Walsh v. Unitil Service Corporation

United States Court of Appeals
For the First Circuit
No. 22-1070
MARTIN J. WALSH, Secretary of Labor,
UNITED STATES DEPARTMENT OF LABOR,
Plaintiff, Appellant,
v.
UNITIL SERVICE CORPORATION,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Landya B. McCafferty, U.S. District Judge]
Before
Gelpí, Selya, and Thompson,
Circuit Judges.
Dean A. Romhilt, Senior Attorney, United States Department of
Labor, with whom Seema Nanda, Solicitor of Labor, Jennifer S.
Brand, Associate Solicitor, and Rachel Goldberg, Counsel for
Appellate Litigation, were on brief, for appellant.
William D. Pandolph, with whom Sulloway & Hollis, P.L.L.C.
was on brief, for appellee.
January 11, 2023
GELPÍ, Circuit Judge. Compliance with the Fair Labor
Standards Act's ("FLSA") overtime pay requirements is critical to
ensuring worker protections. Before us, Appellant, the Department
of Labor ("DOL"), seeks overtime compensation under the FLSA for
hours worked in excess of forty hours per week for two categories
of employees -- Dispatchers and Controllers -- employed by
Appellee, Unitil Service Corporation ("Unitil Service"). Unitil
Service argues that these workers are exempt "administrative"
employees under federal law and as such are not entitled to
overtime payments. The district court found that the employees'
"primary duty" was "directly related" to the general business
operations of Unitil Service's customers and concluded that the
employees were "administrative," exempt from the FLSA, and thus
not entitled to overtime pay. Summary judgment was granted in
favor of Unitil Service. The DOL filed a timely appeal. For the
following reasons, we vacate the grant of summary judgment and
remand to the district court for further proceedings consistent
with this opinion.
I. Background
Unitil Service is a New Hampshire corporation and
wholly-owned subsidiary of Unitil Corporation ("Unitil
Corporation"), a public utility holding company that owns local
and regional utility companies providing gas and/or electricity to
approximately 200,000 residential, commercial, and industrial
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customers in New England. Unitil Corporation and its subsidiaries
do not own power plants, generate electricity, or produce any
natural gas themselves. Unitil Service provides "administrative
and professional services on a centralized basis" to Unitil Service
subsidiaries ("Distribution Operating Companies" or "DOCs"),
"including regulatory, financial, accounting, human resources,
engineering, operations, technology, energy management and
management services." More specifically, Unitil Service operates,
monitors, and controls the electrical grid and gas pipelines that
distribute electricity and gas to the DOCs' end-user customers.
This includes operating centralized electric and gas control rooms
staffed by the Electric Distribution Dispatchers ("Dispatchers")
and Gas Controllers ("Controllers") at issue here.
a. Duties of Dispatchers
Dispatchers are employed by Unitil Service in a
centralized work area known as Central Electric Dispatch.
According to Unitil Service's general position description, their
duties include:
Provid[ing] 24/7 monitoring and control of the
electric transmission and distribution
systems for all [DOCs]; provid[ing] outage
management response and reporting for all
electric [DOCs]; and perform[ing] tasks
associated with compliance with regulatory
requirements including but not limited to NERC
(National Energy Regulatory Commission), MDPU
(Massachusetts Department of Public
Utilities), NHPUC (New Hampshire Public
Utilities Commission) that would include
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reporting, emergency response, notifications
and questions regarding the electric systems.
Monitor[ing] electric [software alarm]
systems and tak[ing] necessary actions to
respond to current system conditions.
In total, approximately 60% of a Dispatcher's time is
spent "perform[ing] monitoring and control of electric systems and
emergency response"; 15% in "communications and notifications";
and 25% in "regulatory reporting compliance" and "documentation."
b. Duties of Controllers
Controllers are employed by Unitil Service in a similar
capacity but for gas DOCs. Their position description reads:
This position has primary oversight
responsib[ility] for the operation and control
of the Company's gas transmission distribution
system; and the managing of pipeline and peak
shaving supplies. The incumbent must ensure
that the system is operated within the
constraints of Federal, State and Company
codes and standards as well tariff constraints
for the receipt and control of the system
supply. This position also provides training
and daily guidance to subordinate Gas
Controllers and Field Services
Coordinator[s].
As a result, approximately 60% of a Controller's time is spent
monitoring and controlling gas pipeline systems, supporting
"processes related to market requirements" for DOCs, and providing
"general control, confirmation, scheduling, balancing and live gas
operations"; 30% interpreting, organizing, and executing complex
assignments, assisting with training and coordination of work for
subordinate Controllers, estimating personnel needs, scheduling
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and assigning work, and managing complex projects; and 10% serving
as "[b]ack up to [the] Field Services Coordinator as needed."
Generally speaking, both Dispatchers and Controllers
monitor their respective systems for automated alerts or other
developments and respond accordingly to keep electricity or gas
flowing safely.1 While they do not actively control the flow of
electricity or gas, they do determine whether alerts warrant
responses such as shutting off or re-routing the flow of gas or
electricity, dispatching service crews, or communicating with
local authorities and other divisions within the company. Each
role has a manual that covers standard responses to most
situations, and each role has supervisors who are available to
address major issues. Both Dispatchers and Controllers can respond
independently to some situations and deviate from certain
procedures, although the extent of their decision-making authority
and the frequency with which situations require this purported
exercise of discretion are points of dispute. Both groups reported
working, on occasion, substantially over forty hours per week.
II. Procedural History
Following a DOL investigation into the Dispatchers' and
Controllers' work, the DOL filed suit in the District Court for
We note that we group Dispatchers and Controllers here
1
because the nature of their work is similar save for one monitoring
gas and the other electricity.
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the District of New Hampshire against Unitil Service alleging
violation of the FLSA's requirement that employees be paid overtime
unless they are exempt. 29 U.S.C. §§ 206-207, 213. Each
party submitted a motion for summary judgment and the district
court -- applying the summary judgment standard -- concluded that
Dispatchers and Controllers are exempt from overtime requirements
because they are "administrative" employees under the FLSA. U.S.
Dep't of Lab. v. Unitil Serv. Corp., 573 F. Supp. 3d 566, 580
(D.N.H. 2021). This appeal followed.
III. Discussion
On appeal, the DOL argues that Dispatchers and
Controllers do not satisfy the FLSA's administrative exemption and
thus are entitled to overtime pay. More specifically, the DOL
argues that the district court did not properly evaluate the job
duties of both categories of workers under the second prong of the
administrative exemption of the FLSA's regulations, discussed
infra. Rather than relying on and analogizing to the relevant
regulation's list of functional areas that can be (but are not
necessarily) administrative, as the district court did, the DOL
posits that the district court should have instead engaged in a
"relational" analysis that considers the relationship between the
job duties of the roles in question and the business purposes of
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the employer or its customers. We agree,2 acknowledge that our
circuit's precedent on this issue is limited, commend the district
court for attempting to parse out our limited jurisprudence,
clarify the application of the "relational" analysis test, vacate
the grant of summary judgment for Unitil Service, and remand to
the district court to apply the test we now outline.
a. Standard of Review
This case comes before us at the summary judgment stage.
Thus, we review the issues de novo and draw all reasonable
inferences in favor of the nonmovant -- here, the DOL. Cash v.
Cycle Craft Co., 508 F.3d 680, 682 (1st Cir. 2007). "Summary
judgment is appropriate only when the record 'show[s] that there
is no genuine issue as to any material fact and that the moving
party is entitled to judgment as a matter of law." Id. (quoting
Fed. R. Civ. P. 56(c)).
b. The FLSA
The FLSA requires that covered employers pay certain
employees an overtime premium "at a rate not less than one and
one-half times the regular rate at which [they are] employed."
29 U.S.C. § 207(a). Employees "in a bona fide executive,
2 The DOL also argues that the district court misapplied the
third prong of the administrative exemption test. Because an
employer must satisfy all three prongs to satisfy the
administrative exemption, and because we vacate on the second
prong, we need not (and do not) reach these arguments.
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administrative, or professional capacity[,] . . . as such terms
are defined and delimited from time to time by regulations of the
Secretary," however, are exempt from these provisions, and thus
not entitled to overtime payment. Id. § 213(a)(1) (emphasis
added). The Secretary's regulations define those working in an
"administrative" capacity to include those employees:
(1) Compensated on a salary or fee basis
pursuant to § 541.600 at a rate of not less
than $684 per week . . . exclusive of board,
lodging or other facilities;
(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. Thus, to fall under the exemption, each of
the three prongs must be satisfied and the employer bears the
burden of establishing each prong. See Reich v. John Alden Life
Ins. Co., 126 F.3d 1, 7-8 (1st Cir. 1997). The DOL has promulgated
additional regulations defining the terms discussed in the second
and third prongs, listing relevant factors for consideration, and
identifying examples of employees who may qualify for the
exemption. 29 C.F.R. §§ 541.201-.203.
Before us, the parties do not dispute that the first
prong -- the sufficient compensation requirement -- is met.
Instead, the dispute turns on whether the remaining two prongs
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were satisfied. Because we vacate on the second prong, we do not
address the third prong -- the discretion-and-independent-
judgment prong.
c. The Second Prong
Whether both classes of employees are administrative
employees -- and thus exempt from overtime payment -- turns on
whether their "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."
Id. § 541.200 (emphases added).
The parameters of the administrative exemption are
articulated in the DOL's regulations. "Primary duty" is defined
to mean "the principal, main, major or most important duty that
the employee performs," and generally means that employees spend
at least 50% of their time performing the duty. Id. § 541.700.
And "directly related to the management or general business
operations" "refers to the type of work performed by the employee."
Id. § 541.201(a). "To meet this requirement, 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." Id. (emphasis added). This
can include "work in functional areas such as tax; finance;
accounting; budgeting; auditing; insurance; quality control;
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purchasing; procurement; advertising; marketing; research; safety
and health; personnel management; human resources; employee
benefits; labor relations; public relations[;] government
relations; computer network, internet and database administration;
legal and regulatory compliance; and similar activities." Id.
§ 541.201(b) (outlining a non-exhaustive list of examples of
"[w]ork directly related to management or business operations").
While our jurisprudence on the second prong is limited,
we clarify here that the analysis is indeed -- as described by the
DOL -- a "relational" one. Although often framed as one question,
it entails two: (1) whether the employee's role relates to "running
or servicing the business," and if so, (2) what the scope or
"generality" of the employee's role is. See Bratt v. County of
Los Angeles, 912 F.2d 1066, 1070 (9th Cir. 1990) ("The test is
whether the activities are directly related to management policies
or general business operations. . . . [This] mean[s] 'the running
of a business, and not merely . . . the day-to-day carrying out of
its affairs.'"). We explain each question in turn.
i. Whether the Employee's Role Relates to "Running or
Servicing the Business"
The first question asks whether the employee's duty is
related to the goods or services offered for market or whether it
is related to running the business itself. See Bothell v. Phase
Metrics, Inc., 299 F.3d 1120, 1127 (9th Cir. 2002). One useful
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but non-dispositive distinction that courts have used is the
distinction between "administrative" staff and "production"
employees. See John Alden, 126 F.3d at 9-10 (discussing
"Administrative-Production Dichotomy"); see also 29 C.F.R.
§ 541.201(a) ("To meet this requirement, 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.").
This administrative-production distinction was the basis
for the test that our circuit has generally applied: considering
whether an employee's duties are "ancillary" to the business's
"principal production activity" or "principal function." See John
Alden, 126 F.3d at 10; Hines v. State Room, Inc., 665 F.3d 235,
242 (1st Cir. 2011) (considering whether the employees' duty was
ancillary to the business's "principal function"); Cash, 508 F.3d
at 684-86 (not mentioning "ancillary" test but evaluating
relationship between employee duties and business purposes). John
Alden provides a clear example. There, we concluded that "the
activities of the marketing representatives [at issue]
[we]re clearly ancillary to John Alden's principal production
activity -- the creation of insurance policies -- and therefore
could be considered administrative 'servicing' within the meaning
of [S]ection 541.205(b)." John Alden, 126 F.3d at 10 (likening
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marketing representatives' activities to "'representing the
company' and 'promoting sales'" -- examples of "exempt
administrative work"). It should be noted that because the test
is "relational" and applies to more than just factory production
or retail, the administrative-production distinction is worth
employing "only to the extent it clarifies the analysis." Bothell,
299 F.3d at 1127; see Schaefer v. Ind. Mich. Power Co., 358 F.3d
394, 402-03 (6th Cir. 2004); see also Defining and Delimiting the
Exemptions for Executive, Administrative, Professional, Outside
Sales and Computer Employees, 69 Fed. Reg. 22122, 22141 (April 23,
2004) (codified at 29 C.F.R. pt. 541). Moreover, while that
question may be helpful to determining the "principal function" of
a business to distinguish between, for example, administrative and
operative roles, there is little principled basis in the text of
the regulation for differentiating between "'primary' marketplace
offering[s] and secondary or tertiary" ones. Bothell, 299 F.3d at
1127. In fact, too much focus on whether something is the
business's "primary" business purpose, or a myopic framing of that
purpose, can miss the forest -- whether work is "directly related
to the management or general business operations of the employer
or the employer's customers," 29 C.F.R. § 541.200(a)(2) -- for the
trees.
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ii. The Scope or "Generality" of the Employee's Role
The second question poses a broader inquiry meant to
ensure that courts do not miss the forest for the trees. While a
bit more subtle in our case law, it asks, even if an employee's
work is "ancillary" to the goods or services that constitute the
business's marketplace offerings, whether the employee is engaged
in "management or general business operations." Id. (emphasis
added).
To satisfy this second, more subtle, aspect of the test,
an employee's job duties must implicate or include responsibility
for "general" (i.e., higher-level or more widely applicable)
aspects of the business's operations. Put another way, the test
is not satisfied if an employee's duties include only the execution
of routine, day-to-day operations. Such tasks would not rise to
the level of "generality" across or within the organization that
is contemplated by the regulation. For instance, in John Alden,
we held that the marketing representatives at issue were exempt
administrative employees because they were responsible for
"promoting (i.e., increasing, developing, facilitating, and/or
maintaining) customer sales generally," 126 F.3d at 10 (quoting
Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 905 (3d Cir.
1991)), rather than responsible for merely performing routine
sales tasks, see Bothell, 299 F.3d at 1127 ("John Alden stressed
that the daily tasks performed . . . , including managing hundreds
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of agents and developing 'customer sales generally,' were
consistent with . . . administrative activities in [the
regulation]."). Cash v. Cycle Craft Co. serves as another example.
508 F.3d 680. There, the "New Purchases/Customer Relations
Manager" was responsible for "improving customer service
generally, by coordinating with various Boston Harley departments"
and not simply dealing with individual customer service issues.
Id. at 685-86 (emphasis added).
Examples from the regulations further illustrate this
distinction. "Human resources managers who formulate, interpret
or implement employment policies . . . generally meet the duties
requirements for the administrative exemption" while "personnel
clerks who 'screen' applicants to obtain data regarding their
minimum qualifications and fitness for employment generally do
not." 29 C.F.R. § 541.203(e). Similarly, while a higher-level
compliance employee might be considered exempt, "[o]rdinary
inspection work generally does not meet the duties requirements
for the administrative exemption." Id. § 541.203(g). And while
a buyer who evaluated pricing reports or an analyst who prepared
them would likely be considered exempt, "[c]omparison shopping
performed by an employee of a retail store who merely reports to
the buyer the prices at a competitor's store does not qualify for
the administrative exemption." Id. § 541.203(i). Just because an
employee is on the operational side of the business does not mean
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that his job duties fall on the administrative side of the line.
To be sure, the requirement of Section 541.200's third prong --
that the employee exercise discretion and independent judgment --
does some work in distinguishing these employees, but the
generality requirement of the second prong also distinguishes
them.
The history of Section 541.200(a)(2) reinforces our
conclusion that an employee's duties must rise to a level of
generality beyond responsibility for day-to-day tasks in order to
satisfy the regulation. For instance, the prior version of
Section 541.200(a)(2) referred to "management policies" rather
than "management," suggesting that an exempt employee must play
more than a purely operational role. See Defining and Delimiting
the Exemptions, 69 Fed. Reg. at 22137-22138. The DOL clarified
that the removal of "policies" was not intended to broaden the
exemption but merely meant to clarify that "exempt administrative
work includes not only those who participate in the formulation of
management policies or in the operation of the business as a whole,
but it 'also includes a wide variety of persons who either carry
out major assignments in conducting the operations of the business,
or whose work affects business operations to a substantial degree,
even though their assignments are tasks related to the operation
of a particular segment of the business.'" Id. at 22138 (emphases
added) (quoting 29 C.F.R. § 541.205(c)(2000)). To a certain
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extent, this intersects with the third prong of Section 541.200,
the exercise-of-discretion-and-independent-judgment prong, but it
is important that the job duties themselves go beyond mere
participation in day-to-day operations.
Two Sixth Circuit cases involving power plant employees
lend further support. In Schaefer v. Indiana Michigan Power Co.,
the court considered whether a nuclear waste disposal technician's
work was administrative. 358 F.3d at 398-99. The Sixth Circuit
recognized that while day-to-day waste removal is "not part of
production proper," it is neither "'administrative' [n]or part of
'servicing the business.'" Id. at 402. As such, in identifying
the limitations of the administrative-production dichotomy and the
"principal function" test, the court concluded that the
technician -- whose role was a limited and highly circumscribed
one -- was not an administrative employee. See id. at 402-03.
Further, the court noted that while some removal procedures were
unique, the scope of the technician's authority was relatively
circumscribed. See id. at 403.
Moreover, in Renfro v. Indiana Michigan Power Co., the
Sixth Circuit considered the case of "planners" responsible for
"creating plans for maintaining equipment and systems in the
nuclear [power] plant," 370 F.3d 512, 518 (6th Cir. 2004), and
managing the work of other skilled employees through those plans,
see id. at 515. The court acknowledged that the power company's
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principal production activity was "generating electricity" and the
product it offered was "electricity." See id. at 518. Thus,
because the planners "creat[ed] plans for maintaining equipment
and systems in the nuclear plant," their work was "ancillary" to
the power company's "principal production activity of generating
electricity." Id. While the Sixth Circuit noted that the planners
were clearly not production workers, it recognized that "[w]hile
not precisely 'administrative,' the planners' duties form[ed] the
type of 'servicing' ('advising the management, planning,' etc.)
that the FLSA deems administrative work directly related to [the
power company's] general business operations." Id.iii. Dispatchers and Controllers
Having explained how to apply the "relational" analysis
test, we now turn to the case of Dispatchers and Controllers. As
an initial matter, we note that areas like the energy sector --
where power is the product, but transmission and certain other
services are inextricably linked -- and separately incorporated
services corporations (common in industries like healthcare,
insurance, and utilities) can create confusion on how to apply the
second question of the "relational" analysis test.
Turning to the facts before us, we thus ask whether
Unitil Service has conclusively shown that the Dispatchers' and
Controllers' primary duties are "directly related to the
management or general business operations of" either Unitil
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Service (the employer) or the DOCs (the employer's customers).
See 29 C.F.R. § 541.200(a)(2). If the Dispatchers' and
Controllers' primary duties relate to Unitil Service's business
purpose, in that they produce the product or provide the service
that the company is in business to provide, the second prong is
not satisfied. Id.; see id. § 541.201(a) ("To meet this
requirement, 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." (emphasis added)).
The district court was correct in finding that the
primary duties of the Dispatchers and Controllers are to provide
the very services that Unitil Service is in the business of
providing. Unitil Service's business purpose is to provide
operational and administrative services to its subsidiaries. The
primary duties of the Dispatchers and Controllers are to provide
these various services -- to operate and monitor their respective
electrical grids and gas pipelines for the DOCs -- and thus are
the very services that Unitil Service is in business to provide.
Because the Dispatchers' and Controllers' primary duties relate to
Unitil Service's business purpose, the second prong of the
"administrative" exemption is not satisfied. Consequently, the
only way Unitil Service -- which bears the burden of establishing
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that an employee falls under the FLSA's "administrative"
exemption -- can satisfy the second prong is to show that the
Dispatchers' and Controllers' primary duties are directly related
to the general business operations of the DOCs (the employer's
customers).
To determine whether Unitil Service can satisfy the
second prong in this regard, we turn to (1) whether the
Dispatchers' and Controllers' primary duties relate to the
"running or servicing" of the DOCs, and if so, (2) what the scope
or "generality" of their role is. See Bratt, 912 F.3d at 1070
("The test is whether the activities are directly related to
management policies or general business operations. . . . [This]
mean[s] 'the running of a business, and not merely . . . the day-
to-day carrying out of its affairs.'").
As previously mentioned, the district court did not
apply this "relational" analysis. Specifically, rather than
compare the primary duties of the Dispatchers and Controllers to
the DOCs' business purposes -- to determine whether their duties
are directly related to the DOCs' general business operations or
to the day-to-day operational work related to the DOCs' business
-- the district court looked to a list of the functional areas in
Section 541.201(b) that can be, but are not necessarily,
administrative depending on the duties of the employees. Unitil
Serv. Corp., 573 F. Supp. 3d at 578. The court then concluded
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that the primary duties performed by the Dispatchers and
Controllers were analogous to the functional areas of "regulatory
compliance," "quality control," and "health and safety." Id.; see
also 29 C.F.R. § 541.201(b) (listing examples of the functional
areas related to "management or general business operations").
We conclude, however, that these analogies cannot bear
the weight that the district court placed upon them. As the DOL
points out, although the position description for Dispatchers
includes "tasks associated with compliance with regulatory
requirements," the record, including the "principal
accountabilities" section of the job description, does not
indicate that either Dispatchers or Controllers do anything beyond
engaging in their daily operational duties "within the limits of
the applicable Federal, State and Company codes and standards."
The same is true for engaging in work subject to certain compliance
and safety standards. Further, neither Dispatchers nor
Controllers play a role in testing or evaluating the DOCs'
distribution or pipeline systems outside of the day-to-day
monitoring of these systems. Dispatchers and Controllers do not
design or plan the systems, nor do they analyze how they work or
how they can be improved. See Renfro, 370 F.3d at 518 (finding
that because the "planners" at issue "creat[ed] plans for
maintaining equipment and systems in the nuclear plant," their
work was "ancillary" to the power company's "principal production
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activity of generating electricity"). Accordingly, while
analogizing to the functional areas may be useful in some cases,
here, these analogies do not address or answer the second
generality question of the "relational" analysis.
Moreover, Unitil Service's organizational makeup reveals
that the company has entirely separate departments for the very
functional areas outlined above. These include departments for
"Business Continuity & Compliance" (employing a number of health
and safety compliance specialists), "Financial Services"
(employing auditors and lawyers), and "Regulatory Services"
(employing regulatory analysts). That the Dispatchers' and
Controllers' duties may, in a limited or superficial way implicate
health, safety, and quality control tasks, does not mean that this
was their "primary duty." Further, their duties lack the level of
generality required by the regulation and the case law to conclude,
without further inquiry, that they were engaged in "management or
general business operations" as opposed to routine, day-to-day
affairs, Bratt, 912 F.3d at 1070, of the DOCs. It is not clear
that they direct business operations "generally" in the way
anticipated by the statute and understood by our case law.
Unitil Service would have us look to two unpublished
cases on which the district court relied -- Galdo v. PPL Electric
Utilities Corp., No. CV 14-5831, 2016 WL 454416 (E.D. Pa. Feb. 5,
2016) and Zelenika v. Commonwealth Edison Co., No. 09 C 2946,
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2012 WL 3005375 (N.D. Ill. July 23, 2012). But these cases have
no role to play in our decision since they employ unpersuasive
reasoning. Zelenika involved "dispatchers" whose job was to
"monitor [an electric utility's] power distribution system,
oversee service to the system, and respond to customer complaints
and power outages." 2012 WL 3005375, at *2. The court determined
that the employer satisfied the second prong by analogizing to the
functional areas in Section 541.201(b) rather than engaging in a
"relational" analysis between the primary duty of the role and the
business of the utility. See id. at *13. However, as discussed
supra, it is not enough to look only at the list of job functions
under Section 541.201(b). Courts must also consider whether the
employee's primary duty is contributing to the "running or
servicing of the business" and, if so, whether their
responsibilities rise to the level of generality required by the
rule. Similarly, in determining that "system operators," who
monitored systems in the utility's transmission department, were
administrative employees, the Galdo court reasoned that they were
not production workers because they did not "generate . . . the
very product or service that the employer's business offers to the
public." 2016 WL 454416, at *4 (quoting Renfro, 360 F.3d at 517).
This reasoning, however, improperly reduced the second prong's
inquiry to the administrative-production dichotomy, rather than
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employ the more flexible "relational" analysis required by the
regulation.
IV. Conclusion
Accordingly, because the district court did not apply a
"relational" analysis comparing the business purpose of Unitil
Service and/or its customers to the primary duty of the Dispatchers
and Controllers, it was improvident to grant summary judgment to
Unitil Service. Unitil Service has not demonstrated that the
Dispatchers' and Controllers' primary duty consists of work
"directly related to the management or general business
operations" of its customers such that the employees fall under
the second prong of 29 C.F.R. § 541.200. We leave it to the trier
of fact to apply the "relational" analysis required by the second
prong of the test. At this stage, genuine issues of material fact
remain unresolved. Accordingly, we vacate the decision of the
district court granting summary judgment to Unitil Service and
remand for further proceedings consistent with this opinion. No
costs are awarded.
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