United States Court of Appeals
For the First Circuit
No. 03-2679
EILLIM DE JESÚS-RENTAS; MAGDALENA MERCADO-CASIANO;
NIDIA S. GÓMEZ-TORRES; MYRNA PIÑERO-MEDINA;
MELBA ROCAFORT-GARCÍA,
Plaintiffs, Appellants,
v.
BAXTER PHARMACY SERVICES CORPORATION;
BAXTER HEALTHCARE CORPORATION;
BAXTER SALES AND DISTRIBUTION CORP.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Salvador E. Casellas, U.S. District Judge]
Before
Lynch, Circuit Judge,
Stahl, Senior Circuit Judge,
and Howard, Circuit Judge.
Carlos R. Ramírez, with whom John F. Nevares & Associates, PSC
was on brief, for appellants.
Pedro J. Manzano-Yates, with whom Juan J. Casillas Ayala and
Fiddler González & Rodrígues, LLP were on brief, for appellees.
March 9, 2005
HOWARD, Circuit Judge. The Fair Labor Standards Act
("FLSA") requires employers to pay employees overtime for hours
worked in excess of 40 hours per week, but it exempts, inter alia,
employees working in a bona fide professional capacity. See 29
U.S.C. § 213(a)(1). This case requires us to decide whether
appellants, compound pharmacists employed by Baxter Pharmacy
Services Corporation ("Baxter"), are professionals exempt from the
overtime requirement. The district court determined that they are
and awarded Baxter summary judgment on this basis. We affirm.
Appellants are five licensed compound pharmacists who
facilitate Baxter's manufacturing and distribution of intravenous
antibiotics, dialysis medication, and chemotherapy drugs. Their
primary duties require them to analyze, approve, and fill
prescription requests.
Appellants rotate through three duty stations -- data
entry, compounding, and labeling. At the data entry stage,
appellants determine whether a prescription is appropriate for the
particular patient based on the nature of the prescription and the
patient's medical profile. At the compounding stage, appellants
supervise pharmacy technicians in the preparation of the requested
drug compounds. At the labeling stage, appellants work with
technicians to confirm that the final product meets pharmacological
standards and that it has been accurately labeled and includes the
required documentation.
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Appellants are guided in performing their tasks by
Baxter's Standard Operating Procedures ("SOPs"). The SOPs combine
sources of pharmacological data about the various drugs that Baxter
sells. The SOPs also establish the protocols that Baxter employees
are expected to follow in performing their duties. Appellants
participate annually in updating the SOPs to reflect changing
practices and new pharmacological information.
At all times, Baxter paid appellants on a salary basis
but did not pay them overtime because Baxter considered them exempt
professionals. Appellants filed suit in August 2001 challenging
this determination. After discovery, the parties filed cross
motions for summary judgment. In a published opinion the district
court awarded Baxter summary judgment. See De Jesús Rentas v.
Baxter Pharmacy Servs. Corp., 286 F. Supp. 2d 235 (D.P.R. 2003).
Applying a test that we shall elaborate momentarily, the court
ruled that appellants were exempt professionals because they
consistently exercised discretion and judgment in performing their
duties. See id. Appellants timely appealed.1
We review the award of summary judgment de novo. See
Kolling v. Am. Power Conversion Corp., 347 F.3d 11, 13 (1st Cir.
2003). Summary judgment is appropriate only when the undisputed
1
In the district court, appellants also claimed overtime pay
under Puerto Rico's overtime law, see 29 P.R. Laws Ann. § 271 et
seq., but have not raised arguments relevant to this claim on
appeal.
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facts demonstrate that the moving party is entitled to judgment as
a matter of law. See Fed. R. Civ. P. 56(c). Cross summary
judgment motions do not alter the basic Fed. R. Civ. P. 56
standard. See Wiley v. Am. Greetings Corp., 762 F.2d 139, 140-41
(1st Cir. 1985). Cross motions simply require that we determine
whether either party deserves judgment as a matter of law on the
summary judgment record. See Wightman v. Springfield Terminal Ry.
Co., 100 F.3d 228, 230 (1st Cir. 1996).
The FLSA's overtime provisions establish the general rule
that employees must be compensated at a rate not less than one and
one-half times their regular rate of pay for all hours worked in
excess of 40 hours. See 29 U.S.C. § 207(a)(1). But employees
working in executive, administrative, or professional capacities
are exempt from this requirement. See id. at § 213(a)(1). "The
employer in an FLSA case bears the burden of establishing that its
employees are exempt, and because of the remedial nature of the
FLSA, exemptions are to be narrowly construed against the employers
seeking to assert them . . ." Reich v. Newspapers of New England,
Inc., 44 F.3d 1060, 1070 (1st Cir. 1995) (internal quotation marks
omitted).
The terms of the professional exemption are set forth in
regulations promulgated by the Secretary of Labor.2 See id. The
2
The Secretary has adopted new regulations for defining
professional employees which became effective in August 2004.
See 29 C.F.R. § 541.300 (2004). Because this case predates the
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parties agree that the so-called "short test" applies for
determining if appellants qualify as professionals.3 Under the
short test, a professional means any employee:
(a) Whose primary duty consists of the
performance of:
(1) Work requiring knowledge of an
advance type in a field of science or learning
customarily acquired by a prolonged course of
specialized intellectual instruction and study,
as distinguished from a general academic
education and from an apprenticeship, and from
training in the performance of routine mental,
manual, or physical processes, . . . and
(b) Whose work requires the consistent exercise
of discretion and judgment in its performance.
29 C.F.R. § 541.3 (1999). Appellants concede that they satisfy the
knowledge portion of the short test but claim that they are not
professionals because their work does not require the consistent
exercise of discretion and judgment. Consequently, we train our
focus on this element of the test.
In general, the exercise of discretion and 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." 29 C.F.R. § 541.207(a)(1999);
change, we apply the prior regulations. See Belt v. EmCare, Inc.,
351 F. Supp. 2d 625 (E.D. Tex. 2005).
3
The regulations provide that the short test applies to
employees compensated at a certain minimum salary. 29 C.F.R. §
541.3(a) (1999). Appellants concede that they satisfy the salary
prerequisite for application of the short test.
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Rutlin v. Prime Succession, Inc., 220 F.3d 737, 743 (6th Cir. 2000)
(citing 29 U.S.C. § 541.207).4 Applying this definition to the
undisputed evidence convinces us that appellants consistently
exercise discretion and judgment.
One of appellants' primary tasks is to evaluate the
safety and propriety of each prescription for the particular
patient. If appellants believe that a drug is contraindicated for
a certain patient, they are responsible for contacting the
prescribing physician to discuss whether the prescription needs
modification. There is no dispute that the decision to contact the
physician and the content of the subsequent conversation is within
appellants' control and judgment and requires appellants to use
their advanced training. See Anunobi v. Eckerd Corp., No. 02-CV-
0820, 2003 WL 22368153, at *5 (W.D. Tex. Oct. 17, 2003) (stating
that pharmacist exercised discretion and judgment because, inter
alia, he was responsible for contacting physician if drug seemed
contraindicated).
As a result of appellants' conversations with the
prescribing physicians, the appellants and physicians typically
4
This definition of "discretion and judgment" comes from the
regulations for the administrative exemption. Several courts have
applied this definition in cases involving the professional
exemption. See Rutlin, 220 F.3d at 743; Piscione v. Ernst & Young,
LLP, 171 F.3d 527, 535-36 (7th Cir. 1999); Barth v. Wolf Creek
Nuclear Operating Corp., 125 F. Supp. 2d 437, 442 (D. Kan. 2000);
Debejian v. Atl. Testing Labs, Ltd., 64 F. Supp. 2d 85, 89-90
(N.D.N.Y. 1999).
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agree on how to modify the original prescription. If, however, the
appellants and physicians reach impasse, the appellants discuss the
situation with their colleagues and supervisors before deciding
whether to dispense the drug. That appellants consult among
themselves and supervisors in difficult cases does not preclude a
finding that they exercise discretion and judgment in those cases.
See Piscione, 171 F.3d at 536 ("[T]he reality [is] that many
individuals who exercise discretion and independent judgment often
do so after consultation with others."). In fact, appellants
concede in their depositions that their position requires them to
use advanced training and judgment in determining if a drug is
contraindicated and deciding whether the drug could be dispensed
without compromising a patient's health.
Appellants also spend a significant portion of their time
supervising other employees. Supervisory responsibility is an
indicum that an employee exercises discretion and judgment.
See id. at 535 & 537. Appellants each supervise between eight and
ten pharmacy technicians during the compounding process and two to
three technicians during labeling. Appellants are responsible for
assigning work, explaining how tasks should be accomplished, and
reviewing the final work product. When the technicians make
mistakes, appellants correct the errors. Moreover, Baxter relies
on appellants' evaluations in making personnel decisions regarding
the technicians. See id. at 537 (stating that employee exercised
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discretion and judgment by assigning work and evaluating
subordinates).
Finally, while appellants spend much of their day
supervising other employees, they are not closely supervised in the
performance of their own duties. This is another indicator that
appellants exercise discretion and judgment. Compare Owsley v. San
Antonio Indep. Sch. Dist., 187 F.3d 521, 526 (5th Cir. 1999)
(stating that athletic trainers exercised discretion and judgment,
in part, because they made many decisions without immediate
supervision), with Quirk v. Baltimore County, 895 F. Supp. 773, 785
(D. Md. 1995) (holding that emergency medical technician did not
consistently exercise discretion and judgment because he worked
under the immediate supervision of a physician).
While not disputing any of this, appellants contend that
they do not consistently exercise discretion and judgment because
they are bound to follow the SOPs in performing their duties. This
argument fails. First, appellants acknowledge that they do not
follow the SOPs if they believe that the result would endanger a
patient's health. Appellants admit that their ultimate duty is to
assure patient health, and that they depart from the SOPs, if
necessary, to meet this responsibility. Thus, appellants maintain
discretion to decide when to depart from the SOPs.5 See Paul v.
5
There is no evidence that appellants were ever disciplined
for declining to follow an SOP. Cf. Quirk, 895 F. Supp. at 785
(holding that emergency medical technician was not a professional
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Petroleum Equip. Tools Co., 708 F.2d 168, 171 (5th Cir. 1983)
(concluding that a pilot exercised discretion and judgment because,
even though he was guided by an extensive procedural manual, he had
discretion to act as appropriate in case of an in-flight
emergency).
Second, the SOPs are issued and/or updated by Baxter
after consultation with appellants. Appellants review the SOPs and
provide suggestions for modification and improvement during the SOP
formulation process. The SOPs thus reflect appellants' collective
wisdom about how operations at Baxter should be organized and what
new pharmacological information should be included. Participation
in this review process itself involves judgment and discretionary
decisionmaking. Cf. Vela v. Houston, 276 F.3d 659, 676 (5th Cir.
2001) (stating that emergency medical specialists were not
professionals, in part, because they did not participate in
establishing the protocols and standing orders that guided the
performance of their duties).
No circuit court has, to our knowledge, considered
whether a pharmacist qualifies as a professional under the FLSA.6
But we derive support for our conclusion from a decision by the
Fifth Circuit classifying athletic trainers as professionals. See
because he was disciplined for deviating from standard protocols).
6
One unpublished district court opinion holds that
pharmacists are exempt professionals under the FLSA. See
Anunobi, 2003 WL 22368153.
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Owsley, 187 F.3d at 526-27. In Owsley, the trainers argued that
they were not professionals because their exercise of discretion
and judgment was substantially cabined by a series of standard
treatment guidelines that they were required to follow. See id. at
526. The court rejected this argument. See id. It concluded that
"[t]he existence of standard procedures and guidelines does not
mean that the trainers' responsibilities do not require the type of
consistent exercise of discretion and judgment [that is]
characteristic of other professionals." Id. at 527. The court
determined that the trainers exercised independent discretion and
judgment because they were not closely supervised in the
implementation of the standard procedures and they maintained
discretion to depart from the procedures in emergency situations.
See id.
Similarly, the undisputed evidence in this case
establishes that appellants consistently exercise discretion and
judgment despite the existence of the SOPs.7 With little
7
Appellants rely on Hashop v. Rockwell Space Operations Co.,
867 F. Supp. 1287 (S.D. Tex. 1994). In Hashop, the court
considered whether technicians who worked as instructors in
training space shuttle ground control personnel were professionals.
See id. at 1298. The court ruled that they were not professionals,
in part, because they made decisions "only within a well-defined
framework." Id. But as we have explained, appellants make
decisions outside the SOP framework which are fundamental to
Baxter's primary mission of dispensing safe and appropriate drugs.
See id. (stating that technicians were not professionals because
their decisions did not "affect the fundamental operation of the
enterprise").
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supervision, appellants use their specialized knowledge to make
numerous discretionary decisions including how to follow up with a
physician over a questionable prescription; when a drug should not
be dispensed because of a potential danger to the patient; and how
to assign, supervise, and review the work of the technicians. This
evidence establishes that appellants are exempt from the FLSA's
overtime requirements.8
Affirmed.
8
After this litigation began, Baxter sought to hire another
compound pharmacist. The advertisement stated that the position
was "non-exempt." Appellants argue that this advertisement
constituted an admission of liability by Baxter under Federal Rules
of Evidence 704 and 801(d)(2), thereby entitling appellants to
summary judgment. This argument was not raised before the district
court and is therefore forfeited on appeal. See Sandstrom v.
ChemLawn Corp., 904 F.2d 83, 87 (1st Cir. 1990). Alternatively,
appellants contend that this job posting establishes a disputed
fact concerning the proper classification of the compound
pharmacist position because it demonstrates that Baxter believed
that the position was non-exempt. We disagree. That Baxter may
have thought that the compounding pharmacist position was non-
exempt is insufficient to overcome the undisputed facts which
establish that the position is exempt.
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