Ramos v. Baldor Specialty Foods, Inc.

• Decision Date: 12 July 2012
• Docket Number: Docket No. 11–2616–cv.
• Citation: 19 Wage & Hour Cas.2d (BNA) 536,687 F.3d 554
• Parties: Luis RAMOS, Herber Martinez, Leobardo Moreno, Wilner Dubon, Sergio Calderon, Jose Barranco, Oswaldo Erazo, Mariano Castro, on behalf of themselves and others similarly situated, Plaintiffs–Appellants, v. BALDOR SPECIALTY FOODS, INC., Kevin Murphy, Defendants–Appellees.
• Court: U.S. Court of Appeals — Second Circuit

687 F.3d 554
19 Wage & Hour Cas.2d (BNA) 536

Luis RAMOS, Herber Martinez, Leobardo Moreno, Wilner Dubon, Sergio Calderon, Jose Barranco, Oswaldo Erazo, Mariano Castro, on behalf of themselves and others similarly situated, Plaintiffs–Appellants,
v.
BALDOR SPECIALTY FOODS, INC., Kevin Murphy, Defendants–Appellees.^*

Docket No. 11–2616–cv.

United States Court of Appeals,
Second Circuit.

Argued: June 22, 2012.
Decided: July 12, 2012.

[687 F.3d 555]

C.K. Lee (Robert L. Kraselnik, on the brief), Kraselnik & Lee, PLLC, New York, NY, for Plaintiffs–Appellants.

Marc B. Zimmerman (Jon Schuyler Brooks, Chryssa V. Valletta, on the brief), Phillips Nizer LLP, New York, NY, for Defendants–Appellees.

Before: POOLER, RAGGI, and LYNCH, Circuit Judges.

GERARD E. LYNCH, Circuit Judge:

Plaintiffs-appellants Luis Ramos, Herber Martinez, Leobardo Moreno, Wilner Dubon, Sergio Calderon, Jose Barranco,

[687 F.3d 556]

Oswaldo Erazo, and Mariano Castro (“plaintiffs”), proceeding individually and on behalf of other “similarly situated” employees working the night shift in a warehouse operated by defendants-appellees Baldor Specialty Foods, Inc. (“Baldor”), filed suit in the United States District Court for the Southern District of New York (Richard M. Berman, Judge ), seeking unpaid overtime wages, liquidated damages, and attorneys' fees and costs under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 207(a)(1), 216(b), and analogous sections of New York Labor Law (“NYLL”), N.Y. Labor L. §§ 2, 651, 663(1); see alsoN.Y. Comp.Codes R. & Regs. tit. 12, § 142–2.2 (2003).¹ The district court granted summary judgment for defendants, concluding that as “captains” employed in Baldor's warehouse, they fell within the FLSA's “executive exemption,” which provides that the FLSA's overtime compensation protections “shall not apply” to “any employee employed in a bona fide executive, administrative, or professional capacity,” as those terms are defined by Department of Labor regulations. 29 U.S.C. § 213(a)(1).

Plaintiffs do not dispute that they satisfy all but one of the criteria for exempt executives. The only disputed criterion, and the only issue on appeal, is whether the teams of employees that plaintiffs concededly supervise constitute “customarily recognized department[s] or subdivision[s]” of Baldor, 29 C.F.R. § 541.100(a)(3), defined by Department of Labor regulations as units with “a permanent status and a continuing function,” id. § 541.103(a). We agree with the district court that the summary judgment record allows for no conclusion other than that the teams of warehouse employees managed by plaintiffs constitute units with a permanent status or function. Plaintiffs thus fall within the FLSA's executive exemption and are not entitled to FLSA overtime pay. Accordingly, we affirm the district court's grant of summary judgment for defendants.

BACKGROUND I. Facts

The pertinent facts of this case are not in dispute.²

Defendant Baldor is a wholesale food distributor in the Hunts Point area of the Bronx, New York. Defendant Kevin Murphy

[687 F.3d 557]

is the company's chief executive officer. Baldor's employees are divided into day and night shifts. The night shift “has a number of different departments, such as the warehouse department, transportation department, receiving department, maintenance department, night sales and International Produce Exchange team.”

Plaintiffs are current or former “captains” employed on the night shift in the Warehouse Department. Baldor employs twenty captains on the warehouse night shift, each of whom performs the same job duties as other captains. These duties include overseeing the work of a “team” of three to six “pickers,” the employees who retrieve food products from the warehouse shelves and load them onto trucks to be delivered to Baldor's customers. Each captain is “in charge of” his team. He is responsible for making sure that his pickers arrive at work on time for each shift, retrieve the correct products from the warehouse shelves, and load the products onto the correct trucks. He is also responsible for improving his team's performance and efficiency over time. Each captain has the power to assign slow pickers “easier work” so that they do not fall behind or hurt the team's performance, and the captain can “give certain orders to certain pickers if [he] trust[s]” a particular picker “to get the right product.” It is the captain's job to ensure pickers “have done their job right.” Supervising his team is the “main part” of a captain's job. The company has continuously operated its Warehouse Department in its current structure, with captains in charge of teams of pickers, since at least 1999.

Although each team performs the same general tasks as other teams, each team has a distinct “assigned work area” in the warehouse where the captain and his team of pickers “report each shift.” However, captains “are not given offices or even chairs.” Every night, each captain arrives at work approximately thirty minutes before his team to prepare the team's work area for the shift and, inter alia, to “sign out” and “inspect” the equipment that his team will use. At the end of every shift, each captain completes a “Pickers Production Report” for each picker on his team. The results of these reports determine whether the night warehouse manager will award productivity bonuses to individual pickers.

Captains report to the night warehouse manager. He regularly meets with each captain to discuss each team's performance. There are “too many” pickers for the manager to watch each of them every night, and so he relies on captains “to let him know” whether pickers are performing well. Each picker reports to his captain, but sometimes has direct contact with the night warehouse manager as well, including when the manager gives each picker his periodic performance evaluation. A captain always attends the performance evaluations of his pickers.

On every night shift, a picker works exclusively with his assigned team and captain. If a picker is not performing adequately, a captain may ask the night warehouse manager to transfer that picker to a different team; the manager typically grants such requests. Captains can recommend pickers to the manager for pay raises and for promotion to captain, and the manager sometimes asks captains for such recommendations. In addition, captains can issue warnings to pickers if they are underperforming. It is undisputed that captains also have the authority to fire pickers, although plaintiffs insist that defendants never told them that they had this authority until after plaintiffs filed their complaint in this case.

Captains earn $700 per week. They spend no more than one hour of each shift

[687 F.3d 558]

on non-supervisory tasks, such as sweeping up their team's work area.

II. The District Court's Decision

The district court concluded that the undisputed facts in the summary judgment record “unequivocally establishe[d]” that plaintiffs satisfied all of the regulatory requirements for the executive exemption from the FLSA's overtime-pay protections, because (1) plaintiffs were paid at least $455 per week; (2) their “primary duty” was managing teams of pickers, each of which constituted a customarily recognized department or subdivision of Baldor; (3) each captain directed the work of at least two other employees; and (4) plaintiffs' “suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of” pickers were “given particular weight.” Ramos v. Baldor Specialty Foods, Inc., No. 10 Civ. 6271, 2011 WL 2565330, at *5–7 (S.D.N.Y. June 16, 2011), quoting 29 C.F.R. § 541.100(a)(2).

Plaintiffs appealed.

DISCUSSION I. Standard of Review

We review de novo a district court's award of summary judgment, “construing the evidence in the light most favorable to the nonmoving party and drawing all reasonable inferences in that party's favor.” Kuebel v. Black & Decker Inc., 643 F.3d 352, 358 (2d Cir.2011). We will affirm the grant of summary judgment only if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A fact is material if it might affect the outcome of the suit under the governing law, and an issue of fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Niagara Mohawk Power Corp. v. Hudson River–Black River Regulating Dist., 673 F.3d 84, 94 (2d Cir.2012) (internal quotation marks omitted).

“The exemption question” under the FLSA “is a mixed question of law and fact.” Myers v. Hertz Corp., 624 F.3d 537, 548 (2d Cir.2010). “The question of how the [employees] spent their working time ... is a question of fact. The question whether their particular activities excluded them from the overtime benefits of the FLSA is a question of law....” Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709, 714, 106 S.Ct. 1527, 89 L.Ed.2d 739 (1986). We review that question of law de novo. See Martin v. Malcolm Pirnie, Inc., 949 F.2d 611, 614 (2d Cir.1991). We likewise review de novo a district court's “interpretations of administrative regulations.” Reiseck v. Universal Commc'ns of Miami, Inc., 591 F.3d 101, 104 (2d Cir.2010).

“[B]ecause the FLSA is a remedial act, its exemptions, such as the ‘bona fide executive’ exemption claimed in this case, are to be narrowly construed.” Martin, 949 F.2d at 614. “To extend an exemption to other than those plainly and unmistakably within its terms and spirit is to abuse the interpretative process and to frustrate the announced will of the people.” A.H. Phillips, Inc., v. Walling, 324 U.S. 490, 493, 65 S.Ct. 807, 89 L.Ed. 1095 (1945). Accordingly, “an employer bears the burden of proving that its employees fall within an exempted category of the Act.” Martin, 949 F.2d at 614;see alsoCorning Glass Works v. Brennan, 417 U.S. 188, 196–97, 94 S.Ct. 2223, 41 L.Ed.2d 1 (1974).

II. The FLSA Executive...