A tthe t i m e of or al ar gum ent , J udge Lynch w as a U ni t ed St at es D i s tr i ctJ udge for * the Southern D i s tr i ctof N ew Y or k, s i t t i ng bydes i gnat i on. 1 08 -40 92 -cv Whalen v. J.P. MorganCh ase & Co.

UN I TED STATES CO UR T OF A PP EALS F ORTH E S EC ON D C IR C U IT A ugus tT erm , 2009 ( A r gued: A ugus t3, 2009 D eci ded: N ovember20, 2009) D ocketN o. 08- 4092- cv M IC H A E L J. D A V IS , a n d a ll o th e rs s im ila rl ys itu a te d , E L ENA L OMB ARDO , C AR OL

S MI TH , D AN IE L J. M C G RAW , P laint i f f s, A NDREW W HA L EN , P la in tif f-Ap p e lla n t, — v . — J . P. M OR GAN C HA SE & C O ., Defendant- Appellee . B ef o r e : P OOLE R , LI VINGS TON , and LY N CH , Circuit Judges . *

__________________ Plaintiff, employed by

J .P. Morga

n Chase (“ Chase”) as an underwriter , challeng es Chase’ s2

cate g oriz at i o n o f underwriters a s administrative employees e x empt from the F air L abor Standa rd A c t ’ s o v e rt i m e p ay r e qu i r e m e nt s . S e e 2 9 U . S . C . § 2 0 7 ( a) . Pl ai nt i ff now appea l s an aw ar d of s u m m a ry ju d g m e n t e n te re d in th e W e s te rn D is tr ic t o f N e w Y o rk (D a v id G . L a ri m e r, Judge ) in f a v o r o f C h a s e . R EVE R SE D .
J. N EL SO N T HO MAS , D ol i n, T hom as & Sol om on L L P, R oches t er , N ew Y o rk , f orP lai nt i f f
-Appel lant . S A M U E L S HA UL SO N , M or gan, L ew i s & B ocki us L L P, N ew Y or k, N ew Y o rk (C a rr ie A . G o n n e ll, I rv in e , C a lif o r n i a , on the br i ef

), f or D ef endant
-Appel l ee .

G ERARD E. L YNCH , C i r cui tJudge : T hi s appea l r equi r es us t o deci de w hetherunderw r i t er s t as ked w i th appr ovi ng loan s, in ac co rda n ce w ith d etail ed g u idelines p rov ided b ytheir em p loy er, are admi ni s tr at i ve empl oy ees exemptfr om the overt i m e r equi r ement s of the Fai rL abor St andar ds A ct . A ndr ew W hal en w as empl oy ed byJ . P. M or gan C has e ( “C has e”) forfour y e a rs a s a n u n d e rw riter . A s a n u n d e rw riter , W h a len e v a lu a ted w h e th e r to iss u e lo a n s to in d iv id u a l lo a n a p p lica n ts b yre f e rrin g to a d e taile d se t o f g u id e lin e s, k n o w n a s th e C re d it G u id e , p ro v id e d to h im b yC h a se . T h e C re d it G u id e sp e c if ied h o w u n d e rw riter s s h o u ldC h a se d o e s n o t co n ten d th a t W h a len e n g a g e d in “ e x e c u tiv e ” o r “ p ro f e ss io n a l” 1 wo r k , o rf

e l l wi th i n a n yo th e re x c e p t i o n t o th e ma x i mu m h o u r s p r o v i s i o n o f th e F L S A. 3 det erm i ne l oan appl i cantchar act er i s t i cs s uch as qual i fy i ng i ncome and cr edi thi s t ory , and in stru c ted u n d e rw riter s to c o m p a re su c h d a ta w ith c riter ia, a lso se t o u t in th e C re d it G uide, prescr i bing w hat qual i fi ed a loan ap pli cant for a part i cularl oan produ ct . C hase a lso p ro v id e d su p p lem e n tal g u id e lin e s a n d p ro d u c t g u id e lin e s w ith in f o rm a tio n sp e c if

ic to i ndi vi dual l oan pr oduct s . A n underw r i t erw as expec t ed t o eval uat e ea ch l oan appl i cat i on u n d e r th e C re d it G u id e a n d a p p ro v e th e lo a n if it m e t th e G u id e ’s s tan d a rd s. If a lo a n d id notm eetthe G ui de’ s s t andar ds , cert ai n underw r i t er s had s om e abi l i tyt o m ake e xcept i ons orvar i ance s t o i m pl ementappr opr i at e compens at i ng fac t or s . W hal en and Chase pr ovi de d if f e re n t a c c o u n ts o f

h o w o f te n u n d e rw ri te rs m a d e s u c h e x c e p tio n s . U nderthe Fai rL aborSt andar ds A ct( FL SA ) , empl oy er s m us tpayempl oy ees o v e r t i me c o mp e n s a t i o n f o rt i me wo r k e d i n e x c e s s o f f o r tyh o u r s p e rwe e k . S e e 2 9 U. S . C. § 207( a) . W hal en cl ai m s thathe fr equent l yw orked overfor tyhour s perw eek. A num ber of ca t egor i es of empl oy ees ar e exe m pt ed fr om the overt i m e payr equi r ement . T he exempt i ons ar e dr aw n al ong a numberof l i nes demar cat i ng the type of pr ofes s i on, j ob funct i on, and otherchar act er i s t i cs . O ne ca t egor i cal exempt i on i s forempl oy ees w ho w o rk in a “ b o n a f

id e e x e c u tiv e , a d m in is tr a tiv e , o r p ro f e s s io n a l c a p a c ity.” 2 9 U .S .C . § 2 1 3 (a)(1). 1 A tthe t i m e of W hal en’ s empl oym entbyC has e, C has e tr eat ed underw r i t er s as4

exemptfr om the FL SA ’ s overt i m e r equi r ement s . W hal en s oughta dec l ar at oryj udgm ent th a tCh a s e v i o l a t e d th e F LS A b ytr e a t i n g h i m a s e x e mp ta n d f a i l i n g t o p a yh i m o v e r t i me compensa t i on. B oth W hal en and Chase fi l ed mot i ons fors um m aryj udgm ent . T he di s tr i ct co u rtd en ied W h alen ’s m o ti o n s an d g ran ted C h ase ’s m o ti o n , d ism issi n g W h alen ’s compl ai nt . T hi s appea l fol l ow ed. W e r evi ew the di s tr i ctcourt ’ s rul i ng on a mot i on fors um m aryj udgm entde novo, c o n stru in g th e e v id e n c e in f a v o r o f th e n o n -m o v in g p a rty . S e e K ra u ss v . O x f o rd H e a lth Pl ans , I nc. , 517 F. 3d 614, 621- 22 ( 2d C i r . 2008) ; Petr os i no v. B el l A t l . , 385 F. 3d 210, 219 ( 2d C i r . 2004) . W e mayaff i r m the di s tr i ctcourt ’ s gr antof s um m aryj udgm enton any gr ound upon w hi ch the di s tr i ctcourtcoul d have r el i ed. See Sant os v. M ur dock, 243 F. 3d 6 8 1 , 6 8 3 (2 d C ir. 2 0 0 1 ). E x e m p tio n s f ro m th e F L S A ’s r e q u ire m e n ts “ a re to b e n a rro w ly c o n stru e d a g a in st th e e m p lo y e rs s e e k in g to a ss e rt th e m a n d th e ir a p p lica tio n lim ited to thos e es t abl i s hm ent s pl ai nl yand unmi s t akabl yw i thi n thei rt erm s and s pi r i t . ” A rnol d v. B en K an o w sk y , Inc . , 3 6 1 U . S . 3 8 8 , 3 9 2 (19 6 0 ). T he s t atut e s peci fy i ng thatempl oy ees w ho w or k i n “bona f i de exe cut i ve, admi ni s tr at i ve, orpr ofes s i onal capa ci t [i es ] ” ar e exe m ptfr om the FL SA overt i m e pay r equi r ement s does notdefi ne “a dm i ni s tr at i ve. ” 29 U . S. C . § 213( a) ( 1) . Feder al r egul at i ons s peci fy , how ever , thata w or keri s empl oy ed i n a bona f i de admi ni s tr at i ve capa ci tyi f s he per form s w or k “di r ect l yr el at ed t o m anage m entpol i ci es orgener alT he D epart m entof Labori s s ued new r egul at i ons defi ni ng the admi ni s tr at i ve 2 exempt i on i n 2004. U nl es s ot herw i s e s peci fi ed, r efe r ence t o the r egul at i ons i s t o the pr e20 04 regul at i on s. A l though t her e ar e otherr equi r ement s t o fal l w i thi n the exe m pt i on, s uch as 3 cu stom aril yan d reg u larl yex erc isi n g d iscreti o n , b ec au se w e c o n clud e tha t W h alen ’s w o rk w as not“admi ni s tr at i ve, ” w e nee d notdeci de w hetherW hal en’ s empl oym entas an un derw ri t er m ettho se r equ i rem ents . 5 bus i nes s oper at i ons ” and “ cus t om ar i l yand r egul ar l yexer ci s es di s cr et i on and i ndepende nt j udgm ent . ” 29 C . F. R . § 541. 2( a) . R egul at i ons fur therexpl ai n thatw or k di r ect l yr el at ed 2 t o m anage m entpol i ci es orgener al bus i nes s oper at i ons cons i s t s of “thos e types of act i vi t i es r el at i ng t o t he admi ni s tr at i ve oper at i ons of a bus i nes s as di s t i ngui s hed fr om ‘p ro d u c tio n ’ o r, i n a re ta il o r s e rv ic e e s ta b lis h m e n t, ‘ s a le s ’ w o rk .” 2 9 C .F .R . § 541. 205( a) . E m pl oym entm aythus be cl as s i fi ed as bel ongi ng i n the admi ni s tr at i ve

3 cat egory , w hi ch fa l l s s quar el yw i thi n the admi ni s tr at i ve exc ept i on, oras pr oduct i on/ s al es w o rk , w h ich d o e s n o t. P re c e d e n t in th is c irc u it i s lig h t b u t p ro v id e s th e f ra m e w o rk o f

o u r a n a ly sis to i dent i fyW hal en’ s j ob as ei theradmi ni s tr at i ve orpr oduct i on. I n R ei ch v. St at e of N ew Y o rk , 3 F .3 d 5 8 1 (2 d C ir. 1 9 9 3 ), o v e rru led b yim p lica tio n o n o th e r g ro u n d s b yS e m in o le T rib e v . F lo rid a , 5 1 7 U .S . 4 4 (1 9 9 6 ), w e h e ld th a t m e m b e rs o f th e sta te p o lice a ss ig n e d to the B ur eau of

C r i m i nal I nves t i gat i on ( B C I ) , know n as B C I I nves t i gat or s , w er e notexempt as admi ni s tr at i ve empl oy ees . See i d. at585, 588. B C I I nves t i gat or s ar e r es pons i bl e for s u p e r v i s i n g i n v e s t i g a t i o n s p e r f o r me d b ys t a t e tr o o p e r s a n d c o n d u c t i n g th e i ro wn6

i nves t i gat i ons of fe l oni es and maj orm i s demeanor s . A ppl y i ng the admi ni s tr at i ve ver s us pr oduct i on anal y s i s , w e then r eas oned thatbeca us e “the pr i m aryfunct i on of the I n v e s t i g a t o r s . . . i s t o c o n d u c t– o r‘ p r o d u c e ’ – i t s c r i mi n a l i n v e s t i g a t i o n s , ” th e BCI I nves t i gat or s fel l “s quar el yon the ‘ pr oduct i on’ s i de of the l i ne” a nd w er e notexempt fr om the FL SA ’ s overt i m e r equi r ement s . I d. at587- 88. T he admi ni s tr at i ve/pr oduct i on di chot om yw as s i m i l ar l yempl oy ed i n a V erm ont cas e w e af

fi r m ed l as ty ear , butthe ci r cumst ance s of ouraff i r m ance l i m i ti t s pr ece dent i al v alue . T h e f

ac ts of that ca se w ere sim il ar to tho se p rese n ted h ere : th e p lai n ti ff s w ere empl oy ed as underw r i t er s fora companyi n the bus i nes s of underw r i t i ng m or t gage l oans thatw er e then s ol d t o t he s econda r yl endi ng m arket . See H aveyv. H om ebound M or t gage, I nc. , N o. 2: 03- C V - 313, 2005 W L 1719061, at*1 ( D . V t . J ul y21, 2005) , aff’ d, 547 F. 3d 158 ( 2d C i r . 2008) . T he di s tr i ctcourtconcl uded w i th veryl i t t l e ana l y s i s thatt he u n d erw ri ters w ere n o t em p loy ed in p rod u cti o n b ec au se th eyp erf o rm ed “n o n m an u al w o rk r e l a t e d t o Ho me b o u n d ’ s b u s i n e s s . ” I d . , a t* 5 S i g n i f i c a n t l y , th e c o u r ta p p e a r e d t o a s s u me that“pr oduct i on” mustr el at e t o t angi bl e goods , ci t i ng a C onnect i cutcas e i n w hi ch the courtr efus ed t o gr ants um m aryj udgm entfi ndi ng thatm at er i al pl anni ng s peci al i s t s , s eni or f i n a n c i a l a n a l ys t s , p r o

j e c tf i n a n c i a l a n a l ys t s , a n d l o g i s t i c s s p e c i a l i s t s e m p l o ye d b y a companythatbui l ts ubm ar i nes w er e exe m ptfr om FL SA ’ s overt i m e r equi r ement s . See i d. at*5 n. 6, ci t i ng C ooke v. G en. D ynami cs C orp. , 993 F. Supp. 56 ( D . C onn. 1997) . T heSuch cons i der at i ons m aybe r el evantt o other , i ndepende nt , r equi r ement s for 4 exempt i on fr om the FL SA overt i m e pr ovi s i ons . T he r es pons i bi l i tyexer ci s ed byan e m p lo y e e , fo r e x a m p le, w o u ld a f f e c t w h e th e r th a t em p lo y e e “ c u sto m a rilya n d re g u lar ly exer ci s e[d] di s cr et i on and i ndepende ntj udgm ent . ” 29 C . F. R . § 541. 2. Such a det erm i nat i on, how ever , i s ent i r el ys epar at e fr om w hetheran empl oy ee’ s funct i on m aybe cl as s i fi ed as admi ni s tr at i ve orpr oduct i on- r el at ed. 7 H aveycourtnot ed that“[i ] n t hatcas e . . . the corpor at i on w as i n the bus i nes s of produ ci ng subm ari nes. H om ebo un d w as i n the busi ness of u nd erw ri t i ng m ort gag e l oan s. N o p ro d u c tio n w a s ta k in g p la c e .” Id . (c ita tio n s o m itte d ). A s R ei ch i l l us tr at es , thi s l i t er al r eadi ng of “pr oduct i on” t o r equi r e t angi bl e goods h a s n o b a sis in law o r re g u latio n . W e a f f irm e d th e d istric t co u rt in H a v e y , b u t th e o n ly i s s ue pr es ent ed on appe al w as w hetherpl ai nt i ffs w er e pai d on a s al arybas i s underthe p a ym e n t stru c tu re a d o p ted b yH o m e b o u n d . A c c o rd in g ly , o u r o p in io n o f f e re d n o a n a ly sis as t o w hetherthe underw r i t er s per form ed w or k di r ect l yr el at ed t o the management p o li cies o r ge n era l bu sine ss o p era ti o n s o f th eir em p loy ers u n d er the F L S A . W e the ref o re d o n o t re a d o u r H a v e yo p in io n a s a d o p tin g th e f law e d a n a ly sis o f

th e V e rm o n t co u rt a s to adm i nis trat i ve an d p roducti on j ob fun ct i on s. T h e lin e b e tw e e n a d m in istra tiv e a n d p ro d u c tio n jo b s is n o t a c lea r o n e , p a rticu lar ly gi ven thatthe i t em bei ng pr oduced – s uch as “cr i m i nal i nves t i gat i ons ” – i s oft en an i nt angi bl e s ervi ce r atherthan a mat er i al good. N ot abl y , the bor derbetw een admi ni s tr at i ve and pr oduct i on w or k does nottr ack the l evel of r es pons i bi l i ty , i m por t ance , ors ki l l neede d t o per form a part i cul arj ob. T he monet aryval ue of the l oans appr oved by 48

W hal en as an underw r i t er , forexampl e, i s i rr el evantt o thi s cl as s i fi cat i on: a bank t el l er m i ghtdeal w i th hundr eds of thous ands of dol l ar s eac h m onth w her eas a s t aff eri n hum an r es our ces nevert ouches a di m e of the bank’ s m oney , y etthe bank t el l eri s i n pr oduct i on a n d th e h u m a n re so u rc e s s taf f e r p e rf o rm s a n a d m in istra tiv e p o sitio n . S im ilarly , itis i rr el evantthatW hal en’ s s al aryw as r el at i vel yl ow orthathe w or ked i n a cubi cl e. W hat d e ter m in e s w h e th e r a n u n d e rw riter p e rf o rm e d p ro d u c tio n o r a d m in istra tiv e f u n c tio n s is th e n a tu re o f

h e r d u ties , n o t th e p h y sic a l co n d iti o n s o f h e r e m p lo ym e n t. T h e D e p a rtm e n t o f

L a b o r h a s a ttem p ted to c lar if yth e c las sif

ica tio n o f

jo b s w ith in the fi nanci al i ndus tr ythr ough r egul at i ons and opi ni on l ett er s . I n 2004, the D epart m entof L aborpr om ul gat ed new r egul at i ons di s cus s i ng, among ot herthi ngs , empl oy ees i n the fin an cial serv ices ind u stry . A lth o u g h thes e re g u lat ion s w ere insti tuted af ter W h alen ’s empl oym entw i th C has e ende d, the D epart m entof Labornot ed thatthe new r egul at i ons w e re “ [ c ]o n s is te n t w ith e x is tin g c a s e la w .” 6 9 F e d . R e g . 2 2 ,1 2 2 , 2 2 ,1 4 5 (A p r. 2 3 , 2 0 0 4 ). T he regu l at i on st at es:

E m pl oy ees i n t he fi nanci al s ervi ces i ndus trygener al l ym eet th e d u ties re q u ire m e n ts f o r th e a d m in istra tiv e e x e m p tio n if thei rdut i es i ncl ude w or k s uch as col l ect i ng and ana l y zi ng i nfo rm at i on regar ding t he cu st om er’ s i nco m e, asset s, in v e stm e n ts o r d e b ts; d e ter m in in g w h ich f in a n c ial p ro d u c ts bestm eetthe cu st om er’ s needs an d financial ci rcum st ances; advi s i ng the cus t om err egar di ng the adva nt ages and di s advant ages of di ffe r entfi nanci al pr oduct s ; and mar ket i ng, servici ng or prom oti ng the em ploy er’ s fi nan ci al produ ct s. H ow ever , an empl oy ee w hos e pr i m arydutyi s s el l i ng fi nanci al9 pr oduct s does notqual i fyforthe admi ni s tr at i ve exe m pt i on. 2 9 C .F .R . § 5 4 1 .2 0 3 (b ). T he D epart m entof Laborexpl ai ned thatthe new r egul at i on w as s parked by gr ow i ng l i t i gat i on i n t he ar ea a nd contr as t ed tw o thr eads of ca s e l aw . O n the one ha nd, so m e c o u rts f

o u n d th a t “e m p lo y e e s w h o re p re se n t th e e m p lo y e r w ith th e p u b lic, n e g o tiate o n b e h a l f

o f th e c o mp a n y , a n d e n g a g e i n s a l e s p r o mo t i o n ” we r e e x e mp tf r o m o v e r t i me requi rem ents . 69 F ed. R eg. . 22 , 12 2, 22 , 14 5 (A pr. 23 , 20 04 ), ci t i ng H og an v . A l l st at e Ins. C o ., N o . 0 2 -1 5 9 1 8 , 2 0 0 4 W L 3 6 2 3 7 8 (1 1 th C ir . 2 0 0 4 ); R e ic h v . J o h n A ld e n L if e In s . C o ., 126 F. 3d 1 ( 1s tC i r . 1997) ; W i l s hi n v. A l l s t at e I ns . C o. , 212 F. Supp. 2d 1360 ( M . D . G a. 2002) . O n t he otherhand, the D epart m entci t ed a M i nnes ot a di s tr i ctcourt , w hi ch found that“empl oy ees w ho had a ‘ pr i m arydutyt o s el l [the company ’ s ] l endi ng pr oduct s on a day - t o- daybas i s ’ di r ect l yt o cons um er s ” w er e notexempt . 69 Fed. R eg. . 22, 122, 22, 145 ( A pr . 23, 2004) , quot i ng C as as v. C ons eco Fi n. C orp. , N o. C i v. 00- 1512( J R T / SR N ) , 2002 W L 507059, at*9 ( D . M i nn. 2002) . T he r egul at i on thus hel ped t o cl ar i fythe di s t i nct i on betw een e m pl oy ees per form i ng s ubs t ant i al and i ndepende ntfi nanci al w or k and em ploy ees w ho m erel ysol d financial produ ct s. O pi ni on l ett er s i s s ued bythe D epart m entof Labors i m i l ar l yr ecogni ze a var i ance in th e typ e s o f

w o rk p e rf

o rm e d b ye m p lo y e e s w ith in th e f in a n c ial in d u stry , an d e x p lain w hys om e fi nanci al empl oy ees ar e admi ni s tr at i ve w hi l e s om e per form pr oduct i on10

funct i ons . I n 2001, the D epart m ents t at ed thata l oan off i cerw ho w as r es pons i bl e for cr eat i ng a l oan pac kage t o m eetthe goal s of a borr ow erby“s el ect [i ng] fr om a w i de r ange of l oan pac kages i n or dert o pr oper l yadvi s e the cl i ent , . . . s upervi s [i ng] the pr oces s i ng of th e tra n sa c tio n to c lo sin g ,” a n d “ a c q u ir[ in g ] a f u ll u n d e rsta n d in g o f

th e c u sto m e r’s c re d it hi s t oryand fi nanci al goal s i n or dert o advi s e them re gar di ng the s el ect i on of a l oan packa ge thatw i l l fi tthei rneeds and abi l i ty ” per form ed admi ni s tr at i ve w or k, al though t he opi ni on l ett erul t i m at el yconcl uded thats uch l oan off i cer s w er e notexempt . D ep’ tof L a b o r, W a g e & H o u r D iv ., O p . L e tte r ( F e b . 1 6 , 2 0 0 1 ), a v a ila b le a t 2 0 0 1 W L 1 5 5 8 7 6 4 . C ruci al l y , the 2001 opi ni on l ett ercl ar i fi ed an opi ni on l ett eri s s ued i n 1999 aft ert he D epart m entr ece i ved more i nform at i on aboutthe l oan off i cer ’ s dut i es . I n 1999, the D e p a rtm e n t u n d e rsto o d lo a n o f f ice rs to d e v e lo p n e w b u sin e ss f o r th e ir e m p lo y e r, co n su lt w i th borr ow er s t o obt ai n t he bes tpos s i bl e l oan pac kage, w or k w i th a numberof di ffe r ent len d e rs to se lec t lo a n p ro g ra m s, a n d p e rf o rm a ss o rte d se rv ice s s h e p h e rd in g th e lo a n to co m p let ion . S ee D ep ’to f L ab o r, W ag e & H o u r D iv., O p . L ett er (M ay1 7 , 1 9 9 9 ), avai l abl e at1999 W L 1002401. W i th thatunder s t andi ng of the l oan off i cer s ’ dut i es , t he D ep artm en t con clud ed that the lo an o ff icers w ere “e n g ag ed in ca rry ing o u t th e e m p loy er’s day - t o- dayact i vi t i es r atherthan i n det erm i ni ng the over al l cour s e and pol i ci es of the b u sin e ss ” a n d w e re th e re f o re n o t em p lo y e d a s a d m in istra tiv e e m p lo y e e s. S e e id . W h ile the 2001 l ett err econs i der ed the l oan off i cer s ’ empl oym entand r eac hed a di ffe r ent11

co n clus ion , the later let ter no ted th at th e re co n side rati o n w as “ in li g h t of the a d v isory dut i es [l oan off

i cer s ] per form on behal f of thei rempl oy er ’ s cus t om er s , ” w hi ch the empl oy ercl ar i fi ed w er e the “pr i m aryduty ” of a l oan off i cer . See 2001 W L 1558764. T he tw o l ett er s r ead t ogetherthus pr ovi de a he l pful poi ntof r efe r ence , hi ghl i ght i ng the i m po rt ance o f adv i sorydu t i es as opp osed to m ere l oan sal es. W e thus turn t o t he j ob of underw r i t eratC has e t o as s es s w hetherW hal en per form ed day - t o- days al es act i vi t i es orm or e s ubs t ant i al advi s orydut i es . A s an underw r i t er , W hal en’ s pr i m arydutyw as t o s el l l oan pr oduct s underthe det ai l ed d ire c tio n s o f

th e C re d it G u id e . T h e re is n o in d ica tio n th a t u n d e rw riter s w e re e x p e c ted to a d v is e c u s to m e rs a s to w h a t lo a n p ro d u c ts b e s t m e t th e irn e e d s a n d a b iliti e s . U nderw r i t er s w er e gi ven a l oan appl i cat i on and fol l ow ed pr ocedur es s peci fi ed i n the C re d it G u id e in o rd e r to p ro d u c e a y e s o r n o d e c isio n . T h e ir w o rk is n o t re late d e ith e r to s ett i ng “managementpol i ci es ” nort o “gene r al bus i nes s oper at i ons ” s uch as hum an r el at i ons oradvert i s i ng, 29 C . F. R . § 541. 2, butr atherconce rns the “pr oduct i on” of l oans – the funda m ent al s ervi ce pr ovi ded bythe bank. C has e i t s el f pr ovi ded s ever al i ndi cat i ons thattheyunder s t ood underw r i t er s t o be engage d i n pr oduct i on w or k. C has e empl oy ees r efe rr ed t o the w or k per form ed by u n d e rw riter s a s “ p ro d u c tio n w o rk .” W ith in C h a se , d e p a rtm e n ts w e re a t lea st in f o rm a lly cat egor i zed a s “oper at i ons ” or“pr oduct i on, ” w i th underw r i t er s encompas s ed bythe12

p rod u cti o n labe l. U n d erw ri ters w ere ev alua ted n o t byw h ethe r l o an s the yap p rov ed w ere pai d back, butbym eas ur i ng eac h underw r i t er ’ s pr oduct i vi tyi n t erm s of “a ver age of t ot al act i on s per day ” and byasses si ng w hetherthe u nd erw ri t ers ’ deci si on s m etthe C hase c re d it g u id e s ta n d a rd s . U nderw r i t er s w er e occ as i onal l ypai d i ncent i ves t o i ncr eas e pr oduct i on, bas ed on f a c t o r s s u c h a s th e n u m b e ro f d e c i s i o n s u n d e rw r i t e r s m a d e . W h i l e b e i n g a b l e t o q u a n t i f y a w or ker ’ s pr oduct i vi tyi n l i t er al num ber s of i t ems pr oduced i s nota r equi r ementof bei ng engage d i n pr oduct i on w or k, i ti l l us tr at es the conc erns thatm ot i vat ed the FL SA . T he overt i m e r equi r ement s of the FL SA w er e meantt o appl yfi nanci al pr es s ur e t o “s pr ead e m p lo ym e n t to a v o id th e e x tra w a g e ” a n d to a ss u re w o rk e rs “ a d d iti o n a l p a yto compensa t e them for the bur den of a w or kw eek be y ond the hour s fi xed i n the ac t . ” O verni ghtM ot orT r ans p. C o. , I nc. v. M i s s el , 316 U . S. 572, 577- 78 ( 1942) , s uper s eded by sta tu te, P o rta l-to -P o rta l P a yA c t o f 1 9 4 7 , ch . 5 2 , 6 1 S tat. 8 4 (g ra n tin g c o u rts a u th o rityto denyorl i m i tl i qui dat ed damages aw ar ded forvi ol at i ons of the FL SA ) . W hi l e i n the ab str ac t anyw o rk c an b e sp rea d , there is a relati v elyd ir ec t correlati o n b etw ee n h o u rs w o rk e d a n d m a ter ials p ro d u c e d in th e c a se o f a p ro d u c tio n w o rk e r th a t d o e s n o t ex ist a s to admi ni s tr at i ve empl oy ees . Pay i ng pr oduct i on i ncent i ves t o underw r i t er s s how s that C h ase b eli ev ed that the w o rk o f u n d erw ri ters co u ld b e q u an ti fied in a w aythat the w o rk o f a d m in istra tiv e e m p lo y e e s g e n e ra llyc a n n o t.13

W e conc l ude thatthe j ob of underw r i t eras i tw as per form ed atC has e fa l l s under the categoryof p roducti on rather than of ad m i nis trat i ve w ork. U nd erw ri t ers atC hase per form ed w or k t hatw as pr i m ar i l yfunct i onal r atherthan conc eptual . T heyw er e notat the hea r tof the company ’ s bus i nes s oper at i ons . T heyhad no i nvol vementi n det erm i ni ng the futur e s tr at egyordi r ect i on of the bus i nes s , nordi d theyper form anyotherfunct i on th a t in a n yw a yre late d to th e b u sin e ss ’s o v e ra ll ef f icie n c yo r m o d e o f

o p e ra tio n . It i s u n d isp u ted th a t th e u n d e rw riter s p layed n o ro le in th e e sta b lish m e n t o f C h a se ’s c re d it pol i cy . R ather , theyw er e tr ai ned onl yt o appl ythe cr edi tpol i cyas theyfound i t , as i tw as art i cul at ed t o t hem t hr ough the det ai l ed C r edi tG ui de. F u rth e rm o re , w e h a v e d ra w n a n im p o rta n t d istin c tio n b e tw e e n e m p lo y e e s d ire c tly pr oduci ng the good ors ervi ce thati s the pr i m aryoutputof a bus i nes s and empl oy ees p erf o rm ing g en era l adm inistrati v e w o rk a p p li ca b le t o the ru n n ing o f a n yb u sine ss. I n Re i c h , f o re x a mp l e , BCI I n v e s t i g a t o r s “ p r o d u c e d ” l a w e n f o r c e me n ti n v e s t i g a t i o n s . By contr as t , admi ni s tr at i ve func t i ons s uch as m anage m entof empl oy ees thr ough a human r es our ces depart m entors upervi s i ng a bus i nes s ’ s i nt ernal fi nanci al act i vi t i es thr ough the accou nti ng dep artm ent ar e fun ct i on s that m ustbe p erform ed n o m at t er w hat the b usi ness p ro d u c e s. F o r th is re a so n , the f a c t th a t W h a len a ss e ss e d c re d itw o rth in e ss is n o t en o u g h to d e ter m in e w h e th e r h is jo b w a s a d m in istra tiv e . T h e c o n tex t o f a jo b f u n c tio n m a tters : a cl othi ng st ore accou ntantdecidi ng w hethert o is sue a credi tcard t o a co nsum er per form s a14

s u p p o rt f u n c tio n a u x ilia ry to th e d e p a rt m e n t s to re ’s p ri m a ry f u n c tio n o f

s e llin g c lo th e s . A n underw r i t erforC has e, bycontr as t , i s di r ect l yengage d i n cr eat i ng the “goods ” – l oans and otherfi nanci al s ervi ces – pr oduced a nd s ol d byC has e. T h is co n clus ion is al so su p p o rt ed b yp ersu asiv e d ec isi o n s o f o u r si ster cir cu it s. In B r attv. C ountyof Los A ngel es , the N i nth C i r cui thel d thatthe “e s s ence ” of a n admi ni s tr at i ve j ob i s thatan admi ni s tr at i ve empl oy ee pa r t i ci pat es i n “the runni ng of a bus i nes s , and notm er el y. . . the day - t o- daycarry i ng outof i t s aff ai r s . ” 912 F. 2d 1066, 1070 ( 9th C i r . 1990) ( i nt ernal quot at i ons om i t t ed) . T he D epart m entof Laborl at erquot ed thats ame l anguage appr ovi ngl y . See D ep’ tof Labor , W age & H ourD i v. , O p. L ett er (S e p t. 12 , 1 9 9 7 ), av a ilab le a t 1 9 9 7 W L 9 7 1 8 1 1 . M o re re c e n tly , the N in th C irc u it ex p an d ed , “T h e a d m inistrati o n /pro d u cti o n d ist inction thu s d ist ing u ishe s b etw ee n w o rk r el at ed t o the goods and s ervi ces w hi ch cons t i tut e the bus i nes s ’ m arketpl ace offe r i ngs and w o rk w h ic h c o n tr ib u te s to ‘r u n n in g th e b u s in e s s its e lf.’” B o th e ll v . P h a s e M e tr ic s , In c ., 299 F. 3d 1120, 1127 ( 9th C i r . 2002) . T he Thi r d C i r cui thas al s o not ed thatpr oduct i on encompas s es m or e than the manufactur e of t angi bl e goods . See M art i n v. C ooperE l ec. Suppl yC o. , 940 F. 2d 896, 903- 04 ( 3d C i r . 1991) . I n thatcas e, t el ephone s al es per s ons w e re g iv e n a p ric in g m a trix sp e c if y in g p ric e q u o tes f

o r sp e c if ic g o o d s a s o f

f e re d to speci fi c cust om ers . T he sal espers on s had som e authori tyt o d eviat e from the p ri ce qu otes , and occ as i onal l yal s o cal l ed manufactur er s t o r es t ock i t ems, negot i at i ng the pr i ce of15

acqui r i ng the i t em w i th t he manufactur er . T he s al es per s ons w er e pai d a fi xed s al ary , but w er e al s o pai d i ncent i ves t i ed t o t hei rs al es per form ance . T he Thi r d C i r cui thel d thatt he sa les p e rso n s w e re p ro d u c tio n e m p lo y e e s b e c a u se th e g o a l o f th e sa les p e rso n s w a s “ to pr oduce w ho l esal e sal es. ” Id. at90 3 (em ph asi s i n o ri ginal ). A l on g si m i l ar l i nes, the F i rs t C i r cui thel d thatm arket i ng r epr es ent at i ves char ged w i th cul t i vat i ng and s upervi s i ng an i ndepende nts al es for ce w er e exe m ptadmi ni s tr at i ve empl oy ees , as thei rpr i m arydut i es of educa t i ng and or gani zi ng s al es peopl e w er e “a i m ed atpr om ot i ng . . . cus t om ers al es g e n e ra lly , ” not“r out i ne s el l i ng eff or t s focus ed s i m pl yon part i cul ars al es tr ans act i ons . ” R eich v . Jo h n A lden L ife In s. C o . , 1 2 6 F . 3 d at 10 (em p h asis in o ri g inal). A n u m b e r o f

d is tr ic t c o u rt o p in io n s h a v e d ra w n a s im ila r d is tin c tio n . S e e , e .g ., N earyv. M etr o. Pr op. & C as . I ns . C o. , 517 F. Supp. 2d 606, 614 ( D . C onn. 2007) ( fi ndi ng that a c lai m s ad

juster did n o t perf

o rm ad m inistrati v e w o rk b ec au se h e d id n o t perf o rm

“ d u ties c lea rlyre late d to se rv icin g th e b u sin e ss itse lf: itc o u ld n o t f u n c tio n p ro p e rly w ith o u t e m p lo y e e s to m a in ta in it; a b u s in e s s m u s t p a yits ta x e s a n d k e e p u p its in s u ra n c e . Such ar e notact i vi t i es thati nvol ve w hatthe day - t o- daybus i nes s s peci fi cal l ys el l s or p rov ides , rathe r th ese are task s tha t eve ryb u sine ss m u st un d ertak e in o rde r t o fu n cti o n . ”); R e l y e a v . C a r m a n , C a l l a h a n & I n g h a m , L L P , N o . 0 3 C i v . 5 5 8 0 ( D R H ) ( ML O ) , 2 0 0 6 WL 2577829, at*5 ( E . D . N . Y . 2006) ( “Li ke [e s cr ow ] cl os er s . . . , Pl ai nt i ffs appl i ed exi s t i ng pol i ci es and pr ocedur es on a ca s e- by - cas e bas i s . T hei rdut i es do noti nvol ve the cr aft i ng16

o f th o se p o li cies, bu t r athe r th e a p p li ca ti o n o f th o se p o li cies. A s a re su lt , P lai n ti ff s are bett erdes cr i bed as ‘ pr oduct i on, ’ r atherthan ‘ admi ni s tr at i ve’ w or ker s , and theyar e not ex em p t from F L S A . ”); C asa s, 2 0 0 2 W L 5 0 7 0 5 9 , at *9 (find ing that loan o ri g inato rs fo r a fi nance companyw ho w er e “r es pons i bl e fors ol i ci t i ng, s el l i ng and pr oces s i ng l oans as w el l as i den t i fy i ng , m od i fy i ng and structuri ng the loan t o fita cust om er’ s fi nan ci al need s” w er e “pr i m ar i l yi nvol ved w i th ‘ the day - t o- daycarry i ng outof the bus i nes s ’ r atherthan ‘the runn i ng of [ the] busi ness [i t sel f]’ or det erm i ning i t s overal l cou rs e or poli ci es” ( quot i ng B r att , 912 F. 2d at1070) ) ; R ei ch v. C hi . T i t l e I ns . C o. , 853 F. Supp. 1325, 1330 (D . K an. 19 94 ) ( fi nd i ng escr ow cl osers em ploy ed b ya com pan yeng aged i n the busi ness of i ns ur i ng t i t l e forr eal pr opertyt o be enga ged i n a pr oduct i on r atherthan admi ni s tr at i ve ca p ac ity ). Oth e ro u t - o f

- c i r c u i tc a s e s s i mi l a r l ys u p p o r tth e l o g i c th a tc o n t e x tma t t e r s . An e m p lo y e e w h o se jo b is to e v a lu a te c re d it w h o w o rk s in th e c re d it i n d u stryis m o re lik e ly t o per form a pr oduct i on j ob. See C as as , 2002 W L 507059, at*9 ( l oan off i cer s forbank ar e pr oduct i on) ; R el y ea, 2006 W L 2577829, at*5 ( l oan cl os er s ar e pr oduct i on) ; R ei ch v. C hi . T i t l e I ns . C o. , 853 F. Supp. at1330. E m pl oy ees w ho eval uat e and e xt end cr edi ton behal f of a companythati s noti n t he cr edi ti ndus try– ext endi ng cr edi ti n or dert o al l ow cu stom ers to p u rch ase a tan g ible g o o d that the e m p loy er m an u fa cture d , fo r ex am p le – a re gener al l ycons i der ed admi ni s tr at i ve empl oy ees . See H i l l s v. W . PaperC o. , 825 F. Supp.17

936 ( D . K an. 1993) ( empl oy ee e xt ended c r edi tt o cus t om er s of companym anufa ctur i ng p a p e r); R e ich v . H a e m o n e tics , 9 0 7 F . S u p p . 5 1 2 (D . M a ss . 1 9 9 5 ) (e m p lo y e e in v o lv e d in ext endi ng cr edi tt o cus t om er s of companythats ol d equi pm entt o hos pi t al s ) . B uti n the cont extof s uch bus i nes s es , s uch empl oy ees pr ovi de adj unct , gener al s ervi ces t o the over al l runni ng of the bus i nes s , w hi l e atC has e, underw r i t er s s uch as W hal en ar e the w o rk e rs w h o p ro d u c e th e se rv ice s – lo a n s – th a t ar e “ so ld ” b yth e b u sin e ss to p ro d u c e its i ncome. C has e off

er s a fe w outof ci r cui tcas es s ugges t i ng thatunderw r i t er s ar e exe m pt a d m in is tr a tiv e e m p lo y e e s , b u t th e c a s e s a re d is tin g u is h a b le o n th e irf a c ts . S e e , e .g ., E dw ar ds v. A udobon I ns . G r oup C o. , N o. 3: 02- C V - 1618- W S, 2004 W L 3119911, at*5 ( S. D . M i s s . A ug. 31, 2004) ( fi ndi ng an underw r i t erw ho “dec i de[d] w hatr i s ks the companyw oul d t ake a nd atw hatpr i ce” an exe m ptadmi ni s tr at i ve empl oy ee) ; C al l ahan v. B ancorps outh I ns . Ser vs . of M i s s . , I nc. , 244 F. Supp. 2d 678, 685- 86 ( S. D . M i s s . 2002) (fi nd i ng m anag er r espon si ble for overs eei ng al l aspect s of em ploy er’ s operat i on s, i ncl udi ng m arket i ng, bi l l i ng and col l ect i ons , and underw r i t i ng, w as admi ni s tr at i ve empl oy ee) ; H i ppen v. Fi r s tN at ’ l B ank, C i v. A . N o. 90- 2024- L , 1992 W L 73554, at*7 (D . K a n . M a r. 1 9 , 1 9 9 2 ) (f in d in g e x e c u tiv e v ice p re sid e n t o f b a n k w h o d e sc rib e d h im se lf as “numbertw o” i n hi er ar chyand w as m emberof boar d of di r ect or s t o be admi ni s tr at i ve e m p lo y e e ); C re e se v . W a sh . M u t. B a n k , N o . B 1 9 3 9 3 1 , 2 0 0 8 W L 6 5 0 7 6 6 , at * 8 (C a l. C t.18

A p p . 2 0 0 8 ) (n o tin g sp e c if ica llyth a t lo w e r c o u rt d e ter m in a tio n a s to c las s c e rtific a tio n d id notaddr es s the mer i t s of w hetherunderw r i t er s s eeki ng t o chal l enge e xempt cl as s i fi cat i on w er e admi ni s tr at i ve empl oy ees ) . I n vi r tual l yal l of thes e ca s es , the empl oy ee i n ques t i on exerci sed m anag eri al t asks bey on d assess i ng credi tri sk, or ass essed r i sks i n a firm w ho se pr i m arybus i nes s w as notthe ext ens i on of cr edi t , and the r es ul ti s ther efor e noti n t ens i on w i th the ana l y s i s offe r ed her e. I n anyevent , t o the ext entthatthe r eas oni ng, l anguage , or r es ul ti n anyof thes e ca s es i s notcons i s t entw i th ouranal y s i s , w e r es pect ful l ydi s agr ee. A c c o rd in g ly , w e h o ld th a t W h a len d id n o t p e rf o rm w o rk d ire c tlyre late d to m anage m entpol i ci es orgener al bus i nes s oper at i ons . B eca us e an a dm i ni s tr at i ve e m p lo y e e m u st both per form w or k di r ect l yr el at ed t o m anage m entpol i ci es orgener al bu si ness ope rat i on s and cus t om ar i l yand r egul ar l yexer ci s e di s cr et i on and i ndepende nt j udgm ent , w e thus hol d t hatW hal en w as notempl oy ed i n a bona f i de admi ni s tr at i ve capa ci ty . W e nee d notaddr es s w hetherW hal en cus t om ar i l yand r egul ar l yexer ci s ed d isc re tio n a n d in d e p e n d e n t ju d g m e n t. T h e j u d g me n to f

th e d i s tr i c tc o u r ti n f

a v o ro f th e a p p e l l e e i s RE VE RS E D.