Walton v. Greenbrier Ford, Inc.

• Citation: 370 F.3d 446
• Decision Date: 28 May 2004
• Docket Number: No. 02-2432.,02-2432.
• Parties: Theadore Carl WALTON, Jr., Plaintiff-Appellant, v. GREENBRIER FORD, INCORPORATED, t/a Cavalier Ford, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

370 F.3d 446

Theadore Carl WALTON, Jr., Plaintiff-Appellant, v. GREENBRIER FORD, INCORPORATED, t/a Cavalier Ford, Defendant-Appellee.

No. 02-2432.

United States Court of Appeals, Fourth Circuit.

Argued: January 23, 2004.

Decided: May 28, 2004.

COPYRIGHT MATERIAL OMITTED

ARGUED: Carl W. Isbrandtsen, Virginia Beach, Virginia, for Appellant. Amy Jacqueline Inge, Durrette Bradshaw, P.L.C., for Appellee.

Before WIDENER, MOTZ, and GREGORY, Circuit Judges.

Affirmed by published opinion. Judge GREGORY wrote the opinion, in which Judge WIDENER and Judge MOTZ joined.

OPINION

GREGORY, Circuit Judge:

Theadore Carl Walton, Jr., appeals from a district court order granting summary judgment for his former employer, Greenbrier Ford, Inc., trading as "Cavalier Ford," on his Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., claim for overtime pay and his state law breach of contract claim. We find that the district court correctly determined that Walton fell within FLSA's automobile dealership workers exemption, 29 U.S.C. § 213(b)(10)(A), and hold Walton is not entitled to overtime pay. Additionally, Walton has failed to establish that he had an enforceable employment contract with Cavalier Ford, thus we conclude that he was an at-will employee, terminable subject to reasonable notice. We affirm the district court on both issues presented.

I.

Walton is a former federal employee whose work-related injuries forced him to discontinue his employment at Portsmouth Naval Hospital. Thereafter, the federal Office of Workers' Compensation Programs ("OWCP") helped Walton obtain vocational rehabilitation and training, and ultimately alternative employment at Cavalier Ford, an automobile dealership. On April 18, 2000, OWCP and Cavalier entered into an agreement, whereby OWCP would reimburse Cavalier for a percentage of Walton's wages. The agreement stated that Walton would work as a "Full-time Service Advisor beginning on April 13, 2000" and would be paid $40,000 per year. The agreement then detailed how much OWCP would reimburse Cavalier over a three-year period, and stated the re-employment subsidy would not exceed such period.

At the beginning of his employment, Walton and Cavalier Ford Service Director Jerry Banks signed a pay plan agreement stating that Walton would be paid $231.00 per week plus a commission of five percent of parts and labor gross computed individually on repair orders completed by Walton as a service advisor. The agreement guaranteed that Walton would receive $3333.33 per month ($40,000 per year), or his salary plus commission, whichever sum was greater.

Walton began his employment as a "Service Advisor" managing the Quick Lane Department, which was a new quick service operation at the dealership. Walton was to greet customers, listen to their concerns about their cars, write repair orders, follow-up on repairs, and keep customers informed about maintenance. Walton would also suggest to customers additional services that needed to be preformed and would prepare work orders. Walton worked in those capacities with Quick Lane from April 2000 to June 2001. In June 2001, he began training as a Service Advisor for all types of repair.¹ Walton testified that his duties were not "a whole lot ... differen[t]" in this new capacity, and his job description did not change.

On August 8, 2001, Walton gave Cavalier a doctor's note stating he could not work more than eight hours per day. On August 16, 2001, Cavalier informed Walton that because he could no longer work the hours required of service advisors, the company would move him to a greeter position, an eight-hour per day job, paying eight dollars per hour. Walton declined this position and ceased working at Cavalier.

Walton then filed this lawsuit, asserting that under FLSA, he was owed compensation for 888.75 overtime hours, and that Cavalier Ford breached a three-year employment contract. The district court granted summary judgment for defendant on both claims. This appeal followed.

II.

We review the district court's grant of summary judgment de novo. Bass v. E.I. DuPont de Nemours & Co., 324 F.3d 761, 766 (4th Cir.2003). Summary judgment is warranted when there are no genuine issues of material fact in dispute and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). We view the evidence in the light most favorable to the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

III.

Walton argues that he is entitled to overtime pay under FLSA for approximately 888.75 hours worked. FLSA sets forth maximum work hour limitations, requiring that an employer pay overtime at a rate of one and one half times an employee's regular hourly rate for all hours worked in excess of forty per week. 29 U.S.C. § 207(a)(1); see also Monahan v. County of Chesterfield, 95 F.3d 1263, 1267 (4th Cir.1996). FLSA contains an exception from § 207's overtime pay requirement for salesmen and other employees working for automobile dealerships. 29 U.S.C. § 213(b)(10)(A).

Section 213(b)(10)(A) provides that § 207 does not apply to "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers...." This exemption, like other FLSA exemptions, is to be narrowly construed. See Auer v. Robbins, 519 U.S. 452, 462, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997). The determination of whether an employee falls within the scope of a FLSA exemption is ultimately a legal question. See Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709, 713-14, 106 S.Ct. 1527, 89 L.Ed.2d 739 (1986).

The Fourth Circuit has not had the opportunity to consider whether "service advisors" or "service writers" like Walton fall within the exemption.² In holding that Walton fit the exemption, the district court primarily relied on Brennan v. Deel Motors, Inc., 475 F.2d 1095 (5th Cir.1973), the only circuit court authority on point. In Deel, the Fifth Circuit held that employees designated as "service writers," "service advisors," and "service salesmen" fell within the FLSA exemption. Id. at 1097. Factually, Deel is nearly on all-fours with Walton's case. The service individuals worked with customers to coordinate the sale of goods, services and mechanical skills provided by the dealership. Id. at 1096. The service employees referred vehicles to an appropriate department for repairs or additional equipment, and thereafter, the employees monitored the work and determined whether satisfactory work had been completed. Id. The individuals did not receive overtime, but were compensated by a weekly wage as well as a percentage commission on every service order they wrote. Id. In all respects, the service employees in Deel were substantially similarly situated to Walton.

The Fifth Circuit held that the advisors were exempt from FLSA's overtime requirement because they were

functionally similar to the mechanics and parts-men who service the automobiles. All three work as an integrated unit, performing the services necessary for the maintenance of the customer's automobile. The mechanic and parts-man provide a specialized service with the service salesman coordinating these specialties. Each of these service employees receive a substantial part of their remuneration from commissions and therefore are more concerned with their total work product than with the hours performed.

Id. at 1097. The court further reasoned that it could not assume that Congress intended to treat employees with functionally similar positions differently, "especially when the exemption by its own terms refers to `any salesman ... engaged in selling or servicing automobiles ...' This is exactly what a service salesman does." Id. at 1097-98 (quoting 29 U.S.C. § 213(b)(10)).³ Similarly, in the instant case, the district court held that:

[A] service writer/advisor [in Walton's position], as a matter of law, is functionally similar to a salesman, partsman or mechanic or service salesman as defined in Deel Motors [citation] for purposes of 29 U.S.C. § 213(b)(10). Accordingly, the Court concludes as a matter of law, that Walton's position as a service writer/advisor is exempt from the FLSA premium overtime pay requirement.

Dist. Ct. slip op. at 17.

Walton, however, argues that the district court erred in following Deel and holding that he was an exempt employee. Walton contends that Deel is contrary to the Secretary of Labor's regulations on FLSA. The FLSA regulations provide:

Employees variously described as service manager, service writer, service advisor, or service salesmen who are not themselves primarily engaged⁴ in the work of a salesman, partsman, or mechanic ... are not exempt under [29 U.S.C. § 213(b)(10)]. This is true despite the fact that such an employee's principal function may be diagnosing the mechanical condition of vehicles brought in for repair, writing up work orders for repairs authorized by the customer, assigning the work to various employees and directing and checking on the work of mechanics.

29 C.F.R. § 779.372(c)(4). Walton argues that under the regulation he was not a "salesman" because the regulations define that term as "an employee who is employed for the purpose of and is primarily engaged in making sales or obtaining orders or contracts for sale of the vehicles." Id. § 779.372(c)(1). Walton asserts that rather than properly applying that definition, the Fifth Circuit in Deel and district court in this case erroneously "created and added a new category of employees ... called `service salesmen'" under the FLSA exemption.

We find Walton's argument unavailing and conclude that the district court created no such new category of employees. While we decline to apply the...