Donovan v. Burger King Corp.

• Decision Date: 22 February 1982
• Docket Number: No. 81-1502,81-1502
• Citation: 672 F.2d 221
• Parties: 25 Wage & Hour Cas. (BN 428, 93 Lab.Cas. P 34,150, 10 Fed. R. Evid. Serv. 168 Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Plaintiff, Appellee, v. BURGER KING CORPORATION, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 221

672 F.2d 221

25 Wage & Hour Cas. (BN 428, 93 Lab.Cas. P 34,150,

10 Fed. R. Evid. Serv. 168

Raymond J. DONOVAN, Secretary of Labor, United States

Department of Labor, Plaintiff, Appellee, v. BURGER KING CORPORATION, Defendant, Appellant.

No. 81-1502.

United States Court of Appeals,

First Circuit.

Argued Dec. 11, 1981.

Decided Feb. 22, 1982.

Martin D. Heyert, New York City, with whom Paul L. Bressan and Kelley, Drye & Warren, New York City, were on brief, for appellant.

Gregory O'Duden, Atty., Washington, D. C., with whom T. Timothy Ryan, Jr., Sol. of Labor, Albert H. Ross, Regional Sol., Beate Bloch, Associate Sol., and Mary-Helen Mautner, Atty., Washington, D. C., were on brief, for appellee.

Before CAMPBELL and BOWNES, Circuit Judges, and WYZANSKI, ^* Senior District Judge.

LEVIN H. CAMPBELL, Circuit Judge.

Burger King appeals from a judgment of the district court enjoining it from violating provisions of the Fair Labor Standards Act ("FLSA" or "the Act"), 29 U.S.C. §§ 201 et seq., and from withholding back pay for overtime due certain of its assistant managers. After a bench trial, the district court concluded that the assistant managers were covered by the Act, and therefore entitled to be paid at one and one-half times their regular rate for overtime hours. See FLSA § 7(a), 29 U.S.C. § 207(a). Burger King argued that its assistant managers were "employed in a bona fide executive ... capacity," and therefore exempt from the pay requirements of the Act. See FLSA § 13(a)(1), 29 U.S.C. § 213(a)(1); 29 C.F.R. § 541.1. On appeal, it repeats this argument, and also urges that the district court improperly limited the number of witnesses called at trial, and that the court's injunction was excessive in its geographic scope.

I.

Burger King fast-food restaurants are operated nationwide. Some of the restaurants are company-owned, others are franchises. At issue in this case are 44 company-owned restaurants in Massachusetts and Connecticut. The restaurants are each staffed by a salaried manager, two salaried assistant managers, and a large crew of hourly employees. Except for brief periods of overlap and Fridays and Saturdays, only one of the three salaried persons is on duty at any one time. The manager usually works day shifts, while the assistant managers normally work swing and night shifts. The manager or assistant manager on duty supervises the hourly employees, up to 25 of whom may be working at any one time.

While on duty, the assistant manager enjoys decision-making authority roughly commensurate with that of the manager. He schedules employees, assigns work, oversees product quality, and speaks with customers. Assistant managers also train employees, determine the quantity of food to be produced at any given time, and perform various recordkeeping, inventory, and cash reconciliation duties. Many of these tasks are governed by highly detailed, step-by-step instructions contained in Burger King's "Manual of Operating Data," and admit of little or no variation. Assistant managers also spend a portion of their time performing many of the same tasks as hourly employees, such as taking orders, preparing food, and "expediting" orders, that is, filling the orders and handing them to the customers. These tasks are also spelled out in great detail in the Manual of Operating Data.

The crux of Burger King's case was its affirmative defense that the assistant managers were employed in a "bona fide executive ... capacity" as that term is used in section 13(a)(1), and thus exempt from the Act. Regulations promulgated by the Secretary of Labor under authority of section 13(a)(1) specify the requirements for this exemption. In the case of employees earning at least $250 per week, two requirements only must be met: the employees' "primary duty" must be management, and they must regularly direct the work of at least two other employees. 29 C.F.R. § 541.1(f). ¹ This is known as the "short test." In the case of employees earning more than $155, but less than $250, per week, there is a "long test." This includes three requirements in addition to the two contained in the short test: the employees must have authority to hire or fire, or at least their recommendations must be given "particular weight"; they must "customarily and regularly exercise( ) discretionary powers"; and they must not devote more than 40 percent ² of their time to activities not "closely related" to their management duties. 29 C.F.R. § 541.1(a)-(f). ³ The district court found that the assistant managers here failed to meet the "primary duty" requirement common to both tests. And in the case of assistant managers whose pay scale made them subject to the "long test," it found they lacked, in addition, the authority to hire and fire and the necessary discretionary powers, and also that they devoted more than 40 percent of their time to non-managerial duties. It therefore ruled that neither those assistant managers to whom the short test applied, nor those to whom the long test applied, were exempt from the Act. The court ordered Burger King to pay back wages to 246 assistant managers in Massachusetts and Connecticut for past overtime hours, and also enjoined Burger King from violating the Act in its company-owned restaurants without limitation as to their location.

II.

Burger King argues first that the district court improperly restricted the evidence it could introduce at trial, in two ways. First, it contends that the court erroneously limited testimony to that concerning only six specific restaurants, out of a total of 44 whose practices were in issue. This was done in order to limit the number of witnesses to manageable proportions (the government had initially stated that it might have to call as many as 2,000 witnesses if full testimony about each restaurant were required). The district court thought the limitation on the number of restaurants a proper approach in light of the basic similarities between the individual restaurants. Counsel for Burger King appears to have agreed to this. During the course of a pretrial conference requested by counsel for Burger King for the purpose, in his words, of "narrowing down the number of witnesses the government intends to call," the court stated I will not listen to witnesses from more than five (later six) stores. I don't care what five stores they are. The five stores should be enough to give me a feeling for what is going on in these places.

Counsel for Burger King replied, "I agree." Especially in light of this concession, we do not accept Burger King's present complaint that the restaurants are so different that it should have been allowed to present testimony concerning more of them. The court later chose three restaurants each from lists prepared by the government and Burger King. While testimony tended to show that one of the stores chosen by the government was unrepresentative due to labor problems, the court's method of deciding on the particular restaurants-in the absence of agreement among the parties-seems fair and equitable. ⁴

Second, Burger King argues that during the trial, the court improperly limited the number of witnesses it could call with respect to the six particular restaurants. Burger King attempted to call 26 witnesses, but after hearing six, the court concluded that further witnesses would not be helpful to it. Burger King and the government then stipulated that 20 named individuals "would give substantially the same testimony regarding the work they did or do as Assistant Managers" as was given by three of Burger King's earlier witnesses. The court has broad discretion under Fed.R.Evid. 403 to prevent the "needless presentation of cumulative evidence." See 10 Moore's Federal Practice § 403.13 (1981). We see no abuse of discretion here. The court found that all of the testimony thus far had been "substantially the same," and counsel for Burger King agreed with this both at trial and in the stipulation. The evidence was thus admittedly cumulative, and it was within the province of the district court to exclude it. ⁵

III.

We turn next to the question of whether the short test assistant managers (i.e., those earning at least $250 per week) were properly held by the district court to be non-exempt and hence within the coverage of the Act. This turns on whether they have management as their "primary duty." 29 C.F.R. § 541.1(f). We hold that the district court erred in concluding that the assistant managers did not meet this requirement. ⁶

The district court found that in the absence of the manager, the assistant manager on duty was "de facto in charge of the store." Burger King contends vigorously that this finding should be sufficient to demonstrate that the assistant managers satisfy the primary duty requirement. Under the regulations,

A determination of whether an employee has management as his primary duty must be based on all the facts of a particular case.... Time alone ... is not the sole test .... (Other) pertinent factors are the relative importance of the managerial duties as compared with other types of duties, the frequency with which the employee exercises discretionary powers, his relative freedom from supervision, and the wages paid other employees for the kind of nonexempt work performed by the supervisor.

29 C.F.R. § 541.103. Some of these factors quite clearly cut in favor of Burger King's contention, especially those related to freedom from supervision and a comparison of wages with other employees. The district court gave no explicit reason for its conclusion that the assistant managers did not have management as their primary duty, but in light of this regulation, two main explanations are possible. One is that it concluded that they do not exercise sufficient discretionary powers to be "managing"; the other is that they spend too much time on non-management tasks. Each of these is unpersuasive.

The supervision of other employees is clearly a...