___________ No. 95-1893

___________ Paul O. Spinden, * * Appellee, * * Appeal from the United States v. * District Court for the * Eastern District of Arkansas. GS Roofing Products Company, * Inc., * * Appellant. *

___________ Submitted: April 8, 1996 Filed: August 22, 1996

___________ Before MAGILL, Circuit Judge, HENLEY, Senior Circuit Judge, and LOKEN , Circuit Judge.

___________ MAGILL, Circuit Judge.

GS Roofin g Products Company, Inc. (GS) appeals the district court's rulin g that GS's former controller, Paul O. Spinden, was not an exemp t admini strative employee under the Fair Labor Standards Act (FLSA), 2 9 U.S.C. §§ 201-216. We reverse.

I.
Spinden worked as the plant controller for the GS plant in Littl e Rock, Arkansas, from January 1985 until September 1993. When Spinden firs t joine d the company, he had an accounting clerk and an accounts payabl e clerk who reported to him. In December 1986, the clerks were terminated as part of a downsizing effort by

### While GS never replaced Spinden's permanent assistants, i t 1 

### did occasionally employ temporary employees who assisted Spi nden in his work. Spinden denies that he directly supervised thes e temporary employees. Spinden's claim for overtime compensation was tried by th e 2 

### district court in a bench trial. Spinden also brought a sui t under the Ag e Discrimination in Employment Act, 29 U.S.C. §§ 621-634 , allegi ng age discrimination by GS. The discrimination suit wa s simultaneouslytried before a jury, which found for GS. Spinde n does not appeal this adverse verdict.
-2- GS, and Sp inden took over their duties. As a result of these additional 1 duties , Spinden consistently worked longer than forty hours each week

. Spinden received only his base salary and bonuses as compensation, however , which at the time of his retirement was $42,792 annually. Spinden brought this lawsuit against GS in August 1993, seeking overtime compensation for hours worked in excess of forty hours per week for the last two years of his employment with GS. 2
In its defense against Spinden's cla im for overtime wages, GS argued that Spinden was exempt from the FLSA's overtime compensation provisions because he was an administrative employee under the definition provided by the FLSA's enabling regulations. Both Spinden and GS submitted evidence which described Spind en's duties at GS. GS relied, in part, on Spinden's own resume, which summarized his work at GS:

* Pr ovided accurate and timely financial reporting , including accounts payable, inventory, cash receipts an d disbursements, journal and bank account reconciliation , production and variance report * Pos ted daily, weekly, and monthly production, includin g downtime and loss time * Maintained personnel records * Prepared hourly payroll * Prepar ed quarterly and annual federal and state ta x reports, including multi-state reports * Managed cash flow * Prepa red annual budgets for plant operation and for al l departments

### -3- * Analyzed standard/actual cost for all production * Responsible for obtaining and maintaining all employe e insurance * Prepared monthly journal entries * Maintained general ledger

Def. Ex. 1, reprinted inAppellant's App. at 34.

GS presented evidence that Spinden regularly created a variety o f reports, including th e Variance Report. The Variance Report measured the Li ttle Rock plant's actual monthly performance against its projecte d month lyperformance; where actual costs exceeded projected costs, a negati ve variance existed. Spinden acknowledged that when he note d negative variances, he "might say something [to the plant manager], becaus e in the course of sett ing up the standard, we may have set the standard up a little bit too low." Trial Tr. at 364.

In addition, GS presented a "Performance Improvement Plan," signe d bySpinden and dated March 2, 1992, which listed "performance criteri a (knowledge, skill, and other personal factors critical to job success)" fo r Spinden's position:
Must be able to determine the best way to program a ll schedules for timely reporting.
Must have accounting skills and knowledge of accountin g principles and practices. Th[o]ro ughknowledge of GS Roofing Products Co. needs an d requ irements to stay abreast of all changes from Corporat e Office. Abilityto analyze, process, interpret and effectivel y communicate cost data.

Def. Ex. 18, reprinted inAppellant's App. at 47 (emphasis added). Th e plan also described several "key job objectives":
Work with Admin Ass't to develo[p] a method to balance

### -4- and audit Distribution T rial Balance Summary Report on monthly basis . . . Design a Cost Reduction Reporting Form that will generate all data needed to accurately report savings . . . Work with Production Superintendent to develop plan an d impl ement[at]ionschedule for computerizing production an d usage reporting on a daily basis . . .

Id.

GS also presented evidence that Spinden had been responsible fo r comput erizing the accounting procedures at the Little Rock plant; tha t Spinde n met with the Little Rock GS plant manager, productio n superintendent, traffic manager, process engineer, and corporate process engin eer for weekly staff meetings, see Trial Tr. at 524 (Spinde n Testimony); that Spinden was, upon his own recom mendation, responsible for accepting service of process as the registered agent for GS in Little Rock , see id. at 463; that Spinden signed documents fr om the city of Little Rock Revenue Collection Division for GS, thereby agreeing that he was an "owner , officer o r manager" of GS, see Appellant's App. at 52; and that Spinde n signed equipment leasing contracts for GS. See id. at 54.
Spinden testified at trial that most of his time was occupied by
[j]ust a bunch of number crunching and basically doing all the ac counting work as far as clerical work that had to be don e gettin g production reports and putting in production and th e time s heets and time cards and just menial, everyda y bookkeeping jobs.

Trial Tr. at 523 (Spinden Testimony). During his cross-examination , Spinden testified regarding his other duties at GS:

Q. Mr. Spinden, in your controller job from 1987 until 1993 , your duties included the following things, correct,

### -5- and I'm going to list them for you: Accountable fo r the timely and accurate reporting of manufacturing costs and variances?
A. Yes. Q. Experience in a manufacturing environment with emphasis on standard costing, variance analysis, and the corollar y disciplines of accounting normally associated with th e maintenance of a general ledger?
A. No. Q. You don't believe that that was one of you r responsibilities? A. Not analysis. I did not have time to do analysis.

. . . Q. All right. Did you give the following answer [during you r deposition on April 26, 1994] to the following question: . . . "Now, No. 2, three to five years' experience in a manufacturing environment with emphasis o n standard cost variance analysis and corollar y disciplines of accounting normally associated with mai ntenance of a general ledger. Would you agre e tha t the plant controller--as plant controller a t GS Roofing, that these were skills that you used as plant controller and skills that you possess?"
"Answer: Yes." Did you give that answer at that time? A. I may have.

Trial Tr. at 452-54. Spinden also agreed that he: reconciled the payroll bank account and audi ted weekly payroll earnings and deductions; prepared journal entries for the recording of accounts payable accruals, liabilitie s associated with the hourly payroll, conception of raw materials and relate d varia nces; scrutinized all production and inventory dates to insur e accuracy, policy compliance, and control; and developed systems/programs which

### It is uncle ar whether the district court referred to Donovan 3 

### v. Burger King Corp. , 675 F.2d 516 (2d Cir. 1982) ( Burger Ki ng II), or Donovan v. Burger King Corp. , 672 F.2d 221 (1st Cir. 1982 ) ( Burger KingI). Both cases involved the same essential fac ts, and arrived at the same legal conclusions. -6- reduced clerical effo rt and improved office productivity. Id. at 457-60.
The district court concluded that Spinden was not an exempt emp loyee, and was therefore entitled to overtime compensation. The court stated:
[Th is case] comes down to the, as everyone agrees, wha t [Spinden's] primary duty was. . . . I think these concepts are a little slippery. So when I first heard about tha t 50 percent rule, a good rule of thumb . . . I figured, well, that wil l give me something I can tie to. Then I hear about the Burger Kin g case [ ] that's 90 percent and they go for managerial o r 3 administrative or whichever . . . . This case is so close that I'm still ma king up my mind as I'm talking in my opinion . . . . But it seems to me that primary duty ha s to have some tie in some way in most cases to amount of time spent on a particul ar duty. Now, if it were 50 percent, I could easil y find in Mr. Spinden's case because I think clearly that mor e than 50 percent of his time was spent in doing thin gs, what I'd cal l mere bookkeeping or things that I would not cal l discretionary or decisio n making or management-type decisions. On the other hand, if we went with the Burger King case on 90 percent, I might be inclined clearly to go the other way.
I do t hink the Burger King case is distinguishabl e because I think somebody that is a manger or supervisor in a fast food place really can be the manager and spendmost of his time doing--cooking hamburgers and dipping french fries an d doing that sort of thing and still have a finger on the pulse of eve rything, still be directing everything and probabl y doe sn't have to do much directing when he's got traine d employee s. I don't think that that is a very close analogy

. I thin k it was Holmes who said, "All similes limp," and so I don't think that's a very close analogy.

### -7- So I get back to, well, how much time u nder all the facts of this case do I think that Mr. Spinden spent doing primarily what I'd call administrative, more managerial, deci sion making, discretion, independent judgment-type things. I kn ow that even though the law is clear that he doesn't have to make the final decisionhimself, that sending information to others who will make the decision doesn't necessarily--can't necessarily mean th at it's an administrative duty because just the pures t boo kkeepers could send numbers into the corporate or to th e plant ma nager and it would be a basis of the final decision

. You could say that he helped or she helped in the decision in that respect. Well, m y overall impression is--and when I say "overal l impression," I mean my o pinion is that Mr. Spinden spent about 80 to 90 percent in nonexempt work. Well, is that enough t o make him nonexempt under all the facts and circumst ances of the case? And I find that i t is. I find him nonexempt, the 80 to 90 per cent. So I'm going to make a specific finding of fac t that i n my opinion that he did about 80 to 90 percent o f nonexempt work and, conversely, the other percentage would be what would normally be exempt work.
I thin k that clearly that Mr. Spinden did more exemp t work t han his testimony in his view he did, but I don't fin d that he did much more. I've got to tie it in some way to how much he did and how important it was. I just don't get th e overall impression that he was much more than a boo kkeeper. He was something more but n ot enough for me to find that that was his primary duty, and so that will be the finding of the Court on that.
Trial Tr. at 1148-51. The district court supple mented this finding during a subsequent telephonic conference with the parties:

I want to make one comment on the findi ng I made that Mr. Spinden was not an administrative person under the exception. I am even more confident of my finding as I have reflected on the tr ial and the evidence. I feel, as I stated earlier, h e pro bablydid do about ten to twenty percent, probably abou t fifteen percent work which would probably be calle d administrative. Just for example, he took over the work of two employ ees who undeniably did nothing other than clerical , bookkeeping type work. So, I think he was basically you r garden variety bookkeeper with a few administrative duties.

### Spinden has moved to dismiss GS's appeal on the ground that 4 

### GS failed to provide a complete record. We deny this motion. GS has countermoved for sanctions against Spinden, for what i t considers a frivolous motion. This motion is also denied. -8- So, b ottomline, when viewed as a whole I do not believ e he was an administrative employee as defined by the statute and the regulations.

Conference of March 9, 1995 Tr. at 5-6.
The district court also found that GS and Spinden had agreed th at his salary was for forty hours per week, and that Sp inden was entitled to oneand-a-half times his normal rate of pay for hours worked over forty. The distri ct court entered a judgment for Spinden for $54,507.28, plu s $5,028.86 in simple interest from September 15, 1993 through March 9, 1995 , plus postjudgment interest at a rate of 6.57 percent until paid, an d awarded Spinden attorney's fees. GS now appeals, arguing that the distric t court erred in (1) concluding that Spinden was a nonexempt employee; (2) finding that there was an agreement between the parties that Spinden' s salarywas for a forty-hour week; and (3) calculating Spinden's overtime wages at one-and-a-half times his base rate of pay. 4

II.

A.

We review the district court's findi ngs of fact for clear error, see Fed. R. Civ. P. 52(a), and its legal conclusions de novo. See Reich v

. Avoca Motel Corp. , 82 F.3d 238, 240 (8th Cir. 1996). "A finding i s 'clearlyerroneous' when although there is evidence to support it, th e reviewing court on th e entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. Unite d States Gypsum Co. , 333

### -9-

U.S. 364, 395 (1948). In an FLSA exemption analysis, "the amount of time devote d to administrative duties, and the significance of those duties , present factual questions." Avoca , 82 F.3d at 240 (quotations an d citati ons omitted). The ultimate question, however, of "whethe r [employees'] particular activities excluded them from the overtime benefit s of the FLSA is a question of law . . . governed by the pertinen t regula tions promulgated by the Wage and Hour Administrator." Icicl e Seafoods, Inc. v. Worthington , 475 U.S. 709, 714 (1986).

B.
Under the FLSA, employees are entitled to additional compensati on for
wor king more than forty hours in a week. See 29 U.S.C. § 207(a). Bon a fide administrative employees, however, are exempt from this provision, an d
are not entitled to additional compensation. See 29 U.S.C. § 213(a)(1). This exemption is "narrowly construed in order to further Congress' goal of providing broad federal employment protection." McDonnell v. City of Omaha, Neb. , 999 F.2d 293, 295 (8th Cir. 1993), cert. denied , 114 S. Ct. 1188 (1994). The burden is on the employer to prove that this exemption app lies by "demonstrat[ing] that their employees fit 'plainly an d unmist akablywithin the exemption's terms and spirit.'" McDonnell , 99 9 F.2d a t 296 (quoting Arnold v. Ben Kanowsky, Inc. , 361 U.S. 388, 39 2 (1960)).

Differen t tests apply to determine if an employee is qualified fo r the administrative exemption, depending on the employee's level o f compensation. Where, as in Spinden's case, an employee earns more tha n $250 per week, the "s hort test" applies. See Shockley v. City of Newport News , 997 F.2d 18, 28 (4th Cir. 1993). Under the short test, an employee qualifies for the administrative exemption if his "primary duty consists of the performance of [office or nonmanual work directly related t o management policies o r general business operations of his employer or his employer's customers],

### -10-

whichincludes work requiring the exercise of discretion and independent judgme nt." 29 C.F.R. § 541.2(e)(2) (incorporating 29 C.F.R. § 541.2(a)(1)).
Regulatio ns at 29 C.F.R. § 541.103, incorporated by 29 C.F.R. § 541.206(b), define "primary duty" for this exemption:

A determination of wheth er an employee has [administration] as his primary duty must be based on all the facts in a particular case. The amount of time spent in the performance of th e [admi nistrative] duties is a useful guide in determinin g whethe r [administration] is the primary duty of an employee

. In t he 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. Thus, an employee who spends over 5 0 percen t of his time in [administration] would hav e [administration] as his primary duty. Time alone, however, is not the sole test, and in situations where the employee doe s not spend over 50 percent of his time in [administrative ] duties, he might nevertheless have [administration] as hi s pri maryduty if the other pertinent factors support such a conclusion. Some of these pertinent factors are the relative importance of the [administrative] duties as compared wit h oth er types of duties, the frequency with which the employe e exe rcises discretionary powers, his relative freedom fro m superv ision, and the relationship between his salary and th e wag es paid other employees for the kind of nonexempt wor k performed by the [administrator].
(emphas is added). Under these regulations, therefore, an "employee' s prima ryduty is that which is of principal importance to the employer , rather than collatera l tasks which may take up more than fifty percent of his or her time." Reich v. Wyoming , 993 F.2d 739, 742 (10th Cir. 1993).
In concluding that Spinden did not have administration as his p rimary dutyas GS's employee, the district court relied entirely on its finding that 80 to 90 percent of Spinden's tasks were ro utine and nondiscretionary in nature. See Trial Tr. at 1148-51; Conference Tr. at 5-6. The district court did not conduct the

### While it ma y be true that "a controller or comptroller would 5 

### ne cessarilyhave a primary duty directly related to managemen t policies or general business operations," Clark v. J.M. Bens on Co. , 789 F.2d 282, 285 (4th Cir. 1986) (paraphrasing district cou rt), we agree t hat "[a] title alone is of little or no assistance i n determining the true importance of an employee to the employer or his ex empt or nonexempt status." 29 C.F.R. § 541.201(b)(1)

. Rat her than using Spinden's controller title as a yardstick, th e proper analysis is "whether his duties, responsibilities, an d salarymeet all the requirements" for the exemption. 29 C.F.R

. § 541.201(b)(2).
-11- analysis set out in 29 C.F.R. § 541.103, which a pplies when the 50 percent "rule of thumb" is inapplicable. While we accept the district court' s finding that only 10 to 20 percent of Spinden's duties involved discretion , we must reject as clearly erroneous its finding that administration was no t Spinden's primary duty.

As th e regulations make clear, the percentage of time an employe e spends o n administrative tasks is but one factor in determining i f administrationis that employee's primary duty. In Murray v. Stuckey's, Inc. , 939 F.2d 614, 618 (8th Cir. 1991), cert. denied , 502 U.S. 107 3 (1992), we held that the fact that an employee spent 65 to 90 percent of his time on nonexempt tasks "is not a controlling factor under th e regula tions" for determining whether the employee was exempt from th e FLSA's overtime provisions. See also Jones v. Tiller , 72 F.3d 138, 1995 WL 712674, *3 (10th Cir. 1995) (unpublished opinion) (employee who spent 90 percent of her time on nonexempt tasks qualified for administrativ e exemption); Burger Ki ng II, 675 F.2d at 521 (analyzing primary duty where 50 percent rule of thumb was inapplicable); Burger KingI, 672 F.2d at 226

- 27 (same).
Applying the proper analysis to the facts of this case, we conclude that Spinden's primary duty as controller of GS's Little Rock plant 5 consisted of the performance of office work directly related to th e management policies or the general business oper ations of GS. Viewing the record as a whole, we must therefore

### It is true that Spinden did complete bookkeeping tasks a s 6 

### part of his overall duties, and that these tasks occupied much of his time after downsizing limited his accounting staff t o occasional temporary employees . We conclude, however, that merely be cause Spinden took on additional clerical tasks does no t necessarily mean that his primary duty became clerical in nature.
-12- conclude that the district court's finding that Spinden "was basically you r garden variety bookkeeper with a few administrative duties," Conference Tr

. at 6, was clearly erroneous. 6

Unlike any bookkeeper, Spinden was a member of the Little Roc k plant's management team, and participated in weekly meetings with senior management personnel. At these meetings, Spinde n and the others discussed issues of importance to GS, including opening a new production line at the Little Rock plant. See Trial Tr. at 379-81 (Spinden Testimony). I n additi on, Spinden's administrative duties included serving as th e regist ered agent for service of process, computerizing the Little Roc k plant's accounting procedures, and signing contracts and tax documents

. Perhaps most significantly, Spinden created Vari ance Reports for GS, which acted as a "score card" for the Little Rock plant. See Trial Tr. at 770 (Testimony of Tom Smi th, Little Rock plant manager). Spinden agrees that the Variance Reports were "vital to pricing and production information." Appellee's Br. at 10. Spinden's role in this area strikes this Court as extremely similar to the example of an exempt st atistician provided by the regulations:

Som e firms employ persons whom they describe a s "statisticians." If all such a person does, in effect, is to tabulate data, he is clearly not exempt. However, if such an employee makes analyses of data and draws conclusio ns which are important to the determination of, or which, in fac t, determine financial, merchandising , or other policy, clearly he is doing work directly related to management policies or genera l business operations

.

### In addition, the specific objectives listed in Spinden' s 7 

### Perfor mance Improvement Plan for Spinden to achieve involved th e de signand development of accounting reports and methods , quintessential administrative tasks. See Appellant's App. at 47. Spinden ear ned $42,792 in 1993, while the plant manager, the 8 

### hig hest paid individual at the Little Rock plant, earned $65,20 8 that year. See Pl. Ex. 36, reprinted in Appellant's App. at 141. We note that, if Spinden were to be paid the more than $27,000 per year in overtime which the district court's judgment provides, he would, as a nonexempt employee, be the highest paid person at the plant. -13- 29 C.F.R. § 205(c)(3) (emphasis added). 7

Th e other elements of the primary duty analysis also support ou r conclusion that Spinden was an administrative employee. Spinden engaged in disc retionary duties at least 10 to 20 percent of the time, which w e hold c onstitutes a frequent exercise of discretionary duties under th e regulatio ns. See, e.g. , Jones , 72 F.3d 138, 1995 WL 712674, at *3 ; Stuckey's , 939 F.2d at 618. In 1993, Spinden was the third highest paid employee of the Littl e Rock plant, earning more than every other employee except for the plant manager and the plant superintendent, and his salary 8 far outpaced that of purely clerical employees who otherwise would hav e
car ried out Spinden's bookkeeping duties. See Appellant's App. at 133

. Spinden acknowledges that employees receiving less compensation than h e
were clea rly exempt. See Trial Tr. at 524-25; Appellant's App. at 133

. It is clear from the record that Spinden was not only the chief financial employee of the Little Rock plant, but that he was essentially a one-man department, receiving only occasional assistance. As such, Spinden was no t directly supervised by any financial officer at the Little Rock plant, but rather received direction only from the plant manager at the Little Rock plant and the corporate office. See Appellee's App. at 63 (organizational chart of Little Rock plant); Trial Tr. at 456 (S pinden's testimony that he received direction from corporate office).

### -14- C.
Spinde n has also met the second prong of the short test: as th e district court found, he spent 10 to 20 percent of his time "doin g primarily what I'd ca ll administrative, more managerial, decision making, dis cretion, independent judgment-type things." Trial Tr. at 1150. Th e term"discretion and independent judgment" is defined in the regulations at 29 C.F.R. § 541.207:

(a) In general, the exercise of discretion and independen t judgment involves the comparison and the evaluationof possible courses of conduct and acting or making a decision after th e various possibilities have been considered. The term . .

. implies that the person has the authority or power to make an independent choice, free from immediate direction o r supervision and with res pect to matters of significance. . . . [(e)(1)] The term "discretion and independent judgment" . . . doe s not necessarily imply that the decisions made by th e employee must have a finality that goes with unlimite d authority and a complete absence of review. The de cisions made as a result of the exercise of discretion and independen t judgment may consist of recommendations for action rather than the actual taking of action. . . .

See also Dymond v. United States Postal Serv. , 670 F.2d 93, 96 (1982 ) ("Even though an employee's work is subject to approval, even to the exten t that a de cision may be reversed by higher level management, it does no t follow th at the work did not require the exercise of discretion an d indepe ndent judgment as the terms are defined for the administrativ e employe e exemption."). In addition to his analytical duties, such a s making suggestions to senior management about negative variances in th e Variance Report, see Trial Tr. at 364, Spinden made recommendations about the need for additional personnel, see id. at 380, and about terminating personnel. See id. at 378. We agree that Spind en spent at least 10 to 20 percen t of his time engaged in discretionary duties, which adequatel y fulfills this element of the short test. See, e.g. , Dymond , 670 F.2d at 95 (under short test, employees "qualify for

### -15-

the ad ministrative employee exemption if they meet the more libera l standard requiring that their duties merely 'include' work requiring the exercise of discretion and independent judgment").

In light of the entire record in this case, and with "due regar d . . . to the opportunity of the trial court to j udge of the credibility of the witnesses," Fed. R. Civ. P. 52(a), we reverse the district court for clear error, and hold that GS has met its burden of proving that Spinden fits "plainly and unmistakably within the [administrative] exemption' s terms and spirit." McDonnell , 999 F.2d at 296 (quotations and citatio n omitted).

III.

Because we hold that Spinden was an exempt administrative employe e under the FLSA, he is not entitled to overtime compensation. Because we
reverse o n this ground, we need not reach GS's other arguments

. Accord ingly, we reverse the district court's judgment and award o f attorney's fees.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.