Opinion ID: 3165693
Heading Depth: 2
Heading Rank: 2

Heading: Management or General Business Operations

Text: Second, NSP must prove that Grage's primary duty [was] the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers. Id. § 541.200(a)(2). It is undisputed that the work Grage performed was office or non-manual work. The issue is whether the primary duty of the office work Grage performed was related to the management or general business operations of NSP, or instead primarily related to direct, hands-on, production and distribution of energy. The primary duty of an employee's job is the principal, main, major or most important duty that the employee performs. Id. § 541.700(a). When deciding the employee's primary duty, it must be based on all the facts in a particular case, with the major emphasis on the character of the employee's job as a whole. Id. The following factors may be considered: relative importance of the exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee's relative freedom from direct supervision; and the relationship between the employee's salary and the wages paid to other employees for the kind of nonexempt work performed. Id. The phrase 'directly related to the management or general business operations' refers to the type of work performed by the employee. Id. § 541.201(a) (emphasis added). For this requirement an employee must perform work directly related to assisting with the running or servicing of the business, as -6- distinguished . . . from working on a manufacturing production line or selling a product in a retail or service establishment. Id. Subsection (b) of § 541.201 lists work that is clearly related to the management or general business operations, but the list is not exhaustive. Id. § 541.201(b). Such work includes finance; accounting; . . . quality control; purchasing; procurement; . . . safety and health; personnel management; . . . labor relations; . . . legal and regulatory compliance; and similar activities. Id. (emphasis added). Administrative work could also include advising the management, planning, negotiating, representing the company, purchasing, promoting sales, and business research and control. Renfro v. Ind. Mich. Power Co., 370 F.3d 512, 517 (6th Cir. 2004) (emphasis added) (quoting 29 C.F.R. § 541.205(b) (2003)). Conversely, 'production' employees . . . 'generate (i.e. 'produce') the very product or service that the employer's business offers to the public.' Id. (quoting Reich v. John Alden Life Ins. Co., 126 F.3d 1, 9 (1st Cir. 1997)). However, if an employee is simply performing work that is 'ancillary to an employer's principal production activity,' [the] employee[ is] administrative. Id. (quoting Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 904 (3d Cir. 1991)). As stated above, NSP and Grage describe her primary duties as a Supervisor I quite differently. However, [c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts should be left to the jury. Torgerson, 643 F.3d at 1042 (quoting Reeves, 530 U.S. at 150). For this reason alone, granting summary judgment for either party was improper. Here, there are fundamental factual issues that must be decided by a jury. Specifically, the jury needs to weigh the evidence and determine the primary duties Grage performed as a Supervisor I before the court can decide the legal question of whether those duties exclude her from overtime pay under the FLSA. This is not a case where a rational trier of fact could not possibly find in favor of the nonmoving party. Id. Factual issues aside, the district court concluded that Grage did not fall within the -7- administrative exemption of the FLSA because she was part of the production of NSP's gas and electricity, not an administrative employee involved in the company's management or general business operations as intended by 29 C.F.R. § 541.201. However, properly instructed, a rational jury could easily disagree. Indeed, NSP's principal endeavor is the production and distribution of energy, i.e., gas and electricity for which commodities customers remunerate NSP. A jury could find that Grage was responsible for long-term planning of installations and maintenance, short-term planning such as daily work assignments, and that she was expected to establish and maintain a safety-focused and positive work culture for her crew. These job responsibilities fit squarely within work that § 541.201(b) lists as directly related to management or general business operations. 29 C.F.R. § 541.201(b) (listing safety and health, personnel management, and labor relations). Also, based on NSP's description of Grage's job, she was not actually producing anything. She merely provided administrative support for the field crews that build and repair the structures needed for NSP's gas and electricity production and services. In other words, Grage engage[d] in work that [was] 'ancillary to [her] employer's principal production activity,' which functions the courts have determined to be administrative work. Renfro, 370 F.3d at 517 (quoting Martin, 940 F.2d at 904). Additionally, § 541.203, which lists examples of administrative exemptions, specifically includes employees who facilitate output. 29 C.F.R. § 541.203(c)-(d) (describing [a]n employee who leads a team of other employees assigned to complete major projects for the employer and [a]n executive assistant or administrative assistant). Moreover, [a] job title alone is insufficient to establish the exempt status of an employee. Id. § 541.2. Therefore, it is irrelevant that the Supervisor I title falls under the Production Operations job family and Field Operations job function, which do not specifically list administrative tasks or support as one the duties of such Supervisor. Thus, a jury could find that Grage's primary duties were directly related -8- to management and general business operations, not production. At the very least, NSP has raised a genuine issue of material fact, which prevents this court from affirming the district court's grant of summary judgment in favor of Grage. C. Discretion and Independent Judgment in Matters of Significance Finally, NSP must prove that Grage's primary duty include[d] the exercise of discretion and independent judgment with respect to matters of significance. Id. § 541.200(a)(3). The district court granted summary judgment in favor of Grage after concluding that NSP did not meet its burden regarding the second requirement. Thus, the third requirement for the administrative exemption was not considered. NSP argues Grage exercised considerable discretion and independent judgment in matters that were critical to NSP's success as part of her work duties. We find that here, too, a fact issue exists regarding Grage's primary duties, thus precluding a grant of summary judgment in favor of either party. [E]xercise 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. Id. § 541.202(a). It generally requires independent choice, free from immediate direction or supervision. Id. § 541.202(c). But, this requirement can be met even if decisions or recommendations are reviewed at a higher level. Id. In making this determination, all facts should be considered, especially the following factors: Whether the employee has authority to formulate, affect, interpret, or implement management policies or operating practices; whether the employee carries out major assignments in conducting the operations of the business; whether the employee performs work that affects business operations to a substantial degree . . . whether the employee has authority to waive or deviate from established policies and procedures without prior approval . . . whether the employee provides consultation or expert -9- advice to management; whether the employee is involved in planning long- or short-term business objectives . . . and whether the employee represents the company in handling complaints, arbitrating disputes or resolving grievances. Id. § 541.202(b). According to Grage, she had little discretion or control as a Supervisor I. She states that employees called Designers decide how and when work is handled; she simply had to follow the work orders established by the Designers. However, there is conflicting evidence that shows Grage exercised discretion as a Supervisor I when she decided how to prioritize work assignments, how to allocate work crews and resources between jobs, and how to reorganize projects in the midst of changing circumstances. A jury could find that she made these decisions without guidance after considering different courses of action and possible outcomes. Evidence on the record also shows that Grage implemented operating practices, carried out major assignments for NSP, and participated in planning business objectives. All of these duties involve a substantial amount of discretion and are specifically listed as factors to be considered when determining whether the primary duty of the employee includes the exercise of discretion and independent judgment. Id. The term 'matters of significance' refers to the level of importance or consequence of the work performed. Id. § 541.202(a). The duties discussed above are certainly matters of significance. The long-term and daily planning Grage allegedly performed is of extreme importance to a power company like NSP. How she performed her job as a Supervisor I directly affected the service provided to customers and thus, was of great importance or consequence to NSP. Id. However, the final determination on this issue ultimately requires the weighing of evidence, which is the job of a jury. Torgerson, 643 F.3d at 1042. And, because NSP has raised a genuine issue of material fact as to whether Grage exercised discretion in her job as a Supervisor I, summary judgment in favor of Grage is not proper. -10-