                                                                                                                           Opinions of the United
2006 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


7-20-2006

Davis v. Mountaire Farms Inc
Precedential or Non-Precedential: Precedential

Docket No. 05-3982




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                                      PRECEDENTIAL

     UNITED STATES COURT OF APPEALS
          FOR THE THIRD CIRCUIT


                    No. 05-3982


              WILLIE DAVIS, JR.;
            NATHANIEL BRIDDELL;
             JOSEPH GARRISON;
              LARRY E. GIBBS;
              ROY H. WALTERS,

                         Appellants

                             v.

MOUNTAIRE FARMS, INC., a Delaware Corporation;
  MOUNTAIRE FARMS OF DELMARVA, INC.,
          a Delaware Corporation;
   MOUNTAIRE FARMS DELAWARE, INC.,
          a Delaware Corporation


   On Appeal from the United States District Court
             for the District of Delaware
               (D.C. No. 04-cv-00414)
       District Judge: Honorable Kent Jordan
                  Argued June 15, 2006
            Before: FISHER, CHAGARES and
               REAVLEY,* Circuit Judges.

                   (Filed July 20, 2006)

JEFFREY K. MARTIN (ARGUED)
Margolis Edelstein
1509 Gilpin Avenue
Wilmington, DE 19806
      Attorney for Appellants

ARTHUR M. BREWER (ARGUED)
Shawe & Rosenthal, LLP
Sun Life Building, 11th Floor
20 S. Charles Street
Baltimore, MD 21201
       Attorney for Appellees




                OPINION OF THE COURT




      *
        The Honorable Thomas M. Reavley, United States
Circuit Judge for the Fifth Circuit, sitting by designation.

                             2
REAVLEY, Circuit Judge.

       Employees of a chicken processing company challenge
the District Court’s grant of summary judgment to their
employer on the employees’ claims for unpaid overtime
compensation under the Fair Labor Standards Act, 29 U.S.C.
§ 201, et seq. (FSLA), the court holding that the claimants
qualified as exempt employees under the Act’s Executive
Exemption, 29 U.S.C. § 213(a)(1). We will reverse.

                                I.

       Appellants are five “Crew Leaders” who are either
currently or formerly employed by Mountaire Farms, Inc.
(“Mountaire”). Crew Leaders are employed to supervise other
employees known as “chicken catchers” who travel to various
growers’ farms to catch and crate chickens to be sent to the
Mountaire processing plant. As part of their job responsibilities,
the Crew Leaders are required to pick up each of seven or eight
crew members (catchers and a forklift operator) at their
respective homes, transport the crew to the farms where the
chickens are harvested, and then transport the crew members
back to their homes.

       In addition to transporting the crew members, the Crew
Leaders have certain other responsibilities for directing the
crew’s work including making sure that the crew arrives at a
farm on time, checking in with the grower, checking the chicken
“houses” for pre-catch dead birds and damage, dividing the
houses into sections to facilitate the catching process, directing
the placement of ventilation fans if needed, monitoring the catch

                                3
process to prevent any “smothers,” checking that the proper
number of birds are placed in each transport cage, ensuring that
the cages are uniformly stacked in the live haul trucks, and
filling out “farm tickets” to send with the live haul drivers.

        Mountaire’s written job description for crew leaders does
not include hiring and firing, and the Crew Leaders testified that
they did not have the authority to do either. The Crew Leaders
occasionally issue disciplinary warning “write-up” forms to
catchers for certain listed violations, e.g., failing to timely notify
them that the catcher will not be working on a given day. Crew
Leaders sign off on requests for holidays or for receipt of pay in
lieu of vacation or holidays. They are also the first stop for any
catcher wishing to report a grievance. The Crew Leaders are not
tasked with ultimate decision making or action taking on any of
these matters, as the write-ups, requests, and grievances are sent
to Mountaire’s administrative offices.

       The Crew Leaders are salaried, but are subject to partial
day deductions for partial time off from normal work hours with
their vacation and holiday pay calculated based on an hourly
rate. The Crew Leaders are required to use their own vehicles
for crew transportation, but they are reimbursed for that use.
The Crew Leader’s testimony reflects that they are minimally
educated and that they worked their way up to crew leader status
from catcher or forklift operator positions.

       The crew transportation part of the Crew Leader’s
responsibilities takes anywhere from two to six hours per day in
addition to their work at the farms, often resulting in a work
week exceeding forty hours. Mountaire has refused to pay any

                                  4
overtime wages to the Crew Leaders because they claim that the
Crew Leaders are “exempt” executive employees who are not
entitled to overtime compensation. Prior to 2002, all Crew
Leaders were hourly employees. The record contains a
Department of Labor (“DOL”) “audit review” dated March 21,
2001. The audit review, which was prepared by Mountaire
based on oral statements of the DOL reviewers, notes that Crew
Leaders (who were then still hourly paid) should be receiving
overtime and that house-to-house travel is compensable for
hours worked. Mountaire concedes that the Crew Leaders’
duties and responsibilities did not change after they were
switched to a salaried status.

                               II.

        We review the District Court’s grant of summary
judgment de novo. Conoshenti v. Public Serv. Elec. & Gas Co.,
364 F.3d 135, 140 (3d Cir. 2004). Summary judgment is
appropriate if there are no genuine issues of material fact
presented and the moving party is entitled to judgment as a
matter of law. Id. In determining whether a genuine issue of
fact exists, we resolve all factual doubts and draw all reasonable
inferences in favor of the nonmoving party. Id.

        We construe FLSA exemptions narrowly against the
employer. Madison v. Resources for Human Dev., Inc., 233
F.3d 175, 183 (3d Cir. 2000). The burden of proof to establish
that its employees come within the scope of an overtime
exemption is on the employer. Friedrich v. U.S. Computer
Servs., 974 F.2d 409, 412 (3d Cir. 1992).


                                5
                               III.

         The FLSA provides generally that covered, nonexempt
employees must receive not less than a stated minimum wage
for all hours worked, and overtime premium pay for all hours
worked over forty hours in a workweek. See 29 U.S.C.
§§ 206(a)(1), 207(a)(1). Exemptions are made for certain
“white collar” salaried employees.1 Among the statutory
exemptions from these requirements is the exemption contained
at 29 U.S.C. § 213(a)(1) for persons employed in a bona fide
executive capacity. This exemption, upon which Mountaire
relies, is defined and explained in DOL regulations at 29 C.F.R.
§§ 541.100 -.106 (2005).

      The general rule for exemption of executive employees
provides in relevant part that:




       1
         See 29 C.F.R. § 541.3 (2005). (“The . . . exemptions and
the regulations in this part do not apply to manual laborers or
other ‘blue collar’ workers who perform work involving
repetitive operations with their hands, physical skill and energy.
Such nonexempt ‘blue collar’ employees gain the skills and
knowledge required for performance of their routine manual and
physical work through apprenticeships and on-the-job training,
not through the prolonged course of specialized intellectual
instruction required for exempt learned professional employees
such as medical doctors, architects and archeologists.”).

                                6
(a)   The term “employee employed in a bona
      fide executive capacity” . . . shall mean
      any employee:

      (1)   Compensated on a salary
            basis at a rate of not less
            than $455 per week . . .
            exclusive of board, lodging
            or other facilities;

      (2)   Whose primary duty is
            management of the
            enterprise in which the
            employee is employed or of
            a customarily recognized
            department or subdivision
            thereof;

      (3)   W ho customarily and
            regularly directs the work of
            two or more other
            employees; and

      (4)   Who has the authority to
            hire or fire other employees
            or whose suggestions and
            recommendations as to the
            hiring, firing, advancement,
            promotion or any other
            change of status of other


                      7
                      em ployees are         given
                      particular weight.

29 C.F.R. § 541.100 (2005).2

       In dealing with all of the definitions issued since the
enactment of the FLSA, courts have generally recognized that
since the requisite characteristics of executive employment are
stated in the conjunctive rather than the disjunctive, it is
necessary, for an employee to be exempt as one employed in an
“executive capacity,” that the employee be shown to meet all of
the administrative requirements for such exemption. See 131
A.L.R. F ED. 1 § 2(a) (1996). There is no dispute on appeal that


       2
         Both the parties and the District Court have proceeded
on the assumption that this regulation applies to all the overtime
at issue in this case. For purposes of this opinion, we will do the
same. We note, however, that “a statutory grant of legislative
rulemaking authority will not, as a general matter, be understood
to encompass the power to promulgate retroactive rules unless
that power is conveyed by Congress in express terms.” Bowen
v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988). The new
section 541.100 did not become effective until August 23, 2004.
See Defining and Delimiting the Exemptions for Executive,
Administrative, Professional, Outside Sales and Computer
Employees, 69 Fed. Reg. 22122 (April 23, 2004). But much of
the overtime at issue in this case accrued prior to that date, and
appellants Nathaniel Briddell and Willie Davis may have left
Mountaire in 2003. We commend this issue to the attention of
the District Court on remand.

                                8
the Crew Leaders satisfy the first three prongs for the
exemption. The sole issue in this case is whether the District
Court wrongly decided that the fourth prong was also satisfied
as a matter of law.

                               IV.

       The District Court found convincing Mountaire’s
contention that the responsibilities of the Crew Leader’s
included crew staffing and, thus, that the fourth prong of the
executive exemption was satisfied. We do not believe that
Mountaire has established satisfaction of this prong as a matter
of law. We note that the case law on this issue is very fact
specific and not consistent. The parties have, of course, cherry-
picked the cases for their respective positions, but all can be
factually distinguished and are not particularly helpful. The
DOL regulations, however, do offer us some additional
guidance, providing in relevant part that:

       To determine whether an employee’s suggestions
       and recommendations are given “particular
       weight,” factors to be considered include, but are
       not limited to, whether it is part of the employee’s
       job duties to make such suggestions and
       recommendations; the frequency with which such
       suggestions and recommendations are made or
       requested; and the frequency with which the
       employee’s suggestions and recommendations are
       relied upon.        Generally, an executive’s
       suggestions and recommendations must pertain to
       employees whom the executive customarily and

                                9
       regularly directs.    It does not include an
       occasional suggestion with regard to the change
       and status of a co-worker. An employee’s
       suggestions and recommendations may still be
       deemed to have “particular weight” even if a
       higher level management’s recommendation has
       more importance and even if the employee does
       not have the authority to make the ultimate
       decision as to the employee’s change in status.

29 C.F.R. § 541.105 (2005).

        In this case, as noted above, the written duties for crew
leaders do not include recruiting, hiring and firing of crew
members. Testimony from the five Crew Leaders indicates that,
in their thirty-plus years of combined service for Mountaire in
a crew leader capacity, they collectively recommended only ten
crew members for hire. All of these candidates were referred to
Mountaire administrators for a screening and testing process.
Some were hired, some were not. Mountaire representatives
testified that the Crew Leaders were required to “maintain a full
crew at all times.” The Crew Leaders testified, however, that
this merely meant that, if they were going to be short-handed on
any given day or farm run, they would arrange to “borrow” a
catcher or forklift operator from another crew by notifying
Mountaire’s dispatcher or contacting a fellow Crew Leader.

       With respect to disciplinary warnings issued by the Crew
Leaders, the record reflects that these were fairly sparse (for
example, one of the Crew Leaders issued three warnings during
his four-plus years in the post). The record reflects that, during

                               10
the same thirty-plus years of combined service to Mountaire in
a crew leader capacity, Mountaire showed the Crew Leaders
collectively supported the termination of only two catchers for
recurring absenteeism. The Crew Leaders disciplinary powers
and freedoms thus appear quite limited.

        We disagree with the suggestion of the District Court that
the affidavit and deposition testimony of the Crew Leaders is
contradictory, which would permit it to disregard the Leaders’
averments by affidavit that their job responsibilities did not
include recruiting, hiring, or firing. Review of the record
reflects that the Crew Leaders consistently testified that they had
no responsibility for recruiting catchers, no responsibility for
making recommendations on the hiring or termination of
individuals, and no power to hire or fire an employee, even
within restricted guidelines. Rather, they had the limited power
to borrow an employee from another crew when necessary and
made only very limited referrals of potential catcher candidates
to Mountaire. There are contradictions in the record evidence
on this issue, but they lie between the testimony of the Crew
Leaders and that of Mountaire, leaving material facts in dispute
and precluding summary judgment.

                                V.

        Reviewing the record in the light most favorable to the
Crew Leaders, we find that genuine issues of material fact
remain as to whether the Crew Leaders were either responsible
for hiring and firing or their recommendations on these issues
were given “particular weight” such that they may fall under the
executive exemption to the requirements of the FSLA.

                                11
Accordingly, we will reverse the District Court’s grant of
summary judgment in favor of Mountaire and remand for further
proceedings.




                             12
