Source: http://openjurist.org/126/f3d/1
Timestamp: 2015-04-18 13:19:01
Document Index: 462001298

Matched Legal Cases: ['§ 217', '§ 207', '§ 213', '§ 541', '§ 541', '§ 541', '§ 541', '§ 541', '§ 541']

126 F3d 1 Reich v. John Alden Life Insurance Company | OpenJurist
126 F. 3d 1 - Reich v. John Alden Life Insurance Company	Home126 f3d 1 reich v. john alden life insurance company
126 F3d 1 Reich v. John Alden Life Insurance Company 126 F.3d 1
134 Lab.Cas. P 33,591, 4 Wage & Hour Cas.2d(BNA) 129
Robert B. REICH, etc., Plaintiff--Appellant,v.JOHN ALDEN LIFE INSURANCE COMPANY, Defendant--Appellee.
Heard June 4, 1997.Decided Sept. 18, 1997.
The primary duty of the marketing representatives--the employees at issue here1--is to cultivate this independent agent sales force, and, thereby, ultimately to increase sales of John Alden products. To this end, the marketing representatives maintain constant contact with agents. Marketing representatives do not "share" agents with one another; instead, each keeps a list or "deck" of agents with whom he or she is in contact. The typical deck consists of 500-600 agents, and marketing representatives continually cull their decks to maintain an active agent base.
On May 4, 1995, the Secretary commenced this action against John Alden pursuant to section 17 of the FLSA, 29 U.S.C. § 217, seeking to enjoin the company from violating the overtime and recordkeeping provisions of the Act, 29 U.S.C. §§ 207 and 211, respectively, and from withholding unpaid overtime wages due to the marketing representatives.3 In its answer, John Alden asserted as an affirmative defense, inter alia, that the marketing representatives were exempt from the applicable regulations of the FLSA as "administrative employees" under section 13 of the Act, 29 U.S.C. § 213(a)(1).
The parties submitted the case to the district court for decision on cross-motions for summary judgment, based on their stipulation of facts as described above. It was undisputed that the marketing representatives routinely worked more than 40-hour workweeks without overtime pay and that the company did not keep records of the hours worked by each during a workweek. Therefore, the only issue before the district court was whether the marketing representatives could be considered "administrative employees" under the FLSA. In a Memorandum and Order dated October 8, 1996, the court concluded that the marketing representatives satisfied the Department of Labor's ("DOL") regulatory requirements for the administrative exemption, and therefore entered judgment in favor of John Alden. See Reich v. John Alden Life Ins. Co., 940 F.Supp. 418 (D.Mass.1996).
In finding these employees to be exempt, the court applied the regulatory "short test" for the administrative exemption, as set forth in 29 C.F.R. § 541.2(e)(2). First, the court addressed whether a marketing representative's primary duty consists of "[t]he performance of office or nonmanual work directly related to management policies or general business operations," as required by § 541.2(a)(1). In concluding that this "primary duty" requirement had been met, the court first found that marketing representatives perform the administrative tasks of "promoting sales" and "representing the company" within the meaning of the DOL's interpretative regulations, see 29 C.F.R. § 541.205(b). The court thus rejected the Secretary's contention that, because they are concerned with securing sales for the company, marketing representatives perform non-administrative "production" work, the distinction drawn in § 541.205(a). See John Alden, 940 F.Supp. at 421-22. Completing its analysis of the "primary duty" requirement, the court went on to find that the work performed by the employees is of "substantial importance to the management or operation of the business" within the meaning of §§ 541.205(a) and (c), noting that "[t]he success of the company in New England depends in large part on the success of the marketing representatives who promote sales of John Alden products." Id. at 422-23.
The court then turned to the second part of the short test, which provides that an exempt administrative employee must engage in work that requires the exercise of "discretion and independent judgment." 29 C.F.R. § 541.2(e)(2). The court found that this requirement had been met on the facts before it as well, noting that marketing representatives exercise discretion and use their own judgment in deciding which agents to contact and which products to emphasize on a given day. See id. at 423-24. Thus, having found that both prongs of the short test had been satisfied, the court concluded that the marketing representatives qualified as administrative employees and were thus exempt from the FLSA's overtime requirements.
The trial court must view all facts and draw all inferences in the light most favorable to the nonmoving party. See Continental Cas. Co. v. Canadian Universal Ins. Co., 924 F.2d 370, 373 (1st Cir.1991). When deciding cross-motions f