370 F.3d 512 | 6th Cir. | 2004
(cid:45) COOK, Circuit Judge. Plaintiffs-Appellants Kurt Renfro
v. (cid:45) and Richard Peterson, on behalf of themselves and other (cid:45) similarly situated persons, appeal the district court’s grant of
I NDIANA M ICHIGAN P OWER (cid:45) summary judgment in favor of their employer, Indiana C OMPANY , d/b/a American (cid:45) Michigan Power Company d/b/a American Electric Power (cid:45) Electric Power, (AEP), and denial of their motion for summary judgment on (cid:45) their claims that AEP failed to pay overtime wages in Defendant-Appellee. (cid:45) violation of the Fair Labor Standards Act of 1938 (FLSA), 29 (cid:78) U.S.C. §§ 201-219 (2000). Because AEP properly treated
plaintiffs as administratively exempt from the FLSA’s Appeal from the United States District Court overtime requirement, we affirm the district court’s judgment. for the Western District of Michigan at Grand Rapids. No. 99-00877—Wendell A. Miles, District Judge. I Argued: February 4, 2004 Indiana Michigan Power Company, doing business as AEP, operates several power-generating facilities, including the Decided and Filed: June 2, 2004 Cook Nuclear Plant in Bridgman, Michigan, where the plaintiffs worked as “planners.” According to plaintiffs,
Before: BATCHELDER, GIBBONS, and COOK, Circuit planners “take job orders that identify work (maintenance or Judges. new construction) and prepare work packages that the plant’s 1 No. 02-2342 Renfro, et al. v. Ind. Mich. Power Co. 3 4 Renfro, et al. v. Ind. Mich. Power Co. No. 02-2342 craft workers use to perform the work in the field.” placing on AEP the burden of proving that the administrative (Appellants’ Br. at 6.) In creating work packages, planners employee exemption applies to the planners, Douglas v. determine which plant procedures apply to the particular Argo-Tech Corp. , 113 F.3d 67, 70 (6th Cir. 1997). AEP must repairs and identify any permits necessary to allow the establish each element of the exemption by a preponderance repairs. of the clear and affirmative evidence. Ale v. Tennessee
Valley Auth. , 269 F.3d 680, 691 n.4 (6th Cir. 2001). During some workweeks, plaintiffs (the planners) work more than forty hours, but AEP does not pay them time-and- B. The Administrative Employee Exemption a-half for the overtime. Under section 7(a) of the FLSA, non- To demonstrate that the planners are bona fide exempt employees are entitled to this additional administrative employees under the applicable Department of compensation for overtime work. 29 U.S.C. § 207(a)(1). Labor regulations (described as the short test), AEP must Section 13(a) sets forth an exception from the Act’s overtime demonstrate (1) that it pays the planners at least $250 per requirement for any salaried employee who works in a bona week on a salary or fee basis; (2) that the planners’ primary fide administrative or executive capacity. 29 U.S.C. duty consists of office or nonmanual work directly related to § 213(a)(1). AEP classified the planners as administrative
AEP’s management policies or general business operations; employees, making them ineligible under section 13(a) for and (3) that the planners’ primary duty requires them to overtime compensation. The planners, disagreeing with exercise discretion and independent judgment. 29 C.F.R. AEP’s classification, filed this suit seeking damages, §§ 541.2(a)(1), 541.2(e)(2); see, e.g., Schaefer v. Ind. Mich. attorneys’ fees, and an injunction requiring AEP to comply Power Co. , 358 F.3d 394, 400 (6th Cir. 2004); Ale , 269 F.3d with the FLSA’s overtime compensation provisions. The at 683–85. district court found that the planners meet the FLSA criteria for exempt administrative employees and therefore granted
1. Salary Basis summary judgment to AEP and denied the planners’ motion for summary judgment.
An employee is paid on a “salary basis” if the employee “regularly receives each pay period on a weekly, or less
II
frequent basis, a predetermined amount constituting all or part of his compensation, which amount is not subject to reduction
This court reviews de novo the district court’s grant of because of variations in the quality or quantity of the work summary judgment to AEP and denial of summary judgment performed.” 29 C.F.R. § 541.118(a). Such an employee to the planners, Williams v. Mehra , 186 F.3d 685, 689 (6th “must receive his full salary for any week in which he Cir. 1999), applying the axiomatic standard from Celotex performs any work without regard to the number of days or Corp. v. Catrett , 477 U.S. 317, 324 (1986), and Anderson v. hours worked,” subject to certain exceptions. Id. Liberty Lobby, 477 U.S. 242, 251 (1986). Although the planners concede that they receive at least
A. Burden of Proof $250 per week, they argue that they cannot be exempt even In determining whether a FLSA exemption applies to the though salaried because AEP requires them to account for at planners, we narrowly construe the exemption against AEP, least 40 hours of work each week and to make up for partial- Arnold v. Ben Kanowsky, Inc. , 361 U.S. 388, 392 (1960), day absence either by working extra hours or by taking No. 02-2342 Renfro, et al. v. Ind. Mich. Power Co. 5 6 Renfro, et al. v. Ind. Mich. Power Co. No. 02-2342 vacation time or paid time off. An employer may require a. Office or Nonmanual Work exempt salaried employees to make up for time missed from Although the planners concede that they perform much of work due to personal business. It is only when an employer their work at a desk, they claim that they perform so much actually deducts from an employee’s paycheck that the
manual work through the “field walk-downs” (used to assess employee is ineligible for the exemption. See, e.g., Cowart repair projects) that they cannot be considered white-collar v. Ingalls Shipbuilding, Inc. , 213 F.3d 261, 265–66 (5th Cir. employees. Performing some manual work does not 2000) (finding that employees who were required to make up automatically remove an employee from exempt status so personal time off and suffered no salary deductions for the long as the manual work is “directly and closely related to the lost time were paid on a salary basis); Haywood v. North work requiring the exercise of discretion and independent Amer. Van Lines, Inc. , 121 F.3d 1066, 1070 (7th Cir. 1997) judgment . . . .” 29 C.F.R. § 541.203(b). If, however, the (holding that the regulations prohibit only monetary discipline planners perform “so much manual work (other than office of exempt employees). Because the planners concede that
work) that [they] cannot be said to be basically ‘white-collar’ AEP has not docked their salaries for missed time from work, employee[s],” then they are not exempt administrative their argument in this regard fails. employees. Id. The planners also argue that they are not salaried The evidence, viewed in the light most favorable to the employees because AEP controls their work schedules and planners, does not support their contention. The planners does not permit them to come and go as they please. These admitted at their depositions that they performed most of their criteria, however, play no part in defining salaried employees. work at their desks; they generally described their duties as See 29 C.F.R. § 541.118(a).
office-based, rather than manual. Additionally, the field Accordingly, the district court correctly determined that walk-downs—performed as part of the planners’ preparation AEP demonstrated that the planners were paid on a salary of work repair packages—are “directly and closely related to basis. the [planners’] work requiring the exercise of discretion and
independent judgment,” supporting exemption from the 2. Nonmanual Work Directly Related to General Business FLSA. 29 C.F.R. § 541.203(b). Operations The planners further argue that because certain planners AEP must next show that the planners’ primary duty worked without overtime pay removing ice at the Cook plant consists of (1) office or nonmanual work, (2) directly related for a month or two in 1998, the planners cannot be considered to management policies or general business operations, nonmanual workers. Exempt employees’ status under the (3) that is of “substantial importance” to the management or FLSA does not change merely because they perform some operation of AEP’s business. 29 C.F.R. §§ 541.2(a)(1), nonexempt work. See, e.g., Counts v. South Carolina Elec. 541.205(a). The parties do not dispute that the planners’ & Gas Co. , 317 F.3d 453 (4th Cir. 2003) (holding that primary duty involves preparing work repair packages. because the language and structure of the FLSA call for a
“holistic approach” to determining employees’ primary duties, the court need not engage in a “day by day scrutiny” of the tasks of administrative employees). The ice removal project does not concern the planners’ primary duty (“the
No. 02-2342 Renfro, et al. v. Ind. Mich. Power Co. 7 8 Renfro, et al. v. Ind. Mich. Power Co. No. 02-2342 major part, or over 50 percent, of the employee’s time,” 29 ancillary to AEP’s principal production activity of generating C.F.R. § 541.103), nor does performing this manual labor electricity. While not precisely “administrative,” the preclude the planners from otherwise meeting the exemption. planners’ duties form the type of “servicing” (“advising the
management, planning,” etc.) that the FLSA deems administrative work directly related to AEP’s general
b. Directly Related to Management Policies or General business operations. 29 C.F.R. § 541.205(b); see, e.g., Business Operations Cowart , 213 F.3d 261 (finding that employees responsible for planning production work requirements in a shipyard AEP must also demonstrate that the planners’ primary duty performed administrative work). is “directly related to management policies or general business operations.” 29 C.F.R. § 541.2(a)(1). According to c. Work of Substantial Importance the regulations, work “directly related to management policies or general business operations” must involve “the The planners claim that their primary duty is not of administrative operations of a business as distinguished from “substantial importance to the management or operation of ‘production.’” 29 C.F.R. § 541.205(a). Work concerning the [AEP’s] business” because their work is standardized and “administrative operations” of a business includes “work because it does not involve setting company policy or performed by so-called white-collar employees engaged in performing major assignments affecting AEP’s business ‘servicing’ a business, as for example, advising the operations. 29 C.F.R. § 541.205(a). management, planning, negotiating, representing the According to the Department of Labor regulations, the company, purchasing, promoting sales, and business research category of employees whose work is of substantial and control.” 29 C.F.R. § 541.205(b). The planners maintain importance includes, but is not limited to, those “whose work that their work is not administrative but rather, “a affects business operations to a substantial degree, even maintenance function best categorized as production.” though their assignments are tasks related to the operation of (Appellants’ Br. at 45.)
a particular segment of the business.” 29 C.F.R. Under the administrative/production dichotomy analysis, § 541.205(c). This does not include “routine clerical duties” the job of “production” employees “is to generate (i.e. or even operating expensive equipment or activities that, if ‘produce’) the very product or service that the employer’s improperly performed, would cause loss to an employer. business offers to the public.” Reich v. John Alden Life Ins. 29 C.F.R. § 541.205(c)(2). Co. , 126 F.3d 1, 9 (1st Cir. 1997). When employees engage The planners’ primary duty can only be viewed as in work that is “ancillary to an employer’s principal substantially important to AEP’s operations. Their production activity,” those employees are administrative. work—interpreting and carrying out plant policies, creating Martin v. Cooper Elec. Supp. Co. , 940 F.2d 896, 904 (3d Cir. plans that permit the continued operation of the equipment 1991). This analysis, however, “is only useful to the extent and systems that generate AEP’s main product—affects that it is a helpful analogy in the case at hand.” Schaefer , 358 AEP’s general business operations to a substantial degree. F.3d at 402–03. AEP’s principal production activity is
See, e.g., Haywood , 121 F.3d at 1072 (holding that generating electricity, and the product it offers the public is employee’s work, while not involving the principal service of electricity; the planners’ primary duty—creating plans for the employer, was nevertheless “important to the success of maintaining equipment and systems in the nuclear plant—is No. 02-2342 Renfro, et al. v. Ind. Mich. Power Co. 9 10 Renfro, et al. v. Ind. Mich. Power Co. No. 02-2342 the firm” and therefore exempt). Moreover, the planners but which, of course, may be less than constant”); see also themselves testified that their work is crucial to keeping the Schaefer , 358 F.3d at 403–04; Douglas , 113 F.3d at 72. Cook plant in compliance with its licensing requirements. We disagree with the planners’ argument that the heavily- And although their work may involve some routine clerical
regulated nature of their primary job duty prohibits their tasks, the planners’ primary duty is not clerical in nature. See exercise of discretion and independent judgment. While Part II.B.3. infra . “[t]he very purpose of such detailed regulations and In sum, the planners have failed to produce evidence procedures is to create conformity which has the practical indicating the existence of a genuine issue as to whether their effect of minimizing discretion,” we nevertheless examine primary duty consists of nonmanual work that affects AEP whether the planners, constrained by regulations, actually business operations to a significant degree and is therefore of exercise discretion and independent judgment. Schaefer , 358 substantial importance to the operation of AEP’s business. F.3d at 404.
3. Discretion and Independent Judgment The process of generating repair work packages is neither wholly mechanical nor restricted to “merely appl[ying] Finally, AEP must show that the planners’ primary duty knowledge in following prescribed procedures.” 29 C.F.R. requires “the exercise of discretion and independent § 541.207(c)(1). When there is no procedure that can be judgment.” 29 C.F.R. § 541.2(e)(2). The planners claim that applied to a particular task, the planners independently they do not exercise discretion and independent judgment determine the nature of the repair task and prepare a repair because AEP’s procedures and other guidelines standardize plan. In those situations, planners use their own skill, and narrowly circumscribe their work such that the planners experience, judgment, and discretion in formulating a repair make no independent choices when generating repair work solution. Additionally, the planners exercise independent packages. decisionmaking when choosing among various options to
remedy a problem—for example, determining whether to “Discretion and independent judgment” generally means replace or repair equipment. The deposition evidence “the comparison and the evaluation of possible courses of demonstrates that the planners make such independent conduct and acting or making a decision after the various decisions and exercise judgment on a daily basis. possibilities have been considered.” 29 C.F.R. § 541.207(a). This process implies “that the person has the authority or
Because the summary judgment evidence shows the power to make an independent choice, free from immediate planners’ primary duty of problem-solving requires them to direction or supervision, and with respect to matters of exercise discretion and independent judgment customarily significance.” Id. (This is distinct from “[a]n employee who and regularly, we conclude that the planners have failed to merely applies his knowledge in following prescribed produce evidence indicating a factual dispute with respect to procedures or determining which procedure to follow.” whether their primary duty required the exercise of discretion 29 C.F.R. § 541.207(c)(1).) Additionally, the regulations and independent judgment. See, e.g., Reich , 126 F.3d at 14 require exempt administrative employees to exercise (finding that despite extensive training in sales techniques, discretion and independent judgment “customarily and
sales representatives still exercised discretion and regularly.” 29 C.F.R. § 541.207(g) (stating that the phrase independent judgment in applying the techniques to particular signifies “a frequency which must be greater than occasional clients). No. 02-2342 Renfro, et al. v. Ind. Mich. Power Co. 11
III
For the foregoing reasons, we affirm the district court’s judgment.
