Opinion ID: 197565
Heading Depth: 2
Heading Rank: 2

Heading: Work Requiring Discretion and Independent Judgment

Text: 69 To satisfy the second prong of the short test, John Alden must demonstrate that its marketing representatives are engaged in work that requires the exercise of discretion and independent judgment. 29 C.F.R. § 541.2(e)(2). The Secretary's interpretations elaborate on this requirement as follows: 70 In general, the exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct and acting or making a decision after the various possibilities have been considered. The term ..., moreover, implies that the person has the authority or power to make an independent choice, free from immediate direction or supervision and with respect to matters of significance. 71 29 C.F.R. § 541.207(a). The interpretations further advise that the discretion and independent judgment exercised must be real and substantial, that is, they must be exercised with respect to matters of consequence. 29 C.F.R. § 541.207(d)(1). However, the exempt employee need not have final decisionmaking authority over such matters; [e]ven though an employee's work is subject to approval, even to the extent that a decision may be reversed by higher level management, it does not follow that the work did not require the exercise of discretion and independent judgment. Dymond v. United States Postal Serv., 670 F.2d 93, 96 (8th Cir.1982); see also 29 C.F.R. § 541.207(e). 72 The district court found, and we agree, that the marketing representatives exercise discretion and independent judgment in carrying out their duties. It is undisputed that these employees have discretion in choosing which agents to contact on any given day, and concerning which products to discuss with each agent. In addition, the marketing representatives rely on their own knowledge of an agent's business to help tailor proposals for the agent's end-customers. Further, they must be able to anticipate the competing products that the agent's customers might be considering, and distinguish John Alden's offerings from those of competitors. Thus, there is clear support in the record for the district court's conclusion that John Alden's marketing representatives exercise discretion and independent judgment in the course of their day-to-day agent contacts. 73 While recognizing that the marketing representatives do exercise some discretion in their dealings with agents, the Secretary argues that this discretion is not exercised with respect to matters of consequence within the meaning of the interpretive regulations. However, the matters on which these employees exercise their discretion and judgment--which agent would be in the best position to sell a given product, and which products would be most attractive to a given customer--would certainly appear to be of consequence to John Alden's business. Indeed, this work would seem to be of equal or greater importance than some of the work the Secretary's interpretations identify as exempt, such as the duties of an administrative assistant to an executive, 10 or those of a customer's man in a brokerage house. 11 See 29 C.F.R. § 541.207(d)(2). Thus, we will not upset the district court's decision on this ground. 12 74 The Secretary also contends that the lower court committed error by mistaking the mere use of skill in applying techniques, procedures, or specific standards, 29 C.F.R. § 541.207(b), for the required discretion and independent judgment. The Secretary submits that the marketing representatives, in informing agents and persuading them to recommend John Alden products, are simply applying the sales techniques they learned in training sessions and weekly sales meetings. The Secretary also points out that the marketing representatives receive both formal and informal guidance about which products and product features to emphasize, and about the general points to make with agents. Thus, the Secretary avers that rather than exercising discretion and independent judgment, these employees are simply making decisions within a given set of parameters, the type of work that would not qualify for the exemption. See 29 C.F.R. § 541.207(c). 13 75 However, as the district court found, the record simply does not support the Secretary's assertion. These employees do not use prepared scripts or read from a required verbatim statement, nor do they operate within the contours of a prescribed technique or sales pitch. On the contrary, the content of a given conversation with an agent is dictated by the needs or customer base of that agent, or by the particular information sought by the marketing representative during that phone call. Further, to the extent that the marketing representatives receive guidance about products to emphasize and suggested points to make with agents, they nonetheless exercise discretion in applying this instruction--for instance, in determining which agent may have an interest in that product, or in fashioning bid proposals that meet the needs of the agent's customers. 14 See Atlanta Professional Firefighters Union, Local 134 v. City of Atlanta, 920 F.2d 800, 805 (11th Cir.1991) (employees who retained discretion in implementing [the] directions of another meet discretion and independent judgment test). In light of all this, we concur that the marketing representatives are not merely 'skilled' workers who operate within a strict set of rules. Rather, they exercise significant discretion in their daily contacts with various insurance agents. John Alden, 940 F.Supp. at 423. 76 The district court did not commit error in finding that the primary duty of the marketing representatives includes work requiring the exercise of discretion and independent judgment within the meaning of 29 C.F.R. § 541.2(e)(2). Therefore, we conclude that the second prong of the administrative exemption has been met in this case.