De Jesus-Rentas v. Baxter Pharmacy Services Corp.

• Citation: 400 F.3d 72
• Decision Date: 09 March 2005
• Docket Number: No. 03-2679.,03-2679.
• Parties: Eillim DE JESUS-RENTAS; Magdalena Mercado-Casiano; Nidia S. Gomez-Torres; Myrna Pinero-Medina; Melba Rocafort-Garcia, Plaintiffs, Appellants, v. BAXTER PHARMACY SERVICES CORPORATION; Baxter Healthcare Corporation; Baxter Sales and Distribution Corp., Defendants, Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

400 F.3d 72

Eillim DE JESUS-RENTAS; Magdalena Mercado-Casiano; Nidia S. Gomez-Torres; Myrna Pinero-Medina; Melba Rocafort-Garcia, Plaintiffs, Appellants, v. BAXTER PHARMACY SERVICES CORPORATION; Baxter Healthcare Corporation; Baxter Sales and Distribution Corp., Defendants, Appellees.

No. 03-2679.

United States Court of Appeals, First Circuit.

Heard December 9, 2004.

Decided March 9, 2005.

Carlos R. Ramírez, with whom John F. Nevares & Associates, PSC was on brief, for appellants.

Pedro J. Manzano-Yates, with whom Juan J. Casillas Ayala and Fiddler González & Rodrigues, LLP were on brief, for appellees.

Before LYNCH, Circuit Judge, STAHL, Senior Circuit Judge, and HOWARD, Circuit Judge.

HOWARD, Circuit Judge.

The Fair Labor Standards Act ("FLSA") requires employers to pay employees overtime for hours worked in excess of 40 hours per week, but it exempts, inter alia, employees working in a bona fide professional capacity. See 29 U.S.C. § 213(a)(1). This case requires us to decide whether appellants, compound pharmacists employed by Baxter Pharmacy Services Corporation ("Baxter"), are professionals exempt from the overtime requirement. The district court determined that they are and awarded Baxter summary judgment on this basis. We affirm.

Appellants are five licensed compound pharmacists who facilitate Baxter's manufacturing and distribution of intravenous antibiotics, dialysis medication, and chemotherapy drugs. Their primary duties require them to analyze, approve, and fill prescription requests.

Appellants rotate through three duty stations — data entry, compounding, and labeling. At the data entry stage, appellants determine whether a prescription is appropriate for the particular patient based on the nature of the prescription and the patient's medical profile. At the compounding stage, appellants supervise pharmacy technicians in the preparation of the requested drug compounds. At the labeling stage, appellants work with technicians to confirm that the final product meets pharmacological standards and that it has been accurately labeled and includes the required documentation.

Appellants are guided in performing their tasks by Baxter's Standard Operating Procedures ("SOPs"). The SOPs combine sources of pharmacological data about the various drugs that Baxter sells. The SOPs also establish the protocols that Baxter employees are expected to follow in performing their duties. Appellants participate annually in updating the SOPs to reflect changing practices and new pharmacological information.

At all times, Baxter paid appellants on a salary basis but did not pay them overtime because Baxter considered them exempt professionals. Appellants filed suit in August 2001 challenging this determination. After discovery, the parties filed cross motions for summary judgment. In a published opinion the district court awarded Baxter summary judgment. See De Jesus Rentas v. Baxter Pharmacy Servs. Corp., 286 F.Supp.2d 235 (D.P.R.2003). Applying a test that we shall elaborate momentarily, the court ruled that appellants were exempt professionals because they consistently exercised discretion and judgment in performing their duties. See id. Appellants timely appealed.¹

We review the award of summary judgment de novo. See Kolling v. Am. Power Conversion Corp., 347 F.3d 11, 13 (1st Cir.2003). Summary judgment is appropriate only when the undisputed facts demonstrate that the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c). Cross summary judgment motions do not alter the basic Fed.R.Civ.P. 56 standard. See Wiley v. Am. Greetings Corp., 762 F.2d 139, 140-41 (1st Cir.1985). Cross motions simply require that we determine whether either party deserves judgment as a matter of law on the summary judgment record. See Wightman v. Springfield Terminal Ry. Co., 100 F.3d 228, 230 (1st Cir.1996).

The FLSA's overtime provisions establish the general rule that employees must be compensated at a rate not less than one and one-half times their regular rate of pay for all hours worked in excess of 40 hours. See 29 U.S.C. § 207(a)(1). But employees working in executive, administrative, or professional capacities are exempt from this requirement. See id. at § 213(a)(1). "The employer in an FLSA case bears the burden of establishing that its employees are exempt, and because of the remedial nature of the FLSA, exemptions are to be narrowly construed against the employers seeking to assert them ..." Reich v. Newspapers of New England, Inc., 44 F.3d 1060, 1070 (1st Cir.1995) (internal quotation marks omitted).

The terms of the professional exemption are set forth in regulations promulgated by the Secretary of Labor.² See id. The parties agree that the so-called "short test" applies for determining if appellants qualify as professionals.³ Under the short test, a professional means any employee:

(a) Whose primary duty consists of the performance of:

(1) Work requiring knowledge of an advance type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual, or physical processes, ... and

(b) Whose work requires the consistent exercise of discretion and judgment in its performance.

29 C.F.R. § 541.3 (1999). Appellants concede that they satisfy the knowledge portion of the short test but claim that they are not professionals because their work does not require the consistent exercise of discretion and judgment. Consequently, we train our focus on this element of the test.

In general, the exercise of discretion and 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." 29 C.F.R. § 541.207(a)(1999); Rutlin v. Prime Succession, Inc., 220 F.3d 737, 743 (6th Cir.2000) (citing 29 C.F.R. § 541.207).⁴ Applying this definition to the undisputed evidence convinces us that appellants consistently exercise discretion and judgment.

One of appellants' primary tasks is to evaluate the safety and propriety of each prescription for the particular patient. If appellants believe that a drug is contraindicated for a certain patient, they are responsible for contacting the prescribing physician to discuss whether the prescription needs modification. There is no dispute that the decision to contact the physician and the content of the subsequent conversation is within appellants' control and judgment and requires appellants to use their advanced training. See Anunobi v. Eckerd Corp., No. 02-CV-0820, 2003 WL 22368153, at *5 (W.D.Tex. Oct. 17, 2003) (stating that pharmacist exercised discretion and judgment because, inter alia, he was responsible for contacting physician if drug seemed contraindicated).

As a result of appellants' conversations with the prescribing physicians, the appellants and physicians typically agree on how to modify the original prescription. If, however, the appellants and physicians reach impasse, the appellants discuss the situation with their colleagues and supervisors before deciding whether to dispense the drug. That appellants consult among themselves and supervisors in difficult cases does not preclude a finding that they exercise discretion and judgment in those cases. See Piscione, 171 F.3d at 536 ("[T]he reality [is] that many individuals who exercise discretion and independent judgment often do so after consultation with others."). In fact, appellants concede in their depositions that their position requires them to use advanced training and judgment in determining if a drug is contraindicated and deciding whether the drug could be dispensed without compromising a patient's health.

Appellants also spend a significant portion of their time supervising other employees. Supervisory responsibility is an indicum that an employee exercises discretion and judgment. See id. at 535 & 537. Appellants each supervise between eight and ten pharmacy technicians during the compounding process and two to three technicians during labeling. Appellants are responsible for assigning work, explaining how tasks should be accomplished, and reviewing the final work product. When the technicians make mistakes, appellants correct the errors. Moreover, Baxter relies on appellants' evaluations in making personnel decisions regarding the technicians. See id. at 537 (stating that employee exercised discretion and judgment by assigning work and evaluating subordinates).

Finally, while appellants spend much of their day supervising other employees, they are not closely supervised in the performance of their own duties. This is another indicator that appellants exercise discretion and judgment. Compare Owsley v. San Antonio Indep. Sch. Dist., 187 F.3d 521, 526 (5th Cir.1999) (stating that athletic trainers exercised discretion and judgment, in part, because they made many decisions without immediate supervision), with Quirk v. Baltimore County, 895 F.Supp. 773, 785 (D.Md.1995) (holding that emergency medical technician did not consistently exercise discretion and judgment because he worked under the immediate supervision of a physician).

While not disputing any of this, appellants contend that they do not consistently exercise discretion and judgment because they are bound to follow the SOPs in performing their duties. This argument fails. First, appellants acknowledge that they do not follow the SOPs if they believe that the result would endanger a patient's health. Appellants admit that their ultimate duty is to assure patient health, and that they depart from the SOPs, if necessary, to meet this responsibility. Thus, appellants maintain discretion to decide when to depart from the SOPs.⁵ See Paul v. Petroleum Equip. Tools Co., 708 F.2d 168, 171 (5th Cir.1983) (concluding that a pilot...