17-1219 Sydney v. Time Warner Entm’t-Advance/Newhouse P’ship

UNITED STATES COURT OF APPEALS

FOR THE SECO ND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A

SUMMARY ORDER FILED ON OR AF TER JANUARY 1, 2007, IS PERM ITTED AND IS GOVERNED BY

FEDERAL RULE OF APPELLATE PROC EDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE

EITHER THE FEDERAL APPEND IX OR AN ELECTRONIC DATAB ASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON

ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United St ates Courthouse, at 40 Foley Square, in the City of New York, on the 4 th day of October, two thousand eighteen.

PRESENT: G ERARD E. L YNCH

, C HRISTOPHER F. D RONEY

, Circuit Judges

, W ILLIAM K. S ESSIONS III, District Judge

. *

________________________________________________

J EFFREY S YDNEY AND S TEPHEN C APOUSIS

, ON

BEHALF OF THEMSELVES AND OTHERS

SIMILARLY SITUATED

,

Plaintiffs-Appellants

,

v. No. 17-1219

T IME W ARNER E NTERTAINMENT

A DVANCE /N EWHOUSE P ARTNERSHIP

,

Defendant-Appellee

,

T IME W ARNER C ABLE

, I NC

., Defendant. **

* Judge William K. Sessions III, of the United States District Court for the District of Vermont, sitting by designation.

** The clerk of court is directed to amend the caption as set forth above.2 ________________________________________________

FOR PLAINTIFFS-APPELLANTS: M ATTHEW J. B LIT

, Levine & Blit, PLLC, New York, NY.

FOR DEFENDANT-APPELLEE: M ICHAEL K ABAT (J. Scott Carr, on the brief ), Kabat Chapman & Ozmer LLP, Atlanta, GA.

Appeal from a March 28, 2017, judgment of the United States District Court for the

Northern District of New York (Scullin, J .).

UPON DUE CONSIDERATION, IT IS HEREBY ORDE RED, ADJUDGED,

AND DECREED that the judgment of the district court is VACATED , and the case is

REMANDED for proceedings consiste nt with this order.

Plaintiffs-Appellants Jeffrey Sydney and St ephen Capousis appeal from an order of

the United States District Court for the Northern District of New York (Scullin, J .) entered March 28, 2017, granting summary judgment in favor of Defendant-A ppellee Time Warner Entertainment-Advance/Newhouse Partnership (“TWEAN”) on all of plaintiffs’ claims. We assume the parties’ familiari ty with the underlying facts, the procedural history of the case, and the issues on appeal.

Sydney and Capousis were formerly employed by TWEAN as Territory Sales Representatives (“TSRs”). TWEAN—now disso lved—was a subsidiary of Time Warner Cable, Inc. TWEAN provided cable television, internet, a nd telephone services in the Syracuse, New York area. On appeal, Plai ntiffs challenge only the grant of summary judgment with respect to their claims for unpaid overti me arising under the Fair Labor Standards Act (“FLSA”) and th e New York Labor Law (“NYLL”). 1 Specifically, Plaintiffs argue that the district court erred in conc luding on summary judgment that they were exempt from the FLSA and NYLL’s overtime provisions because they were “outside salesm[e]n.” See 29 U.S.C. § 207(a)(1); 12 N.Y. Comp. Codes R. & Regs. § 142-2.2. We

agree.

We review de novo the district court’s gran t of summary judgment. Kuebel v. Black

& Decker Inc. , 643 F.3d 352, 358 (2d Cir. 2011). Summary judgment is warranted “if the movant shows that there is no genuine dispute as to any material fa ct and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is “material” if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby,

Inc. , 477 U.S. 242, 248 (1986).

1 Accordingly, they have abandoned any challenges to th e district court’s grant of summary judgment with respect to their other claims. See LoSacco v. City of Middletown , 71 F.3d 88, 92 (2d Cir. 1995).3 In ruling on a motion for su mmary judgment, the court “c onstrues the evidence in the light most favorable to the non-moving part y, and draw[s] all reas onable inferences in

its favor.” Niagara Mohawk Power Corp. v. Jones Chem. Inc. , 315 F.3d 171, 175 (2d Cir. 2003). “[T]he judge must ask . . . not whethe r . . . the evidence unmistakably favors one[]

side or the other but whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented.” Jeffreys v. City of New York , 426 F.3d 549, 553 (2d Cir. 2005) (first, second, and third alte rations in original) (quoting Anderson , 477 U.S. at 252). “Assessments of credibility and choices between conflicting ve rsions of the events are matters for the jury, not for th e court on summary judgment.” Rule v. Brine, Inc. , 85 F.3d 1002, 1011 (2d Cir. 1996).

Subject to certain exemptions, the FL SA and NYLL require employers to pay overtime to employees who work mo re than 40 hours per week. See 29 U.S.C. § 207(a)(1); 12 N.Y. Comp. Codes R. & Regs . § 142-2.2. Relevant here is the provision that “any employee employed . . . in the capacity of outside salesman” is exempt from FLSA and

NYLL overtime rules. 2 See 29 U.S.C. 213(a)(1) (FLSA outsi de salesman exemption); 12 N.Y. C.R.R. § 142-2.2 (adopting most FL SA exemption categorie s, including outside salesman). An outside salesperso n is defined as an employee

(1) Whose primary duty is: (i) making sales within the meaning of section 3(k) of the Act, or (ii) obtaining orders or contracts for services or for the use

of facilities for which a cons ideration will be paid by the client or customer;

and

(2) Who is customarily and regularly engaged away from the employer’s place or places of business in performing such primary duty.

29 C.F.R. § 541.500(a)(1)–(2). 3

The term “primary duty” means “the princi pal, main, major or most important duty that the employee performs.” 29 C.F.R. § 541.700(a). “Determination of an employee’s primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole.” Id. To determine an employee’s primary duty, courts consider the follo wing non-exhaustive list of factors:

2 In the district court, TWEAN argued that Sydney and Capousis were also exempt as employees of retail

or service establishments. See 29 U.S.C. § 207(i); 12 N.Y. Comp. Codes R. & Regs. § 142-2.2. The district court did not address this argument, and TWEAN does not raise it as an alternate ground for affirmance on this appeal. We express no opinion as to the merits of this argument.

3 “‘Sale’ or ‘sell’ includes any sale, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition.” 29 U.S.C. § 203(k).4 [1] the relative importance of the exempt duties as compared with other types of duties; [2] the amount of time sp ent performing exempt work; [3] the employee’s relative freedom from direct supervision; and [4] the relationship between the employee’s salary and the wa ges paid to other employees for the kind of nonexempt work pe rformed by the employee.

Id. ; see also Gold v. N.Y. Life Ins. Co. , 730 F.3d 137, 145

 46 (2d Cir. 2013) (applying 29 C.F.R. § 541.700 to analyze empl oyee’s claim for overtime wages).

The second factor—the amount of time sp ent performing exempt work—“can be a useful guide in determining whether exempt work is the primary duty of an employee.” 29

C.F.R. § 541.700(b). Generally, an employee who spends the majority of his or her time performing exempt work is exem pted, although “time alone . . . is not the sole test.” Id.

When evaluating “primary duty” in the “outside sales” context, work performed incidental to and in conjunction with the employee’s own outside sales or solicitations, including incidental deliveries and collections, shall be regarded as exempt outside sale s work. Other work that furthers the employee’s sales efforts also shall be re garded as exempt work including, for example, writing sales reports, updating or revising the employee’s sales or display catalogue, planni ng itineraries and attending sales conferences.

Id. § 541.500(b).

Whether an employee is exempt is “a mixed question of law and fact.” Myers v. Hertz Corp. , 624 F.3d 537, 54 8 (2d Cir. 2010). “The questi on of how the [employees] spent their working time . . . is a question of fact.” Icicle Seafoods, Inc. v. Worthington

, 475 U.S. 709, 714 (19 86). “The question whether their pa rticular activities excluded them from the overtime benefits of the FLSA is a question of law . . . .” Id. Accordingly, in deciding whether to grant a defendant-emp loyer’s motion for summary judgment on the ground that the plaintiff-employee is exem pt from the FLSA’s overtime provision, the court must first construe the evidence regard ing how the employee spent his or her time in the light most favorable to the employee (the non-moving party). The court must then determine, as a matter of law, whether—for purposes of deciding the motion for summary judgment—the exemption applies on those facts.

We conclude that the district court e rred in holding on summary judgment that Plaintiffs’ primary duties were exempt sales, as opposed to non-exempt installations, and accordingly in its ultimate conclusion that the outside sales exemption applied. 4

4 We emphasize that our conclusion is applicable only to TWEAN’s motion for summary judgment. We express no view whether, after fact-finding by a jury regarding Plaintiffs’ job duties, Plaintiffs may ultimately be determined to be exempt employees.5 According to Sydney and Capousis, thei r duties as TSRs “were primarily the physical installation of cable, internet, and telephone equipment at Multiple Dwelling Units (‘MDU[s]’),” App. 847, 854. MDUs are typi cally apartment complexes. TSRs were assigned to, and were responsible for, inter alia , developing and ma intaining positive relationships with the leasing agents and ma nagement at the MDUs to which they were assigned. At the first meeting with buildin g management, TSRs expl ained to management what services TWEAN could provide to th e tenants. TSRs provided their contact information to MDU managers, along with bu siness cards and promotional materials, and asked the managers to have their tenants call them to place orders for TWEAN services. In order to maintain good rela tionships, the TSRs would meet with managers at their MDUs about once per week for a few minutes. TSRs al so occasionally hosted ev ents such as pizza parties for MDU tenants in order to ensure that tenants were having a positive experience with their TWEAN products, althou gh such events were rare.

Tenants at MDUs could contact TSRs di rectly, via telephone, to order TWEAN services. During the calls, TS Rs would attempt to have cu stomers sign up for as many services and “bundles” of television programmi ng and internet service as possible. If a customer agreed to purchase TWEAN services, the installation of the service could proceed in one of three ways: (1) the tenant would re ceive a self-installation kit; (2) the TSR would deliver the equipment and perform the installation; or (3) the TSR would have a technician perform the installation. If the installation i nvolved complicated wiring issues or required climbing a poll or ladder to ac tivate service, TSRs were unabl e to perform the installation,

and would have to ca ll a technician.

According to Sydney, he worked betw een 50 and 70 hours per week, working Monday through Saturday. On a typical day, he would go into TWEAN’s office between 8:30 and 9:00 am, catch up on paperwork and check phone me ssages. At approximately 10:00 am, he would go to the warehouse, pick up the equipment he needed for the day’s installations, and then go out to perform the installations. He typically performed five to ten installations per day, depe nding on the time of year. Installations could take from 30 minutes to several hours, and woul d usually take at least an hour. Additionally, Sydney would typically receive two to three calls per week from M DU managers asking for him to

troubleshoot customer issues at individual apartments; troubleshooting those issues would typically take between 30 and 90 minutes.

Similarly, Capousis would arrive at TWEAN’s office between 8:00 and 8:30 am. The first “few” hours of his day were spent a ttending sales meetings, responding to emails, and returning phone calls. Afterwards, he would go to the warehouse, pick up the equipment needed for that day’s installations, and perform installations at his MDUs. Like Sydney, he performed five to ten installations per day (las ting 30 minutes to several hours),

in addition to troubles hooting tenant problems. Capousis worked between 55 and 70 hours per week.6 Accordingly, drawing all reasonable inferences in favor of Sydney and Capousis, a

reasonable factfinder could concl ude that they spent the major ity of their time at work performing non-exempt work, i.e., installations. Although “[t]im e alone . . . is not the sole test” for resolving the “primary duty” inquiry, the amount of time that an employee spends performing exempt work “can be a useful gui de in determining whether exempt work is the primary duty of an employee.” 29 C.F.R. § 541.700(b). “Thus, employees who spend more than 50 percent of thei r time performing exempt work will generally satisfy the primary duty requirement.” Id. The inverse must also be true: employees who spend most of their time performing non-exempt work generally do not satisfy the primary duty requirement.

Although it is generally the case that when an employee spends more time performing non-exempt work as o pposed to sales, his “primary dut y” is not sales, it is not always the case; accordingly, we must examine whether fact ors other than “time spent” warrant a finding that Plaintiffs are exempt salespersons. Turning to other factors enumerated in 29 C.F.R. § 5 41.700(a), the evidence, constr ued in Plaintiffs’ favor, does not support a conclusion that Plaintiffs’ sa les duties were more important than their installation duties. Of course, growing th eir customer base and convincing existing customers to purchase additional services is undoubtedly paramoun t to TWEAN; however, their installation duties were also consequen tial. We do not find the direct supervision factor helpful, as one would expect both salespersons and in stallation technicians to be relatively free from direct supervision while out of the office. Finally, installation technicians performing similar work to TSRs ’ non-exempt work—i.e., installation work— were paid hourly wages and received overtim e, which weighs in favor of Plaintiffs’ position that they are non-exempt.

Our analysis does not end here, for the fact ors enumerated in 29 C.F.R. § 541.700(a) are illustrative, not exhaustive. Indeed, “[ d]etermination of an employee’s primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole.” Id.

Plaintiffs provided additional information (not considered by the district court) about the labor required to comp lete the installations which, when construed in Plaintiffs’ favor, is more consistent with th e work of an installe r than that of a sale sperson. Prior to beginning employment in the position, TSRs re ceived a week of safety, equipment, and installation training. Oftentimes when perform ing installations, TSRs had to clear snow or go through crawl spaces or cub by holes in order to access the main cable box in the building. In older units, TSRs had to run coaxial wires th rough different rooms in an apartment unit, including up flights of stai rs. Additionally, the equipment they were required to carry could be quite heavy. TSRs typically brought the following tools with them to perform installations: wrenches, wire cutters, wire, tuners, screwdrivers, pliers, claw hammers, tools to strip wires, cable t oners, tools to crimp wires, utility knives,7 flashlights, a terminator tool, and safety e quipment. Moreover, during installations, they had to wear a hard hat and safety gl asses, and use a voltage detector.

The district court also failed to cons ider evidence regard ing TWEAN’s “Direct Sales Representatives” (“DSRs”). DSRs were tasked with making door-to-door sales to potential TWEAN customers, as well as en couraging existing TW EAN customers to purchase additional services. Significantly, DSRs conducted d oor-to-door sales activity in MDUs assigned to TSRs. DSRs did not perform installations. By contrast, according to Plaintiffs, the TSRs did not directly solicit cu stomers or make door-to- door sales. Drawing all inferences in favor of Plaintiffs, the pr esence of DSRs at the MDUs assigned to TSRs undercuts TWEAN’s argument that TSRs’ primary duty at MDUs was sales.

It is true that the major ity of Plaintiffs’ income ca me from commissions, which is an income structure more typical for a sa lesperson than someone primarily performing installations. However, a significant portion of their commission payments were actually payments for installations th at they performed. For exam ple, they received $5.00 for installing a customer’s cable and $10.00 for installing a modem. There is a dispute regarding whether Plaintiffs would be credite d with the sale for purposes of calculating their commission if they did not personally perform the insta llation. Plaintiffs’ position that they would not be credited with a sale if they did not perform the installation is arguably supported by an Augus t 2, 2011, email detailing an incident in which Capousis claimed to have made a sale, but was not credited with the sale. Instead, the employee who performed the installation receive d credit for the sale. Since this case is before us on TWEAN’s motion for summary judg ment, we must assume that the jury will resolve this factual dispute in Plaintiffs’ favor.

In arguing that notwithstanding the above-re ferenced evidence, Plaintiffs’ primary duty were sales, TWEAN, citing 29 C.F.R. § 5 41.500(b), argues that Pl aintiffs’ installation work was merely incidental to their sales work, and therefore also exempt work. However, drawing all reasonable inferences in favor of Plaintiffs and in light of the evidence described above, we cannot conclude, as a matte r of law, that the installations conducted by the TSRs were merely incident al to their sales efforts.

In sum, construing the evidence in the light most favor able to Plaintiffs—as we must for purposes of summary judgment only—their prim ary duties were installations, not sales.8 Accordingly, the judgment of the district court is VACATED , and the case is

REMANDED for proceedings consistent with this or der, as there are genuine disputes of material facts regarding Plaintiffs’ job duties. 5

FOR THE COURT:

Catherine O = Hagan Wolfe, Clerk of Court

5 We need not address Plaintiffs’ argument that their sales work was carried out over the telephone and that accordingly, they were not “customarily and regularly engaged away from the employer’s place or places of business in performing such primary [sales] dut[ies]. ” 29 C.F.R. § 541.500(a)(2). We leave that for

resolution in the district court.