Pioch v. IBEX Eng'g Servs., Inc.
| Decision Date | 14 June 2016 |
| Docket Number | No. 15-10845,15-10845 |
| Citation | 825 F.3d 1264 |
| Parties | Todd Pioch, Plaintiff-Counter Defendant-Appellee Cross Appellant, v. IBEX Engineering Services, Inc., a Florida profit corporation, Defendant-Counter Claimant-Appellant Cross Appellee. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Cathleen A. Scott, Lindsey Wagner, Scott Wagner & Associates PA, Jupiter, FL, for Appellee-Cross Appellant.
Paul Christopher Munger, Steven J. Whitehead, Taylor English Duma, LLP, Atlanta, GA, Tim B. Wright, Wright Ponsoldt & Lozeau, Stuart, FL, for Appellant-Cross Appellee.
Before MARCUS, JORDAN, and WALKER,* Circuit Judges.
JORDAN
, Circuit Judge:
The Fair Labor Standards Act, 29 U.S.C. § 201 et seq .,
generally requires employers to pay minimum wages and overtime compensation to their employees, but some employees are exempt from its coverage. The exemption at issue in this appeal—the so-called computer employee exemption—provides that the FLSA does not cover an hourly computer software engineer who performs certain duties and who “is compensated at a rate of not less than $27.63 an hour.” 29 U.S.C. § 213(a)(17). The main question we address is whether an hourly computer employee who is otherwise exempt under § 213(a)(17) becomes “non-exempt” during his last three weeks of work if the employer withholds his final paycheck. We conclude that the answer to that question is no, and therefore affirm the district court's dismissal of the employee's FLSA claim. We also hold, however, that the district court erred in granting summary judgment to the employee on the employer's state-law counterclaim for unjust enrichment.
For almost 10 years, Todd Pioch worked for IBEX Engineering Services as a computer software and hardware engineer. IBEX hired Mr. Pioch because of his extensive computer skills and software experience and paid him on an hourly basis at a starting rate of $50 and a final rate of $85.40 per hour. Like many hourly employees, Mr. Pioch's hours varied from week to week. Mr. Pioch regularly worked over 40 hours in a workweek and was paid his regular hourly rate, but not overtime, for the extra hours.
From 2003 to 2004, Mr. Pioch worked for IBEX in Nevada. During this time, Mr. Pioch lived with his girlfriend in a home on Bow Creek Court in Las Vegas. In early 2005, Mr. Pioch accepted an offer from IBEX to work with one of its clients, Florida Power and Light, in Juno Beach, Florida. The offer letter explained that Mr. Pioch would be eligible for a per diem allowance for travel to and from work. Significantly, however, IBEX's per diem policy applied only to employees residing more than 50 miles from their workplace.
After his transfer, Mr. Pioch purchased a home in West Palm Beach, Florida, and that home was within 50 miles of FPL's Juno Beach facility. During his assignment with FPL in Florida, Mr. Pioch worked on 49 separate projects and his duties were similar for each of the projects—testing, verifying, and validating computer software and hardware for the company. Mr. Pioch received per diem payments from IBEX from the time of his 2005 transfer from Nevada through 2013.
In 2012, FPL conducted an audit on several engineers, including Mr. Pioch, who were collecting per diem payments.
The FPL audit raised concerns about Mr. Pioch's per diem payments from 2005 through 2009—a four-year period for which Mr. Pioch admitted that he listed the Bow Creek Court home in Las Vegas (rather than his West Palm Beach home) as his permanent address.1
Following his resignation from IBEX in 2013, Mr. Pioch sued the company under the FLSA, asserting minimum wage and overtime claims. See 29 U.S.C. §§ 206
, 207. IBEX admitted that it had withheld Mr. Pioch's final three weeks of pay as a result of the FPL audit and its belief that Mr. Pioch had improperly collected $147,230 in per diem payments. In response to Mr. Pioch's FLSA claims, IBEX raised as an affirmative defense that Mr. Pioch was an exempt employee under the Act. IBEX also asserted state-law counterclaims for fraud and unjust enrichment relating to the disputed per diem payments.
Following discovery, IBEX moved for summary judgment on Mr. Pioch's FLSA claims, arguing that he was an exempt hourly computer employee under 29 U.S.C. § 213(a)(17)
. Mr. Pioch opposed IBEX's motion and moved for summary judgment himself on IBEX's counterclaim for unjust enrichment and for partial summary judgment on the unpaid wages for his final three weeks of work, which totaled $13,367.20.
The district court heard arguments on the parties' cross-motions for summary judgment and ruled (1) that the undisputed facts established that Mr. Pioch was exempt from FLSA coverage as a matter of law under § 213(a)(17)
; and (2) that IBEX's unjust enrichment counterclaim failed because Mr. Pioch's per diem payments constituted wages that are not recoverable by an employee in an FLSA action.2
Both parties appealed. In its appeal, IBEX challenges the district court's grant of summary judgment in favor of Mr. Pioch on its state-law counterclaim for unjust enrichment. IBEX maintains that its counterclaim is not barred by the FLSA, and that the district court should have at most declined to exercise supplemental jurisdiction. In his cross-appeal, Mr. Pioch argues that IBEX's withholding of his final paycheck rendered him non-exempt during his last three weeks of work, thereby entitling him to $13,367.20 under the FLSA.
We conduct plenary review of a district court's summary judgment order, viewing the record and drawing all factual inferences in the light most favorable to the non-moving party. See Mazzeo v. Color Resolutions Int'l, LLC , 746 F.3d 1264, 1266 (11th Cir. 2014)
. Summary judgment is appropriate when “there is no genuine dispute as to any material fact” and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a) ; Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “If reasonable minds could differ on the inferences arising from undisputed facts, then a court should deny summary judgment.” Allen v. Tyson Foods, Inc. , 121 F.3d 642, 646 (11th Cir. 1997) (internal quotation marks and citations omitted).
Congress enacted the FLSA in 1938 as a remedial scheme designed to address “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.” 29 U.S.C. § 202
. As a part of President Roosevelt's New Deal and its emphasis on economic recovery, the FLSA was designed to eliminate substandard labor conditions in part by imposing a minimum wage and requiring overtime pay for employees. See 29 U.S.C. §§ 206, 207 ; Ellen C. Kearns et al., The Fair Labor Standards Act 1-12 (3d ed. 2015). “In other words, the [Act] was designed to aid the unprotected, unorganized, and lowest paid of the nation's working population; that is, those employees who lacked sufficient bargaining power to secure for themselves a minimum subsistence wage.” Hogan v. Allstate Ins. Co. , 361 F.3d 621, 625 (11th Cir. 2004) (internal quotation marks and citation omitted).
The FLSA imposes a minimum wage for covered employees and requires employers to pay overtime of at least one and one-half times the regular rate to employees working more than 40 hours a week. See 29 U.S.C. §§ 206
, 207(a)(1). Congress, however, removed certain employees from FLSA coverage. See generally 29 U.S.C. § 213.
Whether an employee meets the criteria for an FLSA exemption, although based on the underlying facts, is ultimately a legal question. See Evans v. McClain of Ga., Inc. , 131 F.3d 957, 965–66 (11th Cir. 1997)
. The employer bears the burden of establishing that an employee is exempt, and we construe exemptions narrowly against the employer. See
id. at 965. The Supreme Court has cautioned that “extend[ing] an exemption to other than those plainly and unmistakably within its terms and spirit is to abuse the interpretative process and to frustrate the announced will of the people.” A.H. Phillips, Inc. v. Walling , 324 U.S. 490, 493, 65 S.Ct. 807, 89 L.Ed. 1095 (1945).
We begin with the text of the FLSA and its corresponding regulations. Computer employees may be exempt from the minimum wage and overtime compensation requirements under two different provisions of the Act. See 29 C.F.R. § 541.400(a)
(). Originally, computer employees were analyzed generally under § 213(a)(1). But in 1996, Congress enacted a more specific exemption in § 213(a)(17) which clarified the “duties” requirements by codifying most of the regulatory language for computer employees. See Pub. L. No. 104–188, § 2105, 110 Stat. 1755, 1929 (1996); Kearns et al., The Fair Labor Standards Act , at 5-145.
The more specific exemption applies to computer employees who perform certain duties, and “in the case of an employee who is compensated on an hourly basis, is compensated at a rate of not less than $27.63 an hour.” § 213(a)(17)(A)–(D)
. In 2004, the Department of Labor tried to simplify the exemptions for computer employees by placing them into one regulatory provision. See 29 C.F.R. § 541.400(b). See also
Bergquist v. Fid. Info. Servs., Inc. , 399 F.Supp.2d 1320, 1329–30 (M.D. Fla. 2005) (), aff'd , 197 Fed.Appx. 813 (11th Cir. 2006).
As revised, the regulations create an interesting scenario. Although a computer employee is evaluated under two different FLSA statutory exemptions, only one of those statutory provisions, § 213(a)(1)
, grants the Secretary of Labor authority to promulgate regulations on its application.
As a result, we have little regulatory guidance for interpreting the more specific exemption for hourly employees under § 213(a)(17)
. See 69 Fed. Reg. 22,122, 22,159 (Apr. 23, 2004) (...
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