Court Opinion

ID: 2971117
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:29:13.678769+00
Date Added: 2024-06-11T11:43:33.908633
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
             Pursuant to Sixth Circuit Rule 206            2    Schaefer v. Indiana Mich. Power Co.        No. 02-1401
    ELECTRONIC CITATION: 2004 FED App. 0050P (6th Cir.)
                File Name: 04a0050p.06                     HOWLETT, Grand Rapids, Michigan, for Appellee.
                                                           ON BRIEF: Stephen D. Turner, Gregory N. Longworth,
                                                           LAW, WEATHERS & RICHARDSON, Grand Rapids,
UNITED STATES COURT OF APPEALS                             Michigan, for Appellant. Joseph J. Vogan, Peter Smit,
                                                           Elizabeth Wells Skaggs, VARNUM, RIDDERING,
               FOR THE SIXTH CIRCUIT                       SCHMIDT & HOWLETT, Grand Rapids, Michigan, for
                 _________________                         Appellee.

 MICHAEL L. SCHAEFER,             X                          COLE, J., delivered the opinion of the court.
          Plaintiff-Appellant,     -                       SUHRHEINRICH, J. (pp. 19-21), delivered a separate
                                   -                       concurring opinion. ROGERS, (p. 22), delivered a separate
                                   -   No. 02-1401         dissenting opinion.
            v.                     -
                                    >                                         _________________
                                   ,
 INDIANA MICHIGAN POWER            -
 COMPANY , d/b/a AMERICAN                                                         OPINION
                                   -                                          _________________
 ELECTRIC POWER,                   -
           Defendant-Appellee. -                             R. GUY COLE, JR., Circuit Judge. Plaintiff-Appellant
                                   -                       Michael L. Schaefer appeals the district court’s grant of
                                  N                        summary judgment in favor of his employer, Indiana
        Appeal from the United States District Court       Michigan Power Company, d/b/a American Electric Power
   for the Western District of Michigan at Grand Rapids.   (“AEP”), and the denial of his motion for summary judgment,
      No. 00-00559—Gordon J. Quist, District Judge.        in this action alleging that AEP violated the Fair Labor
                                                           Standards Act (the “FLSA”), 29 U.S.C. §§ 201-219, by
              Argued: September 18, 2003                   failing to pay Plaintiff for overtime work at one-and-a-half
                                                           times his normal hourly rate as required by 29 U.S.C.
         Decided and Filed: February 13, 2004              § 207(a)(1). The central issue on appeal is whether the
                                                           district court erred in granting summary judgment in favor of
Before: SUHRHEINRICH, COLE, and ROGERS, Circuit            AEP based on its conclusion that Plaintiff’s position as an
                   Judges.                                 environmental specialist at AEP is properly classified as
                                                           exempt under the administrative exemption of the FLSA. For
                  _________________                        the following reasons, we REVERSE the decision of the
                                                           district court granting summary judgment to AEP and
                       COUNSEL                             REMAND for further proceedings.
ARGUED: Stephen D. Turner, LAW, WEATHERS &
RICHARDSON, Grand Rapids, Michigan, for Appellant.
Joseph J. Vogan, VARNUM, RIDDERING, SCHMIDT &

                            1
No. 02-1401       Schaefer v. Indiana Mich. Power Co.        3    4    Schaefer v. Indiana Mich. Power Co.        No. 02-1401

                    I. BACKGROUND                                 federal and state regulations and primary responsibility for
                                                                  developing procedures to implement these regulations; and
  Indiana Michigan Power Company, doing business as               supervises the manual tasks involved in shipping radioactive
American Electric Power (“AEP”), operates the Cook Nuclear        materials.
Plant (“Cook”) in Bridgman, Michigan, where Plaintiff-
Appellant Michael L. Schaefer is employed. AEP produces             Schaefer’s deposition testimony presents a different picture
electricity at Cook through nuclear reaction. Schaefer began      of his day-to-day activities. He claims that eighty percent of
his employment at Cook as a “radiation protection technician,     his time is spent on tasks related to actual shipments of
junior,” in 1987. Through promotion and company                   radioactive materials and waste. These tasks include setting
reorganization, Schaefer has subsequently held the positions      up the shipment with the transporter and the waste
of radiation protection technician, engineering technologist,     management facility; determining the type and method of
radioactive material specialist, and environmental specialist.    packaging to be used; preparing shipping documents such as
Schaefer is a “qualified shipping specialist” under Department    manifests; and inspecting packaging containers, trucks, load
of Transportation regulations. Although Schaefer, who is          bracings, and truck signage. Schaefer claims that he does not
paid a yearly salary, has worked in positions classified as       often exercise discretion or independent judgment when
exempt from FLSA overtime requirements by AEP since               working on shipments because the work is tightly governed
1988, he nonetheless received time-and-a-half overtime pay        by federal regulations and company procedures. He
for hours in excess of forty hours in a given workweek until      acknowledges that some of his other tasks sometimes require
1997. Beginning in 1997, AEP began to pay only straight           the exercise of discretion and independent judgment, but he
overtime under its exempt-overtime plan, and in 1999 the          maintains that he performs such tasks much less frequently
plan was changed so that overtime generally did not begin         than AEP indicates and that the exercises of discretion are
until after 45 hours were worked in a given workweek.             much more limited than AEP contends. Finally, Schaefer
                                                                  disputes AEP’s job description and performance reviews: He
  The parties disagree regarding the nature of Schaefer’s         testified in his deposition that those documents cover
daily activities. AEP argues that Schaefer “has overall           activities that he does not actually perform and do not
responsibility for the waste disposal program.” AEP points        accurately reflect his day-to-day responsibilities. He also
out that Schaefer has responsibility for various activities in    claims that he embellished his own resume to include more
addition to actual shipping, such as writing and revising         responsibility and authority than he actually exercises.
procedures, preparing position papers, investigating corrective
actions, and surveying other nuclear facilities as to how they                         II. DISCUSSION
deal with radioactive waste. In support of its position, AEP
primarily relies on AEP’s written job description for the                           A. Standard of Review
position of environmental specialist; the testimony of
Schaefer’s supervisor, Jeffrey H. Long; various job                  This Court reviews de novo a district court’s grant of
performance reviews; and Schaefer’s own resume. These             summary judgment. Stephenson v. Allstate Ins. Co., 328 F.3d
sources generally portray Schaefer as a white-collar employee     822, 826 (6th Cir. 2003). Summary judgment is appropriate
who performs his job independently; makes recommendations         if, examining the record and drawing all inferences in a light
regarding various aspects of the shipping process; has an         most favorable to the non-moving party, there is no genuine
important role in assuring AEP’s compliance with various          issue as to any material fact and the moving party is entitled
No. 02-1401       Schaefer v. Indiana Mich. Power Co.        5    6        Schaefer v. Indiana Mich. Power Co.    No. 02-1401

to judgment as a matter of law. Fed.R.Civ.P. 56(c); Agristor      receives each pay period on a weekly, or less frequent basis,
Fin. Corp. v. Van Sickle, 967 F.2d 233, 236 (6th Cir. 1992).      a predetermined amount constituting all or part of his
                                                                  compensation, which amount is not subject to reduction
        B. The Fair Labor Standards Act and the                   because of variations in the quality or quantity of the work
               Administrative Exemption                           performed.” 29 C.F.R. § 541.118(a).
  The Fair Labor Standards Act requires employers to pay            Although Schaefer is paid a yearly salary, he argues that
their employees time-and-a-half for work performed in excess      AEP does not treat him as a salaried employee because he
of forty hours per week. 29 U.S.C. § 207(a)(1). The FLSA,         must account for at least forty hours of work each week on his
however, exempts employers from this requirement with             time sheet and must make up partial-day absences by either
respect to individuals “employed in a bona fide executive,        working extra hours on another day or using part of a vacation
administrative, or professional capacity.”       29 U.S.C.        day. Exempt status, however, is only affected by monetary
§ 213(a)(1). “This exemption is to be ‘narrowly construed         deductions for work absences and not by non-monetary
against the employers seeking to assert [it],’” Douglas v.        deductions from fringe benefits such as personal or sick time.
Argo-Tech Corp., 113 F.3d 67, 70 (6th Cir. 1997) (quoting         See Haywood v. N. Am. Van Lines, Inc., 121 F.3d 1066, 1070
Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960)), and      (7th Cir. 1997). Schaefer has presented no evidence to
the employer bears not only the burden of proof, but also the     contradict AEP’s showing that it does not dock employees’
burden on each element of the claimed exemption. Arnold,          pay for partial-day absences. Moreover, Schaefer admitted in
361 U.S. at 392.                                                  his deposition that he has never been docked pay for partial-
                                                                  day absences. Accordingly, the district court correctly
  To prove that Schaefer is a bona fide administrative            concluded that AEP satisfied its burden of showing that
employee under the applicable Department of Labor (“DOL”)         Schaefer was paid on a salary basis.
regulations (described as the “short test”), AEP must
demonstrate that: (1) the employee is “compensated on a               2.    Office or Nonmanual Work Directly Related to
salary or fee basis at a rate of not less than $250 per week”;              Management Policies or General Business
(2) the employee’s “primary duty consists of . . . [t]he                    Operations of the Employer
performance of office or nonmanual work directly related to
management policies or general business operations of his            Next, AEP must show the absence of a material factual
employer or his employer’s customers”; and (3) the                dispute over whether Schaefer’s “primary duty” consists of
employee’s primary duty “includes work requiring exercise         the “performance of office or nonmanual work directly related
of discretion and independent judgment.” 29 C.F.R.                to management policies or general business operations of his
§§ 541.2, 541.214.                                                employer or his employer’s customers.”            29 C.F.R.
                                                                  §§ 541.2(a)(1), (e)(2), 541.214. Accordingly, we must first
  1. Salary Basis                                                 analyze Schaefer’s “primary duty.” We focus on evidence
                                                                  regarding the actual day-to-day activities of the employee
  AEP must first establish that it pays Schaefer on a salary or   rather than more general job descriptions contained in
fee basis. 29 C.F.R. § 541.2(e)(2); Douglas, 113 F.3d at 70.      resumes, position descriptions, and performance evaluations.
DOL regulations provide that an employee is paid on a salary      Ale v. Tennessee Valley Authority, 269 F.3d 680, 688-89 (6th
basis “if under his employment agreement he regularly             Cir. 2001). Neither the job description that Schaefer wrote
No. 02-1401          Schaefer v. Indiana Mich. Power Co.                 7    8      Schaefer v. Indiana Mich. Power Co.                 No. 02-1401

for his resume nor Schaefer’s failure to dispute AEP’s                           “Time alone, however, is not the sole test . . . .” 29 C.F.R.
position descriptions or performance evaluations prior to this                §§ 541.103, 541.206(b). A job duty that occupies less than
lawsuit preclude him from arguing that his day-to-day                         fifty percent of the employee’s time can still be the primary
activities differ from those described in these documents –                   duty if that duty is of principal importance to the employer or
such actions merely raise credibility questions for the                       if the other duties performed are collateral to that duty. Rutlin
factfinder. Indeed, we have recognized that “resumes may                      v. Prime Succession, Inc., 220 F.3d 737, 742 (6th Cir. 2000).
not provide the most accurate picture of an employee’s job                    Yet AEP has not argued that Schaefer’s non-shipping tasks
because resumes are typically ‘designed to enhance the                        are more important than shipping or that shipping is merely
employee[’]s duties and responsibilities in order to obtain a                 collateral to these tasks. AEP argues only that these other
job.’” Id. at 689 n.2. Here, the deposition testimony appears                 tasks are “equally important” to shipping. Even if AEP had
to provide a more detailed window into Schaefer’s day-to-day                  submitted evidence sufficient to support this proposition, the
activities.                                                                   contention is not sufficient to trump the fifty-percent “rule of
                                                                              thumb” set forth in 29 C.F.R. § 541.103.
  Schaefer’s tasks can be grouped into two categories:
(1) tasks relating to actual, specific shipments of radioactive                    a. Nonmanual
materials and waste, and (2) tasks relating to the maintenance
of the waste disposal program as a whole. The DOL                               To meet the exemption such that AEP need not pay him
regulations provide that “[i]n the ordinary case it may be                    time-and-a-half for overtime, Schaefer’s primary duty must
taken as a good rule of thumb that primary duty means the                     consist of “nonmanual work directly related to management
major part, or over 50 percent, of the employee’s time.” 29                   policies or general business operations.” Although an exempt
C.F.R. §§ 541.103, 541.206(b). Schaefer contends that he                      employee can perform some manual work without losing
spends roughly eighty percent of his time dealing with the                    exempt status, “if the employee performs so much manual
preparation of shipments and the remaining twenty percent of                  work (other than office work) that he cannot be said to be
his time on other tasks – some of which may also relate to                    basically a ‘white-collar’ employee he does not qualify for
preparation of specific shipments – including condition                       exemption as a bona fide administrative employee . . . .”
reports, procedural revisions, and position papers. Because                   29 C.F.R. § 541.203(a).
we view the evidence in the light most favorable to Schaefer,
we accept his contention that he spends the majority of his                     The evidence, viewed in the light most favorable to
time working on actual shipments of radioactive materials and                 Schaefer, supports his contention that he spends some of his
waste.1                                                                       time performing manual tasks outside the office but this

    1
      Two of AEP’s experts’ reports and Long’s deposition provide three       shipment also greatly incre ased, so the focus of Schaefer’s job shifted
alternative breakdowns of Schaefer’s time. It is not clear from the record    more firmly to shipping during that time. This lawsuit, filed on July 31,
whether this indicates disagreement with Schaefer’s breakdown, or merely      2000, cove rs conduct dating b ack to July 31 , 199 8 or, if willfulness is
a focus on a different period of time. Cook was offline for a pproximately    found, July 31, 1997.
three years, roughly between 1998 and 2000. T hat is, the nuclear reactors         W e offer no opinion on whether our result would be the sam e if
were shut down but the plant remanded op en while work was done on the        actual shipments became a substantially less significant part of Schaefer’s
reactors. As a result of the increased w ork on the reactors, the number of   job; presumably at some point the “primary job duty” would shift to
contaminated items – protective clothing, tools, replaced parts – requiring   maintenance of the program.
No. 02-1401       Schaefer v. Indiana Mich. Power Co.        9    10    Schaefer v. Indiana Mich. Power Co.          No. 02-1401

amount of time is not so much that he no longer qualifies for     the business of shipping radioactive waste, but instead is in
the exemption. Schaefer admits that for the past few years he     the business of producing electricity.” Appellee’s Brief at 40.
has spent fifty percent of his time at his desk and that he       According to AEP, since Schaefer’s work is collateral to the
currently spends greater than eighty percent of his time at his   production of electricity, he is therefore doing administrative
desk. Even when he is away from his desk, he does not spend       work. We reject this contention.
all of his time on manual tasks. Although Schaefer spends
some of this time inspecting trucks, examining load bracings,        Work related to waste disposal is not necessarily
inspecting shipping containers, and examining shipping            “administrative” work as that term is commonly understood.
labels, these “inspection” tasks – even if not performed at his   The very nature of AEP’s business at Cook – the production
desk – are nonetheless not manual tasks. Schaefer performs        of electricity by nuclear reaction – entails very complex waste
manual tasks when he actually picks up a hammer to brace a        issues that require types of employees that a more traditional
load or installs or tightens a strap. Accordingly, Schaefer       factory would not require. Such employees do unique work
does not spend so much of his time on these manual tasks so       which, although not part of production proper, is also not
as to fall outside exempt status.                                 “administrative” or part of “servicing the business.” The
                                                                  problem posed by the dichotomy is not limited to waste. For
    b.   Directly Related to Management Policies or General       example, Long testified that the employees who wear
         Business Operations                                      protective clothing and work in areas of active contamination
                                                                  are not production workers: “I guess if – if you want to say
  To qualify for the exemption, Schaefer’s primary duty must      direct production of electricity, I would think of – of the
also be “directly related to management policies or general       operators. The majority of these people [who wear the
business operations of the employer or the employer’s             protective gear] are probably in maintenance.” J.A. 126.
customers.” 29 C.F.R. § 541.214. This provision, in addition
to describing the types of activities performed by an exempt         As this case indicates, the administrative versus production
employee, “limits the exemption to persons who perform            analysis does not fit all cases. The analogy – like various
work of substantial importance to the management or               other parts of the interpretive regulations – is only useful to
operation of the business of his employer or his employer’s       the extent that it is a helpful analogy in the case at hand, that
customers.” 29 C.F.R. § 541.214(a).                               is, to the extent it elucidates the phrase “work directly related
                                                                  to the management policies or general business operations.”
  AEP urges us to conclude that Schaefer is an administrative     Bothell v. Phase Metrics, Inc., 299 F.3d 1120, 1126 (9th Cir.
employee simply because he is not involved in the direct          2002); see also Shaw v. Prentice Hall Computer Publ’g, Inc.,
production of electricity. 29 C.F.R. § 541.205(a) does            151 F.3d 640, 644 (7th Cir. 1998) (noting that the
distinguish administrative work from production work, and a       administrative/production dichotomy is to be used only to the
number of courts have applied an administrative versus            extent that it is a helpful analogy in the case at hand). This
production analysis, sometimes referred to as the                 dispute must therefore be resolved using other analytical tools
administrative/production dichotomy, to the issue. See, e.g.,     set out in the regulations for resolving this question.
Dalheim v. KDFW-TV, 918 F.2d 1220 (5th Cir. 1990). AEP
argues that Schaefer does not fall on the “production” side of      29 C.F.R. § 541.205(b) provides further guidance on the
this so-called dichotomy because “the Appellant is overseeing     “types” of work that are administrative: “The administrative
the shipment of radioactive waste in a company that is not in     operations of the business include the work performed by so-
No. 02-1401       Schaefer v. Indiana Mich. Power Co.       11    12   Schaefer v. Indiana Mich. Power Co.         No. 02-1401

called white-collar employees engaged in ‘servicing’ a              3. Discretion and Independent Judgment
business as, for example, advising the management, planning,
negotiating, representing the company, purchasing, promoting        Even if AEP could meet its burden in proving that
sales, and business research and control.” We cannot              Schaefer’s primary duty consists of the “performance of
conclude, without more from the employer, that shipping           office or nonmanual work directly related to management
radioactive materials is in the same category as “advising the    policies or general business operations of his employer or his
management, planning, negotiating, representing the               employer’s customers,” AEP must also prove that Schaefer
company, purchasing, promoting sales, and business research       customarily and regularly exercised discretion and
and control.” The fact that some shipments are unique or          independent judgment in the performance of his primary duty.
challenging does not convert them into “servicing the             29 C.F.R. §§ 541.2(e)(2), 541.214(a); Douglas v. Argo-Tech
business” or make them “directly related to management            Corporation, 113 F.3d 67, 72 (6th Cir. 1997). AEP has
policies or general business operations.” An inquiry into         argued that the “short test” requires only occasional exercises
whether the work is of a routine nature is relevant for           of discretion and independent judgment rather than
determining whether the administrative work is of                 “customary and regular” exercises. Yet Douglas, in which we
“substantial importance” to the employer – not whether the        articulated the “customarily and regularly” requirement, is
work is actually of an administrative nature.                     binding on this panel. See Moltan Co. v. Eagle-Picher
                                                                  Industries, Inc., 55 F.3d 1171, 1176 (6th Cir. 1995) (“We
  Where Schaefer is asked to do benchmarking or make              cannot overturn the prior published decision of another panel
recommendations regarding how AEP should deal with an             and are therefore bound by these previous decisions.”). In
unusual shipment, those aspects of the task might qualify but     any event, if we were to accept AEP’s contention, then any
they do not suffice to change the nature of the actual shipping   minimal amount of discretion would satisfy this prong and
work and are too infrequent by either party’s account to form     nonexempt employees given as examples in the regulations,
the basis for finding that Schaefer’s “primary job duty           such as bank tellers and book keepers, would potentially be
consists of . . . work directly related to management policies    swept into the exemption upon performance of an occasional
or general business operations.” Similarly, some of               discretionary task.
Schaefer’s other tasks – for example, writing or updating
procedures and preparing an annual scaling factor report –          There are genuine issues of material fact regarding the
appear to meet the “directly related” requirement, but they are   extent to which Schaefer actually exercises discretion and
not part of Schaefer’s primary job duty. See supra. Because       independent judgment. According to 29 C.F.R. § 541.207(a):
Schaefer’s primary job duty is not “directly related,” we need    “In general, the exercise of discretion and independent
not address whether it is of substantial importance to AEP.       judgment involves the comparison and the evaluation of
                                                                  possible courses of conduct and acting or making a decision
  Thus, genuine issues of material fact exist as to whether       after the various possibilities have been considered.” The
Schaefer’s primary duty is “directly related to management        regulations also distinguish the exercise of discretion and
policies or general business operations of the employer or the    independent judgment from use of skill or application of
employer’s customers.”                                            knowledge:
                                                                    Perhaps the most frequent cause of misapplication of the
                                                                    term “discretion and independent judgment” is the failure
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  to distinguish it from the use of skill in various respects.     whether Schaefer, constrained by regulations, actually
  An employee who merely applies his knowledge in                  exercises discretion and independent judgment. See Ale, 269
  following prescribed procedures or determining which             F.3d at 687.
  procedure to follow, or who determines whether
  specified standards are met or whether an object falls into         AEP also argues that there are gaps in the regulations that
  one or another of a number of definite grades, classes, or       Schaefer must “bridge” using his discretion and independent
  other categories, with or without the use of testing or          judgment. AEP offers several examples of “decisions” or
  measuring devices, is not exercising discretion and              “judgments” made by Schaefer when applying the
  independent judgment within the meaning of § 541.2.              regulations, yet each only entails the application of skill or
  This is true even if there is some leeway in reaching a          knowledge rather than the exercise of discretion or
  conclusion, as when an acceptable standard includes a            independent judgment. It is not enough to merely latch on to
  range or a tolerance above or below a specific standard.         words like “decision,” “recommendation,” “judgment,” or
                                                                   “determine” in the procedures and in Schaefer’s deposition
29 C.F.R. §541.207(c)(2).                                          testimony. Cf. Ale, 269 F.3d at 691 (“The words ‘in charge’
                                                                   are not a magical incantation that render an employee a bona
  Schaefer contends that his shipping-related tasks do not         fide executive regardless of his actual duties.”).
require the exercise of discretion or independent judgment
within the meaning of the regulations. Specifically, Schaefer        Indeed, the term “exercise of discretion and independent
argues that many of his tasks are so heavily regulated by DOT      judgment” as it appears in the regulations has a specific
regulations, Nuclear Regulatory Commission regulations,            meaning which excludes “the use of skill” and the application
state regulations, and company procedures, that his primary        of “knowledge in following prescribed procedures or
duty requires little or no exercise of discretion or independent   determining which procedure to follow, or . . . determin[ing]
judgment. The district court rejected this argument on the         whether specified standards are met or whether an object falls
ground that “it could apply to almost anyone in the nuclear        into one or another of a number of definite grades, classes, or
power industry.” Schaefer v. Ind. Mich. Power Co., 197             other categories.” Many of AEP’s examples either are of
F.Supp.2d 935, 948 (W.D. Mich. 2002). We disagree with             simple decisions that do not require the exercise of discretion
the district court’s analysis. Each person in the industry,        within this definition or involve procedures that provide more
including Schaefer, must be individually examined in order to      guidance than AEP implies. For example, a material either
determine whether he or she actually exercises discretion and      does or does not have a specific activity level of less than 70
independent judgment. The fact that the industry is heavily        Bq/gram (0.002 :Ci/gram) for purposes of determining what
regulated may indeed mean that a facility like Cook may            shipping procedures will govern. Likewise, blocking and
employ fewer individuals who actually exercise discretion.         bracing a load is an exercise of skill rather than discretion.2
Cook employs a different type of employee – those who can
follow regulations – than it would have to employ in the
absence of the regulations – that is, those who could make the          2
                                                                         Vaughn v. Watkins M otor Lines, Inc., 291 F.3d 9 00 (6th Cir. 2002),
kinds of decision made by those who write the various              is inapp osite because it involves the M otor Carriers Act (“MC A”)
regulations. The very purpose of such detailed regulations         exemption from the FLSA.         The MCA allows the Secretary of
and procedures is to create conformity which has the practical     Transportation to regulate the hours of loaders. In Vaughn, the Court
                                                                   found that blocking freight and loading it high and tight met the MCA
effect of minimizing discretion. We must, therefore, examine       “judgment and d iscretion” req uirement. Id. at 904 . “Judgment and
No. 02-1401         Schaefer v. Indiana Mich. Power Co.              15    16   Schaefer v. Indiana Mich. Power Co.        No. 02-1401

AEP additionally argues that there are times when a package                its burden of establishing that Schaefer “customarily and
could be classified in more than one shipping category under               regularly” exercises discretion and independent judgment.
the regulations. Long, however, testified that Cook had a                  Specifically, some benchmarking and the completion of some
preferred method of selecting the least restrictive                        of the condition reports are probably also part of Schaefer’s
classification, and AEP has presented no evidence that                     primary job duty. There is insufficient evidence of record,
Schaefer exercised his discretion and diverged from the                    however, to determine how often he performed them as part
preferred method.                                                          of his primary job duty or how often they required him to
                                                                           exercise discretion or independent judgment. Schaefer spends
   Nor is the mere fact that Schaefer has extensive knowledge              less than one percent of his time on benchmaking, which
of the regulations sufficient to turn their application into               involves calling various facilities and talking to an employee
exercises discretion and independent judgment. 29 C.F.R.                   with a near corresponding position to his own about how that
§ 541.207(c)(3) specifically states that “[o]ften, after                   facility handles a particular issue. Schaefer then narrows the
continued reference to written standards, or through                       options based on what is feasible at Cook, presenting these
experience, the employee acquires sufficient knowledge so                  options to his supervisor, sometimes with a recommendation
that reference to written standards is unnecessary. The                    about the option he prefers. Of the one percent of his time
substitution of the employee’s memory for the manual of                    that Schaefer spends on benchmarking, only a portion of this
standards does not convert the character of the work                       time relates to his primary duty, such as when he performs
performed to work requiring the exercise of discretion and                 benchmarking to ascertain how to ship an unusual piece of
independent judgment.” Rather, Schaefer “merely applies his                waste – for example, a large block of concrete. Other times,
knowledge in following proscribed procedures or determining                the benchmarking relates to secondary duties – for example,
which procedures to follow” and “determines whether                        justifying a current practice or researching a specific issue
specified standards are met.” 29 C.F.R. § 541.207(c)(1).                   such as when he was asked to look into different ways
                                                                           companies estimated the amount of tritium found in waste
  AEP has not demonstrated that these shipping tasks require               because AEP was concerned that they were over-estimating
Schaefer to exercise discretion and independent judgment for               the amount. The record does not reveal what amount of the
purposes of summary judgment. We therefore make no                         total one percent of time Schaefer spent on benchmarking
determination whether decisions made related to these types                relates to his primary duty.
of tasks would be “with respect to matters of significance.”
29 C.F.R. § 541.207(a).                                                      Likewise, AEP has not established that Schaefer exercises
                                                                           discretion with sufficient frequency while completing
  To the extent that AEP does point to some tasks that                     condition reports as part of his primary duty. Schaefer spends
undisputedly require the exercise of discretion, AEP has                   ten to twenty percent of his time on condition reports,
failed to establish the extent to which Schaefer completes                 “depending on the ebb and flow of them.” J.A. 95.
these tasks as part of his primary duty and thus fails to meet             According to Schaefer’s deposition, condition reports are part
                                                                           of AEP’s “corrective action program.” J.A. 427. According
                                                                           to Long, “[a] condition report is – what we call something
discretion” under the regulations for the MCA does not, however, appear    adverse to quality; a problem.” J.A. 122. These problems
to have the specific and specialized meaning of “discretion and            “[m]ay be small; may be large.” Id. All employees – exempt
independent judgment” under the administrative exem ption – particularly
the exc lusion o f “application o f skill.”                                and nonexempt – participate in this program. J.A. 427.
No. 02-1401       Schaefer v. Indiana Mich. Power Co.        17    18   Schaefer v. Indiana Mich. Power Co.       No. 02-1401

Schaefer testified that condition reports have parts: “condition   persist and it must be left to a trier of fact to weigh the
identification, condition evaluation, the proposed actions and     credibility of Schaefer’s characterization of his day-to-day
actual actions that have been performed.” J.A. 241. Schaefer       duties with that of AEP. Accordingly, we REVERSE the
admits that some analysis is required when he is assigned the      decision of the district court granting summary judgment to
“condition evaluation” section. Id. He testified that he           AEP and REMAND for further proceedings.
performs condition evaluation “[r]arely to infrequently. . . .
maybe onto the infrequently side.” Id. Other times he comes
in where the specific action is to be performed in which case
“there’s no analysis required, there’s no determination to be
made, other than just perform that task, perform the action
that was proposed.” Id. Some condition reports no doubt
have required that Schaefer exercise discretion and
independent judgment. We have insufficient information,
however, on how often that might have occurred and, of the
times it occurred, how often it related to an actual shipment
as opposed to a secondary task.
  Most of AEP’s argument that Schaefer customarily and
regularly exercises discretion and independent judgment is
based upon tasks that are not part of Schaefer primary job
duty, many of which Schaefer has completed infrequently or
even only once. We need not consider whether Schaefer
exercises discretion when completing secondary tasks.
29 C.F.R. § 541.214(a). AEP has not met its burden of
demonstrating that the undisputed facts show that Schaefer
customarily and regularly exercises discretion and
independent judgment.
                    III. CONCLUSION
  Here, where the employer bears the burden of proving an
exemption that is to be construed narrowly against the
employer, AEP has not demonstrated that no reasonable trier
of fact could find that Schaefer’s primary duty does not
consist of work “directly related to management policies or
general business operations of his employer” or that Schaefer
does not exercise sufficient discretion and independent
judgment to meet the exemption when the facts are viewed in
the light most favorable to Schaefer. Issues of material fact
No. 02-1401      Schaefer v. Indiana Mich. Power Co.       19    20   Schaefer v. Indiana Mich. Power Co.         No. 02-1401

                ______________________                             Many skilled people, like electricians, nurses, and other
                                                                 skilled professionals and tradesmen, make all kinds of
                   CONCURRENCE                                   discretionary decisions in carrying out their skill, profession
                ______________________                           or trade, but that is not the kind of discretion envisioned by
                                                                 the short test. Indeed, the applicable regulation, explicitly
  SUHRHEINRICH, Circuit Judge, concurring. I concur in           makes this distinction. See Ale, 269 F.3d at 685 (stating that
Judge Cole’s analysis. I write separately simply to indicate     “section 541.207(c) distinguishes the exercise of discretion
my belief that we can decide this issue as a matter of law in    and independent judgement from the use of skill in applying
favor of Plaintiff-Appellant Schaefer. I would therefore grant   techniques, procedures, or specific standards”).
Plaintiff’s motion for summary judgment and deny AEP’s.
                                                                   Perhaps the most frequent cause of misapplication of the
   The decision of whether an employee is exempt from the          term “discretion and independent judgement” is the
FLSA’s overtime compensation provisions under 29 U.S.C.            failure to distinguish it from the use of skill in various
§ 213(a)(1) is primarily a fact question. Lott v. Howard           respects. An employee who merely applies his
Wilson Chrysler-Plymouth, Inc., 203 F.3d 326, 330 (5th Cir.        knowledge in the following prescribed procedures or
2000); see also Ale v. Tennessee Valley Auth., 269 F.3d 680,       determining which procedures follow, or who determines
688-89, 691 (6th Cir. 2002) (stating that the DOL regulations      whether specified standards are met . . . is not exercising
indicate that courts must look to specific fact in determining     discretion and independent judgement within the
whether an employee is exempted for overtime provisions,           meaning of § 514.2. This is true even if there is some
citing 29 C.F.R. § 541.103, 207(b)). However, the ultimate         leeway in reaching a conclusion, as when an acceptable
decision of whether the employee is exempt from the                standard includes a range or tolerance above or below a
overtime compensation provision, § 207(a)(1), is a question        specific standard.
of law. Ale, 269 F.3d at 691; Lott, 203 F.3d at 331.
                                                                 29 C.F.R. § 541.207(c)(1) (2003). Schaefer’s own testimony
  In my view, AEP has, at a minimum, failed to create a          reflects that the decisions he makes are applications of his
genuine issue of fact on the question of whether Schaefer’s      skill or knowledge as an environmental specialist in following
primary duty “includes work requiring exercise of discretion     proscribed procedures or determining which procedures to
and independent judgment.” 29 C.F.R. § 541.1(e)(2); 29           follow. See 29 C.F.R. § 541.207(c)(1). The district court did
C.F.R. § 541.214(a). As the majority points out in its           not consider this subsection (c)(1) in its analysis.
analysis, AEP failed to demonstrate (as part of its burden in
response to Schaefer’s motion for summary judgment) that           Furthermore, as the majority holds, of those tasks that
the “decisions” and “judgments” made by Schaefer when            indisputedly require Schaefer to exercise discretion, “AEP has
applying DOT regulations, require use of his discretion or       failed to establish the extent to which Schaefer completes
judgment distinct from the application of skill or knowledge.    these tasks as part of his primary duty.” Maj. Op., ante, at
That is, AEP’s examples of “judgments” made by Schaefer          15. Nor did AEP establish that Schaefer exercises discretion
when applying the regulations entail only the application of     with sufficient frequency while completing condition reports
his skill or knowledge.                                          as part of his primary duty. Thus, AEP has failed to meet its
                                                                 burden of establishing that Schaefer “customarily and
                                                                 regularly” exercises discretion and independent judgment.
No. 02-1401      Schaefer v. Indiana Mich. Power Co.     21    22   Schaefer v. Indiana Mich. Power Co.     No. 02-1401

Having failed to meet its burden of showing that the                               ______________
employee meets every aspect of the definition for an exempt
employee, see Arnold v. Ben Kanowsky, Inc., 361 U.S. 388,                             DISSENT
392 (1960) (holding that employer bears burden of proof, on                        ______________
each and every element of the claimed exemption); see
generally Corning Glass Works v. Brennan, 417 U.S. 188,          ROGERS, Circuit Judge, dissenting. Essentially for the
196-97 (1974) (application of an exception under the FLSA      reasons given in Judge Quist's careful opinion below, 197
is a matter of affirmative defense, and the employer has the   F.Supp.2d 935, I would affirm the judgment of the district
burden of proof), summary judgment for Schaefer is             court.
appropriate. I would therefore remand to the district court
with instructions to enter summary judgment in favor of
Schaefer.