Petition for Writ of Certiorari — Ackerman v. Coca-Cola Enterprises, Inc.

Coun, Us

No. Dir

IN THE

SUPREME COURT OF THE UNITED STATES

Richard Ackerman, Timothy Booker, Erich Butler, Michael

Dickson, Edward Donahoe, Michael Fabian, Steven Jones, Mark

Mares, Robert Moon, James Mueller, Dana Roe, Kim Smith,

Paul Spielman, Alan Tamondong, and Brad Velliquette,

individually.

Petitioners,

Vu

Coca-Cola Enterprises, Inc., a Delaware Corporation in good

standing and licensed to do business 1n Colorado,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

GARY L. MCPHERSON, ESQ. BRANDON P. HULL, ESQ

PTARMIGAN PLACE, SUITE 900 625 E. 16™ AVE. SUITE 100

3773 CHERRY CREEK DRIVE N. DENVER, CO 80203

DENVER, CO 80209 (303) 860-2848

(303) 320-6100

COUNSEL OF RECORD Attorneys for Petitioners

QUESTIONS PRESENTED FOR REVIEW

The Tenth Circuit Court of Appeal’s ruling that

Petitioners were exempt from the Fair Labor Standards Act

under the “outside salesman” exemption guts the intent and

spirit of the Fair Labor Standards Act and the regulations

interpreting the Act. Petitioners present the following questions

for consideration:

od

Whether 65% of an employee’s duties can be

incidental to, and in conjunction with, his

primary job_ responsibilities thereby

exempting him from the overtime

requirements of the Fair Labor Standards

Act.

Whether the Tenth Circuit’s interpretation of

the Department of Labor’s regulations

rendered the regulations arbitrary, capricious

or manifestly contrary to the intent of the Fair

Labor Standards Act.

Whether the Respondent met it’s burden of

proof demonstrating that the Petitioners are

exempt from the overtime requirements of the

Fair Labor Standards Act.

)

;

TABLE OF CONTENTS

QUESTIONS PRESEN GRE 05 bc cies chess accisises i

TABLE OF CONG iui cesar ieee esas li, 11

TABLE OF AUTRGGIRBeerie oo 08 beer ae cea etka ss iv

STATUTES. ....<c06.caum eee es Vv

OPINIONS BELOW sadn ce ce ee eee eek |

JURISDICTION . ... ik ince ee ee es os 3 |

CONSTITUTIONAL AND STATUTORY

PROVISIONS EN VGIR WIR a aoa re es essa 2

STATEMENT OF "Viltes Gye oa pe ea eae 10

ARGUMENT FOR GRANTING THE WRIT .......... 1]

ARGUMENT I

Forty-six hours per week of an employees duties

can not be incidental to, and in conjunction with,

his primary job_ responsibilities thereby

exempting him from the overtime requirements

of the Fair Labor Standards Act ................ 12

il

ARGUMENT 2

The Tenth Circuit's interpretation of — the

Department of Labor's regulations rendered the

regulations arbitrary, capricious or manifestly

contrary to the intent of the Fair Labor Standards

UDG CN dale a wae aac de bake heen s 16

ARGUMENT 3

The Respondent failed to meet it’s burden of

proof demonstrating that the Petitioners are

exempt from the overtime requirements of the

go gf . eee reer eee eee reer 20

ee Ea a a eee 20

APPENDIX

APPENDIX A

Tenth Circuit Opinion, June, 10 1999 ......... A-| to A-19

APPENDIX B

District Court Opinion and Judgment dated

January 27, 1997 and District Court Opinion

Amended Judgment, June 23, 1997 ........... B-! to B-38

APPENDIX C

U.S. Court of Appeal Order denying

Motion for Reconsideration, August 3, 1999... .. C-1 to C-2

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— ore

TABLE OF AUTHORITIES

Cases

Building & Construction Trades’ Dep‘t v. Donovan,

FERd Pade OE OEE Ge. FOG ok ce cewe caress 17

Donovan v. Sovereign Sec., Ltd..,

pf he Me Pe Oe. | | ee 17

Smiley v. CITIBANK,

eT Me Fe Pe CRE sg Sac ex aed degen ens Wak 18

Chevron U.S.A., Inc. v. Natural Resources Defense Council,

Inc.,

ee ONE 6 ayn oil vn deeds noeecaaws 18

Kmart Corp. v. Cartier, Inc..,

rs en OO COED gv ck cc awesseaasn 18

Chotin Transp. Inc. v. United States,

819 F.2d 1342, 1355 (6" Cir. 1986) (concurrence) . 19

Payne v. Panama Canal Co.,

ee Be Tad ee 19

Virgin Islands v. Berry,

G6 F.2d 221, 225 65" Cie. 19D) oo. ec ceca 19

Hodgson v. Klages Coal and Ice Co..,

435 F.26 377, 56206 CW, F9TOD ws onc oe bens 20

iV

STATUTES

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Dee a sk eee cw oho keeen ck. passim

Paar I oe cae eo ek ole ec ck 4.14

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PP ee TD 6 oid ae ok Rend hak wee ceecny 15, 16

Ps I sk hk vo a he Raa Reha k mek 16

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OPINIONS BELOW

y

The opinion of the United States Court of Appeals for

the Tenth Circuit is reported at 179 F. 3d 1260 (10" Cir. 1999).

A copy of the Opinion is attached in the Appendix at Appendix

A. The following judgements were appealed to the United

States Court of Appeals for the Tenth Circuit by the Respondent:

Memorandum Opinion and Judgement of January 27, 1997 and

Memorandum Opinion and Judgement of June 23, 1997. A

copy of the District Court Opinions and Judgements are also

attached in the Appendix at Appendix B. A copy of the United

States Court of Appeals for the Tenth Circuit Order filed August

3, 1999 is attached as Exhibit C.

JURISDICTION

The United States Court of Appeals for the Tenth Circuit

issued its opinion on June 10, 1999. On June 25, 1999,

Appellees file a Motion for Reconsideration. This Motion was

denied on August 3, 1999. This Petition for Writ of Certiorari

is filed timely and is within ninety (90) days of the Tenth

Circuit's opinion. This Court's jurisdiction is invoked pursuant

to 29 U.S.C. §201 et. seq. since this is a Federal Question.

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

Short title

29 U.S.C. §201 et. seq.

This Act may be cited as the "Fair Labor Standards Act

of 1938."

Congressional finding and declaration of policy

29 U.S.C. §202(a)

(a) The Congress hereby finds that the existence, in

industries engaged in commerce or in the production of goods

for commerce, of labor conditions detrimental to the

maintenance of the minimum standard of living necessary for

health, efficiency, and general well-being of workers ( 1) causes

commerce and the channels and instrumentalities of commerce

to be used to spread and perpetuate such labor conditions among

the workers of the several States; (2) burdens commerce and the

free flow of goods in commerce; (3) constitutes an unfair

method of competition in commerce; (4) leads to labor disputes

burdening and obstructing commerce and the free flow of goods

in commerce: and (5) interferes with the orderly and fair

marketing of goods in commerce. That Congress further finds

that the employment of persons in domestic service in

households affects commerce.

Exemptions

29 U.S.C. §213(a)C1)

(a) Minimum wage and maximum hour requirements.

tJ

The provisions of sections 6 (except section 6(d) in the case of

paragraph (1) of this subsection) and 7 [29 USCS §§ 206, 207]

shall not apply with respect to—

(1) any employee employed in a bona fide executive,

administrative, or professional capacity (including any employee

employed in the capacity of academic administrative personnel

or teacher in elementary or secondary schools), or in the capacity

of outside salesman (as such terms are defined aad delimited

from time to time by regulations of the Secretary, subject to the

provisions of the Administrative Procedure Act except than

[that] an employee of a retail or service establishment shall not

be exciuded from the definition of employee employed in a bona

fide executive or administrative capacity because of the number

of hours in his workweek which he devotes to activities not

directly or closely related to the performance of executive or

administrative activities, if less than 40 per centum of his hours

worked in the workweek are devoted to such activities).

Outside Salesman

29 C.F.R. §541.5

The term employee * * * in the capacity of outside

salesman in section 13(a)(1) of the Act shall mean any

employee:

(a) Who is employed for the purpose of and who is

customarily and regularly engaged away from his employer's

place or places of business in:

(1) Making sales within the meaning of section 3(k) of

the Act, or

(2) Obtaining orders or contracts for services or for the

use of facilities for which a consideration will be paid by the

client or customer: and

(b) Whose hours of work of a nature other than that

described in paragraph (a)(1) or (2) of this section do not exceed

20 percent of the hours worked in the workweek by nonexempt

employees of the employer: Provided, that work performed

incidental to and in conjunction with the employee's own

outside sales or solicitations, including incidental deliveries and

collections, shall not be regarded as nonexempt work.

Incidental to and in conjunction with sales work.

29 C.F.R. §541.503

Work performed "incidental to and in conjunction with

the employee's own outside sales or solicitation” includes not

only incidental deliveries and collections which are specifically

mentioned in 541.5(b), but also any other work performed by the

employee in furthering his own sales efforts. Work performed

incidental to and in conjunction with the employee's own outside

sales or solicitations would include, among other things, the

writing of his sales reports, the revision of his own catalog, the

planning of his itinerary and attendance at sales conferences.

Promotion Work

29 C.F.R. §541.504

(a) Promotion work is one type of activity often

performed by persons who make sales, which may or may not be

4.

exempt work, depending upon the circumstances under which it

is performed. Promotion men are not exempt as "outside

salesmen." (This discussion relates solely to the exemption

under 541.5, dealing with outside salesmen. Promotion men who

receive the required salary and otherwise qualify may be exempt

as administrative employees.) However, any promotional work

which is actually performed incidental to and in conjunction

with an employee's own outside sales or solicitations is clearly

exempt work. On the other hand, promotional work which is

incidental to sales made, or to be made, by someone else cannot

be considered as exempt work. Many persons are engaged in

certain combinations of sales and promotional work or in certain

types of promotional work having some of the characteristics of

sales work while lacking others. The types of work involved

include activities in borderline areas in which it is difficult to

determine whether the work is sales or promotional. Where the

work is promotional in nature it is sometimes difficult to

determine whether it is incidental to the employee's own sales

work.

(b)(1) Typically, the problems presented involve

distribution through jobbers (who employ their own salesmen)

or through central warehouses of chainstore organizations or

cooperative retail buying associations. A manufacturer's

representative in such cases visits the retailer, either alone or

accompanied by the jobber's salesman. In some instances the

manufacturer's representative may sell directly to the retailer; in

others, he may urge the retailer to buy from the jobber.

(2) This manufacturer's representative may perform

various types of promotional activities such as putting up

displays and posters, removing damaged or spoiled stock from

au.

the merchant's shelves or rearranging the merchandise. Such

persons can be considered salesmen only if they are actually

employed for the purpose of and are engaged in making sales or

contracts. To the extent that they are engaged in promotional

activities designed to stimulate sales which will be made by

someone else the work must be considered nonexempt. With

such variations in the methods of selling and promoting sales

each case must be decided upon its facts. In borderline cases the

test is whether the person is actually engaged in activities

directed toward the consummation of his own sales, at least to

the extent of obtaining a commitment to buy from the person to

whom he is selling. If his efforts are directed toward stimulating

the sales of his company generally rather than the consummation

of his own specific sales his activities are not exempt. Incidental

promotional activities may be tested by whether they are

“performed incidental to and in conjunction with the employee's

own outside sales or solicitations” or whether they are incidental

to sales which will be made by someone else.

(cL) A few illustrations of typical situations will be of

assistance in determining whether a particular type of work ts

exempt or nonexempt under 541.5. One situation involves a

manufacturer's representative who visits the retailer for the

purpose of obtaining orders for his employer's product, but

transmits any orders he obtains to the local jobber to be filled. In

such a case the employee is performing sales work regardless of

the fact that the order is filled by the jobber rather than directly

by his own employer. The sale in this instance has been

“consummated” in the sense that the salesman has obtained a

commitment trom the customer.

(2) Another typical situation involves facts similar to

those described in the preceding illustration with the difference

that the jobber's salesman accompanies the representative of the

company whose product is being sold. The order in this instance

is taken by the jobber's salesman after the manufacturer's

representative has done the preliminary work which may include

arranging the stock, putting up a display or poster, and talking to

the retailer for the purpose of getting him to place the order for

the product with the jobber's salesman. In this instance the sale

is consummated by the jobber's salesman. The work performed

by the manufacturer's representative is not incidental to sales

made by himself and is not exempt work. Moreover, even if in

a particular instance the sale is consummated by the

manufacturer's representative it is necessary to examine the

nature of the work performed by the representative to determine

whether his promotional activities are directed toward paving

the way for his own present and future sales, or whether they are

intended to stimulate the present and future sales of the jobber's

salesman. If his work is related to his own sales it would be

considered exempt work, while if it is directed toward

stimulating sales by the jobber's representative it must be

considered nonexempt work.

(3) Another type of situation involves representatives

employed by utility companies engaged in furnishing gas or

electricity to consumers. In a sense these representatives are

employed for the purpose of "selling" the consumer an increased

volume of the product of the utility. This "selling" is

accomplished indirectly by persuading the consumer to purchase

appliances which will result in a greater use of gas or electricity.

Different methods are used by various companies. In some

instances the utility representative after persuading the consumer

to install a particular appliance may actually take the order for

the appliance which is delivered trom stock by his employer, or

he may forward the order to an appliance dealer who then

delivers it. In such cases the sales activity would be exempt,

since it is directed at the consummation of a specific sale by the

utility representative, the employer actually making the delivery

in the one case, while in the other the sale is consummated in the

sense that the representative obtains an order or commitment

from the customer. In another type of situation the utility

representative persuades the consumer to buy the appliance and

he may even accompany the consumer to an appliance store

where the retailer shows the appliance and takes the order. In

such instances the utility representative is not an outside

salesman since he does not consummate the sale or direct his

efforts toward making the sale himself. Similarly, the utlity

representative is not exempt as an outside salesman if he merely

persuades the consumer to purchase an appliance and the

consumer then goes to an appliance dealer and places his order.

(4) Still another type of situation involves the company

representative who visits chainstores, arranges the merchandise

on shelves, replenishes ‘stock by replacing old with new

merchandise, consults with the manager as to the requirements

of the store, fills out a requisition for the quantity wanted and

leaves it with the store manager to be transmitted to the central

warehouse of the Chainstore company which later ships the

quantity requested. The arrangement of merchandise on the

shelves or the replenishing of stock is not exempt work unless

it is incidental to and in conjunction with the employee's own

outside sales. Since the manufacturer's representative in this

instance does not consummate the sale nor direct his efforts

toward the consummation of a sale (the store manager often has

no authority to buy) this work must be counted as nonexempt.

Driver salesmen.

29 C.F.R. §541.505

(a) Where drivers who deliver to an employer's

customers the products distributed by the employer also perform

functions concerned with the selling of such products, and

questions arise as to whether such an employee is employed in

the capacity of outside salesman, all the facts bearing on the

content of the job as a whole must be scrutinized to determine

whether such an employee is really employed for the purpose of

making sales rather than for the service and delivery duties

which he performs and, if so, whether he is customarily and

regularly engaged in making sales and his performance of

nonexempt work is sufficiently limited to come within the

tolerance permitted by 541.5. The employee may qualify as an

employee employed in the capacity of outside salesman if, and

only if, the facts clearly indicate that he is employed for the

purpose of making sales and that he 1s customarily and regularly

engaged in such activity within the meaning of the act and this

part. As in the case of outside salesmen whose jobs do not

involve delivery of products to customers, the employee's chief

duty or primary function must be the making of sales or the

taking of orders if he is to qualify under the definition in 541.5.

He must be a salesman by occupation. If he is, all work that he

performs which is actually incidental to and in conjunction with

his own sales effort is exempt work. All other work of such an

employee is nonexempt work. A determination of an employee's

chief duty or primary function must be made in terms of the

basic character of the job as a whole. All of the duties performed

by an employee must be considered. The time devoted to the

various duties is an important, but not necessarily controlling,

element.

STATEMENT OF CASE

The majority of the facts in this case are undisputed.

Petitioners were employed by the Respondent as salesmen.

They were hired to perform sales activities. However, in the

course of performing their sales activities, Petitioners were

required to perform the “non-exempt” work of “non-exempt”

employees. Respondent stipulated at trial that Petitioners

engaged in non-exempt work in excess of twenty percent (20%)

of Petitioners’ work week. In fact, it was undisputed at trial that

the Petitioners spent up to sixty-five percent (65%) of their time

performing non-exempt work.

The Fair Labor Standards Act (FLSA) was enacted so

that “labor conditions detrimental to the maintenance of the

minimum standard of living necessary for the health, efficiency,

and general well-being of workers” would be protected. 29

U.S.C. $202(a). To that end, the FLSA provides that employees

performing “non-exempt” tasks are entitled to overtime

compensation. The Respondent has failed to comply with the

Fair Labor Standard Act by refusing to compensate Petitioners

for the overtime compensation even though Petitioners spent up

to sixty-five (65%) of their time performing non-exempt work.

If the Tenth Circuit’s ruling is upheld, employers can force

employees to perform non-exempt work up to ninety-nine

percent (99%) of the time and still claim the work is “incidental

to, and in conjunction with” their sales and avoid paying

overtime. In addition, the Tenth Circuit interpretation of the

Department of Labor's regulations rendered the regulations

arbitrary, capricious or manifestly contrary to the intent of the

Fair Labor Standards Act.

-10-

The Fair Labor Standards Act also requires employers to

demonstrate that an employee is exempt from the overtime

compensation requirements by “plain and unmistakable

evidence.” The Tenth Circuit did not hold Respondents to this

burden of proof.

In October of 1996, the United States District Court for

the District of Colorado heard this case. On January 27, 1997,

the District Court entered a judgment for the Petitioners finding

that Petitioners activities were not exempt under the FLSA and

that Petitioners were entitled to overtime compensation.

Appellants filed an appeal before the Tenth Circuit Court

of Appeals on February 26, 1997 and filed an Amended Notice

of Appeal on June 27, 1997. On June 10, 1999, the Tenth

Circuit reversed the District Court's decision. In its decision,

the Tenth Circuit concluded that Petitioners “non-exempt”

activities were “incidental to and in conjunction with” their sales

activities, and thus, Petitioners were not entitled to overtime

compensation. Petitioners’ request for rehearing was denied on

June 25, 1999.

ARGUMENT FOR GRANTING WRIT

The Tenth Circuit's ruling allows employers to require

employees, who are exempt from the Fair Labor Standards Act,

to perform non-exempt work in excess of forty hours per week

without having to pay that employee overtime. Employers can

now hire “sales” employees, who are ostensibly exempt from the

Fair Labor Standards Act, and require them to perform non-

exempt work for as much as ninety-nine percent (99%) of their

time, and avoid paying them overtime, so long as the employee

Xie

is the one who closes the sale.

The Tenth Circuit's decision renders meaningless and

void the terms “incidental and in conjunction with” as set forth

in the Department of Labor's regulations. This interpretation Is

contrary to the spirit and intent of the Fair Labor Standards Act

and renders the regulations arbitrary, capricious or manifestly

contrary to the intent of the Fair Labor Standards Act.

In addition, the Supreme Court of the United States has

not ruled on this issue, and thus the Tenth Circuit’s decision

allows employers to manipulate employee's work activities to

avoid paying overume.

ARGUMENT 1

“Forty-six hours per week of an employees duties can

not be incidental to, and in conjunction with,” his primary

job responsibilities thereby exempting him from the

overtime requirements of the Fair Labor Standards Act.

The Fair Labor Standards Act requires employers to pay

employees overtime for any hours worked in excess of forty

hours per week. It does, however, provide for several narrow

exceptions. Under the “outside salesmen” exception, an

employer is not required to pay overtime if the employer can

meet a two part test. 29 C.F.R. §541.5.

First, the employee's primary responsibility must be to

engage in sales away from the employers normal place of

business. Petitioners acknowledge that this element has been

satisfied. Second, Respondent must prove by plain and

1?

unmistakable evidence that the salesman spent less than twenty

percent of the time non-exempt employees spent performing

non-exempt work. 29 C.F.R. §541.5(b). Time spent performing

work “incidental to and in conjunction with” the employees

sales responsibilities does not count toward the twenty percent

threshold. 29 C.F.R. § 541.5(b)

Respondent also hired “merchandisers” who were non-

exempt employees to perform a variety of tasks associated with

the distribution and promotion of Respondent's product.’

Respondent also required the Petitioners to perform these same

merchandising tasks. As noted by the Court of Appeals,

Respondent required the Petitioners to work up to seventy-two

hours a week, (App. A at 4), and the District Court found at trial

that the Petitioners would spend up to sixty-five percent of that

time, (App. B at 7, FN 5) or over forty six hours a week,

performing these same merchandising tasks.

Respondent acknowledges that merchandisers must be

paid overtime to perform merchandising activities but claims

that the Respondent can avoid paying overtime by requiring the

salesmen to perform the same tasks. Respondent asserts that

merchandising tasks are merely “incidental to and in conjunction

with” the sales responsibilities when performed by a salesman

while admitting that they are the primary responsibility of the

| The non-exempt work performed by merchandisers included

restocking shelves, replacing damaged product, filling coolers, filling

vending machines, delivering products and equipment, adjusting and

cleaning display she!ves, setting up displays, rotating product, hanging signs,

cleaning the warehouse, cleaning coolers and shelves, restocking pallets, and

transferring product from one store to another.

-13-

merchandisers.

Section 541.5(b) states that “work performed incidental

to and in conjunction with the employee's own outside sales or

solicitations, including incidental deliveries and collections,

shall not be regarded as nonexempt work.” 29 C.F.R. §541.503

interprets §541.5(b) to mean that work performed incidental to

and in conjunction with the employee's own outside sales

includes “not only incidental deliveries and collections which

are specifically mentioned in §541.5(b)” but also “the writing of

his sales reports, the revision of his own catalog, the planning of

his iunerary and attendance at sales conferences.” Clearly, these

regulations recognize that the character of the work is an

important. factor in evaluating whether the activities are

“incidental to and in conjunction with” their sales activities. In

tact, C.F.R. §541.504(c)(2) specifically states that the activity

must be related to promoting his own sales in order to be

“incidental to and in conjunction with” his sales activities.

The Petitioners have not included the “incidental”

activities cited in the regulations when calculating the twenty

percent threshold. The “merchandising” activities stipulated to

by the parties, and performed by the salesmen, go well beyond

the examples cited in the regulations and are not related to their

sales acuviues.

The Tenth Circuit, when considering this issue as It was

presented on appeal, focused exclusively on whether the

“salesman” executed the sale and ignored his overall job

responsibilities. The Tenth Circuit concluded that, if the

salesman took an order, every other job responsibility was

related to performing a sales function regardless of the amount

14

of me spent performing the non-sales related functions.

The Tenth Circuits emphasis on “taking the order” ts not

supported by the regulations. The regulations in fact emphasize

that a “determination of an employee's chief duty or primary

function must be made in terms of the basic character of the job

as a Whole” and that “the ume devoted to the various dutes Is an

important, but not necessarily a controlling, element.” 29 CFR.

§ 541.505(a).

The Tenth Circuit's ruling reaches an anomalist result.

When merchandising tasks are performed by Merchandisers one

hundred percent of the me, those tasks are non-exempt work.

When, however, those sume tasks are performed by employees

such as the Petitioners over forty-s1x hours per week, those tasks

ure “exempt” work. By allowing Petitioners to be exempt from

the Fair Labor Standards Act, employers can simply avoid

paying overtime wages by having salaried employees with a

different job ttle pertorm the same work.

Petitioners contend that this result is not what 1s

contemplated by the FLSA or by the Secretary's regulations and

interpretive guidelines. Indeed, to construe the provisions of the

FLSA and the Secretary's regulations and guidelines in the

manner which the Tenth Circuit did would be to utterly deteat

the purpose for which the FLSA was enacted by Congress.

Curiously absent from the Tenth Circuit's Opinion, 1s a

reference to any case from the Supreme Court of the United

States interpreting the outside salesman exempuon or any US.

District Court or other U.S. Court of Appeals defining what ts

“incidental to and in conjunction with” sales related acuvities.

The Tenth Circuit has relied almost exclusively on the

interpretive regulations.

When the Petitioners job responsibilities are viewed as

a Whole, it clear that up to sixty-five percent of their time, and

up to forty-six hours per week, is not “incidental to and in

conjunction with” their job responsibilities. In this instance, the

non-exempt work has in fact become one of their primary

responsibilities. Therefore, pursuant to the purposes of the

SLA, the interpretive guidelines and established case law,

Petitioners are not exempt from the overtime requirements of the

FLSA.

ARGUMENT 2

The Tenth Circuit’s interpretation of the Department

of Labor’s regulations rendered the regulations arbitrary,

capricious or manifestly contrary to the intent of the Fair

Labor Standards Act.

The Tenth Circuit's opinion renders the “outside

salesmen” exemption to the Fair Labor Standards Act

meaningless. The exemption scheme is not intended to allow

employers to manipulate the distinction between exempt and

non-exempt employees by assigning non-exempt duties to

exempt employees to avoid paying overtime. Under the Tenth

Circuit's opinion, employers can require employees to perform

non-exempt work for up to ninety-nine percent of their ime and

sull not have to pay overtume.

The Tenth Circuit's interpretation of 29° C.F.R.

$541.504(b) and 29 C.F.R. §541.505(a) 1s inconsistent with the

~16-

spirit and intent of the Fair Labor Standards Act as legislated by

the United States Congress. Specifically, the opinion of the

Tenth Circuit, in as much as it follows Respondent's

interpretation of the Department of Labor's regulations

regarding™outside salesmen” and “non-exempt work,” defeats

the purpose of the FLSA and is manifestly contrary to the intent

of Congress when they enacted the FLSA.

Reviewing courts must interpret regulations in a manner

that is consistent with the overriding statute such that the

regulation does not defeat the purpose of the statute. Building

& Construction Trades’ Dept. v. Donovan, 7\2 F.2d 611, 616

(D.C. Cir. 1983) quoting Batterton v. Francis, 432 U.S. 416

(1977).

The FLSA was enacted for two primary purposes: (1) to

make whole employees who have unlawfully been deprived of

wages and (2) to eliminate the competitive advantage enjoyed by

the employer who has gained illegally by underpaying their

workers. Donovan v. Sovereign Sec., Lid., 726 F.2d 55, 58 (2nd

Cir. 1984) citing Hodgson v. American Can Co., 440 F.2d 916,

922 (8th Cir. 1971), and citing Hodgson v. Wheaton Glass

Company, 446 F.2d 527, 535 (3rd Cir. 1971).

Petitioners are being denied the protections provided to

them by the FLSA under the Tenth Circuit's ruling that they are

exempt from the overtime requirements. By allowing

Respondent to enjoy the fruits of manipulating the exemption

provisions under 29 C.F.R. §541.504, the Tenth Circuit is failing

to uphold the meaning of the Fair Labor Standards Act.

7.

While regulations promulgated by administrative

agencies are generally given deference by reviewing courts,

regulations that are either “arbitrary [or] capricious” or are

shown to be “manifestly contrary to the statute” will not be

reviewed under the deferential standard. Smiley v. CITIBANK,

517 U.S. 735, 741 (1996). See also, Chevron U.S.A., Inc. v.

Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).

As interpreted by the Tenth Circuit, the regulations in the

present case are clearly contrary to the protections provided by

the FLSA.

To determine whether a regulation is consistent with the

statute it aims to implement, a reviewing court should look to

the “plain meaning” of the statute and to the “design of the

statute as a whole.” K Mart Corp. v. Cartier, Inc., 486 U.S. 281,

291-92 (1987). If the statute is “clear and unambiguous” then a

court must refuse to give deference to any agency interpretation

that is contrary to the statute. /d. The language and meaning of

the Fair Labor Standards Act is clear. The FLSA seeks to

protect the “health, efficiency, and general well-being of

workers.” 29 U.S.C. §202(a).

Enabling employers to take advantage of dedicated

workers by requiring exempt employees to perform the work of

the non-exempt employees fails to comply with the “plain

meaning” and the “design” of the FLSA.

The Tenth Circuit has stated that all activities which

serve to “enhance sales” should be construed as being

“incidental” to Petitioners’ work. If such were the case,

Respondent could give each of its employees a sales pad, call

them outside salesmen, and ask them to stop by their local 7-11

-18-

on their way home to pick up an order. All other tasks

performed by that employee would become “incidental” if they

“enhance sales.” This would include manufacturing the can of

cola on the assembly line, trucking it to the store, and stocking

the can on the store shelf. Each of these tasks “enhance” the sale

of Coke products. Under the Tenth Circuit's interpretation of

the Department of Labor's regulations, virtually all employees

would be exempt from overtime payment as required by the Fair

Labor Standards Act.

The ruling by the Tenth Circuit also reaches inequitable

results by allowing employers to avoid their overtime

obligations under the Fair Labor Standards Act. The Tenth

Circuits own opinion acknowledges that inequitable

interpretations of statutes should be avoided: “Interpretations of

a statue which produce inequitable and unreasonable results

should be avoided when alternative interpretations consistent

with the statute's language and objective are available. (App.

Op. Pg. 17) See also, Chotin Transp. Inc. v. United States, 819

F.2d 1342, 1355 (6" Cir. 1986) (concurrence) citing American

Tobacco Co. v. Patterson, 456 U.S. 63, 71 (1982); Payne v.

Panama Canal Co, 607 F.2d 155, 164 (5" Cir. 1979); Virgin

Islands v. Berry, 604 F.2d 221, 225 (3 Cir. 1979).

There’ore, the Tenth Circuit's interpretation of the

Department of Labor's regulations rendered the regulations

arbitrary, capricious or manifestly contrary to the intent of the

Fair Labor Standards Act.

-19-

ARGUMENT 3

The Respondent failed to meet it’s burden of proof

demonstrating that the Petitioners are exempt from the

overtime requirements of the Fair Labor Standards Act.

The burden of proving that employees are exempt trom

the overtime requirements of the Fair Labor Standards Act falls

on Respondent. “An employer seeking an exemption from the

overtime requirements of the Act under 29 U.S.C. §213tand)

must prove that each employee ts entitled to the exemption by

plain and unmistakable e\ idence.” Hodgson v. Klages Coal and

lee Co... 435 F.2d 377, 382 (6" Cir. 1970). Although noung this

standard in it's opinion, the Tenth Circuit tailed to hold the

Respondent to it’s burden of proof.

The evidence presented at tral in the District Court

established that the Respondent did not refute by “plain and

unmistakable evidence,” the fact that employees in this suit

spent up to 65“ of their ume performing non-sales functions for

Respondent. The Tenth Circuit's decision reversing this

conclusion, did not hold Respondent to this burden of proof.

For this reason alone, this decision should be reversed.

CONCLUSION

Petitioners are not exempt from the Fair Labor Standards

Act overtime requirements due to the “nature” of Petitioners

work and the amount of time spent merchandising. Pettuoners

merchandising activities cannot be considered incidental to and

in conjunction with their primary job responsibilities.

Theretore, Respondent has not demonstrated that the Petuoners

20

fall within the outside salesman exemption and the Petitioners

must be paid overtime.

In addition, the interpretation of the regulations adopted

by the Tenth Circuit Court of Appeals would render the

regulations arbitrary, capricious and manifestly contrary to the

intent of the Fair Labor Standards Act.

Finally, the Respondent has failed to meet its burden of

proof by demonstrating that the Petitioners fall within the

outside salesman exemption. Therefore, the Petitioners are

enutled to be paid overtime.

Respectfully submitte Mhis $" day of September, 1999.

By: VA ur

Gary —. Esq.

Ptarmigan Place, Suite 900

3773 Cherry Creek Drive North

Denver, Colorado 80209

303-320-6100

COUNSEL OF RECORD

-and-

Brandon P. Hull, Esq.

625 E. 16" Avenue, Suite 100

Denver, Colorado 80203

(303) 860-2848

APPENDIX A

[FILED JUNE 10, 1999]

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

RICHARD ACKERMAN, TIMOTHY

BOOKER, ERICH BUTLER, MICHAEL

DICKSON, EDWARD DONAHOE,

MICHAEL FABIAN, STEVEN JONES,

MARK MARES, ROBERT MOON,

JAMES MUELLER, DANA ROE. KIM

SMITH, PAUL SPIELMAN, ALAN

TAMONDONG, AND BRAD

VELLIQUETTE,

Plaintiffs - Appellees/Cross-Appellants,

COCA-COLA ENTERPRISES. INC., a

Delaware Corporation in good standing

and licensed to do business in Colorado,

Detendant-AppellanUCross-Appellee

Appeal from the United States District Court

for the District of Colorado

(D.C.No. 93-OK-1633-TL)

Walter V. Siebert, of Sherman and Howard, Denver, Colorado

(Ronald G. Ingham and Kelly L. Weston, of Miller and Martin,

Chattunooga, Tennessee, with him on the briefs), for the

Defendant-Appellan/Cross- Appellee.

Daniel P. Powell, Alamosa, Colorado (Gary McPherson and

Brandon P. Hull, Aurora, Colorado, with him on the briefs), for

the Plaintitts-Appellees/Cross- Appellants.

Betore ANDERSON, EBEL, and HENRY, Circuit Judges.

HENRY, Circuit Judge.

Coca-Cola Enterprises (Coca-Cola) appeals the district

court’s decision that advanced sales representatives and account

managers employed by the company are entitled to overtime

compensation under the Fair Labor Standards Act (FLSA), 29

U.S.C. §§ 201-219" We conclude that these employees are

exempt from the overtime compensation requirements of the

FLSA because they are “outside salesmen," as that) term is

defined by Department of Labor :egulations. We therefore

reverse the decision of the district court and remand for further

proceedings consistent with this opinion.

The Coca-Cola advance sales representatives and account

manavers have tiled a cross-appeal in which they challenge several other

rulings by the district court. In light of our conclusion regarding the outside

alesman exemption, we address neither the issues raised in the cross-appeal

nor the other pssues raised in Coca-Cola's appeal.

A-2

I. BACKGROUND

From 1991 to 1993, the plainuffs were employed by

Coca-Cola as advance sales representatives and account

managers. Their primary responsibility was to sell CocaCola

products to grocery stores, convenience stores, and mass

merchandisers. During the period from 1991 to 1993, Coca-

Cola also employed individuals Known as "merchandisers."

Although merchandisers did not sell Coca-Cola products, they

pertormed a wide variety of tasks associated with the

distribution and promotion of the = company’s’ products,

including: restocking shelves, replacing damaged products,

filling coolers, filling vending machines, delivering products

and equipment, adjusting and cleaning display shelves, setting

up displays, rotating products, hanging signs, cleaning — the

warehouse, cleaning coolers and shelves, restocking pallets, and

transferring products from one store to another.

During the period at issue in this case, Coca-Cola

employed two different methods of distribution. Prior to April

1, 1992, Coca-Cola used a hybrid system. For customers whose

accounts exceeded four million dollars, the company employed

advance sales representatives (including the plaintiffs) to sell

the products betore delivery. Following the sale, delivery

drivers transported Coca-Cola products to the appropriate store.

CocaCola’s merchandisers then stocked the shelves and

performed other merchandising tasks. For smaller accounts,

Coca-Cola distributed its products through route sales drivers.

These drivers visited stores, sold the product, stocked the

shelves, displayed advertisements, and performed all the other

required merchandising.

A-3

In April 1992, Coca Cola changed its distribution system

such thatindividuals Known as account managers (including the

pluntitts) sold products tor both large and small accounts priot

to delivery, Under this “presale” system, the account managers

Visited large grocery stores, convenience stores, and mass

merchandisers, sold Coca-Cola products, and performed various

merchandising tasks. bor the larger grocery store and mass

merchandiser accounts, Coca-Cola assigned merchandisers to

perform Various merchandising tasks. Coca-Cola did not assign

merchandisers to the smatler accounts, and, at these locations,

the account managers performed the necessary merchandising

tasks themselves. The account managers trequently performed

these tasks atthe larger accounts as well

In their work as advance sales representatives and

account managers, the phunttts typically arrived at Coca Cola's

Offices atabout 5:00 am. After attending a sales meeting, they

vathered advertising materials trom a storeroom and loaded

them into stauion wagons supplied by the company. They then

Visited ten to fifteen grocery stores, — fifteen to twenty

convenience stores, and a few mass merchandisers. At the

vrocery stores and mass merchandisers, they inspected product

displays and advertising and then) determined the amount of

available inventory, At certain stores, the plainutfs also set up

advertising materials. Atter performing these tasks, they spoke

to store managers about subsequent deliveries, obtaining

approval tor Coca-Cola to ship additional products. Delivery

drivers then transported the Coca-Cola products to stores, and

the merchandisers pertormed various tasks associated with

displaying and promoting the products.

From 1991 until 1993, the plainuffs regularly worked

more than forty hours a week as advance sales representatives

A-4

and-account managers. Their hours ranged from an average low

of fifty-five hours per week to an average high of seventy-two

hours per week. Coca-Cola paid them a salary, bonuses, and

commissions, Because Coca-Cola considered them to be

exempt from the requirements of the FLSA, the plaintitts did not

receive overume Compensation. In contrast, Coca-Cola viewed

delivery drivers and merchandisers as subject to the FLSA and

paid them overtime.

The plaintiffs tiled this action in July 1993, alleging that

Coca-Cola had violated the FLSA by failing to pay them

overume Compensation, Coca-Cola responded that the FLSA’s

overtime Compensation requirements were not applicable to the

plaintitts because of the statutory exemptions governing outside

salesmen and motor carriers and because of the exemption

governing positions consisting of a combination of two or more

exempt yobs.

After a bench trial, the district: court) issued a

memorandum opinion reyecung CocaCola’s arguments under

each of the claimed exemptions and concluding that the

plunttts were enutled to overtime compensation under the

FLSA. The court also reyected CocaCola’s argument that the

plaintiffs’ damages should be calculated on the basis of the

“fluctuating work week method,” under which a successtul

plainuff receives overtime Compensation at only half his or her

regular rate (instead of the usual one-and-a-half times his or her

regular rate). See 29 C.F.R. § 778.114 (discussing the fluctuating

work week method). Finally, the court rejected the plainufts’

argument that they were entitled to — liquidated damages,

reasoning that Coca-Cola had demonstrated that it acted in good

faith and had reasonable grounds for believing that its actions

did not violate the FLSA.

Il. DISCUSSION

Congress enacted the FLSA, 29 U.S.C. § 201-219, in

order to improve “labor — conditions detrimental to_ the

maintenance of the minimum standard of living necessary for

the health, efficiency, and general well-being of workers." 29

U.S.C. § 202(a). in turtherance of this aim, the FLSA

established a minimum wage, required overtime pay in certain

instances, and prohibited child labor. See 29 U.S.C. §§ 206, 207,

atc.

In spite of these broad remedial aims, Congress

concluded that not all workers required the same kind of

protecuon. It exempted from the FLSA's requirements “any

employee employed in a bonatide executive, administrative, or

professional capacity... or in the capacity of outside salesman

(as such terms are defined and delimited from time to time by

regulations of the Secretary [of Labor] ....)" 29 U.S.C. §

213(aC1).

Exercising that delegated authority, the Secretary has

promulgated a series of — regulations that define these

exemptions. 29 C.F.R. § 541.500 defines the term "outside

salesman” as:

any employee:

(a) who is employed for the

purpose of and who ts

customarily and regularly

engaged away trom his

employer's place or places of

business 1n:

(1) making sales

A-6

within the

meaning of

secuon 3(k) of

the Act; or

(2) Obtaining

orders or

contracts for

services or for

the use of

facilities for

which a

consideration will

be paid by the

client or

customer; and

(b) Whose hours of work of a

nature other than that described

in paragraph (a)(1) or (2) of this

secuon do not exceed 20 percent

of the hours worked in_ the

workweek by nonexempt

employees of the employer:

Provided, That work performed

incidental to and in conjunction

with the employee's own outside

sales or solicitations. including

incidental deliveries and

collections~ shall not be regarded

as nonexempt work.

(emphasis added).

In the district court proceedings, Coca-Cola contended

that the plainufts were “outside salesmen” under the definition

set forth in § 541.500. The company focused on the proviso of

subsection (b), arguing that although the plaintiffs performed

some merchandising tasks, those tasks were “incidental to and

in conjuncuon with" their sales of Coca-Cola products.

Significantly, in the district court proceedings, there was no

dispute as to either subsection (a) of § 541.500 or the first part

of subsection (b). The parties agreed that the plaintiffs were

employed for the purpose of selling Coca-Cola's products and

that they were regularly and customarily engaged tn that activity

away trom Coca-Cola's offices. See 29 CLFLR. § 541.500. They

also agreed that the time that the plaintiffs spent performing

work of a nonexempt nature (i.e. merchandising) exceeded

twenty percent of the hours worked by nonexempt workers (..e.

merchandisers). Thus, the district court's determination of

whether the plaintiffs were outside salesmen depended entirely

upon the question raised by § 541.500(b)'s proviso-whether the

plaintiffs’ merchandising tasks were “incidental to and in

conjunction with" their sales of Coca-Cola products.

In its memorandum opinion, the district court concluded

that Coca-Cola had failed to establish that the plaintiffs’

merchandising activities were “incidental to and in conjunction

with" their own sales. The court cited testimony “that

merchandising was primarily done because customers expected

it to be done and that merchandising increased the sale of Coca-

Cola products in general." Aplt's App. at 16-17. Additionally,

the court noted that merchandising activities occupied anywhere

from twelve to forty-one hours of the plaintiffs’ time each week.

Id. at 17 n.S. Noting that "incidental" means “occurring or apt

to occur as an unpredictable or minor concomitant" or "of a

minor, casual, or subordinate nature,” see id. (quoting Webster's

A-3

a

Il New Riverside University Dictionary 618 (1984)), the court

said that “[a]n activity that consumes anywhere from 20. to 65

percent of an employee's workday cannot be said to be a minor

occurrence.” Id. It’ therefore concluded that the plainuffs were

not Outside salesmen under the FLSA.

On appeal, Coca-Cola argues that the district court erred

in applying the phrase “incidental to and in conjunction with"

in the proviso of 29 C.F.R. § 541.500(b). Under the Department

of Labor's regulations, Coca-Cola maintains, the merchandising

work pertormed by the plaintiffs, though often time-consuming,

was sull incidental to and in conjunction with their own sales of

Coca-Cola products; as a result, the plaintiffs’ merchandising

responsibilities do not defeat the outside salesman exemption.

In response, the plaintiffs maintain that Coca-Cola's

reading of the outside salesman exemption conflicts with the

policies underlying the FLSA. The plaintiffs observe that. under

Coca-Cola's reading of the applicable regulations,

merchandising work could be exempt from the FLSA when

performed by outside salesmen but governed by the FLSA when

performed by merchandisers. Such an interpretation, the

plainuffs contend, allows Coca-Cola to avoid the overtime

compensation requirements of the FLSA entirely by exploiting

the distinction between merchandisers and account managers.

They observe that under Coca-Cola's reading of the regulations,

the company would be permitted to employ non-exempt

merchandisers for only forty hours a week while requiring

account managers (who are exempt as outside salesmen under

Coca-Cola's interpretation of the FLSA) to work more than

forty hours a week in order to complete the merchandising work

left undone by the merchandisers.

A-9

In light of the parties’ arguments, the question before us

is the same one presented to the district court: whether the

plaintiffs’ merchandising activities were "incidental to and in

conjunction with" their sales of Coca-Cola products such that

the plaintiffs were covered by the FLSA exemption for outside

salesmen. We review the district court's resolution of this legal

question de novo, see Sanders v. Elephant Butte Irrigation

District, 112 F.3d 468.470 (lOth Cir. 1997), but we examine the

underlying factual determinations — for clear error. Id.

Additionally, in light of the FLSA's broad remedial aims,

exemptions must be narrowly construed. Carpenter v. City &

County of Denver Colo., 82 F.3d 353, 355 (Oth Cir. 1996)

(citing Mitchell v. Lublin. McGaughy. & Assocs. 358 U.S. 207,

211(1959)). As the emplover, Coca-Cola bears the burden of

proving that particular employees fit "plainly and unmistakenly

within [the exemption's] terms."" Reich v. Wyoming, 993 F.2d

739, 741 (Oth Cir. 1993) (quoting Arnold v. Ben Kanowsky

Inc., 361 U.S. 388, 392 (1960)). However, "the [Department of

Labor] regulations are entitled to judicial deference and are the

primary source of guidance for determining the scope of

exemptions to the FLSA." Spradling v. City of Tulsa, 95 F.3d

14921495 (Oth Cir. 1996) (citation omitted).

A. Department of Labor Regulations Regarding Outside

Salesmen

As Coca-Cola suggests, the Department of Labor's

regulations provide guidance in determining what tasks may be

considered "incidental to and in conjunction with" the plaintiffs’

sales of Coca-Cola products. Section 541.503 uses that phrase

in the following manner:

A-10

a

Work performed "incidental to and

in conjunction. with the

employee's own outside sales or

solicitation" includes not — only

incidental deliveries and

collections ..., but also any other

work performed by the employee

in furthering his own sales efforts.

Work performed incidental to and

in conjunction with the employee's

own outside sales or solicitations

would include, among other things,

the writing of his sales reports, the

revision of his own catalog, the

planning of his itinerary and

attendance at sales conferences.

29 C.F.R. §541.503 (emphasis

added).

The subsequent regulations describe in more detail the

kinds of activities that are viewed as "in conjunction with and

incidental to” outside sales. See 29 C.F.R. §§ 541.504-541.505.

These regulations address promotional work and the work

of"driver salesmen," who deliver products and make sales. In

both instances, a key inquiry is whether the employee in

question actually consummates the sale of his or her employer's

products at a particular location. If that employee consummiates

the sale but also performs a variety of other tasks intended to

promote the company's products but not directly involving

sales, those tasks may still be considered "incidental to and in

conjunction with" those sales. On the other hand, if the

employee in question does not actually consummate the sale at

the location in question, then his other activities, even if closely

related to sales, are not “incidental to and in conjunction with”

those sales under the regulations.

For example, the Department of Labor's regulation

regarding promotional work — gives the illustration of a

manufacturer's representative who visits retailers accompanied

by a salesman for a distributor (or “jobber"). If the

manutacturer’s representative does preliminary work (which

may include arranging the stock, putting up a display or poster.

and talking to the retailer for the purpose of getting him to place

the order for the product"), but the distributor's salesman

actually takes the order after the preliminary work ts done, then

such work is not incidental to sales made by the manufacturer's

representative and is not exempt. See 29 C.F.R. § 54150516 42).

The same regulation gives an example of a nonexempt company

representative who visits stores in order to perform promotional

work but does not complete the sale of his company’s products:

{AJnother type of | situation

involves the company

representative who visits

chainstores, arranges the

merchandise on shelves,

replenishes stock by replacing old

with new merchandise, consults

with the manager as to. the

requirements of the store, fills out

a requisiion for the quantity

wanted and leaves it with the store

manager to be transmitted to the

central warehouse of the chainstore

company which later ships the

quantity requested. The

A-12

arrangement of merchandise on the

Shelves or the replenishing of

stock is not exempt work unless it

is incidental to and in conjunction

with the employee's own outside

sales. Since the manufacturer's

representative in this instance does

not consummiate the sale nor direct

his _efforts toward the

consummation of a sale (the store

manager often has no_authority to

buy) this work must be counted as

non-exempt.

29 C_FLR. § 541.504 (c)(4) (emphasis added).

The regulation regarding driver salesmen, 29 C.F.R. §

541.505, adopts a similar approach. It contrasts a route driver

who does not make sales at the locations he visits (and ts

therefore not covered by the exemption for outside salesmen)

with a route driver who takes orders or obtains commitments for

the products he delivers (and is therefore covered by the

exemption):

{ A] route driver primarily engaged

in making deliveries to his

employer's customers and

performing activities intended to

promote sales by customers, ;

including placing point-of-sale

and other advertising materials,

price stamping commodities,

arranging merchandise on shelves

A-13

or in coolers or cabinets, rotating

stock according to date, and

cleaning and otherwise servicing

display cases is not employed in

the capacity of outside salesman

by reason of such work. Such work

is nonexempt work for purposes

of this part unless it is performed

as an incident to or in conjunction

with sales actually made by the

driver to such customers. If the

driver who performs such

functions actually takes orders or

obtains commitments from such

customers for the products _he

delivers. and the performance of

the promotion work 1s __1n

furtherance of his own sales

efforts. his activities for that

purpose in the customer's

establishment. would be exempt

29 C.F.R. § 541.505(d) (emphasis added).

Courts considering the outside salesman exemption have

applied this distinction between employees who consummiate

sales at out-of-the-office locations and those employees who do

not consummiate sales there. For example, in Skipper v. Superior

Dairies. Inc., 512 F.2d 409,416 (Sth Cir. 1975), the Fifth Circuit

reversed a district court's ruling that a dairy product distributor's

routeman was covered by the outside salesman exemption,

reasoning that the routeman's responsibility was to deliver

A-|4

products in prearranged amounts. The court cited testimony

from the district court proceedings indicating that the sale of the

dairy products was made not by the routeman but by other

individuals in the company. See id. at 414-415. In an earlier

case, the Sixth Circuit reached a similar conclusion, holding

that a soft drink bottler's routeman was not covered by the

outside salesman exemption because the routeman did not solicit

orders and because the managers of the stores that he visited

lacked the authority to enter into binding sales agreements with

the routeman. See Hodgson v. Klages Coal & Ice Co..435 F.2d

377, 383 (6th Cir. 1970). In contrast, other courts have

concluded that driver-salesmen who make sales of their

employers’ products at the locations they visit are covered by the

outside salesman exemption. See e.g., Hodgson v. Krispy Kreme

Doughnut Co.,346 F. Supp. 1102, 1107 (M.D.N.C. 1972).

B. The Outside Salesman Exemption in this Case

In the case before us, the record indicates that, as advance

sales representatives and account managers, the plainuffs

consummated the sales of Coca-Cola products at the stores that

they visited. In this regard, we note that the parties have not

challenged the district court's conclusion that the plaintiffs were

employed for the purpose of selling Coca-Cola products and

were regularly engaged in that activity. The parties also have not

challenged the district court's description of Coca-Cola's

distribution systems and of the plaintiffs’ sales responsibilities

under those systems. Moreover, in testimony at trial, several of

the plaintiffs described their taking of orders for company

products from store managers. See Aplt's App. at $5, 152. There

is no evidence in the record that sales of Coca-Cola products at

stores visited by the plaintiffs were made by any other Coca-

Cola employees, and neither in the district court proceedings

A-15

nor in this appeal have the plaintiffs disputed the proposition

that it was through their own transactions with personnel from

stores carrying Coca-Cola products — that sales were

accomplished. The plaintiffs thus resemble the exempt “driver

salesman” identified in 29 C.F.R. § 541.505(d), an employee

who “actually takes orders or obtains commitments from .

customers.” In light of their authority to effect sales at the stores

they visited, plaintiffs may be contrasted with the nonexempt

manufacturer's representative discussed in 29 C.F.R. § 541 504

(cy 4)-the one who “does not consummate the sale nor direct his

efforts toward the consummation of a sale.”

Because the plaintiffs consummated sales of Coca-Cola

products at the stores they visited, the work that they performed

in promoting those sales is “incidental to and in conjunction

with” those sales under the Department of Labor's regulations.

See 29 C.F.R. § 541.504 (a) (stating that “any promotional work

which is actually performed incidentai to and in conjunction

with an employee's own outside sales or solicitations is clearly

exempt work. On the other hand, promotional work which 1s

incidental to sales. made, or to be made, by someone else cannot

be considered as exempt work."); 29 C.F.R. § 541.505(d)

(stating that promotion work and delivery work are exempt it

incidental to and in conjunction with the employee's own sales

or efforts to sell). Here, the plaintiffs have not disputed Coca-

Cola’s contention that their various merchandising tasks

promoted sales of Coca-Cola products at the stores they visited.

Instead, they argue only that because merchandising work 1s

considered non-exempt if performed by merchandisers, it

should also be considered non-exempt when performed by

outside salesmen. See Aplee's Br. at 14-17. This argument

misconstrues the Department of Labor regulations, which

provide that promotional work performed by employees who

A-16

consummate sales may be covered by the outside salesman

exemption even if the same work would not be exempt if

performed by other employees. See. e.g.,29 C.F.R §

541.504(b)(2) (noting that "[i]ncidental promotional activities

may be tested by whether they are ‘performed incidental to an in

conjunction with the employee's own outside sales — or

solicitations’ or whether they are incidental to sales which will

be made by someone else."). Therefore, we conclude that the

plaintiffs’ merchandising work was “incidental to and in

conjunction with” their outside sales of Coca-Cola products

under the proviso of § 541.500(b). As a result, in spite of their

merchandising work, the plaintiffs are covered by the outside

salesman exempuon.

In reaching the contrary conclusion, the district court

relied on testimony that “merchandising was primarily done

because the customers expected it to be done and _ that

merchandising increased the sales of Coca-Cola products in

general.” Aplt's App. at 1617. Although we do not dispute the

district court's characterization of this testimony, we note that

neither the fact that the plaintiffs were motivated by a desire to

please customers nor the fact that merchandising increased sales

of products at other locations is determinative of what activilies

are "incidental to and in conjunction with" outside sales under

the Department of Labor regulations. Instead, what matters 1s

whether the _ plaintiffs--or someone else--sold Coca-Cola

products at the locations where the plainuffs performed

merchandising activities and whether, if the plaintiffs sold Coca-

Cola products at those locations, their merchandising work

promoted those sales.

The district court also relied on the quantity of

merchandising work performed by the plaintiffs in certain

A-17

weeks, reasoning that an activity that consumes anywhere from

twenty to sixty-five percent of an employee's work week cannot

be characterized as incidental. Id. at 17. Although the district

court's reasoning is persuasive under the dictionary definition

of"incidental” on which it relied, that dictionary definition is not

applicable here. Instead, we must apply the phrase as used in the

applicable regulations, which use the phrase "incidental to and

in conjunction with" in a manner not directly correlated to the

amount of time expended. See 29 C.F.R. § 541.505 (a) (stating

that "[a] determination of an employee's chief duty or primary

function must be made in terms of the basic character of the job

as a Whole" and that "the time devoted to the various duties is

an important, but not necessarily controlling, element”).

We agree with the plaintiffs that, as the Department of

Labor regulations are: written and as Coca-Cola has interpreted

them, the company may be allowed to avoid paying overtime in

certain instances by assigning merchandising tasks to account

managers rather than to merchandisers. Although such an

assignment may be inequitable and subject to challenge on other

grounds, the evidence in this case does not establish a violation

of the FLSA under the current Department of Labor regulations.

Because Congress has delegated the authority to define the

FLSA exemptions to the Department of Labor, and because the

plaintiffs have not here challenged those regulations as arbitrary,

capricious, or manifestly contrary to the statute, see Chevron~

U.S.A.. Inc. v. Natural Resources Defense Council. Inc., 467

U.S. 837, 844 (1984), our task here is to apply the exemptions

as defined in the regulations.

Ill. CONCLUSION

We therefore conclude that the plaintiffs are exempt from

the FLSA as outside salesmen. The district court's decision is

reversed, and the case is remanded to the district court for

further proceedings consistent with this opinion.

A-19

APPENDIX B

[FILED JANUARY 27, 1997]

IN THE UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF COLORADO

Civil Action No. 93-OK-1633-TL

RICHARD ACKERMAN, TIMOTHY BOOKER, ERICH

BUTLER. MICHAEL DICKSON, EDWARD DONAHOE,

MICHAEL FABIAN, STEVEN JONES, MARK MARES,

ROBERT MOON, JAMES MUELLER, DANA ROE, KIM

SMITH, PAUL SPIELMAN, ALAN TAMONDONG, BRAD

VELLIQUETTE, and JAMES M. FORBES,

Plaintiffs,

Vv.

COCA-COLA ENTERPRISES INC., a Delaware corporation

and in good standing and licensed to do business in Colorado,

Defendant.

MEMORANDUM OPINION

Claiming that defendant owes them unpaid overtime

compensation, plaintiffs filed this action for damages on August

B-1

3, 1993, pursuant to the Fair Labor Standards Act ("FLSA"), 29

U.S.C. $s 201-219.' In addition to seeking overtime

compensation, plaintiffs seek an award of liquidated damages

and attorney's fees. Defendant contends that plaintiffs are

salaried employees exempt from the overtime requirements of

the FLSA. Specifically, defendant argues that plaintiffs are

exempt under either the motor carrier exemption, the outside

sales exemption, or a combination exemption. On October 21,

22. and 23, 1996, this matter was tried to the court without a

jury. In accordance with Fed. R. Civ. P.52(a), this memorandum

opinion constitutes the court's findings of fact and conclusions

of law.

The evidence presented at trial’ and the stipulations of the

| Twenty plaintiffs originally filed this action. On September

14. 1993, the court permitted plaintiffs to amend the complaint to add claims

for plaintiff James M. Forbes. Five plaintiffs have been dismissed trom this

action pursuant to supulations of dismissal: Carlton Hockaday, by Order

dated February 4, 1994, Dorothy Manley, by Order dated February 4, 1994;

Larry Markwell, by Order dated May 2, 1994; Richard Loos, by Order dated

March 28, 1995; and Penny Griffith, by Order dated May 12, 1995.

2 During their case in chief, plaintiffs presented the live

testimony of plaintiffs Timothy Booker, Dana Roe and Michael Dickson.

The parties stipulated that their testimony “is representative of the testimony

of the remaining Plaintiffs except that the dates of employment would vary,

the District Sales Manager to whom they Were assigned would vary, and their

total damages would vary. Each of the remaining Plaintiffs would testify

consistent with their Supplemental Interrogatory Responses as to the number

of hours worked while emploved by the Defendant, as to the number of hours

that they spent doing merchandising activities while employed by the

Defendant.” Stipulation as to Witnesses and Exhibits (Oct.. 23, 1996).

Defendant presented the live testimony of Greg Feasel, Wilton Washington

and Tony Rodriguez-Milligan. The parties stipulated that their testimony “is

representative of the testimony to be presented by Defendant's other listed

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parties establish that plaintiffs were employed by defendant as

"Account Managers" or "Advanced Sales Representatives" for

various periods of time during the two years preceding the filing

of the complaint.’ Defendant is engaged in the production of

Coca-Cola brand beverages and the distribution of such products

along with other beverages. Prior to April 1, 1992, defendant

utilized a hybrid system for distribution. For “major accounts,”

that is accounts which annually bought more than four million

dollars worth of product, defendant employed Account Sales

Representatives to presell the product. Delivery drivers would

then transport the product to the major account, where

individuals known as "merchandisers" would stock the shelves

and perform other merchandising tasks. Prior to April 1, 1992.

all other accounts were served by conventional route sales

drivers who would call on the customer, make the sale,

simultaneously deliver the product, restock the shelves and

displays, hang advertising, and clean shelves and coolers.

Defendant compensated Account Sales Representatives by

paying them a salary, plus bonuses and commissions; Account

Sales Representatives were not paid any overtime compensation.

witnesses.” Id, In addition, defendant presented the live testimony of Paul

King.

3 On May 18, 1995, the court found that this action is

governed by the two-year statute of limitations, rather than the three-year

limitations for willful violations of the FLSA. Fourteen of the plaintiffs are

seeking Overtime compensation for periods of time subsequent to April 1,

1992: five plaintiffs claim overtime compensation for the period of time prior

to April 1, 1992. In light of the court's statute of limitations ruling, however,

overtime compensation cannot be sought for any period prior to August

3.1991 Therefore, the claim of plaintiff James M. Forbes, which seeks

overtime for the period prior to July 15,1991, is barred by the court's May

18,1995 ruling on the statute of limitations.

B-3

Likewise, conventional route sales drivers did not receive

overtime compensation; their compensation package consisted

of salary, plus bonuses and commissions. Defendant, however,

considered delivery drivers and merchandisers to be non-exempt

employees; these employees, therefore, were paid on an hourly

basis and received overtime compensation at | 1/2 times their

hourly rate for all hours over forty hours worked in any

workweek.

After April 1, 1992, defendant utilized a total pre-sell

system for distribution of its product. Account Managers visited

all major accounts, down-the-street accounts (convenience stores

and small grocery stores) and mass merchandisers (discount

stores such as Wal-Mart, Walgreens and Phar-Mor) to receive

orders for product. All product was subsequently delivered to the

account by delivery drivers. Merchandisers were used to

merchandise the major accounts and some mass merchandiser

accounts. The Account Managers performed the merchandising

tasks at all down-the-street accounts and frequently performed

such tasks at major and mass merchandiser accounts.

Merchandising consists of:

Restocking shelves, filling coolers,

filling vendors, delivering product,

adjusting and cleaning display

shelves, setting up the displays,

rotating the product, hanging

signs, placing day glow stickers,

cleaning up warehouse, cleaning

coolers and shelves, delivery of

product and equipment, replacing

damaged product, trading out

production for promotion,

B-4

restocking pallets, rotating

displays, rotating shelves,

transferring product from one store

to another, putting up point of sale

signs, putting up corobuff, pulling

product forward.

Stipulation of the Parties (Oct. 16, 1996).

Plaintiffs began their workdays at approximately 5:00

a.m. During a typical day, plaintiffs’ would attend a sales

meeting or meet with their immediate supervisor or their

merchandisers to discuss sales issues. Following the meeting,

plaintiffs would gather advertising materials, known as point of

sale or POS material from the "POS room." The POS materials,

which were ordered in bulk by defendant, were shipped to

defendant's plant from outside the State of Colorado and were

stored in the POS room at defendant's warehouse. While some

of the POS material may have been slated for a particular chain

of stores, none of the material was designated for a specific

geographic destination. Using station-wagons supplied by

defendant, plaintiffs transported the POS material — from

defendant's warehouse to the stores they serviced.

During a typical day, an Account Manager would visit 10

to 15 major accounts, 15 to 20 down-the-street accounts and a

few mass merchandisers. Plaintiffs testified that mass

merchandisers were not visited daily; rather, the Account

Manager would call on these accounts every two or three days.

At a major and mass merchandiser accounts, the Account

Manager would walk the store to determine the location and

condition of Coca-Cola displays versus the competitors’

displays. The Account Manager would determine the available

B-5

inventory of product in displays, on shelves and in the

storeroom. Oftentimes, Account Managers — performed

merchandising functions, such as restocking and cleaning

shelves and displays, rotating stock and pulling stock forward.

The Account Manager would also ensure that POS materials

were properly displayed. Finally, the Account Manager would

speak to the store's manager to verify the amount of product to

be shipped to the store. At down-the-street accounts and miss

merchandiser accounts that Were not assigned merchandisers, the

Account Manager not only presold the product, but also

performed all of the merchandising tasks.

It is undisputed that plaintiffs worked more than 40 hours

per week as Account Managers.” It is also undisputed that

plaintiffs did not receive any overtime compensation tor the

additional hours worked. The parties have stipulated that “in

certain work Weeks, an account manager would spend in excess

of 20% of the time spent by non-exempt: merchandisers”

performing merchandising tasks. Supulation of the Parties (Oct.

16, 1996).

In general, the FLSA requires employers to pay their

employees at least | '2 their regular pay for hours worked in

excess of 40 hours per week. 29 U.S.C. § 207. The overtime

requirement, however, does not apply to “any employee

employed in a bona fide executive . . . capacity... or in the

capacity of outside salesman (as such terms are defined and

delimited trom time to time by regulations of the Secretary [ot

4 Plaintiffs worked varying hours, ranging [rom an average

low of 55 hours per week to an average high of 72 hours per week See

Exhibit BN.

“lial

Labor] ...." 29 U.S.C. § 213(a)(1). In addition, the overtime

provisions do not apply to “any employee with respect to whom

the Secretary of Transportation has power to establish

qualifications and maximum hours of service pursuant to the

provisions of section 3102 of Title 49." 29 U.S.C. § 213(b)1).

The defendant bears the burden of

preving that an employee falls

within. a FLSA exemption.

Corning Glass Works v. Brennan,

417 U.S. 188, 196-97, 94S. Ct.

2223, 2229, 41 L. Ed. 2d 1 (1974);

Department of Labor v. City of

Sapulpa, 30 F.3d 1285, 1287 (Oth

Cir. 1994). An employee must fit

"plainly and unmistakenly within

the exemption's terms,” and FLSA

exemptions are to be narrowly

construed. Aaron v. City of

Wichita, 54 F.3d 652, 657 (Oth

Cir.) (internal quotation marks

omitted), cert. denied, --- U.S. ---,

116 S. Ct. 419, 133 L. Ed. 2d 336

(1995).

Hays v City of Pauls Valley, 74 F.3d 1002, 1005-6 (Oth Cir.

1996). The regulations issued by the Department of Labor “are

the primary source of guidance for determining the scope and

extent of exemptions to the FLSA." Spradling v. City of Tulsa,

95 F.3d 1492, 1495 (10th Cir. 1996).

To establish the outside salesman exemption, defendant

must satisfy a two-prong test. First, defendant must show that

B-7

plaintiffs were employed for the purpose of making sales of

defendant's products and were regularly and customarily

engaged in that activity away from defendant's warehouse. 29

C.E.R § 541.500(a) (1996). In addition, defendant must

demonstrate that the hours spent by plaintiffs performing

nonexempt work did "not exceed 20 percent of the hours worked

in. the workweek by nonexempt employees of the employers:

Provided, That work performed incidental to and in conjunction

with the employee's own outside sales or solicitations, including

incidental deliveries and collections, shall not be regarded as

nonexempt work." 29 C.F.R. § 541.500(b) (1996). The parties

do not dispute that the first prong of this test is met. In addition,

the parties have stipulated that, except for the proviso, defendant

cannot meet the second prong of this test because the ume

plaintiffs spent performing nonexempt work exceeded 20

percent of the hours worked by nonexempt workers. Therefore,

the issue in this case is whether defendant has met its burden of

proof with respect to the proviso contained in the second prong,

specifically whether the merchandising tasks performed by

plaintiffs can be said to be “incidental to and in conjunction

with" plaintiffs’ sales within the meaning of the regulations. The

regulations counsel that:

With such variations in_ the

methods of selling and promoting

sales each case must be decided

upon its facts. In borderline cases

the test’ is whether the person Is

actually engaged in activities

directed toward the consummation

of his own sales, at least to the

extent of obtaining a commitment

to buy from the person to whom he

B-8

is selling. If his efforts are

directed toward stimulating the

sales of his company generally

rather than the consummation of

his own specific sales his

activities are notexempt.

29 C.F.R. § 541.504(b)(2) (1996) (emphasis added).

Therefore, under the regulations, defendant must establish

that the merchandising activity enhanced the specific sales of

the individual plaintiffs and not just the sales of Coca-Cola

products in general. While there was some evidence in the

record that plaintiffs’ merchandising tasks were done to increase

their specific sales, the preponderance of the evidence reflects

that the witnesses consistently testified that merchandising was

primarily done because the customers expected it to be done and

that merchandising increased the sale of Coca-Cola products in

general. Moreover, it cannot be said that — plaintiffs’

merchandising activities were “incidental” to their primary duty

of outside sales. "Incidental" is defined as “occurring or apt to

occur as an unpredictable or minor concomitant” or “of a minor,

casual, or subordinate nature.” Webster's IL New Riverside

University Dictionary 618 (1984). An activity that consumes

anywhere from 20 to 65 percent of an employee's workday

cannot be said to be a minor occurrence.’ Moreover, plaintiffs

5 Plaintiffs estimate that they spent the following amount

of time on merchandising tasks: Ackerman - 55°; Booker - 25-30,

Butler - 60% ; Dickson - 30°, Donohoe - 305%, Fabian - 50°. Jones -

25%; Mares - 50%; Moon -25-30%; Mueller - 40% , Roe - 40°; Smith -

60-65% Spielman - 45%; Tamondong - 20%, and Velliquette - 40°% . See

Defendant's Exhibit BN. Depending on the individual, this results in a low

B-9

were expected to perform such tasks on a daily basis, as

evidenced by the fact that merchandising was listed as part of the

Account Manager's duties and the Account Managers were

evaluated on their merchandising skills. See Plainuffs' Exhibit

33: see. e.g, Plaintiffs’ Exhibit 49 at C146, C150; Plaintiffs’

Exhibit 56 at C376, C378, C380; see also Plaintiffs’ Exhibit 49

at C214 ("Merchandising is an important part of our overall

marketing strategy, and the execution of merchandising

standards is a key element in reaching our marketing

objectives.”). As a result, defendant has not demonstrated that

plaintiffs fit “plainly and unmistakenly" within the outside

salesman exemption.

The court also finds that defendant did not sustain its

burden of establishing that plaintiffs are exempt under a

combination exemption. The regulations permit an employer to

“tack” exemp! work under one category onto exempt work under

another category in order to qualify an employee for an

exemption that is a combination of the two exemptions. See 29

C.F.R. § 541.600 (1996). In this case, defendant contends that

plaintiffs fall under a combination exemption based on executive

und outside salesman duties.

In combination exemptions,

however, the employee must meet

the stricter of the requirements on

salary and nonexempt work. For

instance, if the employee performs

a combination of an executive's

and an outside salesman's function

ot 12 hours per Week spent on non-exempt tasks to a high of more than 41

hours per week on such tasks.

B-10

(regardless of which occupies most

of his time) he must meet the

salary requirement for executives.

Also, the total hours of nonexempt

work under the definition of

"executive" together with the hours

of work which would not be

exempt if he were clearly an

outside salesman, must not exceed

either 20 percent of his own time

or 20 percent of the hours worked

in the work-week by the

nonexempt employees of — the

employer, whichever is smaller.

541.600(a)(1996).The Court of Appeals for the Eighth Circuit

has interpreted this regulation as requiring the employer to

"show that the employee falls within a combination of the long

tests . . . [the employer] cannot rely on a combination of the

short tests. This means that an employee will qualify for a

combination exemption only if he does not devote more than

20% of his time to nonexempt work.” Auer v. Robbins, 65 F 3d

702, 722 (8th Cir. 1995), cert. granted, 116 S.Ct. 2545 (1996).

As the parties have stipulated that plaintiffs "would spend in

excess of 20% of the time spent by non-exempt merchandisers”

performing nonexempt tasks, defendant cannot meet its burden

under the combination exemption.

Finally, the court concludes that plaintiffs are not exempt

under the motor carrier exemption. The motor carrier exemption

applies to those employees who are subject to regulation by the

Secretary of Transportation. The Secretary of Transportation's

power to regulate employees is limited to those employees who

B-11

meet two tests. First, the employee must be “employed by

carriers Whose transportation of passengers or property by motor

vehicle is subject to his jurisdiction under section 204 of the

Motor Carrier Act..." 29 C.F.R. § 782.2(a) (1996). Second, the

employee must “engage in activities of a character directly

affecting the safety of operation of motor vehicles in the

transportation on the public highways of passengers or property

in interstate or foreign) Commerce within the meaning of the

Motor Carrier Act.” Id. The key in this case is whether plainttts:

intrastate transportation of POS materials constitutes

transportation of property in interstate commerce,

Transportation within a single state

may remain “interstate” in

character when it forms part of a

“practical continuity of movement”

across state lines from the point of

origin to the point of destination.

The characterization) of — such

transportation as interstate or

intrastate depends upon — the

"essential character" of — the

shipment.

“Crucial to a determination of the

essential character of a shipment

is the shipper's fixed and persisting

intent at the time of shipment.”

To make this determination .

[t}his test, set out in 29 C.F.R. §

782.7(b)(2), concludes that there ts

no fixed and persisting intent to

ship goods in interstate commerce

B-12

+ an Dee

where:

(i) At the time of

shipment there 1s

no specific order

being filled for a

specific quantty of

a given product to

be moved through

to a specific

destination beyond

the terminal

storage, and (11)

the terminal

storage Isa

distribution — point

or local marketing

facility from which

specific amount of

the product — are

sold or allocated,

and (i268)

transportation in

the furtherance of

this distribution

within the single

State is specifically

arranged only after

sale or allocation

from storage.

Foxworthy v. Hiland Dairy Co., 997 F.2d 670, 672-73 dOth Cir.

1993) (citations omitted). Pursuant to this test, the court finds

B-13

there was no “fixed and persisting intent" to ship the POS

material in interstate commerce. The evidence demonstrates that

the POS material is general marketing material that is not

designated for specific geographic destinations; this is not a case

where the shipper knew exactly which customer was going to

receive which piece of POS and in what amount. C.f.,

Foxworthy, 997 F.2d at 673. There was no evidence that “a

specific quantity" of POS material was ever designated “to a

specific destination.” In addition, the POS room is akin to a local

marketing facility from which POS material ts allocated:

transportation of such material does not occur -- indeed cannot

occur -- until after such allocation from storage. In short, the

court finds that defendant has not sustained its burden of

establishing that the motor carrier exemption applies.

Having found that plaintiffs are nonexempt employees,

the final issue for decision is the measure of damages. The

parties have supulated to the amount of damages depending on

the theory used by the court. Plaintiffs contend that they should

receive | 1/2 times their regular pay for all hours over 40 during

any given workweek. Defendant cou that) plamntufts’

overtime wages should be calculated on a “fluctuating

workweek" basis. Under the fluctuating workweek method,

payment of overtime at 1/2 of the regular rate in addition to the

employee's salary satisfies the overtime pay requirement. 29

C.F.R. § 778.114(a) (1996). This method of overtime

compensation may not be used “unless the employee clearly

understands that the salary covers whatever hours the job may

demand in a particular workweek and the employer pays the

salary even though the workweek is one in which a full schedule

of hours is not worked." 29 C.F.R. § 778.1 14(b) (1996).

B-14

"(The term, ‘irregular hours of

work,’ does not mean merely a

fluctuating long workweek,

consisting only or mostly of

variations in the hours required

over forty. For hours to be

considered irregular within the

meaning of section [20]7(f), they

must, in a significant number of

weeks, fluctuate both below forty

hours per week as well as above *

Crenshaw v. Quarles Drilling Corp., 798 F.2d 1345, 1348 dOth

Cir. 1986) (quoting Donovan v. Brown Equipment and Service

Tools Inc., 666 F.2d 148, 154 (Sth Cir. 1982)) (emphasis in

Crenshaw). There is no evidence that plainutfs ever worked less

than 40 hours per week, much less did so in a significant number

of weeks Thus. the court finds that the fluctuating workweek

iethod is not applicable to this case. Plaintiffs are therefore

entitled to the stipulated damages set forth in the column

entitled "Time and One-half Calculation" on Plaintiffs’ Exhibit

106.

The final damage issue is whether plainuffs are entitled

to an award of liquidated damages.

The FLSA provides that an

employer who violates the

overtime provisions of § 207

ordinarily is liable for unpaid

overtime compensation and “an

additional equal amount as

liquidated damages.” . - . {T]he

B-15

district court may eliminate or

reduce the award of liquidated

damages only if the employer

demonstrates "both that he acted

in good faith and that he had

reasonable grounds for believing

that his actions did not violate the

Act." "The good faith requirement

mandates the employer have ‘an

honest intention to ascertain and

follow the dictates of the Act.“

"The additional requirement that

the employer have reasonable

grounds for believing that his

conduct complies with the Act

imposes an objective standard by

which to judge the employer's

behavior.”

Dept of Labor v. City of Sapulpa, 30 F.3d 1285, 1288-89 (Oth

Cir. 1994). Based on this standard, the court finds that defendant

has demonstrated that it acted in good faith and had reasonable

grounds for believing that its actions did not violate the FLSA.

It is undisputed that defendant paid overtime compensation to

those employees it thought fell within the ambit of the FLSA

and that it thought plaintiffs fell within the outside salesman

exemption to the FLSA. The fact that this court disagrees with

defendant's interpretation does not lessen the reasonableness of

that interpretation. In addition, the court finds that defendant

acted in good faith. It monitored the compensation paid by its

competitors; the evidence established _ that defendant's

competitors also treated employees similarly situated to

plaintiffs as exempt employees. The court stresses that this case

B-16

presented a very close question on the issue of liability.

Resolution of the exemption issue was intensely factually based

and ultimately turned on the fact that plaintiffs’ nonexempt

activities could not be viewed as incidental to their management

and outside sales activities. Thus, in light of the closeness of the

liability issue and based on the record as a whole, the court

exercises it discretion to eliminate the award of liquidated

damages.

In sum, based on all the evidence the court concludes that

defendant failed to carry its burden of demonstrating that

plaintiffs are exempt from the overtime provisions of the FLSA,

but did carry its burden with respect to liquidated damages.

Therefore, the court awards plaintiffs the following sums:

Plainuft Compensation

Richard Ackerman $12,792.24

Timothy Bocker 37,603.32

Erich Butler 27,468.00

Michael Dickson 40,102.20

Edward Donahoe 66.835.80

Michael Fabian 18,559.45

Steven Jones 43,828.20

Mark Mares 19,423.80

Robert Moon : 19,688.60

James Mueller 39,173.40

Dana Roe 86,963.52

Kim Smith 6,132.75

Paul Spielman 27,311.04

Alan Tamondong 9,839.76

Brad Velliquette 22,683.60

No damages are awarded to plaintiff James M. Forbes, as his

claim is barred by the statute of limitations. Judgment will issue

accordingly.

It is so ordered this 27th day of January, 1997.

s/

TIM LEONARD

United States District Judge

Case No. 93-OK-1633-TL

I certify that a copy of the attached has been mailed to the

following:

Dated: January 27, 1997

JAMES R. MANSPEAKER, CLERK

s/

By: Glenna Drake

Deputy Clerk

Gary L. McPherson

McPherson & Hull, P.C.

3300 S. Parker Rd. #101

Aurora, CO 80014-3520

Daniel Powell

P. O. Box 807

401 Edison Ave. #201

Alamosa, CO 81101

B-18

fon eT ee eT ee

W. V. Siebert

Sherman & Howard

DC Box No. 12

Ronald G. Ingham

Miller & Martin

832 Georgia Ave. #1000

Chattanooga, TN 37102-2289

B-19

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

{FILED JANUARY 27, 1997]

Civil Action No. 93-OK-1633-TL

RICHARD ACKERMAN, TIMOTHY BOOKER, ERICH

BUTLER. MICHAEL DICKSON. EDWARD DONAHOE,

MICHAEL FABIAN, STEVEN JONES, MARK MARES,

ROBERTMOON, JAMES MUELLER, DANA ROE, KIM

SMITH, PAUL SPIELMAN, ALAN TAMONDONG, BRAD

VELLIQUETTE, and JAMES M. FORBES.

Plaintiffis).

v.

COCA-COLA ENTERPRISES, INC., a Delaware corporation

and in good standing and licensed to do business in Colorado,

Defendant(s).

JUDGMENT

Pursuant to the Memorandum Opinion issued this date,

judgment is entered against defendant Coca-Cola Enterprises

Inc., a Delaware corporation and in good standing and licensed

to do business in Colorado and in favor of the following

plaintiffs in the following amounts:

B-20

Plaintiff Compensation

Richard Ackerman $12,792.24

Timothy Booker 37,603.32

Erich Butler 27,468.00

Michael Dickson 40,102.20

Edward Donahoe 66,835.80

Plainuff Compensation

Michael Fabian 18,559 45

Steven Jones 43,828.20

Mark Mares 19,423.80

Robert Moon 19,688.60

James Mueller 39,173.40

Dana Roe $6,963.52

Kim Smith 6,132.75

Paul Spielman 27,311.04

Alan Tamondong 9,839.76

Brad Velliquette 22,683.60

Judgment is also entered against plainuff James M.

Forbes and in favor of defendant CocaCola Enterprises Inc., a

Delaware corporation and in good standing and licensed to do

business in Colorado.

Entered this 27th day of January, 1997.

s/

TIM LEONARD

United States District Judge

- Case No. 93-OK-1633-TL

I certify that a copy of the attached has been mailed to the

following:

Dated: January 27, 1999

JAMES R. MANSPEAKER, CLERK

s/

By: Glenna Drake

Deputy Clerk

Gary L. McPherson

McPherson & Hull, P.C.

3300 S. Parker Rd. #101

Aurora, CO 80014-3520

Daniel Powell

P. O. Box 807

401 Edison Ave. #201

Alamosa, CO 81101

W.V. Siebert Sherman & Howard

DC Box No. 12

Ronald G. Ingham

Miller & Martin

832 Georgia Ave. #1000

Chattanooga, TN 37102-2289

B-22

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Civil Action No. 93-OK-1633-TL

[FILED JUNE 23, 1997]

RICHARD ACKERMAN, TIMOTHY BOOKER, ERICH

BUTLER, MICHAEL DICKSON, EDWARD DONAHOE,

MICHAEL FABIAN, STEVEN JONES, MARK MARES,

ROBERTMOON, JAMES MUELLER, DANA ROE, KIM

SMITH, PAUL SPIELMAN, ALAN TAMONDONG, BRAD

VELLIQUETTE, and JAMES M. FORBES,

Plaintiff(s),

COCA-COLA ENTERPRISES, INC., a Delaware corporation

and in good standing and licensed to do business in Colorado,

Defendant(s).

ORDER

On January 27, 1997, the court entered judgment in favor

of plaintiffs' and against defendant on plaintiffs’ claim for

overtime compensation pursuant to the Fair Labor Standards Act

("FLSA"), 29 U.S.C. §§ 201-219. This matter is before the

| Judgement was entered in favor of all plaintiffs except James M.

Forbes, whose claim was barred by the statute of limitations.

B-23

court on the following post-trial motions: (1) Defendant's

Motion to Alter or Amend Judgment (2) Plaintiffs’ Motion for

Prejudgment and Postjudgment Interest; (3) Plaintiffs’ Motion

to Review Clerk's Taxation of Plaintiffs’ Bill of Costs; (4)

Plaintiffs’ Motion to Compel Production of Billing Records and

Disclosure of Billing Rates; and (5) Defendant's Motion for

Production of Documents and to Shorten Time for Response.

Motion to Alter or Amend

On February 10, 1997, defendant filed its motion to alter

or amend the judgment. As the motion was filed within ten days

of the date of the Judgment, it is treated as a motion pursuant to

Fed. R. Civ. P. 59e). Rule 59 provides that "{a] new trial may

be granted to all or any of the parties and on all or part of the

issues ... in an action tried without a jury, for any of the reasons

for which rehearings have heretofore been granted in suits in

equity in the courts of the United States." Fed. R. Civ. P. 59(a).

The purpose of a motion to alter or amend "is to correct manifest

errors of law or to present newly discovered evidence.” Harsco

Corp. V. Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985) (quoted in

Committee for the First Amendment v. Campbell, 962 F.2d

1517, 1523 (10th Cir. 1992)).

Defendant contends that the court committed a manifest

error of law by declining to apply the "fluctuating workweek"

method to compute the overtime compensation due plaintiffs.

Defendant argues that the court erroneously relied on case law

and definitions that do not apply to the situation at issue here.

The court agrees that its reliance on Crenshaw _v. Quarles

Drilling Corp., 798 F.2d 1345, 1348 (10th Cir. 1986), was in

error. Nonetheless, the court finds that defendant has not met its

burden of establishing that plaintiffs’ overtime compensation

B-24

should be calculated using the fluctuating workweek

methodology. See Burgess v. Catawba County, 805 F. Supp.

341, 347 (W.D.N.C. 1992) ("since the ‘fluctuating workweek’

is also an exception to the normal requirements of the FLSA,

the Defendant bears the burden of establishing that it complied :

with the regulations.").

The fluctuating workweek regulation provides that:

Anemployee employed on a salary

basis may have hours of work

which fluctuate from week to week

and the salary may be paid him

pursuant to an understanding with

his employer that he will receive

such fixed amount as straight time

pay for whatever hours he 1° called

upon to work in a workweek,

whether few or many. Where there

is a clear mutual understanding of

the parties that the fixed salary is

compensation (apart from overtime

premiums) for the hours worked

each workweek, whatever their

number, rather than for working 40

hours or some other fixed weekly

work period, such_ salary

arrangement is permitted by the

Act if the amount of the salary is

sufficient to provide compensation

to the employee at a rate not less

than the applicable minimum wage

rate for every hour worked in

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those workweeks in which the

number of hours he works is

greatest, and if he receives extra

compensation, in addition to such

salary, for all overtime hours

worked at a rate not less than one-

half his regular rate of pay.

29 C.FLR. § 778.1 14(a) (1996). Defendant argues that for the

regulation to apply, all that must be shown is that the parties

clearly understood that plainufts' fixed salary would compensate

them for all hours worked. See Defendant's Reply to Plaintiffs’

Response to Motion to Alter or Amend Judgment at 2. This

reading of the regulation, however, focuses solely on the first

sentence and ignores the remainder of the regulation. The

regulation expressly provides that two criteria must be met

before the fluctuating workweek salary arrangement "is

permitted by the Act.” First, the amount of salary when divided

by the greatest number of hours worked in a workweek must be

greater than the applicable minimum wage rate. Second, the

salary scheme must provide extra compensition for all overtime

hours worked at a rate not less than one-half the regular rate of

pay. While defendant has demonstrated compliance with the

first requirement,” there was no evidence that defendant even

attempted to comply with the second criterion. In fact, the

evidence was to the contrary. The court finds that defendant has

not met its burden of proving that the fluctuating workweek

methodology should be utilized in this case. Thus, while

2 The minimum wage rate for the years in question was

$4.25 per hour. 29 U.S.C. § 206(a). Plaintiffs’ salaries when divided by the

number of hours worked each week exceeded the minimum wage. See

Plaintiffs’ Exhibit 107.

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defendant's motion to alter or amend judgment is granted to the

extent the court no longer relies on Crenshaw, it is denied in all

other respects.

Motion for Prejudgment and Postjudgment Interest

In this motion, plaintiffs seek an award of prejudgment

interest of 8 percent per annum, compounded annually, accruing

on the date their overtime payments became due. In addition.

plaintiffs seek an award of postjudgment interest at the rate of

5.61 percent from the date of judgment until paid. Defendant

does not dispute plaintiffs’ entitlement to postjudgment interest,

nor does defendant challenge plaintiffs’ calculations with

respect to the amount of prejudgment interest at — issue.

Defendant, however, denies that plaintiffs are entitled to recover

prejudgment interest and argues that the court's denial of

plaintiffs’ request for liquidated damages precludes plainuffs’

recovery of prejudgment interest.

Defendant's argument, however, is not persuasive given

the state of the law in this circuit. Tenth Circuit precedent

Clearly provides that a plaintiff may not recover both liquidated

damages and prejudgment interest. See Department of Labor v.

City of Sapula, 30 F.3d 1285, 1290 (10th Cir. 1994): Doty v.

Elias, 733 F.2d 720, 726 (10th Cir. 1984); Blim v. Western Elec.

Co., 731 F.2d 1473, 1479-80 (10th Cir. 1984). The cases do not

provide that the denial of liquidated damages necessitates the

denial of prejudgment interest. In addition, “prejudgment interest

is ordinarily awarded in a federal case ...." Malloy v. Monahan.

73 F.3d 1012, 1019 (10th Cir. 1996).

[A] two step analysis governs the

determination of such an award.

B-27

"First, the trial court must

determine whether an award of

prejudgment interest would serve

to compensate the injured party.

Second, when an award would

serve a compensatory function, the

court must still determine whether

the equities would preclude the

award of prejudgment interest.”

U.S. Indus., Inc. v. Touche Ross &

Co., 854 F.2d 1223, 1257 (10th

Cir. 1988) ....

Id.

The court finds that prejudgment interest is warranted in

this case to compensate plaintiffs for the delay in receiving the

overtime compensation that is due them. See Blim, 731 F.2d at

1479. The equities favor plaintiffs rather than defendant, as

defendant has had the use of money that belongs to plaintiffs

for. in some instances, more than five years. Failure to grant

prejudgment interest to plaintiffs would provide defendant with

4 windfall while failing to fully compensate plaintiffs. Plaintiffs’

Motion for Prejudgment and Postjudgment Interest is therefore

GRANTED.

Motion to Review Bill of Costs

On February 6, 1997, plaintiffs submitted their bill of

costs, seeking $ 13,516.23 in costs. On February 19, 1997, the

Clerk of the Court assessed costs against defendant and in favor

of plaintiffs in the amount of $928.35. Basically, the Clerk

disallowed the costs associated with depositions that were not

B-28

ec a tat Se ISD aa i a a *

actually used at trial and printing and copying charges.

Rule 54(d) provides that "[e]xcept when express

provision therefor is made in a statute of the United States or in

these rules, costs other than attorney’ s fees shall be allowed as

of course to the prevailing party unless the court otherwise

directs." Fed. R. Civ. P. 54(d). The Court of Appeals for the

Tenth Circuit has held that "Rule 54 creates a presumption that

the district court will award costs to the prevailing party.”

Aerotech. Inc. v. Estes, 110 F.3d 1523, 1526 (10th Cir. 1997).

The circumstances under which the court may deny costs to the

prevailing party are limited. See id. In addition, the court "must

provide a valid reason for not awarding costs to a prevailing

party.” Cantrell v. IBEW, AFL-CIO, Local 2021, 69 F.3d 456,

459 (10th Cir. 1995) (en banc). Generally, the costs of taking

and transcribing depositions that are "reasonably necessary to

the litigation of the case" are recoverable. Ramos v. Lamm, 713

F.2d 546, 560 (10th Cir. 1983). Depositions that are taken solely

for discovery, however, are not taxable as costs. Furr v. AT&T

Technologies. Inc., 824 F.2d 1537, 1550 (10th Cir. 1987).

Based on the standards enunciated above, the court grants

plaintiffs’ motion in part and denies it in part. The court hereby

awards the costs associated with the depositions at issue. Each

of the depositions was "reasonably necessary to the litigation of

the case." Without the deposition evidence, the parties would

not have been able to stipulate to the representative nature of the

witnesses who _ testified, both for plaintiffs and defendant.

Furthermore, plaintiffs’ deposition were essential to the parties’

stipulation regarding damages. By entering into these

stipulations, the parties significantly shortened the trial of this

matter. The court finds that these depositions were far more than

discovery depositions; therefore, the costs associated with them

B-29

should be allowed. The court, however, disallows the $386.31

cost associated with the copying of plaintiffs’ depositions for

their review prior to trial. The court finds that such cost is not

encompassed in "fees for exemplification and copies of papers

necessarily obtained for use in the case." 28 U.S.C. § 1920(4).

Likewise, the court disallows the $904.45 cost associated with

photocopies made at counsel's office. Plaintiffs have presented

no evidence that such costs were necessary for presentation of

the case; rather, plaintiffs simply state that "this amount of

photocopies is extremely reasonable." Motion to Review Clerk's

Taxation of Plaintiffs’ Bill of Costs at 5. This is insufficient

under the statute.

In sum, plaintiffs’ motion is granted in part and denied in

part. Plaintiffs are hereby awarded costs in the amount of $12

285.47.

Motion to Compel and Motion for Production of Documents

Plaintiffs seek an order compelling defendant to produce

the billing records and hourly rates of its attorneys. Plaintiffs

argue that such information is relevant to the issue of the

attorney's fee to be awarded plaintiffs under the FLSA.

Plaintiffs argue that "[t]he billing records of counsel for

Defendant would be extremely relevant to the Court to

determine whether the amount of hours expended by Plaintiffs’

counsel was reasonable in Colorado." Plaintiffs’ Motion to

Compe! Production of Billing Records and Disclosure of Billing

Rates at { 3. In addition to plaintiffs’ motion to compel,

defendant seeks an order compelling plaintiffs to disclose their

fee agreement with counsel.

The court finds that neither the billing records nor the

hourly rate charged by defendant's attorneys is relevant. The

issue before the court is the reasonableness of plaintiffs ' fee

request. To determine that issue, the court must examine the

hours expended by plaintiffs’ counsel and the prevailing market

rate for comparable services. See Beard v. Teska, 31 F.3d 942,

956-57 (10th Cir. 1994). The hours and billing rates charged by

defendant's counsel simply have no bearing on that issue. See

Malloy v. Monahan, 73 F.3d 1012, 1018-19 (10th Cir. 1996).

Likewise, the court finds that plaintiffs’ fee agreement with

counsel is not relevant to the issue before the court.

Plaintiffs’ Motion to Compel Production of Billing

Records and Disclosure of Billing Rates is therefore DENIED.

The court also DENIES Plaintiffs’ Motion for Leave to Conduct

Discovery and to Shorten Time for Response and Defendant's

Motion for Production of Documents and to Shorten Time for

Response.

Conclusion

In sum, Defendant's Motion to Alter or Amend Judgment

is DENIED; Plaintiffs’ Motion for Prejudgment and

Postjudgment Interest is GRANTED; Plaintiffs’ Motion to

Review Clerk's Taxation of Plaintiffs’ Bill of Costs is

GRANTED in part and DENIED in part; Plaintiffs’ Motion to

Compel Production of Billing Records and Disclosure of Billing

Rates is DENIED; Plaintiffs’ Motion for Leave to Conduct

Discovery and to Shorten Time for Response is DENIED; and

Defendant's Motion for Production of Documents and to Shorten

Time for Response is DENIED.

It is so ordered this 23th day of June, 1997.

s/

TIM LEONARD

United States District Judge

Case No. 93-OK-1633-TL

I certify that a copy of the attached has been mailed to the

following:

Dated: June 23, 1997

JAMES R. MANSPEAKER, CLERK

s/

By: Glenna Drake

Deputy Clerk

Gary L. McPherson

“McPherson & Hull, P.C.

3300 S. Parker Rd. #101

Aurora, CO 80014-3520

Daniel Powell

P. O. Box 807

401 Edison Ave. #201

Alamosa, CO 81101

W. V. Siebert

Sherman & Howard

DC Box No. 12

B-32

Ronald G. Ingham

Miller & Martin

832 Georgia Ave. #1000

Chattanooga, TN 37102-2289

B-33

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Civil Action No. 93-OK-1633-TL

| FILED JUNE 23, 1997]

RICHARD ACKERMAN, TIMOTHY BOOKER, ERICH

BUTLER, MICHAEL DICKSON, EDWARD DONAHOE,

MICHAEL FABIAN, STEVEN JONES, MARK MARES,

ROBERTMOON, JAMES MUELLER, DANA ROE, KIM

SMITH, PAUL SPIELMAN, ALAN TAMONDONG, BRAD

VELLIQUETTE, and JAMES M. FORBES.

Plainuttis),

we

COCA-COLA ENTERPRISES, INC., a Delaware corporation

and in good standing and licensed to do business in Colorado,

Defendant(s).

AMENDED JUDGMENT

Pursuant to the Memorandum Opinion issued January 27,

1997, and the Order issued June 23, 1997, judgment is entered

against defendant Coca-Cola Enterprises, Inc.. a Delaware

corporation and in good standing and licensed to do business in

Colorado, and in favor of the following plaintiffs in the

following amounts, together with interest thereon at the rate of

5.61 percent per annum from January 27, 1997, until paid:

B-34

Richard Ackerman, compensation in the amount

of $12,792.24 plus prejudgment interest in the

amount of $5,381.78, for a total judgment of

$18,174.02; 7

Timothy Booker, compensation in the amount of

$37,603.32 plus prejudgment interest in the

amount of $16,000.55, for a total judgment of

$53,603.87;

Erich Butler, compensation in the amount of

$27,468.00 plus prejudgment interest in the

amount of $9,479.68, for a total judgment of

$36,947.68;

Michael Dickson, compensation in the amount of

$40,102.20 plus prejudgment interest in the

amount of $14,839.18, for a total judgment of

$54,941.38;

Edward Donahoe, compensation in the amount of

$66,835.80 plus prejudgment interest in the

amount of $27,047.39, for a total judgment of

$93,883.19;

Michael Fabian, compensation in the amount of

$18,559.45 plus prejudgment interest in the

amount of $8,934.95, for a total judgment of

$27,494.40:

Steven Jones, compensation in the amount of

$43,828.20 plus prejudgment interest in the

amount of $15,967.10, for a total judgment of

B-35

$59,795.30;

Mark Mares, compensation in the amount of

$19,423.80 plus prejudgment interest in the

amount of $8,050.79, for a total judgment of

$27,474.59;

Robert Moon, compensation in the amount of

$19,688.60 plus prejudgment interest in the

amount of $9,759.29, for a total judgment of

$29,447.89;

James Mueller, compensation in the amount of

$39,173.40 plus prejudgment interest in the

amount of $14,656.00, for a total judgment of

$53,829.40;

Dana Roe, compensation in the amount of

$86,963.52 plus prejudgment interest in the

amount of $35,943.22, for a total judgment of

$122,906.74;

Kim Smith, compensation in the amount of

$6,132.75 plus prejudgment interest in the

amount of $2,354.30, for a total judgment of

$8,487.05;

Paul Spielman, compensation in the amount of

$27,311.04 plus prejudgment interest in the

amount of $8,861.90, for a total judgment of

$36,172.94;

B-36

Le

;

Alan Tamondong, compensation in the amount of

$9,839.76 plus prejudgment interest in the

amount of $4,271.75, for a total judgment of

$14,111.51; and

Brad Velliquette, compensation in the amount of

$22,683.60 plus prejudgment interest in the

amount of $7,746.53, for a total judgment of

$30,430.13.

It is

FURTHER ORDERED that judgment is entered for the

defendant, Coca-Cola Enterprises, Inc., a Delaware corporation

and in good standing and licensed to do business in Colorado,

and against the plaintiff, James M. Forbes. It is

FURTHER ORDERED that plaintiffs shall have their

costs in the amount of $12,285.47.

Dated: June 23, 1997

JAMES R. MANSPEAKER, CLERK

By s/

Stephen P. Ehrlich

Chief Deputy Clerk

B-37

Case No. 93-OK-1633-TL

| certify that a copy of the attached has been mailed to the

following:

Dated: June 23, 1997

JAMES R. MANSPEAKER. CLERK

s/

By: Glenna Drake

Deputy Clerk

Gary L. McPHERSON

McPHERSON & Hull, P.C.

3300 S. Parker Rd. #101

Aurora, CO 80014-3520

Daniel Powell

P.O. Box 807

401 Edison Ave. #201

Alamos, CO 8: 101

W. V. Seabird

Sherman & Howard

DC Box No. |2

Ronald G. Ingham

Miller & Martin

$32 Georgia Ave. #1000

Chattanooga, TN 37102-2289

B-38

APPENDIX C

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

RICHARD ACKERMAN, TIMOTHY

BOOKER, ERICH BUTLER, MICHAEL

DICKSON, EDWARD DONAHOE,

MICHAEL FABIAN, STEVEN JONES,

MARK MARES, ROBERT MOON,

JAMES MUELLER, DANA ROE, KIM

SMITH, PAUL SPIELMAN, ALAN

TAMONDONG, AND BRAD

VELLIQUETTE,

Plaintiffs - Appellees/CrossAppellants,

v.

COCA-COLA ENTERPRISES, INC., a

Delaware Corporation in good standing

and licensed to do business in Colorado,

Defendant-Appellant/CrossAppellee.

Nos. 97-1079,

97-1102

ORDER

Filed August 3, 1999

Before ANDERSON, EBEL, and HENRY, Circuit Judges.

This matter is before the court on the Appellees’ motion

for reconsideration. The Appellees’ Motion for Reconsideration,

construed as a petition for panel rehearing pursuant to

Fed.R.App. P. 40, is denied. As noted by Appellants, the motion

is untimely. In any event, the arguments advanced by the

Appellees have been fully considered by the panel.

Entered for the Court

PATRICK FISHER, Clerk of the Court

by: s/

Deputy Clerk