                NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                           File Name: 14a0376n.06

                                        Case No. 13-3964                                  FILED
                                                                                    May 20, 2014
                          UNITED STATES COURT OF APPEALS                        DEBORAH S. HUNT, Clerk
                               FOR THE SIXTH CIRCUIT


JOHN HOPKINS; GREGG BOYLES,                            )
                                                       )
       Plaintiffs-Appellants,                          )
                                                       )        ON APPEAL FROM THE
v.                                                     )        UNITED STATES DISTRICT
                                                       )        COURT FOR THE NORTHERN
KEVIN M. CHARTRAND, Individually and as                )        DISTRICT OF OHIO
Geauga County Coroner,                                 )
                                                       )
       Defendant-Appellee.                             )
                                                       )                   OPINION


BEFORE:        COLE and SUTTON, Circuit Judges; CLELAND, District Judge.*

       COLE, Circuit Judge. John Hopkins and Gregg Boyles appeal the grant of summary

judgment in this Fair Labor Standards Act (“FLSA”) overtime-pay dispute. Hopkins and Boyles

served as investigators for the Geauga County Coroner. After the county eliminated their

positions due to financial constraints, Hopkins and Boyles filed suit in federal court alleging that

the county failed to pay them overtime wages as required under the FLSA and Ohio law. The

district court granted summary judgment to the coroner on this claim. Because the coroner’s

belated assertion of an affirmative defense under the FLSA precluded the investigators from




       *
        The Honorable Robert H. Cleland, United States District Judge for the Eastern District
of Michigan, sitting by designation.
Case No. 13-3964, Hopkins, et al. v. Chartrand


conducting meaningful discovery on their claim, we reverse the grant of summary judgment and

remand for further proceedings consistent with this opinion.

                                       I. BACKGROUND

A. Factual Background

       Hopkins and Boyles served as full-time investigators for the Geauga County Coroner’s

Office for the better part of the last decade. During the course of their employment, both men

received an annual salary that the county distributed in bi-weekly paychecks based upon an

eighty-hour pay period. As full-time investigators, they worked in the coroner’s office during

regular business hours but also were responsible for responding to the scene when deaths

occurred during non-business hours. These duties regularly required both men to work in excess

of forty hours per week, but the county did not provide them with overtime compensation.

Indeed, the coroner never undertook any investigation to determine whether his employees were

entitled to overtime; instead, he merely paid them their bi-weekly salaries, as his predecessor had

done, under the assumption that the investigators were not entitled to overtime.

       Hopkins’s and Boyles’s duties included the following: responding to death calls,

processing the scene of a death, interviewing family members or witnesses, taking responsibility

for the bodies of the deceased, taking photographs and collecting evidence, and documenting

their findings for the coroner’s report.      In short, they were responsible for conducting

investigations and compiling the appropriate investigative paperwork for the coroner’s reports.

Additionally, both men were responsible for ensuring the security of the coroner’s office.

Hopkins, who served as “Chief Investigator,” also performed certain clerical duties, including

preparing financial reports and yearly budgets for the coroner to review; paying the office’s bills;

dealing with vendors; keeping statistics and entering data; and handling personnel matters, such



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Case No. 13-3964, Hopkins, et al. v. Chartrand


as supervising the activities of other investigators, training new employees, and signing off on

various work records. Boyles’s duties also involved managing the evidence room.

       During the late 2000s, Geauga County experienced declining revenues and related

budgetary shortfalls. Accordingly, the Board of County Commissioners informed Chartrand in

the fall of 2010 that he should consider defunding the investigators’ positions. Shortly after,

Chartrand notified the investigators that the county was abolishing their positions due to the

downturn in the economy and related budgetary restrictions. The layoffs went into effect on

February 28, 2011.

B. Procedural Background

       Believing that they were classified civil servants and therefore protected from the layoffs

in question, Hopkins and Boyles filed this action against Chartrand in federal district court in

November 2011. They alleged violations of the FLSA and the Family and Medical Leave Act,

as well as supplemental state-law claims for breach of contract and wrongful termination in

violation of public policy. On appeal, Hopkins and Boyles challenge only the district court’s

grant of summary judgment on Count IV of their complaint, which alleged that Chartrand

violated the FLSA’s overtime requirements and a companion provision from Ohio Revised Code

§ 4111.03(A), which provides that employers have the same state-law obligations to pay

overtime as mandated by the FLSA.

       Chartrand answered the complaint on December 14, 2011, and denied that Hopkins and

Boyles were eligible to receive overtime pay under the FLSA and Ohio law. He also raised the

following affirmative defense: “Defendant has complied with the Fair Labor Standards Act

(FLSA) and all applicable amendments.” Chartrand’s answer did not, however, specifically




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Case No. 13-3964, Hopkins, et al. v. Chartrand


reference any of the overtime-pay exemptions contained in the FLSA or expressly assert that

Hopkins and Boyles were exempt employees.

       At the close of discovery, the parties filed cross-motions for summary judgment.

Hopkins and Boyles noted that the FLSA’s overtime exemptions, set forth in 29 U.S.C. § 213,

are affirmative defenses that Chartrand had not specifically pleaded in his answer. Therefore,

they argued that Chartrand had forfeited the benefit of those exemptions and that they were

entitled to judgment as a matter of law.

       Chartrand filed his motion for summary judgment the same day. Despite not pleading the

statutory overtime exemptions in his answer, he argued that both Hopkins and Boyles were

exempt from the FLSA’s overtime wage requirements as bona fide “administrative” employees.

See 29 U.S.C. § 213(a)(1). In addition, Chartrand argued that Hopkins, who served as Chief

Investigator, also was exempt as a bona fide “executive” employee. See id.

       A month later, Chartrand filed a motion “to clarify and/or amend” his answer with

specific reference to both the administrative and executive exemptions set forth in § 213(a)(1).

Hopkins and Boyles objected, arguing that such a belated amendment would prejudice them

given the fact-intensive nature of the FLSA exemptions and their inability to develop the record.

The district court granted Chartrand’s motion to amend in a marginal entry order, and Chartrand

amended his answer the following day.

       On July 18, 2013, the court granted Chartrand’s motion for summary judgment with

respect to the plaintiffs’ FLSA claim. Hopkins v. Chartrand, No. 1:11 CV 2558, 2013 WL

3787596, at *7 (N.D. Ohio, July 18, 2013). The court concluded that both investigators qualified

as exempt administrative employees under the FLSA’s implementing regulations. Id. at *6–7




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Case No. 13-3964, Hopkins, et al. v. Chartrand


(citing 29 C.F.R. § 541.200(a)(1)–(3)). The court did not, however, pass upon Chartrand’s

argument that Hopkins also qualified under the executive-employee exemption. Id.



C. The Instant Appeal

       Hopkins and Boyles timely appealed. They first argue that the district court abused its

discretion by permitting Chartrand to amend his answer to include specific reference to the

FLSA’s statutory exemptions. Hopkins and Boyles next argue that even if the amendment were

proper, the district court erred in determining, at this stage of the proceedings, that they were

exempt from the FLSA’s overtime-pay requirements.

                                     II. JURISDICTION

       The district court had jurisdiction over the FLSA claims under 29 U.S.C. § 216(b) and

28 U.S.C. § 1331. The district court had supplemental jurisdiction over the state-law overtime

claims under 28 U.S.C. § 1367. We have jurisdiction over this appeal under 28 U.S.C. § 1291.

                                       III. ANALYSIS

       We review for abuse of discretion a district court’s decision to allow a party to amend a

pleading under Federal Rule of Civil Procedure 15(a). Rose v. Hartford Underwriters Ins. Co.,

203 F.3d 417, 420 (6th Cir. 2000). We review de novo a district court’s grant of summary

judgment. Elwell v. Univ. Hosps. Home Care Servs., 276 F.3d 832, 837 (6th Cir. 2002).

Summary judgment is proper only when there is no genuine dispute as to a material question of

fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The

moving party bears the burden of proof on both points. Vaughn v. Lawrenceburg Power Sys.,

269 F.3d 703, 710 (6th Cir. 2001). In determining whether this standard is met, we “view the

evidence in the light most favorable to the non-moving party and draw all reasonable inferences



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Case No. 13-3964, Hopkins, et al. v. Chartrand


in its favor.” Crouch v. Honeywell Int’l, Inc., 720 F.3d 333, 338 (6th Cir. 2013). “Before ruling

on a summary judgment motion, the district court must afford the parties adequate time for

discovery, in light of the circumstances of the case.” Id.

A. Chartrand’s Motion to Amend and the Administrative-Employee Exemption

       Hopkins and Boyles first argue that Chartrand forfeited reliance on the FLSA’s overtime-

pay exemptions by not specifically raising them in his answer and that the district court abused

its discretion by granting Chartrand’s belated motion to clarify or amend. We agree in part

because the district court granted summary judgment without affording additional discovery.

       The overtime-pay exemptions set forth in 29 U.S.C. § 213 are affirmative defenses that

defendants must prove. Franklin v. Kellogg Co., 619 F. 3d 604, 611 (6th Cir. 2010). As such,

defendants must generally claim an exemption in their first responsive pleading or we will

consider the defense forfeited. See Fed. R. Civ. P. 8(c); Horton v. Potter, 369 F.3d 906, 911 (6th

Cir. 2004). The purpose of Rule 8(c)’s pleading requirement is to give the opposing party notice

of the defense and a chance to rebut it. Mickowski v. Visi-Trak Worldwide, LLC, 415 F.3d 501,

506 (6th Cir. 2005). To be sure, Chartrand’s answer failed to cite with specificity the overtime

exemptions upon which he relied in his motion for summary judgment.

       Nevertheless, the “failure to raise an affirmative defense by responsive pleading does not

always result in [forfeiture] of the defense—such as, when the plaintiff receives notice of the

affirmative defense by some other means.” Seals v. Gen. Motor Corp., 546 F.3d 766, 770 (6th

Cir. 2008).   As a practical matter, courts may excuse the general rule of forfeiture when

amendment is proper under Federal Rule of Civil Procedure 15(a).            Id. (citing Phelps v.

McClellan, 30 F.3d 658, 663 (6th Cir. 1994)). Under Rule 15(a), courts “should freely give

leave [to amend] when justice so requires.” Fed. R. Civ. P. 15(a). This rule “reinforces the



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Case No. 13-3964, Hopkins, et al. v. Chartrand


principle that cases should be tried on their merits rather than the technicalities of pleadings, and

therefore assumes a liberal policy of permitting amendments.” Inge v. Rock Fin. Corp., 388 F.3d

930, 937 (6th Cir. 2004) (brackets, citations, and internal quotation marks omitted).

       In determining whether to grant leave to amend, district courts should consider several

factors, including “undue delay in filing, lack of notice to the opposing party, bad faith by the

moving party, repeated failure to cure deficiencies by previous amendment, undue prejudice to

the opposing party, and futility of the amendment.” Seals, 546 F.3d at 770 (citing Wade v.

Knoxville Utils. Bd., 259 F.3d 452, 459 (6th Cir. 2001)). Nevertheless, because notice and the

opportunity to respond lie at the heart of our pleading requirements, so too are notice and any

resulting prejudice central to determining whether a court should grant leave to amend. See, e.g.,

Wade, 259 F.3d at 458–59 (concluding that notice and prejudice to the opposing party are

“critical factors”); Smith v. Sushka, 117 F.3d 965, 969 (6th Cir. 1997) (examining whether a

belated affirmative defense resulted in “surprise or unfair prejudice” to the opposing party).

       Based on the proceedings below, we conclude that the district court abused its discretion

by permitting Chartrand to amend his answer with specific reference to the exemptions from

29 U.S.C. § 213(a)(1) in the absence of further discovery. As a threshold matter, the district

court granted Chartrand’s motion in a marginal entry order, thus frustrating meaningful appellate

review by providing no insight into the court’s reasoning. Although the decision to permit an

amendment lies in the sound discretion of the trial court, an “[a]buse of discretion occurs when a

district court fails to state the basis for its denial [of a motion to amend] or fails to consider the

competing interests of the parties and likelihood of prejudice to the opponent.” Jet, Inc. v.

Sewage Aeration Sys., 165 F.3d 419, 425 (6th Cir. 1999) (emphasis added) (quoting Moore v.

City of Paducah, 790 F.2d 557, 559 (6th Cir. 1986)); see Head v. Timken Roller Bearing Co.,



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Case No. 13-3964, Hopkins, et al. v. Chartrand


486 F.2d 870, 874 (6th Cir. 1973) (“[A trial judge’s] decision must weigh good cause shown for

the delay in moving vis a vis dilatoriness of counsel resulting in last minute surprise and inability

of opposing counsel to meet the tendered issue.” (internal quotation marks omitted)).

       As an additional matter, the nature of the claimed defense and the record below both

suggest that Chartrand’s belated amendment may have surprised and unfairly prejudiced the

investigators. The FLSA guarantees overtime compensation to employees who work in excess

of forty hours per week. 29 U.S.C. § 207(a)(1). However, the statute exempts from its coverage

employees who serve “in a bona fide executive, administrative, or professional capacity.” Id.

§ 213(a)(1). Under the FLSA’s implementing regulations, an employer must prove the following

to establish that the administrative-employee exemption applies: (1) the employee is paid at least

$455 per week on a salary basis; (2) the employee’s “primary duty is the performance of office

or non-manual work directly related to the management or general business operations of the

employer”; and (3) the employee’s “primary duty includes the exercise of discretion and

independent judgment with respect to matters of significance.” 29 C.F.R. § 541.200(a)(1)–(3).

As we have observed, questions of fact often predominate in overtime-exemption cases. See

Chao v. Double JJ Resort Ranch, 375 F.3d 393, 395–96 (6th Cir. 2004).

       Here, the parties agree that Hopkins and Boyles were paid over $455 per week on a

salary basis and that they exercised discretion and independent judgment in carrying out their

primary duty—thus satisfying the first and third prongs of the administrative-employee

exemption. The parties seem to disagree only as to what constituted the investigators’ “primary

duty” and whether it “directly related to the management or general business operations” of the

county coroner. See 29 C.F.R. § 541.200(a)(2). We use the qualifying language “seem to

disagree” because the parties agree on the facts surrounding the investigators’ day-to-day duties,



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Case No. 13-3964, Hopkins, et al. v. Chartrand


to the extent the parties developed the record on this front. But the record reflects a glaring lack

of factual development regarding the investigators’ primary duties and how closely they related

to the management of the coroner’s office. The investigators allege prejudice as a result.

       By way of example, when the parties deposed one another, they asked general questions

regarding the investigators’ responsibilities. But neither side followed up with detailed questions

geared toward the particular requirements of the overtime exemptions themselves. The only

questions posed regarding the investigators’ duties were perfunctory and entirely commonplace

in employment litigation.     Chartrand never even mentioned the FLSA exemptions in his

deposition testimony, and it is less than clear that the investigators otherwise knew he was

relying upon the administrative-employee exemption.         Surely the investigators would have

pursued the matter further in discovery had they known it was at issue.

       Thus we face a crossroads. On one hand, we have Rule 8(c)’s requirements, which serve

to put opposing parties on notice of a claimed affirmative defense. Mickowski, 415 F.3d at 506.

On the other hand, we have Rule 15(a)’s instructions, which counsel in favor of permitting

amendments so as to resolve cases on their merits as opposed to the technicalities of pleadings.

Inge, 388 F.3d at 937. The rules are at odds in this case, and we have no reasoning from the

district court—which had a front-row seat throughout this dispute—to guide our review of its

decision.   Moreover, due to the sparse factual record relevant to the second prong of the

administrative-employee exemption, we cannot ascertain whether the district court’s abuse of

discretion constituted harmless error. See Rose, 203 F.3d at 423.

       Under these circumstances, a remand is warranted. Rather than remanding to allow the

district court to rule again on Chartrand’s motion to amend, which will no doubt spawn yet

another non-merits appeal, the better course of action is to remand for the purpose of conducting



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Case No. 13-3964, Hopkins, et al. v. Chartrand


limited discovery with respect to the requirements of 29 C.F.R. § 541.200(a)(2). Allowing both

sides to flesh out the investigators’ primary duties and whether they directly related to the

management or general business operations of the county coroner serves two purposes. First,

permitting limited discovery on these important factual matters corrects any prejudice the

investigators may have suffered from Chartrand’s belated amendment.           Second, permitting

limited discovery will lead to a merits-based decision as opposed to a hollow procedural win for

either side. Both the investigators and the coroner indicated at oral argument that they preferred

developing the record further as opposed to losing as a matter of law based on the dearth of

information before us.

       We leave it to the district court to fashion the scope of this limited discovery. If, after

conducting the relevant discovery, the parties wish to submit the matter to the district court on a

stipulated factual record, they remain free to do so. See Fed. R. Civ. P. 52(a)(1); B.F. Goodrich

Co. v. U.S. Filter Corp., 245 F.3d 587, 592 (6th Cir. 2001) (explaining the difference between

cross-motions for summary judgment and a bench trial on a stipulated record). As we recently

observed, “this circuit and other circuits have resolved many administrative-exemption cases as a

matter of law.” Henry v. Quicken Loans, Inc., 698 F.3d 897, 901 (6th Cir. 2012). If, however,

the parties cannot agree to a stipulated record, they remain free to seek summary judgment under

the traditional framework of Rule 56 or to pursue the matter at trial. Id. (concluding that

administrative-exemption cases involving material factual disputes are properly left to a trier of

fact). We need not and cannot predict today which route is appropriate.

B. The Executive-Employee Exemption

       Chartrand continues to argue that he was entitled to summary judgment against Hopkins

under the executive-employee exemption set forth in 29 U.S.C. § 213(a)(1). The district court



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Case No. 13-3964, Hopkins, et al. v. Chartrand


did not rule on this argument. Under these circumstances, we adhere to the general appellate rule

of refraining from considering issues not passed on below. See, e.g., Blue Cross & Blue Shield

Mut. of Ohio v. Blue Cross and Blue Shield Ass’n, 110 F.3d 318, 335 (6th Cir. 1997).

       If, however, the district court anticipates ruling on the executive-employee exemption on

remand, we presume additional discovery would be warranted on this matter for the reasons

discussed above.

                                       IV. CONCLUSION

       For the foregoing reasons, we reverse the grant of summary judgment and remand the

case to the district court for proceedings consistent with this opinion.




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