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finding 36.1 hours combined preparation between two attorneys excessive for one day of single-party FLSA mediation
Summary of this case from Aguayo v. Bassam Odeh, Inc.Opinion
Civil Action No: SA-02-CA-818-XR
August 27, 2003
ORDER
On this date, the Court considered Defendants' Second Motion for Summary Judgment (Docket No. 20), filed July 16, 2003, Plaintiffs response, and Defendants' reply. After careful consideration, the Court will deny the motion.
Introduction and Procedural History
Plaintiff Debra Lewis sues Defendants Hurst Orthodontics and Lynn Hurst under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., for failure to pay Lewis for overtime. Plaintiff worked at Defendants' orthodontic office for over five years, and alleges that during that time she regularly worked in excess of forty hours per week, resulting in over 500 hours of overtime. Plaintiff further asserts a claim for breach of contract based on the Defendants' alleged failure to pay her for two weeks of accrued vacation pay after she ended her employment. On February 10, 2003, Defendants moved for summary judgment, alleging that Plaintiff was exempt from overtime because she worked in a bona fide administrative or executive capacity. Defendants also alleged that Lewis did not work any overtime, and thus no overtime pay was due. Defendants further moved for summary judgment on Lewis's breach of contract claim, alleging that they paid Lewis for all vacation time to which she was entitled. On April 7, 2003, the Court denied Defendants' motion on all grounds. With regard to the FLSA claim, the Court concluded that fact questions remained regarding the nature of Lewis's duties, including the extend that her duties involved the exercise of discretion and independent judgment, thereby precluding summary judgment on the issue of whether Lewis was exempt.
On July 16, 2003, Defendants filed a Second Motion for Summary Judgment (Docket No. 20). In this second motion, Defendants contend only that they are entitled to summary judgment on Lewis's claims for overtime under the FLSA because she is an exempt administrative employee. Defendants' motion does not request summary judgment on Lewis's breach-of-contract claim.
Summary Judgment Standard
A summary judgment movant must show by affidavit or other evidence that there is no genuine issue regarding any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). To establish that there is no genuine issue as to any material fact, the movant must either submit evidence that negates the existence of some material element of the nomoving party's claim or defense, or, if the crucial issue is one for which the nonmoving party will bear the burden of proof at trial, merely point out that the evidence in the record is insufficient to support an essential element of the nonmovant's claim or defense. Lavespere v. Niagra Machine Tool Works, Inc., 910 F.2d 167, 178 (5th Cir. 1990). Once the movant carries its initial burden, the burden shifts to the nonmovant to show that summary judgment is inappropriate. See Fields v. City of South Houston, 922 F.2d 1183, 1187 (5th Cir. 1991).
Summary judgment is required if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp., 477 U.S. at 322. In order for a court to conclude that there are no genuine issues of material fact, the court must be satisfied that no reasonable trier of fact could have found for the nonmovant, or, in other words, that the evidence favoring the nonmovant is insufficient to enable a reasonable jury to return a verdict for the nonmovant. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 n. 4 (1986). In making this determination, the court should review all the evidence in the record, giving credence to the evidence favoring the nonmovant as well as that "evidence supporting the moving party that is uncontradicted and unimpeached, at least to the extent that evidence comes from disinterested witnesses" and disregarding the evidence favorable to the nonmovant that the jury is not required to believe. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 152 (2000).
Discussion
The FLSA requires employers to pay overtime compensation to employees who work more than forty hours in a workweek. 29 U.S.C. § 207(a)(1). The Act exempts from the overtime-pay requirement any employee who works in a bona fide executive, administrative, or professional. Id. § 213(a)(1). The Department of Labor has created regulations delineating when an employee is employed in an executive, administrative, or professional capacity, setting out for "short" and "long" tests for making the determination. See Lott v. Howard-Wilson Chrysler Plymouth, Inc., 203 F.3d 326, 331 (5th Cir. 2000). Because the parties agree that Lewis made more than $250 per week, the "short test" governs whether Lewis was employed in a bona fide administrative capacity, as urged by Defendants.
Under the short test, an employee is exempt from overtime pay if: (1) the employee is compensated on a salary basis of not less than $250 per week; (2) the employee's primary duty consists of the performance of office or non-manual work directly related to management policies or general business operations of her employer or her employer's customers; and (3) the performance of such primary duty includes work requiring the exercise of discretion and independent judgment. 29 C.F.R. § 541.2(e)(2); 541.214(a); Smith v. City of Jackson, Miss., 954 F.2d 296, 298 (5th Cir. 1992). Activities directly related to management policies are those types of activities relating to the administrative operations of a business as distinguished from production or, in a retail or service establishment, sales work. Smith, 954 F.2d at 298; 29 C.F.R. § 541.205(a). The exemption is limited to persons who perform work of substantial importance to the management or operation of the business of his employer or his employer's customers. 29 C.F.R. § 541.205(a). Administrative operations include such duties as "advising the management, planning, negotiating, representing the company, purchasing, promoting sales, and business research and control." Dalheim v. KDFW-TV, Inc., 918 F.2d 1220, 1230 (5th Cir. 1990); 29 C.F.R. § 541.205(b). 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. § 541.207(a). Work requiring the exercise of discretion and independent judgment is work in which the person has the authority or power to make an independent choice, free from immediate direction or supervision, and with respect to matters of significance. Cowart, 213 F.3d 261, 266 (5th Cir. 2000). Final decisionmaking authority over matters of consequence is unnecessary. Lott, 203 F.3d at 331.
The parties dispute whether Lewis satisfies the second and third elements of the short test. In ruling on Defendants' first motion for summary judgment, the Court found that "a question of fact exists as to the nature of Plaintiff s duties, including the extent that her duties involved the exercise of discretion and independent judgment or the supervision of other employees." Because the parties relied "primarily on their affidavits to support their characterization of Plaintiffs duties and responsibilities," the Court concluded that it did not "have enough detail regarding the supervisory structure to compare with other cases." In Defendants' second motion for summary judgment, Defendants offer additional summary judgment evidence — Lewis's deposition testimony — and contend that this evidence establishes that Lewis is a bona fide administrative employee. The Court will consider all of the evidence in the record, including Defendants' new evidence, to determine if summary judgment is proper.
Lewis began working for Defendants in February 1997 as a chair-side orthodontic assistant. After about two years, she became Treatment Coordinator, and she remained in that position until she voluntarily ended her employment. It is undisputed that Lewis was a salaried employee, and therefore she was paid the same amount per pay period regardless of the number of hours she worked. The parties also agree that Lewis's primary duty was participating in conferences with patients and prospective patients. She also held several types of conferences with patients, including start conferences, surgical conferences, phase I and phase II conferences, treatment conferences, interface conferences, and final conferences. The purpose of some of the conferences was to educate patients about their treatment plans and encourage prospective patients to enter into contracts for orthodontic treatment. Lewis averaged anywhere from two or three conferences in the morning and two or three in the afternoon, and each conference lasted about an hour and half. At the conferences, Lewis would explain the risks and benefits of treatment; obtain informed consent; explain the fee range, office procedures, and patient responsibilities; collect financial information; and either schedule a time to obtain the necessary medical records and mark the patient's chart or schedule a treatment conference. If a prospective patient was unsure, Lewis would make follow-up telephone calls to determine if they had made any decisions.
Defendants rely on the following facts in support of their motion: Lewis's primary duty was participation in treatment conferences with the patients to explain to them the benefits of obtaining orthodontic treatment and persuading them to do so. Lewis was responsible for ensuring that all medical records were available for the conferences. Lewis did not have a script when she was talking to parents and prospective patients and had been doing the job for thirty years. The goal of these conferences was to explain the proposed treatment and have the prospective patient enter into a contract for orthodontic services, and Lewis was responsible for "closing the deal." Plaintiff generally performed these conferences without direct supervision, and her job performance was evaluated in part based on how many contracts were entered. Just as in the conferences, Lewis did not have a script for follow-up telephone calls. Other than what was contained in the treatment plan, Lewis was on her own concerning the manner in which she would persuade individuals to enter an agreement. Lewis would also review financial arrangements with the patient because the office manager did not like to do so. Defendants contend that, even though Dr. Hurst prepared the treatment plan, it was Lewis's responsibility to explain the treatment plan to the patients and persuade them to enter into the contract. They assert that Lewis was expected to use a wide degree of discretion in deciding how to encourage patients to contract for treatment.
Lewis contends that her work was more like than of "inside sales" person, which other courts have found to be non-exempt. See, e.g., Martin v. Cooper Elec. Supply, 940 F.2d 896 (3d Cir. 1991). Accordingly, Lewis asserts that she engaged in activities relating to the day-to-day production of sales rather than the administrative operation of a business. Lewis asserts that she did not exercise discretion and independent judgment because she exercised no discretion regarding client/patient contact. Lewis would be present when Dr. Hurst examined a new patient, and he would inform Lewis "in code language . . . exactly the things that she could communicate to [the patient]." She merely outlined the treatment plan that Dr. Hurst had ordered for the patient. She testified that she had a verbal guideline that she had to follow, and would explain the treatment process in lay terms. Although Lewis was not directly supervised in these duties, she followed a procedure established by Dr. Hurst, and she had no discretion not to perform those duties. The information conveyed to the patients was determined by what Dr. Hurst had instructed. Lewis did not determine what treatment plan was appropriate for any given patient. She did not exercise discretion regarding billing or insurance carriers, and the officer manager was responsible for all insurance and financial details. Lewis did not determine a price range for a particular patient's treatment; she merely explained the price range to the patients after receiving information from Dr. Hurst regarding which treatment plan was ordered. Dr. Hurst made the final decision on all fees, which were provided to Lewis on a printed label. Lewis was required to follow the price guidelines. She was not allowed to lower fees or extend contracts without approval, and the officer manager was the only person with authority to postpone payments and/or restructure the payment schedule. Although Lewis would send correspondence on Dr. Hurst's behalf, she did not exercise discretion or independent judgment because the only task she performed was to insert the patient's information into a form letter. Lewis was not able to refer patients to other dentists without Dr. Hurst's instruction and approval. Lewis's primary duties were sales related, including treatment conferences and telephone sales calls. Lewis contends that she performed her duties under the direct supervision of Dr. Hurst or the office manager. She further alleges that her work was not of substantial importance to the management or operation of defendants' business because she was in no way involved in determination, administration, or implementation of Defendants' management or operational policies.
In its prior order denying Defendants' motion for summary judgment, the Court concluded that fact questions remain regarding whether Lewis's primary work was directly related to management policies or general business operations and whether Lewis exercised discretion and independent judgment. After careful consideration, the Court concludes that the additional evidence offered by Defendants in Lewis's deposition testimony does not establish as a matter of law that Lewis is exempt as a bona fide administrative employee. Primarily, fact questions remain regarding the degree of discretion and independent judgment exercised by Lewis in performing her job duties as Treatment Coordinator.
Conclusion
Accordingly, the Court denies Defendants' Second Motion for Summary Judgment (Docket No. 20).