Heidtman v. County of El Paso

• Decision Date: 21 April 1999
• Docket Number: No. 98-50359,98-50359
• Citation: 171 F.3d 1038
• Parties: 137 Lab.Cas. P 33,858, 5 Wage & Hour Cas.2d (BNA) 385 Kelly HEIDTMAN; et al., Plaintiffs, Kelly Heidtman; Susie Gaines-Charske; James A. Hicks; Mary Lou Gallegos; Jose M. Sierra; Jutta Matalka; Leslie Rayburn, Plaintiffs-Appellees, v. COUNTY OF EL PASO; City of El Paso, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1038

171 F.3d 1038

137 Lab.Cas. P 33,858, 5 Wage & Hour Cas.2d

(BNA) 385

Kelly HEIDTMAN; et al., Plaintiffs,

Kelly Heidtman; Susie Gaines-Charske; James A. Hicks;

Mary Lou Gallegos; Jose M. Sierra; Jutta

Matalka; Leslie Rayburn, Plaintiffs-Appellees, v. COUNTY OF EL PASO; City of El Paso, Defendants-Appellants.

No. 98-50359.

United States Court of Appeals, Fifth Circuit.

April 21, 1999.

Michael Timothy Milligan, El Paso, TX, for Plaintiffs-Appellees.

Thomas F. Keever, El Paso, TX, for County of El Paso.

John David Gates, El Paso, TX, for City of El Paso.

Appeal from the United States District Court for the Western District of Texas.

Before GARWOOD, DAVIS and DeMOSS, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

The City of El Paso and the County of El Paso challenge the judgment entered against them and in favor of their employees for violations of the Fair Labor Standards Act. For the most part, we affirm the judgment of the district court. However, we reverse the district court's 50 percent enhancement of the attorney's fees lodestar award.

I.

Plaintiffs-Appellees Kelly Heidtman, Susie Gaines-Charske, James Hicks, Mary Lou Gallegos, Jose Sierra, Jutta Matalka, and Leslie Rayburn were employees of the El Paso Convention and Visitors Bureau ("CVB"), a joint operation of Defendants-Appellants the City of El Paso and the County of El Paso. ¹ Five of the Appellees were employed to attract certain categories of visitors or events to the El Paso area: Rayburn and Heidtman (conventions); Matalka (tourists); Hicks and Heidtman (sporting events and corporate meetings); and Gaines-Charske (movies). In addition, Sierra worked with Gaines-Charske by finding and photographing possible film locations and by helping film crews locate the settings they desired. Gallegos was the liaison between CVB's advertising agency and CVB employees needing magazine advertisements for their services. The City employed Heidtman and Hicks and the County employed Sierra, Gaines-Charske, Matalka, Gallegos, and Rayburn.

All seven Appellees were categorized by their respective employers as employees exempt from the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-19. Appellees were therefore not granted overtime compensation for hours worked in excess of forty hours per week as required by the FLSA. Appellees sued the County of El Paso in state court for unpaid overtime compensation, alleging that they were incorrectly categorized as exempt employees. The City of El Paso was joined and the case was removed to federal district court, where it was tried before a jury. The jury returned a verdict for Appellees on all issues. The district court then entered a judgment on the jury's verdict. In addition, the district court awarded Appellees liquidated damages and substantial attorney's fees. The City and County now appeal.

II.

A.

Appellants argue first that the district court abused its discretion in excluding Appellants' expert witnesses as a discovery sanction for Appellants' failure to timely disclose their expert witnesses as required by the Federal Rules of Civil Procedure, a Local Rule of the Western District of Texas, and the scheduling order.

Under Federal Rule of Civil Procedure 37(c)(1), "A party that without substantial justification fails to disclose information required by Rule 26(a) [ (which includes the expert witness disclosure requirements) ] or 26(e)(1) shall not, unless such failure is harmless, be permitted to use as evidence at a trial, at a hearing, or on a motion any witness or information not so disclosed." See also Barrett v. Atlantic Richfield Co., 95 F.3d 375, 380 (5th Cir.1996) (providing four-part test, based on Rule 37, for reviewing exclusion of expert witnesses). Appellants provided no explanation for their actions. Therefore, under Rule 37 and Barrett, the district court clearly did not abuse its discretion by excluding the testimony of Appellants' experts.

In addition, Appellants failed to proffer any of the expert witness testimony or the expert witness reports into the record. Without such proffers indicating what testimony the experts would have provided, Appellants cannot demonstrate that the district court's exclusion of the testimony affected their substantial rights. See Fed.R.Evid. 103(a)(2); Petty v. Ideco, Division of Dresser Industries Inc., 761 F.2d 1146, 1151 (5th Cir.1985). For these reasons, we reject Appellants' argument that the district court abused its discretion in excluding the testimony.

B.

Appellants next contend that the district court erred in failing to find that Appellees were exempt from the FLSA as a matter of law. In support of this argument, they rely primarily on Appellees' job descriptions. After reviewing the record, we conclude that there is ample support for the jury's finding that Appellants were not exempt employees.

Appellants argue that Appellees were exempt from FLSA coverage as a matter of law under the bona fide administrative employee exemption. They focus primarily on the "short test" for the administrative employee exemption. Under the short test, the administrative employee exemption is correctly applied if: (1) the employee has a salary of more than $250 per week; (2) the employee's primary duty ² is performing office work or nonmanual work directly related to management policies or general business operations; and (3) the employee exercises discretion and independent judgment. Reich v. John Alden Life Ins. Co., 940 F.Supp. 418, 421 (D.Mass.1996). This appeal focuses primarily on the third prong, whether Appellees exercised discretion and independent judgment. ³

Appellants rely on the job descriptions they prepared for Appellees to demonstrate that Appellees were required to exercise discretion and independent judgment to perform their jobs. Appellant County of El Paso, however, does not point to any specific aspects of the job descriptions that require independent judgment, nor does the County point to any specific instance in which any of their employees exercised discretion or independent judgment.

In contrast, Appellant City of El Paso points to specific aspects of the job descriptions of its employees--Hicks and Heidtman--to support its position that these employees exercised discretion and independent judgment. The City quotes Hicks's and Heidtman's job descriptions, which state in part that Hicks and Heidtman were to "[i]nitiate sales contacts ... answer and respond to inquiries ... [by] developing lists of prospective clients; contacting ... clients to solicit business; preparing and participating in bid proposals and presentations; ... [r]epresent the City of El Paso ... [by] attending and participating in professional organizations, industry trade shows, meetings and seminars." In addition, the City points to trial testimony of Heidtman in which she stated that she used "judgment" in at least one aspect of her job.

In response to Appellants' arguments, Appellees point to their testimony denying that they exercised significant discretion and independent judgment in their jobs. For example, Heidtman testified that much of her time was merely spent on the phone determining whether an organization that might be interested in coming to El Paso wanted information or brochures on the city. Heidtman also testified that when she was at a convention, she could take potential clients out for a meal. However, prior to such a meal, she needed to obtain the approval of her superior. In addition, Appellees' expert witness, Joseph Wysong, testified in detail about the minimal discretion some of the Appellees exercised. He concluded that this discretion fell far short of that required under the FLSA's administrative employee exemption. Wysong's testimony was based both on his past experience and on the relevant regulations interpreting the FLSA.

One of the regulations interpreting the FLSA, 29 C.F.R. § 541.207, defines and explains discretion and independent judgment. The regulation states that these terms indicate that "the person has the authority or power to make an independent choice, free from immediate direction or supervision and with respect to matters of significance." 29 C.F.R. § 541.207(a). Moreover, in order to qualify for the administrative employee exemption, an employee must be required to exercise discretion and independent judgment "customarily and regularly." 29 C.F.R. § 541.207(g). An employer claiming an exemption bears the burden of proving that the exemption claimed is valid. Blackmon v. Brookshire Grocery Co., 835 F.2d 1135, 1137 (5th Cir.1988).

We conclude that the jury's finding that Appellees did not, customarily and regularly, exercise discretion and independent judgment is supported by the record. Most of Appellees' employment actions were mechanical, rather than discretionary, in nature. For most Appellees, considerable time was spent simply compiling names of prospects to complete their databases, calling prospects in these databases, and sending them brochures. The jury was entitled to find that any significant decision required the approval of a superior. Also, most of Appellees' jobs were equivalent to sales positions, and sales jobs are not exempt from FLSA coverage. 29 C.F.R. § 541.205(a). Because the jury's findings are supported by the record, the district court did not err in denying Appellants' motions for judgment as a matter of law.

III.

Appellants next argue that the district court abused its discretion in awarding Appellees liquidated damages.

Under the FLSA, liquidated damages are to be awarded unless the employer demonstrates that it acted reasonably and in good faith. 29 U.S.C. § 260. Even if the district court determines that the employer's actions were taken in good faith and based on reasonable grounds, the district court still retains the discretion to award liquidated damages. Id.; Lee v. Coahoma County, Mississippi, 937 F.2d 220, 227 (5th Cir.1991).

In this case, the district court...