358 F.3d 394 (6th Cir. 2004), 02-1401, Schaefer v. Indiana Michigan Power Co.

Docket Nº:02-1401.
Citation:358 F.3d 394
Party Name:Michael L. SCHAEFER, Plaintiff-Appellant, v. INDIANA MICHIGAN POWER COMPANY, d/b/a American Electric Power, Defendant-Appellee.
Case Date:February 13, 2004
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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358 F.3d 394 (6th Cir. 2004)

Michael L. SCHAEFER, Plaintiff-Appellant,

v.

INDIANA MICHIGAN POWER COMPANY, d/b/a American Electric Power, Defendant-Appellee.

No. 02-1401.

United States Court of Appeals, Sixth Circuit

February 13, 2004

Argued: Sept. 18, 2003.

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Stephen D. Turner (argued and briefed), Gregory N. Longworth (briefed), Law, Weathers & Richardson, Grand Rapids, MI, for Appellant.

Joseph J. Vogan (argued and briefed), Peter Smit (briefed), Elizabeth Wells Skaggs (briefed), Varnum, Riddering, Schmidt & Howlett, Grand Rapids, MI, for Appellee.

Before: SUHRHEINRICH, COLE, and ROGERS, Circuit Judges.

COLE, J., delivered the opinion of the court. SUHRHEINRICH, J. (pp. 407-08), delivered a separate concurring opinion. ROGERS, (p. 408), delivered a separate dissenting opinion.

OPINION

COLE, Circuit Judge.

Plaintiff-Appellant Michael L. Schaefer appeals the district court's grant of summary judgment in favor of his employer, Indiana Michigan Power Company, d/b/a American Electric Power ("AEP"), and the denial of his motion for summary judgment, in this action alleging that AEP violated the Fair Labor Standards Act (the "FLSA"), 29 U.S.C. §§ 201-219, by failing to pay Plaintiff for overtime work at one-and-a-half times his normal hourly rate as required by 29 U.S.C. § 207(a)(1). The central issue on appeal is whether the district court erred in granting summary judgment in favor of AEP based on its conclusion that Plaintiff's position as an environmental specialist at AEP is properly classified as exempt under the administrative exemption of the FLSA. For the following reasons, we REVERSE the decision of the district court granting summary judgment to AEP and REMAND for further proceedings.

I. BACKGROUND

Indiana Michigan Power Company, doing business as American Electric Power ("AEP"), operates the Cook Nuclear Plant ("Cook") in Bridgman, Michigan, where Plaintiff-Appellant Michael L. Schaefer is employed. AEP produces electricity at Cook through nuclear reaction. Schaefer began his employment at Cook as a "radiation protection technician, junior," in 1987. Through promotion and company reorganization, Schaefer has subsequently held the positions of radiation protection technician, engineering technologist, radioactive material specialist, and environmental specialist. Schaefer is a "qualified shipping specialist" under Department of Transportation regulations. Although Schaefer, who is paid a yearly salary, has worked in positions classified as exempt from FLSA overtime requirements by AEP since 1988, he nonetheless received time-and-a-half overtime pay for hours in excess of forty hours in a given workweek until 1997. Beginning in 1997, AEP began to pay only straight overtime under its exempt-overtime plan, and in 1999 the plan was

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changed so that overtime generally did not begin until after 45 hours were worked in a given workweek.

The parties disagree regarding the nature of Schaefer's daily activities. AEP argues that Schaefer "has overall responsibility for the waste disposal program." AEP points out that Schaefer has responsibility for various activities in addition to actual shipping, such as writing and revising procedures, preparing position papers, investigating corrective actions, and surveying other nuclear facilities as to how they deal with radioactive waste. In support of its position, AEP primarily relies on AEP's written job description for the position of environmental specialist; the testimony of Schaefer's supervisor, Jeffrey H. Long; various job performance reviews; and Schaefer's own resume. These sources generally portray Schaefer as a white-collar employee who performs his job independently; makes recommendations regarding various aspects of the shipping process; has an important role in assuring AEP's compliance with various federal and state regulations and primary responsibility for developing procedures to implement these regulations; and supervises the manual tasks involved in shipping radioactive materials.

Schaefer's deposition testimony presents a different picture of his day-to-day activities. He claims that eighty percent of his time is spent on tasks related to actual shipments of radioactive materials and waste. These tasks include setting up the shipment with the transporter and the waste management facility; determining the type and method of packaging to be used; preparing shipping documents such as manifests; and inspecting packaging containers, trucks, load bracings, and truck signage. Schaefer claims that he does not often exercise discretion or independent judgment when working on shipments because the work is tightly governed by federal regulations and company procedures. He acknowledges that some of his other tasks sometimes require the exercise of discretion and independent judgment, but he maintains that he performs such tasks much less frequently than AEP indicates and that the exercises of discretion are much more limited than AEP contends. Finally, Schaefer disputes AEP's job description and performance reviews: He testified in his deposition that those documents cover activities that he does not actually perform and do not accurately reflect his day-to-day responsibilities. He also claims that he embellished his own resume to include more responsibility and authority than he actually exercises.

II. DISCUSSION

A. Standard of Review

This Court reviews de novo a district court's grant of summary judgment. Stephenson v. Allstate Ins. Co., 328 F.3d 822, 826 (6th Cir. 2003). Summary judgment is appropriate if, examining the record and drawing all inferences in a light most favorable to the non-moving party, there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Agristor Fin. Corp. v. Van Sickle, 967 F.2d 233, 236 (6th Cir. 1992).

B. The Fair Labor Standards Act and the Administrative Exemption

The Fair Labor Standards Act requires employers to pay their employees time-and-a-half for work performed in excess of forty hours per week. 29 U.S.C. § 207(a)(1). The FLSA, however, exempts employers from this requirement with respect to individuals "employed in a bona fide executive, administrative, or professional capacity." 29 U.S.C. § 213(a)(1). "This exemption is to be 'narrowly construed

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against the employers seeking to assert [it],' " Douglas v. Argo-Tech Corp., 113 F.3d 67, 70 (6th Cir. 1997) (quoting Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 4 L.Ed.2d 393 (1960)), and the employer bears not only the burden of proof, but also the burden on each element of the claimed exemption. Arnold, 361 U.S. at 392, 80 S.Ct. 453.

To prove that Schaefer is a bona fide administrative employee under the applicable Department of Labor ("DOL") regulations (described as the "short test"), AEP must demonstrate that: (1) the employee is "compensated on a salary or fee basis at a rate of not less than $250 per week"; (2) the employee's "primary duty consists of ... [t]he performance of office or nonmanual work directly related to management policies or general business operations of his employer or his employer's customers"; and (3) the employee's primary duty "includes work requiring exercise of discretion and independent judgment." 29 C.F.R. §§ 541.2, 541.214.

1. Salary Basis

AEP must first establish that it pays Schaefer on a salary or fee basis. 29 C.F.R. § 541.2(e)(2); Douglas, 113 F.3d at 70. DOL regulations provide that an employee is paid on a salary basis "if under his employment agreement he regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of his compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed." 29 C.F.R. § 541.118(a).

Although Schaefer is paid a yearly salary, he argues that AEP does not treat him as a salaried employee because he must account for at least forty hours of work each week on his time sheet and must make up partial-day absences by either working extra hours on another day or using part of a vacation day. Exempt status, however, is only affected by monetary deductions for work absences and not by non-monetary deductions from fringe benefits such as personal or sick time. See Haywood v. N. Am. Van Lines, Inc., 121 F.3d 1066, 1070 (7th Cir. 1997). Schaefer has presented no evidence to contradict AEP's showing that it does not dock employees' pay for partial-day absences. Moreover, Schaefer admitted in his deposition that he has never been docked pay for partial-day absences. Accordingly, the district court correctly concluded that AEP satisfied its burden of showing that Schaefer...

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