“This provision is often referred to in shorthand as the administrative exemption.”
How later courts described this case
- “This provision is often referred to in shorthand as the administrative exemption.”
Written by the judges who cited it.
The opinion
USCA11 Case: 20-13909 Date Filed: 04/01/2022 Page: 1 of 9
[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 20-13909
____________________
ALICIA BROWN,
Individually and on behalf of all others similarly situated
who consent to their inclusion in a Collective Action,
Plaintiff-Appellant,
TINA KHOURI,
Plaintiff,
versus
NEXUS BUSINESS SOLUTIONS, LLC,
Defendant-Appellee.
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2 Opinion of the Court 20-13909
____________________
Appeal from the United States District Court
for the Northern District of Georgia
D.C. Docket No. 1:17-cv-01679-ELR
____________________
Before WILLIAM PRYOR, Chief Judge, GRANT, and ANDERSON,
Circuit Judges.
GRANT, Circuit Judge:
The Fair Labor Standards Act generally requires employers
to pay their employees more for working over 40 hours per week.
29 U.S.C. § 207(a)(1). But it also contains exceptions. The overtime
provisions do not apply, for example, to employees working in “a
bona fide executive, administrative, or professional capacity.” Id.
§ 213(a)(1).
The plaintiffs here are “business development managers,”
tasked with persuading corporate customers to purchase General
Motors vehicles for their fleets. Because this task often requires
over 40 hours of effort per week, the employees argue that they are
entitled to overtime compensation. They are not. Because these
workers exercise discretion in the performance of business
development tasks, they fall within the administrative exemption
of the Fair Labor Standards Act. We therefore affirm the district
court’s grant of summary judgment to their employer below.
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20-13909 Opinion of the Court 3
I.
About nine years ago, General Motors launched “Operation
Conquest”—an initiative aimed at increasing business for its
dealerships and enlarging the market share of its vehicles. The plan
involved recruiting business development managers who would
“hunt and conquest [sic] commercial business from primary
automotive competitors” through “direct contact with prospective
conquest customers” who maintain mid-size fleets. In other
words, the new recruits specialized in finding new corporate
customers and persuading them to purchase GM vehicles.
Business development managers were told to “research and qualify
prospects, make customer presentations and transition sales
opportunities to GM dealers.” (Emphasis omitted). Each was
expected to be a “facilitator and liaison” between customers and
dealerships by developing “business leads and opportunities.” But
they had no authority to quote binding prices or close sales
themselves. Only authorized dealerships could do that.
Although General Motors provided data and resources for
the business development managers to use, it outsourced their
actual hiring to Nexus Business Solutions; all of that firm’s revenue
came from staffing Operation Conquest. Nexus also managed the
business development managers and evaluated them on a monthly
basis. The evaluation accounted for initial meetings, presentations,
new accounts resulting in a GM vehicle purchase, and vehicles
ordered by or delivered to customers. And because Nexus offered
bonuses for good results, it is no surprise that workweeks longer
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4 Opinion of the Court 20-13909
than 40 hours were common. Business development managers
were instructed that more time working would result in more
business—the message was that there was “no such thing as too
much.”
Perhaps chafing at this approach, a group of the employees
filed a collective action suit against Nexus, alleging overtime
violations of the Fair Labor Standards Act. In response, Nexus
asserted that the Act’s maximum hour provisions do not apply
because the business development managers are covered by
several statutory exemptions—namely those for administrative
employees, outside salespeople, and auto sales employees. Both
parties moved for summary judgment. The district court granted
Nexus’s motion, concluding that the business development
managers fell under the administrative exemption. 1 The
employees now appeal.
II.
We review an appeal from summary judgment de novo.
Scantland v. Jeffry Knight, Inc., 721 F.3d 1308, 1310 (11th Cir. 2013).
Summary judgment is proper “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled
1 The district court declined to decide whether the outside sales exemption
applied because it concluded that “genuine issues remain[ed] regarding several
material facts” necessary to making that determination. The court rejected
the argument that the auto sales exemption applied, and Nexus did not appeal
that issue.
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20-13909 Opinion of the Court 5
to judgment as a matter of law.” Id. (quoting Fed. R. Civ. P. 56(a)).
We view the evidence in the light most favorable to the
nonmoving party, and we draw “all justifiable inferences” in that
party’s favor. Id. (quotation omitted). Whether an exemption of
the Fair Labor Standards Act applies is “a matter of affirmative
defense on which the employer has the burden of proof.” Corning
Glass Works v. Brennan, 417 U.S. 188, 196–97 (1974).
III.
Under the Fair Labor Standards Act, employees who work
over 40 hours per week are generally entitled to time-and-a-half
compensation for overtime. 29 U.S.C. § 207(a)(1). But not all
workers qualify—the statute exempts employees working in “a
bona fide executive, administrative, or professional capacity.” Id.
§ 213(a)(1). This provision is often referred to in shorthand as the
administrative exemption.
To decide who falls within this exemption, the Department
of Labor uses a three-pronged test. An employee is an
administrative worker if (1) her salary exceeds the minimum
established by the regulation, (2) she mainly performs “office or
non-manual work directly related to the management or general
business operations of the employer” or its customers, and (3) her
“primary duty includes the exercise of discretion and independent
judgment with respect to matters of significance.” 29 C.F.R.
§ 541.200(a). The employees do not dispute that the first two
prongs are satisfied here. But they argue that their jobs do not
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6 Opinion of the Court 20-13909
satisfy the third—the requirement that they exercise discretion and
independent judgment with respect to matters of significance.
To be sure, many jobs do not. Only those employees who
engage in “the comparison and the evaluation of possible courses
of conduct, and acting or making a decision after the various
possibilities have been considered,” make the cut. Id. § 541.202(a).
Whether an employee exercises the required level of discretion is
ultimately a holistic determination, but several factors guide the
inquiry. Id. § 541.202(b). Employees that satisfy the discretion
prong of the test have the “authority to make an independent
choice, free from immediate direction or supervision,” even
though their choices may still be subject to review, revision, or
reversal. Id. § 541.202(c). The work must involve “more than the
use of skill in applying well-established techniques, procedures or
specific standards described in manuals or other sources”; it cannot
be “mechanical, repetitive, recurrent or routine.” Id. § 541.202(e).
And finally, the work must relate to “matters of significance,”
which “refers to the level of importance or consequence of the
work performed.” Id. § 541.202(a).
The employees argue that their work for Nexus was too
restricted and repetitive to allow for meaningful discretion. They
describe their jobs as asking “pre-determined questions,” following
“literal scripts,” “regurgitat[ing]” pre-approved phrases, and using
“canned presentation materials” with little or no deviation on their
part. (Emphasis omitted). Though they “made minor, ad hoc
decisions about the minutiae of how they would pursue an
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20-13909 Opinion of the Court 7
individual potential customer” and “minor adjustments” along the
way, the employees argue, these choices had a de minimis effect
on their performance.
We are not persuaded. A worker need not have “limitless
discretion” or a total lack of supervision to qualify as an
administrative employee. Hogan v. Allstate Ins. Co., 361 F.3d 621,
627 (11th Cir. 2004). And as the district court observed, the
employees here “had a hand in choosing which leads to develop,
performed customized research before meeting with selected
leads, and delivered presentations that necessarily required some
amount of customization.” In their own words, the “primary role”
of the business development managers is to “develop business
leads and opportunities for the dealerships.” Each business
development manager acts as a “‘facilitator and liaison’ between
the customer and the dealerships,” and the focus of the job is
“developing those new relationships and bringing them to the
dealer.” Business development managers, it seems, are tasked with
building relationships and developing leads—enterprises that
require creative thinking and tailoring to each individual customer.
In carrying its burden to show that the administrative
exemption applies, Nexus points to ample record evidence that
business development managers exercised discretion in their job
pursuits. One employee testified that even though he was given a
particular set of steps to follow, he would choose to go “out of
order” so he could do “whatever would be best for the customer,
whatever is easiest for them, whatever is going to minimize the
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8 Opinion of the Court 20-13909
barriers of entry.” The employees offered testimony affirming the
need to “discern” the needs of corporate customers, provide
“customized” presentations, and “specifically depict information to
the client based on their understanding.” That flexibility is part of
the business model; the Fleet Training Guide for business
development managers invites each one to “[d]ecide for yourself
and for each presentation” how best to deal with questions that
arise and to “[a]nticipate questions in advance and prepare
responses” before speaking with potential customers.
In a bid to escape the administrative exemption, the
employees contend that even if they do have some level of
discretion, it is limited and does not apply to “matters of
significance.” Citing cases from district courts in other circuits,
they assert that “an exercise of discretion that impacts or affects a
matter of significance is not exercising discretion with respect to a
matter of significance.” See Ahle v. Veracity Rsch. Co., 738 F.
Supp. 2d 896, 908 (D. Minn. 2010); see also Calderon v. GEICO
Gen. Ins. Co., 917 F. Supp. 2d 428, 442 (D. Md. 2012).
That strained distinction is not found in the law of this
Circuit, and it does not match up with these facts in any event.
Exercising discretion over how to secure new customers for
General Motors is undoubtedly a “matter of significance” from the
perspective of Nexus, whose entire business model is supplying
employees for GM’s Operation Conquest program. The discretion
exercised by business development managers goes straight to the
heart of GM customer recruitment efforts—and straight to the core
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20-13909 Opinion of the Court 9
service that Nexus provides. In contrast, jobs where an employee’s
discretion lacks the necessary connection to “matters of
significance” generally affect an employer’s operations less directly;
examples include messengers carrying money or operators of
expensive equipment. 29 C.F.R. § 541.202(f). Those workers
perform only relatively routine tasks—a far cry from the day-to-day
exercise of business judgment required here. The business
development managers’ attempt to fit themselves into the shoes of
these other workers cannot succeed. It simply does not work.
In short, the business development managers in this case are
covered by the administrative exemption in the Fair Labor
Standards Act. We therefore need not address the issue of whether
they also fall within the outside sales exemption, and we AFFIRM
the district court’s grant of summary judgment.