Marcie Guerrero v. J. W. Hutton, Inc. ( 2006 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 06-1352
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Marcie Guerrero, *
*
Plaintiff-Appellant, *
* Appeal from the United States
v. * District Court for the Southern
* District of Iowa.
J. W. Hutton, Inc., *
*
Defendant-Appellee. *
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Submitted: June 16, 2006
Filed: August 21, 2006
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Before BYE, LAY, and RILEY, Circuit Judges.
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BYE, Circuit Judge.
In November 2003, Marcie Guerrero filed suit in Iowa state court against her
former employer, J.W. Hutton, Inc., claiming she was owed a bonus under the Iowa
Wage Payment and Collection Act (IWPCA) and overtime under the Fair Labor
Standards Act (FLSA). In January 2004, J.W. Hutton removed the case to federal
court and counterclaimed for a breach of a non-compete agreement. The district
court1 granted J.W. Hutton's motion for summary judgment on the IWPCA and FLSA
claims. It then certified the case for appeal. We affirm.
I
Guerrero was hired by J.W. Hutton as a subrogation analyst in March 2002, and
she signed a non-compete agreement as a condition of her employment. Her job
required her to review client files and to make recommendations to her supervisors
concerning potential settlement offers to close insurance claims. In reviewing offers,
Guerrero would conduct asset searches to determine the solvency of the responsible
party. Occasionally, Guerrero would investigate potential third-party liability.
J.W. Hutton utilizes a "flextime" policy, allowing employees make up absences
of time between fifteen minutes and four hours long within the same pay period the
absences occurred. Absences longer than four hours, however, must be taken using
vacation or personal time. In order to account for each employee's hours, J.W. Hutton
requires all employees–both salary or hourly–to document all vacation, sick, flex, and
unexcused time spent away from work. Nothing in the written policy indicates
whether J.W. Hutton would dock an employee's pay for failing to make up time off.
While employed with J.W. Hutton, Guerrero used flextime, as evidenced by
several e-mail messages between her and her supervisors concerning scheduling and
making up absences under the policy. No evidence shows J.W. Hutton actually
docked Guerrero's pay for failing to make up time taken under this policy. On the
contrary, one pay stub shows the opposite to be true–she was given her full pay
despite not making up a one-hour absence.
1
The Honorable James E. Gritzner, United States District Judge for the Southern
District of Iowa.
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J.W. Hutton also has a bonus program available to eligible full-time employees
at the end of each quarter. Generally, an employee is eligible if the person works
"within the company's standard work ethic" and does nothing to "detrimentally affect[]
the company (i.e. breaking the code of work ethics forthright in the employee
handbook) at any time during the bonus quarter." The bonus program also states: "An
employee must be employed through the last working day of the quarter to be eligible
for the bonus." In 2003, the last working day of the second quarter was Monday, June
30.
According to J.W. Hutton President Julie Bitner, in the spring of 2003, she
received several complaints regarding Guerrero releasing confidential information in
her debt-collection attempts. On June 27, Bitner learned Guerrero interviewed for a
job in Minneapolis, potentially in violation of her non-compete agreement. As a
result, Bitner terminated Guerrero's employment and issued her a letter stating the
termination was effective as of Friday, June 27. Because Guerrero was on vacation
at the time, she did not receive the letter until she arrived for work on Monday, June
30. Guerrero was prepared to work on June 30, but there is no evidence she actually
performed any work for J.W. Hutton on that day. Additionally, the district court noted
while Guerrero's pay stub for the pay period including June 30 covered eleven
working days, she was only paid for ten.
Guerrero did not receive a bonus for the second quarter of 2003. Her attorney
sent J.W. Hutton a letter stating she was due the bonus because she worked "nearly
the entire quarter." In response to this letter, the Bonus Review Committee met and
determined Guerrero was ineligible for two reasons. First, her actions had
detrimentally affected the company and violated the company's code of ethics.
Second, she was not employed through the last working day of the quarter. Despite
citing two reasons for the denial of Guerrero's bonus, J.W. Hutton contends either
reason standing alone would be sufficient to support its decision.
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II
A. Jurisdiction
As an initial matter, we recognize certifications "under Rule 54(b) should
neither be granted routinely nor as an accommodation to counsel." Hardie v. Cotter
& Co., 819 F.2d 181, 182 (8th Cir. 1987) (citation omitted). Rule 54(b) allows the
district court to "direct the entry of a final judgment as to one or more but fewer than
all of the claims or parties only upon an express determination that there is no just
reason for delay and upon an express direction for the entry of judgment." Fed. R.
Civ. Pro. 54(b). We review the district court's decision to grant certification in this
case for an abuse of discretion. See Interstate Power Co. v. Kan. City Power & Light
Co., 992 F.2d 804, 807 (8th Cir. 1993).
The district court certified this case for appeal after it determined no just reason
for delay existed preventing Guerrero from appealing her claims under the IWPCA
and the FLSA. In light of the fact the disposition of this appeal will not impact the
remaining claim before the district court, we find the district court did not abuse its
discretion. See In re Flight Transp. Corp. Sec., 825 F.2d 1249, 1251 (8th Cir. 1987)
(finding no abuse of discretion in certifying a case for appeal when "there is no
significant relationship between the adjudicated and unadjudicated claims").
B. Standard of Review
With respect to the merits, we review the district court's grant of summary
judgment de novo. Turner v. Gonzales, 421 F.3d 688, 694 (8th Cir. 2005). Summary
judgment is appropriate when "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 judgment
as a matter of law." Fed. R. Civ. Pro. 56(c). Under this review, we view the evidence
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in the light most favorable to Guerrero, the non-moving party. Lester E. Cox Med.
Ctr., Springfield, Mo. v. Huntsman, 408 F.3d 989, 992 (8th Cir. 2005). To warrant
reversal, she "must show the existence of facts on the record which create a genuine
issue" of material fact. Id.
C. Guerrero's Bonus Under the IWPCA
Guerrero first claims she was owed a bonus for the second quarter of 2003
under the IWPCA. Under the IWPCA, an employer is required to "pay all wages due
its employees," Iowa Code Ann. § 91A.3(1), and the term "wages" has been
interpreted to include bonuses. Runyon v. Kubota Tractor Corp., 653 N.W.2d 582,
585 (Iowa 2002) (citing Dallenbach v. Mapco Gas Prod., Inc., 459 N.W.2d 483, 488
(Iowa 1990)); see also PFS Distrib. Co. v. Raduechel, 387 F. Supp. 2d 1020, 1022
(S.D. Iowa 2005). We must examine the terms of the employment contract to
determine if Guerrero was improperly denied a bonus. See PFS Distrib. Co., 387 F.
Supp. 2d at 1022-23; see also Phipps v. IASD Health Serv. Corp., 558 N.W.2d 198,
202 (Iowa 1997) (examining the terms of a profit-sharing agreement to determine an
employee's eligibility).
Guerrero challenges both reasons given by J.W. Hutton denying her bonus
request. First, she claims there exists a genuine issue of material fact as to whether
her actions could be construed as detrimental to the company and in violation of the
company's code of ethics. Second, she contends she was employed on the last day of
the quarter. J.W. Hutton concedes a genuine issue of material fact exists with regard
to the former of its proffered reasons. Therefore, we limit our discussion to the latter.
Because the plain language of the bonus policy requires an employee to both act in an
ethical manner and be employed as of the last day of the quarter, we can affirm the
district court's grant of summary judgment if no issue of material fact exists regarding
the applicability of either proffered reason. See Lane v. Amoco Corp., 133 F.3d 676,
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678 (8th Cir. 1998) (applying the "plain, unambiguous language" of an employee
bonus agreement).
The bonus agreement at issue states: "[a]n employee must be employed through
the last working day of the quarter to be eligible for the bonus." We find this language
to be unambiguous. See Lane, 133 F.3d at 678 (applying unambiguous language in
an employee bonus agreement requiring the employee be employed at the end of the
year). The evidence establishes Guerrero was not employed by J.W. Hutton on June
30, the last day of the second quarter. Her termination letter is dated and effective as
of June 27. Although Guerrero appeared at work on June 30, no evidence exists
showing she performed any work on that day. Her contention that she was ready,
willing, and able to work on June 30 is unavailing and undermines her argument.
Additionally, in Guerrero's response to J.W. Hutton's statement of undisputed facts,
she admitted "Bitner terminated Guerrero on June 27, 2003." Guerrero contends this
admission merely reflects her understanding of Bitner's subjective intent. Assuming
this to be true, it does not create a reasonable inference Guerrero was employed on
June 30. The evidence also establishes Guerrero subjectively believed her termination
was effective on June 27. Indeed, her attorney sent a letter to J.W. Hutton stating she
was "terminated from her employment effective June 27, 2003," but entitled to a
bonus because she worked "nearly the entire quarter." Finally, the undisputed
evidence establishes Guerrero was not paid for working on June 30. Therefore, we
affirm the district court on this issue.2
2
We also find Guerrero's argument that she is due a prorated bonus without
merit because the unambiguous policy language requires an employee to be employed
(although not necessarily working) on the last day of the quarter. A prorated bonus
is only available for an employee having excessive absences during the quarter. To
read the contract as advocated by Guerrero would effectively allow all terminated
employees to receive a prorated bonus, and this reading is not supported by the plain
language of the contract.
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D. Overtime Under the FLSA
Guerrero also claims she is entitled to overtime pay under the FLSA. See 29
U.S.C. § 207(a)(1) (2003) (requiring employers to pay overtime for employees who
work more than forty hours in any work week). J.W. Hutton contends Guerrero is not
due overtime pay because she was an exempt administrative employee. J.W. Hutton
bears the burden of proving Guerrero is exempt. McAllister v. Transamerica
Occidental Life Ins. Co., 325 F.3d 997, 999 (8th Cir. 2003).
Under the FLSA, employees are exempt if they are "employed in a bona fide
executive, administrative, or professional capacity." 29 U.S.C. § 213(a)(1). Under
the applicable regulations,3 an administrative employee is one who is paid on a "salary
. . . basis at a rate of not less than $250 per week . . . and whose primary duty consists
of . . . the performance of office . . . work directly related to . . . general business
operations of the employer . . ., where the performance of such primary duty includes
work requiring the exercise of discretion and independent judgment." 29 C.F.R. §
541.214(a).4 Thus, the test for determining if a person is exempt under this section
requires the following showings: 1) the employee is paid at least $250 per week on
a "salary basis"; 2) the employee's "primary duty consisted of the performance of
office work 'directly related to management policies or general business operations of
the employer'"; and 3) the employee's "performance of such primary duty included
'work requiring the exercise of discretion and independent judgment.'" See
McAllister, 325 F.3d at 1000 (quoting 29 C.F.R. § 541.214(a)).
3
The regulations at issue were revised as of July 1, 2004. However, the 2003
regulations are applicable and cited throughout.
4
29 C.F.R. § 541.214 is referred to as the "short test" for employees who earn
more than $250 per week. The "long test" is found in 29 C.F.R. § 541.2(a)-(e). Both
parties agree the short test is applicable in this case.
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Guerrero easily meets the second and third of these requirements. Neither party
disputes her position involved office work relating to the general business operations
of J.W. Hutton. As to the third prong, her work as a subrogation analyst involved the
exercise of discretion and judgment because she was required to review case files,
determine responsible parties, review settlement offers, and make recommendations
based on her findings. See id. at 1001 (holding the position of an insurance claims
examiner involved the exercise of discretion and judgment).
Thus, because the parties agree Guerrero made at least $250 per week, the only
issue on appeal is whether she was paid on a "salary basis." The regulations provide:
[a]n employee will be considered to be paid "on a salary basis" within
the meaning of the regulations if under his employment agreement he
regularly receives each pay period on a weekly, or less frequent basis, a
predetermined amount constituting all or part of his compensation, which
amount is not subject to reduction because of variations in the quality or
quantity of the work performed.
29 C.F.R. § 541.118(a) (emphasis added); see also Fife v. Harmon, 171 F.3d 1173,
1175 (8th Cir. 1999) (holding the grant of overtime pay does not necessarily prove an
employee is not salaried provided the employee's pay is not subject to a reduction for
the reasons stated in the regulations). A salaried employee's pay can only be deducted
"when the employee absents himself from work for a day or more for personal
reasons, other than sickness or accident." 29 C.F.R. § 541.118(a)(2) (emphasis
added). Essentially, Guerrero argues she was not salaried because J.W. Hutton either
actually docked her pay or threatened to dock her pay based on absences of less than
one full day. See Auer v. Robbins, 519 U.S. 452, 461 (1997) (holding the salary basis
test turns on whether the employer's actual practice involves deducting pay or whether
the employer has a policy creating a likelihood pay would be deducted for partial-day
absences).
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Guerrero's argument, however, is without merit because no evidence exists
showing J.W. Hutton actually docked pay for time lost or threatened to do so if her
absences under the flextime policy were not made up. McAllister, 325 F.3d at 1000
(holding plaintiff was paid on a salary basis because nothing "in the record shows [the
plaintiff's] salary was in jeopardy of being reduced based on the quality or quantity
of the work she performed"); see also Nelson v. Ellerbe Becket Constr. Serv., Inc.,
283 F. Supp. 2d 1068, 1078 (D. Minn. 2003) (determining plaintiff was paid on a
salary basis because the employer never docked or threatened to dock the plaintiff's
pay). Guerrero bases her argument on J.W. Hutton's flextime policy, noting the
requirements to keep track of her hours and make up any time missed.
At least two other circuits have explicitly held an employer's requirement for
an employee to make up time missed does not automatically transform the employee
from salaried to hourly, provided the employee's pay was not reduced for the time lost.
In Cowart v. Ingalls Shipbuilding, Inc., 213 F.3d 261 (5th Cir. 2000), the Fifth Circuit
held:
[t]here is no support in the case law for the proposition that requiring
salaried employees to make up time missed from work due to personal
business is inappropriate. Although the salary basis regulation prohibits
deductions from an employees's [sic] salary for personal absences of less
than a day, the regulation does not prohibit an employer from requiring
an employee to make up the time he misses.
Id. at 265; see also Renfro v. Ind. Mich. Power Co., 370 F.3d 512, 516 (6th Cir. 2004)
("An employer may require exempt salaried employees to make up for time missed
from work due to personal business."); Martin v. Ind. Mich. Power Co., 381 F.3d 574,
579 (6th Cir. 2004) ("It does not matter that [the plaintiff] must make up partial-day
absences or that [the plaintiff's] hours are prescribed and he must obtain approval from
his supervisors to vary his hours."). We agree the regulations do not prohibit
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employers from requiring employees to work a specific number of hours per week and
track their time to ensure they have worked the requisite number of hours.
No evidence shows J.W. Hutton actually docked Guerrero's pay for failing to
make up partial-day absences or that the flextime policy created a substantial
likelihood pay would have been docked if Guerrero failed to work the requisite forty
hours during a given pay period. The e-mail correspondence between Guerrero and
her supervisors simply demonstrates Guerrero was required to work forty-hour weeks
and to make up partial-day absences. The messages do not suggest Guerrero's pay
would be reduced if she did not work the requisite number of hours. To the contrary,
one pay stub demonstrates Guerrero was paid her full salary despite not making up
one hour in the pay period. Therefore, we affirm the district court on this issue.
III
Accordingly, we affirm.
LAY, Circuit Judge, dissenting.
Credibility is the matrix of the factual dispute in this case. Specifically, genuine
issues of material fact remain on Guerrero’s IWPCA claim that preclude summary
judgment.
Both sides concede that if Guerrero actually worked through June 30, 2003 –
the last day of the second fiscal quarter – she would be entitled to receive a bonus
pursuant to company policy and Iowa law. In support of her position, Guerrero
references statements she made in her sworn affidavit. In it, Guerrero contends that
she “came to work the last day of the quarter” and was further paid for services
rendered on that day.
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The majority affords undue weight to two alleged admissions to support its
ruling. The majority asserts that Guerrero conceded that she was terminated on June
27 when, in response to paragraph fourteen of J.W. Hutton’s statement of undisputed
facts, she admitted that Bitner terminated her on June 27, 2003. However, Guerrero
was merely setting forth a stipulation concerning Bitner’s subjective belief. The
alleged admission in paragraph fourteen must be read in light of Guerrero’s denial set
forth in paragraph nineteen. In paragraph nineteen, Guerrero disputed that she was
fired on June 27 and asserted instead that she came to work on June 30 and was paid
for work performed that day. Interpreting the facts in the light most favorable to
Guerrero, and drawing all reasonable inferences in Guerrero’s favor, as we must, I am
compelled to believe the alleged admission in paragraph fourteen was merely a
stipulation to Bitner’s subjective intent. Moreover, there are additional factual
disputes in this case that make summary judgment improper.
The majority cites a demand letter written by counsel for Guerrero which states
that Guerrero “was terminated from her employment effective June 27, 2003.”
Although this statement qualifies as an agency admission and could properly be
introduced against Guerrero at trial, it is not conclusive evidence and may easily be
explained. Murrey v. United States, 73 F.3d 1448, 1455 (7th Cir. 1996) (noting that
an extrajudicial admission is not conclusive evidence); see also Stolte v. Larkin, 110
F.2d 226, 233 (8th Cir. 1940). The weight this evidence should be afforded is
especially questionable considering the substance of the letter flatly contradicts
Guerrero’s own sworn statements. If Guerrero was terminated on June 27, 2003, then
why did she show up for work on June 30?
Given the obvious credibility issues involved, I cannot agree that summary
judgment is the proper venue to decide the merits of Guerrero’s IWPCA claim. I
would therefore reverse on this issue and submit the questions of fact to a jury for
final resolution.
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