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Gina McKeen-chaplin v. Provident Savings Bank ( 2017 )


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  •                       FOR PUBLICATION
    UNITED STATES COURT OF APPEALS
    FOR THE NINTH CIRCUIT
    GINA MCKEEN-CHAPLIN,                                No. 15-16758
    individually, on behalf of others
    similarly situated, and on behalf of                  D.C. No.
    the general public,                                2:12-cv-03035-
    Plaintiff-Appellant,               GEB-AC
    v.
    OPINION
    PROVIDENT SAVINGS BANK, FSB,
    Defendant-Appellee.
    Appeal from the United States District Court
    for the Eastern District of California
    Garland E. Burrell, Jr., District Judge, Presiding
    Argued and Submitted April 21, 2017
    San Francisco, California
    Filed July 5, 2017
    Before: Sidney R. Thomas, Chief Judge, Mary H. Murguia,
    Circuit Judge, and Michael M. Baylson,* District Judge.
    Opinion by Chief Judge Thomas
    *
    The Honorable Michael M. Baylson, United States District Judge for
    the Eastern District of Pennsylvania, sitting by designation.
    2     MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK
    SUMMARY**
    Labor Law
    Reversing the district court’s grant of summary judgment
    in favor of the defendant in an action under the Fair Labor
    Standards Act, the panel held that mortgage underwriters
    were entitled to overtime compensation for hours worked in
    excess of forty per week.
    Applying the analysis used by the Second Circuit, rather
    than the Sixth Circuit, the panel held that, because the
    mortgage underwriters’ primary job duty did not relate to
    their employer bank’s management or general business
    operations, the administrative employee exemption to the
    Act’s overtime requirements did not apply.
    COUNSEL
    Matthew C. Helland (argued) and Daniel S. Brome, Nichols
    Kaster LLP, San Francisco, California; for Plaintiff-
    Appellant.
    Michael L. Ludwig (argued), Howard M. Knee (argued), and
    Caitlin Sanders, Blank Rome LLP, Los Angeles, California,
    for Defendant-Appellee.
    **
    This summary constitutes no part of the opinion of the court. It has
    been prepared by court staff for the convenience of the reader.
    MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK                        3
    OPINION
    THOMAS, Chief Judge:
    This appeal presents the question of whether a class of
    mortgage underwriters are entitled to overtime compensation
    under the Fair Labor Standards Act (“FLSA” or “the Act”),
    29 U.S.C. § 201 et seq., for hours worked in excess of forty
    per week. We conclude that, because the mortgage
    underwriters’ primary job duty does not relate to the bank’s
    management or general business operations, the
    administrative employee exemption under 29 U.S.C.
    § 213(a)(1) and 29 C.F.R. § 541.200(a) does not apply,1 and
    the underwriters are entitled to overtime compensation.
    I
    Provident Savings Bank (“Provident” or “the Bank”) sells
    mortgage loans to consumers purchasing or refinancing
    homes and then resells those funded loans on the secondary
    market. Mortgage underwriters at Provident review mortgage
    loan applications using guidelines established by Provident
    and investors in the secondary market, including Fannie Mae,
    Freddie Mac, and the Fair Housing Administration.
    1
    The mortgage underwriters also argue that they do not exercise
    discretion and independent judgment with respect to matters of
    significance, but we need not reach this argument because the test to
    qualify for the administrative exemption under FLSA is conjunctive, not
    disjunctive, see Bothell v. Phase Metrics, Inc., 
    299 F.3d 1120
    , 1125 (9th
    Cir. 2002), and Provident bears the burden of proving the employees in
    question satisfy each of the administrative exemption requirements, 
    id. at 1124.
    4    MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK
    Loan transactions begin with a loan officer or broker who
    works with a borrower to select a particular loan product. A
    loan processor then runs a credit check, gathers further
    documentation, assembles the file for the underwriter, and
    runs the loan through an automated underwriting system. The
    automated system applies certain guidelines based on the
    information input and then returns a preliminary decision.
    From there, the file goes to a mortgage underwriter, who
    verifies the information put into the automated system and
    compares the borrower’s information against the applicable
    guidelines, which are specific to each loan product.
    Mortgage underwriters are responsible for thoroughly
    analyzing complex customer loan applications and
    determining borrower creditworthiness in order to ultimately
    decide whether Provident will accept the requested loan.
    They may impose conditions on a loan application and refuse
    to approve the loan until the borrower satisfies those
    conditions. The decision as to whether to impose conditions
    is ordinarily controlled by the applicable guidelines, but the
    underwriters can include additional conditions. They can also
    suggest a “counteroffer”—which would be communicated
    through the loan officer—in cases where a borrower does not
    qualify for the loan product selected, but might qualify for a
    different loan. Underwriters may also request that Provident
    make exceptions in certain cases by approving a loan that
    does not satisfy the guidelines.
    After a mortgage underwriter approves a loan, it is sent to
    other Provident employees who finalize the loan funding.
    Underwriters say that whether a loan is funded ultimately
    depends on factors beyond the underwriter’s control.
    Another group of Provident employees sells funded loans in
    the secondary market.
    MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK                5
    On behalf of herself and a class of mortgage underwriters,
    Gina McKeen-Chaplin brought this action seeking overtime
    compensation under FSLA. The district court conditionally
    certified an opt-in class of current and former mortgage
    underwriters at Provident. Initially, the district court denied
    cross motions for summary judgment and set the case for
    trial.    But later, on the parties’ joint motion for
    reconsideration, the court concluded that the underwriters
    qualify for the administrative exemption, based on finding
    that their primary duty included “quality control” or similar
    activities directly related to Provident’s general business
    operations, and thus the district court granted summary
    judgment in favor of Provident. This timely appeal followed.
    Whether an employee’s primary duties exclude her from
    FLSA overtime benefits is a question of law to be reviewed
    de novo. Bothell v. Phase Metrics, Inc., 
    299 F.3d 1120
    , 1124
    (9th Cir. 2002); Bratt v. Cty. of L.A., 
    912 F.2d 1066
    , 1068
    (9th Cir. 1990). And we “must give deference to DOL’s [the
    Department of Labor’s] regulations interpreting the FLSA.”
    Webster v. Pub. Sch. Emps. of Wash., Inc., 
    247 F.3d 910
    , 914
    (9th Cir. 2001) (citing Auer v. Robbins, 
    519 U.S. 452
    , 457
    (1997)).
    We review a district court’s grant of summary judgment
    de novo. Swoger v. Rare Coin Wholesalers, 
    803 F.3d 1045
    ,
    1047 (9th Cir. 2015). Summary judgment is appropriate
    where “no genuine dispute as to any material fact” exists such
    that “the movant is entitled to judgment as a matter of law.”
    Fed. R. Civ. P. 56(a), (c). Though a denial of summary
    judgment is ordinarily unappealable because it is not a final
    order, where it is “coupled with a grant of summary judgment
    to the opposing party,” both orders are reviewable de novo.
    6    MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK
    Padfield v. AIG Life Ins. Co., 
    290 F.3d 1121
    , 1124 (9th Cir.
    2002).
    II
    Ordinarily, FLSA provisions require employers to pay
    employees time and a half for overtime work—that is, work
    in excess of forty hours per week. 29 U.S.C. § 207(a)(1).
    But employees who are “employed in a bona fide executive,
    administrative, or professional capacity” are exempt from
    those provisions. 29 U.S.C. § 213(a)(1). Employers who
    claim the so-called administrative exemption under FLSA
    bear the burden of proving its applicability to the employees
    in question. 
    Bothell, 299 F.3d at 1124
    . Exemptions are to be
    construed narrowly. 
    Id. at 1125.
    The overtime requirements
    have long been intended to financially pressure employers to
    “spread employment” and to assure workers “additional pay
    to compensate them for the burden of a workweek beyond the
    hours fixed in the [A]ct.” Overnight Motor Transp. Co., Inc.
    v. Missel, 
    316 U.S. 572
    , 577–78 (1942), superseded by
    statute, Portal-to-Portal Act, 61 Stat. 86–87 (authorizing
    courts to deny or limit liquidated damages awarded for FLSA
    violations), as recognized in Trans World Airlines v.
    Thurston, 
    469 U.S. 111
    , 128 n.22 (1985). Thus, FLSA “is to
    be liberally construed to apply to the furthest reaches
    consistent with Congressional direction” and exemptions “are
    to be withheld except as to persons plainly and unmistakably
    within their terms and spirit.” 
    Bothell, 299 F.3d at 1124
    –25
    (quoting Klem v. Cty. of Santa Clara, 
    208 F.3d 1085
    , 1089
    (9th Cir. 2000)).
    MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK                         7
    A
    To determine whether employees qualify for the
    administrative exemption, the Secretary of Labor has
    formulated a “short duties test.” 
    Bothell, 299 F.3d at 1126
    .2
    A qualifying employee must (1) be compensated not less than
    $455 per week; (2) perform as her primary duty “office or
    non-manual work related to the management or general
    business operations of the employer or the employer’s
    customers;” and (3) have as her primary duty “the exercise of
    discretion and independent judgment with respect to matters
    of significance.” 29 C.F.R. § 541.200(a). An employee’s
    primary duty is “the principal, main, major or most important
    duty that the employee performs.” 29 C.F.R. § 541.700(a).
    These three conditions “are explicit prerequisites to
    exemption, not merely suggested guidelines.” Arnold v. Ben
    Kanowsky, Inc., 
    361 U.S. 388
    , 392 (1960).
    Accordingly, Provident must prove that the mortgage
    underwriters meet all three duty requirements. See 
    Bothell, 299 F.3d at 1125
    (citing Mitchell v. Williams, 
    420 F.2d 67
    , 69
    (8th Cir. 1969) (“The criteria provided by regulations are
    absolute and the employer must prove that any particular
    employee meets every requirement before the employee will
    be deprived of the protection of [FLSA].”)); 
    Bratt, 912 F.2d at 1069
    . It is undisputed that the salary requirement is
    2
    We have explained previously that the Secretary’s new regulations
    issued in 2004 do “not represent a change in the law.” In re Farmers Ins.
    Exch., 
    481 F.3d 1119
    , 1128 (9th Cir. 2007); see also Roe-Midgett v. CC
    Services, Inc., 
    512 F.3d 865
    , 870–71 (7th Cir. 2008) (noting that the new
    “general rule . . . merely restates the short test’s two ‘duties’
    requirements” and that the “Secretary has characterized the promulgation
    of the new rules as an effort to ‘consolidate and streamline’ the dense and
    unwieldy regulatory text of the old regulations”).
    8    MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK
    satisfied. But because the underwriters’ duties go to the heart
    of Provident’s marketplace offerings, not to the internal
    administration of Provident’s business, see 
    Bothell, 299 F.3d at 1126
    , Provident cannot prove that the mortgage
    underwriters qualify for the administrative exemption.
    B
    To satisfy the second requirement, an employee’s primary
    duty must involve office or “non-manual work directly
    related to the management policies or general business
    operations” of Provident or Provident’s customers. 
    Bothell, 299 F.3d at 1125
    (emphasis in original) (quoting 29 C.F.R.
    § 541.200). Said otherwise, “an employee must perform
    work directly related to assisting with the running or
    servicing of the business, as distinguished, for example, from
    working on a manufacturing production line or selling a
    product in a retail or service establishment.” 29 C.F.R.
    § 541.201(a). Courts of appeal commonly refer to this
    framework for understanding whether employees satisfy the
    second requirement as the “administrative-production
    dichotomy.” Its purpose is “to distinguish ‘between work
    related to the goods and services which constitute the
    business’ marketplace offerings and work which contributes
    to ‘running the business itself.’” DOL Wage & Hour Div.
    Op. Ltr., 
    2010 WL 1822423
    , *3 (Mar. 24, 2010) (quoting
    
    Bothell, 299 F.3d at 1127
    (quoting 
    Bratt, 912 F.2d at 1070
    )).
    In our own words, “[t]his requirement is met if the employee
    engages in ‘running the business itself or determining its
    overall course or policies,’ not just in the day-to-day carrying
    out of the business’ affairs.” 
    Bothell, 299 F.3d at 1125
    (quoting 
    Bratt, 912 F.2d at 1070
    ); see also Dalheim v.
    KDFW-TV, 
    918 F.2d 1220
    , 1230 (5th Cir. 1990) (describing
    the dichotomy as distinguishing between “employees whose
    MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK                        9
    primary duty is administering the business affairs of the
    enterprise from those whose primary duty is producing the
    commodity or commodities, whether goods or services, that
    the enterprise exists to produce and market”).
    But the dichotomy “is only determinative if the work
    ‘falls squarely on the production side of the line.’” 69 Fed.
    Reg. 22122, 22141 (Apr. 23, 2004) (quoting 
    Bothell, 299 F.3d at 1127
    ).3 And this means the analysis can be complicated.
    In fact, in the last decade, two of our sister Circuits have
    assessed whether mortgage underwriters qualify for FLSA’s
    administrative exemption and have come to opposite
    conclusions. The Second Circuit held in Davis v. J.P.
    Morgan Chase & Co., 
    587 F.3d 529
    (2d Cir. 2009), that “the
    job of underwriter . . . falls under the category of production
    rather than of administrative work.” 
    Id. at 535.
    In contrast, the Sixth Circuit held recently that mortgage
    underwriters are exempt administrators, explaining that they
    “perform work that services the Bank’s business, something
    ancillary to [the Bank’s] principal production activity.” Lutz
    v. Huntington Bancshares, Inc., 
    815 F.3d 988
    , 995 (6th Cir.
    3
    See, e.g., Davis v. J.P. Morgan Chase & Co., 
    587 F.3d 529
    , 532 (2d
    Cir. 2009) (“The line between administrative and production jobs is not
    a clear one, particularly given that the item being produced—such as
    ‘criminal investigations’—is often an intangible service rather than a
    material good.”); Desmond v. PNGI Charles Town Gaming, LLC,
    
    564 F.3d 688
    , 694 (4th Cir. 2009) (“Although the administrative-
    production dichotomy is an imperfect analytical tool in a service-oriented
    employment context, it is still a useful construct.”); Martin v. Indiana
    Michigan Power Co., 
    381 F.3d 574
    , 582 (6th Cir. 2004) (pointing out that
    the administrative-production dichotomy is not absolute); Reich v. John
    Alden Life Ins. Co., 
    126 F.3d 1
    , 9 (1st Cir. 1997) (“[A]pplying the
    administrative-production dichotomy is not as simple as drawing the line
    between white-collar and blue-collar workers.”).
    10       MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK
    2016). In disagreeing with the Second Circuit, the Sixth
    Circuit understood mortgage underwriters to perform
    “administrative work because they assist in the running and
    servicing of the Bank’s business by making decisions about
    when [the Bank] should take on certain kinds of credit risk,
    something that is ancillary to the Bank’s principal production
    activity of selling loans.” 
    Id. at 993;
    see also 
    id. at 995
    (explaining that Sixth Circuit precedent focuses “on whether
    an employee helps run or service a business—not whether
    that employee’s duties merely touch on a production
    activity”).4
    Given the undisputed facts presented in this case, we
    conclude that the Second Circuit’s analysis in Davis should
    apply. Provident’s mortgage underwriters do not decide if
    Provident should take on risk, but instead assess whether,
    given the guidelines provided to them from above, the
    particular loan at issue falls within the range of risk Provident
    has determined it is willing to take. Assessing the loan’s
    riskiness according to relevant guidelines is quite distinct
    from assessing or determining Provident’s business interests.
    Mortgage underwriters are told what is in Provident’s best
    interest, and then asked to ensure that the product being sold
    fits within criteria set by others. In Davis, the Second Circuit
    came to a similar conclusion:
    Underwriters . . . performed work that was
    primarily functional rather than conceptual.
    4
    The Lutz court did not cite this Circuit’s case law applying the
    administrative exemption—which has been endorsed by DOL in several
    documents. See, e.g., 69 Fed. Reg. at 22141 (quoting 
    Bothell, 299 F.3d at 1127
    ); DOL Wage & Hour Div. Op. Ltr., at *3 (Mar. 24, 2010) (citing
    
    Bothell, 299 F.3d at 1127
    ).
    MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK             11
    They were not at the heart of the company’s
    business operations.         They had no
    involvement in determining the future strategy
    or direction of the business, nor did they
    perform any other function that in any way
    related to the business’s overall efficiency or
    mode of operation. It is undisputed that the
    underwriters played no role in the
    establishment of [the Bank’s] credit 
    policy. 587 F.3d at 535
    . We agree.
    C
    DOL’s codified examples of exempt administrative
    employees, including especially the descriptions of insurance
    claims adjusters and employees in the financial services
    industry, buttress our conclusion. 29 C.F.R. § 541.203(a),
    (b). Recently, in In re Farmers Ins. Exch., 
    481 F.3d 1119
    (9th Cir. 2007), we considered whether claims adjusters of
    many varieties are exempt from FLSA’s overtime provisions.
    
    Id. at 1124.
    We relied heavily on DOL’s regulations and also
    on several DOL Opinion Letters that discussed claims
    adjusters. 
    Id. at 1128–29.
    As we explained then, “the fact
    that the adjusters ‘are not merely pursuing a standardized
    format for resolving claims, but rather are using their own
    judgment about what the facts show, who is liable, what a
    claim is worth, and how to handle the negotiations with either
    a policyholder or a third-party’” was “[e]ssential to the
    DOL’s opinion.” 
    Id. at 1128
    (quoting at DOL Wage & Hour
    Div. Op. Ltr., at 4–5 (Nov. 19, 2002)).
    Specifically, the example describes duties such
    as    “interviewing,” “inspecting property damage,”
    12    MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK
    “reviewing factual information,” “evaluating and making
    recommendations regarding coverage of claims,”
    “determining liability,” “negotiating settlements,” and
    “making recommendations regarding litigation.”5 29 C.F.R.
    § 541.203(a). These duties differ from the duties of
    Provident’s mortgage underwriters. The underwriters do not
    interview or inspect property, negotiate settlements or make
    litigation recommendations.       They do review factual
    information and evaluate the loan product and consumer
    information and, in a sense, they assess liability in the form
    of risk, although that assessment is subject to guidelines that
    they do not formulate. See DOL Wage & Hour Div. Op. Ltr.,
    at *2 (Oct. 29, 1985) (distinguishing appraisers from claims
    adjusters by pointing out that appraisers “merely inspect
    damaged vehicles to estimate the cost of labor and materials
    and to reach an agreed price for repairs . . . are guided
    primarily by their skill and experience and by written
    manuals of established labor and material costs”).
    The financial-services industry example also includes
    descriptors that do not correspond with the underwriters’
    primary duty, which aims more at producing a reliable loan
    than at “advising” customers or “promoting” Provident’s
    financial products. See 29 C.F.R. § 541.203(b). Although
    mortgage underwriters do “collect[] and analyz[e]
    5
    In full, the example reads: “Insurance claims adjusters generally
    meet the duties requirements for the administrative exemption, whether
    they work for an insurance company or other type of company, if their
    duties include activities such as interviewing insureds, witnesses and
    physicians; inspecting property damage; reviewing factual information to
    prepare damage estimates; evaluating and making recommendations
    regarding coverage of claims; determining liability and total value of a
    claim; negotiating settlements; and making recommendations regarding
    litigation.” 29 C.F.R. § 541.203(a).
    MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK                       13
    information regarding the customer’s income, assets,
    investments or debts,” and do sometimes “determin[e] which
    financial products best meet the customer’s needs and
    financial circumstances,” they do not “advis[e]” customers at
    all, nor do they “market[], servic[e] or promot[e] the
    employer’s financial products.”6 As the Department of Labor
    has noted, “[w]ork does not qualify as administrative simply
    because it does not fall squarely on the production side of the
    line.” DOL Wage & Hour Div. Op. Ltr., at *3 (Mar. 24,
    2010).
    Moreover, the financial-services-industry example does
    not “create[] an alternative standard for the administrative
    exemption for employees in the financial services industry”
    and it “is not an alternative test, and its guidance cannot result
    in the ‘swallowing’ of the requirements of 29 C.F.R.
    § 541.200.” 
    Id. at *8;
    see also Perez v. Mortgage Bankers
    Ass’n, 
    135 S. Ct. 1199
    , 1205, 1206–07 (2015) (holding that
    DOL’s decision to withdraw its 2006 opinion letter in its
    2010 letter did not require notice-and-comment procedures
    because both were interpretive rules).
    DOL has also specifically analyzed mortgage loan
    officers and made clear that they “do not qualify as bona fide
    6
    In full, the regulation states: “Employees in the financial services
    industry generally meet the duties requirements for the administrative
    exemption if their duties include work such as collecting and analyzing
    information regarding the customer’s income, assets, investments or debts;
    determining which financial products best meet the customer’s needs and
    financial circumstances; advising the customer regarding the advantages
    and disadvantages of different financial products; and marketing, servicing
    or promoting the employer’s financial products. However, an employee
    whose primary duty is selling financial products does not qualify for the
    administrative exception.” 29 C.F.R. § 541.203(b).
    14   MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK
    administrative employees” because they “have a primary duty
    of making sales for their employers.” DOL Wage & Hour
    Div. Op. Ltr., at *9 (Mar. 24, 2010). Mortgage underwriters
    are distinct from mortgage loan officers in the mortgage
    production process—most significantly because their primary
    duty is not making sales on Provident’s behalf. But they are
    not so distinct as to be lifted from the production side into the
    ranks of administrators.
    Thus, we conclude that where a bank sells mortgage loans
    and resells the funded loans on the secondary market as a
    primary font of business, mortgage underwriters who
    implement guidelines designed by corporate management,
    and who must ask permission when deviating from protocol,
    are most accurately considered employees responsible for
    production, not administrators who manage, guide, and
    administer the business. See 
    Davis, 587 F.3d at 353
    (“[W]e
    have drawn an important distinction between employees
    directly producing the good or service that is the primary
    output of a business and employees performing general
    administrative work applicable to the running of any
    business.”); DOL Wage & Hour Div. Op. Ltr., at *3 (Mar. 24,
    2010) (quoting 
    Davis, 587 F.3d at 353
    ); see also In re
    Farmers 
    Ins., 481 F.3d at 1129
    (“We must give deference to
    the DOL’s interpretation of its own regulations.”).
    D
    The district court concluded that Provident underwriters
    performed work that related to “quality control,” such that it
    constituted “[w]ork directly related to management or general
    business operations,” within the meaning of 29 C.F.R.
    § 541.201(b). But this was a legal conclusion as to the
    MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK                   15
    underwriters’ quality control function that was not supported
    by the record evidence.
    The underwriters’ statement of undisputed facts outlined
    several significant aspects of Provident’s quality control
    process. First, prior to closing, Provident used an outside
    company to perform quality control functions, primarily
    assessing for material deficiencies that affect salability. That
    quality control check pulls approximately five per cent of
    loans, and completely re-underwrites them. Second, a pre-
    closing quality control process generates reports that are
    provided to underwriters, and sends a monthly report to
    Provident’s Vice President of Mortgage Operations. Third,
    the loan servicing department performs post-closing quality
    control and completely underwrites ten per cent of loans.
    That department is not staffed by mortgage underwriters.
    Fourth, the internal audit department reviews the loan process
    annually.
    In recounting the undisputed facts, the district court’s
    opinion does not mention quality control, yet it made the
    legal conclusion that Provident’s underwriters qualify for the
    administrative exemption primarily because of their quality
    control duties. The district court mentioned that “Provident
    uses an outside company to perform quality control
    functions,” and “has an internal Corporate Loan Committee
    that completely re-underwrites 10% of the loans.” Without
    discussing the significance of those facts, however, the
    district court then stated that because the “underwriters ‘must
    apply Provident’s guidelines or lending criteria as well as
    agency guidelines . . . to determine whether [a] particular loan
    falls within the level of risk Provident is willing to accept . . .
    Provident has shown Plaintiffs’ primary duty included
    16   MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK
    ‘quality control,’” such that they are entitled to the
    administrative exemption.
    The record does not support this conclusion. And the
    district court made no finding as to the legal significance of
    the quality control functions that the record establishes are in
    place at Provident.
    Provident contends that because the underwriters do not
    work on a manufacturing production line and do not sell, they
    cannot fall on the production side of the administrative-
    production dichotomy. This assertion fails to take into
    account the mortgage underwriters’ role within Provident.
    Indeed, to permit the administrative exemption of an
    assembly line worker who checks whether a particular part
    was assembled properly—simply because that role bears a
    resemblance to quality control—would run counter to the
    essence of FLSA. But even if mortgage underwriters could
    not be cast by analogy as workers in an assembly line, the
    administrative-production dichotomy is not a perfectly
    determinative one, and the law requires that we construe the
    administrative exemption narrowly against the employer.
    Mortgage underwriters are essential to Provident’s
    business, as are loan officers and many others who do not
    qualify for FLSA’s administrative exemption. See Martin v.
    Cooper Elec. Supply Co., 
    940 F.2d 896
    , 903 (3d Cir. 1991)
    (“[I]t is important to consider the nature of the employer’s
    business when deciding whether an employee is an
    administrative or production worker.”). However, the
    question is not whether an employee is essential to the
    business, but rather whether her primary duty goes to the
    heart of internal administration—rather than marketplace
    offerings. See 
    Bothell, 299 F.3d at 1126
    . Mortgage
    MCKEEN-CHAPLIN V. PROVIDENT SAVINGS BANK                 17
    underwriters at Provident are not administrators or corporate
    executives; their tasks are related to the production side of the
    enterprise.
    E
    For these reasons, we must reverse the district court’s
    grant of summary judgment in favor of Provident and remand
    with instructions to enter summary judgment in favor of Gina
    McKeen-Chaplin and the mortgage underwriters.
    REVERSED.