Opinion
Case No.: SACV 08-00371-CJC (RNBx).
June 1, 2009
ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
I. INTRODUCTION
Plaintiff Cherie Briner claims her former employer, Defendant Arbitration Forums, Inc. ("AFI"), violated California wage-and-hour laws by not paying overtime for her work as a field office manager and panel administrator. AFI moves for summary judgment on the basis that Ms. Briner is exempt from overtime because she falls under the administrative exemption to wage-and-hour laws. After carefully considering the undisputed evidence presented by the parties and the arguments of their counsel, the Court concludes Ms. Briner falls under the administrative exemption to California wage-and-hour laws. Accordingly, AFI's motion for summary judgment is GRANTED.
II. FACTUAL BACKGROUND
AFI is a non-profit corporation that provides volunteer arbitration for insurance-company disputes. (Def.'s Statement of Uncontroverted Facts and Conclusions of Law ("Def.'s Statement") ¶¶ 1, 4, 5.) Ms. Briner began her employment at AFI in 1992, working as a file processor for an hourly wage. ( Id. ¶ 8.) Her primary duties in that position were clerical. (Dep. of Cherie Briner, Jan. 22, 2009, ("Briner Dep.") at 18:10.) AFI promoted Ms. Briner to assistant field office manager in 1994 and field office manager in 1995, raising her salary to $33,400 a year and changing her to an exempt employee. (Def.'s Statement ¶ 8.) Ms. Briner's primary responsibilities in this position were scheduling and conducting arbitration proceedings. ( Id. ¶ 10.) In 1997, AFI changed Ms. Briner's job title to Panel Administrator. ( Id. ¶ 13.) In October, 1997, AFI promoted Ms. Briner to Panel Administrator II, raising her salary to $35,434.56. ( Id. ¶ 14.) In September, 2007, AFI terminated Ms. Briner for having a backlog of unresolved cases. At the time of her termination, Ms. Briner's salary was $48,036.25 annually, with five weeks of vacation time. ( Id. ¶ 23-24.)
Ms. Briner's 1997 job description lists several duties, including: (1) applying "seasoned knowledge of claims procedures to manage" AFI programs, (2) ensuring that the hearing process follows rules and procedures, (3) conducting on-site training sessions and roundtables, (4) assisting arbitrators in rule clarifications while maintaining neutrality, (5) ensuring adherence to AFI's quality review program; (6) recruiting and training arbitrators; (7) coordinating and managing hearing sites; (8) responding to post-decision customer inquiries; (9) adhering to expense and budget guidelines; and (10) supervising hearing officers. ( Id.) During her employment, Ms. Briner executed these duties. Ms. Briner estimates that she spent 40 to 50 percent of her time serving as a hearing officer, 30 percent of her time recruiting, training and testing new panelists, scheduling panelists for hearings, and assigning cases to panelists, 10 percent of her time performing customer service and conducting internal communications, and 5 percent of her time supervising hearing officers. ( Id. ¶ 18.) Ms. Briner would supervise hearings, providing quality control and feedback during the hearing process. ( Id. ¶ 33.) She also conducted "interps," after-hearing reviews of cases spurred by a party's dissatisfaction with the decision. (Briner Dep. at 74:11-75:23.) In her review, Ms. Briner would sometimes contact arbitrators and gather more information, and decide how to resolve the situation. ( Id.) Although most of the time arbitrators' decisions were final — even if Briner uncovered a mistake — specific mistakes such as errors in dollar amounts could be fixed. ( Id. at 76:18-77:7.) Ms. Briner performed her duties with a large degree of independence, working mainly from her home, remote from her supervisor, and generally communicating with her supervisor once or twice a week, via email. (Def.'s Statement ¶¶ 12, 19.) She saw her supervisor in person "once every couple of years." ( Id. ¶ 20.)
Ms. Briner also supervised a staff. In consultation with her supervisor, Ms. Briner determined that she needed assistance with the caseload in her area. (Briner Dep. at 55:7-10.) Ms. Briner recommended Terry Woo be hired for one of the hearing officer positions, and conducted an interview with him, and had input into his hiring. ( Id. at 54:4-21, 56:22.) Ms. Briner also interviewed, and then hired longtime friend Kathy Ronnig to perform clerical duties for Ms. Briner. (Def.'s Statement ¶ 16.) Ms. Briner directly supervised Ms. Ronnig, Mr. Woo, and a third employee, evaluating their job performance annually, and assigning them a rating which was used to determine their compensation for the next year. ( Id. ¶ 17.)
III. LEGAL STANDARD
Summary judgment is proper if the evidence before the Court "show[s] that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A factual issue is "genuine" when there is sufficient evidence such that a reasonable trier of fact could resolve the issue in the non-movant's favor, and an issue is "material" when its resolution might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party bears the initial burden of demonstrating that there are no genuine material issues, and that it is entitled to judgment as a matter of law. T. W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630-31 (9th Cir. 1987). Once this burden has been met, the party resisting the motion "must set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 256. In considering a motion for summary judgment, the court must examine all the evidence in the light most favorable to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962). The court does not make credibility determinations, nor does it weigh conflicting evidence. Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 456 (1992).
IV. ANALYSIS
It is clear that Ms. Briner is subject to the administrative exemption from California wage and hour laws. Her duties are not the rote tasks generally associated with hourly workers. She regularly exercised judgment and specialized knowledge as a field office manager, hearing officer, and panel administrator. She selected and trained members of her arbitration panel. She reviewed arbitration decisions for mistakes. She also hired and evaluated employees beneath her. She worked independent of supervision, following her own judgment, free from day-to-day direction.
Sections 510 and 511 of the California Labor Code set out the requirement to pay workers overtime. Cal. Labor Code §§ 510- 511. However, Cal. Labor Code § 515 provides that the Industrial Welfare Commission:
[M]ay establish exemptions from the requirement that an overtime rate of compensation be paid pursuant to Sections 510 and 511 for executive, administrative, and professional employees, provided that the employee is primarily engaged in the duties that meet the test of the exemption, customarily and regularly exercises discretion and independent judgment in performing those duties, and earns a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.
CAL. LABOR CODE § 515(a). California has also issued regulations clarifying the standard for the administrative exemption. The regulations state that:
A person employed in an administrative capacity means any employee:
(a) Whose duties and responsibilities involve either:
(I) The performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his employer's customers; or
(II) The performance of functions in the administration of a school system, or educational establishment or institution, or of a department or subdivision thereof, in work directly related to the academic instruction or training carried on therein; and
(b) Who customarily and regularly exercises discretion and independent judgment; and
(c) Who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity (as such terms are defined for purposes of this section); or
(d) Who performs under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or
(e) Who executes under only general supervision special assignments and tasks; and
(f) Who is primarily engaged in duties that meet the test of the exemption. The activities constituting exempt work and non-exempt work shall be construed in the same manner as such terms are construed in the following regulations under the Fair Labor Standards Act effective as of the date of this order: 29 C.F.R. Sections 541.201-205, 541.207-208, 541.210, and 541.215. Exempt work shall include, for example, all work that is directly and closely related to exempt work and work which is properly viewed as a means for carrying out exempt functions. The work actually performed by the employee during the course of the workweek must, first and foremost, be examined and the amount of time the employee spends on such work, together with the employer's realistic expectations and the realistic requirements of the job, shall be considered in determining whether the employee satisfies this requirement.
(g) Such employee must also earn a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment. Full-time employment is defined in California Labor Code Section 515(c) as 40 hours per week.
CAL. CODE REGS. Tit. 8 § 11040. Under the terms of these regulations, the Federal Fair Labor Standards Act and related authority are persuasive in interpreting California law in this area.
Ms. Briner's job duties and performance fit squarely within the administrative exemption as defined by California and federal statutes and regulations. Ms. Briner performed non-manual work that is directly related to management policies or general business operations of both AFI and its customers. "The phrase `directly related to the management or general business operations' refers to the type of work performed by the employee. To meet this requirement, an employee must perform work directly related to assisting with the running or servicing of the business, as distinguished, for example, from working on a manufacturing production line or selling a product in a retail or service establishment." 29 C.F.R. § 541.201. Such work includes quality control, personnel management, human resources and similar activities. Id. Ms. Briner hired employees, and supervised and evaluated three employees beneath her. (Def.'s Statement ¶¶ 16-17.) She selected, trained, and assigned work to outside arbitrators. ( Id. ¶¶ 29-30.) She supervised the arbitration sessions as they occurred, conducting on-the-spot quality control. ( Id. ¶ 33.) Ms. Briner also functioned as an after-the-fact quality control officer, conducting investigations of finished arbitration proceedings and occasionally correcting the decisions after discovering errors. (Briner Dep. at 74-77.)
Ms. Briner mistakenly argues that she was more involved in the production of AFI's product — arbitrations — than in the administration of its business. Ms. Briner cites Bell v. Farmers Insurance Exchange, a case in which a California appeals court held that insurance claims adjusters did not fall under the administrative exemption because their services — the processing and approval of claims — were the "products" provided by the insurance company. 87 Cal. App. 4th 805 (Cal. Ap. Ct. 2001). In Bell, the state appeals court observed that "the bulk of [plaintiffs'] time is involved in investigating and estimating claims, communicating with policy holders and third party claimants about the indemnity value of the claim, filling out numerous forms, performing various other clerical work, such as photocopying and matching mail to files, and with respect to field claims representatives, driving." Id. at 825-26. This work fell on the production side of the administrative/production dichotomy, as the workers in Bell were "ordinarily occupied in the routine of processing a large number of small claims," relegating them to the "routine and unimportant." Id. at 828.
Ms. Briner's work was neither routine nor unimportant. Rather, the supervisory work performed by Ms. Briner illustrates how her work qualifies for the administrative exemption. Courts have adopted the position that duties which might not be exempt are subject to exemption when supervisory functions are "infused" into the work. Perine v. ABF Freight Systems, Inc., 457 F. Supp.2d 1004, 1014 (C.D. Cal. 2006.) In Perine, a district court found that a dispatcher was exempt because in addition to dispatching vehicles, he also administrated the dispatch process. Id. at 1015-1016. ("Plaintiffs core function of assigning drivers to pickups likewise requires him to act in a supervisory capacity because he must consider whether to permit overtime pay and must conform his assignments to the Department of Transportation guidelines.").
This Court believes it is an open question whether California law would recognize the core dispatching function as exempt or non-exempt. However, Plaintiff's decisions regarding pickups were not limited to selecting the most efficient course of action. Rather, his decisions were bound up with his supervisory responsibilities. Every time a customer called for a pickup, Plaintiff's subsequent action had to reflect the company's policy of minimizing overtime pay and ensuring that driver would not be on the road beyond the ceiling imposed by the Department of Transportation. At best, Plaintiffs dispatching function was composed of a hybrid of exempt and non-exempt functions.Id. at 1014. Like the plaintiff in Perine, Ms. Briner was a supervisor, who monitored and trained both her subordinates and the volunteers who she assigned to arbitration proceedings. Her duties were not largely clerical, rather, she had a subordinate who she hired to perform clerical duties for her. (Def.'s Statement ¶ 16.) She also reviewed arbitrators' decisions to see if they "made sense." (Def.'s Statement ¶ 33.) These are not the tasks of a mere functionary. Rather, Ms. Briner had to plan sessions, had to give direction to her staff and volunteer arbitrators, and had to review their decisions. She essentially ran the arbitration business for her region. Her arbitrators were the producers, she was the administrator, and every arbitration-related duty she performed was infused with her supervisory duties.
The conditions and responsibilities of her employment also forced Ms. Briner to customarily and regularly exercise discretion and independent judgment and required her to perform under only general supervision, using specialized or technical experience, or knowledge. Ms. Briner worked from home almost totally free of supervision. She saw her supervisor approximately once every two years, she communicated with her supervisor only once or twice a week, and then only by e-mail. (Def.'s Statement ¶¶ 12, 19.) In fact, Ms. Briner considered herself to be "a totally independent panel administrator." (Briner Dep. 132:23.) Ms. Briner's job description called for "seasoned knowledge of claims procedures" in order to manage arbitrators and review cases. (Def.'s Statement ¶ 18.)
Finally, Ms. Briner's salary is equivalent "to no less than two (2) times the state minimum wage for full-time employment." In 2007, the yearly minimum wage would be $15,600. A salary twice the minimum wage would be $31,200 a year. Ms. Briner's salary was $48,036.25 annually, with five weeks of vacation time. ( Id. ¶ 23-24.) This is well within the exemption.
CONCLUSION
For the foregoing reasons, AFI's motion for summary judgment is GRANTED.