Court Opinion

ID: 3016538
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:15:44.755271+00
Date Added: 2024-06-11T11:47:00.645389
License: Public Domain

___________

                                  No. 95-3174
                                  ___________

Robert B. Reich, Secretary            *
of Labor, United States               *
Department of Labor,                  *
                                      *
            Appellant,                *   Appeal from the United States
                                      *   District Court for the
     v.                               *   Southern District of Iowa.
                                      *
Avoca Motel Corporation, doing        *
business as Avoca Heights Motel;*
Denison Park Corporation, doing       *
business as The Denison Park          *
Motel; Walnut Colonial, doing         *
business as Walnut Budget Motel;*
Tom Anderson,                         *
                                      *
            Appellees.                *

                                  __________

                    Submitted:    March 14, 1996

                         Filed:   April 26, 1996
                                  __________

Before MAGILL, FLOYD R. GIBSON, and MORRIS SHEPPARD ARNOLD, Circuit
     Judges.

                                  ___________

MAGILL, Circuit Judge.

     The Secretary of Labor appeals the district court's1 conclusion that
the various defendant motels did not violate the overtime and minimum wage
provisions of the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 206, 207
(1994).   The court determined

     1
     The Honorable Harold D. Vietor, United States District Judge
for the Southern District of Iowa.
that the motel managers' "waiting time"2 counted as exempt work, and thus
the motel managers qualified for the administrative exemption.                     We affirm.

                                               I.

      All four motels at issue in this case, located in southwest Iowa, are
owned by Thomas Anderson.          Although Anderson stops by each motel about once
per   week,   he    does    not    personally       attend   to   the   on-site    management
responsibilities of any of the motels.               Rather, the day-to-day management
rested with the motel manager.            These managers conferred by phone with
Anderson two or three times per week reporting employee hours and other
information.       During these conversations, the managers would often make
suggestions and recommendations to Anderson concerning the method of
operation of the motels.

      The district court found that the primary duties of the managers was
management of the motel.             The duties include such personnel tasks as
interviewing and hiring applicants for employment as housekeepers or desk
clerks,     training       and    evaluating    such     employees,      and,     if   needed,
recommending to Anderson their termination.                       The managers would also
schedule the housekeepers and desk clerks, make assignment sheets for the
housekeepers       and   maintenance     workers,      and   oversee     the    work   of   the
employees.

      The managers also served as the motels' liaisons to the guests.                        It
was the managers' responsibility to receive and solve guest concerns.                       The
managers also inspected guest rooms and the lobby areas, making decisions
as to the proper presentation and appearance of those areas.                             These
decisions were based on numerous

        2
       Waiting time is that period of time beyond the scheduled
working hours during which the managers, although engaged in
personal pursuits, were on the motel premises and were on call to
tend to motel business as circumstances required.

                                           -2-
factors, such as the occupancy rate of the motel, the time of day, the time
of year, and the like.

      Because these motels are small, rural motels that relied heavily on
word-of-mouth advertising, the managers also engaged in "public relations"
work with customers in order to gain their repeat business.     As part of
this, the managers were authorized to grant room rate discounts within
limitations imposed by Anderson.

      The managers also performed duties not directly related to management
duties.    These included doing laundry, snow shovelling, lawn mowing,
cleaning the lobby area, taking reservations, and checking in guests.   The
time spent doing laundry, taking reservations, and checking in guests was
proportional to the volume of business--more when business was good and
less when it was slow.

      One of the managers' conditions of employment was that they live on
the premises, so that they could respond promptly to guest needs.       The
managers generally spent much of the time beyond the standard working hours
in   their lodgings engaged in personal life activities.        There were
interruptions during this waiting time--business phone calls, guests
checking in, guests seeking assistance, guest complaints, and the like.
These interruptions sometimes came during the managers' meal hours and
occasionally late at night.

      The managers were required to keep the motels open from 7:00 or 7:30
a.m. until 10:30 or 11:00 p.m.   Because the managers were required to stay
on the premises during open hours, the motel managers worked approximately
16 hours per day, or 112 hours per week.   For this they were paid a salary
of not less than $155 (but not more than $250) per week, exclusive of
lodging.

      The Secretary brought this action, claiming that the motels violated
the FLSA by not paying minimum wage and not paying

                                    -3-
overtime salary to the managers.      The district court disagreed, concluding
that, under § 13(a)(1) of the FLSA, the managers were "employed in a bona
fide administrative capacity" and thus were exempt employees under the
FLSA.    See 29 U.S.C. § 13(a)(1).3

        Central to the district court's decision was its determination that
the waiting time assumed the character of management duties.     The district
court reasoned that the managers were required to live on the premises due
to their management duties.    The court found that the waiting time plus the
time spent actively performing management duties totalled in excess of
sixty percent of their hours worked, meeting the requirement for exemption
found in 29 C.F.R. § 541.2(d) (1994); see infra note 3.

                                       II.

        Whether a particular duty is administrative presents a legal question
that we review de novo.    See Icicle Seafoods, Inc. v. Worthington, 475 U.S.
709, 714 (1986); Shockley v. City of Newport News, 997 F.2d 18, 26 (4th
Cir. 1993).    In contrast, "the amount of time devoted to [administrative]
duties, and the significance of those duties, present factual questions
that we review for clear error."       Id.; Icicle Seafoods, 475 U.S. at 713.

        To qualify for the administrative exemption found in 29 U.S.C.
§ 13(a)(1), the managers must meet all of the requirements of 29

        3
       At the close of evidence, the Secretary made a motion for
judgment which conforms to the evidence. The Secretary argued that
because the issues were tried with consent of the parties, they
should be allowed to amend their pleadings to include certain
previously unnamed managers pursuant to Federal Rule of Civil
Procedure 15(b). The district court denied this motion, concluding
that the issues were not tried with consent of the parties. We
affirm this denial, noting that the motion is moot because no back
pay was awarded in this case.

                                       -4-
C.F.R. § 541.2 (1994).4     The district court held, without elaboration, that
the managers clearly met the requirements of § 541.2(a)-(c), (e).     We agree
                        5
with this conclusion.

     Whether the managers also met the requirement of § 541.2(d), that
they spend at least sixty percent of their time engaged in work directly
related to management policies or general business operations, is a closer

     4
     Pursuant to 29 C.F.R. § 541.2, an employee employed in a bona
fide administrative capacity within the meaning of § 13(a)(1) of
the FLSA means any employee

       (a) Whose primary duty consists of . . .
        (1) The performance of office or nonmanual work
     directly related to management policies or general
     business operations of his employer . . . ; [and]
     . . . .
       (b) Who customarily and regularly exercises discretion
     and independent judgment; and
       (c)(1) Who regularly and directly assists a proprietor
     . . . ; [and]
     . . . .
       (d) Who does not devote more than 20 percent, or, in
     the case of an employee of a retail or service
     establishment who does not devote as much as 40 percent,
     of his hours worked in the workweek to activities which
     are not directly and closely related to the performance
     of the work described in paragraphs (a) through (c) of
     this section; and
       (e)(1) Who is compensated for his services on a salary
     or fee basis at a rate of not less than $155 per week
     . . . exclusive of board, lodging, or other facilities
     . . . .
         5
        The Secretary argues that the duties at issue are more
properly covered by the executive exemption, see 29 C.F.R. § 541.1,
rather than the administrative exemption.       We disagree.    The
managers performed such tasks as resolving guest complaints,
engaging in "public relations" work to gain repeat customers, and
making decisions as to the proper presentation of the rooms and
common areas. Further, the managers often conferred with Anderson
and made suggestions and recommendations to Anderson concerning the
method of operation of the motels. We find that these duties fall
under the rubric of "advising the management" and "promoting
sales," which are specifically included in the definition of
administrative duties. See 29 C.F.R. § 541.205.

                                       -5-
issue.   Because the managers spent a

                                   -6-
significant amount of time during the day performing nonexempt work such
as laundry and checking in guests, the managers will exceed the sixty
percent threshold only if the waiting time is classified as exempt.        The
district court concluded that the waiting time was exempt, and we agree.

        In determining whether waiting time should be classified as exempt,
the court must undertake a qualitative analysis:      why were the managers on
call?       If the managers were on call because their presence was required to
handle management-type concerns, then the waiting time is exempt time.      The
managers' performance of some nonexempt work during this period will not
otherwise convert the waiting time into nonexempt time, because in such a
situation, the nonexempt work--in this case, laundry and checking in
guests--is merely ancillary and incidental to the performing of exempt
work.       See Smith v. City of Jackson, Miss., 954 F.2d 296, 299 (5th Cir.
1992); Murray v. Stuckey's, Inc., 939 F.2d 614, 618 (8th Cir. 1991), cert.
denied, 502 U.S. 1073 (1992), aff'd upon remand, 50 F.3d 564 (8th Cir.
1995).

        In the present case, the managers on call performed a variety of both
exempt and nonexempt tasks.6      Nevertheless, the district court determined,
as a factual matter, that the managers were on call to handle management-
type concerns.       As the court noted,

        [T]he managers were required to live on the premises because of
        their management duties, and not because they did the laundry
        and checked in guests and did other non-management duties
        during the motels' open hours. They were not glorified desk
        clerks; they were managers. It was primarily to be available
        to respond to management demands that the managers were on the
        premises in a

        6
      Some of the interruptions called on the managers to perform
management-type duties, such as responding to concerns or
complaints of a guest, while other interruptions called upon them
to perform a nonmanagement task, such as take a reservation or
check in a guest.

                                        -7-
waiting status, and I therefore find and conclude that their waiting time
assumes the character of management duties.

Order at 7.    We do not find this conclusion clearly erroneous.   See Icicle
Seafoods, 475 U.S. at 713 (standard of review). Thus, the waiting time
assumes the character of exempt work, see City of Jackson, 954 F.2d at 299,
and the managers have met the requirement of § 541.2(d) that they spend at
least sixty percent of their time performing exempt tasks.

                                     III.

     The managers in this case meet all of the requirements for the
administrative exemption found in § 541.2, and, therefore, the motels did
not violate the minimum wage and overtime provisions of the FLSA.         The
district court's opinion is affirmed.

     A true copy.

              Attest:

                   CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.

                                     -8-