Reiseck v. Universal Communications of Miami, Inc.

• Decision Date: 11 January 2010
• Docket Number: Docket No. 09-1632-cv.
• Parties: Lynore REISECK, Plaintiff-Appellant, v. UNIVERSAL COMMUNICATIONS OF MIAMI, INC., doing business as Universal Media, Blue Horizon Media, Inc., Douglas Gollan, Carl Ruderman, Geoffrey Lurie, David Bernstein,<SMALL><SUP>*</SUP></SMALL> Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

591 F.3d 101

Lynore REISECK, Plaintiff-Appellant, v. UNIVERSAL COMMUNICATIONS OF MIAMI, INC., doing business as Universal Media, Blue Horizon Media, Inc., Douglas Gollan, Carl Ruderman, Geoffrey Lurie, David Bernstein,^* Defendants-Appellees.

Docket No. 09-1632-cv.

United States Court of Appeals, Second Circuit.

Argued: December 14, 2009.

Decided: January 11, 2010.

John K. Diviney, (Gina Ianne Grath, on the brief), Alan B. Pearl & Associates, P.C., Syosset, NY, for Plaintiff-Appellant.

Dana Susman, (S. Reid Kahn, on the brief), Kane Kessler, P.C., New York, NY, for Defendants-Appellees.

Before CABRANES and PARKER, Circuit Judges, and AMON, District Judge.^**

JOSÉ A. CABRANES, Circuit Judge:

Plaintiff Lynore Reiseck ("plaintiff" or "Reiseck") appeals from a March 27, 2009 judgment of the United States District Court for the Southern District of New York (Thomas P. Griesa, Judge) awarding summary judgment to defendants Universal Communications of Miami ("Universal"), Blue Horizon Media, Douglas Gollan, Carl Ruderman, Geoffrey Lurie, and David Bernstein (together "defendants")¹ on plaintiff's various claims of employment discrimination and violations of federal, state, and local laws. Specifically, plaintiff alleged that defendants (1) discriminated against her on the basis of sex in violation of New York state and New York City law, N.Y. Exec. Law. § 296(1)(a); N.Y. City Admin. Code § 8-107; (2) discriminated against her on the basis of her recreational activities, in violation of New York state law, N.Y. Lab. Law § 201-d(2)(c); (3) withheld her overtime pay, in violation of the Fair Labor Standards Act (the "FLSA"), 29 U.S.C. § 207(a), and New York state law, N.Y. Comp.Codes R. & Regs., tit. 12, § 142-3.2; and (4) withheld commissions that she earned, in violation of New York state law, N.Y. Lab. Law § 191-c(1). On appeal, plaintiff argues that the District Court erred in granting defendants' motion for summary judgment. We write to address plaintiff's argument that the District Court erred in concluding that she was not eligible for overtime pay because she fell within the so-called "administrative exemption" to the FLSA. 29 U.S.C. § 213(a)(1).

In a related but separately filed summary order, we dispose of Reiseck's other claims.

BACKGROUND

The following facts are not in dispute for the purposes of this appeal.

In September 2002, Reiseck began working as a Regional Director of Sales at Universal in New York City. As Regional Director of Sales, Reiseck was responsible for generating advertising sales in the northeastern United States and Canada from the travel and finance sectors for Universal's magazine publication, Elite Traveler. While an employee of Universal, Reiseck was paid a base salary plus certain commissions. Plaintiff was paid no overtime during her tenure with Universal.

Elite Traveler is distributed on a complimentary basis. Advertising sales therefore constitute the majority of Universal's revenue from Elite Traveler. The magazine had a sales staff, a marketing staff, and an editorial staff. The sales staff sold advertising space; the marketing staff created promotional material to increase advertising sales; and the editorial staff produced the "content" of the magazine.

Reiseck's was fired from Universal in February 2004. In May 2004, Reiseck filed a lawsuit against defendants Universal and Gollan in the Supreme Court of the State of New York, New York County, alleging that defendants discriminated against her based on her sex and recreational activities in violation of New York state and New York City law. She later amended her complaint to include claims under the FLSA and New York Labor Law ("NYLL"). She also named several additional defendants. Following the filing of Reiseck's amended complaint, all defendants removed the action to the Southern District of New York.

After discovery in the District Court was completed, defendants moved for summary judgment. Plaintiff cross-moved for partial summary judgment with respect to her claims for overtime pay pursuant to the FLSA and NYLL. The District Court granted defendants' motion for summary judgment and denied plaintiff's cross-motion for summary judgment. Plaintiff now appeals.

DISCUSSION

On appeal, Reiseck argues that the District Court erred in granting summary judgment for defendant on all claims. We address here only plaintiff's argument that the District Court erred in granting summary judgment for defendant on her claims for overtime pay under the FLSA and NYLL. Specifically, we consider whether an advertising salesman is an administrative employee for the purposes of the FLSA and thus is exempt from the overtime provisions of the FLSA.

A. Standard of Review

We review an order granting summary judgment de novo, drawing all factual inferences in favor of the non-moving party. See, e.g., Loeffler v. Staten Island Univ. Hosp., 582 F.3d 268, 274 (2d Cir.2009). Summary judgment is appropriate only "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." Fed R. Civ. P. 56(c). Furthermore, we review a District Court's interpretations of administrative regulations de novo. See Anderson v. Rochester-Genesee Reg'l Transp. Auth., 337 F.3d 201, 207 (2d Cir. 2003).

Specialized principles apply to our review of a district court's construction of the FLSA. Because the FLSA is a remedial law,² we must narrowly construe its exemptions. See, e.g. Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 4 L.Ed.2d 393 (1960); Bilyou v. Dutchess Beer Distribs., Inc., 300 F.3d 217, 222 (2d Cir.2002); Reich v. State of New York, 3 F.3d 581, 586 (2d Cir.1993), abrogated on other grounds by Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996). Furthermore, the employer invoking the exemption bears the burden of proving that its employees fall within the exemption. See Bilyou, 300 F.3d at 222.

B. Fair Labor Standards Act and Related Regulations

Congress enacted the FLSA in 1938 to eliminate "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(a). In that effort, the FLSA imposes numerous "wage and hour" requirements, including the provision at issue here, to ensure that workers are adequately compensated.

Pursuant to the FLSA, employers must pay an employee at a rate of "not less than one and one-half times the regular rate at which he is employed" for any hours worked in excess of forty hours in a given week. Id. § 207(a).³ This general rule does not apply, however, to several types of employees, including "administrative" employees. Id. § 213(a)(1).⁴ Accordingly administrative employees, inter alia, are exempt from the overtime pay provision of the FLSA. The NYLL, too, mandates overtime pay and applies the same exemptions as the FLSA. N.Y. Comp.Codes R. & Regs., tit. 12, § 142-3.2 ("[A]n employer shall pay employees [overtime wages] subject to the exemptions of Section 13 of the Fair Labor Standards Act....").

Here, defendant argues—and plaintiff disputes—that Reiseck was an administrative employee for the purposes of the FLSA and thus was exempt from its overtime pay provisions. Under rules promulgated by the Secretary of Labor pursuant to the FLSA, which further define "administrative employee,"⁵ there were two separate tests for determining whether an employee is an administrative employee for the purposes of the FLSA: the so-called "long test" for those employees earning less than $250 per week, 29 C.F.R. § 541.2(a)-(e)(2), and the so-called "short test"⁶ for those employees earning $250 per week or more, id. § 541.2(e)(2) ("[A]n employee [ (1) ] who is compensated on a salary or fee basis at a rate of not less than $250 per week ... and [ (2) ] whose primary duty consists of the performance of [specific duties outlined earlier] ... shall be deemed to [be an administrative employee]." (emphasis added)). See also Freeman v. Nat'l Broad. Co., 80 F.3d 78, 82-84 (2d Cir.1996) (describing the two tests in the professional context). There is no dispute that Reiseck was compensated on a salary basis of "not less than $250 per week," 29 C.F.R. § 541.2(e)(2), and thus the short test applies here.

Under the short test as it applies here, an employee falls under the administrative employee exemption if the employee is paid on a salary or fee basis at a rate of not less than $250 per week (i.e., the "salary test"), id. § 541.2(e)(2), and the employee's "primary duty consists of ... the performance of office or nonmanual work directly related to management policies or general business operations of his employer," id. § 541.2(a), and requires "the exercise of discretion and independent judgment," id. § 541.2(e)(2), (i.e., the "duties test"). As noted above, there is no dispute that Reiseck's employment satisfies the salary test prong of the short test.

Because the first prong of the short test is not in dispute, we move to the second prong—the duties test. Here, it is uncontested that Reiseck's primary duty consisted of "the performance of office or non-manual work"; therefore we must consider whether Reiseck's primary duty was "directly related to management policies or general business operations" of Universal. Id. § 541.2(a).

The phrase "directly related to management policies or general business operations" is not self-defining, and the Secretary of Labor has promulgated interpretive regulations to aid our application of this test. See, e.g., id. § 541.2. Although the Secretary's legislative regulations—those promulgated pursuant to an express grant of authority by Congress, like 29 C.F.R. § 541.2—have the power to control courts' reading of the law, the Secretary's interpretive regulations have only the power to persuade courts. Se...