United States Court of Appeals
For the First Circuit
No. 07-1768
THOMAS W. CASH,
Plaintiff, Appellant,
v.
CYCLE CRAFT COMPANY, INC.,
dba Harley-Davidson/Buell of Boston,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]
Before
Lipez and Howard, Circuit Judges,
and Oberdorfer,* Senior District Judge.
Nina Joan Kimball with whom Justine H. Brousseau was on brief
for appellant.
Seth H. Salinger was on brief for appellee.
November 20, 2007
*
Of the District of Columbia, sitting by designation.
OBERDORFER, Senior District Judge. Plaintiff-Appellant
Thomas W. Cash appeals the district court’s grant of summary
judgment to his former employer, Defendant-Appellee Cycle Craft
Company, Inc., d/b/a Harley-Davidson/Buell of Boston (“Boston
Harley”). Cash contends Boston Harley failed to pay him overtime
at the proper rate in violation of both the Fair Labor Standards
Act, 29 U.S.C. §§ 210–19 (2004), and the Massachusetts Minimum Fair
Wages Act, Mass. Gen. Laws ch. 151, §§ 1A, 1B (2004). The district
court granted Boston Harley’s motion for summary judgment,
concluding that Cash was an exempt “administrative” employee within
the meaning of these Acts. Cash v. Cycle Craft Co., 482 F. Supp.
2d 133 (D. Mass. 2007). We AFFIRM.
I. BACKGROUND
We review the facts in the light most favorable to Cash,
the nonmoving party below.
In fall 2003, Cash was shopping at the Boston Harley
motorcycle store and met the General Manager, Ron Buchbaum. This
encounter, along with another in January 2004, led to discussions
of Cash potentially working at Boston Harley. Buchbaum wanted Cash
to create a new customer-service position. Cash drafted a job
description for the position and Buchbaum suggested some changes,
which Cash adopted. The job description titled the position “New
Purchase/Customer Relations Manager” and identified the following
responsibilities:
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The ability to develop and implement a[n]
overall Customer Service strategic plan that
will allow [Boston Harley] to reach its
current and long-term customer satisfaction
goals.
The ability to develop a clear business plan
to support organizational changes, where
needed, that provide efficiency and improve
customer service delivery.
To ensure service goals and expectations of
customers are met with optimum quality and
satisfaction.
Identify and expeditiously resolve delivery
problems. Develop and implement appropriate
action.
Liason between National representatives, the
Dealership and the customer, resolving issues
to assure complete and on-time shipment of
bike and accessories delivery.
The job description also stated the position’s qualifications,
including a “[m]inimum of five years experience” in both “Customer
Service Management” and “as a Supervisor.” Buchbaum offered Cash
the position, which provided a $60,000 annual salary, along with
health insurance and vacation after one year.
Cash accepted the offer and started working at Boston
Harley on April 26, 2004. His duties included working with various
Boston Harley departments to make sure that they outfitted and
delivered each motorcycle according to the particular purchase
order. If ordered parts were not installed, he was to contact the
service manager, Michael Sienkiewicz, and tell him what needed to
be done. Once problems were resolved, Cash was to tell the finance
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department that the motorcycle was ready. That department would
then set up a time with the customer for delivery or pickup. Cash
then tracked the purchased motorcycles; it was his job to stay in
touch with the customers and make sure that they were satisfied so
that they would provide positive customer-feedback reports.
As Cash’s job worked out, he did not coordinate
motorcycle ordering, delivery, or part installation. Nor did he
supervise or manage any employees. However, he attended management
meetings, except when Buchbaum instructed him not to. At these
meetings, Cash reported the status of previously ordered
motorcycles and their scheduled time for pickup or delivery.
Often, after Cash provided these reports, Buchbaum told him to
leave the meeting.
Cash earned $1,153.85 per week (the prorated amount for
his $60,000 salary) during his employment. He received this same
salary each week regardless of hours worked, except for two pay
periods: (1) the pay period ending August 28, 2004, when he was
paid $769.24; and (2) the next pay period, ending September 4,
2004, when he was paid $961.55. Cash states that “he was never
paid for hours he worked over 40 hours [per week], yet he was
routinely required to work overtime as part of his job, as is
reflected in his payroll records.”
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On April 8, 2005, almost one year after he started
working at Boston Harley, Cash experienced an emotional problem at
work. Boston Harley terminated his employment that day.
On November 4, 2005, Cash brought suit in district court,
alleging the statutory violations mentioned above. On April 6,
2007, the district court granted Boston Harley’s motion for summary
judgment. Cash appealed.
II. DISCUSSION
A. Standard of Review
We review de novo a district court’s entry of summary
judgment. Dávila v. Corporación De P.R. Para La Difusión Pública,
498 F.3d 9, 12 (1st Cir. 2007). Like the district court, we take
the facts of record in the light most favorable to the nonmovant
(here, Cash) and draw all reasonable inferences in his favor. Id.
Summary judgment is appropriate only when the record “show[s] that
there is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(c).
B. Cash’s Claims
1. Fair Labor Standards Act
The Fair Labor Standards Act establishes the general rule
that employers must compensate each employee at “a rate not less
than one and one-half times the regular rate” for all overtime
hours that an employee works. 29 U.S.C. § 207(a)(1). The Act
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defines overtime as employment in excess of 40 hours in a single
workweek. Id.
The Act exempts from this general rule certain so-called
“white-collar” employees, i.e., “any employee employed in a bona
fide executive, administrative, or professional capacity . . . .”
Id. § 213(a)(1) (emphasis added). Boston Harley contends that Cash
was such a “white-collar” employee because he served in an
“administrative” capacity.
An employer defending a suit under the Act bears the
burden of establishing that a particular employee’s job falls
within such an exemption. Reich v. John Alden Life Ins. Co., 126
F.3d 1, 7 (1st Cir. 1997). Additionally, “the remedial nature of
the statute requires that [its] exemptions be ‘narrowly construed
against the employers seeking to assert them’” and “‘limited to
those establishments plainly and unmistakably within [the
exemptions’] terms and spirit.’” Id. (quoting Arnold v. Ben
Kanowsky, Inc., 361 U.S. 388, 392 (1960)).
The Secretary of Labor has issued regulations that
articulate some specific parameters of the exemption. John Alden,
126 F.3d at 7; see 29 C.F.R. § 541.200 (2004). Although the
regulations merely state the Secretary’s official position on how
the statutes should be interpreted, a court must give them
“controlling weight unless [the court finds them] to be arbitrary,
capricious, or contrary to the statute.” John Alden, 126 F.3d at
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8 (citing Chevron U.S.A., Inc. v. Natural Res. Def. Council, 467
U.S. 837, 843–44 (1984)).
According to the regulations, to establish that Cash was
an “employee in a bona fide administrative capacity,” Boston Harley
must show that he was an employee
(1) [c]ompensated on a salary or fee basis
at a rate of not less than $455 per
week . . ., exclusive of board, lodging
or other facilities;
(2) [w]hose primary duty is the performance
of office or non-manual work directly
related to the management or general
business operations of the employer or
the employer’s customers; and
(3) [w]hose primary duty includes the
exercise of discretion and independent
judgment with respect to matters of
significance.
29 C.F.R. § 541.200 (emphasis added).1
(a) Salary
Cash meets the $455-per-week compensation threshold in
the regulation: he received $1,153.83 per week, except for the two
weeks he received $769.24 and $961.55. He argues, however, that
Boston Harley did not pay him on a “salary basis,” because it
1
The Secretary issued these regulations during the course of
Cash’s tenure with Boston Harley; because the changes are largely
stylistic, we do not refer to the old regulations.
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reduced his pay for these two pay periods. The regulations state
that “[a]n employee will be considered to be paid on a ‘salary
basis’. . . if the employee regularly receives each pay period on
a weekly, or less frequent[,] basis, a predetermined amount
constituting all or part of the employee’s compensation, which
amount is not subject to reduction because of variations in the
quality or quantity of the work performed.” Id. § 541.602(a).
Subject to certain exceptions, “an exempt employee must receive the
full salary for any week in which the employee performs any work
without regard to the number of days or hours worked.” Id. The
district court, mistakenly stating that Cash began work on
Thursday, August 26, 2004 (instead of April 26, 2004), concluded
that these two pay periods accurately reflected the 1.5 weeks Cash
worked at this time.
Regardless of this date error, Boston Harley prevails on
this point. A regulation issued August 23, 2004, provides that an
employer “shall lose the exemption if the facts demonstrate that
the employer did not intend to pay employees on a salary basis.”
Id. § 541.603(a). “An actual practice of making improper
deductions demonstrates” this intent. Id. (emphasis added). An
actual practice of making improper deductions is evidenced by “the
number of improper deductions.” Id.
We conclude that two aberrant paychecks out of the
approximately 50 that Cash received do not amount to an “actual
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practice.” See Kennedy v. Commonwealth Edison Co., 410 F.3d 365,
372 (7th Cir. 2005) (“Identifying a few random, isolated, and
negligible deductions is not enough to show an actual practice or
policy of treating as hourly the theoretically salaried.”).
Indeed, even Cash stated that he was earning a “salary” of
$1,153.85 per week.
Accordingly, we conclude that Boston Harley paid Cash on
a “salary basis.”
(b) Primary duty related to management and
includes exercise of discretion
The next questions are whether Cash’s “primary duty” at
Boston Harley (a) “was the performance of office or non-manual work
directly related to management or general business operations of
[Boston Harley] or its customers,” and (b) “include[d] the exercise
of discretion and independent judgment with respect to matters of
significance.” 29 C.F.R. § 541.200.
“The term ‘primary duty’ means the principal, main, major
or most important duty that the employee performs.” Id. § 541.700.
“Determination of an employee’s primary duty must be based on all
the facts in a particular case, with the major emphasis on the
character of the employee’s job as a whole.” Id.
“The phrase ‘directly related to the management or
general business operations’” in the exemption’s second requirement
“refers to the type of work performed by the employee.” Id.
§ 541.201(a). “To meet this requirement, an employee must perform
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work directly related to assisting with the running or servicing of
the business, as distinguished, for example, from working on a
manufacturing production line or selling a product in a retail or
service establishment.” Id. “Work directly related to management
or general business operations includes work in functional areas
such as finance, quality control, and personnel management.” Id.
§ 541.201(b).
In general, “the exercise of discretion and independent
judgment,” i.e., the exemption’s third requirement, “involves the
comparison and the evaluation of possible courses of conduct, and
acting or making a decision after the various possibilities have
been considered.” Id. § 541.202(a). “The term ‘matters of
significance,’” to which that discretion must apply, “refers to the
level of importance or consequence of the work performed.” Id.
Regulation 29 C.F.R. § 541.203 provides examples of
employees who “generally meet the duties requirements for the
administrative exemption.” For instance, employees in the
financial-services industry are generally exempt “if their duties
include work such as collecting and analyzing information regarding
the customer’s income, assets, investments or debts; determining
which financial products best meet the customer’s needs and
financial circumstances; advising the customer regarding the
advantages and disadvantages of different financial products; and
marketing, servicing or promoting the employer’s financial
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products.” Id. § 541.203(b). On the other hand, a financial-
services employee “whose primary duty is selling financial products
does not qualify for the administrative exemption.” Id.
“Similarly, human-resources managers who formulate, interpret, or
implement employment policies generally meet the duties
requirements for the exemption, but personnel clerks who merely
‘screen’ applicants to obtain data regarding their minimum
qualifications generally do not meet the duties requirements.” Id.
§ 541.203(e).
The caselaw is consistent with these examples. In John
Alden we affirmed a district court’s grant of summary judgment in
favor of a life-insurance company, concluding that the company’s
marketing representatives—who worked with outside agents to sell
insurance policies to customers—fell under the administrative
exemption. 126 F.3d at 3. The first (“salary basis”) requirement
was not at issue. The Court explained that the marketing
representatives’ duties met the second (“management”) requirement
because they were “engaged in something more than routine selling
efforts focused simply on particular sales transactions.” Id. at
10 (internal quotation marks omitted). “Rather, their agent
contacts [were] aimed at promoting (i.e., increasing, developing,
facilitating, and/or maintaining) customer sales generally.” Id.
(internal quotation marks omitted). Their duties also met the
third (“discretion”) requirement: they had “discretion in choosing
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which agents to contact on any given day, and concerning which
products to discuss with each agent.” Id. at 13. “In addition,
the marketing representatives rel[ied] on their own knowledge of an
agent’s business to help tailor proposals for the agent’s end-
customers.” Id. “[T]he content of a given conversation with an
agent [was] dictated by the needs or customer base of that agent,
or by the particular information sought by the marketing
representative during that phone call.” Id. at 14. The Court
therefore concluded that the marketing representatives were “not
merely ‘skilled’ workers who operate[d] within a strict set of
rules,” rather, they exercised significant discretion. Id.
Consequently, the Court affirmed the grant of summary judgment to
the company. Id.; cf. Dalheim v. KDFW–TV, 918 F.2d 1220, 1231 (5th
Cir. 1990) (holding that television station producers’ jobs did not
fit into administrative exemption because they produced the
station’s news-department product and were not involved in the
administrative operations).
In the run-up to his employment, Cash provided Boston
Harley with his conception of the job that he would assume as the
“New Purchases/Customer Relations Manager.” He described these
duties as including the following: (i) developing an “overall
Customer Service strategic plan”; (ii) developing a “clear business
plan to support organizational changes”; and (iii) taking
“appropriate action” regarding delivery problems.
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On the job, he performed some, but not all, of the
functions that his proposed job description anticipated. He worked
with various Boston Harley departments to ensure that motorcycles
were properly outfitted and delivered. If ordered parts were not
installed on the motorcycles, Cash instructed the Service Manger
concerning what needed to be done. He also was to stay in contact
with the customers to make sure that they were happy with the
service they were receiving. It is reasonable to infer that his
performance of these duties was infused by his broader pre-job
conception of his responsibilities.
Cash’s employment at Boston Harley meets the “management”
and “discretion” requirements of the administrative exemption.
First, like the marketing representatives in John Alden, Cash was
“engaged in something more than routine selling efforts focused
simply on particular sales transactions.” 126 F.3d at 10. Rather,
he focused on improving customer service generally, by coordinating
with various Boston Harley departments to ensure that customers
were satisfied with their purchase and that they would provide
Boston Harley with positive feedback reports. Cf. 29 C.F.R.
§ 541.203(b) (noting that a financial-services representative who
“determin[es] which financial products best meet the customer’s
needs and financial circumstances” is generally exempt, whereas a
financial-services representative who merely “sell[s] financial
products” is not). Second, just as the marketing representatives
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in John Alden exercised significant discretion by, among other
things, “fashioning bid proposals that me[t] the needs of the
agent’s customers,” 126 F.3d at 14, Cash exercised discretion in
reacting to the unique needs of Boston Harley’s customers. Thus,
Cash was “not merely [a] ‘skilled’ worker[] who operate[d] within
a strict set of rules.” Id. Moreover, in return for performing
his duties, he earned a $60,000 salary, which was greater or equal
to that of all the other managers, except for Buchbaum. Cash’s
attendance at management meetings, albeit in a limited fashion,
further supports his status as a manager. In sum, Cash did not
simply produce a product; he exercised independent judgment as he
engaged in the company’s business operations.
* * *
Cash meets each of administrative-exemption requirements
under the Fair Labor Standards Act; Boston Harley therefore is not
liable to pay him overtime wages.
2. Massachusetts Minimum Fair Wages Act
The Massachusetts statute governing overtime pay mirrors
the Fair Labor Standards Act. It states, in relevant part, that
“[e]xcept as otherwise provided in this section, no employer in the
commonwealth shall employ any of his employees in an
occupation . . . for a work week longer than forty hours, unless
such employee receives compensation for his employment . . . in
excess of forty hours at a rate not less than one and one half
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times the regular rate at which he is employed.” Mass. Gen. Laws
ch. 151, § 1A. The statute also provides for an exception where an
employee is employed “as a bona fide executive, or administrative
or professional person . . . earning more than eighty dollars per
week.” Id. § 1A(3).
The “basic overtime provision of the Massachusetts
statute is essentially identical to the [Fair Labor Standards
Act].” Valerio v. Putnam Assocs. Inc., 173 F.3d 35, 40 (1st Cir.
1999); accord McLaughlin v. Liberty Mut. Ins. Co., 224 F.R.D. 295,
296 (D. Mass. 2004) (referring to the filing of both claims as
“[r]iding that same horse”). The Supreme Judicial Court of
Massachusetts agrees with this view. See Swift v. Autozone, Inc.,
806 N.E.2d 95, 98 (2004) (“[T]he overtime provisions under State
law were intended to be ‘essentially identical’ to Federal law
. . . .”) (citing Valerio, 173 F.3d at 40); see also Goodrow v.
Lane Bryant, Inc., 732 N.E.2d 289, 294 (2000) (stating that the
Fair Labor Standards Act and the Massachusetts statute are “nearly
identical”).
The resolution of Cash’s Fair Labor Standards Act claim
determines his Massachusetts statutory claim.
III. CONCLUSION
For the foregoing reasons, the district court’s grant of
summary judgment in favor of Boston Harley is AFFIRMED.
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