Opinion ID: 2764472
Heading Depth: 1
Heading Rank: 2

Heading: The Motion for Judgment as a Matter of Law

Text: We review de novo a district court’s denial of judgment as a matter of law. Bianchi v. Roadway Express, Inc., 441 F.3d 1278, 1282 (11th Cir. 2006) (per curiam). Where a legally sufficient basis exists for a reasonable jury to find for a 2 Case: 13-11718 Date Filed: 12/24/2014 Page: 3 of 27 particular party on an issue, judgment as a matter of law is not proper. See Cook ex rel. Estate of Tessier v. Sheriff of Monroe Cnty., Fla., 402 F.3d 1092, 1114 (11th Cir. 2005).
The plaintiff lieutenants claim that the City was required to pay them overtime because they were not exempt from the FLSA’s overtime-pay requirements. A general understanding of the FLSA’s overtime-pay requirements, therefore, is helpful to put into context the background of this case. For this reason, we start our consideration of this appeal with a review of the applicable parts of the FLSA. The FLSA is designed to ensure “all able-bodied working men and women a fair day’s pay for a fair day’s work.” Gregory v. First Title of Am., Inc., 555 F.3d 1300, 1307-08 (11th Cir. 2009) (per curiam) (citation omitted). To accomplish this goal, the FLSA requires that overtime be paid to employees who fall under the Act, at a rate of one-and-one-half times the employee’s base pay. Id. at 1302. Typically, employees are paid overtime when they work more than forty hours in a workweek. Id. Section 207(k) of the Act, however, provides an exception to the forty-hour workweek for “any employee in fire protection activities.” 29 U.S.C. § 207(k). Under the Department of Labor (“DOL”) regulations interpreting § 207(k), employees engaged in fire-protection services must be paid overtime for all 3 Case: 13-11718 Date Filed: 12/24/2014 Page: 4 of 27 time worked over 106 hours in a fourteen-day work period. 29 C.F.R. § 553.230(c). The Act also creates a number of exemptions from its minimum wage and overtime requirements. As relevant to this case, one such exemption exists for individuals “employed in a bona fide executive . . . capacity.” 29 U.S.C. § 213(a)(1). We construe this statutory exemption narrowly, like we construe all other exemptions under the FLSA. Gregory, 555 F.3d at 1302. The employer bears the burden of establishing that it is entitled to an FLSA exemption. Alvarez Perez v. Sanford-Orlando Kennel Club, Inc., 515 F.3d 1150, 1156 (11th Cir. 2008). An employer wishing to demonstrate that its employee falls under the FLSA’s executive exemption must establish that (1) [the employee is] [c]ompensated on a salary basis at a rate of not less than $455 per week . . . , exclusive of board, lodging or other facilities; (2) [the employee’s] primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof; (3) [the employee] customarily and regularly directs the work of two or more other employees; and (4) [the employee] has the authority to hire or fire other employees or [that the employee’s] suggestions and recommendations as to the hiring, firing, advancement, promotion or any other 4 Case: 13-11718 Date Filed: 12/24/2014 Page: 5 of 27 change of status of other employees are given particular weight. See 29 C.F.R. § 541.100(a). The first prong of the executive exemption, known as the “salary basis” test, is at issue here. An employee is considered to be paid on a “salary basis” if the employee regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee's 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(a) (emphasis added). This general rule prohibiting deductions from an employee’s paycheck is subject to a number of exceptions. Deductions from pay are permissible when the exempt employee (1) is “absent from work for one or more full days for personal reasons, other than sickness or disability”; (2) is absent from work for “one or more full days occasioned by sickness or disability . . . if the deduction is made in accordance with a bona fide [sick leave] plan”; (3) is penalized “in good faith for infractions of safety rules of major significance”; or (4) receives a “disciplinary suspension[] of one or more full days imposed in good faith for infractions of workplace conduct rules.” See 29 C.F.R. § 541.602. Two of these exceptions are at issue here: (1) deductions for violations of safety rules of major significance and (2) deductions for violations of workplace conduct rules. Safety rules of major significance include “those relating to the 5 Case: 13-11718 Date Filed: 12/24/2014 Page: 6 of 27 prevention of serious danger in the workplace or to other employees, such as rules prohibiting smoking in explosive plants, oil refineries and coal mines.” 29 C.F.R. § 541.602(b)(4). The exception relating to workplace conduct rules was added as a part of the August 2004 amendments to the DOL regulations interpreting the executive, administrative, and professional exemptions. See Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, 69 Fed. Reg. 22122 (April 23, 2004). We have not yet addressed or otherwise interpreted the term “workplace conduct rules.” The preamble to the DOL regulations, however, provides some guidance, noting that the addition of this exception “will permit employers to hold exempt employees to the same standards of conduct as that required of their nonexempt workforce.” 69 Fed. Reg. at 22177. The term “workplace conduct” is not to be construed expansively. Id. Instead, it covers only “serious workplace misconduct like sexual harassment, violence, drug or alcohol violations, or violations of state or federal laws.” Id. “[W]orkplace misconduct,” in turn, refers to conduct and was not meant to apply to performance or attendance issues. Id. Although the term should be construed narrowly, the rule does not prevent an employer from imposing a disciplinary suspension for misconduct that occurs off the employer’s property if the employer 6 Case: 13-11718 Date Filed: 12/24/2014 Page: 7 of 27 has a bona fide rule covering such conduct. Id. Suspensions must be imposed pursuant to a written policy applicable to all employees. 29 C.F.R. § 541.602(b)(5). The written policy need not include an exhaustive list of specific violations that could result in a suspension, but it “should be sufficient to put employees on notice that they could be subject to an unpaid disciplinary suspension.”1 69 Fed. Reg. at 22177.

Roosevelt Watkins, a lieutenant in the Division of Fire Suppression of the Montgomery Fire Department (“MFD”), brought a collective action against his employer, the City of Montgomery, pursuant to the FLSA, seeking overtime 1 Even if an employer makes improper deductions based on suspensions not covered by the exceptions to the salary-basis test, the exempt status of the employee is not necessarily destroyed. Rather, an employer who makes improper deductions will lose the exemption if “the facts demonstrate that the employer did not intend to pay employees on a salary basis.” See 29 C.F.R. § 541.603(a). An “actual practice” of making improper deductions generally satisfies the intent requirement. But even if the employer is shown to have an “actual practice” of making improper deductions, the exemption is lost only “during the time period in which the improper deductions were made for employees in the same job classification working for the same managers responsible for the actual improper deductions.” See 29 C.F.R. § 541.603(b). Moreover, isolated or inadvertent deductions will not destroy the exemption if the employer reimburses the employees for such improper deductions. See 29 C.F.R. § 541.603(c). Finally, the DOL regulations also include a “savings clause,” which may apply in situations where employers have made improper deductions from their employees’ paychecks. See 29 C.F.R. § 541.603(d). So even if an employer makes a deduction from a paycheck that does not fall within any of the exceptions to the salary-basis requirement, an employee may still be considered exempt for purposes of the FLSA if the savings clause applies. The “actual practice” and “savings clause” provisions of the DOL regulations are not at issue in this appeal, so we do not discuss them further. 7 Case: 13-11718 Date Filed: 12/24/2014 Page: 8 of 27 compensation. Watkins contended that he was entitled to overtime compensation as a non-exempt “first responder” under the DOL’s “first responder” regulation, 29 C.F.R. § 541.3(b). In response to his claims, the City raised an affirmative defense under the executive exemption to the FLSA’s overtime requirements. The district court certified the matter as a collective action, and fifty-three other MFD Fire Suppression lieutenants joined the action asserting claims for overtime compensation.
The MFD’s Fire Suppression Division is made up of twenty-two fire companies. The MFD lieutenants command a fire company, which consists of one officer (i.e., a captain or a lieutenant), one sergeant, and two firefighters. Four district chiefs also work during each twenty-four hour shift. When lieutenants are on duty, they are the highest ranking officers in charge of their assigned companies and their duty is to supervise other firefighters in their companies while at the fire station and when responding to emergency calls. Each company operates on a repeating cycle of three twenty-four hour shifts: A shift, B shift, and C shift. The three shifts of twenty-four hours are followed by forty-eight hours off. Based on this schedule, the MFD lieutenants typically work 104, 112, and 120 hours in successive pay periods. They do not receive overtime compensation. 8 Case: 13-11718 Date Filed: 12/24/2014 Page: 9 of 27 The Personnel Board of the City and County of Montgomery has a policy prohibiting improper deductions from exempt employees’ pay. The policy, however, also provides that “[a]ppointing authorities may make deductions from the wages of exempt employees for . . . suspensions for violation of workplace safety rules and workplace conduct rules.” The policy further provides, If an employee believes that an impermissible deduction has been made, the employee should contact his/her payroll office of the Personnel Department. In the event that an impermissible deduction has been made, the employee will be reimbursed for the improper deduction and a good faith commitment will be made to comply with proper deductions in the future.
The MFD lieutenants contended at trial that the City made improper deductions from their wages for suspensions for behavior that did not fall under the permissible exceptions of either violations of safety rules of major significance or violations of workplace conduct rules. 2 As a result, the MFD lieutenants asserted, they were not exempt executives under the FLSA’s overtime-pay requirements. The fourteen suspensions at issue fall into five general categories: (1) responding to the wrong address; (2) leaving before the end of a shift; (3) violations of the law; (4) disrespect towards a superior officer; and (5) violations of the City’s weight policy. During the trial, the testimony of Chief John Petrey 2 The twelve MFD lieutenants receiving the fourteen suspensions did not object to the suspensions at the times that they were imposed. 9 Case: 13-11718 Date Filed: 12/24/2014 Page: 10 of 27 established that the City had rules prohibiting each of the disciplinary violations committed by the lieutenants. For instance, Chief Petrey testified that the City had set forth rules prohibiting lieutenants from (1) leaving their shifts early; (2) being overweight; (3) being disrespectful to supervisors; and (4) participating in illegal conduct. The City also had promulgated a rule that required fire lieutenants to know the addresses of the territory in which they worked. Chief Petrey testified that each of these rules applied to all uniformed members of the Montgomery Fire Department. Barbara Montoya, Director of the City of Montgomery Personnel Board, also testified during the trial that particular allowable deductions were based upon the FLSA regulations. In addition, the parties offered evidence pertaining to the reasons for these rules and the potential consequences to MFD operations resulting from violations of these types. At the close of the evidence, the lieutenants moved for judgment as a matter of law “on the fact that the [C]ity ha[d] failed to prove a prima facie case that the [lieutenants] [met] each and every element of the executive exemption.” The district court denied the motion, concluding that a reasonable jury “would have a legally sufficient evidentiary basis to find for the [C]ity on the issue of the executive exemption.” In instructing the jury on how to consider the suspensions and how to determine whether the lieutenants were paid on a salary basis, the district court 10 Case: 13-11718 Date Filed: 12/24/2014 Page: 11 of 27 provided detailed direction that essentially tracked the DOL’s guidance on these issues: The first element that the City must prove as part of the executive exemption is that it compensated the Plaintiffs on a salary basis. Although the parties agree that Fire Suppression Lieutenants are paid more than $455.00 per week, they do not agree that the Plaintiffs were paid on a salary basis, because the Plaintiffs contend that they were subject to impermissible disciplinary suspensions without pay. . . . ... An employee is paid on a salary basis if the employee is regularly paid, on a weekly or less frequent basis, a predetermined amount constituting all or part of the employee’s compensation, and the amount is not subject to reduction because of variations in the quality or quantity of the work performed. This means that the amount of compensation a Fire Suppression Lieutenant receives generally cannot be subject to reductions because of variations in the quality of the work the Plaintiffs performed. However, certain reductions from salaried employees’ pay are permissible under the Department of Labor regulations. The Plaintiffs contend that there are only two types of improper deductions at issue in this case. The City may reduce a salaried employee’s pay in good faith to penalize an employee for infractions of safety rules of major significance. Under the regulations, safety rules of major significance include those relating to the prevention of serious danger in the workplace or to other employees, such as rules prohibiting smoking in explosive plaints, oil refineries and coal mines. The City may also suspend a salaried employee without pay in good faith for a full day or more without pay for 11 Case: 13-11718 Date Filed: 12/24/2014 Page: 12 of 27 infractions of workplace conduct rules. The term “workplace conduct” refers to conduct, not performance or attendance issues. Unpaid disciplinary suspensions must be made pursuant to written policy applicable to all employees. However, the fact that the employee’s misconduct occurred off the employer’s property should not preclude an employer from imposing a disciplinary suspension, as long as the employer had a bona fide workplace conduct rule that covers such off-site conduct. The Department of Labor regulations give some examples of permissible suspensions for infractions of written workplace conduct rules. These examples include, but are not limited to:
for three days for violating a generally applicable written policy prohibiting sexual harassment;
for twelve days for violating a generally applicable written policy prohibiting workplace violence. Plaintiffs contend they are not paid on a salary basis as required for them to be properly classified as bona fide executives due to the fact that they are subject to disciplinary suspensions without pay for infractions unrelated to violations of “safety rules of major significance” or written “workplace conduct rules.” On the verdict form, you will be asked to render an advisory opinion on whether these disciplinary suspensions were permissible under the FLSA and its interpreting regulations. Finally, the district court provided the jury with a list of the particular suspensions at issue.3 3 The district court advised the jury that the parties had stipulated to the following facts: Lieutenant C.K. Tranthom was suspended without pay for 4 days in August 2008 for leaving early without permission; Plaintiff M.D. Thomas was suspended without pay for 1 day in 12 Case: 13-11718 Date Filed: 12/24/2014 Page: 13 of 27 Armed with these detailed instructions and the testimony that it heard during trial, the jury responded in the following way to these questions on the verdict form: Do you find by a preponderance of the evidence: 1. That the Plaintiffs are paid on a salary basis? Yes. 2. That Plaintiffs’ primary duty is the management? Yes. 3. That the Plaintiffs have the authority to hire and fire or that their suggestions or recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees are given particular weight? Yes. ... 5. That the disciplinary suspensions without pay to which the parties have stipulated were January 2012 for being overweight; Lieutenant A.W. Wiggins was suspended without pay for 5 days in June of 2008 for being overweight; Lieutenant L.P. Stewart was suspended without pay for 5 days in September 2008 for being overweight; Plaintiff G.A. Treloar was suspended without pay for 5 days in May 2009 for being overweight; Plaintiff Watkins was suspended without pay for 4 days in March 2008 for driving to the wrong address; Plaintiff G.A. Treloar was suspended without pay for 4 days in May 2008 for missing a street; Plaintiff J.A. Money was suspended without pay for 4 days in August 2008 for driving to the wrong address; Plaintiff S.L. Lewis was suspended without pay for 4 days in February 2009 for driving to the wrong address; Lieutenant D.W. Dillard was suspended without pay for 3 days in May 2008 for calling a District Chief “The Queen”; Plaintiff R.L. Garmon was suspended without pay for 29 days for disrespecting a District Chief; Lt. L.P. Stewart was suspended without pay for 29 days in April of 2011 for being disrespectful to an Assistant Chief; Lieutenant L. McDade was suspended without pay for 9 days in September of 2008 for receiving a reckless driving ticket; Lieutenant R.T. Crawford was suspended without pay for 5 days in October for receiving a ticket for fireworks. 13 Case: 13-11718 Date Filed: 12/24/2014 Page: 14 of 27 permissible? Yes. Following the jury’s verdict, the lieutenants renewed their motion for judgment as a matter of law. They argued that whether the suspensions imposed accurately could be characterized as being for violations of a safety rule of major significance or a workplace conduct rule necessarily constituted an issue of law, not an issue of fact for a jury to resolve. The district court apparently assumed that the lieutenants’ contention was correct and considered the jury’s verdict as advisory on the question of whether the deductions were permissible. But the district court still denied the lieutenants’ motion because it determined that, as a matter of law, each of the violations qualified as a violation of either a safety rule of major significance or a workplace conduct rule.
On appeal, the MFD lieutenants again urge that whether the suspensions imposed accurately could be characterized as being for violations of a safety rule of major significance or a workplace conduct rule necessarily presents an issue of law, not an issue of fact for a jury to resolve. They invite us to determine whether, as a matter of law, the specific deductions taken by the City for the fourteen suspensions fall into either of the permissible categories relevant here. We decline their invitation. 14 Case: 13-11718 Date Filed: 12/24/2014 Page: 15 of 27 We acknowledge that the question of whether pay deductions for exempt employees are permissible under the FLSA can present a question of law that falls outside the province of the jury. But that is not necessarily the case, and it was not the situation here. Instead, the jury first had to resolve issues of fact to determine whether the deductions at issue qualified as permissible under the DOL’s guidance. That made the question that the jury considered a mixed question of law and fact. See TSC Indus., Inc. v. Northway, Inc., 426 U.S. 438, 450, 96 S. Ct. 2126, 2133 (1976) (an issue may be properly characterized as a mixed question of law and fact when it involves “the application of a legal standard to a particular set of facts”). Issues involving mixed questions of law and fact are typically resolved by juries. See, e.g., United States v. Gaudin, 515 U.S. 506, 512, 115 S. Ct. 2310, 2314 (1995) (citing TSC Indus., Inc., 426 U.S. at 450, 96 S. Ct. at 2133 (1976)). For example, with respect to the deductions for violating the weight policy, without more, the evidence that lieutenants were suspended for violating it sheds no light on the significance, if any, of the City’s weight policy—that is, whether that policy constitutes either a safety rule of major significance or a workplace conduct rule. We have previously explained that, for a rule to qualify as a safety rule of major significance, it must regulate conduct that can create a “serious danger” to the employer or to other employees. Avery v. City of Talladega, 24 15 Case: 13-11718 Date Filed: 12/24/2014 Page: 16 of 27 F.3d 1337, 1341-42 (11th Cir. 1994). And the DOL guidance notes that workplace misconduct refers to “serious workplace misconduct . . . .” 69 Fed. Reg. at 22177. But the mere fact that deductions occurred for violations of the City’s weight policy does not tell us why the City had such a policy or what the possible practical consequences of a violation of the policy may be, if any, to other employees of the MFD. Nor does it provide any indication as to whether violation of the weight policy amounts to “serious . . . misconduct.” This critical information must be considered in determining whether a rule constitutes either a safety rule of major significance or a workplace misconduct rule. Moreover, when the parties do not agree on the answers to these questions, an issue of fact arises concerning them, and a jury may resolve such questions. That is precisely what occurred during the trial in this case. As it related to the City’s weight policy, Chief Kelly Gordon testified that the leading cause of death of a firefighter on the scene of an emergency is a heart attack—that “fifty percent of the fatalities in firefighting [are] a direct result of a heart attack.” Chief Gordon also testified that a firefighter who is overweight is “absolutely” more likely to suffer a heart attack at the scene of the fire and that when a firefighter “goes down” at the fire-fighting scene due to a heart attack, it “puts a strain on the suppression operation, because . . . we have to start treating the individual and taking care of him, whether we do it with on-scene individuals 16 Case: 13-11718 Date Filed: 12/24/2014 Page: 17 of 27 or call out additional units.” This type of situation, according to Chief Gordon’s testimony, could put the lives of the other firefighters in danger. District Chief Dennis Ware also testified at trial that the leading cause of death at the scene of a fire is a heart attack. District Chief Ware further agreed with Chief Kelly that if a firefighter were to suffer a heart attack on the fire-fighting scene, it would put lives in danger. The jury was entitled to believe this testimony. Since it apparently did, the jury could have applied the law to the facts that it found to reasonably conclude that a fire lieutenant’s violation of the weight policy would jeopardize his fellow firefighters on the fire ground and would constitute violation of a safety rule of major significance. The jury similarly heard evidence concerning whether the other rules underlying the deductions for suspensions were either safety rules of major significance or workplace conduct rules. 4 For each category of rule violation, the jury had to make factual determinations about evidence that was presented during the trial and then apply the law to its factual determinations to evaluate whether the 4 No additional evidence was presented with regard to the deductions for suspensions for violations of law. But the DOL guidance clearly provides that the phrase “serious workplace misconduct” includes “violations of state or federal laws.” 69 Fed. Reg. at 22177. Even if the two deductions for violations of the law here were for violations of local law, if any error were made in finding that they were for permissible deductions—a conclusion that we do not reach— any such error was harmless. Two improper deductions for 54 employees over a span of more than three years was not enough to qualify as an actual practice of making improper deductions in this case. 17 Case: 13-11718 Date Filed: 12/24/2014 Page: 18 of 27 deductions were for violations of either safety rules of major significance or workplace conduct rules. Based on the evidence presented at trial, a reasonable jury could have found that each of the categories of disciplinary suspensions and deductions was permissible because each fell under either a safety rule of major significance or a workplace conduct rule. Since a reasonable jury could have found for the City on this issue—and did, in fact, so find, we affirm the district court’s denial of judgment as a matter of law. 5 Indeed, where a legally sufficient basis exists for a reasonable jury to find for a particular party on an issue, judgment as a matter of law is not proper. See Cook, 402 F.3d at 1114.