Wainscoat v. Reynolds Electrical & Eng. Co., Inc., 71-1587.

• Decision Date: 05 January 1973
• Docket Number: No. 71-1587.,71-1587.
• Citation: 471 F.2d 1157
• Parties: George WAINSCOAT, Plaintiff-Appellant, v. REYNOLDS ELECTRICAL & ENGINEERING CO., INC., a corporation, Defendant-Appellee. Joe HARLAN et al., Plaintiffs-Appellants, v. REYNOLDS ELECTRICAL & ENGINEERING CO., INC., a corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

471 F.2d 1157 (1973)

George WAINSCOAT, Plaintiff-Appellant, v. REYNOLDS ELECTRICAL & ENGINEERING CO., INC., a corporation, Defendant-Appellee.

Joe HARLAN et al., Plaintiffs-Appellants, v. REYNOLDS ELECTRICAL & ENGINEERING CO., INC., a corporation, Defendant-Appellee.

No. 71-1587.

United States Court of Appeals, Ninth Circuit.

January 5, 1973.

Bruce L. Woodbury (argued), of Rogers, Whitney, Lea & Woodbury, Las Vegas, Nev., for plaintiffs-appellants.

William F. Spaulding (argued), Bette Bardeen Gallo, of Gibson, Dunn & Crutcher, Los Angeles, Cal., John L. Thorndal, of Austin, Thorndal & Liles, Las Vegas, Nev., for defendant-appellee.

Before WRIGHT and WALLACE, Circuit Judges, and CRARY,^* District Judge.

CRARY, District Judge:

Appellants Wainscoat, Baker, Henry, Wells and Morrison claim to be entitled to overtime compensation for work in excess of forty hours per week during various monthly periods from October, 1965, through 1967 under the provisions of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. The case was tried in October, 1970. No evidence was presented as to the claim of appellant Harlan.

Each of the appellants, Wainscoat, Baker, Henry and Wells, during the time involved, worked for appellee Reynolds Electrical & Engineering Co., Inc., a corporation, (REECo) as an "Operations Superintendent, Drilling". Appellant Morrison worked for REECo as a "Rig Superintendent" from October 25, 1965, to January 3, 1967, for which period he claims overtime compensation. The overtime hours claimed by the appellants varied from 395 to 952.

The four appellants who became Operations Superintendents, Drilling, had previously been working for hourly pay as "directional drillers". Their weekly wages as Superintendents was $268.00. There were small increases which are of no significance to the case. Morrison, during the period of his claim, received a weekly salary of from $254.00 to $266.80.

During the relevant time, Title 29, U.S.C. § 207(a)(1), provided for overtime compensation for work in excess of forty hours per week. Section 213(a)(1) exempts from the coverage of Section 207(a)(1) "any employee employed in a bona fide executive, administrative, or professional capacity, * * * (as such terms are defined and delimited from time to time by regulations of the Secretary) * * *."

The trial court held that the defendant sustained its burden of proof and that the appellants met all the requirements of both the "long" and "short" tests of the "executive" exemption. These tests are set forth in 29 Code of Federal Regulations, § 541.1 (1967).¹

The long test appears in paragraphs (a) through (f) of Section 541.1 of the Regulations, supra, and involves some six qualifying conditions.

SHORT TEST

The short test appears in paragraph (f) of Section 541.1 and provided in 1967 as follows:

"* * * Provided, that an employee who * * * is compensated on a salary basis at a rate of not less than $150 per week (exclusive of board, lodging, or other facilities), and whose primary duty consists of the management of the enterprise in which he is employed or of a customarily recognized department or subdivision thereof, and includes the customary and regular direction of the work of two or more other employees therein, shall be deemed to meet all of the requirements of this section."

29 C.F.R. § 541.1 (1967).

It is to be noted that the Act was amended in 1970 to increase the pertinent weekly wage from $150 to $200. See Footnote 1.

The parties agree that the appellants were compensated at a rate substantially in excess of the $150 minimum but the appellants urge that they were not paid on a salary basis. 29 C.F.R. § 541.118.²

Three of the appellants testified that they received the same salary every week regardless of the number of hours worked, even for weeks they worked less than forty hours. It is the practice of REECo to convert the salaries of all employees to an hourly rate for bookkeeping purposes to facilitate the use of data processing machines that prepare the payroll.

There is substantial evidence that the payment of all appellants was on a salary basis and in excess of $150 per week.

The second condition of the short test requires that the employee's primary duty must consist of the management of the enterprise in which he is employed or of a customarily recognized department or subdivision thereof. The interpretations of the terms "management" and "primary duty" are found in 29 C.F.R. 41.102, 103.³

The position of Operations Superintendent was created for the purpose of planning, coordinating and supervising the directional drilling program and the work of the directional drillers on a twenty-four hour basis. It was the duty of the superintendent to maintain close liaison with each of the user agencies, i. e., the companies employing the services of REECo, which included obtaining the necessary information from the user to be sure the operation was accomplished in accordance with the user's wishes and to coordinate any changes with the user's representative on the job site. His managerial duties also included the determination of what tools and equipment would be used and the manpower required to perform the job. He was also required to plan and coordinate the directional drilling operation with the rig superintendent and had under his supervision the on-the-job training of directional drillers, who were hourly employees, and giving complete critiques of each man's performance. Additional duties involve participation in frequent office conferences with other supervisory personnel in which job problems, continuity, manpower and availability of equipment, were discussed and decisions made.

Morrison's management responsibilities for the over-all drilling program, including the supervision of his crew, the use of his equipment and the recovery operation, made his primary duty consist of the management of his department and his position was one which required the exercise of frequent discretionary powers. This conclusion appears to be true although there was some variance in his work as between "pre-shot" and "post-shot" periods.

The duties of all of the appellants conform to the management requirement as found by the Supreme Court in Walling v. General Industries Co., 330 U.S. 545, at 549-550, 67 S.Ct. 883, 91 L.Ed. 1088 where the Court held that three operating engineers in a powerhouse, who exercised continuous supervision of trained persons and were required to maintain constant observation of all machinery in the powerhouse and to make regular inspection and necessary repairs, were performing management functions and were properly determined to be in executive status. See also McReynolds v. Pocahontas Corp., 192 F.2d 301, at 302-303 (4 C.A.1951), and Phillips v. Federal Cartridge, 69 F.Supp. 522 at 526 (D.C. Minn., 1947).

In the Phillips case, the Court held the plaintiff should be classified as an executive although he engaged, to some extent, in ordinary work performed by employees subordinate to him, which work was a part of his supervisory duties.

This Court ruled, in the case of Hoyt v. General Insurance Company of America, 249 F.2d 589 (9 Cir., 1957), that the plaintiff came within the exemption to Section 7 of the Fair Labor Standards Act of "administrative employee" as provided by Section 13 of the Act, stating at page 590 of the opinion:

"The authorities are uniform in holding that the question of whether an employee comes within one of the exemptions of the Act is an ultimate question of fact to be decided by the trier of the facts." (Citing cases.)

The Court goes on to say:

"The findings of the court below are binding upon this court unless they are clearly erroneous."

We conclude that the record supports the finding of the trial court that the primary duties of the appellants were management and that the major portion of their time was spent in exempt functions.

The drilling department and the directional drilling were completely separate departments with separate management and this is true although the "rig superintendent" (Morrison) supervised and managed the rig crew of twenty men and the equipment involved in the performance of the over-all drilling operation. He was not, however, responsible for the directional drillers or their mission and they were not members of the rig crew nor under the supervision or direction of the rig superintendent.

There is substantial evidence in the record to support the determination of the trial court, as stated in its written decision and findings of fact, that each of the appellants met the qualifications of an "executive", as defined in the Regulations, under the short test, including the third condition, to wit, that they customarily and regularly directed the work of two or more other employees. It is also to be remembered that it was the choice of the appellants to take the positions of Operations Superintendents, Drilling, as against remaining in a union classification with overtime pay.

The appellants contend that during more than fifty per cent of their time they were engaged in manual labor, that the operations superintendents performed essentially the same duties they had performed as directional drillers, that they should properly be classified as craftsmen and, therefore, they were erroneously determined to be executives under either the short or long test.

We conclude that although several of the duties performed by the operations superintendents were the same as when working as directional drillers at hourly wages, their new duties as superintendents primarily consisted of management and supervision of the directional drilling department on the respective job sites. There was substantial manual labor performed by the operations superintendents but it was, in major part,...