Nielsen v. Devry, Inc.
| Decision Date | 17 December 2003 |
| Docket Number | No. 4:02-CV-23.,4:02-CV-23. |
| Citation | 302 F.Supp.2d 747 |
| Parties | Stacy L. NIELSEN, et al., Plaintiffs, v. DEVRY INC., a/k/a Devry University, Inc., Defendant. |
| Court | U.S. District Court — Western District of Michigan |
Dale E. Bock, Flint, MI, for Plaintiffs.
Justin M. Crawford, Noah A. Finkel, Elizabeth Wells Skaggs, Grand Rapids, MI, for Defendant.
Plaintiffs in this action are Stacy L. Nielsen and 173 other past and present employees of Defendant, DeVry, Inc. ("DeVry"). Plaintiffs allege that DeVry denied them overtime compensation for hours routinely worked in excess of 40 per week, in violation of the Fair Labor Standards Act of 1938 (the "FLSA"), 29 U.S.C. §§ 201 et seq. Now before the Court is DeVry's motion for summary judgment, in which DeVry asserts that Plaintiffs' claims fail as a matter of law because Plaintiffs fall within the "outside sales" or alternatively the "administrative" exemptions of the FLSA. For the reasons stated below, the Court will grant DeVry's motion for summary judgment because Plaintiffs are exempt as outside salespersons.
DeVry is a for-profit company that provides career-oriented, technology-based higher education at more than 25 campuses nationwide. DeVry employs certain personnel, referred to throughout this opinion as field representatives, whose job is to identify potential students, persuade them to apply, and follow through with them to ensure they ultimately pay tuition and begin classes. Plaintiffs in the present action are or were employed as DeVry field representatives.
DeVry hires field representatives by advertising in newspapers and on the internet. Newly hired field representatives undergo a month of training, where they learn, among other things, about DeVry's educational programs and services, as well as techniques for finding potential students and getting them to come to DeVry. A manual issued at this training provides guidance on various aspects of the job, and throughout their employment field representatives receive additional training by way of audio tapes and workbooks.
After completing initial training, field representatives are assigned a specific territory in which to work. Each is responsible for setting his or her own schedule, although DeVry imposes performance quotas such as the number of telephone calls, high school visits, student appointments, and application signings. Field representatives do much of their work in high schools. They begin by contacting high school career counselors and principals in order to build relationships and set up workshops where they make presentations to juniors and seniors. They also collect career profile surveys in which students provide contact information, grade point averages, career interests, and an indication of whether they are interested in receiving more information about DeVry. The field representatives use this information to assess whether the student is likely to qualify for and be interested in DeVry.
Based on this initial assessment of which students would be viable candidates, field representatives begin the process of pursuing individual prospects. First, the field representative calls the student at home to confirm the student's interest and qualifications and to arrange a home interview with the student and his or her parent(s). Next, the field representative goes to the student's home to meet with what DeVry calls the "buying committee" — the student, the student's parent(s), and any other person necessary to the student's decision to attend DeVry. The hour-long home interview includes a laptop presentation and a Profile Interest Evaluation designed to provide an overview of career options and DeVry's programs and services, and also to help the field representative further evaluate the student's interests, qualifications, and degree of family support. If the student is deemed a viable candidate and desires to apply, the field representative assists the student in completing an application, collects a $100 application fee, reviews financial aid procedures with the family, instructs the student to contact the campus, and discusses succeeding steps the student must take to attend DeVry.
Field representatives send completed applications to the student's chosen DeVry campus. After the student contacts the campus to verify his program selection, a campus coordinator inputs the student's information into DeVry's computer system. DeVry does not have an open admissions policy, but unlike many colleges, makes admissions decisions based on strictly objective criteria. All students who hold a high school diploma or GED and meet DeVry's SAT/ACT requirements are automatically offered admission. Students who lack the required SAT/ACT scores have two chances to pass DeVry's own college placement test.
Field representatives remain involved with potential students following their application in a process known as "stitching-in." DeVry's field representative manual instructs field representatives to contact applicants numerous times after the home interview to affirm their intention to attend DeVry and help with preparation of financial aid paperwork. Field representatives stay in contact with applicants who may be wavering in order to ensure they begin classes and pay tuition. Throughout this process, field representatives submit daily and weekly activity and progress reports to supervisors.
DeVry pays field representatives a salary, which may increase or decrease periodically based on the field representative's achievement of established objectives, including number of high schools lectured, number of career profile surveys completed, number of home interviews, average application to interview rate, number of applicants tested, and most importantly, number of students who actually start school at DeVry. In addition, each year, DeVry recognizes field representatives who achieve a predetermined number of tuition-paying student starts with an all expense paid, three day trip to a resort. Typically 10-20% of field representatives earn this reward.
Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56. The rule requires that the disputed facts be material. Material facts are facts which are defined by substantive law and are necessary to apply the law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). A dispute over trivial facts which are not necessary in order to apply the substantive law does not prevent the granting of a motion for summary judgment. Id. at 248, 106 S.Ct. at 2510. The rule also requires the dispute to be genuine. A dispute is genuine if a reasonable jury could return judgment for the non-moving party. Id. This standard requires the non-moving party to present more than a scintilla of evidence to defeat the motion. Id. at 251, 106 S.Ct. at 2511 (citing Improvement Co. v. Munson, 81 U.S. 442, 14 Wall. 442, 448, 20 L.Ed. 867 (1871)).
A moving party who does not have the burden of proof at trial may properly support a motion for summary judgment by showing the court that there is no evidence to support the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 324-25, 106 S.Ct. 2548, 2553-54, 91 L.Ed.2d 265 (1986). If the motion is so supported, the party opposing the motion must then demonstrate with "concrete evidence" that there is a genuine issue of material fact for trial. Id.; Frank v. D'Ambrosi, 4 F.3d 1378, 1384 (6th Cir.1993). The court must draw all inferences in a light most favorable to the non-moving party, but may grant summary judgment when "the record taken as a whole could not lead a rational trier of fact to find for the non-moving party." Agristor Financial Corp. v. Van Sickle, 967 F.2d 233, 236 (6th Cir.1992) (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986)).
DeVry argues that it is entitled to judgment as a matter of law because Plaintiffs fall within the outside sales exemption, or alternatively, within the administrative capacity exemption. As discussed below, the Court finds that based on the undisputed facts, DeVry has met its burden of showing that the work Plaintiffs performed as field representatives plainly and unmistakably satisfies the terms and spirit of the "outside sales" exemption. Because DeVry is entitled to judgment on the outside sales exemption, it is not necessary for the Court to consider whether the administrative exemption would apply in the present case.
The overtime provisions of the FLSA establish the general rule that employees must be compensated at a rate not less than one and one-half times their regular rate for all overtime hours. 29 U.S.C. § 207(a)(1). However, these overtime compensation provisions do not apply to "any employee employed in a bona fide ... administrative ... capacity ... or in the capacity of outside salesman (as such terms are defined and delimited from time to time by regulations of the Secretary [of Labor])." 29 U.S.C. § 213(a)(1).
An employer relying on an exemption to the minimum wage and overtime provisions of the FLSA has the burden of proving that the employee is properly classified under the exemption. Mich. Ass'n of Gov't Employees v. Mich. Dep't of Corr., 992 F.2d 82, 83 (6th Cir.1993). In light of the FLSA's broad remedial aims, the exemptions from the FLSA's coverage must be narrowly construed against the employers seeking to assert them. Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 456, 4 L.Ed.2d 393 (1960). An employer seeking to assert an FLSA exemption has the burden of proving that the employee falls "plainly and unmistakably within the terms...
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