Opinion ID: 4526660
Heading Depth: 2
Heading Rank: 1

Heading: The administrative capacity exemptions

Text: An individual “employed in a bona fide executive, administrative, or professional capacity” is exempt. § 213(a)(1). Ochsner argues for application of the exemption for employment in an administrative capacity. There are two forms of that exemption. First, the standalone administrative exemption was created by statute and defined by regulation. Id.; 29 C.F.R. § 541.200(a). The second is the “highly compensated employee” (“HCE”) exemption, which was created by regulation in 2004. § 541.601; Defining and Delimiting the Exemptions, 69 Fed. Reg. 22,122, 22,172 (Apr. 23, 2004). In this case, the district court denied summary judgment on the standalone exemption but granted summary judgment on the HCE exemption. Therefore, that is the exemption we analyze. For clarity, though, we explain both exemptions. An employee is exempt under the highly compensated category if he or she (1) is annually compensated at least $100,000; 1 (2) “customarily and 1 The compensation requirements under 29 C.F.R. § 541.601 have gone through multiple changes over the past few years, the most recent of which went into effect on January 1, 2020. Overtime Eligibility for White Collar Employees, 84 Fed. Reg. 51,230, 51,249–50, 51,307 (Sept. 27, 2019). This element of the exemption, however, is not contested 4 Case: 18-31264 Document: 00515385910 Page: 5 Date Filed: 04/17/2020 No. 18-31264 regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee,” § 541.601(a); and (3) has within his or her primary duties the performing of office or non-manual work, § 541.601(d). The applicable regulation states that the “high level of compensation” that the HCE exemption requires is itself “a strong indicator of an employee’s exempt status, thus eliminating the need for a detailed analysis of the employee’s job duties.” § 541.601(c). In contrast to the HCE exemption, the standalone administrative exemption depends only on the employee’s primary duty rather than the employee’s customary duties. § 541.200(a). The standalone exemption applies when an employee’s “primary duty is 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,” and the “primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.” Id. Smith grounds his argument for error in the burden of proof and the summary judgment standard. He argues that the district court impermissibly weighed the evidence and drew inferences from the facts in favor of movant Ochsner. Smith claims there were three specific errors in the district court’s decision. First, there is a genuine factual dispute over whether he customarily and regularly performed exempt duties. Second, there is a genuine factual dispute over whether he primarily performed non-manual labor. Third, there is a genuine factual dispute over whether his work was directly related to Ochsner’s general business operations. We will address all of those as we go through our analysis. in this case, and Smith’s salary met the compensation standards in the relevant period and would meet the newest standard. 5 Case: 18-31264 Document: 00515385910 Page: 6 Date Filed: 04/17/2020 No. 18-31264 Ochsner emphasizes that the HCE exemption does not require the same level of job-duty scrutinizing as the standalone exemption, § 541.601(c). Ochsner also does not concede the inapplicability of the standalone exemption, and it urges us to affirm on that alternative basis if we are unconvinced on the HCE exemption. See Mangaroo v. Nelson, 864 F.2d 1202, 1204 n.2 (5th Cir. 1989) (stating that we may affirm on any basis supported by the record). In addition to defending the legal and factual basis of the district court’s ruling, Ochsner argues that Smith waived any argument about primarily performing manual labor.