Judith Perry v. Randstad Gen. Partner , 876 F.3d 191 ( 2017 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 17a0264p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
JUDITH PERRY; ERIN LANE; AIMEE DOOLING, ┐
Plaintiffs-Appellants, │
│
> No. 16-1010
v. │
│
│
RANDSTAD GENERAL PARTNER (US) LLC, │
Defendant-Appellee. │
┘
Appeal from the United States District Court
for the Eastern District of Michigan at Ann Arbor.
No. 5:14-cv-11240—John Corbett O’Meara, District Judge.
Argued: November 30, 2016
Decided and Filed: November 20, 2017
Before: MOORE, SUTTON, and WHITE, Circuit Judges.
_________________
COUNSEL
ARGUED: Jordan M. Lewis, KELLEY/UUSTAL, PLC, Fort Lauderdale, Florida, for
Appellants. Jennifer A. Riley, SEYFARTH SHAW LLP, Chicago, Illinois, for Appellee. ON
BRIEF: Jordan M. Lewis, KELLEY/UUSTAL, PLC, Fort Lauderdale, Florida, Barry S. Fagan,
Jennifer L. McManus, FAGAN MCMANUS, P.C., Royal Oak, Michigan, for Appellants.
Jennifer A. Riley, Gerald L. Maatman, Jr., Ashley C. Workman, SEYFARTH SHAW LLP,
Chicago, Illinois, for Appellee.
WHITE, J., delivered the opinion of the court in which MOORE and SUTTON, JJ.,
joined in part. MOORE, J. (pp. 34–37), delivered a separate opinion concurring in part and
dissenting from the court’s opinion regarding matchmaking duties. SUTTON, J. (pp. 38–40),
delivered a separate opinion concurring in part and dissenting from the court’s opinion regarding
sales duties.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 2
_________________
OPINION
_________________
HELENE N. WHITE, Circuit Judge. In this putative collective action under the Fair
Labor Standards Act (FLSA), Judith Perry, Erin Lane, and Aimee Dooling (Plaintiffs) appeal the
district court’s grant of summary judgment to their employer, Randstad General Partner (US)
LLC (Randstad), rejecting their argument that Randstad improperly classified them as exempt
employees not entitled to overtime pay. We AFFIRM IN PART and REVERSE IN PART.
I. BACKGROUND
Randstad is a staffing company; it recruits temporary workers (talent) and hires them out
to other companies (clients). Plaintiffs were in-house Randstad employees (not temporary
workers hired out) in the company’s Troy, Michigan, office. Each Plaintiff held multiple
positions over the course of her employment with Randstad, but Plaintiffs’ responsibilities
generally included marketing and selling Randstad’s services; recruiting and evaluating workers
and placing them with clients; overseeing those placements; and various administrative and
clerical tasks. Randstad tracked Plaintiffs’ performance using a points-based system called the
Work Planning Index (WPI). Each work activity earned a set number of points, e.g., two points
for interviewing a recruit and one point for completing reference checks. Plaintiffs were
required to accrue 100 points each week. Of those 100 points, Plaintiffs were expected to earn a
certain number in particular categories, such as sales and recruiting. Randstad maintained a
progressive discipline system for employees who did not meet the 100-point quota each week,
with penalties up to and including termination.
Randstad also held periodic “contests,” which required Plaintiffs to perform a particular
task a specified number of times in a given week, e.g., make 40 telephone connections with
potential new customers via cold calls. According to Plaintiffs, participation in these contests
was mandatory for all employees in the Troy branch, regardless of job description or title, even if
the “contest” task was not within an employee’s regular duties, thereby taking time away from
meeting the category quotas. Further, while all employees accrued points for the contest
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 3
activities, their category quotas did not change simply because a contest was taking place. Thus,
if a contest required an employee to perform tasks outside her regular duties, she might have to
earn more than 100 points total in order to accrue enough points in each category to meet all her
quotas.
According to Plaintiffs, the quotas set by Randstad and enforced through the WPI system
were impossible to meet working only 40 hours per week. As a result, Plaintiffs regularly
worked significantly more than 40 hours per week, and Randstad managers were aware they did
so.
II. PROCEDURAL HISTORY
Perry, Lane, Dooling, and a fourth plaintiff, Suhaima Choudhury, filed this suit in March
2014. The one-count complaint seeks unpaid overtime and liquidated damages under the FLSA,
attorneys’ fees, costs, and a declaratory judgment that Randstad’s practices are unlawful.
Plaintiffs styled their complaint as a collective action, and sought to represent all similarly-
situated staffing employees who worked for Randstad in the three years prior to the
commencement of the lawsuit.
Randstad answered the complaint in May 2014, and the parties spent several months
engaging in discovery. Subsequently, Plaintiffs filed a motion for conditional class certification,
and Randstad filed a motion for summary judgment seeking the dismissal of all four named
plaintiffs’ claims. After a joint hearing on both motions, the district court granted summary
judgment to Randstad on the claims brought by Dooling, Lane, and Perry, but allowed
Choudhury’s claims to proceed. Based on Plaintiffs’ own testimony, the court found that
Dooling, Lane, and Perry exercised discretion and independent judgment, and therefore were
covered by the administrative exemption to the FLSA.1 The court also found that Randstad was
insulated from any liability because it relied, reasonably and in good faith, on an opinion letter
issued by the Department of Labor’s (DOL) Wage and Hour Division (WHD). Finally, the court
1
Choudhury’s claim was different from the other plaintiffs’. Choudhury was actually classified as non-
exempt, but alleged that Randstad ordered her not to record the overtime hours she actually worked.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 4
denied the certification motion on the merits as to Choudhury, and as moot as to the other
Plaintiffs.
Plaintiffs timely filed a Rule 60 motion for relief from the order granting summary
judgment. Plaintiffs argued that certain WPI-related reports produced by Randstad after
summary judgment was granted constituted new evidence sufficient to justify relief. Plaintiffs
reasoned the reports showed Randstad used the WPI to compare and evaluate employees, and
created a triable fact issue regarding how much discretion Plaintiffs had. The district court
denied the motion, concluding that ranking employees based on how many points they earn “is
not inconsistent with those employees using independent judgment and discretion in how they
complete their work.” (R. 104, PID 2416.)
Finally, after Choudhury’s claims were resolved by the parties and voluntarily dismissed,
the remaining parties stipulated to the entry of judgment. This appeal followed.
III. DISCUSSION
Plaintiffs contend the district court erred both in finding Randstad eligible for the good-
faith-reliance defense and in finding the FLSA’s administrative exemption applicable.2, 3
A. Standard of Review
We review the district court’s decision granting summary judgment de novo. Foster v.
Nationwide Mut. Ins. Co., 710 F.3d 640, 643 (6th Cir. 2013) (citations omitted). “Summary
judgment is appropriate if, examining the record and drawing all inferences in a light most
favorable to the non-moving party, there is no genuine issue as to any material fact and the
moving party is entitled to judgment as a matter of law.” Schaefer v. Ind. Mich. Power Co.,
358 F.3d 394, 399 (6th Cir. 2004).
2
Plaintiffs do not challenge the district court’s denial of their Rule 60 motion.
3
Below, Randstad also made arguments based on the statute of limitations and the executive, outside sales,
and combination exemptions, and challenged Plaintiffs’ entitlement to liquidated damages. The district court did not
address those issues, and neither party raises them on appeal.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 5
B. The Administrative Exemption
1. Applicable Law
The FLSA was enacted “to compensate those who labored in excess of the statutory
maximum number of hours for the wear and tear of extra work and to spread employment
through inducing employers to shorten hours because of the pressure of extra cost.” Bay Ridge
Operating Co. v. Aaron, 334 U.S. 446, 460 (1948). “Consistent with this goal, the [FLSA]
requires employers to pay their employees time-and-a-half for work performed in excess of forty
hours per week, but exempts ‘bona fide executive, administrative, or professional’ employees
from the overtime pay requirements.” Acs v. Detroit Edison Co., 444 F.3d 763, 764–65 (6th Cir.
2006) (quoting 29 U.S.C. § 213(a)(1); other citations omitted) (brackets and other internal
quotation marks removed). “Congress did not define these exemptions, but delegated authority
to the Department of Labor . . . to issue regulations to define and delimit these terms.” Foster,
710 F.3d at 642.
At all times relevant to this litigation, the operative regulation provided that an
“employee employed in a bona fide administrative capacity” is one who is:
(1) Compensated . . . at a rate of not less than $455 per week . . . ;
(2) Whose primary duty is the performance of office or non-manual work directly
related to the management or general business operations of the employer or the
employer’s customers; and
(3) Whose primary duty includes the exercise of discretion and independent
judgment with respect to matters of significance.
29 C.F.R. § 541.200(a);4 Foster, 710 F.3d at 642. “The exemption is to be narrowly construed
against the employer, and the employer bears the burden of proving each element by a
preponderance of the evidence.” Foster, 710 F.3d at 642 (citing Renfro v. Ind. Mich. Power Co.,
4
The text of subsection (a)(1) was slated to change on December 1, 2016, to read: “Compensated . . . at a
rate per week of not less than the 40th percentile of weekly earnings of full-time nonhourly workers in the lowest-
wage Census Region.” See Defining and Delimiting the Exemptions for Executive, Administrative, Professional,
Outside Sales and Computer Employees, 81 Fed. Reg. 32391, 32549 (May 23, 2016). The United States District
Court for the Eastern District of Texas has enjoined the DOL from implementing or enforcing that change, along
with certain other proposed changes to Chapter 541. Nevada v. U.S Dep’t of Labor, 218 F. Supp. 3d 520 (E.D. Tex.
2016). Neither the proposed change to 29 C.F.R. § 541.200(a)(1) nor the injunction has any effect on this case.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 6
497 F.3d 573, 575–77 (6th Cir. 2007) (Renfro II));5 see Auer v. Robbins, 519 U.S. 452, 462
(1997). Here, the parties agree that the first two elements are met. Further, Plaintiffs do not
argue that their duties did not involve “matters of significance.” Thus, the only issue is whether
Plaintiffs’ “primary dut[ies] include[d] the exercise of discretion and independent judgment.”
29 C.F.R. § 541.200(a)(3).
“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. § 541.202(a). Whether a particular
employee exercises discretion and independent judgment must be determined “in the light of all
the facts involved in the particular employment situation in which the question arises.” Id.§ 541.202(b).
Additionally, “[t]he exercise of discretion and independent judgment implies that the
employee has authority to make an independent choice, free from immediate direction or
supervision. However, employees can exercise discretion and independent judgment even if
their decisions or recommendations are reviewed at a higher level.” 29 C.F.R. § 541.202(c).
On the other hand, “[t]he exercise of discretion and independent judgment must be more than the
use of skill in applying well-established techniques, procedures or specific standards described in
manuals or other sources.” Id. § 541.202(e) (citing id. § 541.704); Foster, 710 F.3d at 646.
Finally, Plaintiffs’ “primary duties” are what matter for purposes of the administrative
exemption. 29 C.F.R. § 541.200(a)(3).
The term “primary duty” means the principal, main, major or most important duty
that the employee performs. Determination 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. Factors to consider when determining
the primary duty of an employee include, but are not limited to, the relative
importance of the exempt duties as compared with other types of duties; the
amount of time spent performing exempt work; the employee’s relative freedom
5
Some of our older opinions use the phrase “a preponderance of the clear and affirmative evidence.” See,
e.g., Renfro v. Ind. Mich. Power Co., 370 F.3d 512, 515 (6th Cir. 2004) (Renfro I) (emphasis added). We have since
clarified that the use of that phrase was not intended to, and did not “heighten [a defendant]’s evidentiary burden
when moving for summary judgment.” Renfro II, 497 F.3d at 576.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 7
from direct supervision; and the relationship between the employee’s salary and
the wages paid to other employees for the kind of nonexempt work performed by
the employee.
Id. § 541.700(a). Further,
The amount of time spent performing exempt work can be a useful guide in
determining whether exempt work is the primary duty of an employee. Thus,
employees who spend more than 50 percent of their time performing exempt work
will generally satisfy the primary duty requirement. Time alone, however, 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. 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.
Id. § 541.700(b).
2. Prior Precedent Related to Staffing Company Employees
We have not addressed the question whether staffing company employees such as
Plaintiffs fall within the administrative exemption. Nor, as best we can tell, has any other federal
Court of Appeals. Several district courts and the WHD have addressed the question, however.
First, by regulation:
Human resources managers who formulate, interpret or implement
employment policies . . . generally meet the duties requirements for the
administrative exemption. However, personnel clerks who ‘screen’ applicants to
obtain data regarding their minimum qualifications and fitness for employment
generally do not meet the duties requirements for the administrative exemption.
29 C.F.R. § 541.203(e).
Second, when applying the relevant regulatory provisions to staffing company
employees, the WHD and the courts have considered the specific facts of each case and more
often than not found that such employees exercise discretion and independent judgment.
In Andrade v. Aerotek, Inc., the plaintiff’s job titles were, successively, “Recruiter,”
“Recruiter II,” and “Account Recruiting Manager.” 700 F. Supp. 2d 738, 740–41 (D. Md. 2010).
The key aspects of the plaintiff’s duties were: (i) “[s]he did not screen solely for minimum
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 8
qualifications, but often sent candidates to her Account Managers whose personalities made
them a good fit, even when their qualifications were not as impressive as others;” (ii) she
“negotiated overall pay, holiday pay and vacation pay;” (iii) she “managed the contract
employees while on assignment, assessed and investigated contractor problems, and counseled
and disciplined contractors;” (iv) she “was not subject to immediate direction or supervision;”
and (v) she “was in charge of generating business” in certain areas from a particular client. Id. at
747–48. Citing those factors, and further reasoning that “[t]he fact that she would consider a
particular range when negotiating pay does not mean she did not exercise discretion,” the court
found that the plaintiff exercised discretion and independent judgment. Id. (citation omitted).
In Quintiliani v. Concentric Healthcare Solutions, LLC, the plaintiff was a “Staffing
Coordinator.” 944 F. Supp. 2d 738, 741 (D. Ariz. 2013). Her duties included managing client
relationships and “counseling and discipline of staff who did not comply with the client’s
policies or procedures.” Id. at 746–47. She was also responsible for “implement[ing] important
management policies and operating practices” and doing so “in a manner that would ensure that
the medical professionals placed with the clients were capable of producing good medical
services.” Id. For that reason, the court found that the plaintiff “exercised discretion and
independent judgment.” Id. at 747 (citation omitted); see also Gonzales v. Barrett Bus. Servs.,
Inc., No. CV-05-0104-EFS, 2006 WL 1582380, at *21 (E.D. Wash. June 6, 2006) (using FLSA
standards to interpret a parallel Washington statute and concluding an employee who performed
a range of recruitment, hiring, placement, and supervisory duties exercised discretion and
independent judgment); accord Hudkins v. Maxim Healthcare Servs., Inc., 39 F. Supp. 2d 1349,
1349 (M.D. Fla. 1998) (holding the administrative exemption applied to an employee who
recruited and placed nurses, but without analyzing discretion and independent judgment).
The WHD reached the same conclusion in its most recent relevant decision. In 2005, the
WHD was asked whether “Staffing Managers” at a particular “temporary staffing agency”
qualified for the administrative exemption. U.S. Dep’t of Labor, Wage & Hour Div., Opinion
Letter, 2005 WL 3308616, at *1 (Oct. 25, 2005) (the 2005 WHD Letter). The Staffing
Managers’ primary duties were to manage the function of providing temporary workers to the
company’s clients. Id. This involved: (i) evaluating what skills were needed; (ii) negotiating
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the terms for the placement and the fee to be paid; (iii) recruiting and selecting workers,
including evaluating recruits’ education, skills, and personality, not merely checking against
minimal requirements; (iv) recommending workers to clients; (v) negotiating the wages paid to
workers; (vi) supervising workers; and (vii) counseling and disciplining workers, including
transfers and terminations, if necessary. Id. The Staffing Managers “work[ed] under very little
supervision” and “ma[d]e decisions and accomplish[ed] their tasks without prior approval and
with broad range of discretion.” Id. They also decided whether advertising was necessary to fill
a position, “determine[d] where to place the advertisement,” and “negotiate[d] the costs of such
placement.” Id. at *2.
In analyzing these duties, WHD pointed to the contrast between human resource
managers (covered by the exemption) and personnel clerks (not covered), and concluded that the
Staffing Managers exercised the requisite discretion and independent judgment to qualify for the
administrative exemption because it was their job to: “recruit; interview; hire and recommend
placement of employees to particular assignments; manage the client’s temporary labor pool;
provide advice on personnel issues; handle complaints; resolve grievances; and terminate
employees on behalf of the client’s management.” Id. at *3 (citing 29 C.F.R. §§ 541.202(b),
541.203(e)); see also U.S. Dep’t of Labor, Wage & Hour Div., Opinion Letter, 1970 WL 26434,
at *1 (Aug. 11, 1970) (“Senior Employment Consultant” placing salaried professional workers
found to exercise requisite discretion and independent judgment, where he was “responsible for
making in depth interviews,” had “complete authority and sole responsibility” for deciding
which applicants to refer to clients, served as “primary liaison” with certain clients, and was
subject to less supervision than “other employment consultants”).
The only contrary case cited by Plaintiffs is Ogden v. CDI Corp., No. CV08-2180 PHX
DGC, 2010 WL 2662274 (D. Ariz. July 1, 2010). The plaintiff’s duties in Ogden were to:
(i) search for qualified individuals; (ii) determine whether a candidate’s background matched the
client’s requirements based on both subjective and objective factors; and (iii) determine the
candidate’s salary requirements. Id. at *3. The plaintiff would then “provide the resumes of
qualified candidates to his account manager,” who would “decide whether to present those
candidates to the client.” Id. If the account manager did so, and the client was interested, the
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 10
plaintiff would schedule an interview between candidate and client. Id. And if the client wanted
to hire the candidate, the plaintiff would call the candidate to make the offer. Id. However, there
was no evidence that the plaintiff “hired or fired candidates, made direct recommendations to
clients, or managed and disciplined candidates,” nor any evidence he had “formulated,
interpreted or implemented employment policies.” Id. at *3, *5 (quoting 29 C.F.R. § 541.203(e))
(brackets removed). On that basis, the court distinguished the 2005 WHD Letter, Andrade, and
other staffing-company cases, and found that the defendant had not shown the plaintiff was
covered by the administrative exception as a matter of law. Id. at *3–*5.
3. Facts
As the preceding discussion makes clear, determining what an employee’s primary duties
are and whether they are covered by the administrative exemption is a fact-intensive inquiry.
“We focus on evidence regarding the actual day-to-day activities of the employee rather than
more general job descriptions contained in resumes, position descriptions, and performance
evaluations.” Schaefer, 358 F.3d at 400 (citing Ale v. Tenn. Valley Auth., 269 F.3d 680, 688 (6th
Cir. 2001)). We therefore set out in detail the record evidence relevant to this issue.
a. Judith Perry
Perry was a Staffing Consultant from February 2012 to August 2013 and a Senior
Staffing Consultant from August 2013 to December 2013.6
i. Staffing Consultant Duties – February 2012 to August 2013
As a Staffing Consultant, Perry recruited for “temp, temp to perm, and permanent
positions” in office and administrative roles, such as receptionist, filing clerk, payroll,
administrative assistant, and call-center jobs. She testified:
6
Some documents in the record refer to Perry’s second job as “Staffing Manager.” Since the parties both
use the title “Senior Staffing Consultant” on appeal, we do as well.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 11
it’s sort of like your own business. You do everything from the beginning to the
end. So you bring in the new business, you handle existing business, you help
find the employees, you get them signed up and registered and on the payroll of
Randstad. And then you let them go or you -- whatever. It’s the whole gamut.
(R. 55-2, PID 605.)
Perry was required to earn an average of 100 points per week for completing various job-
related activities, e.g., making calls, opening a new account, making a placement. Perry was also
required to earn a certain number of points in particular categories, such as sales or recruiting.
As long as she met those targets, she could choose which tasks to perform on any given day. As
she put it:
[T]here was a choice of how you got your points, but you had to make sure that
you had so many points in new business development, so many points in existing,
in candidates, you know, in the recruiting. It was -- it was cafeteria style, but you
had to -- it was tight. I mean, you still had to get in certain categories.
(R. 67-6, PID 1518.)
From Perry’s perspective, her most important duty as a Staffing Consultant was “selling
Randstad services.” (Id. at 1520.) To do so, Perry would attend networking events, contact
existing clients, cold call prospective clients, and knock on doors. She sent out marketing
materials to clients pursuant to Randstad policies. She chose for herself which networking
events to attend. When it was time for a door-knocking “blitz,” however, branch management
would select an area and assign streets to each team member. For existing clients, Randstad
prescribed a schedule for when to reach out to them about potential vacancies; Perry was
expected to call each client within a day or two of the date set by Randstad. The process was the
same for prospective clients, except that Perry was also expected to use her own network and
initiative to add new prospects, and she assisted or mentored other employees in these
“prospecting” activities. New prospects had to fit certain criteria set by Randstad, but Perry
decided which prospects to add and whether to classify them as serious or secondary prospects.
Once a client agreed to have Randstad fill a vacancy, Perry was responsible for getting
the client to sign a written agreement. She then interviewed and presented candidates to the
client. This involved completing paperwork and sometimes arranging for drug tests. The client
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 12
then interviewed the recommended candidate(s), and once the client made a selection, Perry
would hire the candidate.
Randstad used template contracts with its clients. The default goal was for Randstad to
receive 160% of what it would pay the candidate (a 60% “mark-up”). If a client declined to pay
the 60% mark-up, Perry could negotiate down to 58%, but only with permission from
management. Perry was encouraged to negotiate for a mark-up above 60%.
As to recruiting, Perry’s responsibilities included “[f]inding talent, interviewing talent,
[and] hiring talent.” (Id. at 1531.) She attended job fairs, posted on and searched social media
and various careers-focused web sites, wrote job descriptions, and conducted interviews. Some
of this outreach was dictated by Randstad, while some was up to Perry, such as talking to her
own contacts. When writing a job description, Perry used Randstad’s resources to compile a list
of the skills necessary for a particular job. Randstad’s procedures were very rigid, and it was
Perry’s responsibility to translate the information about the job provided by the client into
Randstad’s required format.
When recruiting candidates, Perry was required to first post each position to Randstad’s
system, which broadcast it out to various external sources. If that did not produce sufficient
qualified candidates, Perry would manually search social media and career-focused web sites; it
was up to her to decide which resources to use. Separately, Perry would sometimes actively
recruit candidates with certain high-demand skills and then look for a client to place the
candidate with.
Once Perry identified a potential candidate for an open position, she would conduct a
phone screening. Phone screenings generally followed a script provided by Randstad, but Perry
could deviate to some extent based on the job in question. The purpose of the phone screenings
was both to confirm the candidate had the objective qualifications necessary for the job and to
determine if the candidate displayed proper phone etiquette. Perry made the decision whether a
candidate should receive an in-person interview.
In-person interviews followed an outline provided by Randstad. There were
predetermined questions to ask based on the skills needed for the job in question, to which Perry
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 13
could add, but not subtract. Perry also determined which skills tests to give a candidate, again
based on the client’s needs and Randstad’s large set of available tests. After an interview, it was
Perry’s decision whether a candidate met Randstad’s requirements. Perry had discretion in
evaluating subjective criteria like communications skills and whether a candidate made
appropriate eye contact.
As to placements, “Randstad was big on boss, company and culture fit.” (Id. at 1537.) In
addition to the information gained during the phone screening and interview process, Perry
considered a candidate’s work history, such as whether the candidate had previously worked in
the client’s industry or for companies of a similar size.
After a placement was made, Perry was responsible for “keeping the relationship going.”
(Id. at 1531.) For example, Perry “ma[de] sure the candidate was okay and happy and liking
what they were doing,” “ma[de] sure that they stayed at the positions they were in,” and, “[i]f
they called in sick, we had to field those calls and then alert the client that the candidate wasn’t
going to be there, but make sure that we had a back-up for them if they needed a back-up talent.”
(Id.) Randstad set a fixed schedule to follow in checking on new placements. If a placement
was not working out, Perry would address it:
We would coach them, find out what the problems were, what the issues were, if
the client -- first of all, we would have to find out from the client if they wanted to
keep the candidate. The talent. If they wanted us to replace them, we would have
to replace them. We would have to wait until the talent went home, and then call
them after they got home to let them know they weren’t going back the next day.
(Id. at 1538.) Perry further explained:
I would usually call the candidate, find out how it was going, how the job was
going, did they find -- were there any challenges that they were having. And then
I would get -- give them feedback and let them know this is what you need to do
to step it up, or this is what you need to do to improve, this is what you need to do
to -- you know, to keep your position.
(Id.)
Perry estimated that, as a Staffing Consultant, she spent two hours or more per day
“prospecting”—calling clients and prospective clients about potential openings. She spent about
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 14
an hour each day visiting clients and prospective clients in person. Perry spent about another
4.5 hours per month taking clients and prospective clients of her choosing out for meals. Perry
also spent 2–3 hours per month at networking events. It is not clear how the remainder of her
time was divided. Perry’s base hours were 9:00 a.m. to 5:00 p.m., but she could vary her hours
somewhat as long as she met the 100-point quota. In practice, Perry typically worked from
7:00 a.m. to 5:30 or 6:00 p.m., and ate lunch at her desk. She worked some Saturdays and
averaged 55 hours per week.
ii. Senior Staffing Consultant Duties – August 2013 to December 2013
Perry testified that her duties did not change when she was promoted to Senior Staffing
Consultant. She was expected to do more client visits than in her previous role, but she did not
spend more or less time on that task. Perry was also expected to generate more new clients each
month, so she spent more time prospecting, but she did not say how much more, nor did she say
whether that meant less time on other tasks, or whether she simply worked more hours in total.
Perry may have been given a new position description (which has not been identified in the
record by either side), but was not told of any change in her duties or in how her performance
would be reviewed.
b. Erin Lane
Lane was a Talent Acquisition Specialist from December 2011 to February 2012, an
Account Manager from February 2012 to August 2012, a Senior Account Manager from August
2012 to February 2013, and an Assistant Branch Manager from February 2013 to July 2014. Her
testimony about the 100-point quota was substantially the same as Perry’s.
i. Talent Acquisition Specialist Duties – December 2011 to February 2012
Lane began working for Today’s Office Professionals in April 2010 as a staffing
consultant. Her duties were “[t]o recruit candidates for temporary, temp to hire, and direct hire
positions,” to “[m]onitor weekly payroll,” to “[d]o hiring orientations,” and to “assist clients
and candidates and employees with any questions, concerns, problems, [and] pretty much be
there to be like a customer service representative for them.” (R. 36-6, PID 345.) Today’s Office
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 15
Professionals was purchased by Randstad in December 2011 or January 2012. Lane’s title
became Talent Acquisition Specialist.
Lane testified that after the switch to Randstad, she “did not have any sales expectations”
and had no responsibility for searching for new clients. (R. 67-7, PID 1556.) However, Lane
later testified that upper management expected Talent Acquisition Specialists to try to develop
sales leads for other employees to follow up on. Lane also testified that she did visit prospective
clients, because she “did not function as a true talent acquisition specialist” due to the difficulty
in fitting her existing duties into the Randstad hierarchy. (R 36-6, PID 346; R. 67-7, PID 1560.)
There is no evidence in the record as to how many hours, or what percentage of her time,
Lane spent on particular tasks as a Talent Acquisition Specialist.
ii. Account Manager Duties – February 2012 to August 2012
Lane was promoted to Account Manager in February 2012. She testified that “[i]t was
the same duties that I was doing in concept before.” (R. 67-7, PID 1559–60.) She “was still
recruiting and handling payroll, handling hiring paperwork[], interviewing, working with clients,
everything that I was used to doing . . .” (Id. 1560.) And she continued to visit prospective
clients.
Upon becoming an Account Manager, Lane worked with all of the branch’s clients. (Id.)
Later in 2012, Randstad divided the clients based on location and whether the client “was a
national account or a retail account.” (Id.) Lane testified that she “was given control over all
national accounts, which were our larger firms. I did still support a few retail accounts that I had
positive relationships with.” (Id.)
Lane testified that two of her duties were the most important: “to make sure that . . . our
clients had what they needed or were requesting from us, and . . . finding the best candidate for
[each] opening.” (Id.) Lane was presented with a job description for an Account Manager at her
deposition (which is not in the record), but testified that it did not match her actual
responsibilities. She explained that “it does not include that you were required to process
payroll, hire candidates and go through all of the hiring paperwork and training with them”—
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 16
tasks that were “quite frequent and time consuming.” (Id. at 1561.) Lane also testified that the
job description was inaccurate because her sales responsibilities focused “more within current
customers than new development.” (Id.) She called or emailed current clients about once per
week “to make sure that they were happy.” (Id. at 1562, 1574.) But since she already knew their
needs, there was little need to try to sell to them. As Lane put it: “We built relationships to
make sure that they were happy,” so that “when they had a need . . . we would get the business.”
(Id. at 1562.)
When one of Lane’s clients needed to fill a position, the client would either contact her
directly or via a Randstad database. If the position was highly-paid or not an administrative job
(e.g., warehouse laborer), Lane would refer it to another Randstad division. She “was . . .
tracked on how many orders [she] brought in from current customers.” (Id. at 1565.) Lane
wrote job descriptions independently, relying on her degree in human resources and publically
available resources. She also prepared standard job descriptions for use by other branch
employees. Lane worked collaboratively with other employees to determine the rate a worker
would be paid.
Lane’s description of the process for identifying candidates was similar to Perry’s (use of
social media and internet resources, phone screenings, in-person interviews). However, Lane
testified that it was her decision whether to post an available position through Randstad’s system
or to search for candidates in other ways. Regarding recommending candidates, Lane testified
that it was important to match candidates to clients: “If somebody was really, really bubbly, we
wouldn’t want to put them with a client that had a very calm and quiet environment. They
wouldn’t do well there.” (R. 55-3, PID 678.) Lane elaborated:
We had some [clients] that were very laid back, and you could wear jeans to work
every day . . . . Somebody that had a very corporate personality and needed
direction and didn’t have so much of a creative mind wouldn’t fit well there. So
we would look to place them at more of a corporate office. So we talked to them
in the interview about . . . what would your ideal workplace look like, what would
your ideal manager do . . . . Things of that nature to try and make sure we put
them in the best spot. Because many times we had . . . more than one position
open that they could fit for. And then it came down to environmental fit, because
that’s just as successful as to whether or not they can do the job.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 17
(Id. at 680–81.) Lane made the ultimate decision which candidate(s) to recommend to a client.
She was also part of a team that decided how much to bill clients, but she did not have ultimate
decision-making authority.
As to dealing with unsuccessful matches, Lane testified that it was her role to coach the
workers “at least once.” (Id. at 686.) If the problem continued, Lane employed warnings and
additional coaching. Normally, Lane had the authority to decide what intermediate steps to take.
(Id. at 688–89.) Sometimes, “something happened that justified immediate termination,” and
Lane would fire a worker. (Id. at 687.) Other times, the client made the final decision and Lane
carried it out. Lane advised clients on whether termination was appropriate. (Id. at 688.) She
was involved in coaching or firing someone “at least once a week.” (Id. at 689.) In a broad
sense, Lane was the intermediary between the client and the worker for all issues which might
arise.
Further, Lane continued to assist other Randstad in-house employees with new client or
prospective client visits, doing so about once per month. She would make three or four cold
calls to prospective clients per week, based on leads derived from her own network, “even
though that was not [her] job requirement.” (R. 67-7, PID 1571.) Lane also attended networking
events to promote Randstad and build the branch’s candidate pool. She attended these events
about once per quarter, and each event took two to three hours. Finally, Lane conducted annual
visits to each client to insure the workplace was safe according to prescribed criteria.
Lane had a “small” amount of flexibility to order her own work by deciding which tasks
to do when, “[a]s long as at the end of the week, [she] still had the hundred points and [she] had
met all expectations.” (Id. at 1574.) Aside from the information about networking events, there
is no evidence in the record regarding exactly how many hours, or what percentage of her time,
Lane spent on particular tasks as an Account Manager.
iii. Senior Account Manager Duties – August 2012 to February 2013
Lane was elevated to Senior Account Manager in February 2013. Her responsibility for
mentoring others increased, but otherwise her job duties did not change. There is no evidence in
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 18
the record regarding how much time Lane spent on her various duties as a Senior Account
Manager.
iv. Assistant Branch Manager Duties – February 2013 to July 2014
After being promoted to Assistant Branch Manager in February 2013, Lane had new,
additional duties. She “had authority to counsel employees internally.” (Id. at 1566.) She was
also responsible for handling “any escalated issue that one of my staff could not handle internally
or with a client or employee.” (Id.) Lane also had new reporting requirements, attended
managers’ meetings and conference calls, and traveled quarterly to Randstad’s Chicago office.
Additionally, she had increased responsibility for attending customer visits with the less-
experienced sales staff to support them. Although “[e]veryone in the branch reported directly to
[Lane],” and she participated in performance reviews and made recommendations about hiring
and firing, Lane did not have ultimate authority to hire or fire employees. (Id. at 1566–67.)
Despite those new duties, Lane was still expected to earn her 100 points per week, and
her individual performance metrics were “basically the same” as in her prior role. (Id. at 1569.)
However, she “was required to develop more new business,” including via cold calls. (Id.)
c. Aimee Dooling
Dooling was a Staffing Consultant from December 2011 to September 2012, an Account
Manager from October 2012 to August 2013, and a Senior Account Manager for a few weeks in
August 2013. Her testimony about the 100-point quota was substantially the same as Perry’s
testimony.
i. Staffing Consultant Duties – December 2011 to September 2012
As a Staffing Consultant, Dooling was “required to sell 50 percent of the time as well as
recruit 50 percent of the time.” (R. 67-2, PID 1462.) Selling meant “going out and finding new
business,” including “lots of phone calls, lots of cold-calling” and prospective client visits, if she
was able to set them up. (Id.) Dooling was also responsible for sending out “lots of marketing
material,” much of which Randstad required her to hand-address or add a personal note to. (Id.)
She was required to reach out to prospective clients in her assigned territory that met Randstad’s
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 19
criteria. She used Randstad’s database of potential contacts, and also conducted internet research
and did cold calls to add new prospective clients to the database herself. Dooling also knocked
on the doors of potential clients several times per month; when she did so, she would be away
from the office for approximately half a day. Dooling generally used a script provided by
Randstad to guide her cold calls and meetings with prospective clients.
If a prospective client was interested, Dooling would “send[] over contracts to solidify
that relationship with the new client” and “start recruiting for that client’s needs.” (Id.) To do
so, she would develop a “job order” based on the client’s requirements. (Id. at 1464.) Dooling
usually prepared job orders together with Lane, her supervisor. Dooling also negotiated the
worker’s pay and the billing rate to the client, although, again, “many times [she] did refer to
management on that as well.” (Id.) In negotiating, the range she could agree to was set by her
managers. (Id. at 1478.)
As for recruiting, Dooling described her duties as:
recruiting online, bringing candidates in for face-to-face interviews, completing
reference checks, doing what we called write-ups, so that is highlighting the
candidate’s skill sets and just bullet-pointing out maybe the skills that they have
that the client is looking for. Also assisting in their resume itself, maybe cleaning
it up, fixing grammatical errors, things of that nature. Preparing the candidate for
the interview, following up after the interview with the client as well as the
candidate. That also included occasionally phone interviews prior to a face-to-
face interview or maybe a second interview with another manager.
(Id. at 1462.) Dooling also communicated with candidates after their interviews and, if a
candidate was hired, handled the candidate’s entry-on-duty paperwork. Once a candidate was
placed with a client, Dooling followed up regularly with both the worker and the client to make
sure the placement was a success.
From Dooling’s point of view, “there wasn’t one activity that was more important over
another. All of your responsibilities were important.” (Id.) Rather, what mattered most “was
getting your hundred points.” (Id.)
Dooling typically started work between 7:00 and 7:30 a.m., and left between 6:00 and
7:00 p.m. She ate lunch at her desk. She occasionally worked weekends.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 20
ii. Account Manager and Senior Account Manager Duties – October 2012 to August 2013
Dooling was shifted from Staffing Consultant to Account Manager because she had
developed a strong relationship with a particular client, and her best skill was “farming . . .
current relationships” to get more business from existing clients. (Id. at 1466–67.) In her new
role, she was “no longer . . . calling for new business.” (Id. at 1467.) Otherwise, Dooling’s new
duties were “[v]ery similar” to her old duties. (Id.) She still went on client visits and called new
managers at her existing national-account clients. She also reached out to Randstad’s national
customers with locations in her territory that were not yet using Randstad’s services. Dooling
was still responsible for generating business, but she did so via “relationship building” rather
than cold calls. (Id. at 1468.) To that end, she sometimes took clients out for meals. Dooling
also inspected new clients’ workspaces for safety.
As an Account Manager, Dooling continued recruiting, conducting interviews, following
up with candidates, and following up with clients. To match candidates and clients, Dooling
focused on whether the candidate’s skills were “transferable . . . to [the new] role” and whether
the candidate “would be a good fit for [the client] or [the client’s] environment.” (Id. at 1473.)
She also used reference checks to find out whether a candidate’s past habits, such as punctuality,
would satisfy the client’s particular expectations. As Dooling explained:
It was important to know [the client’s] environment . . . the way the office was
r[u]n, the hierarchy of the office . . . . [T]hat was something that Randstad wanted
you to do, was really understand your client, really understand their needs. . . . It
was about really knowing your client and really being that true business partner so
that you could find that best fit for them, that true fit, so that they’re going to
come back to you.
(Id.) Randstad provided Dooling a list of questions to ask to help understand a client’s business.
Sometimes, Dooling also visited a client’s office to sit in on the client’s interview with a
recommended candidate.
Dooling also continued to monitor placements for success. She “would do roundtable
check-in . . . it was about things going on, like whether people maybe were showing up late or
their attire they were choosing was inappropriate.” (Id. at 1467.) She did “counseling, things of
that nature.” (Id.) If there was a problem, her goal was “[t]o have a peaceful ending,” and to
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 21
make both the client and the candidate happy. (Id. at 1481.) However, Dooling also “had to go
on site” if workers “needed to be fired.” (Id. at 1467.) For example, one worker got into an
argument with the client’s on-site manager and “us[ed] some suggestive language.” (Id. at
1477.) The client’s on-site manager made the decision to terminate the worker, and Dooling
carried out the firing. On other occasions, “there would be opportunities to counsel” a worker,
such as the time a worker reported to a job site “wearing stilettos and a low-cut shirt” that was
“just not appropriate for a work environment.” (Id.)
One change in the new role was that Dooling now also “did on-site meetings” with
clients that had concerns about their relationship with Randstad, or about issues in the news such
as the Affordable Care Act; sometimes Dooling was accompanied by a manager, sometimes she
went alone. (Id. at 1470–71.) Another change was that Dooling no longer negotiated her clients’
billing rates, as they were set on a national basis.
Finally, Dooling testified that her supervisors closely scrutinized all of her work, and
regularly reviewed her work plan for each day.
4. Analysis
a. Talent Acquisition Specialist
Lane worked as a Talent Acquisition Specialist from December 2011 to February 2012.
When asked at oral argument whether any Randstad employees are not covered by the
administrative exemption, Randstad’s counsel responded that its Talent Acquisition Specialists
are not exempt because they are only involved in “sourcing candidates” and checking candidates
against established criteria. (Oral Arg. at 16:20.) Because Randstad concedes Lane was not
covered by the administrative exemption during her time as a Talent Acquisition Specialist, we
need not analyze her duties during that period.7
7
Randstad says nothing about the duties of Talent Acquisition Specialists or Lane’s time in that role in its
brief to this court. Below, Randstad argued that Choudhury, a Talent Acquisition Specialist, was covered by the
administrative exemption because she also performed exempt work. Whether counsel intended to reverse that
stance at oral argument, or was speaking generally about all Talent Acquisition Specialists other than Choudhury is
immaterial. Either way, counsel’s concession covers Lane’s time as a Talent Acquisition Specialist.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 22
b. Account Manager/Senior Account Manager
Lane testified that she had more mentoring responsibilities after being promoted from
Account Manager to Senior Account Manager, but that her duties were otherwise unchanged.
And Randstad’s brief to this court does not distinguish between the two positions. We therefore
analyze them together.
To determine whether Lane and Dooling exercised discretion and independent judgment
such that they were covered by the administrative exemption during their time as Account
Managers, we must decide whether their “primary duty” was “the performance of exempt work.”
29 C.F.R. § 541.700(a); see id. § 541.202(a). This requires a totality-of-the-circumstances
analysis emphasizing “the character of the employee’s job as a whole,” informed by the non-
exclusive list of relevant factors identified by the DOL. See 29 C.F.R. § 541.700(a).
With that in mind, we agree with the district court that matching candidates to clients
based on fit—meaning subjective criteria such as the match between a candidate’s personality
and a client’s corporate culture—as opposed to objective criteria such as years of experience or
test scores, involves meaningful discretion and independent judgment. Andrade, 700 F. Supp. 2d
at 747; Quintiliani, 944 F. Supp. 2d at 746–47); 2005 WHD Letter at *1; (see R. 94, PID 2229).
So, too, does independently drafting job descriptions, deciding which recruitment tools to use,
negotiating how much to pay the worker and how much to bill the client (even without ultimate
decision-making authority), and counseling workers and otherwise dealing with unsuccessful
placements. Andrade, 700 F. Supp. 2d at 747–48; Quintiliani, 944 F. Supp. 2d at 746–47); 2005
WHD Letter at *1. These responsibilities involved “the comparison and the evaluation of
possible courses of conduct,” and reflect the authority “to interpret[] or implement management
policies or operating practices,” to “represent[] the company in handling complaints,” and “to
make . . . independent choice[s], free from immediate direction or supervision” with respect to
matching workers and clients. 29 C.F.R. § 541.202(a)-(c). Thus, during their time as Account
Managers, Lane’s and Dooling’s matchmaking tasks fit within the administrative exemption.
We next ask whether those exempt matchmaking tasks were Lane’s and Dooling’s
“primary dut[ies]” as Account Managers. See id. § 541.202(a). “[E]mployees who spend more
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 23
than 50 percent of their time performing exempt work will generally satisfy the primary duty
requirement.” See id. § 541.700(b). Randstad offers no evidence showing how much time Lane
and Dooling spent on exempt tasks. And Lane and Dooling both performed basic recruiting
tasks during their time as Account Managers, which Randstad acknowledged at oral argument
are non-exempt. (Oral Arg. at 16:20.) These tasks, such as handling payroll and processing
workers’ paperwork, were “quite frequent and time consuming.” (R. 67-7, PID 1561.) Given
the limited evidence presented, we cannot say that Lane and Dooling spent more than 50 percent
of their time on exempt tasks as Account Managers. See Schaefer, 358 F.3d at 400–01 (finding
summary judgment inappropriate, in part because the plaintiff’s testimony created a factual
dispute over whether he actually spent the majority of his time on exempt tasks).
That does not mean the administrative exemption is inapplicable, however. See
29 C.F.R. § 541.700(b). When asked at her deposition how important matching candidate to
client was, Lane answered: “I would say about 50 percent.” (R. 55-3, PID 684.) She also
testified that her two most important duties were: “to make sure that . . . our clients had what
they needed or were requesting from us, and . . . finding the best candidate for [each] opening.”
(R. 67-7, PID 1560.) Thus, while matchmaking may not have taken up the majority of Lane’s
and Dooling’s time as Account Managers, matchmaking tasks were their “principal, main, major
or most important duty.” 29 C.F.R. § 541.700(a). Further, Lane had at least some flexibility to
decide which tasks to do when, was given control over all national accounts, wrote her own job
descriptions, chose her own recruitment tools, made the ultimate decision as to which candidates
to recommend to her clients, and sometimes (but not always) fired workers without first
consulting with the client or a supervisor. Thus, as an Account Manager, Lane had “relative
freedom from direct supervision,” which supports the conclusion that the administrative
exemption applied. 29 C.F.R. § 541.700(a); see id. at § 541.202(c); Andrade, 700 F. Supp. 2d at747–48; 2005 WHD Letter at *1.
Dooling had less independence than Lane. For example, she was more closely
scrutinized by her supervisors, who regularly reviewed her work plan for each day. And there is
no evidence Dooling ever hired or fired a worker on her own authority, as opposed to in
consultation with a client or supervisor. However, “[t]he fact that an employee’s decision may
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 24
be subject to review . . . does not mean that the employee is not exercising discretion and
independent judgment.” 29 C.F.R. § 541.202(c).8
Thus, considering all of the relevant record evidence, we agree with the district court that
Lane’s and Dooling’s primary duties as Account Managers involved the exercise of sufficient
discretion and independent judgment such that the administrative exemption applied.
c. Staffing Consultant/Senior Staffing Consultant
We analyze Perry’s and Dooling’s work as Staffing Consultants together with Perry’s
work as a Senior Staffing Consultant because Perry’s promotion did not change the nature of her
duties, and because Randstad does not distinguish the two positions.
A Staffing Consultant’s duties, like an Account Manager’s, included a mix of exempt and
non-exempt recruitment and placement tasks. Staffing Consultants had the same sort of
8
It is true, as Judge Moore’s partial dissent argues, that Randstad constrained Plaintiffs’ discretion by
establishing a points system and requiring adherence to Randstad’s protocols and procedures. (Op. of Moore, J., at
34–36.) However, the fact that an employee’s discretion is “somewhat circumscribed by her district manager’s
supervision and [the employer]’s standardized operating procedures” does not make the exemption inapplicable.
Thomas v. Speedway SuperAmerica, LLC, 506 F.3d 496, 507 (6th Cir. 2007). And neither the points system nor the
protocols diminished Plaintiffs’ subjective decision-making authority in determining whether candidates possessed
sufficient communication skills or whether their personalities matched a client’s profile and needs. Based on
Plaintiffs’ subjective assessment of a candidate, Plaintiffs made the ultimate determination whether a candidate as a
whole was a good “boss, company and culture fit,” and whether to recommend the candidate to a client. Thus,
Plaintiffs’ discretion in assessing and recommending candidates was “free from immediate direction or supervision.”
29 C.F.R. § 541.202(c). The partial dissent also argues that Plaintiffs’ matchmaking duties fall outside of the
administrative exemption because “none of the Plaintiffs in this case had the authority to ‘formulate’ or even
‘interpret’ or ‘implement’ Randstad’s policies.” (Op. of Moore, J., at 34 (quoting 29 C.F.R. § 541.202(b)).)
However, Plaintiffs’ own testimony about the importance of subjective decision-making when recommending
candidates to clients indicates that matchmaking did involve interpreting and implementing Randstad’s policies.
Although the authority to formulate or deviate from policies may alone be sufficient to trigger the administrative
exemption, it is not a necessary requirement because the regulations provide examples of employees who qualify for
the exemption although they lack any apparent authority to formulate or deviate from policies. See, e.g., id.§ 541.203(b) (“Employees in the financial services industry generally meet the duties requirements for the
administrative exemption if their duties include work such as collecting and analyzing information regarding the
customer’s income, assets, investments or debts; determining which financial products best meet the customer’s
needs and financial circumstances; advising the customer regarding the advantages and disadvantages of different
financial products; and marketing, servicing or promoting the employer’s financial products.”); § 541.203(e)
(“‘[W]hen interviewing and screening functions are performed by the human resources manager or personnel
manager who makes the hiring decision or makes recommendations for hiring from the pool of qualified applicants,
such duties constitute exempt work . . . .”); § 541.203(f) (“Purchasing agents with authority to bind the company on
significant purchases generally meet the duties requirements for the administrative exemption . . . .”). Finally,
although Plaintiffs exercised less discretion than the Staffing Managers described in the 2005 WHD Letter, (see Op.
of Moore, J., at 36–37), they exercised significantly more discretion than the personnel clerks described in 29 C.F.R.
§ 541.203(e).
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 25
matchmaking responsibilities as Account Managers, but generally with less independence and
more supervision. As Perry testified, Staffing Consultants had at least some discretion to decide
which tasks to do when. Instead of writing her own job descriptions, however, Perry used
Randstad’s in-house resources and was required to follow rigid procedures so as to produce a job
description that tracked Randstad’s required format. Similarly, Perry was required to post all her
vacancies via Randstad’s internal system, which routed them to predetermined external web
sites, and it was only if that process failed to produce qualified candidates that she had discretion
to recruit independently. And while admittedly not dispositive for the reasons discussed, there is
no evidence that Perry had the authority to unilaterally fire an arranged worker.
Further, Perry testified that her most important duty as a Staffing Consultant was “selling
Randstad services,” not matching candidates to clients. (R. 67-6, PID 1520.) To that end, she
spent time reaching out to both existing and prospective clients. This involved sending out
marketing materials according to Randstad policies, making phone calls on a schedule set by the
company, and knocking on doors in specific areas and on specific streets assigned by branch
management. Perry was free to use her own network and initiative to identify new prospects, but
even then, those prospects had to fit criteria set by Randstad. Dooling gave similar testimony
about her sales duties during her time as a Staffing Consultant.
It appears that most of a Staffing Consultant’s sales responsibilities involved little more
than “use of skill in applying well-established techniques, procedures or specific standards”
prescribed by Randstad. 29 C.F.R. § 541.202(e). As related to sales, the record evidence does
not establish that Staffing Consultants had “authority to formulate, affect, interpret, or implement
management policies or operating practices,” and, accepting Plaintiffs’ testimony as true,
Staffing Consultants had little or no ability to “waive or deviate from established policies and
procedures without prior approval.” Id. § 541.202(b). Nor is there evidence they “carrie[d] out
major assignments” or “perform[ed] work that affect[ed] business operations to a substantial
degree.” Id. Considering “all the facts involved”—and appearing in the record—Staffing
Consultants’ sales activities were non-exempt. See id.
Judge Sutton’s partial dissent argues that Plaintiffs’ sales duties fall within the
administrative exemption because Plaintiffs “exercised considerable discretion in marketing
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 26
Randstad’s services within their assigned territories.” (Op. of Sutton, J., at 38.) The partial
dissent relies on two out-of-circuit cases, Schaefer-LaRose v. Eli Lilly & Co., 679 F.3d 560 (7th
Cir. 2012) and Smith v. Johnson & Johnson, 593 F.3d 280 (3d Cir. 2010), both involving
pharmaceutical sales representatives. The cases, however, are distinguishable because the
plaintiffs in Schaefer-LaRose and Smith had far more independence than Perry and Dooling had
as Staffing Consultants.
In Smith, the Third Circuit found that the administrative employee exemption applied to a
traveling pharmaceutical sales representative who used a high level of planning and foresight to
develop a strategic sales plan, and who performed her duties independently without direct
oversight, running “her own territory as she saw fit.” 593 F.3d at 285. Smith testified in her
deposition: “It was really up to me to run the territory the way I wanted to. And it was not a
micromanaged type of job. I had pretty much the ability to work it the way I wanted to work it.”
Id. at 282–83.
In Schaefer-LaRose, the Seventh Circuit concluded that the pharmaceutical sales
representatives at issue exercised independent judgment and discretion because the employer
trained them extensively in disease processes, [the employer’s] own assigned
products, and products manufactured by competitors; indeed they were tested in
their substantive knowledge. The level of attention given to substantive education
demonstrates that the company viewed these individuals as employees needing a
solid understanding of the message that they were delivering if they were to fulfill
their roles as the company’s representative to the community of practicing
physicians. A significant amount of discretion is no doubt required to determine
when the physician’s inquiry is sufficiently nuanced to require a response from a
more knowledgeable individual than the representative himself. The
representative who is unable to tailor the conversation to the time and
circumstances, or to engage the physician in an intelligent conversation, is
understandably not an effective representative to the professional community
whose estimation of the company is key to its success.
679 F.3d at 581. In fact, the plaintiff in Schaefer-LaRose “described herself as a ‘scientist,’
rather than a salesperson, because she was charged with ‘convey[ing] scientific information to
physicians about how and why [the employer’s] product is beneficial to patients.’” Id. at 568
n.16 (citation to record omitted). Moreover, before visiting a particular physician, a sales
representative would develop “a pre-call plan,” which could include reviewing the physician’s
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 27
prescribing practices, patient population, and similar information, to develop a strategy for a
conversation with the physician that would induce the physician to prescribe the employer’s
pharmaceutical products. Id. at 563–64.
Here, however, Plaintiffs’ discretion as Staffing Consultants was much more
circumscribed; in contrast to the representatives in Schaefer-LaRose and Smith, Perry and
Dooling fulfilled their sales duties by merely following Randstad’s well-established techniques
and procedures to meet the pre-determined quotas. The record is clear that Plaintiffs were able
to “run their territor[ies]” only as Randstad saw fit and did not have the authority to
independently “develop a strategic plan” to effectuate their duties. For instance, although Perry
sometimes knocked on prospective clients’ doors on her own initiative, she was also required to
participate in door-knocking “blitzes,” for which Randstad assigned her (and her colleagues) to
specific ZIP codes and streets. (R. 67-6, PID 1522.) Further, Perry was required to make
follow-up calls to prospective clients on the schedule prescribed by Randstad, and she could not
choose to deviate from Randstad’s commands in any meaningful way. Moreover, unlike the
representatives in Schaefer-LaRose, Plaintiffs’ task was merely to sell Randstad’s staffing
services, not to “convey scientific information” while navigating “federal law and . . . medical
ethics requirements” in a “tightly regulated industry.” 679 F.3d at 562–63, 568 n.16 (alteration
removed from first quotation).
Turning to the question of the Staffing Consultants’ primary duties, Dooling testified that
her non-exempt sales duties took up “50 percent of [her] time.” (R. 67-2, PID 1462.) She spent
the rest of her time on a mix of exempt and non-exempt recruiting and matchmaking duties.
Based on the estimates of time spent on various tasks Perry offered during her deposition, she
spent at least five hours per day on sales activities, perhaps more. The record is silent as to how
much time Dooling or Perry spent on exempt matchmaking activities as opposed to non-exempt
routine recruiting duties. Thus, as with Account Managers, we must draw the reasonable
inference that Staffing Consultants spent less than half their time on exempt tasks. See Schaefer,
358 F.3d at 400–01. This is significant because factors other than time do not compel the
conclusion that a Staffing Consultant’s “primary duty” was “the performance of exempt work.”
29 C.F.R. § 541.202(a)-(b). As discussed above, Staffing Consultants had relatively little
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 28
freedom from direct supervision, and Randstad makes no attempt to advance its case based on
“the relationship between [a Staffing Consultant]’s salary and the wages paid to other
employees,” such as Talent Acquisition Specialists, “for the kind of nonexempt work performed
by [Staffing Consultants].” Id. § 541.202(a).
For those reasons, a reasonable trier of fact could find that Perry’s and Dooling’s primary
duties during their time as Staffing Consultants were their non-exempt sales and routine
recruiting tasks, not their exempt matchmaking duties. See Schaefer, 358 F.3d at 405–06 (“To
the extent that [defendant] does point to some tasks that undisputedly require the exercise of
discretion, [defendant] has failed to establish the extent to which [plaintiff] completes these tasks
as part of his primary duty and thus fails to meet its burden.”). The district court thus erred in
granting summary judgment to Randstad as to Dooling’s and Perry’s time as Staffing
Consultants based on the administrative exemption.9
d. Assistant Branch Manager
When asked at oral argument whether any Randstad employees were covered by the
administrative exemption, Plaintiffs’ counsel acknowledged that employees who managed a
branch office were covered, and stated that Plaintiffs were “not pressing” the assertion that
Assistant Branch Managers fell outside the exemption. (Oral Arg. at 2:08.) We take that as a
concession that Lane was covered by the administrative exemption during her time as an
Assistant Branch Manager, from February 2013 to July 2014. And, to the extent counsel may
not have intended to concede this point, we have no trouble concluding that Lane’s
responsibilities as an Assistant Branch Manager—which included supervising everyone other
than the branch manager, counseling Randstad’s internal employees, participating in
performance reviews, dealing with problems her subordinates could not resolve, and at least
some exempt matchmaking duties, consisted primarily of exempt work.
9
We express no opinion on whether any other exemptions apply, as Randstad has not raised any other
exemptions on appeal.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 29
C. The Good-Faith Reliance Defense
Since Randstad is not entitled to summary judgment regarding Lane’s time as a Talent
Acquisition Specialist, Dooling’s time as a Staffing Consultant, or Perry’s time as a Staffing
Consultant and Senior Staffing Consultant, we turn to the applicability of the statutory good-faith
reliance defense.
The Portal-to-Portal Act of 1947 “protect[s] employers from liability if they took certain
actions on the basis of an interpretation of the law by a government agency, even if the agency’s
interpretation later turned out to be wrong.” Equal Emp’t Opportunity Comm’n v. Home Ins.
Co., 672 F.2d 252, 263 (2d Cir. 1982); see Fazekas v. Cleveland Clinic Found. Health Care
Ventures, Inc., 204 F.3d 673, 679 n.3 (6th Cir. 2000). The statute provides that:
no employer shall be subject to any liability or punishment for . . . failure of the
employer to pay minimum wages or overtime compensation under the [FLSA] . . .
if he pleads and proves that the act or omission complained of was in good faith in
conformity with and in reliance on any written administrative regulation, order,
ruling, approval, or interpretation, of [the Administrator of the WHD] . . . with
respect to the class of employers to which he belonged. Such a defense, if
established, shall be a bar to the action or proceeding, notwithstanding that after
such act or omission, such administrative regulation, order, ruling, approval,
interpretation, practice, or enforcement policy is modified or rescinded or is
determined by judicial authority to be invalid or of no legal effect.
29 U.S.C. § 259(a), (b)(1); see also 29 C.F.R. §§ 790.13-790.19 (defining key terms and giving
illustrative examples). Thus, the statute “provide[s] an affirmative defense to employers” who
comply with its terms and the “accompanying regulations.” Fazekas, 204 F.3d at 679 n.3. The
district court found the defense applicable here. We disagree.
1. “In Conformity With” and “Good Faith”
The operative administrative interpretation here is the 2005 WHD Letter.10 The 2005
WHD Letter is a qualifying written ruling by the Administrator. See id.; 29 C.F.R. § 790.17(d).
Further, Plaintiffs do not dispute that Randstad actually relied on the 2005 WHD Letter. The
10
The 2005 WHD Letter was relevant to our retrospective analysis of whether Plaintiffs were covered by
the administrative exemption. See Fazekas, 204 F.3d at 677–79. Whether Randstad can make out a valid defense
based on its prospective reliance on the 2005 WHD letter is a separate question.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 30
only open questions, then, are whether Randstad acted “in conformity with” the 2005 WHD
Letter and in “good faith.”
The DOL has published regulations interpreting those two statutory terms. 29 C.F.R.
§§ 790.14 (“in conformity with”), 790.15 (“good faith”). We have never directly addressed the
matter, however. The closest we have come is Marshall v. Baptist Hospital, Inc., 668 F.2d 234(6th Cir. 1981). In that case, we held that the employer hospital was protected by the good-faith
reliance defense because it reasonably relied on the portion of the WHD’s then-current Field
Operations Handbook that specifically stated student x-ray technicians were not “employees” for
purposes of the FLSA, rather than another, more general section, that stated medical training
programs would be evaluated on a case-by-case basis. Id. at 237–39.11 However, the instant
case does not involve conflicting guidance from the WHD, and Marshall does not speak directly
to the meanings of “in conformity with” and “in good faith.” Further, “[i]n the years following
Marshall, [we have] had little additional opportunity to construe . . . § 259(a).” See Schneider v.
City of Springfield, 102 F. Supp. 2d 827, 833 (S.D. Ohio 1999)).
Other courts, however, have considered both 29 U.S.C. § 259(a) and 29 C.F.R.
§§ 790.14-15, and concluded that the “in conformity with” and “good faith” requirements are
related, but distinct. See, e.g., Cole v. Farm Fresh Poultry, Inc., 824 F.2d 923, 926 (11th Cir.
1987). As to good faith, one well-reasoned opinion from within our circuit explained:
The good faith requirement contains both subjective and objective components.
The subjective component requires an employer to show that it had “honesty of
intention and no knowledge of circumstances which ought to put him upon
inquiry.” However, subjective good faith is not enough—the employer must also
satisfy an objective test. In other words, “good faith is not to be determined
merely from the actual state of [the employer’s] mind.” The employer must show
that it “acted as a reasonably prudent man would have acted under the same or
similar circumstances.”
Swigart v. Fifth Third Bank, 870 F. Supp. 2d 500, 510 (S.D. Ohio 2012) (quoting 29 C.F.R.
§ 790.15(a); other citation omitted) (alteration in Swigart). Succinctly put, “[g]ood faith requires
11
The handbook has since been revised, and now states that all paramedical training programs, including
those for x-ray technicians, should be evaluated on a case-by-case basis. U.S. Dep’t of Labor, Wage & Hour Div.,
Field Operations Handbook §§ 10b11, 10b14, https://www.dol.gov/whd/FOH/FOH_Ch10.pdf.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 31
that the employer have . . . no knowledge of circumstances which ought to put him upon
inquiry.” 29 C.F.R. § 790.15(a) (internal quotation marks and citations omitted).
As to conformity, “[a]n employer cannot avail itself of the defense unless it relied on a
DOL interpretation that specifically addresses its circumstances.” Swigart, 870 F. Supp. 2d. at
512 (citing Frank v. McQuigg, 950 F.2d 590, 597–98 (9th Cir. 1991)). “In other words, ‘[t]he
administrative interpretation relied upon must provide a clear answer to the particular situation in
order for the employer to rely on it.’” Id. (quoting Cole, 824 F.2d at 928 (alteration in Swigart);
see Bollinger v. Residential Capital, LLC, 863 F. Supp. 2d 1041, 1050–51 (W.D. Wash. 2012)
(collecting cases); Schneider, 102 F. Supp. 2d at 833 (same). Finally, “[i]f there is no
conformity, general good faith in other respects cannot save the day.” Swigart, F. Supp. 2d at
512 (quoting Home Ins. Co., 672 F.2d at 265).
2. Analysis
The parties focus their arguments on whether or to what extent Plaintiffs’ duties matched
those described in the 2005 WHD Letter. In doing so, they conflate two separate questions.
First, were the two sets of duties so similar that the 2005 WHD Letter “provide[d] a clear answer
to the particular situation” faced by Randstad when it decided how to classify Plaintiffs
(conformity)? Cole, 824 F.2d at 928. Second, did Randstad act reasonably, or did it have
“knowledge of circumstances” that should have prompted further inquiry before relying on the
2005 WHD Letter (good faith)? 29 C.F.R. § 790.15(a). Asking the proper questions reveals that
the district court erred.
Randstad’s reliance on the 2005 WHD Letter is shown through five letters from its
attorney, Alexander Passantino, all written between May 28 and July 16, 2010. Each letter
addresses the FLSA status of one group of Randstad employees: Staffing Consultants; Staffing
Managers; Account Managers; Senior Account Managers; and Assistant Branch Managers. And
each letter cites the 2005 WHD Letter in support of the conclusion that the employees in
question are covered by the administrative exemption. Further, James Ferguson, Randstad’s in-
house counsel, attested that he relied on the letters and the authorities cited therein, including the
2005 WHD Letter, in classifying Randstad’s employees.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 32
Randstad’s reliance was not “in conformity with” the 2005 WHD Letter because certain
“specified circumstances and facts” cited in the 2005 WHD Letter are absent, at least as to Talent
Acquisition Specialists and Staffing Consultants/Senior Staffing Consultants. See 29 C.F.R.
§ 790.14(b). For example, the employees covered by the 2005 WHD Letter had “full authority
to discipline, fire, promote and assign to various tasks the employees they supervise[d].”
2005 WHD Letter at *1 (emphasis added). In Randstad’s Troy office, Talent Acquisition
Specialists and Staffing Consultants/Senior Staffing Consultants were involved in those
decisions, and Staffing Consultants/Senior Staffing Consultants actively counseled
underperforming employees, but they did not have the ultimate authority to decide to fire an
employee. Also, the employees covered by the 2005 WHD Letter “work[ed] under very little
supervision” and acted “without prior approval.” 2005 WHD Letter at *1. That was not the case
for Talent Acquisition Specialists and Staffing Consultants/Senior Staffing Consultants. Thus,
the 2005 WHD Letter did not provide “a clear answer to the particular situation” faced by
Randstad in deciding how to classify its Talent Acquisition Specialists and Staffing
Consultants/Senior Staffing Consultants. See Cole, 824 F.2d at 928; Bollinger, 863 F. Supp. 2d
at 1052 (“partial overlap in duties” does not satisfy the “clear answer” requirement).
Additionally, Randstad has not shown its reliance was in “good faith” as a matter of law
because Randstad arguably had “knowledge of circumstances which ought to” have caused it to
inquire further. See 29 C.F.R. § 790.15(a). A recurring theme in Passantino’s letters is that
some Randstad employees will spend more time on sales activities than others, and that sales
activities are typically not covered by the administrative exemption. Randstad also knew that its
employees’ job duties “could vary significantly based on the clients serviced,” “the market,”
“who the branch manager is,” and “who the area vice president is for that particular region.”
(R. 55-6, PID 761.) For example, in the Troy office, mandatory participation in “contests”
sometimes required Plaintiffs to perform tasks outside of their usual responsibilities. Despite all
this, Randstad classified its employees on a nationwide basis. At minimum, then, there is a
factual question whether Randstad reasonably relied on the 2005 WHD Letter to classify
Plaintiffs as FLSA-exempt without conducting a review of their individual duties, or at least a
review of the duties of employees in the Troy, Michigan office or the relevant region. Swigart,
870 F. Supp. 2d at 511 (good-faith defense not proven as a matter of law in part because “there is
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 33
no evidence that Defendant made an attempt to communicate with its [employees] or their
supervisors to determine the [employees’] primary job duties or whether they were actually
performing the same job duties as the mortgage loan officers described in the [relevant WHD]
Opinion Letter”).
IV. CONCLUSION
For these reasons, we AFFIRM the district court’s grant of summary judgment to
Randstad as to: (1) Dooling’s claim arising out of her time as an Account Manager; (2) Lane’s
claims arising out of her time as an Account Manager and Senior Account Manager; and
(3) Lane’s claim arising out of her time an Assistant Branch Manager. We REVERSE the
district court’s grant of summary judgment as to: (1) Lane’s claim arising out of her time as a
Talent Acquisition Specialist; (2) Dooling’s claim arising out of her time as a Staffing
Consultant; and (3) Perry’s claims arising out of her time as a Staffing Consultant and a Senior
Staffing Consultant.12
12
We note that the district court did not address Randstad’s statute of limitations arguments below, and
Randstad made no statute of limitations arguments on appeal. We therefore express no opinion on the issue.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 34
______________________________________________________
CONCURRING IN PART AND DISSENTING IN PART
______________________________________________________
KAREN NELSON MOORE, Circuit Judge, concurring in part and dissenting in part.
I agree with the court that Plaintiffs’ sales duties fall outside of the administrative exemption, but
I disagree that their matchmaking duties fall within the exemption.
To fall within the administrative exemption, an employee’s primary duties must “include
the exercise of discretion and independent judgment with respect to matters of significance.”
29 C.F.R. § 541.202(a). “The phrase ‘discretion and independent judgment’ must be applied in
the light of all the facts involved in the particular employment situation in which the question
arises.” 29 C.F.R. § 541.202(b). Mindful that exemptions to the Fair Labor Standards Act “are
to be narrowly construed against the employers seeking to assert them,” Arnold v. Ben
Kanowsky, Inc., 361 U.S. 388, 392 (1960); see also Auer v. Robbins, 519 U.S. 452, 462 (1997),
this court must consider several “[f]actors . . . when determining whether an employee exercises
discretion and independent judgment with respect to matters of significance,” 29 C.F.R.
§ 541.202(b). “Federal courts generally find that employees who meet at least two or three of
these factors are exercising discretion and independent judgment, although a case-by-case
analysis is required.” 69 Fed. Reg. 22122, 22143 (Apr. 23, 2004). The three factors most
relevant to Plaintiffs’ duties at Randstad, and most likely to bring their matchmaking duties
within the administrative exemption, are “whether the employee has authority to formulate,
affect, interpret, or implement management policies or operating practices”; “whether the
employee has authority to waive or deviate from established policies and procedures without
prior approval”; and “whether the employee provides consultation or expert advice to
management.” 29 C.F.R. § 541.202(b). Analyzing these three factors, I conclude that Plaintiffs’
matchmaking duties do not fall within the administrative exemption.
First, none of the Plaintiffs in this case had the authority to “formulate” or even
“interpret” or “implement” Randstad’s policies. Id. Randstad constrained employees’ discretion
by establishing a points system requiring them to complete certain tasks to earn 100 points per
week. R. 67-6 (Perry Dep. at 270) (Page ID #1550). Randstad further constrained employees’
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 35
schedules by holding “contests” that required them to perform specific tasks at specific times.
Id. 271 (Page ID #1550); R. 67-7 (Lane Dep. at 92) (Page ID #1571). This rigid points system
meant that Plaintiffs performed company-assigned matchmaking tasks each week, rather than
deciding on their own how to find candidates and place them in appropriate jobs.
Beyond lacking authority to decide which tasks would help them achieve Randstad’s
matchmaking goals, or flexibility as to when to perform their assigned tasks, Plaintiffs also
lacked discretion over how to perform their assigned tasks. Randstad had specific requirements
for job descriptions, and an outline that employees had to follow when interviewing candidates.
R. 67-6 (Perry Dep. at 129, 144–45) (Page ID #1531, 1535); R. 67-2 (Dooling Dep. at 117–18)
(Page ID #1473–74). When screening candidates, Plaintiffs selected which candidates to
interview based on preset criteria, rather than their own assessment of whether the candidate was
a good fit for a particular position. R. 67-2 (Dooling Dep. at 132–33) (Page ID #1476); but see
R. 67-6 (Perry Dep. at 143, 152) (Page ID #1535–36) (explaining that she exercised some
judgment in deciding who to bring in for an interview, although the decisions were based on
predetermined criteria). Randstad also established a precise timeline for checking on new hires
to see how they were doing at their placements. R. 67-6 (Perry Dep. at 158–59) (Page ID
#1538); R. 67-7 (Lane Dep. at 149) (Page ID #1576). Plaintiffs did not interpret or implement,
let alone formulate, Randstad policies; they followed specific rules that they did not help create.
Second, Plaintiffs did not have the authority to deviate from established policies without
prior approval. For example, Randstad had a standard billing rate of 60%. R. 67-6 (Perry Dep.
at 119) (Page ID #1529). Plaintiffs could not agree to charge under 60% without prior approval
from their supervisors. Explaining the process of setting the billing rate, Perry made clear that
the rate “wasn’t up to [her].” Id. at 122 (Page ID #1530). Plaintiffs did not have the authority to
deviate from other Randstad policies, either.
Third, with one exception, Plaintiffs did not provide advice to management. Randstad
gave Plaintiffs formulas for how to advertise job openings, interview candidates, set a client’s
billing rate, and follow up after making a placement. Plaintiffs did not give management advice
or suggestions about these formulas, but simply followed them. The exception is Lane’s time as
an Assistant Branch Manager; in that capacity, Lane could “make recommendations regarding
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 36
the hiring and firing of employees at [her] branch” that would be “very well considered.” R. 67-
7 (Lane Dep. at 74) (Page ID #1567). But even when Lane was an Assistant Branch Manager,
she did not have full authority to hire and fire. And as an Assistant Branch Manager, Lane still
lacked discretion over decisions like the billing rate, and was still subject to the 100-point system
that told her how to allocate her time. Id. at 82, 110 (Page ID #1569, 1575). Plaintiffs largely
did not advise management, and none of them had any input about the policies, formulas, or
procedures they were required to follow. Considering these three factors as well as the other
enumerated factors that determine whether an employee exercises discretion and independent
judgment, see 29 C.F.R. § 541.202(b), I conclude that Plaintiffs’ matchmaking duties fall outside
the administrative exemption.
The Department of Labor’s Wage and Hour Division (WHD) letter about Staffing
Managers further convinces me that Plaintiffs’ matchmaking duties do not fall within the
administrative exemption. See U.S. Dep’t of Labor, Wage & Hour Div., Opinion Letter, 2005
WL 3308616, at *1 (Oct. 25, 2005) [hereinafter WHD Letter]. In concluding that certain
Staffing Mangers fall within the administrative exemption, the WHD Letter notes that the
Staffing Managers discussed in the letter “work under very little supervision” and “make
decisions and accomplish their tasks without prior approval.” Id. By contrast, Plaintiffs worked
within a 100-point system that told them which tasks to perform in a given week, from the
number of phone calls to make to the number of candidates to place in jobs. R. 67-6 (Perry Dep.
at 66) (Page ID #1518).
The Staffing Managers discussed in the letter “continue[d] to supervise the services of the
employee” “[o]nce the employee [was] placed” with a client, and they had “full authority to
discipline, fire, promote and assign to various tasks the employees they supervise.” WHD Letter
at *1. Here, however, although Plaintiffs communicated with companies and employees after
making a placement, they did not supervise the employees. They were intermediaries between
companies and new employees, rather than supervisors. R. 67-6 (Perry Dep. at 160–61) (Page
ID #1538).
The Staffing Managers discussed in the letter “decide[d] if advertising for the position is
needed to find certain candidates” and “negotiate[d] the costs of such placement.” WHD Letter
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 37
at *1. Here, however, Plaintiffs advertised for jobs at predetermined websites that they accessed
through Randstad’s portal. R. 67-6 (Perry Dep. at 132–34) (Page ID #1532–33).
Moreover, the letter specifically distinguishes Staffing Managers from “nonexempt . . .
personnel clerks who simply screen applicants to obtain data regarding qualifications and to
identify those who do not meet the minimum required standards.” WHD Letter at *3 (citing 29
C.F.R. § 541.203(e)). This description of personnel clerks is much closer to the duties of
Plaintiffs than the description of Staffing Managers.
The majority acknowledges the differences between the Staffing Managers discussed in
the WHD Letter and Plaintiffs’ positions, and even says that the differences are significant
enough that Randstad could not have relied in good faith on the WHD Letter. In my view, the
differences are so significant that the WHD Letter makes clear that Plaintiffs’ matchmaking
duties fall outside of the administrative exemption.
Therefore, I disagree with the court that Plaintiffs’ matchmaking duties fall within the
FLSA’s administrative exemption. I would reverse the district court’s judgment. Therefore, as
to the part of this court’s judgment affirming the district court’s grant of summary judgment,
I respectfully dissent.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 38
______________________________________________________
CONCURRING IN PART AND DISSENTING IN PART
______________________________________________________
SUTTON, Circuit Judge, concurring in part and dissenting in part. I agree with the court
that the plaintiffs’ match-making duties fall within the administrative exemption, but I cannot
agree that their sales duties do not.
The plaintiffs’ own testimony demonstrates that they exercised considerable discretion in
marketing Randstad’s services within their assigned territories. Perry testified that, as a staffing
consultant, she had to identify prospective new customers, classify those prospects as top or
secondary priorities, and select networking events to attend. Perry also selected prospective
clients to take out to meals, approximately “three times a month.” R. 67-6 at 14. When
marketing to existing clients, Perry would show them the resumes of job candidates she thought
might have “potential for a client” based on her knowledge of that client’s needs. Id. at 10. The
objective of all this on-your-own sales activity was to generate 1.5 new clients, and to check in
with 6 existing clients, each month. Dooling provided fewer details about her sales duties, but
her description of the job parallels Perry’s.
On these facts, the staffing consultants’ sales duties “include[d] the exercise of discretion
and independent judgment with respect to matters of significance.” 29 C.F.R. § 541.200(a)(3).
Case law shows as much. In Smith v. Johnson & Johnson, the Third Circuit held that a
pharmaceutical sales representative fell within the administrative exemption. 593 F.3d 280, 285
(3d Cir. 2010). Johnson & Johnson gave Smith a “target list” of doctors in her assigned territory
and required her to complete ten visits per day. Id. at 282. The list also identified “high-
priority” doctors, and Smith could choose to visit these doctors more often than the others. She
received a budget for those visits, which she could use to take doctors to lunch or to put on
seminars. Id. Because Smith decided for herself how to woo those high-priority customers, the
Third Circuit determined that Smith’s position required her to use discretion and independent
judgment to “form a strategic plan designed to maximize sales in her territory.” Id. at 285.
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 39
The Seventh Circuit followed suit in Schaefer-LaRose v. Eli Lilly & Co., 679 F.3d 560(7th Cir. 2012). The pharmaceutical sales representatives in that case received “specific call
plans identifying the physicians to be visited and the degree of frequency or priority category for
each physician,” but nonetheless applied “strategic analysis to their work, choosing to see
physicians not on their call plans or non-physicians who may influence prescribing patterns.” Id.
at 581; see also Reich v. John Alden Life Ins. Co., 126 F.3d 1, 13–14 (1st Cir. 1997) (holding that
insurance marketing representatives exercised discretion and independent judgment).
With respect, I am not persuaded by the court’s attempt to distinguish these cases. The
court points to the nature of the commodities being sold rather than how employees convinced
clients to buy them. Randstad’s employees, the court says, sold talent, not complex prescription
drugs in a highly regulated environment. But which way does that cut? For the pharmaceutical
sales representative, there may be a correct (if complicated) answer to how a drug dissipates in
the body after a subcutaneous injection. But for Randstad’s employees, there often will not be a
scientific answer to whether a particular candidate meets a client’s “intangible” staffing needs or
is a good fit for that company’s “culture.” Answering the former question requires flash cards;
answering the latter requires judgment.
The court suggests, alternatively, that Randstad’s employees exercised less discretion
because they were subject to greater supervision. If anything, the staffing consultants in this case
exercised more discretion because they identified and prioritized prospective clients on their
own, while the pharmaceutical representatives received prioritized lists of doctors from their
employers. For that reason, Randstad’s staffing consultants would still be exempt even under the
one opinion coming to a contrary conclusion on pharmaceutical sales representatives. See In re
Novartis Wage & Hour Litig., 611 F.3d 141, 157 (2d Cir. 2010), abrogated on other grounds by
Christopher v. SmithKline Beecham Corp., 567 U.S. 142 (2012).
That the staffing consultants considered criteria and followed timetables set by Randstad
does not eliminate discretion from this work. Most employers set business objectives and direct
employees to perform certain tasks as part of a job. But that says nothing about how an
employee goes about achieving those objectives or performing those tasks. The plaintiffs
considered Randstad’s criteria and followed its scheduling requirements when matching job
No. 16-1010 Perry, et al. v. Randstad Gen. Partner Page 40
candidates with clients, but that does not make those actions any less discretionary. The staffing
consultants made strategic sales decisions on their own, without interference from their
managers, even if those managers sometimes told them how to divide their time between sales
and recruiting.
It’s also true that the staffing consultants performed a number of non-discretionary tasks
as part of their sales duties, such as making cold calls, writing personal notes, and knocking on
businesses’ doors. But all administrative positions include some required legwork. The
pharmaceutical representatives spent substantial time driving and filling out paperwork, see
Smith, 593 F.3d at 283, but they qualified for the administrative exemption because that more
menial work served the “strategic [sales] plan” they developed using their independent judgment,
id. at 285. So too here.
For these reasons, I respectfully concur in part and dissent in part.