Veronica R. Grage v. Northern States Power Co. - MN , 813 F.3d 1051 ( 2015 )


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  •                   United States Court of Appeals
    For the Eighth Circuit
    ___________________________
    No. 15-1418
    ___________________________
    Veronica R. Grage
    lllllllllllllllllllll Plaintiff - Appellee
    v.
    Northern States Power Co. - Minnesota
    lllllllllllllllllllll Defendant - Appellant
    ____________
    Appeal from United States District Court
    for the District of Minnesota - Minneapolis
    ____________
    Submitted: October 21, 2015
    Filed: December 28, 2015
    ____________
    Before WOLLMAN, BEAM, and GRUENDER, Circuit Judges.
    ____________
    BEAM, Circuit Judge.
    Veronica Grage sued her employer, Northern States Power Company-
    Minnesota (NSP), for failing to pay overtime wages in violation of the Fair Labor
    Standards Act (FLSA), 29 U.S.C. §§ 201-219. The district court granted partial
    summary judgment in favor of Grage, holding that because Grage's work was not
    directly related to NSP's management or general business operations, she did not fall
    within the administrative exemption of the FLSA. As a result, the district court
    determined Grage was entitled to overtime pay. NSP appeals the district court's denial
    of its motion for summary judgement and grant of partial summary judgment in favor
    of Grage. For the reasons discussed below, we reverse in part and remand for further
    proceedings.
    I.    BACKGROUND
    NSP provides gas and electricity to customers throughout Minnesota. Grage
    worked for NSP for over thirty years and was eventually promoted to Supervisor I.
    As a Supervisor I she worked at NSP's Chestnut Service Center. She was a salaried
    employee classified by NSP as exempt from overtime pay under the administrative
    exemption of the FLSA. She retired at the end of 2013 and sued NSP for failing to
    pay her overtime in her capacity as a Supervisor I in violation of the FLSA.
    NSP and Grage describe her Supervisor I duties and responsibilities quite
    differently. NSP's description, which Grage agreed generally reflected her primary
    job duties, includes development and management of daily work plans, assigning and
    directing Field Operations employees, providing work direction to construction
    resources, assigning equipment, overseeing work detail, coordinating all components
    involved with requested outages, and independently assigning resources to work. One
    of the "competencies" listed as part of the job description for Supervisor I is
    "Project/Program Management," which includes planning, directing, managing, and
    monitoring programs, schedules, and resources. Specifically, she regularly engaged
    in daily and long-term planning in regards to work plans and reprioritization of jobs.
    NSP notes that crews took direction and guidance from Grage, she authorized
    overtime when necessary, and she investigated and responded to customer complaints.
    Conversely, Grage claims that her primary duty was to schedule and dispatch
    NSP's work crews to do installations, maintenance, and repairs. She claims she did
    not have to manage the business or use discretion because NSP employees, called
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    "Designers," performed consultations and designed plans to meet customer needs.
    After work orders from the Designers were submitted to Grage, she simply scheduled
    crews to perform the orders. She also alleges that although she was in charge of
    scheduling and assigning crews to deal with emergencies and routine maintenance,
    she had minimal customer service responsibility, did not oversee contract crews, and
    did not manage operations or the budget. Grage points out that NSP lists the title of
    Supervisor I under the "Production Operations" job family, not the "Administrative
    Services" job family. Jobs within Production Operations are "directly involved in the
    production distribution or maintenance of system[s] that produce or distribute energy."
    Also, the Supervisor I's official "Job Function" is "Field Operations" rather than "Field
    Support." Field Operations includes duties such as "development, and implementation
    management of processes and systems directing the overall gas and electric
    construction, operations, maintenance and emergency repair activities." Field support,
    she claims, is the category that includes performance of administrative or support
    functions.
    In October 2013, NSP moved for summary judgment requesting dismissal of
    the case, arguing there was no genuine dispute of material fact that Grage is exempt
    from overtime under the FLSA as an administrative employee. Grage also moved for
    summary judgment, arguing that there was no genuine dispute of material fact that one
    of the three requirements for the administrative exemption was not met and requested
    liquidated damages. In September 2014, the district court found that Grage was not
    exempt from overtime pay under the administrative exemption of the FLSA because
    her primary duty did not directly relate to the management or general business
    operations of NSP. Accordingly, the court denied NSP's motion for summary
    judgment and granted Grage's request for summary judgment on liability. But the
    court denied Grage's request for summary judgment on the issue of liquidated
    damages. NSP now appeals the district court's grant of partial summary judgment in
    favor of Grage and denial of its motion for summary judgment.
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    II.   DISCUSSION
    We review a district court's decision to grant or deny summary judgment de
    novo. Tusing v. Des Moines Indep. Cmty. Sch. Dist., 
    639 F.3d 507
    , 514 (8th Cir.
    2011). Summary judgment is only proper "where the evidence, viewed in the light
    most favorable to the nonmovant, shows that no genuine issue of material fact exists,
    such that the movant is entitled to judgment as a matter of law." 
    Id. There is
    no
    genuine issue of material fact when "the record taken as a whole could not lead a
    rational trier of fact to find for the nonmoving party." Torgerson v. City of Rochester,
    
    643 F.3d 1031
    , 1042 (8th Cir. 2011) (quoting Ricci v. DeStefano, 
    557 U.S. 557
    , 586
    (2009)). "'The burden of demonstrating that there are no genuine issues of material
    fact rests on the moving party,' and '[w]e review the evidence and the inferences that
    reasonably may be drawn from the evidence in the light most favorable to the
    nonmoving party.'" Davis v. Jefferson Hosp. Ass'n, 
    685 F.3d 675
    , 680 (8th Cir. 2012)
    (alteration in original) (quoting Davis v. KARK-TV, Inc., 
    421 F.3d 699
    , 703 (8th Cir.
    2005)). Nonetheless, in an FLSA exemption case such as this, the employer, NSP, has
    the burden of proving the employee fits within one of the FLSA exemptions. Fife v.
    Harmon, 
    171 F.3d 1173
    , 1174 (8th Cir. 1999).
    When analyzing a potential FLSA exemption, "the amount of time devoted to
    [administrative] duties, and the significance of those duties, present factual questions."
    Reich v. Avoca Motel Corp., 
    82 F.3d 238
    , 240 (8th Cir. 1996) (alteration in original)
    (quoting Icicle Seafoods, Inc. v. Worthington, 
    475 U.S. 709
    , 713 (1986)). Similarly,
    "[c]redibility determinations, the weighing of the evidence, and the drawing of
    legitimate inferences from the facts are jury functions, not those of a judge."
    
    Torgerson, 643 F.3d at 1042
    (emphasis added) (quoting Reeves v. Sanderson
    Plumbing Prods., Inc., 
    530 U.S. 133
    , 150 (2000)).1 These factual questions are
    1
    Grage demanded trial by jury pursuant to Federal Rule of Civil Procedure
    38(b), Corrected First Amended Complaint and Demand for Jury Trial, Grage v.
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    reviewed for clear error. 
    Reich, 82 F.3d at 240
    . However, "whether [employees']
    particular activities excluded them from the overtime benefits of the FLSA is a
    question of law." Spinden v. GS Roofing Prods. Co., 
    94 F.3d 421
    , 426 (8th Cir. 1996)
    (alteration in original) (quoting Icicle 
    Seafoods, 475 U.S. at 714
    ). Questions of law
    are reviewed de novo. 
    Reich, 82 F.3d at 240
    .
    The FLSA requires employers to pay overtime of at least one and one-half times
    the regular pay rate for employees who work over forty hours in one workweek. 29
    U.S.C. § 207(a)(2). However, some employees are exempt and thus, are not entitled
    to overtime pay. 
    Id. § 213.
    Such employees include "any employee employed in a
    bona fide executive, administrative, or professional capacity." 
    Id. § 213(a)(1)
    (emphasis added). An employee fits within the administrative exemption of the FLSA
    if the employee is:
    (1) Compensated on a salary or fee basis at a rate of not less than $455
    per week . . . (2) Whose primary duty is the performance of office or
    non-manual work directly related to the management or general business
    operations of the employer or the employer's customers; and (3) Whose
    primary duty includes the exercise of discretion and independent
    judgment with respect to matters of significance.
    29 C.F.R. § 541.200(a). All three requirements must be met to qualify for this
    exemption. 
    Reich, 82 F.3d at 240
    .
    Northern States Power Co.-Minnesota, No. 12-2590 (D. Minn. Jan. 14, 2014), ECF
    87, and there is nothing in the record concerning consent to withdraw such demand
    as required by Rule 38(d).
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    A.     Salary Basis
    First, NSP must prove that Grage was "[c]ompensated on a salary or fee basis
    at a rate of not less than $455 per week." 29 C.F.R. § 541.200(a)(1). Whether Grage
    satisfies this requirement is not disputed. Both parties agree Grage was a salaried
    employee.
    B.     Management or General Business Operations
    Second, NSP must prove that Grage's "primary duty [was] the performance of
    office or non-manual work directly related to the management or general business
    operations of the employer or the employer's customers." 
    Id. § 541.200(a)(2).
    It is
    undisputed that the work Grage performed was "office or non-manual work." The
    issue is whether the primary duty of the office work Grage performed was related to
    the management or general business operations of NSP, or instead primarily related
    to direct, hands-on, production and distribution of energy.
    The primary duty of an employee's job is "the principal, main, major or most
    important duty that the employee performs." 
    Id. § 541.700(a).
    When deciding the
    employee's primary duty, it "must be based on all the facts in a particular case, with
    the major emphasis on the character of the employee's job as a whole." 
    Id. The following
    factors may be considered: "relative importance of the exempt duties as
    compared with other types of duties; the amount of time spent performing exempt
    work; the employee's relative freedom from direct supervision; and the relationship
    between the employee's salary and the wages paid to other employees for the kind of
    nonexempt work performed." 
    Id. "The phrase
    'directly related to the management or
    general business operations' refers to the type of work performed by the employee."
    
    Id. § 541.201(a)
    (emphasis added). For this requirement "an employee must perform
    work directly related to assisting with the running or servicing of the business, as
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    distinguished . . . from working on a manufacturing production line or selling a
    product in a retail or service establishment." 
    Id. Subsection (b)
    of § 541.201 lists work that is clearly related to the management
    or general business operations, but the list is not exhaustive. 
    Id. § 541.201(b).
    Such
    work includes "finance; accounting; . . . quality control; purchasing; procurement;
    . . . safety and health; personnel management; . . . labor relations; . . . legal and
    regulatory compliance; and similar activities." 
    Id. (emphasis added).
    Administrative
    work could also include "advising the management, planning, negotiating,
    representing the company, purchasing, promoting sales, and business research and
    control." Renfro v. Ind. Mich. Power Co., 
    370 F.3d 512
    , 517 (6th Cir. 2004)
    (emphasis added) (quoting 29 C.F.R. § 541.205(b) (2003)). Conversely, "'production'
    employees . . . 'generate (i.e. 'produce') the very product or service that the employer's
    business offers to the public.'" 
    Id. (quoting Reich
    v. John Alden Life Ins. Co., 
    126 F.3d 1
    , 9 (1st Cir. 1997)). However, if an employee is simply performing "work that
    is 'ancillary to an employer's principal production activity,' [the] employee[ is]
    administrative." 
    Id. (quoting Martin
    v. Cooper Elec. Supply Co., 
    940 F.2d 896
    , 904
    (3d Cir. 1991)).
    As stated above, NSP and Grage describe her primary duties as a Supervisor I
    quite differently. However, "[c]redibility determinations, the weighing of the
    evidence, and the drawing of legitimate inferences from the facts" should be left to the
    jury. 
    Torgerson, 643 F.3d at 1042
    (quoting 
    Reeves, 530 U.S. at 150
    ). For this reason
    alone, granting summary judgment for either party was improper. Here, there are
    fundamental factual issues that must be decided by a jury. Specifically, the jury needs
    to weigh the evidence and determine the primary duties Grage performed as a
    Supervisor I before the court can decide the legal question of whether those duties
    exclude her from overtime pay under the FLSA. This is not a case where a "rational
    trier of fact" could not possibly find in favor of the nonmoving party. 
    Id. Factual issues
    aside, the district court concluded that Grage did not fall within the
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    administrative exemption of the FLSA because she was part of the production of
    NSP's gas and electricity, not an administrative employee involved in the company's
    management or general business operations as intended by 29 C.F.R. § 541.201.
    However, properly instructed, a rational jury could easily disagree. Indeed, NSP's
    principal endeavor is the production and distribution of energy, i.e., gas and electricity
    for which commodities customers remunerate NSP.
    A jury could find that Grage was responsible for long-term planning of
    installations and maintenance, short-term planning such as daily work assignments,
    and that she was expected to establish and maintain a safety-focused and positive
    work culture for her crew. These job responsibilities fit squarely within work that §
    541.201(b) lists as "directly related to management or general business operations."
    29 C.F.R. § 541.201(b) (listing safety and health, personnel management, and labor
    relations). Also, based on NSP's description of Grage's job, she was not actually
    producing anything. She merely provided administrative support for the field crews
    that build and repair the structures needed for NSP's gas and electricity production and
    services. In other words, Grage "engage[d] in work that [was] 'ancillary to [her]
    employer's principal production activity,'" which functions the courts have determined
    to be administrative work. 
    Renfro, 370 F.3d at 517
    (quoting 
    Martin, 940 F.2d at 904
    ).
    Additionally, § 541.203, which lists examples of administrative exemptions,
    specifically includes employees who facilitate output. 29 C.F.R. § 541.203(c)-(d)
    (describing "[a]n employee who leads a team of other employees assigned to complete
    major projects for the employer" and "[a]n executive assistant or administrative
    assistant").
    Moreover, "[a] job title alone is insufficient to establish the exempt status of an
    employee." 
    Id. § 541.2.
    Therefore, it is irrelevant that the Supervisor I title falls
    under the "Production Operations" job family and "Field Operations" job function,
    which do not specifically list administrative tasks or support as one the duties of such
    Supervisor. Thus, a jury could find that Grage's primary duties were directly related
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    to management and general business operations, not production. At the very least,
    NSP has raised a genuine issue of material fact, which prevents this court from
    affirming the district court's grant of summary judgment in favor of Grage.
    C.     Discretion and Independent Judgment in Matters of Significance
    Finally, NSP must prove that Grage's "primary duty include[d] the exercise of
    discretion and independent judgment with respect to matters of significance." 
    Id. § 541.200(a)(3).
    The district court granted summary judgment in favor of Grage after
    concluding that NSP did not meet its burden regarding the second requirement. Thus,
    the third requirement for the administrative exemption was not considered. NSP
    argues Grage exercised considerable discretion and independent judgment in matters
    that were critical to NSP's success as part of her work duties. We find that here, too,
    a fact issue exists regarding Grage's primary duties, thus precluding a grant of
    summary judgment in favor of either party.
    "[E]xercise of discretion and independent judgment involves the comparison
    and the evaluation of possible courses of conduct, and acting or making a decision
    after the various possibilities have been considered." 
    Id. § 541.202(a).
    It generally
    requires "independent choice, free from immediate direction or supervision." 
    Id. § 541.202(c).
    But, this requirement can be met even if "decisions or recommendations
    are reviewed at a higher level." 
    Id. In making
    this determination, all facts should be
    considered, especially the following factors:
    Whether the employee has authority to formulate, affect, interpret, or
    implement management policies or operating practices; whether the
    employee carries out major assignments in conducting the operations of
    the business; whether the employee performs work that affects business
    operations to a substantial degree . . . whether the employee has authority
    to waive or deviate from established policies and procedures without
    prior approval . . . whether the employee provides consultation or expert
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    advice to management; whether the employee is involved in planning
    long- or short-term business objectives . . . and whether the employee
    represents the company in handling complaints, arbitrating disputes or
    resolving grievances.
    
    Id. § 541.202(b).
    According to Grage, she had little discretion or control as a Supervisor I. She
    states that employees called Designers decide how and when work is handled; she
    simply had to follow the work orders established by the Designers. However, there
    is conflicting evidence that shows Grage exercised discretion as a Supervisor I when
    she decided how to prioritize work assignments, how to allocate work crews and
    resources between jobs, and how to reorganize projects in the midst of changing
    circumstances. A jury could find that she made these decisions without guidance after
    considering different courses of action and possible outcomes. Evidence on the record
    also shows that Grage implemented operating practices, carried out major assignments
    for NSP, and participated in planning business objectives. All of these duties involve
    a substantial amount of discretion and are specifically listed as factors to be
    considered when determining whether the primary duty of the employee includes the
    exercise of discretion and independent judgment. 
    Id. "The term
    'matters of significance' refers to the level of importance or
    consequence of the work performed." 
    Id. § 541.202(a).
    The duties discussed above
    are certainly matters of significance. The long-term and daily planning Grage
    allegedly performed is of extreme importance to a power company like NSP. How
    she performed her job as a Supervisor I directly affected the service provided to
    customers and thus, was of great "importance or consequence" to NSP. 
    Id. However, the
    final determination on this issue ultimately requires the weighing of evidence,
    which is the job of a jury. 
    Torgerson, 643 F.3d at 1042
    . And, because NSP has raised
    a genuine issue of material fact as to whether Grage exercised discretion in her job as
    a Supervisor I, summary judgment in favor of Grage is not proper.
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    III.   CONCLUSION
    We reverse the district court's grant of summary judgment in favor of Grage,
    and because there are factual issues that must be decided, we remand for further
    proceedings consistent with this opinion.
    ______________________________
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