FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

 AUGUST 26, 2010

JOHN LEY

CLERK

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

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No. 10-11086

Non-Argument Calendar

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D.C. Docket No. 1:06-cv-01993-CC

HARRIET BELL, individually and on behalf of all

similarly situated persons,

Plaintiff-Appellant,

versus

CALLAWAY PARTNERS, LLC,

HURON CONSULTING GROUP, INC.,

Defendants-Appellees.

________________________

Appeal from the United States District Court

for the Northern District of Georgia

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(August 26, 2010)

Before TJOFLAT, WILSON and COX, Circuit Judges.

PER CURIAM:

Plaintiff Harriet Bell is the class representative for an opt-in class of

approximately 100 bookkeeper/accountants (“Plaintiffs”) who were hired as
employee consultants by Callaway Partners, LLC (“Callaway”) for a large-scale

financial audit involving the restatement of HealthSouth Corporation following

allegations that HealthSouth had perpetrated a multi-billion dollar accounting fraud. 

Callaway classified Plaintiffs as exempt from the Fair Labor Standards Act’s (FLSA)

overtime pay requirement. 

Plaintiffs’ pay consisted of two distinct components. First, Plaintiffs received

a guaranteed weekly salary of $1600 or more that did not depend on the quality or

quantity of the work performed. This weekly salary was reduced by one-fifth of the

weekly salary for every full day a Plaintiff took off from work for personal reasons

during the normal workweek without substituting Paid Time Off (“PTO”). But, a

Plaintiff could work fewer than eight hours during any given workday without any

reduction in his or her weekly salary. Second, Plaintiffs were eligible to receive

additional incentive compensation (a “bonus”) paid at a straight-time hourly rate

based on the cumulative number of billable hours that Plaintiffs worked. Any bonus

to be awarded was determined based on how many additional hours over forty a

Plaintiff worked in a given week minus any “deficit” hours a Plaintiff had

accumulated in past weeks. For example, if a Plaintiff worked seven and not eight

hours on each regularly-scheduled workday in a given week, thus totaling 35 hours

of work, he or she still earned the full predetermined weekly salary, but would not

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earn a bonus in a subsequent week until he or she made up the bonus-hour deficit of

five hours and then worked more than 40 hours in a given week. 

Plaintiff Bell filed suit against Callaway on August 24, 2006, as a collective

action under the FLSA, claiming that Callaway had violated the overtime provisions

of the FLSA. The only issue considered by the district court was whether Callaway’s

pay system violated the salary basis test set forth in 29 C.F.R. § 541.602. The district

court granted summary judgment for Callaway. The court held thatCallaway’s bonus

practice complied with Department of Labor (DOL) regulations, and that Plaintiffs’

claims that such practice violated the salary basis test were without merit. The court

also found that Callaway had complied with DOL regulations regarding deductions

fromsalaries for workdays missed, and that Plaintiffs’ claimthat the manner in which

Callaway calculated pay for weekend work constituted improper “partial day

deductions” in violation of the salary basis test was also without merit. Plaintiffs

appeal; they argue that the court erred in concluding that Callaway’s bonus system

did not violate the FLSA’s overtime requirements.

The FLSA requires employers to pay employees “engaged in commerce or in

the production of commerce” overtime when an employee works more than forty

hours in a week. 29 U.S.C. § 207(a)(1). But, an exemption from the overtime pay

requirement exists for employees in a “bona fide executive, administrative, or

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professional capacity” as defined by regulations of the Secretary. 29 U.S.C. §

213(a)(1). The class of Plaintiffs in this lawsuit are highly-educated accountants and

Certified Public Accountants who, during their employment with Callaway, often

made more than $100,000 per year. (R.374 at 3.) Consequently, Plaintiffs fall under

the overtime pay exemption.

An employee is considered “paid on a salary basis” if “he regularly receives

each pay period on a weekly, or less frequent basis, a predetermined amount

constituting all or part of his compensation, which amount is not subject to reduction

because of variations in the quality or quantity of the work performed.” 29 C.F.R. §

541.602. Plaintiffs argue that they were not paid on a salary basis because the amount

of their bonuses fluctuated based on the cumulative number of hours worked. But,

as we have previously determined, “as long as there is a non-deductible minimum,

additional compensation on top of the non-deductible salary is permissible.” Hogan

v. Allstate Ins. Co., 361 F.3d 621, 625 (11th Cir. 2004) (citation omitted). And, while

additional compensation is permissible, the regulations do not require additional

compensation, nor do they prescribe a set method for setting up a bonus system. 29

C.F.R. § 541.604(a) (“An employer may provide an exempt employee with additional

compensation without losing the exemption or violating the salary basis requirement,

if the employment arrangement also includes a guarantee of at least the minimum

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weekly-required amount paid on a salary basis. . . . Such additional compensation

may be paid on any basis . . . .”).

After a review of the record, we agree with the district court’s well-reasoned

analysis concluding that Callaway’s bonus system conformed to the requirements of

the salary basis test. (R.374 at 13-24.) While Callaway’s incentive program may

have been designed in a way that encouraged overtime work, as Plaintiffs argue it

was, because it deducted for “deficit” hours, it nevertheless conformed to the

requirements of the FLSA. Because there was a non-deductible minimum weekly

salary, Callaway was free to structure any bonus program as it saw fit. 

Plaintiffs also argue that Callaway violated the salary basis test when it

deducted a full day’s pay for personal days missed during the workweek (Monday

through Friday) but did not pay Plaintiffs for a “full day” for partial days worked on

Saturday or Sunday. Again, we agree with the district court’s analysis concluding

that such deductions were allowable under the provisions of 29 C.F.R. §

541.602(b)(1). (R.374 at 25-34.) Therefore, we hold that the district court did not

err in finding Callaway’s pay policies to be in compliance with the FLSA.

AFFIRMED.

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