trial court summary judgment in short the trial court concluded that by a preponderance of the evidence ph an established each of the plaintiffs qualifies as exempt based on the f l essays administrative exams to reach this conclusion t court erred in several ways which can be broken down into two main categories st that the child court made legal errors in broadening the application of the administrative exemption and to that it made incorrect factual  applying an incorrect standard in determining summary judgment based on a preponderance of the evidence standard rather than a question of material fact the court also relied on evidence not presented in this summary judgment or in the record although we believe we should win on each and every one of those points we requested oral argument specifically to discuss the court's extensive broadening of the administrative exemption this is important because the trial judges the trial court's judgment substantially broadens the administrative exemption almost to the point that any employee not specifically turning a screw on in assembly line or selling a product as a cashier at a retail site and i'm retail facility would virtually with allow any employee that could be complex mind is exempt and unless they're specifically excluded from the exemption and i'm sure that each of us heard of nothing if i say in the cases to know that we already talk in double negatives about being exempt from the overtime provision and whether or not you are exempt this wouldn't in fact make it a triple negative because you would you would they or the rule would apply then the administrative exemption would apply to everybody who's not in production and then you would have t salary and the primary job duties work relate directly related to management in general business operations of the employer's cost of the employer or its customers in the work of includes the exercise of discretion in independent judgment with respect to matters of significance not just checked and discretion in independent judgment but it has to be about something important in regards to the being paid by person being paid by salary if time permits i will get to that but i'd like to address that later as an error of fact rather than the big issues which i believe are books of law which are before the court in regards to the management in general general business operations and expansion of the by the tr the regulations say that an employee must perform work directly related to assisting with the running or servicing of the business asked distinguish for example from working on a manufacturing production line or selling a product in a retail or services sta these regulations then give an illustrated list we don't dispute that the list is illustrated and it is not necessarily complete but the list includes a commonality there includes things like tax finance accounting budgeting auditing insurance that commonality is that it all happens in what is traditionally considered the back end of the house the back side of the house those common business aspects that are common to all businesses throughout america regardless of whether you sell legal services or widgets or you sell insurance products products all businesses have to deal with accounting and legal and advertising in marketing and that is primary duty is producing the commodity or commodities that the enterprise exists to produce and market the trial court through its reasoning substantially broaden the traditional applications of this exemption remember there's three main jobs at issue in this particular case the contracting specialists the operations specialist and the pharmacy part d specialists in regards to the contracting specialist according to ph and ins own words on authority as to what is traditional but i didn't see any fest circuit sites and then people's health files a fifty eight page brief and they quote fist circuit authority especially the cheatham case but for some reason you decided not to brief so if you're going to credibly say a district court far expanded the law it's probably important either to tell us what the narrow law is in court opinions or at least to respond to what looks circuit wall so if you can give me the best this circuit say case it creates the baseline as being so narrow that would help and nd if you could respond to their citation to cheat  that would help but if i could start bison replying to their citation the cheatham in cheat on the plane is had different job titles but they were all considered to be claims adjusters for the insurance product so there's distinguishing factors here that are that are critical c p h and is in the business of selling medical insurance not property insurance not life insurance but medical insurance and in the cheatham case the plaintiffs were claims adjusters they were essentially taking in claims and it's harming whether or not those claims need to be paid none of that is a political to the case here in here ph and sells a product that has two parts st light property insurance and life insurance promises to pay if there is a reason to pay in this particular case if there is a medical reason to pay the b exam promises to pick but unlike life insurance and property insurance and or are in the cheatham case they also have to promise to pay to allow the the insurer to get treated by a doctor that they trust or like and that it is my in this particular case that it was specifically in the contracting specialist arena that these but i don't think that has anything to do with the analysis of whether or not they were administratively exempt the two you're putting to your judges into your arms point that they were they were sales they weren't actually sales they were recruiters and they were recruiting what ph and ultimately sells the product because what ph and ultimately sells the product is we will sweep will pay for your insurance and we will do so with this list of doctors what is your best circuit authority even if you now are trying to distinguish there is the love that i think you i mean i don't want to overstate the specificity or the limitation of the administrative exemption you're on there i'm not trying to say that it is narrowly construed what i'm trying to say in this particular case these individuals i don't but you got you you did say you get to the facts but you made your compelling oral argument point to us the judge sain far extended it we had to hear oral argument because this is a big extension for what is normal and i'm just asking you for any circuit case that you think is analogous where the exemption was not apply if you don't have one that's ok there just i don't think it's i think this is a unique enough case that i can have one that is analogous but it was directly on point your honor to then go to your facts you're not the issue so what we have is in this particular case  the the specifically the contracting specialists are selling air or recruiting recruiting doctors and physicians to be part of this network it has nothing to do with the business operations that are required to be part of the exemption under the regulations then they're actually developing the product similarly the court made an error with the operation a specialist position the operations specialist position is simply a person who goes from department to department identifies what the what the individual in the department do writes down their processes and reports it that's it isn't that like research which is one of the listed functions and isn't a recruiting sort of like marketing i mean these are listed to a one b tasks back in the office as opposed to on the production line around selling it right that's the sort of simplistic binary way i look at it but maybe it's wrong well i don't believe there are analogous and i think certainly not to marketing because marketing is dealt with in developing your customer base of not developing your product you don't you don't do marketing so that you can buy doctors aren't a product in one sense they are your honor because that's what ph and is selling ph in is saying use our insurance over a b c insurance because this is our network of doctors these are the ones that we will pay for so in some ways and that's why i'm distinguishing it from property from property insurance john ok they are kind of part of the product at least the part of the commodity  the operation special and finally we have the pharmacy part of the specials whose or her job is quite simply paperwork when when claims are rejected for pharmacy related reasons she receives a list she identifies any that might be a paperwork issue corrects what she can and in reports the rest of management in no way connect be considered an important business decision state if for the for the company a nd to that is i'm as i'm running a little low on time is the ultimate issue of discretion an independent judgment in each of these cases the court not only has to some find that all of these fall into the administrative to the administrative role that is the backhaus of the company but each one of these job duties exercises discretion in independent jump judgment to matters of significance in regards to the contracting specialist position the trial court  because the individual contract a specialist could tailor their sales pitch to recruit doctors that was an independent decision that had a matter of significance i don't think anybody can insignificant work is that that's your argument it's not that they lacked independent judgment it's that they weren't very essential to the business services business not necessarily your own i think the decision making was in consequential to the business i'm not saying that they i'm not minimizing what they did a minimum ising their decision making authority that they had they didn't have the authority to change the parameters of how a doctor in gage with ph then they didn't see the doctors are interested in how do i get paid what people works involved how quickly can i get paid that's one thing the contracting specials have nothing to do with that what they could decide was if this doctor is more interested in paperwork than he is on  renders that requirement in consequential and renders it moot because everything then would be a matter of significance if it ultimately had an impact on the bottom line business for the for the business similarly the operations specialist had the same think you know with or you know she couldn't change policy she couldn't drop new policy she couldn't create new policy she simply reported what was going on and and and advised if there were similar things going on in other departments so that those managers could increase efficiency not that she could do it it's morris that as far as the pharmacy part of the specialist she had no authority at all either she up she independent judgment and discretion so the judge the trial court concluded that because she worked independently she had to have made decisions independently but that's a that's a and illogical conclusion there are tons of people in the workforce who work independently that aren't necessarily making matt a important decisions regarding matters of significance really my time's up all right yes and you have time for a bubble thank you for you into the timetable mr  any austins beginning with whether the appellant's jobs require or related rather to people sounds general business operations in order to make that determination the court needs to understand the nature of people's thoughts business people's health is an insurance company it provides a medicare advantage plan to people who are eligible for that plan it's day to day business operations involved offering the insurance policy to the market and servicing the needs of its members in this case the appellant's don't really contend there's any question of facts concerning what their primary job duties are nor could they really do that because people to lie on their own description of their work to support it summary judgment motion and the district court also relied on their own description of their job duties to support its ruling under the f l essays interpretating and implementing regulations if an employee performs work that quote assists with the running or servicing of the business then that work is deemed to relate directly to the employer's general business operations whereas on the other hand if the work relates to carrying out the day to day business of the company in people's health sconce tax that would mean either selling its insurance product or service in the needs of its members then it does not and in this case none of the appellant's primary job duties involved either selling people insurance or servicing the needs of the members pursuant to the policy all of them really did work in the proverbial back office and sharing the people's health had the operational infrastructure that it needed to do business and so if you start by looking at the contracting specialists there's no dispute about what their job was they were recruiters who are responsible for building the network of providers without which people's health cannot do business what they do is identify markets and specialties where people's health needs provider it's and they go out and try to build a network if people south wants to expand into a new geographic area it's the responsibility of the contracting specialists to locate providers in those markets and then to recruit them to join the network and eventually be put in place to contract with  the district court correctly concluded that those activities relate to people south general business operations the argument that the appellant's are really making is not based on the f l a's regular f l s's regulations it's based on language from the department of labor's field operations handbook and some and administrative versus production and dichotomy and some courts have applied in some cases but it's not a dichotomy that should apply in this case  seventeen recognised that that dichotomy may have limited relevance in certain contexts if found in that case that it's more impeding with a quote industrial age and it not so much in keeping with  the modern service industry context i would submit to the court that people's health business is more service oriented than production oriented but even if you apply that state entered here which we don't believe is the right standard to apply it doesn't warrant reversal of the district court's ruling to the extent that people's health is deemed to produce a product it's an insurance policy and the contracting specialist had no role in creating that product or underwriting  offering it and selling it to the market in that regard this case is like the cheatham case where judge ash i believe it was correctly recognized that the product of an insurance company is the policy but to the extent that people's health is deemed to deliver a service that would be helping its members to take advantage of their benefits under the policy the contracting specialist had no role in that either ensuring that people's health has an adequate network of providers and that it isn't deficient in any specialty in any market is really about compliance it's about making sure that people's health is in compliance with its contract with c m s and compliance is specifically listed as one of the functional areas that the regulations identify as leading to a company's general business operations if you look at the operations specialist her work was to work with various departments api people's health to find ways to improve operational efficiencies as her title suggests her job was operational in nature and it's difficult to identify many jobs that are more operational than the one that she performed and so for that reason the appellants and their argument essentially make the argument that not that her job didn't relate to business operations but at the tasks she performed were to monday into account and the record doesn't actually support add but regardless that's not that standard for this prong of the test the standard is whether her job duties related to assisting people's health to or service its business and they undisputedly did with respect to the pharmacy part d specialist people's health undisputedly only had one person in that position she was the subject matter expert of the company was sponsible for resolving prescription drug of vets and so the court understands generally speaking when a people's health member goes to a pharmacy to to get a product then a person that a pharmacy benefit manager will submit this p d e this prescription drug  at to the government on people's health behalf it's essentially like a claim for payment and then c m s will review it and it will determine whether or not to approve or to reject it if c m s approves that that is a recognition that that is a benefit is covered under the plan terms and the government has an obligation to reimburse peoples health for it if it rejects it it doesn't immediately reach reimburse people's health what it does instead is give any number of different reasons for the rejection and then it is the responsibility of the pharmacy benefit manager to make a determination about the propriety of that rejection as she described it she enjoyed doing the deed she would analyze and research and evaluate the reason most importantly she would determine whether the approval was an appropriate one or not which goes to a very significant compliance question in the health care industry and that is making sure that people's health is getting paid for the claims that the government should be paying it for but is not getting paid for claims that it is not entitled to money for and that unquestionably relates to assisting people sell to run or service its business as opposed to servicing the members i will point out that in the briefs the appellant's described the pharmacy part the specialist job as helping consumers to work through insurance red tape and made it sound as though this person was helping the members with their pharmacy plan benefits but that is absolutely not supported by the record the job of this person and this one person within the company was exclusively devoted to making sure that people's health was getting paid for what it should be getting paid for and not getting paid what it shouldn't be and the district court correctly concluded that that job is functionally similar to many of the categories that are listed in the regulations like auditing insurance and legal and regulatory compliance my opposing counsel mentioned that the appellants are not arguing here for a narrow construction of the fair labor standards act but i believe that is precisely what they are keeping their argument at the trial court level and on appeal essentially is that if something does not get squarely into one of these categories that the regulations recognize as relating to general business operations then it doesn't count but as this court probably knows in two thousand and eighteen the united states supreme court and the encino motorcars v explicitly rejected the idea that exceptions under the fair labor standards act should be given a narrow interpretation and that in that case the supreme court said that the exemptions are as much a part of the act as the overtime fireman itself and instructed that they should be given a fair reading they shouldn't be construed narrow we are strictly this is cell yes i mean again you are clearly both you practice in this area a lot just compendiums of course sometimes office workers are found to be except and yet when i look at the two elements it doesn't relate to general business operations and doesn't involve discretion i don't see good limiting principle and you may work in this area would you say there is one best authority that tells us when someone isn't working in business operations and a person isn't i independent discrete judgment yes that's a very good question i think the best authority is the implementing regulations for the fair labor standards act and the language and then that says if something relates to assisting with the running or the servicing of the business and when you take that standard and you put it into a service industry job which really people souths is i think what you should look at with the items is from that regulation  if somebody is helping to service the business then you have met that criteria if someone is helping to service the customer the member then they aren't so for instance in the retail establishment if somebody is in the retail store selling a t shirt then they are not helping to service the business that's a who is finding new locations where you might want to oh it's not office st is production line it's business versus member direct contact ok that's helpful for me conceptually what about the rd element is a tendency to there the expertise versus do they do things rote or it how do you know when someone has independent judgment versus just yet so again your honor i think the i actually think the language and the regulations here is helpful the basic language as opposed to the numerate in various examples if you go back to the basics what it says is if a person is required to consider two different courses of conduct and use their own to determine which one to follow that is exercising independent judgment and discretion and then you of course also have to have a fact that they are and that relates to something  a matter of significance to the company so i think i actually think the regulations are helpful if you go straight from them wish to do that for me my last question for the forms the special do both those little points that you with with the record evidence perfect so your honor the pharmacy part d specialist with respect to the st element exercising the independence and discretion she was required to take data that was provided by s and to analyze that data as i said your honor i don't have the records for this it and her deposition testimony she she said i like the dig that's how she described it you know you whether or not this was a proper rejection and and making her own judgment based on her knowledge about whether in fact this was something that was a covered plan payment or wasn't a covered plan payment and the reason it's really significant is twofold  of all as i mentioned before it is imperative that people's health make sure that it is only getting paid for things that it is entitled to be paid for about the important health care industry compliance standards it's also important because people's health relies on that data when it goes on an annual basis to submit its bid so it gives that data and needs it to be as accurate as possible they give it to its actuaries and he actually has use it to to prepare the bid to the government so that it can make sure that it is pricing its you know its contract with the government the way that it can it can make money right so so it's significant in that regard it's also significant because people's help pays millions and millions of dollars  and the only person in the company who is responsible for making the judgment as to whether or not a particular claim should or shouldn't be paid or specifically whether rejection is or isn't proper was this pharmacy part and so in this case she did have to use her job and to decide is this a proper rejection or not if it's not why i'm not and what can we do to make sure that we get an accurate outcome here and if she exercised her judgment to say in my own independent judgment with no supervisory review i am concluding that c m s made the right decision here and not reimbursing people how that has significant financial consequences thank you into the million s i guess that your honor with respect to just jumping ahead as i was about to get to be independence and judgment required of the other positions this is the same standard applies right where people using different courses of co nduct and with regard to significant matters in here again everybody understands what the role of the contracting specialists was we cited a number of cases that the district level that are there are pretty factually analogous and it involved people who were recruited who would go out who had identified people they would then put together material summarizing what those people did and they would make recommendations to others about whether to hire those people and so forth those cases aren't exactly the same because these jobs are pretty unique but they're very analogous to what these folks did they would go out identify a need locate providers do independent research contacts and meet with them usually alone and encourage them to see the benefit of doing business with people's health and they would then go ahead and put in place a contract with them at the district court level palance didn't distinguish any of those cases and on a hill they ignored them but really they are they are quite analogous instead the appellate cited a couple of cases that really have no factual similarity to this case at all so not only are these folks doing things that require  to exercise their discretion and judgment about how to target but it was something important because no one disputes that people's health could not do business without a network of providers finally concerning the operation specialist really here i think the admissions of the operations specialist herself are dispositive of the question of whether she had the independent judgment or discretion to do her job  with her or she admitted in her own discovery responses and in her deposition testimony that she was responsible for problem solving for the company she said she would assess need make recommendations about what change standard there was one standard for the motion for summary judgment which is is there any question of fact the judge correctly found that there was no question of fact with respect to what these people's job duties were however he did  and exemption is an affirmative defense the people's health is responsible for proving on summary judgment that people's health did bear a burden of proof in connection with the summary judgment and it was our burden to prove i have propon the evidence that each of the elements of these exemptions to satisfy and so i think it was appropriate for jeb samy to recognize what people's house burden was and to conclude that we met it and i don't think that he conflated improperly unless the court has any questions concerning the salary basis which we have not addressed yet i will go ahead and you know the rest of my time ok thank you mr then our yes coming your your honor i had previously said i don't believe there's any case specifically on point regarding the job duties that each of these plaintiffs performs and i think that's true regarding the authority that i have cited and it's true regarding the authority that the defendant has cited when you're are asked whether where are the limitations to this application and that i have cited clarkie scenting now i will admit that that is not directly on point because it does not directly address the the job duties before the court however it does address the logic used to apply this exemption of the f l s sec now remember the f l s a has a default rule you're entitled to over time in less you fall into one of these exceptions now the defendant is just articulated that the supreme court has has issued an order saying that those exemptions need a fair reading that is the term of art they are a fair reading we don't dispute that what we dispute is that a fair reading means that they get more credibility or more attention than the actual underlying rule itself because the default rule is that you're entitled to overturn it unless you fall into an exception and the way this exception is being applied and this is why i say broadens the actual law your honor is that it's being applied that the exception becomes a rule in so much as anybody any entity can say this is important to our business operations because ultimately affects your bottom dollar and in less it is one of the the way the rules being applied is to say that the rule is is making the underlying principle of your in times over time narrowly construed because if we apply the administrative rule as broadly as this court did then it will apply to everybody in lest you specifically listed in the exceptions of this rule that were exemplary in illustrated if not complete being in sales and being in sales and being in being in sales pm management so then and there and i i realize it's tough to have an office  maybe i don't know about armistice but anyway how many people were notified of this act i don't have that number of south my head your honor it was not a substantial amount it was not in the hundreds  what was terminated prior to filing a lawsuit but most of them were still employed ok so in regards to your honest question about the standard of review just so i make sure i address it the concern i have with the standard of review and the phrase ology that both the court and defendant use is that when there is a bench trial at summary judgment the court has additional discretion regarding finding factual dis and i don't dispute that that language has been used in the past but this very court has limited that for discretion it is said to has limited discretion to decide that the same evidence be presented to him or her as a trial fact at trial could not possibly lead to a different result well what you was there any evidence that you were not allowed to present you would have presented at a bench trial well there was no evidence and i was made aware of until the judgment was was rendered your honor and in that particular case that's where i say the judge took evidence that he had seen in a different case and let that influence his decision here but other than  so you're not saying that this private you up an opportunity to present evidence no your honor what we're saying is that but i put applying this standard he switched the summary judgment standard from if there's a genuine issue material fact to i've been convinced by a preponderance of the evidence and that is evidence through the salary requirement there is no way to reach a conclusion other than there's a question of material fact about the salary requirement there's testimony from their executives that say we only pay for the hours that you work as long as you work forty hours you get your salary as long as you work forty hours and if you work less than that we don't pay you and then there's record evidence of them being docked when they take time off how is that not a question of fact that requires a tr l all right you i miss up thank you both very much it was well brief case and the court will be in recess until nine thirty tomorrow morning thank you