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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 

DEPARTMENT OF LABOR, Robert Reich, ) 

Secretary, ) 

v. 

Plaintiff-Appellee/ 

Cross-Appellant, 

CITY OF SAPULPA, OKLAHOMA, 

Defendant-Appellant/ 

Cross-Appellee. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

JUL 1 2 1994 

ROBERT L. HOECKER 

Clerk 

Nos. 93-5144 

93-5165 

Appeal from the United States District Court 

for the Northern District of Oklahoma 

(D.C. No. 90-B-684-E ) 

Stephen L. Andrew (D. Kevin Ikenberry, also of McCormick, Andrew & 

Clark, with him on the briefs) Tulsa, Oklahoma, for the City of 

Sapulpa. 

Mary J. Rieser, Attorney (Thomas S. Williamson, Jr., Solicitor of 

Labor; Monica Gallagher, Associate Solicitor; William J. Stone, 

Counsel for Appellate Litigation; James E. White, Regional Solicitor, with her on the briefs) U.S. Department of Labor, Washington, 

D.C., for the Department of Labor. 

Before SEYMOUR, Chief Judge, LOGAN and ANDERSON, Circuit Judges. 

LOGAN, Circit Judge. 

Appellate Case: 93-5144 Document: 01019283634 Date Filed: 07/12/1994 Page: 1 
The City of Sapulpa, Oklahoma, appeals the district court's 

judgment for the Secretary of Labor finding that captains and 

fourth captains employed by the City of Sapulpa Fire Department 

were entitled to overtime compensation pursuant to 29 U.S.C. 

§§ 207(a) and 215(a) (2). The Secretary has cross-appealed, 

asserting that the district court erred in failing to award liquidated damages pursuant to 29 U.S.C. § 216. 

The only issues on appeal are whether (1) the captains and 

fourth captains are 11 executive 11 employees under§ 13(a) (1) of the 

Fair Labor Standards Act (FLSA), 29 U.S.C. § 213(a) (1), and therefore exempt from the FLSA overtime provisions, and, if not, 

(2) whether the district court should have awarded liquidated damages under 29 U.S.C. § 216. 

I 

In April 1986 the City became subject to the provisions of 

the FLSA, which mandates payment of overtime compensation to nonexempt employees who work over forty hours per workweek. See 29 

U.S.C. §§ 207, 213. For purposes of determining overtime compensation public agencies may adopt alternative work periods for employees engaged in fire protection or law enforcement. Id. 

§ 207(k). The Sapulpa Fire Department has adopted a 27-day work 

period of 204 hours to accommodate the employees in its three fire 

stations, who work rotating shifts of twenty-four hours on and 

forty-eight hours off. The City must pay overtime-- 11 compensation 

at a rate not less than one and one-half times the regular rate, 11 

id.--to Fire Department employees for time worked in excess of 204 

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Appellate Case: 93-5144 Document: 01019283634 Date Filed: 07/12/1994 Page: 2 
hours in a 27-day period, unless those employees are otherwise 

exempt. 

The Fire Department is headed by a fire chief and employs a 

deputy chief (fire marshal), three assistant chiefs/battalion 

chiefs (AC/BC), twelve captains, three fourth captains, ten to 

twelve drivers, and twelve fire fighters. An AC/BC supervises and 

visits each of the three fire stations during each shift. Usually 

each fire station is staffed by a captain, a driver, and a fire 

fighter. 1 A dispute arose during collective bargaining whether 

the captains and fourth captains (collectively "captains") 2 were 

exempt from the FLSA overtime provisions under the "executive" 

exemption. When the parties could not agree on the exemption and 

the City continued to treat captains as exempt, the union filed a 

1 The Secretary introduced evidence that between 33% and 36% of 

the time, one of the three stations will be manned by only two 

employees--a captain and a driver. 

2 A fourth captain is a driver who has passed the test for captain, but ·works as a driver unless needed to relieve captains. 

The City argues that fourth captains are exempt when filling in 

for captains. 

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Appellate Case: 93-5144 Document: 01019283634 Date Filed: 07/12/1994 Page: 3 
' th ' ' 3 grlevance on e overtlme lssue. An arbitrator denied the grievance and the City continued to pay straight time to captains for 

all of their work. 

In early 1989 a Wage and Hour investigator, after conducting 

fact finding at the Fire Department, found that captains were 

working overtime. The investigator also determined that the City 

had not established the exempt status of captains. When the City 

would not pay captains overtime compensation, the Secretary 

brought this action in August 1990, seeking overtime pay for captains' work performed since August 1987. 

The district court concluded that the captains were not executive employees and thus were not exempt from the overtime provisions. It also found that the City's actions were not willful nor 

in reckless disregard of the FLSA standards; it therefore applied 

the two-year statute of limitations under § 255. The court 

3 In their negotiations following their disagreement, the City 

and the union had included the following provision in their collective bargaining agreement: 

Article XX 

Section 1. Overtime. 

A. Employees of the Fire Department who are required to 

put in overtime hours shall be paid at the rate required 

by the Fair Labor Standards Act except for those employees who are determined to be exempt from the coverage 

provided by said Act. Employees so determined to be 

exempt, shall be compensated at straight time rates for 

overtime worked except as set forth in Paragraph B, below. 

B. Employees who are called back to duty on their time 

off shall be paid a minimum of two hours pay at one and 

one-half (1/2) that of their regular pay and for all 

hours over that. 

XV App. 1633. 

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Appellate Case: 93-5144 Document: 01019283634 Date Filed: 07/12/1994 Page: 4 
ordered payment of overtime compensation and prejudgment interest 

but did not specifically address liquidated damages. The City 

appealed and the Secretary cross-appealed. 

II 

The City has the burden to prove that the Fire Department 

captains were exempt "executive" employees within the meaning of 

29 U.S.C. § 213(a) (1). Corning Glass Works v. Brennan, 417 U.S. 

188, 196-97 (1974). We review the district court's factual findings under the clearly erroneous standard, and its ultimate conclusion that the captains were not exempt employees de novo. Icicle Seafoods. Inc. v. Worthington, 475 U.S. 709, 714 (1986); Reich 

v. State of Wyoming, 993 F.2d 739, 741 (lOth Cir. 1993). 

The FLSA exempts from overtime compensation "any employee 

employed in a bona fide executive, administrative, or professional 

capacity." 29 U.S.C. § 213(a) (1). The federal regulations set 

forth a "short test" and a "long test" for determining executive 

employee exemptions. See 29 C.F.R. § 541.1. Because the captains' salaries were over $250.00 per week, the district court 

properly applied the "short test." It provides that "an employee 

who is compensated on a salary basis at a rate of not less than 

$250.00 per week . . and whose primary duty consists of the management of the enterprise in which the employee 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 the 

requirements of this section." Id. § 541.l(f). 

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Appellate Case: 93-5144 Document: 01019283634 Date Filed: 07/12/1994 Page: 5 
The regulations also provide guidelines to determine whether 

an employee's "primary duty" is management. The following activities are considered to be management duties: 

Interviewing, selecting, and training of employees; 

setting and adjusting their rates of pay and hours of 

work; directing their work; . . appraising their productivity and efficiency for the purpose of recommending 

promotions or other changes in their status; handling 

their complaints and grievances and disciplining them 

when necessary; planning the work; determining the techniques to be used; apportioning the work among the workers; determining the type of materials, supplies, 

machinery or tools to be used or merchandise to be 

bought, stocked and sold; controlling the flow and distribution of materials or merchandise and supplies; providing for the safety of the men and the property. 

Id. § 541.102(b). A fact-sensitive inquiry is necessary, but 

"[i]n the ordinary case it may be taken as a good rule of thumb 

that primary duty means the major part, or over 50 percent, of the 

employee's time." Id. § 541.103. 

Applying the "short test," the district court first found 

that the evidence did not establish that captains spend more than 

fifty percent of their time in management functions. The City 

appears not to dispute this finding, but argues that the fifty 

percent "rule" is not appropriate in this case. Brief of Appellant at 14-16 (citing Donovan v. Burger King Corp., 672 F.2d 221, 

226 (1st Cir. 1982) ("the more natural reading of 'primary' is 

'principal' or 'chief,' not 'over one-half,' . one can still 

be 'managing' if one is in charge, even while physically doing 

something else")). 

The regulations provide that even if an employee does not 

spend fifty percent of his time in managerial duties, four other 

factors are considered in determining whether management is an 

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Appellate Case: 93-5144 Document: 01019283634 Date Filed: 07/12/1994 Page: 6 
employee's primary duty: "the relative importance of the managerial duties as compared with other types of duties, the frequency with which the employee exercises discretionary powers, his 

relative freedom from supervision, and the relationship between 

his salary and the wages paid other employees for the kind of nonexempt work performed by the supervisor." 29 C.F.R. § 541.103. 

See Reich v. State of Wyoming, 993 F.2d at 742 (employee's primary 

duty is that which is of principal importance to the employer) . 

Contrary to the City's assertion, the district court did not 

rely on a simple fifty percent standard. It also applied the 

alternative criteria, stating 

[o]ther factors than time spent in management functions 

further indicated failure of the evidence to establish 

the exception: 

A.. Under the incident command system used by the Fire 

Department the first arriving officer is in charge of 

the fire scene. In excess of 50% of the time the AC/BC 

arrives at the fire scene first and is in charge. 

B. Captains/Fourth Captains are granted no authority to 

call additional personnel to a fire scene. Such authority is given to the Chief, Deputy Chief, or AC/BC. 

Captains/Fourth Captains have little discretion at the 

fire scene. 

C. Captains/Fourth Captains do not set work schedules 

for other employees. 

D. [Captains/Fourth Captains] do not have input into 

their own work schedules. 

E. [Captains/Fourth Captains] participate in all the 

routine manual station duties such as sweeping and mopping floors, washing dishes and cleaning bathrooms. 

F. Captains/Fourth Captains do not earn much more than 

the employees they allegedly supervise. 

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Appellate Case: 93-5144 Document: 01019283634 Date Filed: 07/12/1994 Page: 7 
I App. 35-36. The district court further found that responsibility for management of the individual fire stations is vested in 

4 the AC/BC on duty. 

The cases the City cites as "hardly distinguishable from this 

one," and "virtually unanimous in holding fire captains to be 

exempt employees," Appellant's Brief at 23, are factually distinguishable in significant respects from the instant case. See, 

~, Atlanta Professional Firefighters Union, Local 134 v. City 

of Atlanta, 920 F.2d 800, 805 (11th Cir. 1991) (captains perform 

limited manual fire fighting; make strategic decisions on fighting 

fire); Masters v. Huntington, 800 F. Supp. 363, 365-66 (S.D. W.Va. 

1992) (captains have authority to assign firemen to particular 

jobs, such as driver or nozzleman; may impose penalties on firemen; and direct "operation in particular sector" of fire ground; 

deputy chief "only occasionally visit[s] the fire stations"); Harkins v. City of Chesapeake, 1988 WL 235927 (E.D. Va. Dec. 2, 1988) 

(captains have substantial input on promotions; have discretion 

whether to relinquish command of fire ground; and under department 

policy captains do not perform manual work at station) ; see also 

Smith v. City of Jackson, Mississippi, 954 F.2d 296, 297-99 (5th 

Cir. 1992) (district and battalion chiefs assume control of scene 

4 The district court further found in the alternative that 

"[e]ven if the facts establish that they supervise employees the 

proof fails to establish that the Captains/Fourth Captains' duties 

include the 'customary and regular direction of two or more 

employees.'" I App. 36. Because we uphold the district court's 

determination that the captains' primary duty was not supervision, 

we do not review this finding. 

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Appellate Case: 93-5144 Document: 01019283634 Date Filed: 07/12/1994 Page: 8 
and rarely participate in actual firefighting; court imputed managerial character of their work during emergency dispatch to waiting time) . The common thread in each of these cases is that a 

title as "captain" provides no guidance on whether the administrative exemption applies; rather, a fact-sensitive inquiry like that 

the district court conducted here is required. 

Although the City presented contrary evidence, our review of 

the record indicates that all of the district court's findings are 

supported by the record. The district court's findings of fact 

are not clearly erroneous, and they support the court's conclusion 

that the captains' primary duty is not management and that they 

are entitled to overtime compensation. 

III 

The Secretary's cross-appeal contends that the district court 

5 erred in failing to award· liquidated damages. The FLSA provides 

that an employer who violates the overtime provisions of § 207 

ordinarily is liable for unpaid overtime compensation and "an 

5 The complaint in this case cited as its jurisdictional basis 29 

U.S.C. § 217, as did the pretrial order. See I App. 1, 10. This 

is the provision for injunctive relief. Courts have held in such 

a case that liquidated damages are unavailable. ~, Brock v. 

Superior Care, Inc., 840 F.2d 1054, 1062-63 (2d Cir. 1988). A 

claim must be made under 29 U.S.C. § 216(b) or§ 216(c), in which 

case a party would be entitled to ask for a jury trial. See Superior Care, 840 F.2d at 1063. Neither party asked for a jury trial 

or raised in the district court or on appeal the issue of the 

court's authority to grant liquidated damages if it found a violation. In the instant case the complaint did request liquidated 

damages and in the prayer for relief cited 29 U.S.C. § 216(c). I 

App. 1, 4. The pretrial order recites that one issue is entitlement to liquidated damages under 29 U.S.C. § 216(c). I App. 16. 

Therefore, we consider the entitlement to liquidated damages properly raised and within the jurisdiction of the district court. 

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Appellate Case: 93-5144 Document: 01019283634 Date Filed: 07/12/1994 Page: 9 
additional equal amount as liquidated damages." 29 U.S.C. § 216 

(b). However, 29 U.S.C. § 260 provides that 

if the employer shows to the satisfaction of the court 

that the act or omission giving rise to such action was 

in good faith and that he had reasonable grounds for 

believing that his act or omission was not a violation 

of the [FLSA], the court may, in its sound discretion, 

award no liquidated damages or award any amount thereof 

not to exceed the amount specified in section 216 of 

this title. 

Thus, the district court may eliminate or reduce the award of 

liquidated damages only if the employer demonstrates "both that he 

acted in good faith and that he had reasonable grounds for believing that his actions did not violate the Act." Doty v. Elias, 

733 F.2d 720, 725-26 (lOth Cir. 1984). "The good faith requirement mandates the employer have 'an honest intention to ascertain 

and follow the dictates of the Act.'" Renfro v. City of Emporia, 

948 F.2d 1529, 1540 (lOth Cir. 1991) (quoting Marshall v. Brunner, 

668 F.2d 748, 753 (3d Cir. 1982)), cert. dismissed, 112 S. Ct. 

1310 (1992). "The additional requirement that the employer have 

reasonable grounds for believing that his conduct complies with 

the Act imposes an objective standard by which to judge the 

employer's behavior." Brunner, 668 F.2d at 753. 

The Secretary correctly points out that the district court 

made no findings as to Whether the City acted in good faith6 and/ 

6 The only mention of good faith is in the district court's order 

and judgment, in which it addresses the issue whether prejudgment 

interest against the City was appropriate. 

Disputing this court's assessment of pre-judgment interest, Defendant argues it acted in good faith in treating 

the Captains of the Fire Department as exempt employees 

under the Fair Labor Standards Act (hereinafter "FLSA") 

for purposes of payment of overtime compensation. 

Continued to next page 

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or with reasonable grounds to believe its actions complied with 

the Act. Several circuit courts have held that "before a district 

court exercises discretion it must make findings that the 

employer acted in good faith and with reasonable grounds." Martin 

v. Cooper Electric Supply Co., 940 F.2d 896, 907 (3d Cir. 1991) 

(quotations omitted), cert. denied, 112 S. Ct. 1310 (1992); see 

also Mireles v. Frio Foods, Inc., 899 F.2d 1407, 1415 (5th Cir. 

1990); Joiner v. City of Macon, 814 F.2d 1537, 1539 (11th Cir. 

1987) ("Before a district court may exercise its discretion to 

award less than the full amount of liquidated damages, it must 

explicitly find that the employer acted in good faith."). 

In the case before us, despite the district court's failure 

to make findings addressing these requirements, the Secretary 

urges us to conduct a de novo review of the record. He argues 

Continued from previous page 

Defendant cites Donovan v. Painton, 717 F.2d 1320 (lOth 

Cir. 1983), cert. denied, 466 U.S. 934 (1984) as authority for the proposition that the assessment of prejudgment interest is inappropriate absent a finding of 

bad faith. . . . Finding no specific authority from the 

Tenth Circuit Court of Appeals on the issue of prejudgment interest in an action for injunctive relief 

under the FLSA, this court follows the majority of circuits which hold that prejudgment interest should generally be included in a back pay award in an action seeking injunctive relief under section 17 of the FLSA. 

I App. 42-43 (citations omitted). 

The district court also made a finding of fact that the 

City's "conduct did not constitute a wilful or reckless disregard 

of the application of the Fair Labor Standard. 11 Id. at 37. The 

City asserts that this is a finding that it acted in good faith 

and with reasonable grounds to believe it was in compliance with 

the FLSA. But this was a finding applicable to the issue whether 

the three- or two-year statute of limitations applied to· the 

City's violations. We do not read either of these findings or 

discussions by the district court as a conclusion that the City 

acted in good faith. 

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that the record compels a conclusion that the City did not meet 

its burden to show good faith and reasonable grounds. We have 

sometimes ourselves searched the record in FLSA cases in which the 

district court failed to make a crucial finding on liquidated damages. See Doty v. Elias, 733 F.2d at 726 (district court awarded 

no liquidated damages because it found good faith but made no 

findings concerning reasonable grounds; record did not contain 

evidence to meet defendant's burden of showing reasonable grounds; 

reversed and remanded for award of liquidated damages); Sinclair 

v. Automobile Club of Oklahoma. Inc., 733 F.2d 726, 730 (lOth Cir. 

1984) (district court denied liquidated damages but made no findings of reasonable grounds; reversed and remanded with instructions to award liquidated damages because defendant had offered no 

evidence of reasonable grounds) . 

In the instant case, however, our review of the record 

reveals evidence that would possibly justify a decision on either 

side of the good faith and objective reasonable grounds questions. 

Under these circumstances, fact findings should be made by the 

district court in the first instance. Therefore, we remand to the 

district court for a redetermination on the liquidated damages 

issue, including the making of findings of fact concerning good 

faith and reasonable grounds. If the district court finds that 

liquidated damages should be awarded it must vacate its award of 

prejudgment interest, because it is settled that such interest may 

not be awarded in addition to liquidated damages. Brooklyn Sav. 

Bank v. O'Neil, 324 U.S. 697, 714-16 (1945); Doty, 733 F.2d at 

726. 

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AFFIRMED in part, and REMANDED in part for further proceedings in accordance with this opinion. 

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