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Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

FRED HAYS, 

Plaintiff - Appellant, 

FILED 

United States Court of Appeals 

Tenth Circuit 

JAN 2 3 1996 

PATRICK FISHER 

Clerk 

v. No. 94-6389 

CITY OF PAULS VALLEY, State of 

Oklahoma, a municipal corporation, 

Defendant - Appellee. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF OKLAHOMA 

(D.C. No. CIV-93-1467-W) 

Jack R. Durland, Jr., Durland & Durland, Oklahoma City, Oklahoma, 

for the appellant. 

Robert s. Lafferrandre, Pierce, Couch, Hendrickson, Baysinger & 

Green, Oklahoma City, Oklahoma, for the appellee. 

Before TACHA, MCWILLIAMS, HENRY, Circuit Judges. 

TACHA, Circuit Judge. 

Fred Hays sued his former employer, the City of Pauls Valley, 

alleging willful violation of the Fair Labor Standards Act (FLSA) , 

wrongful discharge, and conversion. After granting summary 

judgment in favor of the City on the wrongful discharge claim and 

a portion of the conversion claim, the district court held a jury 

trial on the FLSA claim and remaining conversion claim. The jury 

found for the City on the FLSA claim and for Hays on the 

conversion claim. Hays now appeals the grant of summary judgment 

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on the wrongful discharge and conversion claims, and the jury's 

verdict on the FLSA issue. We exercise jurisdiction pursuant to 

28 U.S.C. § 1291 and affirm. 

BACKGROUND 

Hays was Golf Course Manager at the Pauls Valley Municipal 

Golf Course from 1984 to 1992. In 1990, Hays and the City entered 

into two agreements, the "Golf Course Manager Employment Contract" 

and the "Independent Contractor Operation of Golf Course" 

contract, which reduced the parties' previous oral understanding 

to writing. Under the Golf Course Manager Employment Contract, 

Hays agreed to be at the golf course five days a week during 

regular business hours and to "devote his full time and best 

efforts to his employment as golf course manager." He al-so agreed 

to operate a pro shop in the golf course clubhouse; to keep 

financial records and collect all golf course fees; to deliver 

golf course fees to the city manager once a week in the winter and 

twice a week in the summer; to attend golf course board meetings; 

and to handle general management of the golf course, including 

supervision of employees and enforcement of golf course rules. 

Under the Independent Contractor agreement, Hays agreed to keep 

the golf course open on weekends, holidays, and after regular 

business hours. Hays's total salary under the two contracts was 

$24,000 per year. He also received all profits from sales at the 

pro shop. 

Either party could terminate the Golf Course Manager Contract 

on sixty days written notice. The City could terminate the 

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contract if Hays became unfit or incapacitated or if he failed to 

perform his obligations. Hays could terminate the contract if, 

for any reason, he decided that termination was in his best 

interest. The Independent Contractor agreement could be 

terminated for any reason by either party on thirty days written 

notice. 

On August 4, 1992, Pauls Valley City Manager John Haynes 

wrote Hays to notify him that the City wished to terminate the 

contracts. The City contended that Hays had breached four parts 

of the Golf Course Manager Contract. Haynes stated that because 

of Hays's breach, the City had decided to renegotiate both 

contracts. On September 24, Haynes wrote Hays to inform him that 

the City would not renegotiate Hays's contracts and that he would 

be permanently discharged on October 4, sixty days from the date 

of the earlier letter. 

Hays and his wife spent his last Sunday of work in the 

clubhouse, creating an inventory of the items in the pro shop. 

Sometime after they left that evening, the City changed the locks 

to the clubhouse. The next day Haynes, the City Manager, opened 

the clubhouse and sold crackers, candy bars, and golf balls from 

the pro shop. 

Hays offered to sell all of the merchandise in the pro shop 

to the City for $10,026.39. The City rejected Hays's offer, but 

said that it would be willing to purchase the goods for $6,000. 

On October 9, Haynes wrote to Hays, stating that if Hays refused 

the City's offer then he could pick up his merchandise from the 

clubhouse any time Monday through Friday from 8:00 A.M. to 5:00 

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P.M. Hays rejected the City's offer but failed to remove his 

merchandise from the clubhouse. Later, a bank repossessed the 

goods as collateral for a loan on which Hays had defaulted. Hays 

regained possession of the merchandise after he paid off the loan. 

Hays filed this suit against the City in August 1993. The 

complaint alleged that the City willfully violated the FLSA, 29 

U.S.C. § 207, by failing to pay Hays one and one-half times his 

usual salary for hours he worked in excess of 40 hours per week; 

that Hays's discharge was wrongful and a breach of his contracts 

with the City; and that by changing the locks at the clubhouse, 

the City exercised dominion over the merchandise in the pro shop 

and thus wrongfully converted Hays's property. 

The district court granted summary judgment in the City's 

favor on the wrongful discharge claim on the ground that Hays was 

an at-will employee and could be terminated with or without cause 

at any time. The court also granted summary judgment for the City 

on part of the conversion claim, stating that Hays's failure to 

retrieve his property from the clubhouse constituted abandonment. 

The court held a jury trial on the FLSA claim and the 

surviving portion of the conversion claim. In a general verdict, 

the jury found that while the City had not violated the FLSA, it 

had converted Hays's property, and awarded Hays $542 in 

compensation for the goods that the City sold from the pro shop. 

Hays filed a motion for judgment notwithstanding the verdict 

(JNOV) or for a new trial. The district court denied the motion, 

and this appeal followed. 

DISCUSSION 

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Hays maintains on appeal that the district court erred in 

denying his motion for JNOV or a new trial. He argues that (1) 

the golf course did not qualify as a recreational establishment 

exempt from FLSA; (2) he did not qualify as an executive exempt 

from FLSA; and (3) he did not qualify as an administrator exempt 

from FLSA. Hays further argues that the district court erred in 

instructing the jury on the recreational exemption and in failing 

to instruct the jury on the working foreman provision. Finally, 

Hays contends that the district court erred in granting summary 

judgment on the wrongful discharge claim and part of the 

conversion claim. 

We review the district court's denial of a motion for JNOV de 

novo. Federal Deposit Ins. Corp. v. United Pac. Ins. Co., 20 F.3d 

1070, 1079 (lOth Cir. 1994). However, "[w]e may find error in the 

denial of such a motion only if the evidence points but one way 

and is susceptible to no reasonable inferences supporting the 

party opposing the motion . . . " Id. (internal quotation marks 

omitted) . We review the denial of a motion for a new trial for 

abuse of discretion. Sheets v. Salt Lake County, 45 F.3d 1383, 

1390 (lOth Cir. 1995). We also review district court decisions 

regarding jury instructions for an abuse of discretion. Green v. 

Denver & Rio Grande W.R.R. Co., 59 F.3d 1029, 1034 (lOth Cir. 

1995). In doing so, we are mindful that "[i]nstructions must be 

considered as a whole; we will not reverse unless any errors are 

prejudicial." Id. 

The FLSA requires employers to pay employees at least one and 

one-half times their regular pay for hours worked in excess of 

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forty hours per week. 29 U.S.C. § 207(a). However, the statute 

exempts employers operating recreational establishments, 29 U.S.C. 

§ 213(a) (3), and employees in bona fide executive or 

administrative capacities, 29 U.S.C. § 213(a) (1). At trial, the 

City argued both that the golf course was an exempt recreational 

establishment and that Hays qualified as an exempt executive and 

administrator. Hays contends on appeal that none of these FLSA 

exemptions apply in this case. 

The defendant bears the burden of proving that an employee 

falls within a FLSA exemption. Corning Glass Works v. Brennan, 

417 U.S. 188, 196-97 (1974); Department of Labor v. City of 

Sapulpa, 30 F.3d 1285, 1287 (lOth Cir. 1994). An employee must 

fit "plainly and unmistakenly within the exemption's terms," and 

FLSA ·exemptions are to be narrowly construed. Aaron v. City of 

Wichita, 54 F.3d 652, 657 (lOth Cir.) (internal quotation marks 

omitted), cert. denied, 64 U.S.L.W. 3330 (U.S. Nov. 7, 1995) (No. 

95-432). Hays argues that he was entitled to a JNOV or a new 

trial because the City did not meet its burden of proof under the 

FLSA. Hays also contends that the City did not present enough 

evidence to warrant instructions on the recreational establishment 

exemption. 

Because the jury returned a general verdict, we review both 

whether the golf course qualified for the recreational 

establishment exemption and whether Hays qualified for the 

executive or administrative exemption. An employer qualifies as a 

recreational establishment if "(A) it does not operate for more 

than seven months in any calendar year, or (B) during the 

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preceding calendar year, its average receipts for any six months 

of such year were not more than 33 1/3 per centum of its average 

receipts for the other six months of such year . " 29 U.S.C. 

§ 213(a) (3). Since the Pauls Valley Golf Course operated year 

round, it qualified for the exemption only if its receipts for 

half of the year were equal to or less than one-third of its 

receipts for the rest of the year. 

After reviewing the record, we conclude that the City 

satisfied the requirements of the recreational establishment 

exemption. The City produced substantial evidence for the jury to 

conclude that in every relevant year, the golf course's average 

monthly receipts for the slowest six months were substantially 

less than one-third of the average monthly receipts for the 

busiest six months. The City collected most of its golf course 

dues in May, June, and July. Consequently, receipts for those 

months are substantially higher than receipts for the rest of the 

year. 

Hays argues that the City should have prorated the dues 

receipts over the full year. However, nothing in the statute or 

regulations requires that dues be prorated. Hays also asserts, 

based on an opinion letter from the Wage-Hour Administrator, that 

the golf course could not qualify as a recreational establishment 

because it was supported in part by city taxes. Opinion Letter of 

the Wage-Hour Administrator No. 1592, Labor L. Rep. (CCH) ,r 31,935 

(Sept. 27, 1985). Hays's reliance on the opinion letter is 

misplaced, however, because the letter discusses an establishment 

that had no private receipts and was "wholly or primarily" 

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supported by tax funds. By contrast, the Pauls Valley Golf Course 

had substantial private receipts. Accordingly, the golf course 

qualified as an exempt recreational establishment. Thus the 

district court did not err in instructing the jury on the 

recreational establishment exemption or in denying the motion for 

a JNOV or a new trial. 

We next review whether Hays qualified for the executive 

exemption. An employee qualifies as an exempt executive if he 

satisfies one of two tests in the FLSA regulations, the long test 

or the short test. The long test states that an executive is an 

employee: 

(a) 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 

(b) Who customarily and regularly directs the work of two or 

more other employees therein; and 

(c) Who has the authority to hire or fire other employees or 

whose suggestions and recommendations as to the hiring or 

firing and as to the advancement and promotion or any other 

change of status of other employees will be given particular 

weight; and 

(d) Who customarily and regularly exercises discretionary 

powers; and 

(e) Who does not devote more than 20 percent . . . of his 

hours of work in the workweek to activities which are not 

directly and closely related to the performance of the work 

described in paragraphs (a) through (d) of this section . . 

. ; and 

(f) Who is compensated for his services on a salary basis at 

a rate of not less than $155 per week . . . . 

29 C.F.R. § 541.1. 

The short test applies to employees earning more than $250 

per week. An employee satisfies the short test if her "primary 

duty" is management and includes the customary and regular 

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supervision of two or more full-time employees. 29 C.F.R. § 

54l.l(f). An employee who fulfills these requirements is deemed 

to have met all of the requirements of the long test and thus "it 

is not necessary to test that employee's qualifications in detail" 

under that test. 29 C.F.R. § 541.119. 

Since Hays earned $461.54 per week, we apply the short test. 

In order to apply the short test, we must review the meaning of 

the words "primary duty". Whether an employee's primary duty is 

management is a fact-based inquiry guided in part by the amount of 

time spent on management duties. 29 C.F.R. § 541.103; Department 

of Labor v. City of Sapulpa, 30 F.3d 1285, 1287 (lOth Cir. 1994). 

Primary duty usually means "the major part, or over 50 percent, of 

the employee's time." 29 C.F.R. § 541.103. However, "[t]ime alone 

. is not the sole test." Id. When an employee spends less 

than 50 percent of his time on management, four other factors 

should be considered: "[1] the relative importance of the 

managerial duties as compared with other types of duties, [2] the 

frequency with which the employee exercises discretionary powers, 

[3] his relative freedom from supervision and [4] the relationship 

between his salary and the wages paid other employees for the kind 

of nonexempt work performed by the supervisor." Id.; accord City 

of Sapulpa, 30 F.3d at 1287. Thus an employee may spend more than 

50 percent of his time on nonexempt work and still be considered 

an executive if other pertinent factors support such a conclusion. 

29 C.F.R. § 541.103. 

After reviewing the record and applying the short test, we 

conclude that Hays was not entitled to JNOV or a new trial on the 

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executive exemption issue. Hays spent more than 50 percent of his 

time on nonmanual, management tasks, and consequently he satisfied 

the "primary duty" requirement. He kept financial records, made 

recommendations on hiring and firing, and was responsible for the 

general operation of the golf course. He supervised and trained 

more than two full-time employees. Furthermore, he was not 

directly supervised by anyone on a day-to-day basis. Accordingly, 

Hays qualified as an exempt executive. 

We now turn to Hays's contention that the district court 

erred in failing to instruct the jury on the working foreman 

provision. The court denied Hays's requested instruction on the 

ground that it would confuse the jury. The City argues on appeal 

that the working foreman provision applies only to the executive 

exemption long test, and consequently that Hays was not entitled 

to the instruction. Hays contends that the working foreman 

provision applies whether the long or short test is used. 

In order to resolve this issue, we turn first to the language 

of the working foreman provision. The provision begins by stating 

that "[t]he primary purpose of the exclusionary language [in the 

long test] placing a limitation on the amount of nonexempt work is 

to distinguish between the bona fide executive and the 'working' 

foreman or 'working' supervisor .... " 29 C.F.R. § 541.115(a); 

see 29 C.F.R. § 541.1(e). A working foreman is a supervisor who 

is not exempt from the FLSA because he regularly performs work 

that is "unrelated or only remotely related to his supervisory 

activities." 29 C.F.R. § 541.115(a). Hays requested that the jury 

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be instructed on the following clause of the working foreman 

provision: 

One type of working foreman or working supervisor most 

commonly found in industry works alongside his subordinates. 

Such employees, sometimes known as strawbosses, or gang or 

group leaders perform the same kind of work as that performed 

by their subordinates, and also carry on supervisory 

functions. Clearly, the work of the same nature as that 

performed by the employees' subordinates must be counted as 

nonexempt work and if the amount of such work performed is 

substantial the exemption does not apply. ("Substantial," as 

used in this section, means more than 20 percent. See 

discussion of the 20-percent limitation on nonexempt work in 

§ 541.112.) 

29 C.F.R. § 541.115(b). 

Hays contends that the working foreman provision applies to 

both the long test and the short test. However, this 

interpretation is inaccurate: the working foreman provision is 

merely an explanation of the long test's limitation on nonexempt 

work described in 29 C.F.R. § 54l.l(e). The introductory 

paragraph of the working foreman provision refers to the long test 

limitation on nonexempt work, indicating that the working foreman 

provision applies only to the long test. See, ~, Martin v. 

Tango's Restaurant, Inc., 969 F.2d 1319, 1325 (1st Cir. 1992) 

(high salaried employee not subject to the working foreman's 

percentage limitation on hours) . In addition, the 20 percent 

limitation on nonexempt work described in the working foreman 

provision is identical to the 20 percent limitation on nonexempt 

work in the long test, 29 C.F.R. § 54l.l(e); and the subsection 

defining the 20 percent limitation in the long test, 29 C.F.R. § 

541.112, also defines the 20 percent limitation in the working 

foreman provision, 29 C.F.R. § 541.115(b). These aspects of the 

working foreman provision indicate that Congress intended the 

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provision to be a caveat to the requirements of the long test. 

The provision does not apply to the short test. Hays, an employee 

qualifying under the short test, was therefore not entitled to a 

working foreman instruction. 

We next review whether Hays qualified for the administrative 

exemption to the FLSA. Like the executive exemption, the 

administrative exemption has both a long test and a short test for 

determining whether an employee qualifies. The long test applies 

to employees earning between $155 and $250 per week, while the 

short test applies to employees who earn more than $250 per week. 

Because Hays earned $461.54 per week, we apply the short test. An 

employee satisfies the administrative exemption short test if her 

primary duty consists of office or nonmanual work and includes 

work requiring the exercise of discretion and independent 

judgment. 29 C.F.R. §§ 541.2(e) (2), 541.214. The same definition 

of "primary duty" applies to both the administrative and the 

executive exemption short tests. 

After reviewing the record and applying the short test, we 

conclude that the City produced enough evidence for a jury to find 

that Hays was an exempt administrator. The record indicates that 

Hay's primary duties were nonmanual office work and that he 

frequently exercised discretion and independent judgment. 

Accordingly, the district court did not err in denying the motion 

for JNOV or new trial. 

The district court granted summary judgment on the wrongful 

discharge claim and part of the conversion claim. Our review of 

those decisions is de novo "using the same legal standard as the 

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district court." Federal Election Comrn'n v. Colorado Republican 

Fed. Campaign Comrn., 59 F.3d 1015, 1018 (lOth Cir. 1995). 

The Pauls Valley City Charter governed Hays's employment with 

the City. The charter states that the city manager shall 

"[a]ppoint and, when deemed necessary for the good of the service, 

lay off, suspend, demote or remove, all directors or heads of 

administrative departments and all other administrative officers 

and employees of the city .... " The Oklahoma Supreme Court has 

held that almost identical language does not change an employee's 

at-will status. Hall v. O'Keefe, 617 P.2d 196, 198-200 (Okla. 

1980). Moreover, under Oklahoma law, an employer may discharge an 

at-will employee at any time, with or without cause, unless the 

discharge is contrary to a clear mandate of public policy. 

Gilmore v. Enogex. Inc., 878 P.2d 360, 362-63 (Okla. 1994). 

Because Hays was an at-will employee under the city charter, 

the City had the power to dismiss him at any time. The contracts 

between Hays and the City did not change his at-will status. 

"Under Oklahoma law, where certain terms of employee dismissal are 

explicitly stated in the city charter, the city manager or other 

city officials are not authorized to alter or otherwise restrict 

those terms so as to legally bind the city." Graham v. City of 

Oklahoma City, 859 F.2d 142, 146 (lOth Cir. 1988); see also 

Driggins v. City of Oklahoma City, 954 F.2d 1511, 1514-15 (lOth 

Cir. 1992). Thus Hays was an at-will employee, and the City had 

the power to dismiss him without cause. Accordingly, the district 

court did not err in granting summary judgment on the claim of 

wrongful discharge. 

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Finally, we review the grant of summary judgment on the 

conversion claim. In Oklahoma, "[c]onversion is any act of 

dominion wrongfully exerted over another's personal property in 

denial of or inconsistent with his rights therein." Welty v. 

Martinaire of Oklahoma, Inc., 867 P.2d 1273, 1275 (Okla. 1994). 

The exercise of dominion must be "in defiance or exclusion of the 

owner's rights." Brown v. Oklahoma State Bank and Trust Co., 860 

P.2d 230, 233 (Okla. 1993). 

Hays left his merchandise in the clubhouse after he was 

dismissed from his employment. Although the City changed the 

locks to the clubhouse, Hays was free to retrieve his property at 

any time during weekday business hours. Hays admitted in 

deposition testimony that he could have gone to the clubhouse and 

retrieved his property. He failed to do so. Furthermore, a bank 

eventually repossessed the goods, and Hays regained possession of 

them after he paid off his loan. There is no evidence in the 

record that the City exerted dominion over Hays's property in 

defiance or exclusion of Hays's rights. Accordingly, the district 

court's grant of summary judgment on the conversion claim was 

proper. 

In sum, we hold that the City was not required to compensate 

Hays for overtime hours both because the golf course qualified as 

an exempt recreational establishment and because Hays qualified as 

an exempt administrator and executive under the short tests. In 

addition, we hold that because the working foreman provision 

applies only to the executive exemption long test, Hays was not 

entitled to a jury instruction on that provision. Finally, the 

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district court did not err by granting summary judgment on the 

wrongful discharge and conversion claims. 

We GRANT the appellee's application to file a rejoinder brief 

and AFFIRM the decision of the district court. 

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