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### STATE OF MICHIGAN

COURT OF APPEALS

TODD MUSCAT,

Plaintiff-Appellant, UNPUBLISHED December 3, 2015

v No. 322971

Oakland Circuit Court MINACS GROUP USA, INC., LC No. 2013-133823-CZ

Defendant-Appellee.

Before: S ERVITTO , P.J., and W ILDER and B OONSTRA , JJ.

P ER C URIAM

.

In this action under the Fair Labor Standards Act (FLSA), 29 U SC 201 et seq ., alleging that plaintiff was denied overtime payment, plaintiff appeals a s of right the trial court’s order granting summary disposition in f avor of defendant pursuant to MCR 2.116(C)(10). We affirm.

Defendant hired plaintiff in August 2010 and eventually promot ed him to the position of a training specialist. This position was a salaried position a nd defendant did not pay plaintiff overtime. After working for two years at what plaintiff estima ted as 55 hours per week, plaintiff filed the instant action seeking, among other claims, the unpai d overtime he asserted he was owed but not paid in violation of the FLSA. During litigation, plaintiff’s other claims were voluntarily disposed of, and plain tiff was left only with the F LSA claim.

After discovery, defendant moved the trial court to summarily dispose of plaintiff’s FLSA claim, arguing that plainti ff’s position was exempt from t he FLSA’s overtime requirement. Defendant argued that plaintiff could be consider ed a bona fide administrative employee or, alternatively, a bona fide executive employee, bot h of which positions are exempted from the requirement of overtime pay under the FLSA. Despite plaintiff’s contention that neither exemption applied to him, the trial court found th at plaintiff was exempt under the bona fide administrative exemption, and summarily disposed of p laintiff’s FLSA overtime claim. Plaintiff now appeals that decision.

“This Court reviews decisions on motions for summary dispositio n de novo to determine if the moving party was entitled to judgment as a matter of law .” Alcona Co v Wolverine
Environmental Prod, Inc , 233 Mich App 238, 245; 590 NW2d 586 (1998). A motion for summary disposition pursuant to MCR 2.116(C)(10) “tests the fac tual sufficiency of the complaint.” Joseph v Auto Club Ins Ass’n , 491 Mich 200, 206; 815 NW2d 412 (2012). “In evaluating a motion for summary disposition brought under this subsection, a trial court-2- considers affidavits, pleadings, depositions, admissions, and o ther evidence submitted by the parties, MCR 2.116(G)(5), in the light most favorable to the pa rty opposing the motion.”

Maiden v Rozwood , 461 Mich 109, 120; 597 NW2d 817 (1999). Summary disposition is proper where there is no “genuine issue regarding any material fact.” Id

.

Plaintiff argues that the bona fide administrative exemption d id not apply to him. We disagree.

Generally, under the FLSA, an employer is not permitted to work employees more than 40 hours per week without paying the employee a higher wage for the additional hours. See 29 USC 207(a)(1). Specifically, “[e] xcept as otherwise provided i n this section, no employer shall employ any of his employees . . . for a workweek longer than fo rty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he i s employed.” 29 USC 207(a)(1). The FLSA, however, provides certain exemptions to this requirem ent. See 29 USC 213(a)(1). Specifically, “any employee employed in a bona fide executive, administrative, or professional capacity,” is not subject to the maximum hour requirements of 2 9 USC 207(a)(1) under FLSA.

The term “bona fide administra tive capacity” is defined in 29 C FR 541.200(a):

(a) The term “employee employed in a bona fide administrative capacity” in section 13(a)(1) of the Act shall mean any employee:

(1) Compensated on a salary or fee basis at a rate of not less than $455 per week . . . exclusive of board, lodg ing or other facilities;

(2) Whose primary duty is the performance of office or non-man ual work directly related to the manageme nt or general business operatio ns of the employer or the employer's customers; and

(3) Whose primary duty includes t he exercise of discretion and independent judgment with respe ct to matters of significance.

Plaintiff’s training specialis t position was salaried at $35,00 0 per year. It is undisputed on appeal that this salary fulfills t he first prong of 29 CFR 541.200(a).

With regard to the second and third prong, defendant’s company provides people to staff other companies’ support telephone lines. In the relevant port ion of plaintiff’s history with defendant, plaintiff worked as a training specialist on the Net flix and Verizon West accounts. Plaintiff reported that his job was to train approximately 25 t o 30 individuals in two-week sessions. During the first week, plaintiff would run a classro om under limited supervision. Plaintiff was required to follow the protocol and curriculum la id out by defendant and defendant’s client (Netflix or Verizon West). He was not permi tted to change that curriculum. Although plaintiff was permitted to suggest changes to the curr iculum, and admitted doing so, he testified that his suggested changes were never accepted. As t he class progressed in week one, plaintiff was permitted to speed up the given lessons depending on the level of understanding exhibited by the trainees in the class at the time. When the t rainees left for the day, plaintiff would review their work. Plaintiff discussed with trainees any deficiencies in their work, and used his own creativity and judgment when determining how to pr operly encourage and critique-3- their performance. Plaintiff’s supervisor testified that plain tiff was permitted to discipline the

trainees based on issues with the trainees’ attendance and cond uct. That discipline, according to the supervisor, was determ ined solely by plaintiff.

During the second week, the tr ainees would then move into an o n-the-job type training, where they would answer actual telephone calls, in a process de fendant refers to as “nesting.” Plaintiff testified that his immediate supervisor was there eve ry day during those nesting sessions. Nevertheless, plainti ff was required to answer the q uestions that arose from any trainee. Plaintiff testified that he did not have a script he read from and there was no way for plaintiff to prepare for every question that could possibly be asked. Before the nesting session, plaintiff would provide the train ees with a pep talk, which pla intiff stated was not scripted, but during which he used his own personal stories and anecdotes. A fter a given nesting session, plaintiff would then have a debr iefing session with the trainee s, discussing what went wrong and what did not and how to improve in the future. After completin g the entire two weeks, plaintiff would then make a recommendation to management regarding which trainees to keep and which

to fire. Plaintiff testified tha t his recommendations were usu ally followed.

Recall that prong two of the definition of “employee employed in a bona fide administrative capacity” requires that plaintiff’s “primary dut y” be “the performance of office or non-manual work directly related to the management or general b usiness operations of the employer or the employer’s customers.” 29 CFR 541.200(a)(2). Plaintiff argues that his work was not directly related to the management or general business operations of defendant’s business. “The phrase ‘directly related to the management or g eneral business operations’ refers to the type of work performed by the employee.” 29 CFR 541.201 (a). In other words, the position must be “directly related to assisting with the runnin g or servicing of the business.” 29 CFR 541.201(a). As a distinguishi ng example, the regulations s tate that “working on a manufacturing productio n line or selling a product in a retail or service establishment” would not fulfill this prong. 29 CFR 541.201(a). “Work directly related to management or general business operations includes, but is not limited to, work in fu nctional areas such as . . . personnel management[.]” 29 CFR 541.201(b).

“Personnel management” is not defined in the FLSA or the CFR. “Terms that are not defined in a statute must be giv en their plain and ordinary mea nings, and it is appropriate to consult a dictionary for definitions.” Anzaldua v Neogen Corp , 292 Mich App 626, 632; 808 NW2d 804 (2011). “Personnel,” as defined in Black’s Law Dictio nary (10th Ed, 2014), means “[c]ollectively, the people who work in a company.” According to Black’s Law Dictionary, “management” means “[t]he people in an organization who are ves ted with a certain amount of discretion and independent judgmen t in managing its affairs,” o r “[t]he act or system of controlling and making decisions for a business, department, et c.” Considering these terms together, someone working in “personnel management” must be “ma king decisions for a . . . department,” regarding “the pe ople who work in a company.”

The facts show that plaintiff was in charge of a training grou p of approximately 25 to 30 people at a time, for which he made decisions on how fast the t raining should proceed, how to answer their individual questions, how best to encourage and mo tivate them, how to discipline them when they made errors, and ultimately who to recommend for hiring and firing. By engaging in this personnel management under 29 CFR 541.201(b), plaintiff’s position was-4- “directly related to assisting with the running or servicing of the business.” 29 CFR 541.201(a). As such, pursuant to 29 CFR 541.201(a), the job was “directly r elated to the management or general business operations.” Cons idering this, the second pro ng of 29 CFR 541.200(a) was properly determined to have been fulfilled.

Next, this Court must consider whether the third prong of the bona fide administrative exemption was fulfilled. This prong requires that plaintiff’s “primary duty includes the exercise of discretion and independent jud gment with respect to matters of significance.” 29 CFR 541.200(a)(3). “In general, the exercise of discretion and ind ependent judgment involves the comparison and the evaluation of possible courses of conduct, a nd acting or making a decision after the various possibilities have been considered.” 29 CFR 541.202(a). “The exercise of discretion and independent judgment implies that the employee h as authority to make an independent choice, free from imme diate direction or supervisio n.” 29 CFR 541.202(c). “[T]he term ‘discretion and independent judgment’ does not require tha t the decisions made by an employee have a finality that goes with unlimited authority and a complete absence of review.” 29 CFR 541.202(c). “The decisions made as a result of the exer cise of discretion and independent judgment may consist of recommendations for action rather than the ac tual taking of action.” 29 CFR 541.202(c).

It is true, as plaintiff notes, that plaintiff’s recommendatio ns on who to hire and fire were not final. Nevertheless, 29 CFR 541.202(c) specifically consid ers such a situation, and states that the lack of finality in a decision does not negate a findi ng of independent judgment. Furthermore, 29 CFR 541.202(c) states that an exercise of discr etion “may consist of recommendations for action,” rather than definitive and unrevie wable actions. It is hard to imagine a more precise description of plaintiff’s job descripti on with regard to the hiring and firing of trainees. Plaintiff is permitted to make “recommenda tions for action,” in that he can recommend who to hire and fire, but the “actual taking of actio n” lies with others. See 29 CFR 541.202(c). Additionally, plaintiff’s supervisor testified tha t plaintiff was permitted to discipline trainees for errors regarding c onduct and attend ance without up per management approval. That action, according to the supervis or, was within plaintiff’s dis cretion. So, not only was plaintiff permitted to make “recommendations for action,” but he also did the “actual taking of action.” 29 CFR 541.202(c).

As such, we must conclude that the trial court properly determ ined that plaintiff was exempt from the FLSA’s overtime requirement. In so concluding, we also determine that plaintiff’s claim was properly summarily disposed of pursuant t o MCR 2.116(C)(10). See 29 USC 213(a)(1); 29 USC 207(a)(1).

Affirmed.

/s/ Deborah A. Servitto

/s/ Kurtis T. Wilder

/s/ Mark T. Boonstra