___________

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 Roofing Products Company, Inc. (GS) appeals the district court's

ruling that GS's former controller, Paul O. Spinden, was not an exempt

administrative employee under the Fair Labor Standards Act (FLSA), 29

U.S.C. §§ 201-216. We reverse.

I.

Spinden worked as the plant controller for the GS plant in Little

Rock, Arkansas, from January 1985 until September 1993. When Spinden first

joined the company, he had an accounting clerk and an accounts payable

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, it

1

did occasionally employ temporary employees who assisted Spinden in

his work. Spinden denies that he directly supervised these

temporary employees.

 Spinden's claim for overtime compensation was tried by the

2

district court in a bench trial. Spinden also brought a suit under

the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-634,

alleging age discrimination by GS. The discrimination suit was

simultaneously tried before a jury, which found for GS. Spinden

does not appeal this adverse verdict.

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GS, and Spinden 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 claim 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 Spinden's duties at GS. GS relied, in part, on Spinden's

own resume, which summarized his work at GS:

* Provided accurate and timely financial reporting,

including accounts payable, inventory, cash receipts and

disbursements, journal and bank account reconciliation,

production and variance report

* Posted daily, weekly, and monthly production, including

downtime and loss time

* Maintained personnel records

* Prepared hourly payroll

* Prepared quarterly and annual federal and state tax

reports, including multi-state reports

* Managed cash flow

* Prepared annual budgets for plant operation and for all

departments
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* Analyzed standard/actual cost for all production

* Responsible for obtaining and maintaining all employee

insurance

* Prepared monthly journal entries

* Maintained general ledger

Def. Ex. 1, reprinted in Appellant's App. at 34.

GS presented evidence that Spinden regularly created a variety of

reports, including the Variance Report. The Variance Report measured the

Little Rock plant's actual monthly performance against its projected

monthly performance; where actual costs exceeded projected costs, a

negative variance existed. Spinden acknowledged that when he noted

negative variances, he "might say something [to the plant manager], because

in the course of setting 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," signed

by Spinden and dated March 2, 1992, which listed "performance criteria

(knowledge, skill, and other personal factors critical to job success)" for

Spinden's position:

Must be able to determine the best way to program all schedules

for timely reporting.

Must have accounting skills and knowledge of accounting

principles and practices.

Th[o]rough knowledge of GS Roofing Products Co. needs and

requirements to stay abreast of all changes from Corporate

Office.

Ability to analyze, process, interpret and effectively

communicate cost data.

Def. Ex. 18, reprinted in Appellant's App. at 47 (emphasis added). The

plan also described several "key job objectives":

Work with Admin Ass't to develo[p] a method to balance
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and audit Distribution Trial 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 and

implement[at]ion schedule for computerizing production and

usage reporting on a daily basis . . .

Id.

GS also presented evidence that Spinden had been responsible for

computerizing the accounting procedures at the Little Rock plant; that

Spinden met with the Little Rock GS plant manager, production

superintendent, traffic manager, process engineer, and corporate process

engineer for weekly staff meetings, see Trial Tr. at 524 (Spinden

Testimony); that Spinden was, upon his own recommendation, responsible for

accepting service of process as the registered agent for GS in Little Rock,

see id. at 463; that Spinden signed documents from the city of Little Rock

Revenue Collection Division for GS, thereby agreeing that he was an "owner,

officer or manager" of GS, see Appellant's App. at 52; and that Spinden

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

accounting work as far as clerical work that had to be done

getting production reports and putting in production and the

time sheets and time cards and just menial, everyday

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,
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and I'm going to list them for you: Accountable for 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 corollary

disciplines of accounting normally associated with the

maintenance of a general ledger?

A. No.

Q. You don't believe that that was one of your

responsibilities?

A. Not analysis. I did not have time to do analysis.

. . . 

Q. All right. Did you give the following answer [during your

deposition on April 26, 1994] to the following question:

. . . "Now, No. 2, three to five years' experience

in a manufacturing environment with emphasis on

standard cost variance analysis and corollary

disciplines of accounting normally associated with

maintenance of a general ledger. Would you agree

that the plant controller--as plant controller at

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 audited weekly payroll earnings and deductions; prepared

journal entries for the recording of accounts payable accruals, liabilities

associated with the hourly payroll, conception of raw materials and related

variances; scrutinized all production and inventory dates to insure

accuracy, policy compliance, and control; and developed systems/programs

which
 It is unclear whether the district court referred to Donovan 3

v. Burger King Corp., 675 F.2d 516 (2d Cir. 1982) (Burger King II),

or Donovan v. Burger King Corp., 672 F.2d 221 (1st Cir. 1982)

(Burger King I). Both cases involved the same essential facts, and

arrived at the same legal conclusions.

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reduced clerical effort and improved office productivity. Id. at 457-60.

The district court concluded that Spinden was not an exempt employee,

and was therefore entitled to overtime compensation. The court stated:

[This case] comes down to the, as everyone agrees, what

[Spinden's] primary duty was. . . . I think these concepts are

a little slippery. So when I first heard about that 50 percent

rule, a good rule of thumb . . . I figured, well, that will

give me something I can tie to. Then I hear about the Burger

King case [ ] that's 90 percent and they go for managerial or

3

administrative or whichever . . . .

This case is so close that I'm still making up my mind as

I'm talking in my opinion . . . .

But it seems to me that primary duty has to have some tie

in some way in most cases to amount of time spent on a

particular duty. Now, if it were 50 percent, I could easily

find in Mr. Spinden's case because I think clearly that more

than 50 percent of his time was spent in doing things, what I'd

call mere bookkeeping or things that I would not call

discretionary or decision 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 think the Burger King case is distinguishable

because I think somebody that is a manger or supervisor in a

fast food place really can be the manager and spend most of his

time doing--cooking hamburgers and dipping french fries and

doing that sort of thing and still have a finger on the pulse

of everything, still be directing everything and probably

doesn't have to do much directing when he's got trained

employees. I don't think that that is a very close analogy.

I think it was Holmes who said, "All similes limp," and so I

don't think that's a very close analogy.
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So I get back to, well, how much time under all the facts

of this case do I think that Mr. Spinden spent doing primarily

what I'd call administrative, more managerial, decision making,

discretion, independent judgment-type things. I know that even

though the law is clear that he doesn't have to make the final

decision himself, that sending information to others who will

make the decision doesn't necessarily--can't necessarily mean

that it's an administrative duty because just the purest

bookkeepers could send numbers into the corporate or to the

plant manager 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, my overall impression is--and when I say "overall

impression," I mean my opinion is that Mr. Spinden spent about

80 to 90 percent in nonexempt work. Well, is that enough to

make him nonexempt under all the facts and circumstances of the

case? And I find that it is. I find him nonexempt, the 80 to

90 percent. So I'm going to make a specific finding of fact

that in my opinion that he did about 80 to 90 percent of

nonexempt work and, conversely, the other percentage would be

what would normally be exempt work.

I think that clearly that Mr. Spinden did more exempt

work than his testimony in his view he did, but I don't find

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 the

overall impression that he was much more than a bookkeeper. He

was something more but not 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 supplemented this finding during

a subsequent telephonic conference with the parties:

I want to make one comment on the finding 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 trial and the evidence. I feel, as I stated earlier, he

probably did do about ten to twenty percent, probably about

fifteen percent work which would probably be called

administrative. Just for example, he took over the work of two

employees who undeniably did nothing other than clerical,

bookkeeping type work. So, I think he was basically your

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 it

considers a frivolous motion. This motion is also denied.

-8-

So, bottomline, when viewed as a whole I do not believe

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 that his

salary was for forty hours per week, and that Spinden was entitled to oneand-a-half times his normal rate of pay for hours worked over forty. The

district court entered a judgment for Spinden for $54,507.28, plus

$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, and

awarded Spinden attorney's fees. GS now appeals, arguing that the district

court erred in (1) concluding that Spinden was a nonexempt employee; (2)

finding that there was an agreement between the parties that Spinden's

salary was 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 findings 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 is

'clearly erroneous' when although there is evidence to support it, the

reviewing court on the entire evidence is left with the definite and firm

conviction that a mistake has been committed." United States v. United

States Gypsum Co., 333
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U.S. 364, 395 (1948). In an FLSA exemption analysis, "the amount of time

devoted to administrative duties, and the significance of those duties,

present factual questions." Avoca, 82 F.3d at 240 (quotations and

citations omitted). The ultimate question, however, of "whether

[employees'] particular activities excluded them from the overtime benefits

of the FLSA is a question of law . . . governed by the pertinent

regulations promulgated by the Wage and Hour Administrator." Icicle

Seafoods, Inc. v. Worthington, 475 U.S. 709, 714 (1986).

B.

Under the FLSA, employees are entitled to additional compensation for

working more than forty hours in a week. See 29 U.S.C. § 207(a). Bona

fide administrative employees, however, are exempt from this provision, and

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

applies by "demonstrat[ing] that their employees fit 'plainly and

unmistakably within the exemption's terms and spirit.'" McDonnell, 999

F.2d at 296 (quoting Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392

(1960)).

Different tests apply to determine if an employee is qualified for

the administrative exemption, depending on the employee's level of

compensation. Where, as in Spinden's case, an employee earns more than

$250 per week, the "short 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 to

management policies or general business operations of his employer or his

employer's customers],
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which includes work requiring the exercise of discretion and independent

judgment." 29 C.F.R. § 541.2(e)(2) (incorporating 29 C.F.R. §

541.2(a)(1)).

Regulations 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 whether 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 the

[administrative] duties is a useful guide in determining

whether [administration] is the primary duty of an employee.

In 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. Thus, an employee who spends over 50

percent of his time in [administration] would have

[administration] as his primary duty. Time alone, however, is

not the sole test, and in situations where the employee does

not spend over 50 percent of his time in [administrative]

duties, he might nevertheless have [administration] as his

primary duty if the other pertinent factors support such a

conclusion. Some of these pertinent factors are the relative

importance of the [administrative] 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 [administrator].

(emphasis added). Under these regulations, therefore, an "employee's

primary duty is that which is of principal importance to the employer,

rather than collateral 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 primary

duty as GS's employee, the district court relied entirely on its finding

that 80 to 90 percent of Spinden's tasks were routine and nondiscretionary

in nature. See Trial Tr. at 1148-51; Conference Tr. at 5-6. The district

court did not conduct the
 While it may be true that "a controller or comptroller would 5

necessarily have a primary duty directly related to management

policies or general business operations," Clark v. J.M. Benson Co.,

789 F.2d 282, 285 (4th Cir. 1986) (paraphrasing district court), we

agree that "[a] title alone is of little or no assistance in

determining the true importance of an employee to the employer or

his exempt or nonexempt status." 29 C.F.R. § 541.201(b)(1).

Rather than using Spinden's controller title as a yardstick, the

proper analysis is "whether his duties, responsibilities, and

salary meet all the requirements" for the exemption. 29 C.F.R.

§ 541.201(b)(2).

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analysis set out in 29 C.F.R. § 541.103, which applies 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 not

Spinden's primary duty. 

As the regulations make clear, the percentage of time an employee

spends on administrative tasks is but one factor in determining if

administration is that employee's primary duty. In Murray v. Stuckey's,

Inc., 939 F.2d 614, 618 (8th Cir. 1991), cert. denied, 502 U.S. 1073

(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 the

regulations" for determining whether the employee was exempt from the

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 administrative

exemption); Burger King II, 675 F.2d at 521 (analyzing primary duty where

50 percent rule of thumb was inapplicable); Burger King I, 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 plant5

consisted of the performance of office work directly related to the

management policies or the general business operations of GS. Viewing the

record as a whole, we must therefore
 It is true that Spinden did complete bookkeeping tasks as

6

part of his overall duties, and that these tasks occupied much of

his time after downsizing limited his accounting staff to

occasional temporary employees. We conclude, however, that merely

because Spinden took on additional clerical tasks does not

necessarily mean that his primary duty became clerical in nature.

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conclude that the district court's finding that Spinden "was basically your

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 Rock

plant's management team, and participated in weekly meetings with senior

management personnel. At these meetings, Spinden 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). In

addition, Spinden's administrative duties included serving as the

registered agent for service of process, computerizing the Little Rock

plant's accounting procedures, and signing contracts and tax documents.

Perhaps most significantly, Spinden created Variance Reports for GS, which

acted as a "score card" for the Little Rock plant. See Trial Tr. at 770

(Testimony of Tom Smith, 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 statistician provided by the

regulations:

Some firms employ persons whom they describe as

"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 conclusions which are

important to the determination of, or which, in fact, determine

financial, merchandising, or other policy, clearly he is doing

work directly related to management policies or general

business operations. 
 In addition, the specific objectives listed in Spinden's

7

Performance Improvement Plan for Spinden to achieve involved the

design and development of accounting reports and methods,

quintessential administrative tasks. See Appellant's App. at 47.

 Spinden earned $42,792 in 1993, while the plant manager, the 8

highest paid individual at the Little Rock plant, earned $65,208

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.

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29 C.F.R. § 205(c)(3) (emphasis added).7

The other elements of the primary duty analysis also support our

conclusion that Spinden was an administrative employee. Spinden engaged

in discretionary duties at least 10 to 20 percent of the time, which we

hold constitutes a frequent exercise of discretionary duties under the

regulations. 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 Little 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 have

carried out Spinden's bookkeeping duties. See Appellant's App. at 133.

Spinden acknowledges that employees receiving less compensation than he

were clearly 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 not

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 (Spinden's testimony that he

received direction from corporate office).
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C.

 Spinden has also met the second prong of the short test: as the

district court found, he spent 10 to 20 percent of his time "doing

primarily what I'd call administrative, more managerial, decision making,

discretion, independent judgment-type things." Trial Tr. at 1150. The

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 independent

judgment involves the comparison and the evaluation of possible

courses of conduct and acting or making a decision after the

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 or

supervision and with respect to matters of significance. . . .

[(e)(1)] The term "discretion and independent judgment" . . .

does not necessarily imply that the decisions made by the

employee must have a finality that goes with unlimited

authority and a complete absence of review. The decisions made

as a result of the exercise of discretion and independent

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 extent

that a decision may be reversed by higher level management, it does not

follow that the work did not require the exercise of discretion and

independent judgment as the terms are defined for the administrative

employee exemption."). In addition to his analytical duties, such as

making suggestions to senior management about negative variances in the

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 Spinden spent at least 10 to 20

percent of his time engaged in discretionary duties, which adequately

fulfills this element of the short test. See, e.g., Dymond, 670 F.2d at

95 (under short test, employees "qualify for
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the administrative employee exemption if they meet the more liberal

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 regard

. . . to the opportunity of the trial court to judge 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 citation

omitted).

III.

Because we hold that Spinden was an exempt administrative employee

under the FLSA, he is not entitled to overtime compensation. Because we

reverse on this ground, we need not reach GS's other arguments.

Accordingly, we reverse the district court's judgment and award of

attorney's fees. 

A true copy.

Attest:

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