Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Perry v. Randstad General Partner (US) LLC

United States Court of Appeals, Sixth Circuit

November 20, 2017

Judith Perry; Erin Lane; Aimee Dooling, Plaintiffs-Appellants,
v.
Randstad General Partner (US) LLC, Defendant-Appellee.

          Argued: November 30, 2016

         Appeal from the United States District Court for the Eastern District of Michigan at Ann Arbor. No. 5:14-cv-11240-John Corbett O'Meara, District Judge.

         ARGUED:

          Jordan M. Lewis, KELLEY/UUSTAL, PLC, Fort Lauderdale, Florida, for Appellants.

          Jennifer A. Riley, SEYFARTH SHAW LLP, Chicago, Illinois, for Appellee.

         ON BRIEF:

          Jordan M. Lewis, KELLEY/UUSTAL, PLC, Fort Lauderdale, Florida, Barry S. Fagan, Jennifer L. McManus, FAGAN MCMANUS, P.C., Royal Oak, Michigan, for Appellants.

          Jennifer A. Riley, Gerald L. Maatman, Jr., Ashley C. Workman, SEYFARTH SHAW LLP, Chicago, Illinois, for Appellee.

          Before: MOORE, SUTTON, and WHITE, Circuit Judges.

          OPINION

          HELENE N. WHITE, Circuit Judge.

         In this putative collective action under the Fair Labor Standards Act (FLSA), Judith Perry, Erin Lane, and Aimee Dooling (Plaintiffs) appeal the district court's grant of summary judgment to their employer, Randstad General Partner (US) LLC (Randstad), rejecting their argument that Randstad improperly classified them as exempt employees not entitled to overtime pay. We AFFIRM IN PART and REVERSE IN PART.

         I. BACKGROUND

         Randstad is a staffing company; it recruits temporary workers (talent) and hires them out to other companies (clients). Plaintiffs were in-house Randstad employees (not temporary workers hired out) in the company's Troy, Michigan, office. Each Plaintiff held multiple positions over the course of her employment with Randstad, but Plaintiffs' responsibilities generally included marketing and selling Randstad's services; recruiting and evaluating workers and placing them with clients; overseeing those placements; and various administrative and clerical tasks. Randstad tracked Plaintiffs' performance using a points-based system called the Work Planning Index (WPI). Each work activity earned a set number of points, e.g., two points for interviewing a recruit and one point for completing reference checks. Plaintiffs were required to accrue 100 points each week. Of those 100 points, Plaintiffs were expected to earn a certain number in particular categories, such as sales and recruiting. Randstad maintained a progressive discipline system for employees who did not meet the 100-point quota each week, with penalties up to and including termination.

         Randstad also held periodic "contests, " which required Plaintiffs to perform a particular task a specified number of times in a given week, e.g., make 40 telephone connections with potential new customers via cold calls. According to Plaintiffs, participation in these contests was mandatory for all employees in the Troy branch, regardless of job description or title, even if the "contest" task was not within an employee's regular duties, thereby taking time away from meeting the category quotas. Further, while all employees accrued points for the contest activities, their category quotas did not change simply because a contest was taking place. Thus, if a contest required an employee to perform tasks outside her regular duties, she might have to earn more than 100 points total in order to accrue enough points in each category to meet all her quotas.

         According to Plaintiffs, the quotas set by Randstad and enforced through the WPI system were impossible to meet working only 40 hours per week. As a result, Plaintiffs regularly worked significantly more than 40 hours per week, and Randstad managers were aware they did so.

         II. PROCEDURAL HISTORY

         Perry, Lane, Dooling, and a fourth plaintiff, Suhaima Choudhury, filed this suit in March 2014. The one-count complaint seeks unpaid overtime and liquidated damages under the FLSA, attorneys' fees, costs, and a declaratory judgment that Randstad's practices are unlawful. Plaintiffs styled their complaint as a collective action, and sought to represent all similarly-situated staffing employees who worked for Randstad in the three years prior to the commencement of the lawsuit.

         Randstad answered the complaint in May 2014, and the parties spent several months engaging in discovery. Subsequently, Plaintiffs filed a motion for conditional class certification, and Randstad filed a motion for summary judgment seeking the dismissal of all four named plaintiffs' claims. After a joint hearing on both motions, the district court granted summary judgment to Randstad on the claims brought by Dooling, Lane, and Perry, but allowed Choudhury's claims to proceed. Based on Plaintiffs' own testimony, the court found that Dooling, Lane, and Perry exercised discretion and independent judgment, and therefore were covered by the administrative exemption to the FLSA.[1] The court also found that Randstad was insulated from any liability because it relied, reasonably and in good faith, on an opinion letter issued by the Department of Labor's (DOL) Wage and Hour Division (WHD). Finally, the court denied the certification motion on the merits as to Choudhury, and as moot as to the other Plaintiffs.

         Plaintiffs timely filed a Rule 60 motion for relief from the order granting summary judgment. Plaintiffs argued that certain WPI-related reports produced by Randstad after summary judgment was granted constituted new evidence sufficient to justify relief. Plaintiffs reasoned the reports showed Randstad used the WPI to compare and evaluate employees, and created a triable fact issue regarding how much discretion Plaintiffs had. The district court denied the motion, concluding that ranking employees based on how many points they earn "is not inconsistent with those employees using independent judgment and discretion in how they complete their work." (R. 104, PID 2416.)

         Finally, after Choudhury's claims were resolved by the parties and voluntarily dismissed, the remaining parties stipulated to the entry of judgment. This appeal followed.

         III. DISCUSSION

         Plaintiffs contend the district court erred both in finding Randstad eligible for the good-faith-reliance defense and in finding the FLSA's administrative exemption applicable.[2] [3]

         A. Standard of Review

         We review the district court's decision granting summary judgment de novo. Foster v. Nationwide Mut. Ins. Co., 710 F.3d 640, 643 (6th Cir. 2013) (citations omitted). "Summary judgment is appropriate if, examining the record and drawing all inferences in a light most favorable to the non-moving party, there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Schaefer v. Ind. Mich. Power Co., 358 F.3d 394, 399 (6th Cir. 2004).

         B. The Administrative Exemption

         1. Applicable Law

         The FLSA was enacted "to compensate those who labored in excess of the statutory maximum number of hours for the wear and tear of extra work and to spread employment through inducing employers to shorten hours because of the pressure of extra cost." Bay Ridge Operating Co. v. Aaron, 334 U.S. 446, 460 (1948). "Consistent with this goal, the [FLSA] requires employers to pay their employees time-and-a-half for work performed in excess of forty hours per week, but exempts 'bona fide executive, administrative, or professional' employees from the overtime pay requirements." Acs v. Detroit Edison Co., 444 F.3d 763, 764-65 (6th Cir. 2006) (quoting 29 U.S.C. § 213(a)(1); other citations omitted) (brackets and other internal quotation marks removed). "Congress did not define these exemptions, but delegated authority to the Department of Labor . . . to issue regulations to define and delimit these terms." Foster, 710 F.3d at 642.

         At all times relevant to this litigation, the operative regulation provided that an "employee employed in a bona fide administrative capacity" is one who is:

(1)Compensated . . . at a rate of not less than $455 per week . . .;
(2)Whose 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) Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

29 C.F.R. § 541.200(a);[4] Foster, 710 F.3d at 642. "The exemption is to be narrowly construed against the employer, and the employer bears the burden of proving each element by a preponderance of the evidence." Foster, 710 F.3d at 642 (citing Renfro v. Ind. Mich. Power Co., 497 F.3d 573, 575-77 (6th Cir. 2007) (Renfro II));[5] see Auer v. Robbins, 519 U.S. 452, 462 (1997). Here, the parties agree that the first two elements are met. Further, Plaintiffs do not argue that their duties did not involve "matters of significance." Thus, the only issue is whether Plaintiffs' "primary dut[ies] include[d] the exercise of discretion and independent judgment." 29 C.F.R. § 541.200(a)(3).

         "In general, the exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered." 29 C.F.R. § 541.202(a). Whether a particular employee exercises discretion and independent judgment must be determined "in the light of all the facts involved in the particular employment situation in which the question arises." Id. § 541.202(b).

         Additionally, "[t]he exercise of discretion and independent judgment implies that the employee has authority to make an independent choice, free from immediate direction or supervision. However, employees can exercise discretion and independent judgment even if their decisions or recommendations are reviewed at a higher level." 29 C.F.R. § 541.202(c). On the other hand, "[t]he exercise of discretion and independent judgment must be more than the use of skill in applying well-established techniques, procedures or specific standards described in manuals or other sources." Id. § 541.202(e) (citing id. § 541.704); Foster, 710 F.3d at 646.

         Finally, Plaintiffs' "primary duties" are what matter for purposes of the administrative exemption. 29 C.F.R. § 541.200(a)(3).

The term "primary duty" means the principal, main, major or most important duty that the employee performs. 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. Factors to consider when determining the primary duty of an employee include, but are not limited to, the relative importance of the exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee's relative freedom from direct supervision; and the relationship between the employee's salary and the wages paid to other employees for the kind of nonexempt work performed by the employee.

Id. § 541.700(a). Further,

The amount of time spent performing exempt work can be a useful guide in determining whether exempt work is the primary duty of an employee. Thus, employees who spend more than 50 percent of their time performing exempt work will generally satisfy the primary duty requirement. Time alone, however, is not the sole test, and nothing in this section requires that exempt employees spend more than 50 percent of their time performing exempt work. Employees who do not spend more than 50 percent of their time performing exempt duties may nonetheless meet the primary duty requirement if the other factors support such a conclusion.

Id. § 541.700(b).

         2. Prior Precedent Related to Staffing Company Employees

         We have not addressed the question whether staffing company employees such as Plaintiffs fall within the administrative exemption. Nor, as best we can tell, has any other federal Court of Appeals. Several district courts and the WHD have addressed the question, however.

         First, by regulation:

Human resources managers who formulate, interpret or implement employment policies . . . generally meet the duties requirements for the administrative exemption. However, personnel clerks who 'screen' applicants to obtain data regarding their minimum qualifications and fitness for employment generally do not meet the duties requirements for the administrative exemption.

29 C.F.R. § 541.203(e).

         Second, when applying the relevant regulatory provisions to staffing company employees, the WHD and the courts have considered the specific facts of each case and more often than not found that such employees exercise discretion and independent judgment.

         In Andrade v. Aerotek, Inc., the plaintiff's job titles were, successively, "Recruiter, " "Recruiter II, " and "Account Recruiting Manager." 700 F.Supp.2d 738, 740-41 (D. Md. 2010). The key aspects of the plaintiff's duties were: (i) "[s]he did not screen solely for minimum qualifications, but often sent candidates to her Account Managers whose personalities made them a good fit, even when their qualifications were not as impressive as others;" (ii) she "negotiated overall pay, holiday pay and vacation pay;" (iii) she "managed the contract employees while on assignment, assessed and investigated contractor problems, and counseled and disciplined contractors;" (iv) she "was not subject to immediate direction or supervision;" and (v) she "was in charge of generating business" in certain areas from a particular client. Id. at 747-48. Citing those factors, and further reasoning that "[t]he fact that she would consider a particular range when negotiating pay does not mean she did not exercise discretion, " the court found that the plaintiff exercised discretion and independent judgment. Id. (citation omitted).

         In Quintiliani v. Concentric Healthcare Solutions, LLC, the plaintiff was a "Staffing Coordinator." 944 F.Supp.2d 738, 741 (D. Ariz. 2013). Her duties included managing client relationships and "counseling and discipline of staff who did not comply with the client's policies or procedures." Id. at 746-47. She was also responsible for "implement[ing] important management policies and operating practices" and doing so "in a manner that would ensure that the medical professionals placed with the clients were capable of producing good medical services." Id. For that reason, the court found that the plaintiff "exercised discretion and independent judgment." Id. at 747 (citation omitted); see also Gonzales v. Barrett Bus. Servs., Inc., No. CV-05-0104-EFS, 2006 WL 1582380, at *21 (E.D. Wash. June 6, 2006) (using FLSA standards to interpret a parallel Washington statute and concluding an employee who performed a range of recruitment, hiring, placement, and supervisory duties exercised discretion and independent judgment); accord Hudkins v. Maxim Healthcare Servs., Inc., 39 F.Supp.2d 1349, 1349 (M.D. Fla. 1998) (holding the administrative exemption applied to an employee who recruited and placed nurses, but without analyzing discretion and independent judgment).

         The WHD reached the same conclusion in its most recent relevant decision. In 2005, the WHD was asked whether "Staffing Managers" at a particular "temporary staffing agency" qualified for the administrative exemption. U.S. Dep't of Labor, Wage & Hour Div., Opinion Letter, 2005 WL 3308616, at *1 (Oct. 25, 2005) (the 2005 WHD Letter). The Staffing Managers' primary duties were to manage the function of providing temporary workers to the company's clients. Id. This involved: (i) evaluating what skills were needed; (ii) negotiating the terms for the placement and the fee to be paid; (iii) recruiting and selecting workers, including evaluating recruits' education, skills, and personality, not merely checking against minimal requirements; (iv) recommending workers to clients; (v) negotiating the wages paid to workers; (vi) supervising workers; and (vii) counseling and disciplining workers, including transfers and terminations, if necessary. Id. The Staffing Managers "work[ed] under very little supervision" and "ma[d]e decisions and accomplish[ed] their tasks without prior approval and with broad range of discretion." Id. They also decided whether advertising was necessary to fill a position, "determine[d] where to place the advertisement, " and "negotiate[d] the costs of such placement." Id. at *2.

         In analyzing these duties, WHD pointed to the contrast between human resource managers (covered by the exemption) and personnel clerks (not covered), and concluded that the Staffing Managers exercised the requisite discretion and independent judgment to qualify for the administrative exemption because it was their job to: "recruit; interview; hire and recommend placement of employees to particular assignments; manage the client's temporary labor pool; provide advice on personnel issues; handle complaints; resolve grievances; and terminate employees on behalf of the client's management." Id. at *3 (citing 29 C.F.R. §§ 541.202(b), 541.203(e)); see also U.S. Dep't of Labor, Wage & Hour Div., Opinion Letter, 1970 WL 26434, at *1 (Aug. 11, 1970) ("Senior Employment Consultant" placing salaried professional workers found to exercise requisite discretion and independent judgment, where he was "responsible for making in depth interviews, " had "complete authority and sole responsibility" for deciding which applicants to refer to clients, served as "primary liaison" with certain clients, and was subject to less supervision than "other employment consultants").

         The only contrary case cited by Plaintiffs is Ogden v. CDI Corp., No. CV08-2180 PHX DGC, 2010 WL 2662274 (D. Ariz. July 1, 2010). The plaintiff's duties in Ogden were to: (i) search for qualified individuals; (ii) determine whether a candidate's background matched the client's requirements based on both subjective and objective factors; and (iii) determine the candidate's salary requirements. Id. at *3. The plaintiff would then "provide the resumes of qualified candidates to his account manager, " who would "decide whether to present those candidates to the client." Id. If the account manager did so, and the client was interested, the plaintiff would schedule an interview between candidate and client. Id. And if the client wanted to hire the candidate, the plaintiff would call the candidate to make the offer. Id. However, there was no evidence that the plaintiff "hired or fired candidates, made direct recommendations to clients, or managed and disciplined candidates, " nor any evidence he had "formulated, interpreted or implemented employment policies." Id. at *3, *5 (quoting 29 C.F.R. § 541.203(e)) (brackets removed). On that basis, the court distinguished the 2005 WHD Letter, Andrade, and other staffing-company cases, and found that the defendant had not shown the plaintiff was covered by the administrative exception as a matter of law. Id. at *3-*5.

         3. Facts

         As the preceding discussion makes clear, determining what an employee's primary duties are and whether they are covered by the administrative exemption is a fact-intensive inquiry. "We focus on evidence regarding the actual day-to-day activities of the employee rather than more general job descriptions contained in resumes, position descriptions, and performance evaluations." Schaefer, 358 F.3d at 400 (citing Ale v. Tenn. Valley Auth., 269 F.3d 680, 688 (6th Cir. 2001)). We therefore set out in detail the record evidence relevant to this issue.

         a. Judith Perry

         Perry was a Staffing Consultant from February 2012 to August 2013 and a Senior Staffing Consultant from August 2013 to December 2013.[6]

         i. Staffing Consultant Duties - February 2012 to August 2013

         As a Staffing Consultant, Perry recruited for "temp, temp to perm, and permanent positions" in office and administrative roles, such as receptionist, filing clerk, payroll, administrative assistant, and call-center jobs. She testified:

it's sort of like your own business. You do everything from the beginning to the end. So you bring in the new business, you handle existing business, you help find the employees, you get them signed up and registered and on the payroll of Randstad. And then you let them go or you -- whatever. It's the whole gamut.

(R. 55-2, PID 605.)

         Perry was required to earn an average of 100 points per week for completing various job-related activities, e.g., making calls, opening a new account, making a placement. Perry was also required to earn a certain number of points in particular categories, such as sales or recruiting. As long as she met those targets, she could choose which tasks to perform on any given day. As she put it:

[T]here was a choice of how you got your points, but you had to make sure that you had so many points in new business development, so many points in existing, in candidates, you know, in the recruiting. It was -- it was cafeteria style, but you had to -- it ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.