Donovan v. United Video, Inc., 80-2215

• Decision Date: 17 January 1984
• Docket Number: No. 80-2215,80-2215
• Citation: 725 F.2d 577
• Parties: 26 Wage & Hour Cas. (BN 938, 99 Lab.Cas. P 34,490 Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Plaintiff-Appellee, v. UNITED VIDEO, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 577

725 F.2d 577

26 Wage & Hour Cas. (BN 938, 99 Lab.Cas. P 34,490

Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Plaintiff-Appellee, v. UNITED VIDEO, INC., Defendant-Appellant.

No. 80-2215.

United States Court of Appeals Tenth Circuit.

Jan. 17, 1984.

Richard L. Barnes, Tulsa, Okl. (Kothe, Nichols & Wolfe, Inc., Tulsa, Okl., were also on brief), for defendant-appellant.

Paula W. Coleman, Atty., U.S. Dept. of Labor, Washington, D.C. (T. Timothy Ryan, Jr., Sol. of Labor, Donald S. Shire, Associate Sol., Mary-Helen Mautner and Ruth E. Peters, Attys., U.S. Dept. of Labor, Washington, D.C., and James E. White, Regional Sol., Dallas, Tex., were also on brief), for plaintiff-appellee.

Before SETH, Chief Judge, and HOLLOWAY and BARRETT, Circuit Judges.

HOLLOWAY, Circuit Judge.

United Video appeals from a judgment of the district court enjoining it from violating provisions of the Fair Labor Standards Act of 1938, as amended ("FLSA" or "Act"), 29 U.S.C. Secs. 201 et seq., and from withholding back pay for overtime due certain of its microwave system engineers. The district court concluded that the microwave system engineers 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 Sec. 7(a), 29 U.S.C. Sec. 207(a). United Video argued that its microwave system engineers were employed in a bona fide administrative capacity, and therefore exempt from the overtime provisions of the Act. See FLSA Sec. 13(a)(1), 29 U.S.C. Sec. 213(a)(1). On appeal, it repeats this argument and also contends that the district court's findings as to the number of overtime hours which the microwave system engineers worked and the amount of overtime compensation due them are not supported by the record. We affirm.

I

United Video is engaged in gathering and transmitting television video and audio signals and FM stereo radio signals. It utilizes almost 180 unstaffed microwave relay stations or towers located approximately twenty-five miles apart over eight states. Operation and maintenance of the microwave relay system are the responsibility of United Video's microwave system engineers. (I R. 64-66). Each engineer is responsible for ten to eighteen stations in a specific geographic area. (I R. 65).

Before June 1, 1975, United Video referred to these employees as microwave technicians and paid them on an hourly basis and time-and-a-half for overtime hours worked. (I R. 63). On June 1, 1975, United Video changed the job title from microwave technician to microwave system engineer and began paying the employees on a flat salary basis for all hours worked rather than on the usual hourly basis. (I R. 63). However, there was no change, after June 1, 1975, in the employees' job duties. (I R. 69). The only change in their conditions of employment was that they were no longer paid overtime compensation for hours worked in excess of forty hours per work week. (I R. 63; V R. 20).

The Secretary of Labor brought suit in the district court to enjoin United Video from violating the overtime and record keeping provisions of the Act, and to restrain the continued withholding of unpaid wages due under the Act to certain of defendant's microwave system engineers who provided maintenance and upkeep for United Video's microwave relay stations. United Video alleged that all the employees in question were administrative employees, and thus exempt from the Act's overtime provisions.

The district court bifurcated the case, considering first the issue whether United Video was obligated to pay overtime compensation to the employees in question. On the Secretary's motion for partial summary judgment, the district court ruled that United Video's microwave system engineers were not exempt as administrative employees from the Act's overtime provisions and that United Video, by failing to pay those employees overtime compensation for hours worked in excess of forty hours per work week, violated the overtime provisions of the Act. It was stated by United Video's counsel at argument that there is no challenge to the summary judgment procedure, and it was pointed out that no testimony was observed by the district judge who decided the issue on depositions, stipulations, and answers to interrogatories. The company does, of course, challenge the legal conclusions underlying the summary judgment.

In the second stage of the proceedings, on the parties' stipulation that the matter be submitted to the court for trial on the record, the district court determined the amount of overtime compensation owed, based on United Video's records and the deposition testimony of the employees and of the compliance office. The district court enjoined United Video from committing future violations of the Act and from further withholding of unpaid overtime compensation which the court found to be due the employees.

This appeal followed.

II

A

Section 7(a) of the Act, 29 U.S.C. Sec. 207(a) (1976), mandates overtime compensation for certain employees who work in excess of forty hours per week. ¹ However, Sec. 13(a)(1), 29 U.S.C. Sec. 213(a)(1) (1976), exempts from the provisions of section 7 those employees who are employed in certain designated capacities, including an "administrative" capacity. ² Such terms, under the statute, are left for definition and delineation by regulations promulgated by the Secretary of Labor.

The regulations establish two tests for determining whether an employee is exempt as a bona fide administrative employee. Employees earning less than $250 per week are subject to the "long test" of 29 C.F.R. Secs. 541.2(a)-(e) (1976), whereas those earning $250 or more per week are governed by the "short test" as set forth in the proviso to Sec. 541.2(e)(2). ³

Both parties agree that the "short test" governs here. Under the short test employees are deemed exempt if (1) their "primary duty consists of ... [t]he performance of office or nonmanual work directly related to management policies or general business operations of [the] employer or [the] employer's customers," 29 C.F.R. Sec. 541.2(a)(1) (1976), and (2) such duty "includes work requiring the exercise of discretion and independent judgment." Id. Sec. 541.2(e)(2). The employer who asserts the exemption has the burden of establishing both of these requirements by clear and affirmative evidence. See Walling v. General Industries Co., 330 U.S. 545, 547-48, 67 S.Ct. 883, 884, 91 L.Ed. 1088 (1947); Legg v. Rock Products Manufacturing Corp., 309 F.2d 172, 174 (10th Cir.1962).

In this case, the district court found that the employer's microwave system engineers are not exempt administrative employees because (1) their primary duty--maintenance of the microwave system--involves a substantial amount of manual work, and (2) the engineers do not customarily and regularly exercise discretion and independent judgment. United Video challenges both of these findings on appeal. However, we limit our review to the primary duty issue, which we find to be dispositive. ⁴

B

United Video contends that the district court erred in failing to apply the "scope of responsibility" as the exclusive standard for determining the employees' primary duty, and that its finding is unsupported by the evidence. The company says that the court erroneously narrowed its view to a single aspect of the duties and responsibilities of the engineers in determining their "primary duty," instead of evaluating the totality of the nature of the work required. We disagree.

Guidelines for determining an employee's primary duty are set forth in 29 C.F.R. Secs. 541.206, 541.103 (1976) of the Secretary's regulations. As a "rule of thumb," an employee's "primary duty" means that duty which occupies the major part, or more than fifty percent, of an employee's time. Id. Sec. 541.103. Time alone, however, is not the sole test. Other factors that may be considered include: the relative importance of the duties as compared with other types of duties, the frequency with which the employee exercises discretionary powers, his relative freedom from supervision, and the relationship between his salary and the wages paid other employees for the kind of nonexempt work performed. Id.

Based on the amount of time involved and the overall importance of the work, the district court could properly find that the engineers' primary duty is the maintenance of United Video's microwave system. The court was not required to limit its inquiry to the employees' "scope of responsibility," as United Video contends.

Moreover, we are satisfied that the district court carefully evaluated all the employees' duties in reaching its determination, ⁵ and that its conclusion that maintenance is the engineers' primary duty is not in error. The record shows that each microwave engineer is responsible for maintaining ten to eighteen microwave relay stations in a specific geographic area. (I R. 65). The engineers' maintenance tasks include driving to the various relay points to perform preventive maintenance inspections and emergency repairs; driving their trucks is a task which by itself consumes fifty to seventy percent of the engineers' workweek. (I R. 67). The engineers perform preventive maintenance inspections at the relay stations at least once every quarter, and at some relay stations once a month. (I R. 65). The record shows that preventive maintenance can take up to twenty-five percent of the employees' work time and that short, minimal inspections are the exception and not the rule. (I R. 65; II R. 12; VIII R. 18, Johnson deposition; XIX R. 22). An inspection includes an overall check of the equipment according to prescribed procedures, the repair or replacement of any malfunctioning equipment, and a general clean-up of the area around the relay station. (I R. 65-66). In addition to performing preventive maintenance inspections, the microwave engineers are required to respond to...