Opinion
Civil No. 2:99CV0011C
September 19, 2000.
ORDER
This is an action for overtime pay brought under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 207, 216. The case was tried without a jury on May 9-11, 2000, after which the court took the matter under advisement.
The court has reviewed the evidence received, and considered the arguments of counsel and the applicable law. Pursuant to Federal Rule of Procedure 52, the court now enters its findings of fact and conclusions of law.
Background
Plaintiff Don Gubler was the Human Resource Representative at the Defendant Phillips Petroleum Company's ("Phillip's") Woods Cross Refinery ("Woods Cross" or "the plant") when he left the company in October 1998. He began his non-union employment in human resources for Phillips in 1994 as a nonexempt employee and was moved into an exempt position in February 1996. Mr. Gubler claims that his classification as an exempt employee in February 1996 was in error and that he is entitled to an average of six hours a week overtime from February 1996 through October 1998. In support of that claim, he argues that ninety-five percent of his functions were routine and clerical in nature and did not require the exercise of discretion or independent judgment.
In response, Phillips asserts that Mr. Gubler was the key administrative employee for all human resource functions at Woods Cross and that he was properly classified as an exempt employee from 1996 through 1998. Phillips contends that the Woods Cross management relied on Mr. Gubler for all labor union relations, including interpretation and administration of the contract between Phillips and the labor union. Phillips further claims that Mr. Gubler's duties were directly related to the management policies and business operations of Woods Cross and included the exercise of discretion and independent judgment.
Findings of Facts
Phillips initially hired Mr. Gubler in 1980 as an operations employee, a bargaining unit position in which the Oil, Chemical and Atomic Workers Union represented him. While a bargaining unit employee, Mr. Gubler returned to school and received a Masters of Human Resource Management from the University of Utah Business School in 1990. In September 1994, Mr. Gubler applied for and was selected as the Human Resources Assistant, a nonbargaining unit position. Mr. Gubler was classified as a nonexempt employee and was paid $3300 a month ($19.00 per hour).
On December 6, 1995, Mr. Joe Frana, the Woods Cross Finance Manager and Mr. Gubler's immediate supervisor, prepared a memorandum outlining the human resource responsibilities to be performed at Woods Cross and the areas in which Woods Cross personnel would need corporate support or additional training. This memorandum was prepared in response to organizational changes that had resulted in additional assignments to the Woods Cross plant. The memorandum indicates that Mr. Gubler would continue to be assigned full-time to human resources and would also be given some additional responsibilities.
On February 1, 1996, Mr. Gubler was promoted to Human Resource Representative and classified as exempt. Mr. Gubler did not receive overtime pay once he was promoted to Human Resource Representative. Once he was classified as exempt, neither Phillips nor Mr. Gubler kept records of the hours he worked, although Mr. Gubler recorded vacation and other paid leave. Mr. Gubler knew he was classified as an exempt employee and that he would not receive overtime pay. Although Mr. Frana estimated that he initially spent more than 20% of his time working with Mr. Gubler, as Mr. Frana became more comfortable with Mr. Gubler's performance, Mr. Frana spent far less time supervising the human resource functions, perhaps 10%.
In February 1999, Steven Piotter took over Mr. Frana's position as Administrative Services Manager and Mr. Gubler's supervisor. Mr. Piotter had never worked in human relations before coming to the Phillips facility at Woods Cross. When Mr. Piotter arrived at Woods Cross, he received very little training from Mr. Frana in human resources. Mr. Piotter described the training given him by Mr. Frana:
In the human resources areas, you know, we went over what some of my major responsibilities would be; mainly those of the oversight. Joe [Franna] told me that Don Gubler was, you know, very proficient in all those areas. He'd be able to handle all those areas with minimal oversight, so we did cover many of those areas.
(May 11, 2000 Tr. at 39.)
Although Mr. Piotter was Mr. Gubler's supervisor, Mr. Piotter gave Mr. Gubler minimal supervision. According to Mr. Piotter, "He [Mr. Gubler] knew his job very well. He required very little supervision from my point." (Id. at 57.)
Mr. Gubler was the only employee at Woods Cross dedicated full-time to human resources and he was involved in essentially all human resource matters at the plant. Mr. Gubler was involved in a variety of traditional human resource functions, including local administration of employee benefits, the Employee Assistance Program, employee evaluations, drug-testing, payroll and scheduling. In a job evaluation completed by Mr. Gruber in June of 1997, Mr. Gruber described his "major areas of responsibility" as "all human resource functions." (Team Excellence Plan at 14, Def.'s Ex. M.)
While employed as the Human Resource Representative, Mr. Gubler obtained additional professional training in human resources, including courses that enabled him to obtain a Certificate in Management and Human Resources from Utah State University in 1997.
On one occasion, Mr. Gubler was notified that one of the employees had tested positive for a controlled substance. Although Mr. Gubler notified Mr. Piotter of the positive results, Mr. Gubler conducted a meeting with the employee and the union representative and, in the words of Mr. Piotter, "basically handled the discipline." (May 11, 2000 Tr. at 44.)
Mr. Gubler also played a key role in hiring decisions. In a memorandum dated May 1, 1998, Mr. Gubler described the hiring process at the Woods Cross plant, which was a three-step procedure: first, application solicitation; second, testing; and third, interviewing. Mr. Gubler described his role in the interviewing: "I am solely responsible for selecting the candidates for interview. . . . I also select the interview panel. . . . Taking the panels [sic] recommendations into consideration I recommend to the Business Unit Manager the candidate(s) I thing [sic] should be hired." (Memo. dated May 1, 1998, Def.'s Ex. H.)
In a letter to an investigator from the Office of Federal Contract Compliance Programs, in connection with an investigation of the Woods Cross plant, Mr. Gubler wrote "I have presided over the hiring at this facility for the last five years and if I am guilty of anything it is of reverse discrimination. I have afforded the members of protected groups every possible advantage and opportunity in the hiring process." (Letter from Don Gubler to Ms. Gomez dated Oct. 1, 1998, Def.'s Ex. P.)
Perhaps the most important of Mr. Gubler's responsibilities were those connected to labor relations. The Woods Cross plant employed both union and nonunion employees. A collective bargaining contract ("the contract") between the Oil, Chemical and Atomic Workers Union and the management of the Woods Cross plant governed the work hours, work activities, lines of progression, and pay rates of the union employees. Mark Haney, General Manager of the Woods Cross Business Unit from 1995 until 1998, described Mr. Gubler's importance in labor relations at the Woods Cross Plant:
Don was a very valuable member of our team in that he had tremendous knowledge of the current contract, which was — governed the labor pool's activities, and he also had a significant amount of history with the plant and knew all of the past practices, past activities, the spirit and intent of which the contracts were derived, and knew the people quite well, and was a very valuable resource to us to help us manage any abnormalities or any new activities that may arise surrounding the labor relations issues in the Woods Cross refinery.
(May 10, 2000 Tr. at 138.)
Mr. Gubler had a number of significant responsibilities in the area of labor relations. He was involved in the initial negotiations for the current contract. He participated in the negotiations of the 12-hour shift agreement, a modification to the shift provisions of the contract. He dealt directly with the union on this issue and obtained information from other Phillips locations as well as from other local refineries to assist in those discussions. Mr. Gubler was asked to analyze the options from a scheduling perspective, to consider the benefits and detriments of various schedules, and to work with the union on this issue. Based on the conversations between union representatives and management representatives on the committee, Mr. Gubler drafted the Addendum to the 12-hour shift agreement that addressed specific local issues. Mr. Gubler attended workman's committee meetings, monthly meetings between union representatives and company representatives during which a variety of contract issues were often discussed.
Mr. Gubler also had considerable input in deciding whether a grievance by a union employee would be granted or denied. The grievance procedure consisted of three steps. First, if an employee believed that there had been a violation of the contract, such as a failure to designate a particular employee for overtime work, he could make an oral grievance with the employee's supervisor. Second, if the employee disagreed with the supervisor's response, the employee could make a written request to the supervisor for a written response. Third, if an employee was not satisfied by the supervisor's written response, the employee could seek arbitration of the complaint with the National Mediation and Arbitration Service.
Various supervisors frequently asked Mr. Gubler for advice on how they should respond to the oral grievances. When the grievance had passed to the second stage, Mr. Gubler was responsible for preparing the written response: Mr. Gubler would gather the relevant facts, review the contract, and draft a response for Mark Haney, the plant manager, to review. Sometimes Mr. Haney signed the draft response without making any changes, othertimes Mr. Haney would make changes and return the response to Mr. Gubler for revision.
When the subject of pending grievances was raised at workman's committee meetings, Mr. Gubler frequently expressed his opinion on how the grievance should be resolved. Other members of the committee looked to Mr. Gubler for guidance in the area of grievances.
Jamie Bateman, a nonexempt employee who was paid just slightly more than half of what Mr. Gubler was paid when he left the company, assisted Mr. Gubler in performing the human resource duties at Woods Cross. Ms. Bateman did not work exclusively in human resources; she was also an assistant to the plant manager. Ms. Bateman was not involved in contract interpretation issues or grievances from union employees and she did not participate in the monthly workman's committee meetings. The "back-up" for Mr. Gubler on those functions was his supervisor, Mr. Frana or Mr. Piotter.
It was Mr. Gubler's position at trial, and throughout this lawsuit, that he rarely, if ever, exercised any discretion or independent judgment in his job responsibilities and that at least 95% of his responsibilities were routine, clerical tasks. However, substantial credible evidence in the case does not support Mr. Gubler's position. For example, although Mr. Gubler described his participation at the monthly workman's meetings as limited to taking the minutes, in reality Mr. Gubler's role in the meetings was much more significant. Before the workman's meetings, Mr. Gubler attended the "pre-meetings" with management. At the pre-meetings, Mr. Gubler informed management of the pending human resource issues and concerns that had been expressed by the union representatives. During the workman's meetings, if questions of interpretation of the contract arose, Mr. Gubler was asked for his opinion.
Similarly, Mr. Gubler's responsibility in preparing the work schedules was not simply a routine clerical task. Scheduling required knowledge of the contract so that, for example, Mr. Gubler would know which employees to schedule for upgrades, or for overtime. And even though it was Mr. Gubler's contention that Ms. Bateman was "cross-trained" in scheduling and could perform it in Mr. Gubler's absence, when Mr. Gubler left Phillips, Ms. Bateman was not able to prepare the schedules without the assistance of Mr. Piotta and other supervisors.
Conclusions of Law
The court has jurisdiction over this action under 28 U.S.C. § 1331. The parties agree that venue is proper here.
The FLSA generally requires that an employer pay its employees additional compensation for working more than forty hours in a week. See generally 29 U.S.C. § 207(a). However, an employee "employed in a bona fide executive, administrative or professional capacity" is exempt from the overtime provisions. 29 U.S.C. § 213(a)(1). Phillips claims that Mr. Gubler fell within the administrative exemption. It is Phillips' burden to prove that the administrative exception applies "plainly and unmistakenly." Reich v. State of Wyoming, 993 F.2d 739, 741 (10th Cir. 1993) (internal citations omitted). "Exemptions to the FLSA are to be narrowly construed. . . ." Id.
The Secretary of Labor has issued regulations to provide guidance in determining whether an employee is employed in an administrative capacity. Because Mr. Gubler earned more than $250 a week while employed as the Human Resources Representative, the "short test" found in these regulations applies. Under the short test, an employee qualifies for the administrative exception if his "primary duty consists of the performance of [office or nonmanual work directly related to management policies or general business operations of his employer or his employer's customers], which includes work requiring the exercise of discretion and independent judgment. . . ." 29 C.F.R. § 541.2(e)(2) (incorporating 29 C.F.R. § 541.2(a)(1)).
The regulations make clear that the amount of time an employee spends on administrative tasks is significant in determining an employee's primary duty. As "a good rule of thumb . . . primary duty means the major part, or over 50 percent, of the employee's time." 29 C.F.R. § 541.103. It is unclear how much time Mr. Gubler actually spent on administrative tasks. As discussed above, Mr. Gubler's testimony that he spent 95% of his time on clerical tasks was not credible in light of other witnesses' testimony and the documentary evidence that demonstrated that many of Mr. Gubler's responsibilities involved significant decision-making responsibilities and duties that were plainly not clerical. Furthermore, it appeared that many of the tasks Mr. Gubler categorized as clerical were not.
While significant, time is but one factor that must be considered. See Reich, 993 F.2d at 742. In deciding what an employee's primary duty is, a court should also consider:
[T]he relative importance of the duties, the frequency with which the employee exercises discretion, and the relative freedom from supervision are all relevant considerations. The employee's primary duty is that which is of principal importance to the employer, rather than collateral tasks which may take up more than fifty percent of his or her time.
Id. (internal citations omitted). The evidence demonstrated that Mr. Gubler's responsibilities in labor relations was of principal importance to the management of Woods Cross. It was also clear that Mr. Gubler was a key member of the Woods Cross administrative staff and responsible for the human resource functions. He handled, with part-time assistance from Ms. Bateman, all the human resource responsibilities of the plant. He required and received little supervision in carrying out his duties. These duties were Mr. Gubler's primary duties and they were directly related to the management policies and business operations of Woods Cross.
Mr. Gubler regularly exercised discretion and independent judgment in carrying out his duties. His responsibilities in labor relations required that he make significant decisions about the interpretation of the contract, validity of grievances, and the interaction between the union and nonunion factions at Woods Cross; he participated in meetings held between union representatives and management; he took part in negotiating the contract and drafting an amendment to the contract; he made decisions related to hiring and disciplining employees.
Although Mr. Gruber's discretion was not without limits, and his decisions were subject to review, the definitions of "discretion and independent judgment" in the regulations do not require that an employee make final decisions:
The term "discretion and independent judgment" as used in the regulations . . . does not necessarily imply that the decisions made by the employee must have a finality that goes with unlimited authority and a complete absence of review. The decisions made as a result of the exercise of discretion and independent judgment may consist of recommendations for action rather than the actual taking of action. The fact that an employee's decision may be subject to review and that upon occasion the decisions are revised or reversed after review does not mean that the employee is not exercising discretion and independent judgment. . . .
29 C.F.R. § 541.207(e).
In sum, Mr. Gubler's primary duties were not routine, clerical tasks, but were duties that directly related to the management policies and general business administration of Phillips. In carrying out his primary duties, Mr. Gubler was required to exercise discretion and independent judgment. Accordingly, Phillips has met its burden of proving that Mr. Gubler plainly and unmistakably falls with the administrative exemption and that he was properly classified as an exempt employee under the FLSA.
Judgment is granted to the Defendant Phillips Petroleum Company.