Cash v. Cycle Craft Co., Inc.

• Decision Date: 20 November 2007
• Docket Number: No. 07-1768.,07-1768.
• Citation: 508 F.3d 680
• Parties: Thomas W. CASH, Plaintiff, Appellant, v. CYCLE CRAFT COMPANY, INC., dba Harley-Davidson/Buell of Boston, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

508 F.3d 680

Thomas W. CASH, Plaintiff, Appellant, v. CYCLE CRAFT COMPANY, INC., dba Harley-Davidson/Buell of Boston, Defendant, Appellee.

No. 07-1768.

United States Court of Appeals, First Circuit.

Submitted October 5, 2007.

Decided November 20, 2007.

Nina Joan Kimball with whom Justine H. Brousseau was on brief for appellant.

Seth H. Salinger was on brief for appellee.

Before Lipez and Howard, Circuit Judges, and Oberdorfer,^* Senior District Judge.

OBERDORFER, Senior District Judge.

Plaintiff-Appellant Thomas W. Cash appeals the district court's grant of summary judgment to his former employer, Defendant-Appellee Cycle Craft Company, Inc., d/b/a Harley-Davidson/Buell of Boston ("Boston Harley"). Cash contends Boston Harley failed to pay him overtime at the proper rate in violation of both the Fair Labor Standards Act, 29 U.S.C. §§ 210-19 (2004), and the Massachusetts Minimum Fair Wages Act, Mass. Gen. Laws ch. 151, §§ 1A, 1B (2004). The district court granted Boston Harley's motion for summary judgment, concluding that Cash was an exempt "administrative" employee within the meaning of these Acts. Cash v. Cycle Craft Co., 482 F.Supp.2d 133 (D.Mass. 2007). We AFFIRM.

I. BACKGROUND

We review the facts in the light most favorable to Cash, the nonmoving party below.

In fall 2003, Cash was shopping at the Boston Harley motorcycle store and met the General Manager, Ron Buchbaum. This encounter, along with another in January 2004, led to discussions of Cash potentially working at Boston Harley. Buchbaum wanted Cash to create a new customer-service position. Cash drafted a job description for the position and Buchbaum suggested some changes, which Cash adopted. The job description titled the position "New Purchase/Customer Relations Manager" and identified the following responsibilities:

The ability to develop and implement a[n] overall Customer Service strategic plan that will allow [Boston Harley] to reach its current and long-term customer satisfaction goals.

The ability to develop a clear business plan to support organizational changes, where needed, that provide efficiency and improve customer service delivery.

To ensure service goals and expectations of customers are met with optimum quality and satisfaction.

Identify and expeditiously resolve delivery problems. Develop and implement appropriate action.

Liason between National representatives, the Dealership and the customer, resolving issues to assure complete and on-time shipment of bike and accessories delivery.

The job description also stated the position's qualifications, including a "[m]inimum of five years experience" in both "Customer Service Management" and "as a Supervisor." Buchbaum offered Cash the position, which provided a $60,000 annual salary, along with health insurance and vacation after one year.

Cash accepted the offer and started working at Boston Harley on April 26, 2004. His duties included working with various Boston Harley departments to make sure that they outfitted and delivered each motorcycle according to the particular purchase order. If ordered parts were not installed, he was to contact the service manager, Michael Sienkiewicz, and tell him what needed to be done. Once problems were resolved, Cash was to tell the finance department that the motorcycle was ready. That department would then set up a time with the customer for delivery or pickup. Cash then tracked the purchased motorcycles; it was his job to stay in touch with the customers and make sure that they were satisfied so that they would provide positive customer-feedback reports.

As Cash's job worked out, he did not coordinate motorcycle ordering, delivery, or part installation. Nor did he supervise or manage any employees. However, he attended management meetings, except when Buchbaum instructed him not to. At these meetings, Cash reported the status of previously ordered motorcycles and their scheduled time for pickup or delivery. Often, after Cash provided these reports, Buchbaum told him to leave the meeting.

Cash earned $1,153.85 per week (the prorated amount for his $60,000 salary) during his employment. He received this same salary each week regardless of hours worked, except for two pay periods: (1) the pay period ending August 28, 2004, when he was paid $769.24; and (2) the next pay period, ending September 4, 2004, when he was paid $961.55. Cash states that "he was never paid for hours he worked over 40 hours [per week], yet he was routinely required to work overtime as part of his job, as is reflected in his payroll records."

On April 8, 2005, almost one year after he started working at Boston Harley, Cash experienced an emotional problem at work. Boston Harley terminated his employment that day.

On November 4, 2005, Cash brought suit in district court, alleging the statutory violations mentioned above. On April 6, 2007, the district court granted Boston Harley's motion for summary judgment. Cash appealed.

II. DISCUSSION

A. Standard of Review

We review de novo a district court's entry of summary judgment. Dávila v. Corporación De P.R. Para La Difusión Pública, 498 F.3d 9, 12 (1st Cir.2007). Like the district court, we take the facts of record in the light most favorable to the nonmovant (here, Cash) and draw all reasonable inferences in his favor. Id. Summary judgment is appropriate only when the record "show[s] that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c).

B. Cash's Claims

1. Fair Labor Standards Act

The Fair Labor Standards Act establishes the general rule that employers must compensate each employee at "a rate not less than one and one-half times the regular rate" for all overtime hours that an employee works. 29 U.S.C. § 207(a)(1). The Act defines overtime as employment in excess of 40 hours in a single workweek. Id.

The Act exempts from this general rule certain so-called "white-collar" employees, i.e., "any employee employed in a bona fide executive, administrative, or professional capacity . . . ." Id. § 213(a)(1) (emphasis added). Boston Harley contends that Cash was such a "white-collar" employee because he served in an "administrative" capacity.

An employer defending a suit under the Act bears the burden of establishing that a particular employee's job falls within such an exemption. Reich v. John Alden Life Ins. Co., 126 F.3d 1, 7 (1st Cir.1997). Additionally, "the remedial nature of the statute requires that [its] exemptions be `narrowly construed against the employers seeking to assert them'" and "`limited to those establishments plainly and unmistakably within [the exemptions'] terms and spirit.'" Id. (quoting Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 4 L.Ed.2d 393 (1960)).

The Secretary of Labor has issued regulations that articulate some specific parameters of the exemption. John Alden, 126 F.3d at 7; see 29 C.F.R. § 541.200 (2004). Although the regulations merely state the Secretary's official position on how the statutes should be interpreted, a court must give them "controlling weight unless [the court finds them] to be arbitrary, capricious, or contrary to the statute." John Alden, 126 F.3d at 8 (citing Chevron U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837, 843-44, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)).

According to the regulations, to establish that Cash was an "employee in a bona fide administrative capacity," Boston Harley must show that he was an employee

(1) [c]ompensated on a salary or fee basis at a rate of not less than $455 per week . . ., exclusive of board, lodging or other facilities;

(2) [w]hose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and

(3) [w]hose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

29 C.F.R. § 541.200 (emphasis added).¹

(a) Salary

Cash meets the $455-per-week compensation threshold in the regulation: he received $1,153.83 per week, except for the two weeks he received $769.24 and $961.55. He argues, however, that Boston Harley did not pay him on a "salary basis," because it reduced his pay for these two pay periods. The regulations state that "[a]n employee will be considered to be paid on a `salary basis' . . . if the employee regularly receives each pay period on a weekly, or less frequent[,] basis, a predetermined amount constituting all or part of the employee's compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed." Id. § 541.602(a). Subject to certain exceptions, "an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked." Id. The district court, mistakenly stating that Cash began work on Thursday, August 26, 2004 (instead of April 26, 2004), concluded that these two pay periods accurately reflected the 1.5 weeks Cash worked at this time.

Regardless of this date error, Boston Harley prevails on this point. A regulation issued August 23, 2004, provides that an employer "shall lose the exemption if the facts demonstrate that the employer did not intend to pay employees on a salary basis." Id. § 541.603(a). "An actual practice of making improper deductions demonstrates" this intent. Id. (emphasis added). An actual practice of making improper deductions is evidenced by "the number of improper deductions." Id.

We conclude that two aberrant paychecks out of the approximately 50 that Cash received do not amount to an "actual practice." See Kennedy v. Commonwealth Edison Co., 410 F.3d 365, 372 (7th Cir. 2005) ("Identifying a few random, isolated, and negligible deductions is not enough to show an actual practice or policy of treating as hourly the theoretically salaried."). Indeed,...