Jones v. New Orleans Reg'l Physician Hosp. Org., Inc.

• Decision Date: 03 December 2020
• Docket Number: No. 19-31027,19-31027
• Citation: 981 F.3d 428
• Parties: Bill JONES, on behalf of himself and all others similarly situated; Jennifer Branch, on behalf of herself and all others similarly situated; Laura Romero, on behalf of herself and all others similarly situated; Melissa Breaux; Ivette M. Perez; Nicole Crowder, Plaintiffs-Appellants, v. NEW ORLEANS REGIONAL PHYSICIAN HOSPITAL ORGANIZATION, INCORPORATED, doing business as Peoples Health Network, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

981 F.3d 428

Bill JONES, on behalf of himself and all others similarly situated; Jennifer Branch, on behalf of herself and all others similarly situated; Laura Romero, on behalf of herself and all others similarly situated; Melissa Breaux; Ivette M. Perez; Nicole Crowder, Plaintiffs-Appellants,

v.NEW ORLEANS REGIONAL PHYSICIAN HOSPITAL ORGANIZATION, INCORPORATED, doing business as Peoples Health Network, Defendant-Appellee.

No. 19-31027

United States Court of Appeals, Fifth Circuit.

FILED December 3, 2020

Chad Alan Danenhower, Danenhower Law Firm, L.L.C., Covington, LA, Dale Edward Williams, Esq., Law Office of Dale Edward Williams, Covington, LA, for Plaintiffs-Appellants

Elizabeth Anderson Roussel, Sara C. Valentine, Esq., Adams & Reese, L.L.P., New Orleans, LA, for Defendant-Appellee

Before Higginbotham, Jones, and Higginson, Circuit Judges.

Edith H. Jones, Circuit Judge:

The Appellants are former white-collar employees of Appellee Peoples Health Network who filed suit for themselves and others alleging violations of the Fair Labor Standards Act. Appealing the district court's summary judgment in favor of the employer, they contend principally that their job duties did not fall within an administrative employee exemption to the statute. See 29 C.F.R. Sec. 541.200(a). Upon careful review of the arguments and relevant portions of the record, we AFFIRM.

I. BACKGROUND

The Plaintiffs filed a purported collective action¹ under the FLSA against their former employer, New Orleans Regional Physician Hospital Organization, L.L.C. ("Peoples Health"). Peoples Health is a managed care company that offers a Medicare Advantage Plan insurance product to eligible individuals. The Plaintiffs claim that Peoples Health intentionally misclassified them as "salaried" and "exempt" to avoid paying overtime wages. Peoples Health contends that each Plaintiff was administratively exempt from the FLSA's overtime requirements.

An employee qualifies as administratively exempt if three facts can be shown. First, the employee must be compensated on a salary or fee basis at a rate that exceeds an amount set by regulation. Second, the employee's primary job duties must involve the performance of office or non-manual work directly related to the management or general business operations of the employer or its customers. Finally, the employee's primary job duties must include exercising discretion and independent judgment with respect to matters of significance. 29 C.F.R. § 541.200(a).

The six Plaintiffs held three different job titles in two departments at Peoples Health: four were Contracting Specialists, one was an Operations Specialist, and one was a Pharmacy Part D Specialist.

Four Plaintiffs were Contracting Specialists who were responsible for signing up physicians and hospital-based providers who wished to join Peoples Health's network. They worked within the Network Development Department, which is responsible for establishing and maintaining Peoples Health's network of healthcare providers for plan members. Their core function was to recruit healthcare providers, with a focus on the providers executing contracts.

The Operations Specialist was responsible for working on projects designed to improve operational processes and efficiencies. Although the Plaintiffs recognize that the scope of this position included a broad range of activities, they assert that actual execution required consistent direction from more senior leaders.

The Pharmacy Part D Specialist worked within the Pharmacy Department, which handles payments to pharmacies for filling members’ prescriptions. The Pharmacy Part D Specialist's responsibilities included: preparing documentation for Centers for Medicare and Medicaid Services ("CMS") audits; reviewing claims and prescription drug events ("PDEs"); and analyzing and researching compliance issues. Although the Plaintiffs agree with these general statements of responsibility, they claim that the actual tasks performed were ministerial.

After discovery, the district court granted Peoples Health's motion for summary judgment and found the Plaintiffs administratively exempt from the FLSA's overtime requirement. The Plaintiffs timely appealed.

II. DISCUSSION

This court reviews a grant of summary judgment de novo , applying the same standard as the district court. Summary judgment is warranted if "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Depree v. Saunders , 588 F.3d 282, 286 (5th Cir. 2009) (internal citations omitted); see FED. R. CIV. P. 56. A dispute about a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the non-moving party. TIG Ins. Co. v. Sedgwick James , 276 F.3d 754, 759 (5th Cir. 2002) (citation omitted). The court views all facts and evidence in the light most favorable to the nonmovant. Johnson v. Diversicare Afton Oaks, LLC , 597 F.3d 673, 675 (5th Cir. 2010).

In a non-jury case, such as this one, "a district court has somewhat greater discretion to consider what weight it will accord the evidence." In re Placid Oil Co. , 932 F.2d 394, 397 (5th Cir. 1991). The district court "has the limited discretion to decide that the same evidence, presented to him or her as a trier of fact in a plenary trial, could not possibly lead to a different result." Jones v. United States , 936 F.3d 318, 321–22 (5th Cir. 2019) (internal quotations omitted).

The Plaintiffs take issue with each aspect of the district court's adverse conclusions as to each factor necessary to the FLSA administrative exemption. They also contend that the court erroneously imbedded findings of disputed facts in its summary judgment analysis. We address each of these contentions.

A. Salary Basis

At the first step of the administrative exemption analysis, see 29 C.F.R. § 541.200(a), the Plaintiffs assert that Peoples Health did not compensate them on a salary basis, but instead treated them like hourly employees. We disagree.

The district court had ample support from the record to conclude that the Plaintiffs were salaried employees. First, the Plaintiffs do not contest that Peoples Health paid them enough to far surpass the regulation's minimum weekly wage requirement. These six employees’ annual salaries ranged from about $56,000 to over $68,000. Every year, Peoples Health's human resources department reviewed and certified each employee's job description to ensure accuracy and that the employee qualified as FLSA exempt. The record contains no evidence that any Plaintiff complained of his or her job duties or exempt status during his or her employment. Additionally, two of the Plaintiffs testified that they understood that they would receive the same, fixed amount of pay each week regardless of their hours worked.

The Plaintiffs point to three types of evidence showing they were treated like hourly employees despite Peoples Health's official designation: payroll records, testimony from senior managers, and Peoples Health's failure to follow timekeeping practices. Each argument fails.

First, payroll records supposedly show instances in which the salary of two Plaintiffs was docked in half-day increments. They argue that employers may only dock pay for exempt employees in full day increments (the "no pay-docking rule"). 29 C.F.R. § 541.602(b)(1). But they do not refute evidence that in each instance a deduction was expressly permitted notwithstanding the no pay-docking rule. Specifically, the half-day reductions occurred when the Plaintiffs were either about to leave employment or on leave pursuant to the Family and Medical Leave Act ("FMLA"). The relevant regulations explicitly permit partial payments to exempt employees for time worked in the last week of employment and during periods where leave is taken under the FMLA.² 29 C.F.R. §§ 541.602(b)(6)–(7).

Second, the Plaintiffs claim that statements from three senior managers support their claim that Peoples Health actually paid them as hourly employees. In fact, these managers only expressed the belief that exempt employees had to use time off (e.g., vacation time) if they worked under forty hours in a week. This testimony simply does not help the Plaintiffs. As the district court observed, the FMLA (1) does not prohibit an employer from requiring its employees to track their attendance at work; (2) does not prohibit an employer from requiring a forty-hour workweek from a salaried employee; (3) allows for deductions from pay when a salaried employee does not work a forty-hour week so long as those deductions are not for absences of less than a day; and (4) allows an employer to require employees to make up missed time for a partial day or otherwise use appropriate leave when not working a full day. See Cowart v. Ingalls Shipbldg., Inc. , 213 F.3d 261, 265 (5th Cir. 2000).

Third, the Plaintiffs argue that Peoples Health violated its written timekeeping policy by not permitting salaried employees to record time in excess of forty hours per week. Even if this were true, it is not evidence that the relevant employees were not treated as exempt, salaried employees.

B. Relationship to Management or Business Operations

The second requirement of the administrative exemption is that the employees’ primary job duties must directly relate to the management or general business operations of Peoples Health or its customers. See 29 C.F.R. § 541.201. Like the district court, we hold this condition was satisfied.

"The term ‘primary duty’ means the principal, main, major or most important duty that the employee performs." 29 C.F.R. § 541.700(a). This does not mean, however, that exempt employees must spend more than fifty percent of their time performing exempt work. 29 C.F.R. § 541.700(b). "The phrase ‘directly related to the management or general business operations’ refers to the type of work performed by the employee....