Court Opinion

ID: 2964878
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:32:30.894596+00
Date Added: 2024-06-11T11:43:02.963868
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

          No. 97-1053

                                ROBERT B. REICH, ETC.,

                                Plaintiff - Appellant,

                                          v.

                          JOHN ALDEN LIFE INSURANCE COMPANY,

                                Defendant - Appellee.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                   [Hon. Nathaniel M. Gorton, U.S. District Judge]
                                              ___________________

                                 ____________________

                                        Before

                                Selya, Circuit Judge,
                                       _____________

                           Campbell, Senior Circuit Judge,
                                     ____________________

                            and Lagueux,* District Judge.
                                          ______________

                                _____________________

               Anne  Payne Fugett, Attorney,  with whom J.  Davitt McAteer,
               __________________                       __________________
          Acting Solicitor of Labor, Steven J. Mandel, Associate Solicitor,
                                     ________________
          and  William J.  Stone, Counsel  for  Appellate Litigation,  U.S.
               _________________
          Department of Labor, were on brief for appellant.
               William J. Kilberg, with whom Eugene Scalia and Gibson, Dunn
               __________________            _____________     ____________
          & Crutcher LLP were on brief for appellee.
          ______________

                                 ____________________

                                  September 18, 1997
                                 ____________________
                              
          ____________________

          *  Of the District of Rhode Island, sitting by designation.

                    LAGUEUX, District Judge.  In  this appeal, the Court is
                    LAGUEUX, District Judge.
                             ______________

          asked to decide whether certain  employees of the John Alden Life

          Insurance Company ("John Alden") are exempt from the overtime pay

          provisions of the Fair Labor  Standards Act, 29 U.S.C.    201-219

          ("FLSA" or the "Act").   The particular question before the Court

          concerns  whether  the  employees at  issue,  known  as marketing

          representatives  or  marketing   specialists  (collectively,  the

          "marketing  representatives"),  fall within  the  "administrative

          employee" exemption, 29  U.S.C.   213(a)(1), which  provides that

          "any  employee employed in a bona fide executive, administrative,

          or professional capacity" is excluded from the Act's overtime pay

          and recordkeeping provisions.

                    The United States Secretary of Labor ("the  Secretary")

          filed this  action against John Alden on  May 4, 1995, seeking to

          enjoin  the  company  from  violating  the  FLSA's  overtime  and

          recordkeeping   requirements  with   respect  to   the  marketing

          representatives.  The parties submitted  the case to the district

          court on stipulated facts and cross-motions for summary judgment,

          under Rule  56 of  the Federal Rules  of Civil  Procedure.   In a

          Memorandum and  Order dated October  8, 1996, Judge  Gorton found

          that the marketing  representatives qualified as  "administrative

          employees" under 29 U.S.C.   213(a)(1), and  therefore denied the

          Secretary's motion  and granted summary judgment in favor of John

          Alden.  See Reich v. John Alden Life Ins. Co., 940 F. Supp.  418,
                  ___ _____    ________________________

          421-24 (D. Mass. 1996).  For the reasons that follow, we affirm.

                                         -2-

          I.  FACTUAL BACKGROUND
          I.  FACTUAL BACKGROUND

                    As noted above, the parties submitted this case  to the

          district  court on stipulated facts,  and Judge Gorton provides a

          detailed account of  the parties' stipulation in  his memorandum.

          See id.  at 419-20.   Thus, for the  purposes of this  appeal the
          ___ ___

          Court needs only to highlight  those facts that are most relevant

          to the issue presented for review.

                    John  Alden is a Florida-based company that operates in

          several states,  including Massachusetts,  where it  maintains an

          office in Westborough.   The company designs,  creates, and sells

          various  types of insurance products; its customers are typically

          businesses,  who purchase  group  coverage  on  behalf  of  their

          employees.

                    As is the common  practice in the industry, John  Alden

          does  not  sell   its  products  through  direct   contacts  with

          customers, but  instead relies on licensed  independent insurance

          agents ("agents") to  provide its customer base.   In general, an

          agent will recommend  a variety of insurance  products, including

          John  Alden  products   and  those  of  its   competitors,  to  a

          prospective end-purchaser.  When a customer decides to purchase a

          John Alden product, the agent acts as an intermediary between the

          company  and the  end-purchaser  to  achieve  completion  of  the

          transaction.

                                         -3-

                    The primary  duty of  the marketing representatives  --

          the employees at issue here1  -- is to cultivate this independent

          agent sales force,  and, thereby, ultimately to increase sales of

          John Alden products.  To this end,  the marketing representatives

          maintain constant contact with agents.  Marketing representatives

          do not  "share" agents  with one another;  instead, each  keeps a

          list or "deck" of  agents with whom he or she is in contact.  The

          typical   deck  consists   of  500-600   agents,   and  marketing

          representatives  continually  cull  their decks  to  maintain  an

          active agent base.

                    As  an agent's  primary  contact  with  John  Alden,  a

          marketing  representative is responsible  for keeping his  or her

          agents up  to date on all  aspects of John Alden's  product line.

          For instance,  the marketing  representatives  keep their  agents

          apprised  of any new  products or product  combinations available

          from John Alden,  and make their agents  aware of any changes  in

          the  pricing   of  the   company's  products.     The   marketing

          representatives also discuss how John Alden's products might meet

          the  particular  needs  of  an  agent's  current  or  prospective

          customers, and advise  agents as to which John  Alden products to

          market against competing products.  Often, they help their agents

          develop proposals for bidding on new business by recommending the

          appropriate  combination  of   John  Alden  products  to   fit  a

          prospective customer's needs.   To further educate  their agents,

                              
          ____________________

          1   All of  the marketing representatives  at issue in  this case
          work in John Alden's Westborough, Massachusetts office.

                                         -4-

          marketing representatives sometimes pass along articles about the

          company and/or its competitors, or give small-group presentations

          about John Alden's products.

                    In dealing  with agents, the  marketing representatives

          do not  use prepared  scripts.   Further,  although they  receive

          guidance about  suggested points  of emphasis  during an  initial

          training period  and at  weekly sales  meetings, these  employees

          must  decide for  themselves  which products  to  emphasize to  a

          particular agent, and which of their agents to contact on a given

          day.  Thus, to make these decisions the marketing representatives

          must rely  on their own  knowledge of their  agent decks  and the

          specific  needs of their  agents' customers.   Consequently, they

          spend most of their time (approximately seven hours a day) on the

          phone with agents.   While most of these calls are made to agents

          with whom they  are already familiar --  to advise agents  of new

          product developments,  discuss current customer needs,  or follow

          up on  outstanding sales proposals  -- they also make  some "cold

          calls" to agents in  the deck with whom they are unfamiliar, both

          to  acquaint the agents  with John Alden and  to learn about each

          agent's customer base.

                    When a customer  ultimately decides to purchase  a John

          Alden  product,  a  marketing representative  acts  as  a conduit

          between the agent and prospective purchaser, on the one hand, and

          John Alden's underwriting  department, on the other.   Generally,

          the marketing representative  sends an application to  the agent,

          who meets with the customer  to complete the necessary paperwork;

                                         -5-

          the agent then returns the completed application to the marketing

          representative,  who  in  turn forwards  it  to  the underwriting

          department.   While  the application  is  pending, the  marketing

          representative will  sometimes gather the  additional information

          needed  in the  approval  process, such  as  medical records,  or

          arrange  medical tests for  the purchasers' employees  where such

          information  is lacking.   Beyond  this,  however, the  marketing

          representatives play no further role in the purchase transaction.

          Thus,  they do not set or negotiate prices or terms of insurance,

          nor do they have any authority to approve or deny an application,

          as this is done solely by the underwriting department.

                    Typically,   marketing   representatives   are  college

          graduates  with two  to six  years of  marketing experience.   An

          initial  period of  training at  John Alden is  supplemented with

          both  formal and informal  instruction from supervisors  and more

          senior marketing  representatives throughout their tenure  at the

          company.  They also attend  weekly sales meetings with a District

          Manager,  where  they  learn  about  new  products  and  exchange

          information   about  sales  techniques  they  have  found  to  be

          effective.      At   these   sales   meetings,   the    marketing

          representatives also pass  along any information they  might have

          received  from agents --  for instance, information  concerning a

          competitor's new  products or prices, or about which new products

          are  selling well  -- that  might be  helpful to  the company  in

          designing new products.

                                         -6-

                    The marketing  representatives work  five days a  week,

          typically working ten-hour days with a one-hour lunch break.2  As

          noted earlier, they  spend most of  their time on the  phone with

          agents,  with the remaining  time spent completing  and reviewing

          paperwork related to these agent  contacts.  On average, a first-

          year marketing  representative will  generate approximately  $1.5

          million   in  sales  annually  for  the  company,  while  a  more

          experienced representative will be credited with approximately $3

          million in sales each year.   The average annual compensation for

          a   marketing  representative   is  $50,000,   and  more   senior

          representatives can  earn as much  as $75,000.  In  addition to a

          base salary of $34,000 to $37,000, these employees earn quarterly

          incentive and  bonus pay based  on the number, value,  and profit

          performance of the  policies issued by the agents  in their agent

          decks.  To further encourage  sales, the company sets a quarterly

          sales goal for each marketing representative; anyone who fails to

          meet this benchmark receives further training and counseling, and

          ultimately risks termination if this failure persists for two  or

          more consecutive quarters.

          II.  PROCEDURAL BACKGROUND
          II.  PROCEDURAL BACKGROUND

                    On May  4, 1995,  the Secretary  commenced this  action

          against John Alden pursuant to section 17 of the  FLSA, 29 U.S.C.

            217, seeking  to enjoin the company from violating the overtime

          and recordkeeping  provisions of  the Act, 29  U.S.C.     207 and
                              
          ____________________

          2   Although John Alden  does not maintain  records of the  hours
          worked  by  its  marketing  representatives,  the   parties  have
          stipulated that they average more than 40 hours per week.

                                         -7-

          211, respectively, and from withholding unpaid overtime wages due

          to the  marketing representatives.3   In its  answer, John  Alden

          asserted   as  an  affirmative  defense,  inter  alia,  that  the
                                                    ___________

          marketing  representatives   were  exempt  from   the  applicable

          regulations  of  the  FLSA  as  "administrative employees"  under

          section 13 of the Act, 29 U.S.C.   213(a)(1).

                    The  parties submitted the  case to the  district court

          for  decision on  cross-motions for  summary  judgment, based  on

          their stipulation of facts as described above.  It was undisputed

          that the marketing representatives routinely worked more than 40-

          hour workweeks without overtime pay  and that the company did not

          keep  records of  the hours  worked  by each  during a  workweek.

          Therefore, the only issue before  the district court was  whether

          the marketing representatives could be considered "administrative

          employees"  under the  FLSA.   In  a Memorandum  and Order  dated

          October  8,  1996,   the  court  concluded  that   the  marketing

          representatives  satisfied  the  Department  of  Labor's  ("DOL")

          regulatory  requirements  for the  administrative  exemption, and

          therefore entered judgment in favor of John Alden.   See Reich v.
                                                               ___ _____

          John Alden Life Ins. Co., 940 F. Supp. 418 (D. Mass. 1996).
          ________________________

                    In  finding these  employees to  be  exempt, the  court

          applied  the  regulatory  "short  test"  for  the  administrative

          exemption, as set forth in  29 C.F.R.   541.2(e)(2).   First, the

          court addressed whether a marketing representative's primary duty
                              
          ____________________

          3   Specifically, the Secretary  seeks to recover unpaid overtime
          wages owed to 29 marketing representatives, 16 of whom were still
          employed at John Alden at the time of the suit.

                                         -8-

          consists  of "[t]he  performance  of  office  or  nonmanual  work

          directly  related  to  management policies  or  general  business

          operations," as required  by   541.2(a)(1).   In concluding  that

          this  "primary duty" requirement  had been  met, the  court first

          found that  marketing representatives perform  the administrative

          tasks  of "promoting sales" and "representing the company" within

          the  meaning  of  the DOL's  interpretative  regulations,  see 29
                                                                     ___

          C.F.R.    541.205(b).   The court  thus rejected  the Secretary's

          contention that, because  they are concerned with  securing sales

          for   the  company,   marketing   representatives  perform   non-

          administrative  "production"  work, the  distinction  drawn  in  

          541.205(a).   See John Alden, 940 F. Supp. at 421-22.  Completing
                        ___ __________

          its analysis of the "primary duty" requirement, the court went on

          to  find  that  the  work   performed  by  the  employees  is  of

          "substantial importance  to the  management or  operation of  the

          business" within  the meaning  of    541.205(a)  and (c),  noting

          that  "[t]he success  of the  company in  New England  depends in

          large part on  the success of  the marketing representatives  who

          promote sales of John Alden products."  Id. at 422-23.
                                                  ___

                    The court then  turned to the second part  of the short

          test,  which provides that an exempt administrative employee must

          engage in  work  that requires  the exercise  of "discretion  and

          independent judgment."  29 C.F.R.   541.2(e)(2).  The court found

          that this  requirement had  been met  on the  facts before  it as

          well, noting  that marketing representatives  exercise discretion

          and use  their own judgment  in deciding which agents  to contact

                                         -9-

          and which products to  emphasize on a given day.  See id. at 423-
                                                            ___ ___

          24.  Thus,  having found that both  prongs of the short  test had

          been   satisfied,  the   court  concluded   that  the   marketing

          representatives  qualified as  administrative employees  and were

          thus exempt from the FLSA's overtime requirements.

                    Following the entry of judgment in favor of John Alden,

          the Secretary filed a timely notice of appeal to this Court.  The

          case is now in order for decision.

          III.  STANDARDS OF REVIEW
          III.  STANDARDS OF REVIEW

                    Rule 56(c) of the Federal Rules of Civil Procedure sets

          forth the standard for ruling on a motion for summary judgment:

                    The   judgment  sought   shall  be   rendered
                    forthwith  if  the   pleadings,  depositions,
                    answers to interrogatories, and admissions on
                    file, together with  the affidavits, if  any,
                    show that there is no genuine issue as to any
                    material fact and  that the  moving party  is
                    entitled to a judgment as a matter of law.

          The trial court  must view all facts  and draw all inferences  in

          the light most favorable to the nonmoving party.  See Continental
                                                            ___ ___________

          Cas.  Co. v. Canadian Universal Ins. Co.,  924 F.2d 370, 373 (1st
          _________    ___________________________

          Cir.  1991).  When  deciding cross-motions for  summary judgment,

          the  court   must  consider  each   motion  separately,   drawing

          inferences against each movant in turn.  See Blackie v. Maine, 75
                                                   ___ _______    _____

          F.3d 716, 721  (1st Cir. 1996).  Summary  judgment is appropriate

          when  there is  no  dispute  as to  any  material fact  and  only

          questions of law remain.  Id.
                                    ___

                    Because  the  summary  judgment standard  requires  the

          trial court to  make a legal determination rather  than to engage

                                         -10-

          in factfinding, appellate review is  generally governed by the de
                                                                         __

          novo standard.  See National  Amusements, Inc. v. Town of Dedham,
          ____            ___ __________________________    ______________

          43 F.3d 731, 735 (1st Cir.), cert. denied, 515 U.S.  1103 (1995).
                                       ____________

          However, the particular procedural vehicle by which this case was

          decided by  the district court  requires some deviation  from the

          norm.    As noted  earlier, the  parties cross-moved  for summary

          judgment  on stipulated facts, with their legal arguments focused

          on  the significance  to be  accorded to  the agreed-upon  facts.

          Thus, in effect, the parties  submitted this case to the district

          court as a case stated.   Cf. Equal Opportunity Employment Comm'n
                                    ___ ___________________________________

          v.  Steamship Clerks  Union, Local  1066, 48  F.3d 594,  603 (1st
              ____________________________________

          Cir.), cert. denied,  116 S. Ct.  65 (1995).   As this Court  has
                 ____________

          stated in a similar case:

                    [W]here,  in  a  nonjury  case,  "the   basic
                    dispute  between  the  parties  concerns  the
                    factual  inferences . . . that one might draw
                    from  the  more  basic  facts  to  which  the
                    parties have drawn  the court's attention," .
                    .  . the  district court  is  freed from  the
                    usual    constraints    that    attend    the
                    adjudication  of  summary  judgment  motions.
                    Federaci n  de  Empleados  Tribunal  Gen.  de
                    _____________________________________________
                    Justicia v.   Torres,  747 F.2d  35, 36  (1st
                    ________     _______
                    Cir.  1984) (Breyer, J.).  The court may then
                    engage in  a certain  amount of  differential
                    factfinding,   including   the   sifting   of
                    inferences.   By the same token, the court of
                    appeals   may   assume  that   "the   parties
                    considered the matter to have been  submitted
                    below as  a case  ready for  decision on  the
                    merits."  Id.  Consequently, the standard for
                              ___
                    appellate  oversight  shifts   from  de  novo
                                                         ________
                    review to clear-error review.

          Id. at 603.
          ___

                    Here,  as in Steamship Clerks, in reaching its decision
                                 ________________

          the lower court was required first to engage in some differential

                                         -11-

          factfinding -- i.e.,  the drawing of factual  inferences from the

          stipulated facts -- and then  to make a legal determination based

          upon these  facts.  Thus,  this appeal involves both  factual and

          legal determinations.  This Court will apply the more deferential

          clear-error standard when reviewing the factual  inferences drawn

          by  the  court  below,  id.,  while the  lower  court's  ultimate
                                  ___

          application  of the  law  to  the facts,  both  those stated  and

          inferred, remains subject to de novo review.  Id.
                                       _______          ___

                    In parsing out the questions of fact from the  ultimate

          legal  conclusion, we  are guided  by  our decision  in Reich  v.
                                                                  _____

          Newspapers of  New England, Inc.,  44 F.3d 1060 (1st  Cir. 1995),
          ________________________________

          where  the Court considered  whether certain  newspaper employees

          fell within the professional exemption to the FLSA's overtime pay

          provisions, 29 U.S.C.   213(a)(1).  Adopting the approach used by

          the Fifth Circuit in Dalheim v. KDFW-TV, 918 F.2d 1220, 1226 (5th
                               _______    _______

          Cir.  1990), this Court recognized that "there are three distinct

          types of findings involved in  determining whether an employee is

          exempt."  Newspapers of New England, 44 F.3d at 1073.  First, the
                    _________________________

          court must  make  findings concerning  the so-called  "historical

          facts" of the case, such as determining an  employee's day-to-day

          duties.  Id.  Second, the court must draw factual inferences from
                   __

          these historical facts,  for instance, to conclude  whether these

          day-to-day duties require "invention,  imagination, or talent" as

          required  by  applicable regulations.   Id.   Finally,  the trial
                                                  __

          court must reach  the ultimate conclusion of whether  an employee

          is exempt, based on both historical facts and factual inferences.

                                         -12-

          Id.   Having separated  out the  lower court's  determinations in
          __

          this manner, we  concluded that the first two  types of findings,

          as  essentially  factual  determinations,  were  subject  to  the

          clearly erroneous standard of review.   Id.  As for the  district
                                                  __

          court's ultimate finding, we noted that "[a]lthough this is based

          on  both  historical  facts  and  factual  inferences,  it  is  a

          conclusion of law, over which we exercise plenary review."  Id.
                                                                      __

                    The Court  will apply this  framework in its  review of

          the decision at issue here.  Of course, there are no "first tier"

          findings to review,  as the historical facts were  agreed upon in

          the parties' stipulation.   Accordingly,  the factual  inferences

          drawn by  the district  court from the  stipulated facts  will be

          reviewed for clear error, while the lower  court's ultimate legal

          determination engenders plenary review.

                    Finally, while  recognizing that  the determination  of

          whether an  employee is  exempt is clearly  tied to  the district

          court's  inferential factfinding,4 we remain acutely aware of our

          duty  to engage in a  thorough review of the  record.  See id. at
                                                                 ___ ___

          1073.  Moreover, we must review the decision below to ensure that

          the court's factfinding was guided by the proper legal standards,

          as "to the extent that findings of fact can be shown to have been

          predicated  upon, or  induced by,  errors  of law,  they will  be
                              
          ____________________

          4  As  the Fifth Circuit has  noted, "[i]n the great  majority of
          cases, the district court's  findings of fact and  the inferences
          it draws,  if carefully  set forth and  supported by  the record,
          will all but compel the legal conclusion that a given employee is
          or is  not exempt.   Absent some  fundamental legal  error, those
          conclusions  will usually stand undisturbed on appeal."  Dalheim,
                                                                   _______
          918 F.2d at 1226-27.

                                         -13-

          accorded  diminished respect  on appeal."   Dedham  Water Co.  v.
                                                      _________________

          Cumberland Farms Dairy, Inc., 972 F.2d 453, 457 (1st Cir. 1992).
          ____________________________

          IV.  DISCUSSION
          IV.  DISCUSSION

                    The FLSA establishes, as a general rule, that employees

          must be compensated  at a  rate not  less than  one and  one-half

          times  their regular rate  for all overtime  hours.  29  U.S.C.  

          207(a)(1).   The Act  further defines overtime  as employment  in

          excess  of 40  hours in a  single workweek.   Id.   However, this
                                                        __

          overtime provision does not apply  to "any employee employed in a

          bona fide executive, administrative, or professional capacity . .

          . (as such terms are defined  and delimited from time to time  by

          regulations  of the  Secretary)."   29  U.S.C.    213(a)(1).   Of

          course,  the remedial nature  of the  statute requires  that FLSA

          exemptions be "narrowly  construed against the  employers seeking

          to  assert   them  and   their  application   limited  to   those

          establishments plainly  and unmistakably  within their  terms and

          spirit."  Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960).
                    ______    __________________

          Further,  it  is the  employer in  an  FLSA case  that  bears the

          ultimate  burden of establishing  that its employees  fall within

          the exemption.  See Newspapers of New England, 44 F.3d at 1070.
                          ___ _________________________

                    The specific  parameters of  the FLSA's  administrative

          exemption  are not  set forth  in  the statute,  but are  instead

          articulated  in the DOL's  regulations and interpretations.   The

          regulations,  promulgated pursuant  to an  express delegation  of

          legislative  authority, are to be given controlling weight unless

          found to  be arbitrary, capricious,  or contrary to  the statute.

                                         -14-

          See Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467
          ___ ___________________    _________________________________

          U.S. 837,  843-44 (1984).   On the  other hand,  the interpretive

          regulations  are not  conclusive, as  they merely  set  forth the

          Secretary's  official position on  how the regulations  should be

          applied in specific contexts.   See Newspapers of New England, 44
                                          ___ _________________________

          F.3d at 1070.  Even so, these interpretations have the "power  to

          persuade, if  lacking power  to control," as  they "constitute  a

          body  of experience  and informed  judgment to  which courts  and

          litigants may properly resort for guidance."  Skidmore v. Swift &
                                                        ________    _______

          Co., 323 U.S. 134, 140 (1944).
          ___

                    The requirements  of the  administrative exemption  are

          set  forth  in  the  regulations at  29  C.F.R.     541.2.   That

          regulation outlines both a short  and a long test for determining

          whether an employee  qualifies for the  administrative exemption;

          the short test is used for employees whose salaries are more than

          $250 per week.  29 C.F.R.   541.2(e)(2).  Since the  parties have

          stipulated that the marketing representatives earn more than $250

          per week, there  is no  dispute that the  short test governs  the

          instant case.

                    Under the short test, John Alden must demonstrate:  (1)

          that the primary duty of the marketing representative consists of

          "[t]he performance of  office or nonmanual work  directly related

          to  management policies  or general  business  operations of  his

          employer  or his employer's customers," 29 C.F.R.   541.2(a)(1),5
                              
          ____________________

          5   To be more  precise, the  first prong of  the short  test set
          forth at    541.2(e)(2) requires that the  "primary duty consists
          of the  performance of  work described in  paragraph (a)  of this

                                         -15-

          and  (2) that  such  primary duty  "includes  work requiring  the

          exercise of  discretion and  independent judgment,"  29 C.F.R.   

          541.2(e)(2).   The district court  found, and we agree,  that the

          marketing representatives meet both parts of this test.

          A.  Work Directly Related to Management or Operations
          A.  Work Directly Related to Management or Operations

                    As stated  above, under  this first prong  of the  test

          John Alden must show that its marketing representatives have as a

          primary  duty "office  or  nonmanual  work  directly  related  to

          management policies or general business operations" of John Alden

          or its  customers.  29  C.F.R.    541.2(a)(1).   In the  parties'

          stipulation, the "primary duty" of the  marketing representatives

          is described as follows:

                    to contact and deal with licensed independent
                    insurance  agents  ("agents"),   and  related
                    activities,  to  increase purchases  of  John
                    Alden  insurance  products  by end-purchasers
                    who are in contact with the agents.

          As there is  no dispute that this statement  describes "office or

          nonmanual work,"  the only question that remains  is whether this

          primary duty  is "directly  related" to  John Alden's  management

          policies or general business operations.

                    The   interpretative    regulations   concerning    the

          administrative  exemption are set  forth at  29 C.F.R.    541.201

          through   541.215.   Of particular relevance is section  541.205,

          which specifically addresses the  "directly related to management

                              
          ____________________

          section."   For  the sake  of  simplicity, the  Court has  quoted
          directly from paragraph (a) in setting out the short test.

                                         -16-

          policies   or  general   business   operations"  language   under

          consideration.  Subsection 541.205(a) provides as follows:

                    The  phrase "directly  related to  management
                    policies  or general  business operations  of
                    his  employer  or his  employer's  customers"
                    describes those types  of activities relating
                    to   the  administrative   operations  of   a
                    business as  distinguished from  "production"
                    or,  in  a retail  or  service establishment,
                    "sales" work.  In  addition to describing the
                    types  of activities,  the phrase  limits the
                    exemption  to  persons  who  perform work  of
                    substantial importance  to the  management or
                    operation of the business of his  employer or
                    his employer's customers.

          Thus,    541.205(a) of the interpretations further subdivides the

          first  prong of  the  short test  into  two  subparts:   (1)  the

          employee   must  be  engaged   in  "administrative"  rather  than

          "production" activity; and (2) this administrative activity  must

          be of "substantial importance" to management or operations.

                    The district court found  that both parts of  this test

          had  been satisfied,  and thus  concluded  that the  work of  the

          marketing representatives was "directly  related" to John Alden's

          business operations.  See John Alden, 940 F. Supp. at 421-23.  As
                                ___ __________

          the Fifth Circuit has noted,  "[w]hether an employee's work is or

          should be deemed 'directly related' to business operations  is an

          inference drawn from the historical facts."  Dalheim, 918 F.2d at
                                                       _______

          1230.  Thus,  we review this finding  for clear error.   Id.; see
                                                                   ___  ___

          also Newspapers of New England, 44 F.3d at 1073.
          ____ _________________________

          1.  The Administrative-Production Dichotomy
          1.  The Administrative-Production Dichotomy

                    Subsection 541.205(b) of the interpretations offers the

          following definition of "administrative" work:

                                         -17-

                    The administrative operations of the business
                    include the work performed by so-called white
                    collar  employees  engaged in  "servicing"  a
                    business  as,   for  example,   advising  the
                    management,       planning,      negotiating,
                    representing    the   company,    purchasing,
                    promoting  sales, and  business research  and
                    control.

          However, applying the  administrative-production dichotomy is not

          as  simple as  drawing  the line  between white-collar  and blue-

          collar workers.  On the contrary, non-manufacturing employees can

          be considered  "production"  employees in  those instances  where

          their job  is to generate  (i.e., "produce") the very  product or

          service that the employer's business  offers to the public.  See,
                                                                       ___

          e.g., Reich v. New York, 3 F.3d 581, 587-89 (2d Cir. 1993), cert.
          ____  _____    ________                                     _____

          denied, 510  U.S. 1163  (1994) (police  investigators conduct  or
          ______

          "produce" criminal investigations); Dalheim,  918 F.2d at 1230-31
                                              _______

          (television  station's   producers,  directors,   and  assignment

          editors "produced" newscasts, and were thus non-exempt).

                    Applying this distinction, the district court held that

          the  marketing  representatives  were engaged  in  administrative

          rather than  production activities, a finding in which this Court

          joins.  As stated  in the stipulation of facts, John  Alden is in

          the  business  of  designing,  creating,  and  selling  insurance

          policies  to the  public.    It follows,  as  the district  court

          properly  recognized, that the "products" generated by John Alden

          are  these insurance  policies  themselves.    As  the  marketing

          representatives  are  in  no  way  involved  in  the   design  or

          generation  of insurance  policies, the  very  product "that  the

                                         -18-

          enterprise exists  to produce and  market," Dalheim, 918  F.2d at
                                                      _______

          1230, they cannot be considered production employees.

                    In its arguments both to the lower court and on appeal,

          the Secretary  has  urged that  the Third  Circuit's decision  in

          Martin  v. Cooper  Electric Supply  Co.,  940 F.2d  896 (3d  Cir.
          ________   ____________________________

          1991), cert. denied, 503 U.S. 936  (1992), compels the conclusion
                 ____________

          that  the employees  at  issue  here  are  production  employees.

          However, both  the district  court and  John Alden  have properly

          distinguished Cooper Electric from the instant case.  The company
                        _______________

          at  issue  in Cooper  Electric  was  a  wholesaler that  did  not
                        ________________

          manufacture any  products of its  own, but instead  sold products

          made by other firms.   Id. at 903.  Thus,  the parties stipulated
                                 __

          that the  wholesaler's primary  business purpose  was to  produce

          sales of electrical products.  Id.  Since the employees  at issue
                                         __

          in Cooper Electric, the company's salespeople, worked to generate
             _______________

          the very product that  the company existed to market --  sales of

          electrical products -- the Third Circuit concluded that they were

          non-exempt production employees.  Id.  at 903-04.  Of course, the
                                            __

          facts  of Cooper Electric  are clearly distinguishable  from this
                    _______________

          case, as  John Alden does  indeed generate  a product,  insurance

          policies, not merely sales of a product.

                    In  an attempt to  answer this argument,  the Secretary

          points out that the  stipulation of facts describes John  Alden's

          business purpose as the  design, creation, and sale  of insurance
                                                     ________

          policies.  Thus, the Secretary  contends that, in addition to the

          production of insurance policies, John Alden also produces sales,

                                         -19-

          and that any  employee engaged in the generation  of sales should

          be  deemed  non-exempt  under  the  logic  of  Cooper  Electric.6
                                                         ________________

          However, Cooper  Electric itself  provides an  effective counter.
                   ________________

          In  discussing  the  "servicing"  component  of  the  Secretary's

          interpretations,  see 29 C.F.R.    541.205(b), the  Third Circuit
                            ___

          explained  that  "servicing  a   business"  entailed  "employment

          activity   ancillary  to   an  employer's   principal  production
                     _________

          activity."    Cooper  Electric,  940 F.2d  at  904  (emphasis  in
                        ________________

          original).  In the instant  case, the activities of the marketing

          representatives are  clearly ancillary to John  Alden's principal

          production activity -- the creation of insurance policies  -- and

          therefore could be  considered administrative "servicing"  within

          the meaning of section 541.205(b).

                    As  the district court noted, the day-to-day activities

          of   marketing  representatives  are   more  in  the   nature  of

          "representing  the company" and  "promoting sales" of  John Alden

          products,  two examples of exempt administrative work provided by

             541.205(b) of  the interpretations.   As John  Alden's primary

          contact with the insurance market (via agent contacts), marketing

          representatives  represent  the  company  by  keeping  the market

          informed of changes in John Alden's product offerings and pricing

          structure.   Further,  by advising  agents  as to  which of  John

                              
          ____________________

          6  In  the context of a retail or  service establishment, section
          541.205(a)  expressly   provides  that   "sales"   work  is   not
          administrative.  However, as the  Secretary recognizes, insurance
          companies are  not retail  or service  establishments within  the
          meaning of  the FLSA,  see 29  C.F.R.    779.316,  and thus  this
                                 ___
          provision is inapplicable to the present case.

                                         -20-

          Alden's products  to market  against competing  products, and  by

          helping them put together proposals for bidding on  new business,

          marketing representatives  are, again  to quote  Cooper Electric,
                                                           _______________

          engaged in "something  more than routine selling  efforts focused

          simply on particular  sales transactions."  Id. at  905.  Rather,
                                                      ___

          their agent contacts  are "aimed at promoting  (i.e., increasing,

          developing,  facilitating,  and/or  maintaining)  customer  sales

          generally,"  id. (emphasis in original), activity which is deemed
          _________    ___

          administrative  sales  promotion work  under  section 541.205(b).

          Therefore, there  was no  error in  the district  court's finding

          that John Alden's marketing representatives are engaged primarily

          in administrative rather than production work.

                                         -21-

          2.  Substantial Importance to Management or Operations
          2.  Substantial Importance to Management or Operations

                    In  addition to  drawing the  administrative-production

          work  dichotomy,  29  C.F.R.    541.205(a)  limits  the "directly

          related" language  to "persons  who perform  work of  substantial

          importance to the management or  operation of the business of his

          employer or his employer's customers."   Of course, employees who

          formulate  management   policies  or  oversee   general  business

          operations   easily   satisfy   this   "substantial   importance"

          requirement.    See  29  C.F.R.     541.205(c).    However,   the
                          ___

          interpretations make  it clear  that the exemption  is not  to be

          limited solely to so-called "management" personnel:

                    As  used  to  describe  work  of  substantial
                    importance to the management or operation  of
                    the business, the phrase "directly related to
                    management  policies   or  general   business
                    operations"  is not  limited  to persons  who
                    participate in the  formulation of management
                    policies or  in the operation of the business
                    as   a  whole.     Employees  whose  work  is
                    "directly related" to  management policies or
                    to general business  operations include those
                    [whose]   work   affects  policy   or   whose
                    responsibility it is  to execute or  carry it
                    out.  The phrase also includes a wide variety
                    of  persons   who  either  carry   out  major
                    assignments in  conducting the  operations of
                    the business, or whose  work affects business
                    operations  to  a  substantial  degree,  even
                    though their assignments are tasks related to
                    the  operation of a particular segment of the
                    business.

          29 C.F.R.   541.205(c).   Examples of employees or positions that

          generally meet  the "substantial importance"  requirement include

          credit  managers, claim agents and adjusters, wage-rate analysts,

          securities  brokers,   and  promotion   men.     See  29   C.F.R.
                                                           ___

            541.205(c)(5).    However,  the particular  title  given  to an

                                         -22-

          employee is  not determinative,  as an  employee's exempt  status

          must  instead be  predicated on  whether  his or  her duties  and

          responsibilities   meet   all   of   the  applicable   regulatory

          requirements.  See 29 C.F.R.   541.201(b).
                         ___

                    In applying  these interpretations, the  district court

          first  recognized that "the work of the marketing representatives

          is critically important to John Alden's business," in that "[t]he

          success  of the company  in New England depends  in large part on

          the success of the marketing representatives who promote sales of

          John  Alden products."    John  Alden, 940  F.  Supp. at  422-23.
                                    ___________

          Having thus found that the marketing representatives were engaged

          in  work that  "affects  business  operations  to  a  substantial

          degree"  --  one of  the  categories  of  work  deemed to  be  of

          "substantial  importance" under  29 C.F.R.     541.205(c) --  the

          district court  concluded that their  work met this prong  of the

          test.  Id. 
                 __

                    On appeal, the Secretary contends that, in applying the

          interpretations, the district  court misconstrued the concept  of

          "substantial importance" so as to  require plenary review of this

          issue.   In  short, the  Secretary submits  that the  lower court

          improperly equated economic  impact with substantial  importance,

          so  that  if  an  employee's work  contributes  to  an employer's

          financial  well-being, that fact  alone is sufficient  to satisfy

          the substantial importance requirement.  If  the court did indeed

          misconstrue  the  concept of  "substantial importance,"  then its

                                         -23-

          factual inferences  were drawn with  the wrong legal  standard in

          mind, and it would have erred as a matter of law.

                    We  recognize that more than  one circuit has held that

          "[t]he  financial effect of  employee activity cannot  alone show

          work of 'substantial  importance to the management  or operation'

          of an  employer's business."   Cooper Electric, 940 F.2d  at 906;
                                         _______________

          see  also Dalheim, 918  F.2d at 1231.7   As stated  by the Fourth
          _________ _______

          Circuit in  Clark  v. J.M.  Benson Co.,  789 F.2d  282 (4th  Cir.
                      _____     ________________

          1986), in  assessing substantial  importance it  is necessary  to

          look at "the  nature of the work, not  its ultimate consequence."
                        ______

          Id. at  287 (emphasis in  original).   Further, the  interpretive
          __

          regulations clearly dismiss the view that this requirement can be

          met simply  by showing a  link between poor performance  and lost

          profits:

                    A  messenger  boy   who  is  entrusted   with
                    carrying large  sums of  money or  securities
                    cannot be said to be doing work of importance
                    to   the   business   even   though   serious
                    consequences may  flow from his neglect.   An
                    employee operating  very expensive  equipment
                    may cause serious loss to his employer by the
                    improper performance of his duties. . . . But
                    such employees, obviously, are not performing
                    work of  such substantial  importance to  the
                    management or operation of the business  that
                    it can  be said  to be  "directly related  to
                    management  policies   or  general   business
                    operations"  as  that  phrase  is used  in   
                    541.2.

                              
          ____________________

          7  In Dalheim, the  employer argued for substantial importance by
                _______
          stressing that "if a producer performs poorly, KDFW's bottom line
          might suffer."   Dalheim, 918 F.2d at 1231.   The Court held that
                           _______
          "[a]s  a matter  of law,  that is  insufficient to  establish the
          direct  relationship  required  by     541.2  by  virtue  of  the
          'substantial importance' contemplated by   541.205(c)."  Id.
                                                                   __

                                         -24-

          See 29 C.F.R.   541.205(c)(2).
          ___

                    Although the district court did not expressly set forth

          the test in the above manner, our review of the  district court's

          reasoning  convinces us  that these  principles  were taken  into

          account in  assessing substantial  importance.   Contrary to  the

          Secretary's   assertion,  the   court   did  not   simply  equate

          "substantial  importance" with  financial impact.   Rather, after

          noting the economic  significance of their sales  promotion work,

          the  court then  proceeded to  consider  the nature  of the  work
                                                       ______

          undertaken  by the  marketing  representatives,  which the  court

          recognized required them to:

                    a)  understand  the  nature  of the  evolving
                    insurance market, b) grasp the subtleties  of
                    that market,  c) familiarize  themselves with
                    their agents, their competitors and the needs
                    of existing  and prospective  end-purchasers,
                    and  d) respond  quickly  in identifying  and
                    promoting a  John Alden product when an agent
                    contemplates    a   particular    competitive
                    product.

          John  Alden,  940 F.  Supp. at  423.   In light  of this,  we are
          ___________

          satisfied that the district court did not misconstrue the  nature

          of the  "substantial importance"  inquiry, as  it considered  the

          nature of the employee's work as well as the consequences of that

          work.8   Accordingly, because  the district  court was  operating

                              
          ____________________

          8  While recognizing  the Fourth Circuit's statement  that "[t]he
          regulations emphasize  the nature of  the work, not  its ultimate
                                     ______
          consequence,"  J.M.  Benson,   789  F.2d  at  287   (emphasis  in
                         ____________
          original), we would find it  difficult to conclude that a certain
          kind of work was "substantially important" to business operations
          without also considering the consequences of that work.

                                         -25-

          within the proper legal framework, we will review its inferential

          factfinding on this issue for clear error.

                    Our review of  the record finds  ample support for  the

          lower  court's conclusion.   First and foremost,  as John Alden's

          primary  contact   with   the   independent   agents,   marketing

          representatives are  the insurance market's  principle source for

          information about John Alden and  its products.  Moreover, in the

          course  of  their  daily   activities,  these  employees   gather

          information  about their agents,  the agents' customers,  and the

          insurance market as a whole  -- such as information about changes

          in   consumer  needs,  or   regarding  the  success   of  certain

          competitors' offerings.  The marketing representatives  must then

          use all of this information  both to pique their agents' interest

          in John  Alden, and to  suggest products or  product combinations

          that an agent's  customers might find  attractive.  In  addition,

          the marketing representatives can pass along the information they

          have compiled to  their supervisors, who later relay  the same to

          John Alden's management, who can then factor it into decisions on

          new product designs and offerings.

                    It is certainly  reasonable to draw the  inference that

          this type  of work, both  by its  nature and in  its consequence,

          would  affect John Alden's  business operations to  a substantial

          degree.   Indeed, it  would appear  that work of  this nature  --

          disseminating  information  to   the  marketplace,  understanding

          customers and competitors, and gathering available information to

          be  used in  putting  together proposals  and  packages that  are

                                         -26-

          appropriate  for  those  customers  --  is  directly  related  to

          operations, and  at the heart  of John Alden's  business success.

          As such,  we find no error in  the district court's conclusion on

          this issue.

                    Lastly, the Secretary attaches some significance to the

          fact   that  John   Alden   employs   a   number   of   marketing

          representatives in  this region,  stressing  that the  collective

          economic  impact  of a  group  of  employees is  insufficient  to

          satisfy  the  substantial  importance requirement.    See  Cooper
                                                                ___  ______

          Electric,  940  F.2d  at  906.    However,  the  Secretary's  own
          ________

          interpretative regulations provide a sufficient rejoinder:

                    The fact  that there  are a  number of  other
                    employees of  the same employer  carrying out
                    assignments of  the same  relative importance
                    or performing identical work  does not affect
                    the determination  of whether they  meet this
                    test  so  long  as  the  work  of  each  such
                    employee is of substantial  importance to the
                    management or operation of the business.

          29 C.F.R.   541.205(c)(6).  In the instant case, we find that the

          work  of each  marketing representative,  standing  alone, has  a

          substantial effect on John Alden's business.9   As set out in the

          parties'  stipulation,  the   sixteen  marketing  representatives

          currently employed in the regional office are responsible for the

          promotion of the company's products throughout all of New England

          (minus Connecticut).  Moreover, each marketing  representative is

          individually responsible for a deck  of 500-600 agents, with each
                              
          ____________________

          9  It is unclear from the district court's discussion  whether it
          considered  the  consequences of  the  marketing representatives'
          work individually or  as a whole.   Thus, we consider  this issue
          based upon our own review of the record.

                                         -27-

          deck generating, on  average, from $1.5 million to  $3 million in

          sales annually.  In light of  all this, we have little difficulty

          in finding that each  individual marketing representative carries

          out  a "major assignment[]  in conducting  the operations  of the

          business," and  "affects  business operations  to  a  substantial

          degree" through his  or her own sales promotion  activities.  See
                                                                        ___

          29 C.F.R.   541.205(c).

                    The district  court was  not clearly  wrong in  finding

          that the marketing representatives  are engaged in administrative

          work  of   substantial  importance   to  John   Alden's  business

          operations.    Accordingly,  we agree  that  these  employees are

          engaged  in administrative work  "directly related  to management

          policies or general  business operations," as required  under the

          first prong of the short test,  29 C.F.R.   541.2(a)(1).  We  now

          turn to the court's  analysis of the "discretion  and independent

          judgment" part of the test.

          B.  Work Requiring Discretion and Independent Judgment
          B.  Work Requiring Discretion and Independent Judgment

                    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:

                    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

                                         -28-

                    from immediate  direction or  supervision and
                    with respect to matters of significance.

          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).
                 ________

                    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

                                         -29-

          and independent judgment in the  course of their day-to-day agent

          contacts.

                    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
                              
          ____________________

          10  "The regulations . . . contemplate the kind of discretion and
          independent judgment exercised by an administrative  assistant to
          an  executive, who  without  specific  instruction or  prescribed
          procedures, arranges interviews and meetings, and handles callers
          and  meetings himself where the executive's personal attention is
          not required."  29 C.F.R.   541.207(d)(2).

          11   The test  includes "the kind  of discretion  and independent
          judgment exercised  by a customer's  man in a brokerage  house in
          deciding  what recommendations  to  make to  a  customer for  the
          purchase of securities."  Id.
                                    ___

          12   As  the district  court  noted, the  work of  the  marketing
          representatives  does not at  all resemble the  given examples of
          nonexempt  work where  discretion  is  exercised  on  matters  of
          relatively little consequence: i.e., a truck driver's decision on
          which route to follow; a  shipping clerk's decision on the method

                                         -30-

                    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
                      ___

                    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

                              
          ____________________

          of packing and  mode of shipment; and a  bookkeeper's decision on
          whether to post  to one ledger or  another first.  See  29 C.F.R.
                                                             ___
            541.207(d)(1).

          13   The interpretive regulations offer the following examples of
          work in  which skill in  applying standards or techniques  can be
          mistaken for discretion:  inspectors who  develop facts to assess
          whether  prescribed standards have been met; lumber "graders" who
          inspect  each "stick"  and then  place  each into  a well-defined
          grading category;  personnel clerks  who screen applications  and
          reject  those that do  not meet prescribed  minimum requirements.
          See 29 C.F.R.   541.207(c)(1)-(6).
          ___

                                         -31-

          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 Prof'l 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.

                    The district court did not commit error in finding that

          the  primary duty of the marketing representatives "includes work

                              
          ____________________

          14  By way of comparison, the  Court notes that a "customer's man
          in  a brokerage  house" likely  receives  similar training  about
          product  features and points of emphasis.  Under the interpretive
          regulations, 29 C.F.R.    541.207(d)(2), this employee  exercises
          the requisite discretion when he  or she applies this guidance to
          make a recommendation to a customer for a securities purchase.

                                         -32-

          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.

          V.  CONCLUSION
          V.  CONCLUSION

                    For all of  these reasons, we  agree with the  district

          court's determination that John Alden's marketing representatives

          are exempt administrative employees.   Accordingly, the  judgment

          below is affirmed.
                   affirmed
                   ________

                                         -33-