, in assessing “whether the [Company] has a clearly communicated policy permitting or prohibiting improper deductions,”
Because even a brief review of the challenged district court order belies Ms. Ellis‘s assertion that only one component of the salary-basis test—the number of improper deductions—received consideration, this argument does not avail her. We are satisfied by the district court‘s cogent reasons offered in applying the test—and, although it disposed of the third and fourth factors summarily, we discern no error in that choice. The court had already scrutinized those factors in its December 11, 2012, ruling on Ms. Ellis‘s
2
More broadly, Ms. Ellis disputes the district court‘s conclusion that she failed to raise genuine issues of material fact concerning the existence of an actual Company practice or policy of making improper deductions. For the reasons discussed, we find her position unconvincing.
a
First, Ms. Ellis argues that the district court incorrectly found no genuine issue of material fact concerning the existence of an actual practice of improper deductions by the Company—and, therefore, no genuine issue of material fact concerning the Company‘s intent to pay her on a salary basis. We disagree.
After setting out the components of the salary-basis test, the district court determined that the factors to consider when determining whether an employer has an actual practice of making improper deductions, on the record presented, did not prompt a finding that the Company had such a practice. The court appropriately invoked the Supreme Court‘s Auer decision to support its view that the Company‘s one-time improper deduction from Ms. Ellis‘s pay, “taken under unusual circumstances[, would] not defeat [Ms. Ellis‘s] salaried status.” Aplt.App. at 452 (citing Auer, 519 U.S. at 460-61). This is hardly an unusual conclusion in FLSA jurisprudence, and it is the correct result here. See, e.g., Carpenter v. City & Cnty. of Denver, 115 F.3d 765, 767 (10th Cir.1997) (noting with approval that “although there were two cases of alleged deductions, the [district] [c]ourt specifically recognized that such one time deductions under unusual circumstances will not oust exempt status and may be remedied“); see also Kennedy v. Commonwealth Edison Co., 410 F.3d 365, 372 (7th Cir.2005) (discussing subsection (a) and its predecessor regulation, and concluding that “[i]dentifying a few random, isolated, and negligible deductions is not enough to show an actual practice or policy of treating as hourly the theoretically salaried.... This means that these isolated instances of deductions do not create a genuine issue of fact about the proper characterization of the plaintiffs’ positions.“); Block v. City of L.A., 253 F.3d 410, 415 (9th Cir.2001) (“In some cases, the number of [employer] suspensions alone may be sufficient indicia of the employer‘s intent to resolve the ‘actual practice’ determination. For example, the number may be so small that there would be no way to say that the employer meant to treat an entire class of employees as hourly rather than salaried by virtue of one or two isolated suspensions.“); Aiken v. City of Memphis, 190 F.3d 753, 762 (6th Cir.1999) (“The evidence shows that only one captain ever faced a deduction in pay. Thus, plaintiffs cannot demonstrate an actual practiсe of applying such deductions to captains.“).
In affirming the district court on this basis, we note that the regulatory language—which “[is] entitled to judicial deference [as] the primary source of guidance
Our growing body of FLSA caselaw reflects this understanding of the Secretary‘s regulatory focus: we have held that “one change in base hours [producing a deduction] ... is not the kind of frequent change necessary to create a factual dispute.” Archuleta, 543 F.3d at 1235; see also In re Wal-Mart, 395 F.3d at 1189 (in crafting rule regarding prospective deductions, expressly requiring proof of “frequent” “salary changes” and “adjustments” (emphases added)). Along those lines, we find it implausible that subsection (a)‘s requirement of a “practice” of such deductions contemplates isolated conduct. See
In sum, we agree that Ms. Ellis did not meet her summary-judgment burden regarding her first argument for reversal. We reach this conclusion because, as a matter of law, Ms. Ellis‘s failure to identify more than the April 3, 2012, deduction precluded a finding of аn “actual practice,”
b
Ms. Ellis‘s second salary-basis argument does not give us pause in reaching this conclusion. Specifically, she directs her fire at what she perceives to be the Company‘s impermissible deductions policy and contends that “[she] raised a genuine issue of material fact concerning the existence of an employer policy requiring deduction from her pay when she was absent from work for a brief period of time.” Aplt. Opening Br. at 21. This argument implicates both subsections (a) and (d): subsection (a) expressly counsels courts in reaching an “actual practice” determination to inquire regarding the existence vel non of a “clearly communicated [employer] policy permitting or prohibiting improper deductions,” and subsection (d)‘s provisions inform that specific inquiry. However, we agree with the district court‘s determination that the Company had no “policy” requiring improper deductions. And, therefore, we do not fault the court‘s explicit repudiation of Ms. Ellis‘s “assert[ion] that the $31.20 deduction on April 3, 2012, ... was part of a policy requiring a deduc-
As a preliminary matter, we note that the approach taken by the DOL with respect to an employer‘s “policy” regarding deductions in the context of the salary-basis test is not hypertechnical. That is, the Secretary
rejects a wooden requirement of actual deductions, but in their аbsence ... requires a clear and particularized policy—one which effectively communicates that deductions will be made in specified circumstances. This avoids the imposition of massive and unanticipated overtime liability ... in situations in which a vague or broadly worded policy is nominally applicable to a whole range of personnel but is not significantly likely to be invoked against salaried employees.
Auer, 519 U.S. at 461 (emphasis added) (citation omitted) (internal quotation marks omitted).
Relevant here, the Company‘s “policy,” as set forth in the version of the employee handbook in effect during Ms. Ellis‘s employment, declares that “[t]he Company prohibits deductions from an exempt, salaried employee‘s pay except under the circumstances set forth in the [FLSA] and state law. If you believe that improper [deductions have occurred], it will promptly reimburse the employee and ensure the mistake will be corrected in the future.” Aplt.App. at 384 (Emp. Handbook, filed Jan. 11, 2013). We would be hard-pressed to conclude that this language evinces a policy that mandates improper deductions, as Ms. Ellis intimates on appeal. Indeed, essentially the obverse, is true. This is so because the foregoing handbook language tracks the text of the Secretary‘s guidance regarding the salary-basis test, which specifies that an employer will retain the exemption as long as it maintains “a clearly communicated policy that prohibits the improper pay deductions specified in [subsection] (a) and includes a complaint mechanism, reimburses employees for any improper deductions and makes a good faith commitment to comply in the future.”
Nevertheless, in Ms. Ellis‘s view, the Company‘s FLSA-related handbook policy flouts the regulatory scheme for two reasons. First, she claims, “[a] policy that requires the employee to research the law to determine the employer‘s policy does not clearly communicate which deductions are not allowed.” Aplt. Opening Br. at 32. We understand Ms. Ellis to argue that the law requires employers not to task their exempt employees with “learning that deductions from an exempt employee‘s pay for absences from work of less than a day‘s duration are prohibited by the FLSA.” Aplt.App. at 360 (Resp. to Mot. for Summ. J., filed Jan. 11, 2013). This contention did not avail her in the district court because she failed to marshal any authority “indicating that a policy fails to be clear merely because it incorporates by reference, but does not reiterate in full, the governing law.” Id. at 454 n. 4. Nor does this contention help Ms. Ellis here; for, like the district court did, we find her hypothesis unsupported.7 Given Ms. Ellis‘s obligation
Ms. Ellis‘s second argument on this score is even more tenuous: she claims that “[the Company‘s] policy did not contain a complaint mechanism” and, therefore, the Company could not retain the exemption. Aplt. Opening Br. at 32. This contention is patently incorrect. Our review of the employee handbook makes clear that it contemplates at least three species of employee complaints. An employee who experiences or observes harassment “must promptly notify the supervisor“—or, if she believes a violation of the law has occurred, she “is directed to advise the [Company] President.” Aplt. App. at 383. If an employee suspects her pay has been reduced because of a “cash shortage or gas skip,” she “should notify [her] supervisor or the Company President immediately.” Id. at 384.
Finally—and most germane to this case—the handbook has a section discussing “open door communications” that provides, “If you have a problem, complaint, or need help with anything related to your job, ... [y]ou may ... [t]alk to your su-
pervisor; or ... if you are not satisfied with thе results of such a discussion, please contact the President.” Id. at 383-84 (capitalization altered) (emphases added). In light of these provisions, we reject Ms. Ellis‘s bald assertion regarding the absence of a complaint mechanism and reiterate our view that the Company‘s deductions policy permits it to retain the challenged exemption.
For these reasons, we hold that the district court correctly found no evidence of an “actual practice” of making improper deductions or of a “policy” of making improper deductions by the Company. Therefore, the district court properly declined Ms. Ellis‘s invitation to strip the Company, under the authority of subsection (a), of its exemption as to Ms. Ellis.
3
Next, Ms. Ellis entreats us to reverse the district court based upon its purported “evasion of the spirit of the FLSA,” Aplt. Opening Br. at 19—that is, its failure to consider her employment conditions sufficiently oppressive. She complains, “Reading the District Court‘s order one could conclude that an employer can adopt a hard floor of fifty hours and assign to the employee a virtually unlimited amount of work,” id. at 15, and that such an employer could still evade the FLSA‘s overtime requirements. The crux of her argument, however, is that the district court relied upon improper precedent in making its determinations. Having carefully reviewed the district court‘s ruling, we reach a different conclusion.
Ms. Ellis challenges the district court‘s reliance upon various DOL interpretations
Congress, in effect, provided that employees should be exempt who fell within certain general classifications as rationally and reasonably defined and made certain by the [DOL‘s Wage and Hour] Administrator. The general standard was laid down by Congress[]—bona fide executive, administrative, or professional capacity. The policy was made manifest by Congress[] that of precise definition and delimitation by a reasonable and rational regulation defining and delimiting the general terms. The delegation of such a power to define and delimit has been sustained by the decisions of the Supreme Court[.] Congress has laid down a general standard and manifest a policy and within the framework thereof has delegated to the Administrator the duty to supply the details.
Walling v. Yeakley, 140 F.2d 830, 832 (10th Cir.1944) (footnote omitted). In looking to the DOL‘s Wage and Hour Administrator for such interstitial particulars, we have subsequently recognized the permissibility of deferring to the DOL‘s interpretations of the FLSA scheme by way of opinion letters. See In re Wal-Mart, 395 F.3d at 1184 (“The DOL considers these opinion letters to be rulings.... [O]pinion letters are entitled to great weight when they interpret the DOL‘s own (ambiguous) regulations.” (citations omitted) (internal quotation marks omitted)); see also Rodriguez v. Whiting Farms, Inc., 360 F.3d 1180, 1189 (10th Cir.2004) (“[W]e may look to such opinions for guidance. Such inter-
pretations are entitled to respect.” (internal quotation marks omitted)).
And, in this same vein, the Supreme Court has established the propriety of seeking interpretive guidance from the DOL‘s preambles to its regulations. See Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 132 S.Ct. 2156, 2162-63 (2012) (interpreting the term “employee employed in the capacity of outside salesman” in an FLSA exemption by looking to the DOL‘s regulations, and also finding that “[a]dditional guidance concerning the scope of the outside salesman exemption can be gleaned from ... the preamble to the 2004 regulations” (internal quotation marks omitted)); see also Ramos v. Baldor Specialty Foods, Inc., 687 F.3d 554, 560-61 (2d Cir.2012) (interpreting the term “a customarily recognized department or subdivision” in FLSA‘s executive exemption, and looking to the preamble to the 2004 regulation as an interpretive guidepost).
In light of the foregoing authority, it is clear that the district court was entitled to consult DOL interpretations when ruling on the potentially ambiguous concept of intent to pay a salary. In particular, the court did not err in reasonably relying on the preamble to the regulations or a 2006 DOL opinion letter. See In re Wal-Mart, 395 F.3d at 1186 (“[W]e need not take a jaundiced view of the DOL‘s own interpretation of ‘salary.‘“). Both agency interpretations provide strong justification for the district court‘s conclusion that Ms. Ellis‘s purportedly unduly burdensome job requirements did not run afoul of the Company‘s duties under the FLSA.
We аre not unsympathetic to the hours of diligent work Ms. Ellis provided to the Company as a store manager. Nonetheless, it is pellucid that she was aware of this requirement throughout her employment—indeed, she admits that the Compa-
Similarly, we are not troubled by the district court‘s citation to a 2006 DOL opinion letter in its assessment. This particular letter was issued in response to an employer‘s “wish[] to require exempt employees to work either 45 or 50 hours a week” and “to require ... that exempt employees make up work time lost due to personal absences of less than a day.”
Aplt.App. at 33 (DOL Op. Letter No. FLSA2006-6, dated Mar. 10, 2006). The employer‘s concern was not whether it could effect any salary deductions for employees who violated these proposed rules, but whether “consistent failure to observe the proposed requirements [c]ould result in discipline.” Id. (internal quotation marks omitted). The DOL opined that the employer could implement the requirements with impunity—i.e., under those hypothetical facts, the employer would not lose the exemption. More to the point, the DOL advised that
[t]he number of hours worked by an employee ... is a matter to be determined between the employer and the employee. An employer may require an exempt employee to make up work time lost due to personal absences of less than a day without loss of the exemption.... As the preamble to the final rule explains, an employer may require an exempt employee to do things such as to record and track hours and to work a specified schedule without affecting the employee‘s exempt status.
Id. (citing Cowart v. Ingalls Shipbuilding, Inc., 213 F.3d 261 (5th Cir.2000)). These principles find support in both binding and persuasive caselaw. See, e.g., Aaron, 54 F.3d at 658 (“[T]he fact that the [employees‘] paystubs indicated the number of hours covered is ... not inconsistent with salaried status. Such an accоunting of hours is necessary....“); see also Spradling, 95 F.3d at 1500 (noting that “the facts pertaining to [the] plaintiffs’ pay are reviewed in light of Aaron“); accord Guerrero v. J.W. Hutton, Inc., 458 F.3d 830, 835-36 (8th Cir.2006);
Having failed to advance a compelling—let alone plausible—justification for us to discount the district court‘s consultation of DOL interpretations of the FLSA, Ms. Ellis cannot prevail on this score. This particular strand of reasoning only strengthens our view that affirmance is the correct result.
4
Ms. Ellis also argues that the district court mishandled her attempt to demonstrate, via her own affidavit, a violation of the salary-basis test. The affidavit detailed Ms. Ellis‘s view that the Company maintained an impermissible policy of making improper deductions—which, if true, would support her conclusion that the salary-basis test was violated. Ms. Ellis relied heavily on this affidavit to support the assertion that the Company could not have intended to pay her a salary when the deduction at issue was intentional and made pursuant to its policy. In granting the Company‘s summary-judgment motion, the district court noted that Ms. Ellis had “support[ed] her assertion only with [this] affidavit which, in turn, merely recite[d] alleged statements of another [Company] manager that arguably substantiate[d] Ellis‘s description of [a] ‘policy’ of docking salaried employees’ pay.” Aplt.App. at 453 (emphasis added). The court found Ms. Ellis‘s affidavit conclusory and self-serving. And we conclude that it was entitled to do so.
As a threshold matter, Ms. Ellis is mistaken in her view that “the Court reviews this issue de novo.” Aplt. Opening Br. at 32. It is well-settled that a district court‘s assessments of the admissibility and probative value of affidavits at the summary-judgment phase involve, at bottom, evidentiary determinations; as such, they are reviewed for an abuse of discretion. See Sports Racing Servs., Inc. v. Sports Car Club of Am., Inc., 131 F.3d 874, 894 (10th Cir.1997) (“Like other evidentiary rulings, we review a district court‘s decision to exclude evidence at the summary judgment stage for abuse of discretion.... We cannot say that the district court abused its discretion in finding [the plaintiff‘s] affidavit a sham and excluding it.” (citations omitted)); accord Mitchael v. Intracorp, Inc., 179 F.3d 847, 854-55 (10th Cir.1999).
Affidavits must contain certain indicia of reliability. “Unsubstantiated allegations carry no probative weight in summary judgment proceedings[; they] must be based on more than mere speculation, conjecture, or surmise.” Bones v. Honeywell Int‘l, Inc., 366 F.3d 869, 875 (10th Cir.2004) (citation omitted). Information presented in the nonmovant‘s affidavit must be “based on personal knowledge and [must set] forth facts that would be admissible in evidence. We do not consider conclusory and self-serving affidavits.” Garrett v. Hewlett-Packard Co., 305 F.3d 1210, 1213 (10th Cir.2002) (citation omitted) (quoting Murray v. City of Sapulpa, 45 F.3d 1417, 1422 (10th Cir.1995)) (internal quotation marks omitted).
Because the statements in Ms. Ellis‘s affidavit constitute inadmissible hearsay, they do not pass muster. In her affidavit, Ms. Ellis alleged that when she presented her time sheet for the week of her relevant absence (reflecting 40.91 hours worked), the Company‘s payroll clerk asked whether she “wanted to take sick pay or vacation.” Aplt.App. at 371. Ms. Ellis claimed that she replied, “[D]o whatever you need to do.” Id. (internal quotation marks omitted). She then described the following alleged conversation she had with the Company‘s office manager after she realized she did not receive her full salаry:
I asked Kathy “Do we have an HR Department?” She said that would be her or Dan. I explained that I had lost a vacation day because I was sick. I was upset and asked whether that was what I got for all the 60 and 70 hour[] weeks I worked.... She said that is their “policy” and that is what she had to do. She said “I can get that straightened out. [The payroll clerk] should have done sick pay.”
Id. Additionally, Ms. Ellis claimed that other Company leaders “were extremely upset that [she] had questioned the policy.” Id. She now challenges the district court‘s conclusion that these particular statements would be inadmissible at trial.
Basic hearsay jurisprudence makes clear that Ms. Ellis could not have introduced these statements at trial: she offered statements pertaining to her conversation with the office manager in order “to prove the truth of the matter asserted in the statement[s].”
Nevertheless, Ms. Ellis contends that the office manager‘s statements are outside the ambit of
Ms. Ellis‘s remaining argument regarding her affidavit—that we should reject the “more stringent standard” of Johnson and Jaramillo, Aplt. Reply Br. at 12—is also unconvincing. In her view, the better case upon which to rely is Aliotta v. National Railroad Passenger Corp., 315 F.3d 756 (7th Cir.2003). She seizes upon the
We likewise agree in material respects with the district court‘s resolution of Ms. Ellis‘s arguments regarding the remaining affidavit statements—i.e., her averments that she worked more than her time sheets indicated. More specifically, we conclude that the district court‘s reasoning was on target insofar as it found that Ms. Ellis‘s unsupported assertions were at best “conclusory,” Aplt.App. at 454, and consequently of marginal probative value. See, e.g., Bones, 366 F.3d at 875. Indeed, a huge dollop of conjecture would be necessary to divine from these averments a genuine issue of material fact. Cf. Aplt.App. аt 373 (generally stating that “[The Company] has submitted documents ... as evidence that I didn‘t work 50 hours or more during [a certain time period]. I did work more than 50 hours during [that time period]. I know I did....“). Perhaps, as the district court noted, Ms. Ellis could have improved her cause by submitting affidavits of other managers or co-workers. Her choice not to do so sounds the death knell for this argument.
For all of the reasons detailed above, we affirm the judgment of the district court insofar as it based its grant of summary judgment on a finding that the Company did not violate the salary-basis test, as explicated in subsection (a) and informed by subsection (d). We conclude that the Company intended to pay Ms. Ellis a salary, which means that she is exempt and may not receive overtime pay under the FLSA.
B
Next, Ms. Ellis insists that the district court‘s ruling cannot stand because its interpretation of the window-of-correction defense explicated in subsection (c) “conflicts with the principles of statutory interpretation and the narrow interpretation of FLSA exemptions.” Aplt. Opening Br. at 29. We disagree and hold that the district court did not err in concluding that the Company was entitled to rely on this defense.
Subsection (c) provides that “[i]mproper deductions that are either isolated or inadvertent will not result in loss of the exemption for any employees subject to such improper deductions, if the employer reimburses the employees for such improper deductions.”
Resisting this conclusion, Ms. Ellis argues that subsection (c) should not be “read in isolation from the remainder of the regulation,” Aplt. Opening Br. at 30, but instead, if read in context with subsections (a) and (d), “should ... apply only when there is no other evidence of the employer‘s intent, such as a policy allowing deductions,” id. at 31. Otherwise, she claims, subsections (a) and (d) would be nullified because an employer would have no need for a clear policy prohibiting improper deductions; instead, it could “intentionally dock an exempt employee‘s pay and avoid all liability for overtime simply by reimbursing the employee.” Id. In effect, she argues that subsection (c) is only triggered where the improper deduction is both isolated and unintentional.
We cannot accеpt Ms. Ellis‘s statutory-construction argument. Beginning with the text of subsection (c), as we must, see United States v. Lamirand, 669 F.3d 1091, 1094 (10th Cir.2012), it is apparent that this language renders the window-of-correction defense available to an employer who has made “[i]mproper deductions that are either isolated or inadvertent,” but has “reimburse[d] the employees for such improper deductions.”
The district court thus did not err in concluding that the lone improper deduction affecting Ms. Ellis was “isolated“—even without addressing whether that improper deduction was also “inadvеrtent.” Generally speaking, we understand statutes containing disjunctive language to require that only one of the listed requirements must be satisfied. See, e.g., Graham v. Hartford Life & Accident Ins. Co., 589 F.3d 1345, 1353 (10th Cir.2009) (finding that a definition stating that “a plan need only be established or maintained” would be met if the party either established the plan or maintained the plan (internal quotation marks omitted)). Additionally, we have said that “effect must be given, if possible, to every word, clause and sentence of a statute ... [which means we] therefore cannot ignore the use of the ‘or’ in” a statute and its accompanying regulations. Knutzen v. Eben Ezer Lutheran Hous. Ctr., 815 F.2d 1343, 1348-49 (10th Cir.1987) (citation omitted) (quoting 2A N. Singer, Sutherland on Statutory Construction § 46.06, at 104 (4th ed.1984)) (internal quotation marks omitted).
Ms. Ellis correctly observes that courts should consider statutory and regulatory text as a whole, see Bethesda Hosp. Ass‘n v. Bowen, 485 U.S. 399, 405 (1988),
[i]t is not a proper use of the [“whole-text“] canon to say that since the overall purpose of the statute is to achieve x, any interpretation of the text that limits the achieving of x must be disfavored.... [L]imitations on a stаtute‘s reach are as much a part of the statutory purpose as specifications of what is to be done.
Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 168 (2012). This concept is particularly apt here because Ms. Ellis repeatedly argues that the FLSA is a remedial statute designed to be resolved “in favor of employee coverage.” Aplt. Opening Br. at 14; accord id. at 15; id. at 19; id. at 43. The fact that one purpose of the FLSA is to ensure overtime pay for non-exempt employees does not preclude the possibility that an employer may “intentionally dock an exempt employee‘s pay and avoid all liability for overtime simply by reimbursing the employee.” Id. at 31. Such a situation does not necessarily abuse the window-of-correction defense or eviscerate the employee‘s exempt status—provided, of course, that the intentional (i.e., not inadvertent) deduction was “isolated.”
While we note that some of our sister circuits have intimated that this defense can only apply when an employer has made an innocent mistake,11 we remind Ms. Ellis that these decisions are not binding upon us. Our own precedent makes clear that “[t]he ‘window of correction’ provided by [the predecessor version of subsection (c)] allows employers to treat otherwise eligible employees as salaried, regardless of the employer‘s one-time or unintentional failure to adhere to” the statute‘s prohibition on improperly deducting salaried employees’ pay based on quantity of work performed. Spradling, 95 F.3d at 1503 (emphasis added). And our holding in Spradling leads ineluctably to the conclusion that the district court properly allowed the Company to rely upon the window-of-correction defense regarding its lone improper deduction to Ms. Ellis‘s pay.
C
In conclusion, we hold that subsections (a) and (c) can be read harmoniously. We further hold that the Company can rely on both provisions here: as to the former, there was no practice or policy of making inappropriate pay deductions for salaried employees; and, as to the latter, the one time the Company acted improperly as regards Ms. Ellis, that action was isolated. On these grounds, we affirm.
IV
Finally, we address the district court‘s denial of Ms. Ellis‘s motion to defer summary judgment for the gathering of additional discovery under
Ms. Ellis attempted to satisfy the foregoing directives in the district court by submitting the affidavit of Attorney Bradley Sherman. According to that affidavit, the probable facts unavailable to Ms. Ellis included information in “pay records, deposition testimony, and other documents” that would “show a wide ranging policy and practice of making improper deductions” and allow Ms. Ellis “to determine if any deductions were in fact ‘isolated’ or not.” Aplt.App. at 319 (Aff. of Bradley Sherman, dated Oct. 31, 2012). The affidavit furthеr indicated that Ms. Ellis had participated in the discovery conference required by
But the district court was not persuaded that such a wide swath of discovery was necessary. In fact, it found that Attorney Sherman‘s affidavit failed to demonstrate the need for any further discovery beyond Ms. Ellis‘s pay and time records. Reasoning that this affidavit only raised a speculative hope of unearthing evidence sufficient to prevail at summary judgment, the
We first address Ms. Ellis‘s argument that she was unable to rebut the Company‘s “isolated-deduction” allegations without a thorough “analysis of [the Company‘s] pay practices regarding other employees.” Id. at 318. Ms. Ellis apparently believes that subsection (a) always contemplates an employer-wide assessment—and, to be sure, subsection (a) lists among its nonexhаustive factors “the number and geographic location of employees whose salary was improperly reduced.”
tional time to conduct other-employee discovery.
Next—and relatedly—we reject Ms. Ellis‘s contention that the procedural posture of her case justified relief under
On this record, we would be hard-pressed to find fault with the district court‘s conclusion that Ms. Ellis required no further discovery to respond to the Company‘s summary-judgment motion. By that point in the case, the Company had provided time sheets and pay records for the relevant time period set forth in Ms. Ellis‘s complaint, which was all Ms. Ellis could reasonably have required to rebut the Company‘s allegations as they related to her, the sole named plaintiff. Those materials unmistakably revealed that the Company made only one deduction to Ms. Ellis‘s pay in the amount of $31.20—a fact Ms. Ellis has never disputed. Moreover, while the summary-judgment and class-certification motions were pending, the Company amended its answers to Ms. Ellis‘s interrogatories to reflect that it had previously made pay deductions for two other store managers. This amendment did not benefit Ms. Ellis, though, because both subtractions stemmed from the employees’ use of “a full sick day,” Aplt.App. at 423 (Resp. to Pl.‘s Mot. to Supplement R., Ex. A, filed Feb. 22, 2013), which is permissible under
In light of Ms. Ellis‘s obvious failure to marshal evidence of improper deductions, as the FLSA regulations contemplate, it was hardly irrational for the district court to have found her
ment. See Meyer v. Dans un Jardin, S.A., 816 F.2d 533, 537 (10th Cir.1987) (“The nonmoving party has the burden of showing ... how additional time will enable [her] to rebut the movant‘s allegations.” (emphasis added)); accord Culver v. Town of Torrington, 930 F.2d 1456, 1458-59 (10th Cir.1991).14 And, in a similar procedural context in Lewis v. City of Ft. Collins, we reached a result that further undermines Ms. Ellis‘s position:
In her brief in response to the motion for summary judgment, plaintiff asserts that there has been “insufficient time for discovery” and that “[t]he parties have not begun the discovery process.” Thus, plaintiff argued that appellants’ motion for summary judgment was “premature” and “improper.” Within the affidavit itself, plaintiff repeatedly asserts that she “will be able to show” certain facts relative to her claims.... These inspecific referenсes are simply insufficient to meet [
Rule 56(d) ] muster.... Plaintiff has not attempted to particularize her request for discovery. She has not explained how any specific documents or depositions will aid in rebutting defendants’ showing of objective reasonableness. [Rule 56(d) ] is not a license for a fishing expedition....
903 F.2d 752, 758-59 (10th Cir.1990) (first alteration in original) (emphasis added). Guided by these cases, we believe denying Ms. Ellis‘s
Reduced to its essence, then, Ms. Ellis‘s
V
For the reasons explicated above, we AFFIRM.