Argued: November 30, 2016
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.
M. Lewis, KELLEY/UUSTAL, PLC, Fort Lauderdale, Florida, for
Jennifer A. Riley, SEYFARTH SHAW LLP, Chicago, Illinois, for
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.
N. WHITE, Circuit Judge.
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
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.
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
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.
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.
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. 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
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.)
after Choudhury's claims were resolved by the parties and
voluntarily dismissed, the remaining parties stipulated to
the entry of judgment. This appeal followed.
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. 
Standard of Review
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).
The Administrative Exemption
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
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
(3) Whose primary duty includes the exercise of discretion
and independent judgment with respect to matters of
29 C.F.R. § 541.200(a); 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)); 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).
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).
"[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.
Plaintiffs' "primary duties" are what matter
for purposes of the administrative exemption. 29 C.F.R.
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).
Prior Precedent Related to Staffing Company Employees
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.
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).
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
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).
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).
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.
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").
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.
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
was a Staffing Consultant from February 2012 to August 2013
and a Senior Staffing Consultant from August 2013 to December
Staffing Consultant Duties - February 2012 to August 2013
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
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.)
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 ...