Hays v. City of Pauls Valley

• Decision Date: 23 January 1996
• Docket Number: No. 94-6389,94-6389
• Citation: 74 F.3d 1002
• Court: U.S. Court of Appeals — Tenth Circuit
• Parties: 131 Lab.Cas. P 33,340, 3 Wage & Hour Cas.2d (BNA) 97 Fred HAYS, Plaintiff-Appellant, v. CITY OF PAULS VALLEY, State of Oklahoma, a municipal corporation, Defendant-Appellee.

Page 1002

74 F.3d 1002

131 Lab.Cas. P 33,340, 3 Wage & Hour Cas.2d (BNA) 97

Fred HAYS, Plaintiff-Appellant, v. CITY OF PAULS VALLEY, State of Oklahoma, a municipal

corporation, Defendant-Appellee.

No. 94-6389.

United States Court of Appeals, Tenth Circuit.

Jan. 23, 1996.

Jack R. Durland, Jr., Durland & Durland, Oklahoma City, Oklahoma, for appellant.

Robert S. Lafferrandre, Pierce, Couch, Hendrickson, Baysinger & Green, Oklahoma City, Oklahoma, for appellee.

Before TACHA, McWILLIAMS and HENRY, Circuit Judges.

TACHA, Circuit Judge.

Fred Hays sued his former employer, the City of Pauls Valley, alleging willful violation of the Fair Labor Standards Act (FLSA), wrongful discharge, and conversion. After granting summary judgment in favor of the City on the wrongful discharge claim and a portion of the conversion claim, the district court held a jury trial on the FLSA claim and remaining conversion claim. The jury found for the City on the FLSA claim and for Hays on the conversion claim. Hays now appeals the grant of summary judgment on the wrongful discharge and conversion claims, and the jury's verdict on the FLSA issue. We exercise jurisdiction pursuant to 28 U.S.C. Sec. 1291 and affirm.

BACKGROUND

Hays was Golf Course Manager at the Pauls Valley Municipal Golf Course from 1984 to 1992. In 1990, Hays and the City entered into two agreements, the "Golf Course Manager Employment Contract" and the "Independent Contractor Operation of Golf Course" contract, which reduced the parties' previous oral understanding to writing. Under the Golf Course Manager Employment Contract, Hays agreed to be at the golf course five days a week during regular business hours and to "devote his full time and best efforts to his employment as golf course manager." He also agreed to operate a pro shop in the golf course clubhouse; to keep financial records and collect all golf course fees; to deliver golf course fees to the city manager once a week in the winter and twice a week in the summer; to attend golf course board meetings; and to handle general management of the golf course, including supervision of employees and enforcement of golf course rules. Under the Independent Contractor agreement, Hays agreed to keep the golf course open on weekends, holidays, and after regular business hours. Hays's total salary under the two contracts was $24,000 per year. He also received all profits from sales at the pro shop.

Either party could terminate the Golf Course Manager Contract on sixty days written notice. The City could terminate the contract if Hays became unfit or incapacitated or if he failed to perform his obligations. Hays could terminate the contract if, for any reason, he decided that termination was in his best interest. The Independent Contractor agreement could be terminated for any reason by either party on thirty days written notice.

On August 4, 1992, Pauls Valley City Manager John Haynes wrote Hays to notify him that the City wished to terminate the contracts. The City contended that Hays had breached four parts of the Golf Course Manager Contract. Haynes stated that because of Hays's breach, the City had decided to renegotiate both contracts. On September 24, Haynes wrote Hays to inform him that the City would not renegotiate Hays's contracts and that he would be permanently discharged on October 4, sixty days from the date of the earlier letter.

Hays and his wife spent his last Sunday of work in the clubhouse, creating an inventory of the items in the pro shop. Sometime after they left that evening, the City changed the locks to the clubhouse. The next day Haynes, the City Manager, opened the clubhouse and sold crackers, candy bars, and golf balls from the pro shop.

Hays offered to sell all of the merchandise in the pro shop to the City for $10,026.39. The City rejected Hays's offer, but said that it would be willing to purchase the goods for $6,000. On October 9, Haynes wrote to Hays, stating that if Hays refused the City's offer then he could pick up his merchandise from the clubhouse any time Monday through Friday from 8:00 A.M. to 5:00 P.M. Hays rejected the City's offer but failed to remove his merchandise from the clubhouse. Later, a bank repossessed the goods as collateral for a loan on which Hays had defaulted. Hays regained possession of the merchandise after he paid off the loan.

Hays filed this suit against the City in August 1993. The complaint alleged that the City willfully violated the FLSA, 29 U.S.C. Sec. 207, by failing to pay Hays one and one-half times his usual salary for hours he worked in excess of 40 hours per week; that Hays's discharge was wrongful and a breach of his contracts with the City; and that by changing the locks at the clubhouse, the City exercised dominion over the merchandise in the pro shop and thus wrongfully converted Hays's property.

The district court granted summary judgment in the City's favor on the wrongful discharge claim on the ground that Hays was an at-will employee and could be terminated with or without cause at any time. The court also granted summary judgment for the City on part of the conversion claim, stating that Hays's failure to retrieve his property from the clubhouse constituted abandonment.

The court held a jury trial on the FLSA claim and the surviving portion of the conversion claim. In a general verdict, the jury found that while the City had not violated the FLSA, it had converted Hays's property, and awarded Hays $542 in compensation for the goods that the City sold from the pro shop. Hays filed a motion for judgment notwithstanding the verdict (JNOV) or for a new trial. The district court denied the motion, and this appeal followed.

DISCUSSION

Hays maintains on appeal that the district court erred in denying his motion for JNOV or a new trial. He argues that (1) the golf course did not qualify as a recreational establishment exempt from FLSA; (2) he did not qualify as an executive exempt from FLSA; and (3) he did not qualify as an administrator exempt from FLSA. Hays further argues that the district court erred in instructing the jury on the recreational exemption and in failing to instruct the jury on the working foreman provision. Finally, Hays contends that the district court erred in granting summary judgment on the wrongful discharge claim and part of the conversion claim.

We review the district court's denial of a motion for JNOV de novo. Federal Deposit Ins. Corp. v. United Pac. Ins. Co., 20 F.3d 1070, 1079 (10th Cir.1994). However, "[w]e may find error in the denial of such a motion only if the evidence points but one way and is susceptible to no reasonable inferences supporting the party opposing the motion...." Id. (internal quotation marks omitted). We review the denial of a motion for a new trial for abuse of discretion. Sheets v. Salt Lake County, 45 F.3d 1383, 1390 (10th Cir.1995). We also review district court decisions regarding jury instructions for an abuse of discretion. Green v. Denver & Rio Grande W.R.R. Co., 59 F.3d 1029, 1034 (10th Cir.1995). In doing so, we are mindful that "[i]nstructions must be considered as a whole; we will not reverse unless any errors are prejudicial." Id.

The FLSA requires employers to pay employees at least one and one-half times their regular pay for hours worked in excess of forty hours per week. 29 U.S.C. Sec. 207(a). However, the statute exempts employers operating recreational establishments, 29 U.S.C. Sec. 213(a)(3), and employees in bona fide executive or administrative capacities, 29 U.S.C. Sec. 213(a)(1). At trial, the City argued both that the golf course was an exempt recreational establishment and that Hays qualified as an exempt executive and administrator. Hays contends on appeal that none of these FLSA exemptions apply in this case.

The defendant bears the burden of proving that an employee falls within a FLSA exemption. Corning Glass Works v. Brennan, 417 U.S. 188, 196-97, 94 S.Ct. 2223, 2229, 41 L.Ed.2d 1 (1974); Department of Labor v. City of Sapulpa, 30 F.3d 1285, 1287 (10th Cir.1994). An employee must fit "plainly and unmistakenly within the exemption's terms," and FLSA exemptions are to be narrowly construed. Aaron v. City of Wichita, 54 F.3d 652, 657 (10th Cir.) (internal quotation marks omitted), cert. denied, --- U.S. ----, 116 S.Ct. 419, 133 L.Ed.2d 336 (1995). Hays argues that he was entitled to a JNOV or a new trial because the City did not meet its burden of proof under the FLSA. Hays also contends that the City did not present enough evidence to warrant instructions on the recreational establishment exemption.

Because the jury returned a general verdict, we review both whether the golf course qualified for the recreational establishment exemption and whether Hays qualified for the executive or administrative exemption. An employer qualifies as a recreational establishment if "(A) it does not operate for more than seven months in any calendar year, or (B) during the preceding calendar year, its average receipts for any six months of such year were not more than 33 1/3 per centum of its average receipts for the other six months of such year...." 29 U.S.C. Sec. 213(a)(3). Since the Pauls Valley Golf Course operated year round, it qualified for the exemption only if its receipts for half of the year were equal to or less than one-third of its receipts for the rest of the year.

After reviewing the record, we conclude that the City satisfied the requirements of the recreational establishment exemption. The City produced substantial evidence for the jury to conclude that in every relevant year, the golf course's average monthly receipts for the slowest six months were substantially less than one-third of the average monthly receipts for the busiest six months. The City collected most of its golf course dues in May, June, and July. Consequently, receipts for those months are substantially higher than receipts for the rest of the year.

Hays argues that the...