IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 18-20687

MONIQUE FRASER; CASSANDRA MALVO; MAHLON SMITH; 

CHRISTIAN FOSTER; VERONICA TAYLOR; LAKISHER MILES; 

ANTOINETTE JOHNSON; KIMBERLEY DESPANIA; MICHAEL DUNKIN; 

SEAN ANDERSON; SEAN DAVIDSON, 

 Plaintiffs – Appellees,

v.

PATRICK O’CONNOR & ASSOCIATES, L.P., DOING BUSINESS AS 

O’CONNOR & ASSOCIATES; O’CONNOR MANAGEMENT, L.L.C.; 

PATRICK O’CONNOR; KATHLEEN O’CONNOR, 

 Defendants – Appellants.

Appeal from the United States District Court

for the Southern District of Texas

Before ELROD, SOUTHWICK, and HAYNES, Circuit Judges.

JENNIFER WALKER ELROD, Circuit Judge:

O’Connor & Associates appeals from the district court’s determination 

that its property-tax-consultant employees are not administratively exempt 

from the FLSA’s overtime requirements and that the “fluctuating workweek” 

method of calculating overtime does not apply. We affirm.

I.

O’Connor is a Houston-based real estate firm specializing in property tax 

consulting, appraisal, and market research. To help provide its valuation and 

United States Court of Appeals

Fifth Circuit

FILED

April 3, 2020

Lyle W. Cayce

Clerk

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No. 18-20687

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tax-reduction services to homeowners, O’Connor uses a proprietary algorithm 

capable of compiling and analyzing numerous data points to generate a range 

of potential tax values. Property-tax consultants, like the plaintiffs in this 

action, then review these files and use the generated numbers to negotiate for 

reduced tax assessments on behalf of O’Connor’s clients. The consultants do

not create the files themselves nor do they perform any independent research.

All the information they need is contained within those files. Indeed, the 

consultants rarely, if ever, meet with the clients personally, and they never 

offer advice or counseling. 

In addition to reviewing client files, consultants also attend two types of 

protest hearings: informal and formal. During informal hearings, the 

consultant negotiates with a district appraiser to try to reduce a home’s 

assessed value. The hearing begins with the consultant giving an opinion as to 

the property’s value. According to the plaintiffs, O’Connor requires its 

consultants to automatically use the lowest value contained in the file (as 

generated by O’Connor’s proprietary algorithm) for the initial opening opinion.

After providing the opinion, O’Connor expects consultants to then rely on file 

materials to support a value reduction. Informal hearings sometimes end with 

a value agreement. When they do not, a formal hearing follows. 

At formal hearings, instead of negotiating with a district appraiser, the 

property-tax consultant attempts to convince an appraisal review board 

composed of three homeowners to reduce a property’s assessed value. As with 

the informal hearing, the consultant begins by giving the opinion value listed 

in the file, even if the consultant thinks the figure unreasonable. The district 

then provides its proposed value. The consultant can subsequently offer a short 

rebuttal. At the end of the proceedings, the board assigns a value. 

O’Connor’s internal procedures prohibit consultants from making value 

agreements during these formal hearings, even if the board concurs with the 

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consultant’s proposed value. For example, one of O’Connor’s guidelines 

provides that “[i]f an . . . appraiser agrees to an agent’s value at the formal 

hearing[,] [t]he agent must clearly state, ‘[I] do not have the property owner’s 

authority to enter into an agreement/or authority to agree with the district to 

a specific figure.’” In fact, a consultant’s inability to reach a value agreement 

sometimes prompts the board to increase a home’s assessed value. Consultants 

who violated the rule could be fired or fined via payroll deduction. 

Most of the property-tax consultants are seasonal employees, hired to 

work only during the “peak” tax season—May through September. During the 

peak season, each consultant is assigned sixty-five files per day. An average 

file contains 50–100 pages, so a day’s docket requires review of 3,000 to 6,500 

pages. During nights and weekends, consultants “prep” files, meaning they 

“take out the right documents” and “choose the right evidence.” During the day, 

consultants conduct hearings and negotiations in front of appraisal boards, 

beginning at 7:30am and generally lasting until 5:00pm. Given this schedule, 

consultants worked as much as sixty to ninety hours a week, although at the 

times they were hired, the plaintiffs purportedly knew that they were expected 

to work more than forty hours a week. O’Connor admits that no employee 

received overtime pay. 

The plaintiffs thus filed this lawsuit seeking unpaid overtime wages 

under the Fair Labor Standards Act (FLSA). A four-day bench trial was held 

in 2018 before Magistrate Judge Frances Stacy. The court entered a final 

judgment for $286,671 in favor of the plaintiffs. O’Connor appeals.

II.

This court reviews the district court’s factual findings for clear error and 

its legal conclusions de novo. Ivy v. Jones, 192 F.3d 514, 516 (5th Cir. 1999). A 

factual finding is clearly erroneous only if, “based upon the entire record, we 

are ‘left with the definite and firm conviction that a mistake has been 

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committed.’” S. Travel Club, Inc. v. Carnival Air Lines, Inc., 986 F.2d 125, 128 

(5th Cir. 1993) (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 573 

(1985)). Thus, when the district court’s account of the evidence is plausible, 

reversal is improper, even if the reviewing court “would have weighed the 

evidence differently.” Id. at 128–29 (quoting Anderson, 470 U.S. at 573–74).

Giving greater weight to certain testimony “can virtually never be clear error” 

because “only the trial judge can be aware of the variations in demeanor and 

tone of voice that bear so heavily on the listener’s understanding of and belief 

in what is said.” Anderson, 470 U.S. at 575; see also Fed. R. Civ. P. 52(a)(6).

III.

O’Connor argues that it did not need to pay overtime to its property-tax 

consultants because they were exempt. We disagree. 

A.

The FLSA requires employers to pay overtime compensation to

employees who work more than 40 hours a week. 29 U.S.C. § 207(a)(1). Exempt 

from the FLSA, however, are individuals “employed in a bona fide executive, 

administrative, or professional capacity.” Id. § 213(a)(1). “[T]he ultimate 

decision whether [an] employee is exempt from the FLSA’s overtime 

compensation provisions is a question of law.” Lott v. Howard Wilson ChryslerPlymouth, Inc., 203 F.3d 326, 331 (5th Cir. 2000). With respect to the 

underlying facts, the employer has the burden of establishing that an 

exemption applies by a preponderance of the evidence. Meza v. Intelligent 

Mexican Mktg., Inc., 720 F.3d 577, 581 (5th Cir. 2013). “Under the Supreme 

Court’s decision in Encino Motorcars, we must give FLSA exemptions a ‘fair 

reading’ rather than narrowly construing them against the employer.” Faludi 

v. U.S. Shale Sols., L.L.C., 950 F.3d 269, 273 (5th Cir. 2020) (quoting Encino 

Motorcars, LLC v. Navarro, 138 S. Ct. 1134, 1142 (2018)).

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Relevant here is the FLSA’s administrative exemption. For it to apply, 

three requirements must be satisfied: (1) the employee must be “[c]ompensated 

on a salary or fee basis at a rate of not less than $455 per week;” (2) the 

employee’s primary duty must be “work directly related to the management or 

general business operations of the employer or the employer’s customers;” and 

(3) the employee must “exercise . . . discretion and independent judgment with 

respect to matters of significance.” Dewan v. M-I, L.L.C., 858 F.3d 331, 334 (5th 

Cir. 2017) (quoting 29 C.F.R. § 541.200(a)). 

B.

We address the second requirement first because it is dispositive. To 

satisfy this requirement, an employee’s work must directly relate to assisting

with the running of the company, as opposed to simply doing work related to 

the production of the business’s products or services. Id. This court has 

described the distinction between these two types of work as: “between those 

employees whose primary duty is administering the business affairs of the 

enterprise from those whose primary duty is producing the commodity or 

commodities, whether goods or services, that the enterprise exists to produce 

and market.” Dalheim v. KDFW-TV, 918 F.2d 1220, 1230 (5th Cir. 1990).

The district court concluded, based on the testimony heard and on 

Department of Labor guidance, that the plaintiffs’ “duties were ‘production’ in 

nature,” such that O’Connor did not meet its burden of proving that its 

employees’ duties related to the management or general business operations of 

the company. Fraser v. Patrick O’Connor & Assocs., L.P., No. H-11-3890, 2018 

WL 8732101, at *4 (S.D. Tex. Sep. 17, 2018). We agree with the district court.

On appeal, O’Connor, although initially conceding that its property-tax 

consultants were not generally involved in the management of the business 

itself and that the consultants were the ones responsible for actually providing 

the tax-reduction services sold by O’Connor, argues that it nonetheless meets

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this requirement because the consultants “played an important role in 

assisting [O’Connor] in ‘managing the clients.’” They ostensibly did so through 

their representation of clients at hearings, negotiating for lower tax values on 

the clients’ behalf. In addition, O’Connor touted the consultants’ fiduciary duty 

to their clients as evidence that their work was related to the management of 

the company. 

That is not enough. No consultant helped run or service any business, no 

consultant was ever a supervisor or manager, and no consultant formulated 

management policies, provided tax advice, prepared tax returns, or helped 

with regulatory or legal compliance. O’Connor is in the business of tax 

reduction; property-tax consultants provided that service to the company’s 

clients. See Dalheim, 918 F.2d at 1230. Indeed, O’Connor admitted that the 

consultants did not manage the business and that their duties in producing tax 

savings “fell squarely on the production side of the equation.” 

O’Connor further argues that property-tax consultants are “tax or 

financial consultants” as that term is used in the regulation. Section 541.201(c) 

provides, for example, that “employees acting as advisers or consultants to 

their employer’s clients or customers (as tax experts or financial consultants, 

for example) may be exempt.” O’Connor believes that a property-tax consultant 

is the same as a tax or financial consultant and should thus satisfy the 

exemption. That is so, the company urges, because a consultant represents 

clients before appraisal boards and negotiates property values using their own 

special expertise. 

We reject O’Connor’s argument. The plaintiffs were not tax advisers 

because they lacked a property tax license enabling them to give tax advice.

They were also not financial consultants because they did not help customers 

choose among an array of complex financial products. In fact, the consultants 

never “consulted” with the clients at all. O’Connor’s reliance upon the 

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plaintiffs’ job title—property-tax consultants—is also irrelevant. The focus, 

rather, is on the duties performed by the employees, not on the titles they hold.

See 29 C.F.R. § 541.200(a)(2) (“Whose primary duty is the performance of . . . .”) 

(emphasis added).1 

Finally, O’Connor challenges the district court’s “reliance” on 

Department of Labor guidance, arguing that it is (1) erroneous and (2) not 

entitled to deference. We do not think it erroneous. The relied-upon guidance, 

Administrator’s Interpretation 2010-1, explains that mortgage loan officers are 

typically non-exempt production employees because their work involves “the 

day-to-day carrying out of the employer’s business” and thus falls “squarely on 

the production side.” U.S. Dep’t of Labor, Wage & Hour Div., Administrator’s 

Interpretation 2010-1 (Mar. 24, 2010). In other words, mortgage loan officers 

sell home loans—i.e., the production work of a bank. Similarly, property-tax 

consultants provide the tax-reduction services that O’Connor offers its 

clients—i.e., the production work of O’Connor. Neither type of work involves 

the running or servicing of the employer’s business.

Moreover, the Interpretation clarified that “work for an employer’s 

customers does not qualify for the administrative exemption where the 

customers are individuals seeking advice for their personal needs, such as 

1 O’Connor attempts to bolster its argument by citing to various cases. None of them 

provide support. See, e.g., Hogan v. Allstate Ins. Co., 361 F.3d 621, 628 (11th Cir. 2004) 

(insurance agents responsible for “selecting, maintaining, and supervising their own offices”); 

Spangler v. Mourik, L.P., No. H-16-0349, 2017 WL 3412117, at *2 (S.D. Tex. Aug. 8, 2017) 

(project supervisor whose duties included managing teams of employees and evaluating 

subordinates); Hein v. PNC Fin. Servs. Grp., Inc., 511 F. Supp. 2d 563, 575 (E.D. Pa. 2007) 

(securities broker managing over 200 client accounts worth roughly $25 million and advising 

clients on various financial products). The main case O’Connor relies upon, Zannikos v. Oil 

Inspections (U.S.A.), Inc., 605 F. App’x 349 (5th Cir. 2015), is also unpersuasive. In our 

opinion in that case, we specifically said that the plaintiffs’ work included supervision, quality 

control, and ensuring compliance with applicable safety, legal, and regulatory standards. Id. 

at 353. The property-tax consultants in the instant case have not been shown to have an 

analogous level of managerial responsibility.

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people seeking mortgages for their homes.” Id.; cf. 29 C.F.R. § 541.200(a)(2) 

(providing that the administrative exemption can also apply if the employee’s 

primary duty is directly related to the management or general business 

operations of the employer’s customers). That is forceful evidence that the 

plaintiffs here are not exempt, because the work they are providing to 

O’Connor’s customers—the reduction of taxes for individual homeowners—also 

involves a purely personal need.2

O’Connor’s deference point is likewise unavailing. For one, it is unclear 

that the district court even deferred to the agency’s guidance in reaching its 

conclusion. See Fraser, 2018 WL 8732101, at *3 (stating that it found the 

guidance “helpful and informative”). For another, the Supreme Court has held 

that “interpretations and opinions of the Administrator under this Act, while 

not controlling upon the courts by reason of their authority, do constitute a 

body of experience and informed judgment to which courts and litigants may 

properly resort for guidance.” Skidmore v. Swift, 323 U.S. 134, 140 (1944) 

(considering the question of how much weight should be given to a Department 

of Labor interpretation addressing what qualifies as “work time” under the 

FLSA). 

It is ultimately immaterial, though, whether the district court did or did 

not defer. Even if we disregarded the agency’s guidance altogether, we would 

still have no trouble concluding that the plaintiffs failed to satisfy this 

2 O’Connor argues further that Administrative Interpretation 2010-1 cannot apply 

because it does not address property-tax consultants or “tax and financial consulting” 

specifically. But certainly one can make analogies from the guidance provided by the 

agency—after all, the agency issues these interpretations “[i]n order to provide meaningful 

and comprehensive guidance and compliance assistance to the broadest number of employers 

and employees” and in a manner that “set forth a general interpretation of the law and 

regulations, applicable across-the-board to all those affected by the provision at issue.” U.S. 

Dep’t of Labor, Wage & Hour Div., Final Rulings and Opinion Letters (last accessed Mar. 5, 

2020), https://www.dol.gov/agencies/whd/opinion-letters/request/existing-guidance.

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requirement. O’Connor pointed to no job responsibility carried out by a 

property-tax consultant that related in any way to the management or general 

business operations of the company or its customers. The consultants merely 

provided the day-to-day service that O’Connor sold to its clients—the reduction 

of property taxes. We agree with the district court that O’Connor failed to meet 

its burden on this requirement; we therefore need not address the other two.

IV.

Because we hold that the plaintiffs are not exempt under the FLSA, we 

next address O’Connor’s argument that the district court erred in concluding 

that the fluctuating-workweek method of calculating overtime does not apply 

in this case. 

Under the fluctuating-workweek method, employees who are entitled to 

overtime pay receive a fixed weekly salary, which is then divided by the actual 

number of hours an employee worked in the week to determine the week’s base 

hourly rate. Dacar v. Saybolt, L.P., 914 F.3d 917, 921–22 (5th Cir. 2018). The 

employee then receives an additional 0.5 times his base rate for each hour 

worked beyond forty. Id. at 922. This is an alternative to the FLSA’s regular 

method of calculating overtime pay, under which employees are paid an hourly 

rate and receive 1.5 times that rate for overtime hours. 29 U.S.C. § 207(a)(1).

To use the fluctuating-workweek method, employees’ hours must change 

on a week-to-week basis, and employees must receive the fixed salary even 

when they work less than their regularly scheduled hours. Black v. SettlePou, 

P.C., 732 F.3d 492, 498 (5th Cir. 2013) (“The FWW [fluctuating workweek] 

method . . . is appropriate when the employer and the employee have agreed 

that the employee will be paid a fixed weekly wage to work fluctuating hours.”).

In addition, for this method to apply, there must be a clear mutual 

understanding between the business and employees about how workers are 

paid. Id. at 499 (“The parties’ initial understanding of the employment 

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arrangement as well as the parties’ conduct during the period of employment 

must both be taken into account . . . .”). Whether the employer and employee 

“agree[d] to a fixed weekly wage for fluctuating hours is a question of fact.” Id. 

at 498. 

The district court held that the fluctuating-workweek method did not 

apply in this case because the “preponderance of the evidence supports the 

conclusion that there was no mutual agreement between Plaintiffs and 

Defendants that Plaintiffs would be paid a fixed weekly salary regardless of 

the number of hours worked.” Fraser, 2018 WL 8732101, at *5. Specifically, the 

court found that O’Connor’s policies did not clearly indicate whether the 

plaintiffs’ salaries or commissions could be docked or reduced, and the 

plaintiffs were provided no guidance on how to complain about their 

compensation. Id. at *2. Because this is a question of fact and because we see 

no clear error in the district court’s findings, we uphold its decision. 

* * *

For the foregoing reasons, we AFFIRM. 

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