Berg v. Newman
| Decision Date | 28 December 1992 |
| Docket Number | No. 92-1209,92-1209 |
| Citation | 982 F.2d 500 |
| Parties | , 124 Lab.Cas. P 35,745, 1 Wage & Hour Cas.2d (BNA) 314 Ronald L. BERG, Borre A. Schmidt and Dale T. Sturgill, Plaintiffs-Appellants, v. Constance Berry NEWMAN, Director, Office of Personnel Management, Donald B. Rice, Secretary of the Air Force and United States of America, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Federal Circuit |
Linda Lipsett, Bernstein & Lipsett, of Washington, DC, argued, for plaintiffs-appellants.
Joan M. Bernott, Dept. of Justice, argued, for defendants-appellees, with her on the brief were Stuart E. Schiffer and David M. Cohen. Of counsel was Lt. Col. W. Jan Faber, U.S. Dept. of Air Force.
Before ARCHER, LOURIE, and RADER, Circuit Judges.
Ronald Berg, et al. appeal the grant of summary judgment in favor of the Office of Personnel Management (OPM). In granting OPM's motion, the United States District Court for the Eastern District of California determined that appellants are "exempt" from Fair Labor Standards Act (FLSA) overtime benefits. Berg v. Newman, No. CV-F-90-671 REC (E.D.Cal. June 19, 1991). The district court also determined that OPM could invoke the FLSA's "good faith" defense against liability for overtime payments. 29 U.S.C. § 259 (1988). Because the record does not show as a matter of law that appellants are exempt from FLSA overtime benefits and because Government agencies may not rely on OPM regulations for a "good faith" defense, this court reverses and remands.
Appellants are or were GS-12 electronic technicians who maintain and repair air traffic control equipment at Edwards Air Force Base in California. Appellants allege that the United States Air Force improperly classified them as exempt from FLSA overtime provisions. Exempt employees under the FLSA are not entitled to overtime benefits. Appellants seek payment for overtime.
Before 1985, appellants were GS-11 electronic technicians whose positions were eligible for FLSA overtime. In 1985, OPM issued new regulations governing overtime status. Under these new regulations, the Air Force reclassified appellants' positions as exempt from FLSA overtime benefits.
By March 1987, the Air Force had promoted all appellants to GS-12 positions. In June 1989, the Air Force Director of Operations and Training requested reclassification of non-supervisory electronic technicians as non-exempt, in other words, entitled to FLSA overtime. After reviewing appellants' job description, the Air Force denied this request. The Air Force concluded that appellants' positions fell within the administrative exemption from the overtime provisions of the FLSA. See 5 C.F.R. § 551.205 (1992).
Appellants brought this action challenging this classification. The Government moved to dismiss, or in the alternative, for summary judgment. Appellants cross-moved for summary judgment. The district court denied appellants' motion and granted OPM's motion for summary judgment.
This court has jurisdiction under 28 U.S.C. § 1295(a)(2) (1988). This court reviews the district court's summary judgment grant de novo. National Cable Television Ass'n v. American Cinema Editors, Inc., 937 F.2d 1572, 1576, 19 USPQ2d 1424, 1427 (Fed.Cir.1991). Although both parties moved for summary judgment, this court need not affirm a judgment if the record discloses genuine factual disputes or does not justify a legal conclusion. Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1391 (Fed.Cir.1987).
The FLSA provides overtime compensation for hours worked above a forty-hour workweek. 29 U.S.C. § 207 (1988). Employees classified by the FLSA as "exempt," however, receive no entitlement to overtime. 29 U.S.C. § 213 (1988). Exempt employees include individuals employed "in a bona fide executive, administrative, or professional capacity." 29 U.S.C. § 213(a)(1). OPM has set forth specific criteria for determining whether specific jobs fall within the "executive," "administrative," or "professional" exemptions. See 5 C.F.R. §§ 551.204-551.206 (1992). § 551.205 Administrative exemption criteria.
OPM's regulations on the administrative exemption state:
An administrative employee is an advisor, assistance [sic], or representative of management, or a specialist in a management or general business function or supporting service who meets all of the following criteria:
(a) The employee's primary duty consists of work that--
(1) Significantly affects the formulation or execution of management policies or programs; or
(2) Involves general management or business functions or supporting services of substantial importance to the organization serviced; or
(3) Involves substantial participation in the executive or administrative functions of a management official.
(b) The employee performs office or other predominantly nonmanual work which is--
(1) Intellectual and varied in nature; or
(2) Of a specialized or technical nature that requires considerable special training, experience, and knowledge.
(c) The employee must frequently exercise discretion and independent judgment, under only general supervision, in performing the normal day-to-day work.
5 C.F.R. § 551.205.
This regulation requires an examination of the day-to-day work of an employee. To fit within the administrative exemption, an employee's day-to-day work must satisfy each of the three major regulatory touchstones: it must primarily involve or affect significant management responsibilities; it must involve nonmanual, intellectual or specialized duties; and it must demand frequent exercise of discretion and independent judgment.
The United States Civil Service Commission (CSC), succeeded by OPM, issued Federal Personnel Manual (FPM) Letter No. 551-7 on July 1, 1975. This letter sets forth for "Heads of [Federal] Departments and Agencies" the "Instructions for Applying the Exemption Provisions of the [FLSA]." FPM Letter No. 551-7 elaborates on the administrative exemption's "general management or business functions or supporting services" as follows:
General management, business, or supporting services: This element brings into the administrative category a wide variety of specialists who provide general management, business, or other supporting services as distinguished from production functions. The administrative employees in this category provide support to line managers by:
(1) Providing expert advice in specialized subject matter fields, such as that provided by management consultants or systems analysts;
(2) Assuming facets of the overall management function, such as safety management, personnel management, or budgeting and financial management;
(3) Representing management in such business function as negotiating and administering contracts, determining acceptability of goods or services, or authorizing payments; or
(4) Providing supporting services, such as automated data processing, communications, or procurement and distribution of supplies.
FPM Letter No. 551-7(B)(1)(h), July 1, 1975. In addition, FPM Letter No. 551-7 describes certain groups of employees who do not fit any of the administrative exemption criteria:
[N]onsupervisory employees at any grade level in occupations requiring highly specialized technical skills and knowledges [sic] that can be acquired only through prolonged job training and experience ... unless such employees are performing predominantly administrative functions rather than the technical work of the occupation.
FPM Letter No. 551-7(B)(2)(c), July 1, 1975. This letter clarifies that technical skills alone do not make employees exempt. Rather, the administrative exemption applies to technical employees whose primary duties include specialized management consultation Indeed, this record does not contain sufficient facts to justify the legal conclusion that appellants belong in the administrative exemption. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157-61, 90 S.Ct. 1598, 1608-10, 26 L.Ed.2d 142 (1970). The Government has the burden to show that appellants meet the criteria for the administrative exemption. See Corning Glass Works v. Brennan, 417 U.S. 188, 196-97, 94 S.Ct. 2223, 2229, 41 L.Ed.2d 1 (1974). As movant for summary judgment, the Government must further show the absence of a genuine dispute about any material fact. Adickes, 398 U.S. at 157, 90 S.Ct. at 1608.
overall management functions, contract negotiation and administration, and the like. To determine whether a position fits within the exemption, a trial court must have before it sufficient facts concerning the daily activities of that position to justify its legal conclusion
At the outset, appellants' technical expertise alone does not place them within the administrative exemption. See Palardy v. Horner, 711 F.Supp. 667, 670 (D.Mass.1989) (). Beyond technical expertise, the exemption requires day-to-day duties with other characteristics, such as significant managerial functions and frequent exercise of independent judgment.
The record does not suffice to show that appellants' day-to-day duties fall within the administrative exemption. The Government's evidence consists of appellants' job description and two conclusory statements from Air Force classifiers. The Government, however, presents no evidence describing appellant's specific job duties. The general job description lacks specific facts about appellants' day-to-day activities. Similarly, the Air Force classifiers supply little, if any, factual basis for their conclusions that appellants fit within the exemption. The record provides little, if any, evidence of appellants' supervisory or managerial functions on a daily basis. Nor does the record show that appellants' duties require frequent exercise of discretion and independent judgment.
Given the scarcity of specific evidence in the record, appellants' status under the administrative...
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...5 C.F.R. § 551.206. The burden to prove an exemption "rests with the agency." 5 C.F.R. § 551.202(c); see also Berg v. Newman, 982 F.2d 500, 503 (Fed. Cir. 1992). The agency's determination "must ultimately rest on the duties actually performed by the employee," 5 C.F.R. § 551.202(e), and "m......
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