Julio Barreto v. Davie Marketplace, LLC ( 2009 )


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                IN THE UNITED STATES COURT OF APPEALS
                                                                    FILED
                        FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
                          ________________________ ELEVENTH CIRCUIT
                                                                JUNE 11, 2009
                                 No. 08-16940                 THOMAS K. KAHN
                             Non-Argument Calendar                CLERK
                           ________________________
    
                       D. C. Docket No. 08-60159-CV-DLG
    
    JULIO BARRETO,
    
    
                                                               Plaintiff-Appellant,
    
                                      versus
    
    DAVIE MARKETPLACE, LLC,
    a Florida limited liability
    company d.b.a. Foodtown,
    ESMAIL MOBARAK,
    
    
                                                            Defendants-Appellees.
    
    
                           ________________________
    
                    Appeal from the United States District Court
                        for the Southern District of Florida
                          _________________________
    
                                  (June 11, 2009)
    
    Before BLACK, BARKETT and KRAVITCH, Circuit Judges.
    PER CURIAM:
    
          Julio Barreto appeals the district court’s entry of summary judgment in favor
    
    of his former employer, Davie Marketplace, LLC d/b/a Foodtown, on his claim for
    
    violation of the overtime pay requirements of the Fair Labor Standards Act
    
    (“FLSA”), 29 U.S.C. §§ 201 et seq. On appeal, Barreto argues that the district
    
    court erred in holding that Davie Marketplace had satisfied as a matter of law the
    
    “executive exemption” to the FLSA’s overtime pay requirements because there are
    
    disputed facts as to three of the four prongs of the “executive exemption” test: (1)
    
    whether Barreto’s “primary duty” as “manager” of the produce department
    
    consisted of management; (2) whether Barreto customarily and regularly directed
    
    the work of two or more other employees; and (3) whether Barreto’s
    
    recommendations with respect to hiring and firing employees were given
    
    “particular weight” by management. Upon thorough review of the record and
    
    careful consideration of the parties’ briefs, we conclude that the evidence creates a
    
    genuine issue of material fact as to all three of these elements. Accordingly, we
    
    reverse the entry of summary judgment and remand this case to the district court.
    
          We conduct a de novo review of a district court’s order granting summary
    
    judgment, “applying the same legal standards as the district court.” Chapman v. AI
    
    Transp., 
    229 F.3d 1012
    , 1023 (11th Cir. 2000). “Summary judgment is appropriate
    
    
    
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    if the evidence before the court shows ‘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.’
    
    In making this determination, the court must view all evidence and make all
    
    reasonable inferences in favor of the party opposing summary judgment.” Haves
    
    v. City of Miami, 
    52 F.3d 918
    , 921 (11th Cir. 1995) (citations omitted). The
    
    summary judgment movant bears the initial burden of showing the court, by
    
    reference to the record, that no genuine issues of material fact exist to be
    
    determined at trial. Clark v. Coats & Clark, Inc., 
    929 F.2d 604
    , 608 (11th Cir.
    
    1991). The movant meets this burden by showing that there is an “absence of
    
    evidence to support the non-moving party’s case.” Jeffery v. Sarasota White Sox,
    
    Inc., 
    64 F.3d 590
    , 593 (11th Cir. 1995). Once this initial burden is met, the other
    
    party must “go beyond the pleadings, and by its own affidavits, or by depositions,
    
    answers to interrogatories, and admissions on file, designate specific facts showing
    
    that there is a genuine issue for trial.” Id. at 593-94 (citations and quotations
    
    omitted).
    
          The FLSA provides that employees are generally entitled to receive overtime
    
    pay at one and one-half times their regular rate for all hours worked in excess of
    
    forty per week. See 29 U.S.C. § 207(a)(1). The FLSA exempts from its overtime
    
    pay requirements “any employee employed in a bona fide executive,
    
    
    
                                               3
    administrative, or professional capacity.” See 29 U.S.C. § 213(a)(1); see also
    
    Avery v. City of Talladega, 
    24 F.3d 1337
    , 1340 (11th Cir. 1994). The employer
    
    has the burden of showing entitlement to an exemption, Jeffery v. Sarasota White
    
    Sox, Inc., 
    64 F.3d 590
    , 594 (11th Cir. 1995), and we construe overtime exemptions
    
    narrowly, against the employer. Avery, 24 F.3d at 1340 (citing Brennan v. Sugar
    
    Cane Growers Co-Op, 
    486 F.2d 1006
     (5th Cir. 1973)). This court has recognized
    
    the “Supreme Court’s admonition that courts closely circumscribe the FLSA’s
    
    exceptions.” Nicholson v. World Bus. Network, Inc., 
    105 F.3d 1361
    , 1364 (11th
    
    Cir. 1997). The executive exemption “is to be applied only to those clearly and
    
    unmistakably within the terms and spirit of the exemption.” Morgan v. Family
    
    Dollar Stores, Inc., 
    551 F.3d 1233
    , 1269 (11th Cir. 2008).
    
          The Code of Federal Regulations defines executive employees as those (1)
    
    who receive compensation “of not less than $455 per week”; (2) whose “primary
    
    duty” is the management of the enterprise in which the employee is employed or of
    
    a customarily recognized department thereof; (3) who customarily and regularly
    
    direct the work of two or more other employees; and (4) who have 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
    
    employees are given “particular weight.” 29 C.F.R. § 541.100(a). As evidence
    
    
    
                                             4
    that Barreto met all four prongs on this test, Davie Marketplace submitted only the
    
    deposition of Barreto, with attached exhibits, and the three-page affidavit of store
    
    supervisor Ajay Dhawan. In responding, Barreto relied solely on his deposition.
    
    Thereafter, based only on this evidence, the district court granted summary
    
    judgment, finding that Davie Marketplace was entitled to the executive exemption
    
    defense as a matter of law.
    
          On appeal, it is uncontested that Barreto was paid a flat rate of $500.00 per
    
    week, thereby satisfying the first element of the executive employee definition.
    
    The parties, however, dispute the applicability of the remaining three elements.
    
    Accordingly, we first consider whether the evidence submitted by the parties
    
    creates a genuine issue of fact regarding whether management was Barreto’s
    
    “primary duty” in his employment as manager of the produce department at Davie
    
    Marketplace.
    
          The Code of Federal Regulations defines “primary duty” as “the principal,
    
    main, major or most important duty that the employee performs” but explains that
    
    the “[d]etermination 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.” 29 C.F.R. § 541.700(a). The factors to consider in this analysis
    
    include: (1) the amount of time spent performing management duties; (2) the
    
    
    
                                               5
    relative importance of the management duties as compared with other types of
    
    duties; (3) the frequency with which an employee may exercise discretionary
    
    powers; (4) the employee’s relative freedom from direct supervision; and (5) the
    
    relationship between the employee’s salary and the wages paid to other employees
    
    for the kind of non-management work performed by the employee. Rodriguez v.
    
    Farm Stores Grocery, Inc., 
    518 F.3d 1259
    , 1264 (11th Cir. 2008) (citing 29 C.F.R.
    
    § 541.103). This analysis specifically requires an examination beyond an
    
    employee’s title to the specific duties performed by the employee.
    
          The district court, relying on Barreto’s deposition and Dhawan’s affidavit,
    
    found as a matter of law that Barreto’s duties were primarily managerial. Barreto
    
    stated in his deposition that Davie Marketplace hired Barreto as the Manager of the
    
    Produce Department, paying him a flat rate of $500.00 per week for all hours
    
    worked. In this position, Barreto admitted to performing certain managerial tasks,
    
    namely, ordering and pricing produce as needed to meet proscribed profits and
    
    providing direction and work schedules to the other three employees in the
    
    department. Store supervisor Ajay Dhawan’s affidavit asserted that (1) Barreto
    
    was given wide latitude to run the produce department and received little
    
    supervision from upper management, (2) Barreto was responsible for reaching a
    
    certain level of productivity for the department and for using his judgment to
    
    
    
                                              6
    accomplish that important business objective, and (3) Barreto earned more that two
    
    times the compensation earned by other employees in the produce department.
    
    The district court found that Barreto’s deposition testimony did not directly dispute
    
    the assertions in Dhawan’s affidavit and therefore deemed these assertions to be
    
    admitted. Accordingly, after acknowledging that Barreto’s deposition also asserted
    
    that he spent the majority of his time performing non-managerial tasks and that his
    
    discretion was somewhat limited by the store’s policies, the district court found
    
    that the evidence nonetheless required a finding that Barreto’s primary duties were
    
    managerial.
    
          Barreto claims that although his title was that of “manager” and he
    
    admittedly performed some managerial-type tasks, his deposition testimony,
    
    considered in the light most favorable to him, creates a genuine dispute as to
    
    whether management was his primary duty. We agree. The parties agree that
    
    Barreto performed the managerial tasks of ordering produce, pricing produce, and
    
    scheduling and directing produce department employees; however, it is also
    
    undisputed that Barreto spent more than 50% of his time performing tasks identical
    
    to those performed by the hourly, non-exempt employees. Indeed, Barreto testified
    
    that, due to management’s under-staffing of the department, he was required to
    
    perform non-exempt work for such a large percentage of his time that he had no
    
    
    
                                              7
    time to fulfill some of the managerial responsibilities he had been nominally given,
    
    i.e., to supervise other employees and to purchase the least expensive produce. He
    
    also testified that the four other non-exempt employees did not require his
    
    supervision, as they already “knew what the job was.” This evidence suggests that
    
    Barreto’s non-management responsibilities were more important to the operation
    
    of the store than his few managerial duties.1 Cf. Diaz v. Team Oney, Inc., 291 Fed.
    
    Appx. 947 (11th Cir. 2008) (rejecting plaintiff’s claim that management was not
    
    his “prime responsibility” where the record was clear that “his managerial duties –
    
    as the highest ranking employee on duty during the majority of his shifts, in which
    
    he supervised the drivers, counterpersons, and cooks, apportioned work, made
    
    deposits, filled out required forms, interviewed prospective employees, and
    
    engaged in local restaurant marketing – were significantly more important to the
    
    operation of the restaurant than his non-managerial tasks”).
    
           1
             The district court correctly noted that “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.” See 29 C.F.R. § 541.700(b), (c)
    (“Time alone . . . 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. Thus, for example, assistant
    managers in a retail establishment who perform exempt executive work such as supervising and
    directing the work of other employees, ordering merchandise, managing the budget and
    authorizing payment of bills may have management as their primary duty even if the assistant
    managers spend more than 50 percent of the time performing nonexempt work such as running
    the cash register.”). However, where an employee spends the majority of his time on non-
    exempt work and has admittedly few managerial-type obligations, there is at least a factual
    question as to whether the non-exempt duties are comparatively more important than the exempt
    duties. Such determinations of fact in the face of conflicting evidence are within the exclusive
    province of a jury. See e.g., Morgan, 551 F.3d at 1269.
    
                                                     8
          Barreto also presented evidence that his discretion in performing his
    
    managerial tasks was limited and his work was subject to supervision.
    
    Specifically, Barreto testified that he was required to order the cheapest produce
    
    available from a list of vendors pre-selected by management, to fix the pricing of
    
    the produce by increasing the wholesale prices according to a set scale given to
    
    him by management, and to order produce only as needed to restock preexisting
    
    supplies. He testified that he was told at the managers’ meeting how many
    
    employees he needed to schedule for each shift and how many hours the
    
    employees would work. Barreto also testified that when he asked management to
    
    hire one or two more employees for his understaffed department, management
    
    denied his request and instructed him to cut the hours of the remaining hourly
    
    employees from 40 to 30 hours per week. This testimony, considered in the light
    
    most favorable to Barreto, contradicts Dhawan’s conclusory affidavit statements
    
    that Barreto was given “wide latitude” in managing his department and that he was
    
    responsible for using “his judgment” to accomplish certain business goals. As
    
    such, Barreto’s testimony creates a genuine issue of fact regarding the extent of
    
    Barreto’s discretionary powers and relative freedom from direct supervision while
    
    performing his identified managerial tasks, i.e., ordering produce, setting prices,
    
    and setting the work schedule for non-exempt employees.
    
    
    
                                               9
          In summary, Barreto’s sworn testimony suggests that Barreto spent the
    
    majority of his time performing non-management duties; the management duties he
    
    did perform were less important to his position than the other types of duties he
    
    performed; and Barreto infrequently exercised his discretion and was subject to
    
    direct supervision. Accordingly, even though the evidence suggests that Barreto’s
    
    wages were significantly greater than the wages paid to the non-exempt employees
    
    in the produce department, we conclude that a reasonable factfinder could find that
    
    Barreto’s managerial tasks did not constitute his “primary duties” under the
    
    balancing test set forth in the Regulations. See Morgan, 551 F.3d at 1280-81
    
    (holding that store managers were not exempt executives where evidence showed
    
    that they “spent most of their time performing manual, not managerial, tasks, that
    
    corporate manuals micro-managed store managers’ performance of those tasks,
    
    that the 380 district managers closely supervised their store managers, and that
    
    store managers had little discretion or freedom from supervision”).
    
          Based solely on Barreto’s deposition, the district court also found that the
    
    evidence established that Barreto “customarily and regularly directed the work of
    
    two or more employees” and that his recommendations in hiring, firing or the
    
    advancement of employees were given “particular weight.” Accordingly, the court
    
    found Davie Marketplace met the third and fourth prongs of the executive
    
    
    
                                             10
    exemption test as a matter of law. Specifically, the district court noted that Barreto
    
    admitted that “he told employees who worked in the produce department their
    
    schedules and place[d] them on either the morning shift or afternoon shift,” that
    
    “he would assign jobs to the employees to take merchandise outside, and had them
    
    rotate bad produce and refill missing produce,” and that “none of [the other
    
    employees] were experienced.” The district court also noted that Barreto admitted
    
    that he had recommended that an employee be terminated for eating “very
    
    expensive fruit” and that the employee had subsequently been fired. Furthermore,
    
    although Barreto made no recommendations regarding hiring or advancement of
    
    employees, the district court found that “it is unlikely that evaluations and
    
    recommendations of advancement of employees would be made” in the five
    
    months Barreto worked for Davie Marketplace. Therefore, although Dhawan’s
    
    affidavit did not comment upon Barreto’s authority to direct other employees or
    
    upon the weight given to his hiring or firing recommendations, the district court
    
    found that Barreto’s deposition testimony alone established that the third and
    
    fourth prongs of the executive exemption had been met as a matter of law.
    
          We conclude, however, that Barreto’s deposition testimony, when read in its
    
    entirety, does not support the district court’s conclusion. First, regarding the third
    
    prong, the Regulations define “two or more other employees” as either two full-
    
    
    
                                               11
    time workers or their equivalent. 29 C.F.R. § 541.104(a). As to equivalency,
    
    “[o]ne full-time and two half-time employees, for example, are equivalent to two
    
    full-time employees. Four half-time employees are also equivalent.” Id.; Morgan,
    
    551 F.3d at 1274. In his deposition, Barreto testified that the produce department
    
    consisted of five employees, including himself, during his first week of
    
    employment, but that after the first week, “two of them were reduced” and that
    
    ultimately, there were “three less” employees in the department. Barreto also
    
    testified that after the first week, there were “three [employees in the produce
    
    department] in the morning and one in the afternoon.” Considering this testimony
    
    in the light most favorable to Barreto, after his first week on the job, Barreto
    
    supervised two half-time employees in the morning and was by himself in the
    
    department in the afternoon. Davie Marketplace offers no evidence refuting this
    
    testimony. Accordingly, we conclude that Davie Marketplace has not satisfied its
    
    burden of proving that Barreto regularly directed the work of two or more full-time
    
    employees.
    
          Regarding the fourth prong, we disagree that evidence of one employment
    
    recommendation that was followed is sufficient to establish as a matter of law that
    
    Barreto’s recommendations regarding hiring and firing were given a “particular
    
    weight.” The Regulations explain that “[t]o determine whether an employee’s
    
    
    
                                               12
    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.” 29
    
    C.F.R. § 541.105. Here, Barreto’s testimony established that, in one instance, his
    
    recommendation to fire an employee for a serious infraction – stealing – was
    
    followed; however, his testimony also showed that in another instance, he
    
    recommended hiring additional employees and this advice was not heeded.
    
    Indeed, after he recommended that additional employees be hired, Barreto was
    
    directed instead to cut the hours of his remaining employees. Furthermore, Barreto
    
    stated that he did not evaluate the employees in his department and it is
    
    uncontested that he did not interview candidates or make any decisions regarding
    
    the hiring or advancement of other employees. As such, the evidence in the record
    
    creates a genuine issue of fact as to whether Barreto’s employment
    
    recommendations were given “particular weight.”
    
          Viewing the evidence in the light most favorable to Barreto, there are
    
    questions of fact as to whether his “primary duty” consisted of management,
    
    whether he regularly directed the work of two or more full-time employees, and
    
    
    
                                              13
    whether his recommendations in hiring, firing, or advancement of employees were
    
    given particular weight. Summary judgment based on the executive exemption is
    
    appropriate only where the four prongs of the “executive exemption” test are met
    
    as a matter of law; it is not the appropriate disposition where, as here, there remain
    
    issues of fact regarding three of the four elements. Accordingly, we vacate the
    
    entry of summary judgment and remand this matter to the district court.
    
          VACATED AND REMANDED.
    
    
    
    
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