Opinion ID: 660190
Heading Depth: 1
Heading Rank: 2

Heading: procedural history and the district court opinion

Text: 23 The Secretary brought this action on March 15, 1990 under Secs. 6, 7, 11(c), 15(a)(3) and 15(a)(5) of the FLSA. 29 U.S.C. Secs. 206, 207, 211(c), 215(a)(3), 215(a)(5). 5 The Secretary sought to enjoin Gateway and Blanchflower from violating the FLSA's minimum wage, overtime and recordkeeping requirements. The Secretary also sought unpaid minimum wages and overtime pay for Gateway's reporters, stringers, part-time reporters, photographers and a data processing manager. Additionally, the Secretary claimed that three years of back pay were appropriate rather than the normal two, because Gateway's violations had been willful under 29 U.S.C. Sec. 255(a). 24 As noted above, Gateway defended itself by claiming that its employees were exempt from the FLSA on two grounds. First, Gateway argued that its employees worked for small newspapers which are exempt under Sec. 13(a)(8) of the Act. Second, Gateway claimed that its employees were professional employees and therefore were exempt under Sec. 13(a)(1) of the Act. 25 Following a six-day bench trial, the District Court filed an opinion holding that Gateway owed back wages only to the reporters who had worked for six of the nineteen newspapers. The court ruled that the Sec. 13(a)(8) small newspaper exemption applied to all the Gateway papers except the six papers which had circulations of more than four thousand. The court rejected the Secretary's argument that the nineteen different newspapers were, for all practical purposes, the same newspaper and that the circulation of all of the nineteen papers should be aggregated before applying the exemption; when combined, the circulation of the Gateway papers was around sixty thousand, which would easily have taken the papers outside the scope of the exemption. 26 In reaching this conclusion, the court primarily relied on a 1965 opinion letter issued by the Wage and Hour Administrator which stated that 27 ... when a company publishes more than one newspaper, each newspaper is tested separately in order to determine whether the circulation is less than four thousand, provided that, in addition to their separate mastheads, the several newspapers carry different local news items. 28 Op. Letter No. 376, [1961-66 Transfer Binder] Lab.L.Rep. (CCH) p 30,988 (June 29, 1965). According to the court, since the nineteen papers had different mastheads and different local news items, the circulations of the papers should be considered separately. 29 Having disposed of the small newspaper exemption issue, the district court turned to the application of the professional employee exemption. The court held that the reporters were not professional employees within the scope of Sec. 13(a)(1). In reaching its conclusion, the court looked to the definition of professional employees in the Secretary's regulations, 29 C.F.R. Sec. 541.3, and interpretations, 29 C.F.R. Sec. 541.303. The interpretations require that a reporters' writing be  'predominantly original and creative'  to be exempt. 29 C.F.R. Sec. 541.303(f)(1). 30 Following this standard, the District Court found that while some of [the reporters'] work involved investigative reporting, features, and editorials, their job was predominantly to fill pages by gathering facts about routine community events and reporting them in a standard format. Because these duties were not predominantly original and creative, it concluded that the reporters were not professional employees within the scope of Sec. 13(a)(1). The court made no distinction in its analysis between reporters who made more than $250 per week and those who made less than $250, notwithstanding the provision in the regulations that requires the court to engage in different tests for professional status depending on whether the employee makes $250 or more. 31 The court then held that Gateway had not willfully violated the FLSA. Relying on McLaughlin v. Richland Shoe Co., 486 U.S. 128, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988), the district court reasoned that Gateway's defenses raised sufficiently legitimate and close questions of law and fact that its actions were not willful violations of the FLSA. 32 The court also held that the Secretary had not proved that Gateway owed back wages for those employees who did not testify at trial. The evidence that the Secretary introduced to prove the amount of back wages owed to the reporters did not indicate which papers employed the non-testifying reporters. Because the court had no way of knowing which of the non-testifying employees had worked for the non-exempt papers, it could not determine which non-testifying reporters were covered by the exemption and which were not. As a result, it awarded back wages only to those reporters who had testified at trial. 6 33 Following the entry of final judgment, both the Secretary and Gateway filed timely notices of appeal. The Secretary appealed the district court's orders concerning the small newspaper exemption, willfulness, and back wages to non-testifying reporters. Gateway appealed the district court's decision that the reporters were not professional employees. Albany Business Journal, Inc. filed an amicus brief in support of Gateway's appeal.