Renfro v. IN MI Power Co ( 2007 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 07a0267p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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KURT RENFRO; WILLIAM SOUTHWORTH; RICHARD
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PETERSON; JAMES FITCHUK, individually and as
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Class Representatives on behalf of other persons
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No. 06-1935
similarly situated,
,
Plaintiffs-Appellees, >
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v.
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INDIANA MICHIGAN POWER COMPANY, d/b/a
Defendant-Appellant. -
American Electric Power,
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Appeal from the United States District Court
for the Western District of Michigan at Grand Rapids.
No. 99-00877—Wendell A. Miles, District Judge.
Argued: April 17, 2007
Decided and Filed: July 18, 2007
Before: ROGERS and COOK, Circuit Judges; and O’MALLEY, District Judge.*
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COUNSEL
ARGUED: Joseph J. Vogan, VARNUM, RIDDERING, SCHMIDT & HOWLETT, Grand Rapids,
Michigan, for Appellant. Stephen D. Turner, CLARK HILL, Grand Rapids, Michigan, for
Appellees. ON BRIEF: Joseph J. Vogan, Peter A. Smit, Elizabeth Wells Skaggs, VARNUM,
RIDDERING, SCHMIDT & HOWLETT, Grand Rapids, Michigan, for Appellant. Stephen D.
Turner, Gregory N. Longworth, CLARK HILL, Grand Rapids, Michigan, for Appellees.
COOK, J., delivered the opinion of the court, in which ROGERS, J., joined. O’MALLEY,
D. J. (p. 6), delivered a separate dissenting opinion.
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OPINION
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*
The Honorable Kathleen McDonald O’Malley, United States District Judge for the Northern District of Ohio,
sitting by designation.
1
No. 06-1935 Renfro, et al. v. Indiana Michigan Power Co. Page 2
COOK, Circuit Judge. This case requires us to consider for the second time whether certain
American Electric Power (AEP) employees are exempt from the Fair Labor Standards Act’s (FLSA)
overtime regulations. In Renfro v. Ind. Mich. Power Co. (Renfro I), 370 F.3d 512 (6th Cir. 2004),
we held that the regulations did not apply to AEP planners. Applying the same analysis to AEP’s
technical writers, we conclude that they too are exempt from overtime regulations. We reverse and
remand with instructions to enter summary judgment in favor of AEP.
I
AEP operates several nuclear power plants, including the Cook Plant in Bridgman, Michigan,
where the plaintiffs are employed. Technical writers support the plant’s maintenance department
by developing written procedures on how to maintain equipment. They create new procedures,
change existing procedures as needed, and review plant documents for their impact on established
procedures. In these and other responsibilities, the technical writers work without constant
supervision, and their assignments are not doled out step-by-step by their supervisors.
Prior to drafting a procedure—a technical writer’s primary role—she first consults numerous
sources, including vendor manuals, technical specifications, EPRI guides, INPO operating
experiences, NCR bulletins, industry standards, and colleagues in other departments (mainly
engineering), to determine how to maintain a particular piece of equipment. The writer compares
different ways to address a problem and chooses one based upon her assessment of the available
information. When confronted with a novel maintenance obstacle, a writer determines how best to
remove that obstacle and memorializes her proposed solution into a draft procedure, which is peer
reviewed by another department.
The writer then writes a procedure incorporating her solution and has wide latitude to
determine how to do so. If someone from another department within the plant believes a procedure
is needed, or believes changes are needed to an existing procedure, that person addresses the
technical writer directly. Should the writer determine that the change is appropriate, she may
implement it into the existing procedures without approval from her supervisor.
The technical writers also work without direct supervision in drafting a new procedure. AEP
has, however, developed a manual on procedure writing. It explains the purpose of the different
types of procedures, provides definitions and abbreviations for various technical terms, outlines and
explains the structure of each type of procedure, prescribes format and style, and dictates the
sequence of certain sections. Attached to the manual is a writing guide that provides basic grammar
instruction and explains AEP’s standard template for page layout and numbering. The manual does
not, though, restrict a technical writer’s discretion to determine the level of detail a procedure needs.
The technical writers were once paid for overtime (as a bonus) despite being classified as
exempt. After the Cook Plant went through a restructuring and a shutdown, AEP stopped paying
the writers overtime, and the writers brought this suit. AEP and the writers cross-moved for
summary judgment on the issue of whether the writers were properly classified as exempt. The
district court denied AEP’s motion and granted the writers’ motion, holding that the writers do not
exercise sufficient discretion and independent judgment to qualify as exempt under FLSA
regulations. After a bench trial, the district court further ruled that AEP was not entitled to the good-
faith defense and awarded the writers liquidated damages. AEP appealed the denial of summary
judgment and the trial court’s judgment on the good-faith defense.
No. 06-1935 Renfro, et al. v. Indiana Michigan Power Co. Page 3
II
A
We review de novo a district court’s disposition of a motion for summary judgment. See,
e.g., Stephenson v. Allstate Ins. Co., 328 F.3d 822, 826 (6th Cir. 2003). “Summary judgment is
appropriate if, after examining the record and drawing all inferences in the light most favorable to
the non-moving party, there is no genuine issue as to any material fact and the moving party is
entitled to judgment as a matter of law.” Martin v. Ind. Mich. Power Co., 381 F.3d 574, 578 (6th
Cir. 2004) (citing Fed. R. Civ. P. 56(c)).
We narrowly construe against AEP the administrative employee exemption1 as applied to
the technical writers. See Renfro I, 370 F.3d at 515 (citing Arnold v. Ben Kanowsky, Inc., 361 U.S.
388, 392 (1960)). In Renfro I, we required AEP to “establish each element of the exemption by a
preponderance of the clear and affirmative evidence.” Id. (citing Ale v. TVA, 269 F.3d 680, 691 n.4
(6th Cir. 2001)). Two panels of this court have questioned the meaning of the phrase “clear and
affirmative evidence.” See Acs v. Detroit Edison Co., 444 F.3d 763, 767 (6th Cir. 2006); Martin,
381 F.3d at 578 n.1. The phrase appears to have its genesis in the Tenth Circuit, though even there
it went unexplained save a general citation to Walling v. General Industries Co., 330 U.S. 545,
547-48 (1947). See, e.g., Donovan v. United Video, Inc., 725 F.2d 577, 580-81 (10th Cir. 1984)
(citing Walling). Walling, however, does not raise the evidentiary burden; it merely clarifies that
the applicability of an FLSA exemption is an affirmative defense. 330 U.S. at 547-48; see also
Clark v. J. M. Benson, Co., 789 F.2d 282, 286 (4th Cir. 1986). The Walling Court also noted that
the district court was not “clearly wrong,” citing Fed. R. Civ. P. 52(a)’s requirement that a district
court’s finding of fact after a bench trial be upheld unless clearly erroneous. Walling, 330 U.S. at
550 & n.8 (emphasis added).
We clarify here that the phrase “clear and affirmative evidence” does not heighten AEP’s
evidentiary burden when moving for summary judgment. The word “clear,” as used in this phrase,
traces to the “clearly erroneous” Rule 52(a) standard, but that standard is inapposite to our current
review of a motion for summary judgment. And because establishing the applicability of an FLSA
exemption is an affirmative defense, AEP has the burden to establish the following elements by a
preponderance of the evidence: “(1) that it pays the [technical writers] at least $250 per week on
a salary or fee basis; (2) that the [technical writers’] primary duty consists of office or nonmanual
work directly related to AEP’s management policies or general business operations; and (3) that the
[technical writers’] primary duty requires them to exercise discretion and independent judgment.”
Renfro I, 370 F.3d at 516.2
The district court held that AEP had satisfied the first two elements of the test but not the
third. Neither party disputes that the first element is met. The employees perfunctorily claim that
the district court also erred in finding for AEP on the second element, but make no attempt to
develop this argument. We will not consider this argument. See Meridia Prods. Liab. Litig. v.
Abbott Labs., 447 F.3d 861, 868 (6th Cir. 2006) (“Issues adverted to in a perfunctory manner,
1
Administrative employees are exempt from the FLSA’s overtime requirements. See 29 U.S.C. § 213(a)(1).
An administrative employee must (1) be salaried “at a rate of not less than $455 per week,” (2) primarily perform “office
or non-manual work directly related to the management or general business operations of the employer or the employer’s
customers,” and (3) “exercise . . . discretion and independent judgment with respect to matters of significance.” 29
C.F.R. § 541.200(a).
2
The current regulations, which went into effect on August 23, 2004, require employers to pay exempt
employees at least $455 per week. 29 C.F.R. § 541.200. The parties do not dispute that the writers’ salaries, generally
between $1200 and $1700 per week, exceed the regulatory minimum. Furthermore, we need not decide whether to apply
the current set of regulations or the pre-2004 regulations. Our decision would be the same under either set.
No. 06-1935 Renfro, et al. v. Indiana Michigan Power Co. Page 4
unaccompanied by some effort at developed argumentation, are deemed waived. It is not sufficient
for a party to mention a possible argument in the most skeletal way, leaving the court to put flesh
on its bones.” (quoting McPherson v. Kelsey, 125 F.3d 989, 995-96 (6th Cir. 1997))). All that
remains for us to decide then is whether the technical writers’ primary duty—writing
procedures3—requires that they exercise sufficient discretion and independent judgment to exempt
them from the FLSA’s overtime requirements.
B
Essentially, the technical writers contend that because AEP has rigid procedures for how to
craft maintenance procedures, the writers are simply applying skills rather than exercising discretion
and independent judgment. In Renfro I, however, we rejected the planners’ similar argument “that
the heavily-regulated nature of their primary job duty prohibits their exercise of discretion and
independent judgment.” 370 F.3d at 519. Despite the procedure-driven nature of the planners’
work, “[t]he process of generating repair work packages is neither wholly mechanical nor restricted
to ‘merely applying knowledge in following prescribed procedures.’” Id. (quoting 29 C.F.R.
§ 541.207(c)(1)).
We apply the same reasoning to the technical writers. They do not work under constant
supervision and, when preparing a procedure, select the best method to maintain the plant’s
equipment. Their job requires them to create a clear and understandable set of highly technical
instructions for maintaining the electrical and mechanical systems of a particular piece of equipment.
Looking to various source materials for some of the technical information and using a computer to
aid research and recommendations does not detract from the import of the discretion and
independent judgment exercised. Channeling discretion through a manual on procedure writing does
not eliminate the existence of that discretion.
To determine whether an employee, constrained by guidelines and procedures, actually
exercises any discretion or independent judgment, see id.; see also Reich v. John Alden Life Ins. Co.,
126 F.3d 1, 14 (1st Cir. 1997); Haywood v. N. Am. Van Lines, 121 F.3d 1066, 1073 (7th Cir. 1997),
we consider whether those guidelines and procedures contemplate independent judgment calls or
allow for deviations, Schaefer v. Ind. Mich. Power Co., 358 F.3d 394, 404 (6th Cir. 2004). Neither
the technical writers’ manual nor the daily realities of their work environment eliminates their use
of considerable discretion or independent judgment.
The manual provides a guideline on how to develop a procedure, not an encyclopedia of
strict requirements. It does not answer substantive questions that might arise during the research,
analysis, and development of a procedure; nor does it restrict the technical content of the instructions
that are formatted by the general template. Rather, it outlines various items for the writer to consider
when researching and drafting a procedure and recommends certain checks to ensure the feasibility
of a procedure once written. The writer is free to judge whether, based on her experience, she needs
to perform these checks. The manual ensures uniformity of the style and format of the technical
writers’ procedures, but not their content.
The approach taken by one technical writer to create a complex procedure often differs from
that of another technical writer creating a similar procedure. As Plaintiffs’ own witness testified in
his deposition, two different writers may solve the same problem two different ways, even though
both solutions are equally effective. AEP could assign two different writers to create the same
procedure and receive differing documents—both in level of detail and in approach—that
sufficiently instruct the users of the procedure on how to properly complete the task. It is apparent
3
We agree with the technical writers’ contention that this is their primary duty.
No. 06-1935 Renfro, et al. v. Indiana Michigan Power Co. Page 5
to us that any reasonable juror would conclude that the technical writers “actually exercise discretion
and independent judgment.” Renfro I, 370 F.3d at 519.
III
Because we hold that AEP was entitled to summary judgment on its claim that the writers
were properly classified as exempt from the FLSA overtime regulations, we do not reach the issue
of whether AEP is entitled to a good-faith defense.
IV
We reverse the district court’s grant of summary judgment in favor of the writers and its
denial of summary judgment in favor of AEP, vacate the judgment awarding the plaintiffs liquidated
damages, and remand the case to the district court with instructions to enter summary judgment in
favor of AEP.
No. 06-1935 Renfro, et al. v. Indiana Michigan Power Co. Page 6
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DISSENT
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KATHLEEN M. O’MALLEY, District Judge, dissenting. I respectfully dissent. The
underlying litigation actually involves three classes of plaintiffs employed by AEP at the Cook
power plant: technical writers, planners, and nuclear specialists. Guided by this Court’s prior
decisions on this precise issue, the district court did a very careful job of analyzing and
differentiating between the three job classifications - each of which AEP considered to be exempt
from the FLSA’s overtime provisions. In determining that, for purposes of the cross-motions
involved in this appeal, the technical writers were non-exempt employees, Senior Judge Wendell
A. Miles had a thorough and well-developed record before him detailing the day-to-day job duties
involved in all three positions. He also had a specialized familiarity with the parties, their counsel,
and the issues involved in this case, having been assigned to similar FLSA litigation involving AEP
and other employees at its nuclear power plants. While Judge Miles ultimately concluded the
technical writers were entitled to overtime wages, he carefully drew distinctions between the writers
and the two classifications of employees he concluded were not entitled to overtime wages - i.e., the
planners and nuclear specialists. Given the district court judge’s detailed familiarity with the
respective job duties, the full record that was developed, and the careful procedure the court
employed, I would defer to the district court’s determination.