Hines, et al v. State Room Inc., et al

Filing

OPINION issued by Jeffrey R. Howard, Appellate Judge; Kenneth F. Ripple and Bruce M. Selya, Appellate Judge. Published. [10-2298]

Case: 10-2298

Document: 00116296547

Page: 1

Date Filed: 11/28/2011

Entry ID: 5598523

United States Court of Appeals
For the First Circuit
No. 10-2298
CHRISTINE HINES; MARY A. O’CONNOR;
JESSICA LEPORACCI,
Plaintiffs, Appellants,
v.
STATE ROOM, INC.; LONGWOOD EVENTS, INC.;
BELLE MER, INC.; JAMES APTEKER,
Defendants, Appellees,
VERONIQUE CORPORATION,
Defendant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Patti B. Saris, U.S. District Judge]
Before
Howard, Ripple, and Selya, Circuit Judges.
*

John F. Tocci, with whom Cary Gianoulis and Tocci, Goss & Lee,
P.C. were on brief, for appellants.
Colleen C. Cook, with whom Jack I. Siegal and Nystrom Beckman
& Paris LLP were on brief, for appellees.

November 28, 2011

*

Of the Seventh Circuit, sitting by designation.

Case: 10-2298

Document: 00116296547

RIPPLE,

Circuit

Page: 2

Judge.

Date Filed: 11/28/2011

Christine

Hines

Entry ID: 5598523

originally

brought this action in Massachusetts state court against the State
Room, Inc., where she formerly was employed.1

In the amended

complaint, which was before the district court following removal,
Ms. Hines and her coplaintiffs sought unpaid overtime wages that
they claimed were due under the Fair Labor Standards Act (“FLSA”),
29 U.S.C. §§ 201-219, and related state statutes.

In addition to

the State Room, Longwood Events, Inc., Belle Mer, Inc. and James
Apteker

were

named

as

defendants.

After

various

further

amendments, including the addition of counterclaims, and following
discovery, the defendants sought summary judgment on the wage
claims.

The defendants asserted that the plaintiffs were exempt

from the overtime requirement because they were administrative
employees under the FLSA, 29 U.S.C. § 213(a)(1).

The plaintiffs

countered that their work did not involve sufficient discretion to
satisfy the exemption.

The district court determined that the

duties of the employees did involve substantial discretion and,
under our precedent, the exemption was applicable; accordingly,
partial summary judgment was entered for the defendants.
plaintiffs

now

appeal.

They

continue

to

contend

that

The
their

employers have failed to demonstrate that they acted with any

1

Ms. Hines’s original complaint also listed Veronique
Corporation as a defendant and claimed that it was the State Room’s
corporate parent. Veronique Corporation was dropped as a defendant
in the amended complaint and terminated from the action in 2009.
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meaningful discretion and, therefore, to carry the burden of
demonstrating the applicability of the exemption.

Because the

district court correctly applied governing legal principles, we
affirm the judgment of the district court.
I
BACKGROUND
A.

Facts
The State Room and Belle Mer are affiliated banquet

facilities that “host high-end wedding receptions and other social
functions” in Boston, Massachusetts, and Newport, Rhode Island,
respectively.

R.78 at 2.

Individual defendant James Apteker is

the founder and president of the State Room and Belle Mer.
Longwood Events is an affiliated management company that provides
accounting and record-keeping services for the banquet facilities.
According to the complaint, Longwood is the corporate parent for
the State Room and Belle Mer, and the companies share common
management.
The plaintiffs are former sales managers2 at one or both
2

According to their deposition testimony and their resumes,
the plaintiffs held different titles at various points in their
tenures with the defendant facilities. See, e.g., R.68-4 at 14-15
(Leporacci Dep. 61-62) (stating that she was given “a few different
titles . . ., but continued to perform the same duties no matter
what the title was” for the majority of her time working for the
defendants).
However, the plaintiffs themselves use the more
generic term “sales manager” in structuring their arguments in this
case.
The plaintiffs’ titles do not affect our analysis, and,
therefore, for ease of reading, we employ the plaintiffs’
terminology. See Reich v. John Alden Life Ins. Co., 126 F.3d 1, 10
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of the defendant facilities:

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Ms. Hines was employed from 2006 to

2008 at the State Room; Mary O’Connor, at Belle Mer from 2007 to
2008; and Jessica Leporacci, at Belle Mer for several months in
2006, then at the State Room through 2008.

As sales managers, the

plaintiffs were the primary client contacts on behalf of the event
venues.

Principally, their role was to secure event business for

the company, either by use of a cold-call list kept by management
or in response to inquiries by potential clients.

When given a

cold-call list, the plaintiffs would assess which calls were likely
to generate business and would not make calls they determined would
be unproductive. See R.68-3 at 7 (O’Connor Dep. 34-35) (explaining
that, after researching a list of law firms to cold call, she would
not contact a firm of three attorneys to offer to host a holiday
party and agreeing that the research she did would help her
determine “whether to call or not”).

As part of their regular

tasks, plaintiffs spoke by phone and in person with potential
clients; they toured the facility with potential clients to sell
events; and they assisted clients in determining which venue and
time might be appropriate for an event and what minimum charges
would apply.

The goal behind this work was to commit a prospective

client to a contract for an event.

In addition to the efforts with

individual clients and prospective clients, the plaintiffs engaged

(1st Cir. 1997) (“[T]he particular title given to an employee is
not determinative[ of] an employee’s exempt status . . . .”).
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in broader sales efforts. For example, Ms. O’Connor testified that
she

marketed

Convention

Belle

and

Mer

by

Visitors

attending
Bureau

Chamber

events

as

of

Commerce

the

or

company’s

representative, again with the goal of “bring[ing] events to Belle
Mer.”
her

Id. (O’Connor Dep. 36).

assigned

nonprofit

To bring in business from within

sector,

Ms.

Hines

suggested

to

her

supervisor that she could develop a lunch presentation on “‘how to
plan a gala fundraiser for [a] non[]profit’” as a marketing tool.
R.68-20 at 2 (email from Hines to a supervisor).
For the majority of the plaintiffs’ tenure with the
defendant facilities, their duties extended beyond securing the
basic sale and event contracts.

They were required to work with

clients to design details and menus that would meet each client’s
expectations;3 they prepared internal order forms that explained
every detail of the event for the operations staff; and from time
to time, they attended events to ensure that the client’s wishes
were carried out.

As Ms. O’Connor stated in her deposition, “Soup

to nuts is what I was doing back then.
managers.

You ran the whole thing.”

You didn’t have any events
R.68-3 at 14 (O’Connor Dep.

69); id. at 12 (O’Connor Dep. 59) (confirming that her duties
included “[c]oordinat[ing] the setup, design, [and] execution of
the

wedding”);

see

also

R.68-4

3

at

15

(Leporacci

Dep.

63)

See, e.g., R.68-4 at 13 (Leporacci Dep. 55) (explaining
that she would make suggestions for an event and “could create a
custom menu with the chef”).
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(describing her work as an events manager as including organizing
“tastings, menu selection, . . . linen selection, design of the
space, [and] everything else that goes into planning an event”);
R.68-2 at 8 (Hines Dep. 44-45) (answering affirmatively when asked
if

she

“work[ed]

closely

with

nonprofit

board

committees

in

researching, designing and executing events”). The plaintiffs were
responsible

for

maintaining

a

relationship

with

clients

and

satisfying client needs in the course of their event planning with
the defendant venues.

See R.68-15 (contemporaneous email from

supervisor to sales and events management staff stating, “[I]t is
your responsibility to proactively manage client expectations and
obligations.

You are accountable for the ‘life’ of this client

while they book, and then plan and execute their event with us.”);
R.68-2 at 18 (Hines Dep. 123) (agreeing that her job was to “keep
the client happy” from the initial contact through the actual
event).
Indeed, the picture that emerges from the record is one in
which the primary role of sales managers was to secure a steady
stream of business by selling each prospective client on a package
of options--location, timing, atmosphere, design, food and the
like, all within the client’s budget--and by ensuring that each
event so planned was a success.

See R.68-3 at 10 (O’Connor Dep.

51-52) (explaining the process of creating an event within a
client’s budget); id. (O’Connor Dep. 50-51) (“[T]his is a one-time

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event, let’s make it the most incredible thing you will ever have
in your life.

Even if you have a small budget, let’s still make it

the most breathtaking thing that could ever happen to you, and how
that is going to happen is customer service.
believe in me.”).

You have got to

In so doing, the sales managers secured clients

one at a time, but also worked to maintain and enhance the
reputation of their venues as a desirable location for custom,
high-end events for private and nonprofit clients.
21

(Hines

Dep.

145)

(confirming

that

her

See R. 68-2 at
tasks

included

“develop[ing] relationships with” clients and “encourag[ing] repeat
business”); see also R.72-8 at 8 (Longwood Events Sales Handbook)
(instructing

sales

staff

to

“[c]apitalize

on

re-booking

opportunities immediately” while clients “have positive feelings
about their event”).4
The
plaintiffs

did

record
not

also
do

in

establishes
the

course

some
of

things

their

that

daily

the

work.

Specifically, the plaintiffs had virtually no authority to make any
financial decisions.

When working with a potential client to

secure an event contract, the sales managers were bound by price
schedules controlled by management that dictated minimum charges
for particular rooms based on the times and dates of the event.

4

See also R.68-21 at 2-3 (email chain in which Ms. Hines’s
supervisor congratulates her on a successful event in which a
nonprofit raised $200,000 and instructs her to “quote these numbers
when wooing the big non[]profits,” a suggestion with which
Ms. Hines agrees).
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R.68-3 at 5 (O’Connor Dep. 28) (noting that the prices and minimums
“don’t change” and that “[t]here is no wavering unless you want to
marry in the winter”).

Beyond the event minimum, each option a

client might select for a particular event carried a price already
fixed by management, the sum of which defined the total cost for
the entire event, and sales managers were not permitted to deviate
or discount in any way without management’s approval.

See, e.g.,

R.72-8 at 6 (Longwood Events Sales Handbook) (“Do not provide
discounts or lower [food and beverage] minimums without Sales
Director approval.”); id. at 7 (“[A]ny discounts are with a Sales
Director’s approval only.”).

Further, although they signed final

event contracts as representatives of the defendant businesses,
they were permitted to do so only when management had approved the
terms.

R.72-9 at 4 (Gullins Aff.).

expressly

from

creating

any

Indeed, they were prohibited

financial

obligations

for

the

businesses without management approval. R.72-8 at 3-4 (emails from
supervisor forbidding the staff from creating “obligation[s]” for
the company without prior approval); see also R.72-9 at 4 (Gullins
Aff.).

They did not generate the form contracts or intake forms

that they used to structure their interactions with clients and to
forward client information to management.

Id. at 3.

They were not

supervisors and had no direct authority over any other staff.
They were not policy-makers for their respective businesses.
id. at 4.

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Id.
See

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The plaintiffs were guided by the Longwood’s Events Sales
Handbook, which presents “[t]he Longwood Events Way of Selling.”
R.72-8 at 6.

Some of the instructions provided are specific and

directive, such as “do not hold dates beyond the 7-day timeframe,”
id., or “[n]ever match a deal from last year,” id. at 7.
often,

however,

strategic

or

the

handbook’s

aspirational.

customer[’s] perspective.

instructions

See

id.

at

6

are

Equally

generalized,

(“Always

take

the

Anticipate what they would want and

listen to what they are asking for.

Roll up your sleeves and do

whatever it takes to ensure the customer has a great impression of
[Longwood Events] and the venue, enlisting operations and kitchen
where necessary.”); id. at 7 (“Always make a concerted effort to
up[]sell . . . .”); id. (“Make sure the menu fits the event.

Are

we selling something requiring a knife and fork for an event which
is intended to have a cocktail feel and light seating?”).

In

addition to the directions provided by the handbook, the defendant
businesses provided a scripted response to one specific question
that sales managers sometimes received regarding an affiliated
venue, the development of which the defendants had abandoned.

The

vast majority of the plaintiffs’ work as sales managers, however,
involved

unscripted

conversations

with

clients

and

potential

clients.
Ms. Hines earned $77,000 a year in her role, second in
the department only to the director of sales; Ms. O’Connor earned

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$48,000;

Ms.

Leporacci

Page: 10

earned

Date Filed: 11/28/2011

between

$28,000

and

Entry ID: 5598523

$36,000.

Although the plaintiffs claimed to have worked more than forty
hours per week on a consistent basis--indeed, the offer letters
that they received expressly stated that they would work forty-five
to fifty-five hours per week5--they did not receive overtime pay
during

their

tenure

as

sales

managers

because

the

defendant

businesses designated them as “exempt” employees for purposes of
overtime laws.

Although they were required to punch-in for some

portion of their tenure, they were not required to keep specific
hours.
All of the plaintiffs had left the defendants’ employ by
the time this action was commenced.

When Ms. Hines resigned in

2008, she requested a severance, which was denied.
claims that,

when

Ms.

Hines

was informed

that

Mr. Apteker

severance was

unavailable, he heard her mumble something that he understood to be
a threat that she would go after the company and “find a way” to
get the denied severance.
B.

R.76-8 at 4 (Apteker Dep. 125).

District Court Proceedings
After being granted leave by the Massachusetts Attorney

General’s Office, Ms. Hines filed a class action complaint in the
Massachusetts state courts alleging violations of the Massachusetts
and federal overtime laws on behalf of herself and a putative

5

R.68-2 at 11 (Hines Dep. 84); R.68-4 at 11 (Leporacci Dep.

46).
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class.
her

as

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She alleged that the State Room improperly had classified
an

obligations.

exempt

employee

in

order

to

avoid

its

overtime

The State Room removed the action to the district

court.
In an amended complaint filed in federal court, Ms. Hines
removed her class action allegations, added Ms. O’Connor and
Ms. Leporacci as plaintiffs and added Belle Mer, Longwood and
Mr. Apteker6 as defendants.

The amended complaint included seven

claims under the FLSA and related Massachusetts and Rhode Island
wage and hour laws.
In

response,

the

defendants

filed

a

state

tort

counter-claim for abuse of process. They claimed that the overtime
suit was in retaliation for the denial of Ms. Hines’s requested
severance.

Ms. Hines, in turn, counter-claimed that the abuse of

process allegation was made in retaliation for filing the initial
suit, relying on the anti-retaliation provision in the FLSA, 29
U.S.C. § 215(a)(3).
Following discovery, the defendants moved for summary
judgment on the original wage claims.
judgment on her retaliation claim.

Ms. Hines sought summary

The district court granted the

defendants’ motion for summary judgment and denied Ms. Hines’s
motion.

The court set forth the relevant portion of the FLSA and

6

Mr. Apteker was added pursuant to a state statute that
deems corporate principals “employers” responsible for wage and
hour violations. See Mass. Gen. Laws ch. 149, § 148.
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the regulations and noted that the central issue in the case was
whether the plaintiffs had exercised sufficient discretion and
independent judgment in their work to be classified properly as
administrative employees exempt from the overtime requirement. The
court acknowledged that the FLSA places the burden on the employer
to establish the applicability of the exemption and that the courts
have required that the exemption be drawn narrowly against the
employer.

However, the court found this circuit’s decisions in

Cash v. Cycle Craft Co., 508 F.3d 680 (1st Cir. 2007), and Reich v.
John

Alden

Life

Insurance

Co.,

126

F.3d

1

(1st

Cir.

1997),

instructive and determined that they were strong support for the
defendants’ position in the present case.

The court concluded

that, like the plaintiffs in Cash and John Alden, the plaintiffs
here had a primary task of communicating with clients and assessing
client

needs.

Although

a

handbook

guided

these

important

interactions, it did not script them; instead, the plaintiffs’ work
required a significant measure of judgment in all of their daily
interactions.

The plaintiffs were “the primary conduit between

defendants and their clients,” and their “efforts constituted major
assignments . . . affecting a substantial portion of defendants’
business.”

R.78 at 18.

Further, although the options that the

plaintiffs presented to clients for various services were prepriced by management, the plaintiffs “determined for themselves how
best to fit those options to the needs of each individual client.”

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That plaintiffs’ supervisors had the authority to review and

approve,

noted

the

regulations.

court,

After

was

reviewing

not
the

dispositive

the

including

evidence,

under

the

plaintiffs’ own descriptions of their work for the defendants on
their personal resumes, which the opinion set forth in full, the
court

concluded

that

the

employers

had

established

that

the

plaintiffs fell properly within the administrative exception.
The court did acknowledge that, with respect to many of
the factors identified in the regulations as relevant to the
application of the administrative exemption, the plaintiffs had
demonstrated questions of fact.
the

plaintiffs

determining

had

that

produced

they

administrative exemption:
required

to

follow)

were

The court, moreover, noted that
evidence
properly

that

weighed

classified

against

within

the

They did not shape (indeed, they were

management’s

policies,

and

negotiate or obligate financially the defendants.

they

did

not

Further, the

district court concluded that, in its view, taking the evidence in
the light most favorable to the plaintiffs, they did not have
meaningful discretion regarding the selection of potential clients
to approach.

Nevertheless, the court found that the evidence

clearly demonstrated that the plaintiffs “exercised discretion and
independent judgment in determining how to assemble an event to
suit each client’s taste.”

Id. at 19.

Accordingly, summary

judgment was entered for the defendants on the wage claims.

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The district court further ruled that disputed issues of
fact remained on the abuse of process claim against Ms. Hines, and
therefore denied summary judgment on that counter-claim.

The

parties then jointly moved for entry of a separate judgment under
Rule 54(b), which the district court entered upon concluding that
the ruling on the wage claims was final and that there was no
persuasive reason for delay.7

Proceedings on the counterclaims

were stayed pending the outcome of this appeal.
II
DISCUSSION
A.

Standard of Review
We review a district court’s grant of summary judgment de

novo.
2011).

Hunt v. Golden Rule Ins. Co., 638 F.3d 83, 86 (1st Cir.
Summary judgment is proper where there is no genuine

dispute of material fact and the moving party is entitled to
judgment as a matter of law.

Fed. R. Civ. P. 56(a).

“In the

typical case, we will reverse a grant of summary judgment only if,
making all factual inferences in favor of the non-moving party, a

7

Consistent with the duties prescribed in Spiegel v.
Trustees of Tufts College, 843 F.2d 38, 43 (1st Cir. 1988), and its
progeny, we independently have examined the propriety of a Rule
54(b) certification in the present case and are satisfied that the
district court acted within its sound discretion. Specifically, we
agree that the ruling upon which judgment was entered was final.
Further, we agree that, given the separate factual bases for the
claims at issue here and those still unadjudicated in the district
court, the court was entitled to conclude that there was “‘no just
reason for delay.’” Id. (quoting Fed. R. Civ. P. 54(b)).
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rational factfinder could resolve the legal issue for either side.”
D & H Therapy Assocs., LLC v. Boston Mut. Life Ins. Co., 640 F.3d
27, 34 (1st Cir. 2011).8
B.

The FLSA and the Department of Labor’s Regulations
The FLSA of 1938, as amended, establishes a federal

minimum wage and restricts youth labor.

See 29 U.S.C. §§ 201-219.

In addition, the Act requires overtime pay--payment at the rate of
one and one-half of the regular rate--for all hours worked in
excess of a forty-hour work week.

Id. § 207(a)(1).

The statute

also sets forth various exemptions from the overtime requirement.
Relevant to the present case, the overtime requirement in § 207
does not apply to “any employee employed in a bona fide executive,
administrative, or professional capacity . . . (as such terms are
defined and delimited from time to time by regulations of the
Secretary . . .).”
Pursuant
rulemaking

Id. § 213(a)(1).
to

authority,

the
the

statute’s
Secretary

express
has

delegation
issued

of

detailed

regulations, following notice-and-comment procedures, defining each

8

We note the plaintiffs’ objections to the district court’s
factual conclusions at summary judgment and, in particular, to the
use of the plaintiffs’ resumes in determining their job duties.
The plaintiffs would have us disregard the resumes because, in
their view, it is common practice to include puffery about one’s
own importance or achievements within any given position. We see
no reason to set forth a categorical rule regarding the use of
resumes in FLSA litigation. Our obligation on review of summary
judgment dictates the manner in which we view all of the evidence
of record, including the plaintiffs’ resumes.
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of the exemptions in § 207.

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See generally 29 C.F.R. Part 541; see

also 29 U.S.C. § 213(a)(1) (providing authority); John Alden, 126
F.3d at 7-8 (discussing the regulations).
The regulations in effect at the time of the plaintiffs’
employment provide a single three-prong test9 for determining
whether an employee qualifies for the administrative exemption:
(a) The term “employee employed in a bona fide
administrative capacity” in section 13(a)(1)
of the Act shall mean any employee:
(1) Compensated on a salary or fee
basis at a rate of not less than
$455 per week (or $380 per week, if
employed
in
American
Samoa by
employers other than the Federal
Government), exclusive of board,
lodging or other facilities;
(2) Whose primary duty is the
performance of office or non-manual
work
directly
related
to
the
management
or
general
business
operations of the employer or the
employer’s customers; and

9

In 2004, the Department of Labor amended the regulations
governing administrative employees. Prior to the amendment, the
regulations allowed employers to demonstrate an employee’s
qualification for the exemption under one of two tests, the “long
test” and the “short test.” The long test covered lower-income
employees; within a certain salary range, an employer was required
to demonstrate that more stringent requirements were satisfied to
establish an exemption. When an employee earned above the range
included in the long test, the exemption could be demonstrated
using the simpler short test. The long test no longer exists; the
short test was modified in the new regulations and is now called
the “standard test.” It applies to all employees that an employer
seeks to designate as exempt administrative staff. See generally
Defining
and
Delimiting
the
Exemptions
for
Executive,
Administrative, Professional, Outside Sales and Computer Employees;
Final Rule, 69 Fed. Reg. 22122 (Apr. 23, 2004).
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(3) Whose primary duty includes the
exercise
of
discretion
and
independent judgment with respect to
matters of significance.
29

C.F.R.

§

541.200(a).

The

sections

that

follow

provide

substantial further direction regarding the implementation of this
standard test for the administrative exemption, and we shall
address

them

in

significant

detail

below

as

we

analyze

the

application of the regulatory mandate to the case before us.
At the outset, we note that we are guided by a general
interpretive principle.

Because of the remedial nature of the

statute, the Supreme Court has emphasized that the exemptions
should be “narrowly construed” and “limited to those establishments
plainly and unmistakably within their terms and spirit.” Arnold v.
Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960); see also John Alden,
126 F.3d at 7 (quoting Arnold).
The parties concede, and the record is clear, that the
sales managers were compensated on a salary basis at a level in
excess of the required $455 per week.

The parties also agree that

the second prong, see 29 C.F.R. § 541.200(a)(2), which requires
that

the

qualifying

employee’s

“primary

duty

[must

be]

the

performance of . . . work directly related to the management or
general business operations of the employer or the employer’s
customers,” is met.

The regulations further provide:

The phrase “directly related to the management
or general business operations” refers to the
type of work performed by the employee. To
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meet this requirement, an employee must
perform work directly related to assisting
with the running or servicing of the business,
as distinguished, for example, from working on
a manufacturing production line or selling a
product in a retail or service establishment.
Id. § 541.201(a).
We agree with the parties that the second prong is met.
As our decisions in John Alden, 126 F.3d 1, and Cash, 508 F.3d 680,
make clear, the work performed by Ms. Hines, Ms. Leporacci and
Ms. O’Connor properly is considered administrative.

The principal

business of the defendant employers is providing banquets.

The

sales aspect of the defendants’ businesses, although necessary to
their success, is clearly ancillary to the principal function of
actually

providing

the

banquet

services

themselves.

The

plaintiffs’ own descriptions of their duties further make clear
that they

were

transactions.

focused

on

more

than

simple

individual

sales

With respect to each individual transaction, the

sales managers’ own testimony indicates that they did not simply
close contracts.

Instead, they worked with each client to create

a custom event in all of the particulars.

Further, they worked to

establish long-term relationships, to keep clients happy and to
maintain the overall reputation of their employers.

Accordingly,

the second prong of the administrative exemption is satisfied.

C.

Discretion Regarding Matters of Significance
The parties’ real dispute in this case concerns the third
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prong of the administrative exemption, whether the employees’
“primary duty include[d] the exercise of discretion and independent
judgment with respect to matters of significance.”
§

541.200(a)(3).

The

regulation

itself

provides

29 C.F.R.
substantial

further guidance on this point:
(a)
To
qualify
for
the
administrative
exemption, an employee’s primary duty must
include the exercise of discretion and
independent judgment with respect to matters
of significance. In general, the exercise of
discretion and independent judgment involves
the comparison and the evaluation of possible
courses of conduct, and acting or making a
decision after the various possibilities have
been considered.
The term “matters of
significance”
refers
to
the
level
of
importance
or
consequence
of
the
work
performed.
(b)
The phrase “discretion and independent
judgment” must be applied in the light of all
the
facts
involved
in
the
particular
employment situation in which the question
arises. Factors to consider when determining
whether an employee exercises discretion and
independent judgment with respect to matters
of significance include, but are not limited
to:
whether the employee has authority to
formulate, affect, interpret, or implement
management policies or operating practices;
whether the employee carries out major
assignments in conducting the operations of
the business; whether the employee performs
work that affects business operations to a
substantial degree, even if the employee’s
assignments are related to operation of a
particular segment of the business; whether
the employee has authority to commit the
employer in matters that have significant
financial impact; whether the employee has
authority to waive or deviate from established
policies
and
procedures
without
prior
approval; whether the employee has authority
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to
negotiate
and
bind
the company
on
significant matters; whether the employee
provides consultation or expert advice to
management; whether the employee is involved
in planning long- or short-term business
objectives; whether the employee investigates
and resolves matters of significance on behalf
of management; and whether the employee
represents the company in handling complaints,
arbitrating disputes or resolving grievances.
(c) The exercise of discretion and independent
judgment implies that the employee has
authority to make an independent choice, free
from immediate direction or supervision.
However, employees can exercise discretion and
independent judgment even if their decisions
or recommendations are reviewed at a higher
level.
Thus, the term “discretion and
independent judgment” does not require that
the decisions made by an employee have a
finality that goes with unlimited authority
and a complete absence of review.
The
decisions made as a result of the exercise of
discretion
and
independent
judgment
may
consist of recommendations for action rather
than the actual taking of action. The fact
that an employee’s decision may be subject to
review and that upon occasion the decisions
are revised or reversed after review does not
mean that the employee is not exercising
discretion and independent judgment. . . .
. . .
(e) The exercise of discretion and independent
judgment must be more than the use of skill in
applying
well-established
techniques,
procedures or specific standards described in
manuals or other sources. . . . The exercise
of discretion and independent judgment also
does not include clerical or secretarial work,
recording or tabulating data, or performing
other mechanical, repetitive, recurrent or
routine work. . . .
Id. § 541.202.

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The plaintiffs contend that they perform virtually none
of the duties outlined as “[f]actors to consider” in subsection
541.202(b), that they do not have “authority to make an independent
choice,

free

from

immediate

direction

or

supervision,”

id.

§ 541.202(c), and that their work, properly characterized, involved
more skill than discretion, see id. § 541.202(e).

In particular,

the plaintiffs focus on their lack of any authority to make any
decisions of financial consequence to their employers, their lack
of supervisory authority and their lack of policy-making authority.
Again, we begin with our own precedents in John Alden and
Cash.

In John Alden, 126 F.3d 1, we evaluated a claim by marketing

representatives who alleged that John Alden Insurance Co. had
misclassified them as exempt and denied overtime in violation of
the FLSA. The marketing representatives each worked with a list of
independent field agents, not employed by John Alden, who worked
directly with end customers seeking insurance.

Those agents, in

turn, would recommend a variety of insurance products to consumers,
including those offered by John Alden’s competitors. The marketing
representatives, who were charged with presenting their employer’s
insurance products to the field of independent agents, did so
primarily
agents.”

through
Id.

at

“maintain[ing]
3.

In

an

constant

contact

individual

sales

with
call,

[the]
the

representative attempted to engage the agent in an unscripted
conversation about John Alden’s product offerings in the way they

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determined would market most successfully those offerings ahead of
those offered by the competition. Although there were weekly sales
meetings at which the representatives were presented with suggested
points of emphasis, it was left to an individual representative to
determine which particular products to present and discuss in any
given conversation, drawing on his own knowledge of the agent’s
customer base as well as John Alden’s new offerings.

Id. at 13.

Beyond the marketing aspect of representatives’ daily work, they
also continued to follow sales that already had been made.
Specifically, once an agent’s customer elected to purchase a
John Alden product, the representative would “act[] as a conduit”
between the purchasing party and John Alden’s own underwriting
department.

Id. at 4.

transaction,

however,

was

Their role in actually processing a
limited.

They

“d[id]

not

set

or

negotiate prices or terms of insurance, nor d[id] they have any
authority to approve or deny an application, as [that was] done
solely by the underwriting department.” Id. We concluded that, on
those facts, the representatives exercised sufficient discretion to
warrant the exemption and, therefore, affirmed the grant of summary
judgment to the employer.
In Cash, the plaintiff customer service manager was
responsible for ensuring that motorcycles were “outfitted and
delivered . . . according to the particular purchase order.”
F.3d at 682.

508

Following delivery, he would “stay in touch with the

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customers and make sure that they were satisfied.”

Id.

Entry ID: 5598523

On these

facts, we also concluded that the customer service manager was
required to use discretion and independent judgment in performing
his primary duties of communicating with customers concerning their
orders.

Again, we focused on the fact that he was required to

“react[] to the unique needs of [the employer’s] customers.”

Id.

at 686.
Even when the record in the present case is evaluated in
a light most favorable to the plaintiffs, as we must on summary
judgment,
Ms.

the work

Leporacci

independent

performed

exhibits

judgment

to

a
the

by

Ms.

similar

Hines,
level

discretion

Ms.

of

that

O’Connor

and

discretion

and

we

already

have

determined to be sufficient for the exemption. Like the plaintiffs
in John Alden and Cash, the plaintiffs here had a primary duty of
engaging potential clients and assisting them in selecting from
various options from the employers’ offerings.

Indeed, although

the options from which a client could select in any given category
were finite, the goal of the sales team was to create a truly
custom event for each client.

In our view, working with a client

to create a custom product, personalized to individual tastes and
budgets, exhibits at least as much creative freedom as the John
Alden plaintiffs had in marketing insurance plans that they had no
authority to create, modify or repackage to suit an individual
client.

In proposing options for an event within a budget, the

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sales managers did not operate within “a prescribed technique or
‘sales pitch.’”

See John Alden, 126 F.3d at 14.

Instead, they

were guided by the instructions in the Longwood Events Sales
Handbook.

That handbook contained certain limited iron rules, but

largely provided guidelines.

The rules were not so numerous nor

the guidelines--to upsell where possible, to make sure menus fit
the tone of an event and the like--so specific as to cabin the
judgment that the plaintiffs were required to exercise in engaging
with clients

and

prospective clients.

Such work

requires

a

significant degree of “invention, imagination and talent,” id. at
7 (internal quotation marks omitted).

See id. at 14 (“[T]o the

extent that the marketing representatives receive guidance about
products to emphasize and suggested points to make with agents,
they nonetheless exercise discretion in applying this instruction-for instance, in determining which agent may have an interest in [a
particular] product, or in fashioning bid proposals that meet the
needs of the agent’s customers.”); Renfro v. Indiana Michigan Power
Co., 497 F.3d 573, 577 (6th Cir. 2007) (noting, in the course of
finding adequate discretion among nuclear power plant employees,
that the technical manual they used “provide[d] a guideline on how
to

develop

a

procedure,

not

an

encyclopedia

of

strict

requirements”); Kennedy v. Commonwealth Edison Co., 410 F.3d 365,
374 (7th Cir. 2005) (noting that the plaintiffs’ discretion may be
channeled by applicable regulations without defeating the existence

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of sufficient discretion).
The plaintiffs repeatedly have emphasized all of the
matters

about

which

they

had

no

authority

and

exercised

no

discretion, primarily those involving their employers’ finances and
contractual obligations. In both John Alden and Cash, however, the
respective plaintiffs had similar restrictions.

“[W]hether the

employee has authority to commit the employer in matters that have
significant financial impact” is a factor that the regulations
instruct us to consider, 29 C.F.R. § 541.202(b); it is not,
however, a requirement that must be satisfied to demonstrate that
an

employee

exercises

independent

judgment.

The

regulations

likewise provide that an employee’s discretionary actions need not
“have a finality that goes with unlimited authority and a complete
absence of review.”

Id. § 541.202(c).

The fact that, after

engaging a potential client and arriving at a proposed agreement
for a

banquet,

the

sales

managers

submitted the

proposal

to

management for approval does not, therefore, detract from the
judgment that was exercised in arriving at the proposal in the
first instance.10

10

For this reason, we are not persuaded by the plaintiffs’
arguments that the district court failed to consider “powerful,
uncontroverted evidence,” Appellants’ Br. 33, in their favor in the
form of the affidavit of a former supervisor, Jennifer Gullins. As
with much of the plaintiffs’ argument before this court, the
Gullins affidavit tells the court much of what the plaintiffs did
not do, but does not provide substantial assistance in determining
what the plaintiffs daily activities included and whether, in
performing those duties, the plaintiffs exercised discretion.
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The plaintiffs rest their argument in large part on the
recent decision of the Second Circuit in In re Novartis Wage &
Hour Litigation, 611 F.3d 141 (2d Cir. 2010).

According to the

plaintiffs, Novartis establishes that the function of a court
reviewing the discretion prong is to “analyz[e] all ten factors set
forth in 29 C.F.R. § 541.202(b).” Appellants’ Br. 36.

We disagree

that Novartis suggests broadly that a simple evaluation of the
regulation’s exemplary list of factors to be considered among “all
the facts involved in the particular employment situation in which
the

question

arises”

provides

a

determinative

answer

to

the

ultimate question whether an employee exercises discretion. See 29
C.F.R. § 541.202(b); id. (noting that the “[f]actors to consider
. . . include, but are not limited to” the ten listed items).

In

our view, Novartis did not suggest a new methodology; it simply
emphasized that, on the facts before it, the employer had not shown
that the employees exercised meaningful discretion.

Although it

identified the factors specifically listed in the regulation, the
court went on to evaluate the specific tasks identified by the
employer as discretionary and found none sufficient to warrant the
application of the administrative exemption.

Indeed, the preamble

to the current regulations identifies a host of factors, other than
those listed in the regulations themselves, that courts have found
sufficient

to

demonstrate

that

employees

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judgment.11

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We decline to impose an unnecessary rigidity on the

circumstance-specific analysis called for in the regulations.
Finally, we conclude that the record firmly establishes
that

the

matters

about

which

the

sales

managers

exercised

discretion are matters of significance to the employer.
C.F.R. § 541.200(a)(3).

See 29

As was the case in John Alden, the sales

and customer service position that each plaintiff occupied is
integral to the functioning of the employers’ businesses.

The

sales managers were the face of the businesses to prospective
clients, and the judgment that they exercised concerned how best to
represent the employers and to develop a proposal that would
attract the prospective clients to a contract with the venues.
In
plaintiffs

sum,

the

exercised

record

in

adequate

this

case

discretion

to

reveals
come

that

the

within

the

boundaries of our precedents and the guidance from the Department
of Labor.

The district court properly concluded that, under the

law of this circuit, the plaintiffs were exempt administrative

11

See 69 Fed. Reg. at 22144 (identifying as other relevant
considerations an “employee’s freedom from direct supervision,
personnel responsibilities, troubleshooting or problem-solving
activities on behalf of management, use of personalized
communication techniques, authority to handle atypical or unusual
situations, authority to set budgets, responsibility for assessing
customer needs, primary contact to public or customers on behalf of
the employer, the duty to anticipate competitive products or
services and distinguish them from competitor’s products or
services, advertising or promotion work, and coordination of
departments, requirements, or other activities for or on behalf of
employer or employer’s clients or customers”).
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employees.
D.

State Causes of Action
The plaintiffs acknowledge that their state law claims

are

“dependent

upon

and

Appellants’ Br. 15 n.5.

derivative

of”

their

FLSA

claims.

Our disposition of their FLSA claims on

the merits resolves the state claims as well.

See Cash, 508 F.3d

at 686-87; Valerio v. Putnam Assocs. Inc., 173 F.3d 35, 40 (1st
Cir. 1999).
Conclusion
We

conclude

that

the

plaintiffs

appropriately

were

classified as exempt administrative employees for the purposes of
the FLSA and relevant state overtime laws. We therefore affirm the
district court’s entry of summary judgment on the wage claims for
the defendant.
AFFIRMED.

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