seventeen thirty one twelve tom hughes desmond mcdonald on behalf of themselves and others simular situated vs the gulf in a state field service is incorporated oral argument not to exceed fifteen minutes  good morning and may please the court my name is rex burch and i represent mr hughes mr mcdonald i would like to reserve four minutes of my time for rebuttal by payment on a day rate basis is not and has never been a payment on a salary basis for the purposes of applying the white collar exemptions to fair labor standards act the district court therefore erred in granting summary judgment and it did so for at least three reasons first it misinterpreted the six circuits precedent in orton versus johnny's lunch as focusing the inquiry as to whether or not someone is salary soley on the amount of pay that a person receives to it disregarded the substantial evidence including plaintiff's written employment agreements gulf interstates contracts with its clients its admissions with respect to those contracts as well as the testimonies from both parties demonstrating that there wasn't a pre determined amount of weekly guaranteed salary at all but rather that there was a payment on a day rate basis and third the district court failed to draw inferences from that evidence in plaintiff's favor for by example assuming that because there was some evidence that the payment plan was consistent with a salary even though it was also consistent with a day rate it therefore constituted a salary this is inconsistent with the burden of proof under the f a let's say as well as the narrow scope which is to be given to the exemptions because there is a genuine issue of material fact with respect to the we're not the employees at issue and that the salary t summary judgment should be reversed this panel has sat on several effortlessly cases and so everyone knows that the eveleigh say set forth a broad rule that requires the payment of over time to employees who work more than forty hours in a week there are of course exceptionally through seeking overtime even though as i understand you were being paid a salary twenty five thousand dollars a year and that was of course ten years ago so that the seems like a fairness problem that you seek to have and i have after more than one hundred thousand dollars a year on a pipeline i mean that's kind of the nature of this industry these folks work well beyond forty hours a week if you were to if you were to pay what mr hughes for example would have earned on an hourly basis had he been getting overtime it's about twenty eight dollars an hour which is not that much difference from from pipeline welders or even regular welders particularly in the oil and so it is true that these folks make more than the average you know checker at a grocery store the twenty eight dollars an hour that you're saying is that without overtime it's twenty eight dollars an hour is that right that's with overtime that's with the top without overtime pay it's about thirty one so looking at the regulations five forty one point six zero four yes is there is the critical flaw in your view that there was not a guarantee of a minimum weekly required amount and that is that is certainly dispositive under five forty one six  four b because there was no guarantee of a weekly amount there was only the data that's disputed whether there was a guarantee that's true then they had put for some people to say we had to despite what our contracts despite what the people testified to we told them something different and that's part of the issue here we did not seek summary judgment in this case we just defended summary judgment and our argument here to the court of appeals is not to do you could eat consistent with your position now send it back and have the fact finder determine whether there was a contractual obligation to pay a minimum amount absolutely in fact if it was not clear from the contract you could do take pearl evidence i suppose to see what the contractual obligation was when the contractual obligation kills them because the contracts in this case say you will be paid this much per day and their contractual obligations with their client which they say governs what these workers are so we don't have to hold it kills them in order to rule for you on this appeal i'm sorry we don't have to hold that it kills them in order to rule for you in this appeal is not absolutely not all you have to do this say that based on this evidence there's fact issue and that's in fact all we're asking you to have wanted one more question that's concerned about this evidence about being paid for on work sick days and holidays you say in your reply brief i guess that nonexempt employees are often paid for on work sick days and holidays is their support for that in the wrecker as that is something you all say well i are you argue do say that right i mean we do we do say that in there is a what i'm asking you is that support in the record or is that just something you're saying people know it is something that we're saying people know they're supporting it in the for example the keen versus dx p oh you're just saying look at other cases where that's reflected right you can certainly do that and with respect to the sick or vacation pay keep in mind that gulf interstates testimony and this can be founded three to five three of the record gulf interstates testimony is we didn't have any sick or vacation plan and we didn't have any plan for paying for holidays that was determined by mark west these inspectors work for gulf interstate at the request of marc west and so mark west determines and this is a direct quote from this in this crime or determines in its discretion whether or not it w pay for holidays or sick days or things like that and what it goes to whether there's a contractual obligation or for sure what would be enforceable ifs if it some point which doesn't appear to have happened but hypothetically speaking they just didn't pay for they didn't have work for half a week and said nobody's coming in this week no good reason other than we just don't have the work for you this week and then they don't pay then the employees go to court and say pay us and if they win then in that hypothetical then you lose because that's weekly but if they lose then it's not weekly and you would win this case it ok i got it  miss miss cramer of course testified that the what she would have paid during the relevant time period is whatever was reflected on mark west time she would you agree that the question that would be if we agreed with you and remained of the question would be that question which is what would happen in that what would have happened in that hypothetical situation where they just didn't have work for a few days and then the question is whether they still owed the money or not not that i believe that that would be a relevant question that's not the only question the primary question is whether or not there is a salary in the first place all this talk of deductions is something about the dioxins i'm talking about whether you get paid when you don't work right there in the week either get if you work three days you don't work two days do you get paid for five days or do you get paid for three days that seems like a question just that it just may be that that never happened but the inquiry is what would have happened right and if if that had happened right and it may be that it may be that we're saying the same thing i think because because my my concern with the district court's opinion of course is the district court's opinion says doesn't matter as long as the as long as they got the pay that can't be a question right m p or you're saying at least can't you just whether you got the money because it might have been that they'd never ever decided to take a few days off correct you're  receive that is that what you say we didn't receive it as as a salary which is the relevant inquiry because under our arrangement we had a day or a plan and i know there are some reference in the record to mr hughes's day rate being five hundred dollars an hour for example his day rate was in fact three thirty seven day three thirty am right and three thirty seven is obviously less than four fifty five and  so you know again a day rate is not a salary because it's not a period of at least a week which is required under the regulations and it's by definition shorter than that but the four fifty five wasn't that for a week it is it is per week ok he was getting three thirty seven per day he would get three thirty seven per day and mr mcdonald's day rate was also less than forty five per week and so to to be direct judge merit i want to be clear about this if you only look at what was the amount of money that got paid to these workers that was generally i believe in every instance more than four fifty five a week yeah but but that's what the right and that's clear in multiple places in the five forty one regulations including five forty one seven o five which makes an exception for folks who work in the movie production business and allows them to be paid a day rate despite the salary basis requirements and so so your red light is so thank you very much good morning your honors and may please the court my name is jim swartz and i represent gulf interstate in this appeal what this issue what this case is really about is whether or not the plaintiffs appellants in this case were were paid on a salary basis one element of the highly these are highly compensated employees and that's really where we start these employees all were paid more than one hundred thousand dollars a year they were where they paid on a salary basis yes they and how do we know that we look at the records of their pay the salaried basis requirement is defined in six zero two five forty one six zero two and the undisputed evidence in the lower court and in this record requires a question to be answered in the affirmative summary judgment should be affirmed for gulf in this case what about six o four b which seems to require that there be a guarantee and the crux as i understand it of the argument against your position is that there was no guarantee or at least there was a fact question as to whether there was a guarantee list to pieces to iran or for highly compensated employees they should be analyzed under six  the contrary we would be in conflict with the first and second circuit yes your honor and the other piece of this is plaintiffs raised before you go on i'm miserable seeing what the differences if you of the full salary for any week in which the employer performs any work without regard to the number of days or hours work now if you can say that's different from a guarantee i'm willing to let you say it's different from a guarantee but in my mind that's pretty close to guarantee right it's as it says you must receive it even if you work fewer days why isn't that more what's the same as a guarantee it's a good point around or in the discussion in the briefs in this case you'll see that of the things that that that brings equivalency to the two concepts is that the best way to assess what the pre determined amount under six o two has to be paid the it could be that they were obligated to pay even if they were just simply not called in for a few days or it could be that they were not legally obligated to pay that is those two possibilities and it could be that during a period of time that that hypothetical never eventually made it never occur right then you would have to ask some sort of hypothetical question what if it ever occurred here it's it appears that it never occurred they were always paid more than more than the hypothetical question your honor is interested in was actually address specifically to kathy kramer the deposition that opponents counsel referred to a moment ago and she was asked what happens if somebody only works five days and she said well is only part of the agreement between the parties as to what their compensation arrangement will be in this case you're saying then that there's a written agreement and then there's an oral agreement or there's more multiple written agreement the the entire agreement between the parties regarding their compensation is similar to what the court analyzed in the a c s case and six circuit and that's it looked at the was there were there any writings between the parties on the topic of compensation the actual pay records that demonstrate what was paid to the paid from the employer to the employee declarations that were submitted by the parties on the topic of what the compensation method was and the testimony so and were if there was not if there was a written agreement that didn't provide a guarantee you're saying that the employer could be bound and if sued by the employee could be required to pay the oral agreement amount well whether or not there is yes or no if you please ask the question when you're if there is nothing in the written agreement guaranteeing a certain amount per week are you saying that the employee could sue the employer if the employer didn't pay and the employer would be bound to pay this amount that was sort of their the have it in writing in this written agreement the written agreement would be part of the analysis you know everyone else would be in the know so so in some cases look at in some cases you look at parole evidence as it were well potentially but in the analysis of either and i don't i'm the problem with your making those arguments is just that in the context of this case that they look like factual arguments well in in this case the question becomes what was the agreement between the parties for what you're saying it's not just in the words it's in the context and in it's in the undisputed record in this case yes your honor well but if we don't find it undisputed then it would be improper to have summary judgment and we should send back to resolve that question is that correct well the focus for purpose is no the focus for purposes of this case isn't f l s a case is what was the actual pay that was received but that's the six o two question yes you so if we if we think six o four has meaning it's different no you're it's the same analysis younger and so it's our view that this notion of predict or what's the pre determined amount under six zero two versus guarantee those  equivalent notions why use different words because you know that's raises the same question of why you have in the first circuit case in the second circuit case bose analyzed the issue of whether or not the highly compensated employees making over one hundred thousand dollars a year should fall into that six zero four rule so it's four different kind of employees you're saying six o four doesn't apply to people who are making one hundred thousand dollars a year that's correct and it's noticed you get that that's based on the language of the actual regulations i've got six zero four in front of me what in six zero four tells you that it doesn't apply to people who make a hundred thousand dollars a year and it just doesn't see any i mean logically i understand your point that you know they're talking about it one time it was four fifty five and now it's nine thirteen a week and so that's somebody who makes fifty thousand or less for the nine thirteen  but i but i don't see it in the regulation that employers don't have to worry about a guarantee for people who make over one hundred thousand the whole notion of the highly compensated exemption was to start to relax some of the requirements of the of the act to employees who were guaranteed a certain who were were they were given a certain amount of money or guarantee erin teed pre determined amount but as long as this person was receiving one hundred thousand dollars there were some get over time they don't get overtime and here is exactly the type of situation that was contemplated where you have an employer who needs to absolutely pay these employees over one hundred thousand dollars a year just to recruit them into their into their business from all around the country you have to say one regulation applies in the case of a highly compensated oil and one does not the highly compensated employees have the entirely different regulations with this first and second circuit of the salary is properly done under six o two as opposed to six zero four i've still not seen the difference i'm sorry i must proceed without regard sounds like county how's it any different the only way for the court to assess looking at the words here how are the how are the words different must receive a full salary without regard to the number of days or hours ok for any week they must receive the full salary for any week without regard to the number of days  determined amounts are equivalent terms and in fact the the plaintiffs in this case the opponents in this case were given a verbal guarantee with was understand that i understand that i'm just trying to get away from all this quibbling over which which regulation which i just don't understand unless you can explain the difference why we should spend time trying to figure out whether it's six o two or six zero four when they basically say the same thing with respect to this one issue and i guess the reason you're trying to distinguish is because you're trying to distinguish away some cases that deal with one of these provisions and not the other but in terms of this issue why can't i just say we got to figure out whether the employee must receive the full salary without regard to the number of days work which is the six o two rule it appears to be your honor as we said in our papers if you take that approach there is the undisputed record in this case shows that they were in fact guaranteed they were given a pre determined amount whether you call it that's  part on what they actually received in part and what they actually received in part the undisputed verbal guarantee that they were given by their supervisor that's undisputed in the record they put the appellants advice they make the argument which you know is not silly that if they didn't have this guarantee they would receive the same amount and that the and that the hypothetical of just not working certain number of days never occurred during that period while you're on it is there argument right but that's not the record and it's not true they were not true is one thing not on the record as another ok it's not in the record for purposes of this case and that's shown a number of different ways so for example there were there were holidays that they were just getting down to what their what what whether the evidence compels one of the factual answers to that question as opposed to whether that actual question still has a reasonable fact finder could find either way there is no dispute to that record my understanding to that issue and lists is that there were statements by the relevant courts in each of those cases that there was no dispute that the bas weekly salary was guaranteed and that was from language from and in the language from let's was there was a project managers will be guaranteed a minimum weekly salary and i thought one key aspect here is that hughes and mcdonald claim that their pay is calculated more frequently than weekly they are claiming their day rate people as opposed to weekly rate people that's their argument in the record they confirmed in their depositions that they at the outset they knew they were being paid six tenths that was the the weekly payment it was stated as a day rate certain it was three somebody just said earlier three fifty five or something like that that's how ultimately the salary is derived but the salary was a weekly salary is there some place where there was a statement in writing this is a weekly salary of a certain amount and if so what is that's that's undisputed in the record in the declaration of michael hill that stated in the depositions and we cited the specific locations in our brief from the depositions of kathy kramer from brought bob's brick and from the two plaintiffs hughes and mcdonald in this case they actually received yes your honor there were a whole host of other which under the analysis where's at least in your colloquy with me under you under that analysis is not entirely determined because you could in fact never  had days off during that week and that so the fact that you always received more than the amount would tell you nothing about what would have happened if there had been days off the record before the court and in line with six circuit precedent assessing how to understand whether in fact there was a pre determined amount to be paid what you called a pre determined amount or a guarantee is to look at what actually happened between a part of but that's different from what i was suggesting the test should be the test is what if assuming that this never happened what would have happened mean i got it either guarantee something or not you can say did this insurance cover cover cover a storm and if that's determine it regardless of whether there's a storm you have to ask it when the regs didn't shove or the regs changed to change the your red light is on so thank you very much thank you connor's is is it is simply not true that it is undisputed mr he is mr macdonald we're told that there was this verbal guarantee of six ten six ten's is a well known schedule that is worked like pi saying that you're going to work six ten hour days in a week is not a guarantee of pay anymore than telling an hourly employee hey you're typical your best he says there's a there's no evidence that supports your position what's the evidence if it was if we can look at the ada and everyone assumed that it was all the evidence we've shown shows that you will get this extend that matter matter what and by no matter what we're not just talking about sick pay we're talking about you know there just wasn't any work for a few days even though that never happened he would still get it what's the evidence that he wouldn't still get it there's a variety what's the best evidence in the time that you have i think the best evidence is f page three to five three of the record that's miss kathy cramer saying that the way that she was paid was determined by mark west not by reference to an employment contract or anything like that i think other good evidence is found at three to four one which is a request from blair miller who was at that time the number one manic gulf interstate and he is asking mark west how will these people we pay is the inspector paid for days worked only or is there a five six or seven day minimum answer from mark west who again g interstate admits is directing how these people will be paid they are paid for days worked only this was explained to all of the inspectors coming in and so it is simply not the case that it is undisputed as to what would have happened so the so then the answer from your perspective is to say summary judgment improperly granted take evidence and find the answer to the question we're asking here getting paid over time what do we do with that do the regs intend to cover somebody who's making hundred thousand dollars a year and require over two absolutely i mean the exemption is is merely a relaxed test for the administrative executive and professional exemption it is not a standalone exemption that's that's been disproven by the department of labor who gets to under our read robinson gets to say what you can make up or invented thousand dollars a year and you still got it you're going to get the time and i have overtime absolutely if you don't make any sense if you  look at the bottom of a five forty one six zero one d for example it says that certain types of blue collar employees are paid in title to be paid overtime regardless of how highly paid that they are that they guess could read could require time and a half or everybody couldn't even the million or so that they absolutely could and indeed why congress does things sometimes but isn't that to congress and the people drafting the regulations yes and the people drafting the regulations said in the most recent round by the way that they gave an example of an inspector from the southern discriminate your in the case begins  now who was making well over one hundred thousand dollars a year that he was the property that he was properly classified as nonexempt and should have been receiving overtime i see my time has expired thank you all very much thank you for your argument the case w