COLELLO v. BOTTOMLINE TECHNOLOGIES INC
ORDER denying 21 Motion for Summary Judgment. By JUDGE JOHN A. WOODCOCK, JR. (MFS)
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
SUMMARY JUDGMENT ORDER
Deborah Colello claims that her former employer, Bottomline, Inc., violated
federal and state law by failing to pay her overtime for work in excess of forty hours.
Before the Court is Bottomline’s motion for summary judgment on the ground that
Ms. Colello is not owed overtime pay as a matter of law because she is
administratively exempt. The Court concludes that under Federal Rule of Civil
Procedure 56, there are genuine disputes of material fact that require jury resolution.
It denies Bottomline’s motion for summary judgment.
On June 25, 2014, Ms. Colello filed a complaint against Bottomline in
Cumberland County Superior Court. State Ct. R. Attach. 2 Compl. (ECF No. 6)
(Compl.). The Complaint alleged a single count for failure to pay overtime wages. Id.
at 1-2. On July 17, 2014, Bottomline removed the case to federal court on the grounds
of federal question jurisdiction pursuant to 28 U.S.C. § 1331 and diversity jurisdiction
pursuant to 28 U.S.C. § 1332; it also demanded a jury trial. Notice of Removal and
Demand for Jury Trial (ECF No. 1) (Removal Pet.); see also State Ct. R. Attach. 5
Notice of Filing of Notice of Removal (ECF No. 6). On July 28, 2014, Bottomline
answered Ms. Colello’s complaint. Def.’s Answer to Pl.’s Compl. and Demand for Jury
Trial (ECF No. 7) (Answer).
On January 29, 2015, Bottomline filed a notice of intent to file a motion for
summary judgment and requested a pre-filing conference. Def.’s Notice of Intent to
File Rule 56 Mot. for Summ. J. and Need for Pre-filing Conference Pursuant to Local
Rule 56(h) (ECF No. 15). In anticipation of a Local Rule 56(h) Conference, Bottomline
filed a pre-conference memorandum on February 9, 2015. Def.’s Pre-filing Conference
Mem. (ECF No. 17). On March 18, 2015, the parties filed a joint motion for approval
of their proposed summary judgment schedule. Rule 56(h) Joint Mot. with Proposed
Schedule (ECF No. 18). The Court approved the parties’ proposed summary judgment
schedule, Order Granting Mot. for Approval of Local Rule 56(h) Schedule (ECF No.
19), which dispensed with the Local Rule 56(h) Conference.
Local Rule 56(h)
Conference Cancellation (ECF No. 20).
On April 29, 2015, Bottomline moved for summary judgment with a supporting
statement of material facts. Def.’s Mot. for Summ. J. (ECF No. 21) (Def.’s Mot.); Def.’s
Statement of Undisputed Material Facts (ECF No. 22) (DSMF). On May 29, 2015,
Ms. Colello opposed Bottomline’s motion. Pl.’s Mem. in Opp’n to Def.’s Mot. for Summ.
J. (ECF No. 23) (Pl.’s Opp’n). She filed a reply to Bottomline’s statement of material
facts that same day, Pl.’s Opposing Statement of Material Facts at 1-2 (ECF No. 24)
(PRDSMF), as well as her own statement of additional material facts. Id. at 2-4
(PSAMF). On June 12, 2015, Bottomline filed a reply to Ms. Colello’s opposition and
to her statement of additional material facts. Def.’s Reply to Pl.’s Obj. to Mot. for
Summ. J. (ECF No. 27) (Def.’s Reply); Def.’s Reply Statement to Pl.’s Additional
Material Facts (ECF No. 28) (DRPSAMF).
On June 26, 2015, Ms. Colello moved for leave to file a sur-reply. Pl.’s Mot. for
Leave to File Sur-Reply (ECF No. 29). On June 30, 2015, Bottomline opposed Ms.
Colello’s motion. Def.’s Obj. to Mot. for Leave to File Sur-Reply (ECF No. 30). The
Court granted Ms. Collello’s motion on July 1, 2015. Order Granting Mot. for Leave
to File Sur-Reply (ECF No. 31). On July 15, 2015, Ms. Colello filed her sur-reply.
Pl.’s Sur-Reply in Resp. to Def.’s Reply to Pl.’s Obj. to Mot. for Summ. J. (ECF No. 33)
(Pl.’s Sur-Reply). On July 27, 2015, Bottomline filed a response to Ms. Colello’s surreply. Def.’s Resp. to Pl.’s Sur-Reply Brief (ECF No. 34) (Def.’s Resp. to Sur-Reply).
SUMMARY JUDGMENT FACTS1
Bottomline’s business is to provide financial processing services; in particular,
it provides collaborative payment, invoice, and documentation automation solutions
to corporations, financial institutions, and banks.2 PSAMF ¶ 25; DRPSAMF ¶ 25.
In keeping with “the conventional summary judgment praxis,” the Court recounts the facts in
the light most hospitable to nonmovant’s case theories consistent with record support. Gillen v. Fallon
Ambulance Serv., Inc., 283 F.3d 11, 17 (1st Cir. 2002).
Ms. Colello’s paragraph twenty-five states:
Bottomline Technologies, Inc.’s business is to provide financial processing services.
PSAMF ¶ 25. Bottomline interposed a qualification, fleshing out in greater detail the nature of their
business. DRPSAMF ¶ 25. It cited two sources. First, in a letter defining the terms and scope of Ms.
Colello’s employment, Bottomline described its business as “provid[ing] collaborative payment, invoice
and document automation solutions to corporations, financial institutions and banks.” DSMF Attach.
Bottomline takes as revenue a commission on each transaction it processes.3 PSAMF
¶ 26; DRPSAMF ¶ 26.
3 Letter from April Morgan, Manager of Human Resources, Bottomline, to Debra Colello, at 1 (ECF No.
22). Second, Ms. Colello’s résumé described Bottomline’s business as being a “global provider of cloudbased payments and invoice automation software/services.” DSMF Attach. 1 Debra J. Colello Résumé,
at 1 (ECF No. 22). The Court includes Bottomline’s qualification but amends the sentence to include
only the first source because the second source appears elsewhere in the statement of material facts.
See DSMF ¶ 16; PRDSMF ¶ 16.
Ms. Colello posited fifteen statements of additional material fact, PSAMF ¶¶ 25-39, and she
supported the statements by supplying her own affidavit and citing the deposition of her former
supervisor, Susan Coward. PRDSMF Attach. 2 Aff. of Debra Colello (ECF No. 24) (Colello Aff.); id.
Attach. 3 Dep. of Susan Coward (ECF No. 24) (Coward Dep.). In its reply, Bottomline objected to five
of Ms. Colello’s paragraphs, citing Federal Rules of Evidence 601 and 602. DRPSAMF ¶¶ 26-29, 37.
The basis for Bottomline’s objections is that Ms. Colello did not have sufficient personal knowledge of
Bottomline’s business to make the statements. Id. The Court considers Bottomline’s foundational
objections frivolous and overrules each of them.
It is ironic that Bottomline takes the position in this motion that it employed Ms. Colello in “a
bona fine, executive, administrative, or professional capacity,” Def.’s Mot. at 5, and despite her
position, Bottomline claims that Ms. Colello knew so little about Bottomline that she does not have an
adequate foundation to make statements about such basic things as how Bottomline makes its money.
Ms. Colello’s paragraph 26 reads:
Bottomline takes as revenue a commission on each transaction it processes.
PSAMF ¶ 26. In support, Ms. Colello cites her own affidavit, which states “Bottomline takes as
revenue a commission on each financial transaction it processes.” Collelo Aff. ¶ 3.
Objection. F.R.Ev. 601, 602. Colello has no personal knowledge of the basis for the
revenue received by Bottomline.
DRPSAMF ¶ 26. Bottomline did not otherwise respond to the paragraph.
Bottomline’s response is inappropriate. Bottomline failed to comply with Local Rule 56(c),
which required Bottomline to “admit, deny or qualify the facts.” D. ME. LOC. R. 56(c). By failing to
respond other than to object, Bottomline waived the right to contest the truthfulness of the statement.
Nor is the objection well taken. Rule 601 states in part that “[e]very person is competent to be
a witness unless these rules provide otherwise,” FED. R. EVID. 601, and Rule 602 states in part that
“[a] witness may testify to a matter only if evidence is introduced sufficient to support a finding that
the witness has personal knowledge of the matter.” FED. R. EVID. 602.
Bottomline offers nothing beyond the bald assertion that “Colello has no personal knowledge
of the basis for the revenue received by Bottomline.” DRPSAMF ¶ 26. While “[t]he party offering the
testimony has the burden of laying a foundational showing that the witness had an adequate
opportunity to observe, actually observed, and presently recalls the observation,” it is a “minimal”
burden: if “reasonable persons could differ as to whether the witness had an adequate opportunity to
observe, the witness’s testimony is admissible.” 1 MCCORMICK ON EVIDENCE § 10 (7th ed. rev. 2013).
While Ms. Colello would bear the burden of laying a foundational showing as the party offering the
testimony, the Court also considers facts and inferences in the light most favorable to her as the
nonmoving party at summary judgment. Here, Ms. Colello provided her affidavit as support for her
statement. Colello Aff. ¶ 3.
Ms. Colello was employed as a Client Relations Manager, Commissions
Program, Paymode-X, by Bottomline from June 18, 2012 to March 27, 2014. DSMF
¶ 1; PRDSMF ¶ 1. The terms of her employment, including her annual salary of
$89,500, and a brief description of her duties are set forth in her offer letter dated
May 30, 2012. DSMF ¶¶ 2-3; PRDSMF ¶¶ 2-3. The written job description for the
position of Client Relationship Manager, Commission Program, Paymode-X is an
accurate description of Ms. Colello's responsibilities. DSMF ¶ 4; PRDSMF ¶ 4.
Those responsibilities included working directly with and building personal
relationships with Bottomline’s Paymode-X Commission Program customers,
handling complex problem-solving requests from customers for all program issues,
including process improvement, change management, and problem triage. DSMF ¶¶
5, 8; PRDSMF ¶¶ 5, 8. Ms. Colello was the primary contact for key customers postimplementation, as well as the services representative for Commission Program
customers, and she submitted recommendations to management regarding
enhancements for these customers.
DSMF ¶¶ 7, 9; PRDSMF ¶¶ 7, 9.
Bottomline, she was required to work closely with the following departments: Sales,
Management, Development, and Quality Assurance. DSMF ¶ 6; PRDSMF ¶ 6.
On a daily basis, Ms. Colello responded to customer issues to ensure they were
addressed in a timely and professional manner, and, in three or four conversations
The Court overrules Bottomline’s objection and deems the paragraph admitted. Using the
same rationale, the Court overrules Bottomline’s objections to Plaintiff’s paragraphs 27, 28, 29, 37.
Because Bottomline failed to admit, qualify or deny paragraphs 27, 28, and 37, the Court deems each
paragraph admitted without qualification.
over the course of her employment, identified potential areas of expansion with
customers.4 DSMF ¶ 10; PRDSMF ¶ 10. She made frequent recommendations for
resolution of clients’ problems, identifying “what was wrong and who could best fix
it,” as well as weekly recommendations on how Bottomline could improve its
customers’ businesses. DSMF ¶¶ 11-12; PRDSMF ¶¶ 11-12. Ms. Colello supported
accounts by participating in key customer and channel partner implementations and
facilitating training for her customers. DSMF ¶ 13; PRDSMF ¶ 13. She dealt with
escalated service or support needs of her customers, communicating their product
enhancement requests to the product management team. DSMF ¶ 14; PRDSMF ¶
14. Ms. Colello was an advocate for her customers, essentially “the voice for her
customers” within Bottomline, in the sense that she was charged with ensuring that
errors in their accounts were resolved within Bottomline.5 DSMF ¶ 15; PRDSMF ¶
Bottomline’s paragraph ten states:
On a daily basis, Colello responded to customer issues to ensure they were addressed
in a timely and professional manner, and, from time to time, identified potential areas
DSMF ¶ 10 (emphasis supplied). Ms. Colello interposed a qualified response specifying that she
“identified potential areas of expansion with customers only ‘three or four’ times over the course of her
employment . . . .” PRDSMF ¶ 10 (emphasis supplied).
The record evidence supports Ms. Colello’s qualification. Id. Attach. 1 Dep. of Debra J. Colello
63:7-11 (Colello Dep.). The Court amended Bottomline’s statement to reflect the qualification, which
makes Bottomline’s general statement more specific.
Bottomline’s paragraph fifteen states:
Colello was an advocate for her customers, essentially ‘the voice for her customers’
DSMF ¶ 10. Ms. Colello interposed a qualification: she “was an advocate for ‘her’ customers and the
‘voice for her customers’ in so much as she was charged with ensuring that errors in their accounts
were resolved within Bottomline.” PRDSMF ¶ 15.
In her deposition, Ms. Colello admitted that she was “basically . . . advocating for your
customers” and that she was “essentially the voice for your customers.” Colello Dep. 71:5-10. In her
affidavit, which she cited in support of her qualification, she seeks to refine what she meant by these
15; PSAMF ¶ 25; DRPSAMF ¶ 25.
Ms. Colello’s job typically consisted of
communicating customer problems with various Bottomline departments in order to
resolve customer complaints and relay the answer to the customer; although she
made weekly recommendations to Bottomline about growth opportunities for her
clients, she did not “advocate” or otherwise speak for those clients for Bottomline’s
customers in any other manner.6 PSAMF ¶ 33; DRPSAMF ¶ 33.
statements: “My job typically consisted of communicating customer problems with various Bottomline
departments in order to resolve customer complaints and relay the answer to the customer. This was
the sole way in which I ‘advocated’ for Bottomline customers.” Colello Aff. ¶ 11.
The questions to which Ms. Colello responded were qualified by the adverbs “basically” and
“essentially.” Viewing the evidence in the light most favorable to Ms. Colello, the Court amended
Bottomline’s statement to incorporate her qualification on this point.
Ms. Colello’s paragraph 33 reads:
Colello’s job typically consisted of communicating customer problems with various
Bottomline departments in order to resolve customer complaints and relay the answer
to the customer. She did not “advocate” or otherwise speak for those clients for
Bottomline’s customers in any other manner.
PSAMF ¶ 33. Bottomline denied this entire statement, stating that Ms. Colello had “extensive client
contact.” DRPSAMF ¶ 33.
The parties largely rehashed their arguments in footnote five regarding whether Ms. Colello
was an “advocate” for her clients. Again, Ms. Colello cited paragraph eleven of her affidavit as support
for her statement. Colello Aff. ¶ 11 (reciting nearly identical verbatim to the proposed statement).
Bottomline denied this fact: “Colello had extensive client contact, including advocating for
clients in numerous area[s] and was generally the voice for clients.” DRPSAMF ¶ 33. Because its
denial cited portions of the record not cited in support of its proposed fact addressed in footnote five,
the Court turns to this additional record evidence. Bottomline cited two sources in denying Ms.
Colello’s statement: Ms. Colello’s and Ms. Coward’s depositions. Ms. Coward’s deposition is not
illuminating and speaks largely in generalities. See Coward Dep. 21:1-25. In Ms. Colello’s deposition,
she says she “had to recommend how to resolve a problem” and made “recommendations” on “escalated
problems.” Colello Dep. 74:17-18, 75:1-19. Going beyond problem-solving, she says:
Did you make any recommendations on growth opportunities for customers?
How did I think we could improve their business?
On weekly updates to my managers I would have made some recommendations.
The parties’ dispute appears to be a matter of semantics: i.e., whether Ms. Colello was
advocating for her clients by making recommendations about growth opportunities. As the Court is
required to view the facts in the light most favorable to Ms. Colello, the Court has slightly amended
In Ms. Colello’s own words, she, as a Client Relationship Manager:
Developed and maintained travel industry client relationships with
agile environment for global provider of cloud-based payments and
invoice automation software/services. Managed financial processing,
including foreign exchange for 19 major accounts, involving over 15,000
vendors for clients, including cruise line and national car rental
companies with annual sales of $1M-250M. Utilized CRM [customer
relations management] strategies to build revenues and retain accounts,
collaborating with payers, recipients and internal team members,
including systems development to resolve complex issues for high value
clients and negotiating with vendors to identify and support areas for
revenue growth for service enhancements.
DSMF ¶ 16; PRDSMF ¶ 16.
The detailed description of her “Professional Experience” on the résumé she
prepared after leaving Bottomline accurately represents the work she did while
employed at Bottomline. DSMF ¶ 17; PRDSMF ¶ 17. Ms. Colello was required to
obtain approval for any billing adjustments and could not refund monies to a
customer without approval from a Senior Executive; she was not authorized to send
mass mailings to vendors or customers without the approval of a Senior Executive;
and she was not involved in meetings to discuss Bottomline’s overall vision and/or
the long-term goals and objectives of Bottomline’s customers. DSMF ¶ 18; PRDSMF
¶ 18. Ms. Colello could, and did, make recommendations to management about
“forward plans for vendors” and the customers’ “overall vision or road map.” DSMF
¶ 19; PRDSMF ¶ 19.
From Bottomline’s perspective as articulated by Jill McFarland, one of Ms.
Colello’s two supervisors during her employment at Bottomline, the position of Client
the paragraph to reflect her testimony but retains her general statement that she did not otherwise
act as an advocate.
Relationship Manager is “an integral part of the business. The position is responsible
for managing very high-visibility clients, an entire portfolio of both travel vendors
and agents, and this role acts as the primary liaison between the client and
Bottomline.”7 DSMF ¶¶ 20-21; PRDSMF ¶¶ 20-21. Ms. Colello’s first supervisor,
Susan Coward, agreed that Ms. Colello had extensive client contact, resolved
customer problems on a daily basis, and was liked and relied upon by her customers.
DSMF ¶ 22; PRDSMF ¶ 22. According to Ms. Coward, Ms. Colello made many
recommendations for improvements; growth opportunities for customers; vision and
strategy for customers; and for the overall strategy for account payable automation
as it related to the Commission Program to management. DSMF ¶ 23; PRDSMF ¶
23. Ms. Coward considered Ms. Colello a “valuable employee” who was “essentially
the voice for her customers” within Bottomline. DSMF ¶ 24; PRDSMF ¶ 24.
Before Ms. Colello was hired by Bottomline, Bottomline acquired a travel
agent/vendor commission business as part of a larger deal with Bank of America.
PSAMF ¶ 27; DRPSAMF ¶ 27. The purpose of this agent/vendor commission business
was to allow companies like Carnival Cruise Lines to pay commissions to travel
Ms. Colello interposed the following qualification to Bottomline’s statement:
Paragraph 20 of Defendant’s Statement of Undisputed ‘Material Facts’ contains only
Bottomline’s position regarding Colello’s job responsibilities disguised as ‘facts.’
PRDSMF ¶ 20. Bottomline responded to Ms. Colello’s qualification in its reply to her statement of
additional material facts, arguing that “Colello has offered no record evidence to support her
qualification.” DRPSAMF ¶ 28. It also opened its reply brief with the statement that “[b]ecause she
did not provide a citation to the record for her qualification SMF ¶ 20, she is also deemed to have
admitted the facts contained therein.” Def.’s Reply at 1 (footnote omitted) (citing D. ME. LOC. R. 7(f)).
This back-and-forth loses sight of an obvious point. As written, Bottomline’s statement begins:
“From Bottomline’s perspective, . . . .” DSMF ¶ 20. The Court concludes that Ms. Colello’s requested
qualification is already in the statement, and the statement requires no further qualification.
agents such as Expedia. PSAMF ¶ 28; DRPSAMF ¶ 28. These accounts constituted
only a miniscule portion of Bottomline’s overall business and were seen as a
distraction by Bottomline, who had no apparent interest in expanding or improving
these services. Id. Bottomline’s absorption of the formerly Bank of America accounts
caused significant problems in their processing as Bottomline converted them to its
systems; customers would complain about these problems, and prior to Ms. Colello’s
employment, Bottomline executives were charged with handling these complaints.8
PSAMF ¶ 29; DRPSAMF ¶ 29. Ms. Colello was hired by Bottomline to work in a
division that was charged with handling customer complaints and payment errors
In full, Ms. Colello proposed the following statement:
Bottomline’s absorption of the formerly Bank of America accounts caused significant
problems in their processing as Bottomline converted them to its systems. Customers
would complain about these problems. Prior to Colello’s employment, Bottomline
executives were charged with handling these complaints.
PSAMF ¶ 29.
Bottomline qualified its response to the first two sentences, noting that “[t]here were problems
with the commission accounts during the first few months beginning in June of 2012 when Colello was
supervised by Susan Coward, and customers complained to management.” DRPSAMF ¶ 28. It cited
portions of Susan Coward’s deposition:
Q. In the months starting in June over that summer, can you describe the situation
with the accounts?
A. The accounts were chaotic, they were – there were many errors, they weren’t
balanced. I think that’s about it.
Q. So after the first few months, when did the – when did the chaos start to subside?
A. On those accounts or in general?
Q. First on those accounts.
A. On those accounts, probably sometime in late fall, winter we were in a better place.
It wasn’t as chaotic.
DSMF Attach. 6 Susan Coward Dep. Tr. 6:12-17, 7:17-22 (ECF. No. 22) (Coward Dep.). Although “first
few months” does appear in the deposition, id. 6:18, the passage quoted above makes clear that
Bottomline is not entitled to a qualification that would restrict the time period to a few months because
three months from June is September—which is obviously not “late fall, winter.” Id. 7:21-22. The
Court rejects Bottomline’s requested qualification as contrary to the record.
related to the conversion of the formerly Bank of America business into Bottomline’s
systems; in essence, she was hired to assure customers that there was someone they
could reach out to when there were errors in their accounts.9
DRPSAMF ¶ 30.
PSAMF ¶ 30;
Moreover, her position description included “fostering and
maintaining relationships with current and potential Commissions Program
Customers, primary contact for escalation issues and oversee all aspects of the
customer relationship including best practices, change management and other
services, and primary internal customer advocate post-implementation.” Id. Ms.
Bottomline interposed a qualification:
Colello was hired as a Commission Client Relationship Manager; her job duties
included “fostering and maintaining relationships with current and potential
Commissions Program Customers, primary contact for escalation issues and oversee
all aspects of the customer relationship including best practices, change management
and other services, and primary internal customer advocate post-implementation…”
Colello Dep. at 54-55; Colello Dep. Ex. 4; see also Coward Dep. at 13-14 (Colello’s job
was to keep customers happy). The position is an integral part of Bottomline’s
business, commission client managers are responsible for managing very highvisibility clients, an entire portfolio of both travel vendors and agents, and commission
managers act as the primary liaison between the client and Bottomline. McFarland
Dep[.] at 19-20; 21-36.
DRPSAMF ¶ 30.
Taking the second sentence of the qualification first, this language already appears verbatim
in the statement of facts, see DSMF ¶ 20, and the Court opts not to include the language a second time.
Turning to the first sentence, Bottomline takes the quoted language from Ms. Colello’s position
description. DSMF Attach. 4 Position Title: Client Relationship Manager, Commissions Program,
Paymode-X (ECF No. 22). Indeed, Ms. Colello affirmed the accuracy of the language, which appears
nowhere else in the statement of facts, in her deposition:
Q. And the position description, is that what you were responsible for doing?
Colello Dep. 56:12-14. Given Ms. Colello’s deposition testimony, the Court qualifies the language to
include the position description.
Colello was in direct contact with Bottomline customers only with regard to errors in
the processing of their accounts.10 PSAMF ¶ 31; DRPSAMF ¶ 31.
This statement parrots its record support. See Colello Aff. ¶ 9 (“I was in direct contact with
Bottomline customers only when they had a complaint or there was a problem in the processing of
Bottomline denied Ms. Colello’s statement on the ground that she “had extensive contact with
the clients of Bottomline, and was essentially the ‘voice of her customers.’” DRPSAMF ¶ 31. It cited
Ms. Colello’s deposition, which it claimed “acknowledg[ed] that she had ‘extensive client contact’ and
that she was ‘the voice of the customer’ escalating support and[/]or service needs, including requests
for product enhancements, of key customers to the product management team.” Id. In relevant part,
the cited portion of her deposition reads:
Q. Then it goes on to say, “Handle escalated support or service needs for key customers
including communicating product enhancement requests to the product management
team.” Did you do that?
A. I would – again, you’re correct. I would be the voice of the customer listing this is
what they asked me, and going to the development team’s experts to ask them can we
do this, is it possible.
Q. So fair to say that you had extensive client contact?
Q. And you were really the person running the client account?
Colello Dep. 71:11-72:1.
Bottomline also cited Ms. Coward’s and Ms. McFarland’s depositions. In addition to
confirming that Ms. Colello “had extensive client contact with the clients” and “was essentially the
voice of her customers,” Ms. Coward explained that Ms. Colello made “recommendations [that] were
technology related in correcting the code that was driving the payment processing for those vendors
and travel agents.” Coward Dep. 21:11-25. Ms. McFarland explained in greater detail her
understanding of Ms. Colello’s role:
Q. Was – is this position responsible for adjusting any disputes between Bottomline
and the company or the customer, I guess I should say? Did the position adjust any
errors or changes in compensation between Bottomline and the customers?
A. Responsible for understanding what the adjustment for the customer required and
making recommendations for those adjustments.
Q. And other than the adjustments, what else does a person in this role do?
A. Everything from client asking for a modification to their existing setup with our
organization, handling any complex escalated issue that the customer may have,
responsible for working with our product and development organization to provide
product and development with what those customers are asking for out of our product
and solutions, to work with all of the service teams across Bottomline internally to be
the voice of the customer and to advocate on behalf of those customers to ensure we're
delivering the appropriate solution.
DSMF Attach. 5 Jill McFarland Dep. Tr. 19:17-20:14 (McFarland Dep.).
In sum, Bottomline again pointed to language that more characterizes Ms. Colello’s role than
describes it by saying that she was “the voice of her customers.” DRPSAMF ¶ 31. It provided record
support from Ms. Colello’s and her supervisors’ depositions for its denial of Ms. Colello’s assertion that
Ms. Colello was not permitted to sell Bottomline’s financial products or services
to customers. PSAMF ¶ 32; DRPSAMF ¶ 32. If a customer informed Ms. Colello that
it was interested in a product that Bottomline provided, she was required to get
someone else from Bottomline to reach out to them to discuss the product further. Id.
If a customer had an issue with another Bottomline product, they had contacts other
than Ms. Colello at Bottomline to whom they could reach out. Id. At the same time,
Ms. Colello could identify additional services to offer vendors.11 Id.
Ms. Colello would often make suggestions to her supervisors about how
Bottomline could prevent and/or more efficiently handle customer complaints; many
of these recommendations consisted of nothing more than Ms. Colello passing on
processing suggestions from those in more technical roles at Bottomline. PSAMF ¶
34; DRPSAMF ¶ 34. She also made technology-related recommendations, based on
what “computer people” had told her. 12 Id. Ms. Colello was never told that she had
she was “in direct contact with Bottomline customers only with regards to errors in the processing of
their accounts.” PSAMF ¶ 31. The dispute, then, centers on the range of services Ms. Colello provided
her customers. While both parties agree she served as the voice of her customers, they disagree on
what this characterization actually means—i.e., they disagree regarding the scope of the matters on
which she spoke for her customers. Ms. Colello contends she spoke about only account errors, see
Colello Aff. ¶ 9, while Bottomline contends she spoke about a broader range of matters. See, e.g.,
McFarland Dep. 20:4-14.
The Court perceives a genuine dispute of material fact regarding the precise boundaries of Ms.
Colello’s role at Bottomline. Charged as it is to view the facts in her favor, the Court admits Ms.
Colello’s account and rejects Bottomline’s denial.
Bottomline interposed a qualified response to Ms. Colello’s paragraph thirty-two on the ground
that “Colello was not permitted to contract deals, but was expected to discuss products and services
with customers.” DRPSAMF ¶ 32. The record supports Bottomline’s qualification, see Colello Dep.
46:23-47:4, so the Court added a sentence to Ms. Colello’s statement to reflect the qualification.
Bottomline interposed this qualification:
Colello made recommendations regarding growth opportunities and vision and
strategy for customers, along with technology related recommendations.
DRPSAMF ¶ 34. There are three pieces to this proposed qualification: (1) growth opportunities, (2)
vision and strategy for customers, and (3) technology-related recommendations.
to make recommendations concerning Bottomline’s business as part of her primary
duty.13 PSAMF ¶ 35; DRPSAMF ¶ 35. Any employee at Bottomline was permitted
to make recommendations to their supervisors. PSAMF ¶ 36; DRPSAMF ¶ 36.
Bottomline implemented none of Ms. Colello’s recommendations.14 PSAMF ¶ 37;
There is some support in the record for the qualification. Coward Dep. 21:23-25 (“Most of the
recommendations were technology related in correcting the code that was driving the payment
processing for those vendors and travel agents”), 23:3-8 (answering affirmatively (i) whether Colello
“made recommendations on growth opportunities” and (ii) whether she made recommendations “on
vision and strategy for customers”).
First, because the qualifying language regarding growth opportunities is already in these facts,
see DSMF ¶ 16, the Court concludes that including it for a second time would be redundant.
Second, because the qualifying language regarding vision is already in these facts, see DSMF
¶ 19, the Court again concludes that including it for a second time would be redundant.
What remains is the technology-related recommendations qualifying language. The Court
accepts this piece of the qualification. Even in so qualifying, however, the Court looks to Ms. Colello’s
record support for her proposed additional fact, which clarifies what exactly it means to say she made
technology-related recommendations. Coward Dep. 24:18-22 (“Q. . . . These recommendations on
computer programming types of things, was – was Deb coming up with those herself or was she passing
on what the computer people had told her? A. She was passing on what the computer people had told
her”). The Court admits Bottomline’s qualification on this one piece along with a qualification called
for by Ms. Colello’s record support.
Bottomline interposed this qualification: “Colello was asked for, and provided her
recommendations regarding client issues and concerns.” DRPSAMF ¶ 35. This is not directly relevant
to the proposed statement; there is an obvious difference between being told to make recommendations
as part of one’s primary duty and being asked for them. Further, Bottomline again cited to record
evidence that contradicts its position. See Colello Dep. 62:16-18 (“Q. Were you ever discouraged from
making recommendations? A. Yes”). For these reasons, the Court rejects Bottomline’s qualification.
Bottomline objected to this paragraph on Rule 601 and 602 grounds. This is a particularly
frivolous objection. Bottomline claims that Ms. Colello has “no personal knowledge regarding the
status of her recommendations once they were submitted to her supervisor.” DRPSAMF ¶ 37. The
Court rejects this objection out of hand. Ms. Colello did not attempt to assert the process by which
such a recommendation would be approved; she only stated that when she made a recommendation,
Bottomline did not adopt it. Ms. Colello, as the employee who made the recommendation, must have
known whether Bottomline implemented it.
Moreover, Ms. Colello cited the deposition of Ms. Coward as confirming that none of Ms.
Colello’s recommendations was ever implemented. PSAMF ¶ 37. Bottomline states that Ms. Coward
“testified that Colello made recommendations to her, which she approved and ‘sent up the chain.”
DRPSAMF ¶ 37. But this is not all of what Ms. Coward said at her deposition. The transcript reads:
And did you take those recommendations seriously?
Yes, I did.
Did you rely on those recommendations?
And did you sometimes implement those recommendations?
Those recommendations were never implemented by me.
But you had approved it and sent it up the chain?
DRPSAMF ¶ 37. Despite going as far as to “beg” for supervisors for changes in the
Bottomline systems, Ms. Colello was discouraged from making recommendations.15
PSAMF ¶ 38; DRPSAMF ¶ 38. Ms. Colello was not permitted to be a part of any
short- or long-term planning for Bottomline customers.16 PSAMF ¶ 39; DRPSAMF ¶
THE PARTIES’ POSITIONS
Although “FLSA [Federal Labor Standards Act] requires employers to pay
overtime compensation for hours worked in excess of forty hours per week,” Def.’s
Mot. at 5, Bottomline notes an exemption to this requirement for those “employed in
a bona fine, executive, administrative, or professional capacity.” Id. (citing 29 C.F.R.
§ 541.200 (2015); Hines v. State Room, Inc., 665 F.3d 235, 241 (1st Cir. 2011)). It
Coward Dep. 22:1-12.
If Bottomline had a good faith basis for this objection, it would have been on the ground that
it in fact implemented one or more of Ms. Colello’s recommendations. But Bottomline presented no
evidence to contradict Ms. Colello’s assertion and, in fact, failed to answer whether, subject to the
objection, it admitted, qualified or denied the statement. DRPSAMF ¶ 37. The Court overrules
Bottomline’s objection and deems the statement admitted.
Bottomline interposed a qualification (i) pointing out that Ms. Coward “believed Colello at
times made good recommendations and forwarded the recommendations to management” and (ii)
itemizing the array of subjects on which Ms. Colello supposedly gave recommendations. DRPSAMF ¶
The latter is irrelevant to whether Bottomline discouraged Ms. Colello from making
recommendations. The former may be relevant to the issue, insofar as Ms. Coward was more likely to
encourage—rather than discourage—recommendations she found worthy of forwarding up. See
Coward Dep. 22:1-12. Ms. Colello’s deposition testimony must be viewed in the light most favorable
to her, and the Court admits this fact. See Colello Dep. 61:7-15, 62:16-18.
It is confusing that Bottomline would seek to qualify Ms. Colello’s statement on this point,
given that in its own statement of facts Bottomline asserted “she was not involved in meetings to
discuss . . . the long-term goals and objectives of Bottomline’s customers.” DSMF ¶ 18. Nonetheless,
Bottomline interposed this qualification: “Colello made recommendations on vision and strategy for
customers, growth opportunities for customers and developing goals and targets to monitor progress
of programs.” DRPSAMF ¶ 39. The Court does not overlook Bottomline’s inconsistency and rejects its
argues Ms. Colello “was properly classified as an exempt employee and not entitled
to overtime compensation under FLSA.” Id.
Bottomline says it can carry the burden of establishing the three-part
administrative exception test for determining whether Ms. Colello is an exempt
employee. Id. at 5-6 (citing 29 C.F.R. § 541.200(a) (2015)). First, it asserts that Ms.
Colello “was paid more than $455 per week, satisfying the ‘salary basis’ test.” Id. at
6. Next, it reasons that because “her duties were directly related to the management
and general business operations of the company,” it “has satisfied the second prong.”
Id. at 10. On the third prong, Bottomline submits that Ms. Colello’s “job required her
to exercise discretion and independent judgment on matters of substantial
importance.” Id. at 10. It narrows the dispute on this prong. In its view, “there can
be no dispute” about Ms. Colello’s importance, id., so “the only issue for this Court is
whether, as a matter of law, [she] exercised the requisite ‘discretion and independent
judgment’ in her position . . . .” Id. at 11. It writes that the “work performed by
Colello required a level of discretion and independent judgment equal to or greater
than” that present in a trio of cases—Hines; 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)—in which the First Circuit determined there was sufficient discretion and
independent judgment. Id. at 13.
For these reasons, Bottomline says “there is no genuine issue of fact as to the
duties and responsibilities performed by Colello as a Customer Relationship Manager
at Bottomline.” Id. at 14.
Ms. Colello’s Opposition
Ms. Colello argues that “Bottomline has failed to establish that the
administrative exemption applies under either Maine law or the FLSA.” Pl.’s Opp’n
She begins with her state-law argument. Ms. Colello asserts that “Bottomline
waived the affirmative defense of the administrative exemption under state law when
it raised this . . . defense under only federal law in its answer.” Id. at 6 (emphasis in
original) (citing FED. R. CIV. P. 8(c); Federal Deposit Ins. Co. v. Ramirez-Rivera, 869
F.2d 624, 626 (1st Cir. 1989)). According to Ms. Colello, this is significant because
Maine law sets a higher bar than FLSA does on the third prong of the administration
There, Maine law calls for an exemption only “‘where the
performance of such primary duty customarily and regularly includes the exercise of
discretion and independent judgment.’” Id. (emphasis in original) (quoting 12-170
C.M.R. ch. 16, § II(A)). Ms. Colello points out that FLSA is “without any reference to
‘customarily and regularly.’” Id. (citing 29 C.F.R. § 541.200(a) (2015)).
Ms. Colello turns to FLSA. Conceding the first prong regarding salary, she
addresses the second and third prongs at length. On the second prong, regarding
whether her work related directly to the management or general business operations,
her argument boils down to an administration-versus-production dichotomy whereby
producers are not exempt but administrators are. According to Ms. Colello, her “work
concerns the ‘production’ side of Bottomline, rather than the administrative side
required by the administrative exception.” Id. at 8.
On the third prong, regarding whether her primary duties included the
exercise of discretion and independent judgment with respect to matters of
substantial importance, Ms. Colello makes several arguments: first, that none of her
responsibilities as listed by Bottomline establishes she exercised discretion and
independent judgment, id. at 11; second, that the fact she made business
recommendations does not establish she exercised discretion and independent
judgment, id. at 13; that the trio of First Circuit cases cited by Bottomline are not on
point, id. at 14-16; and finally that the factors set out in the federal regulations show
the inapplicability of the exemption on her facts. Id. at 16-19.
Bottomline opens by addressing Ms. Colello’s argument that it has waived the
administrative exemption defense under Maine law.
Because its answer had
language referencing state-law defenses, Bottomline asserts Ms. Colello had
adequate notice of those defenses. Def.’s Reply at 2. It also contests the notion that
Maine law sets a higher bar than FLSA does. Id.
On the second prong, Bottomline dismisses Ms. Colello’s attempts to analogize
her work to “largely manual tasks” and contends that the case relied upon for this
analogy in fact cuts against her. Id. at 3-4 (citing Bothell v. Phase Metrics, Inc., 299
F.3d 1120, 1125 (9th Cir. 2002)). Moreover, Bottomline contends that Ms. Colello’s
“admissions alone establish that [she] performed work directly related to the running
and servicing of Bottomline’s business.” Id. at 4.
On the third prong, Bottomline rebukes Ms. Colello’s efforts to minimize her
position. Id. at 5. It stresses that Ms. Colello’s own statements about her position,
which Bottomline thoroughly recounts, reveal that she had the requisite amount of
discretion and independent judgment. Id. at 7-8.
Ms. Colello’s Sur-Reply
Ms. Colello’s sur-reply asserts that new facts introduced in Bottomline’s reply
should be disregarded, treated as irrelevant, or both. Pl.’s Sur-Reply at 1 (citing D.
ME. LOC. R. 7(c), 56(d)). In particular, she urges the Court to treat as irrelevant new
information claiming “that Colello was the only client relationship manager assigned
to the travel industry portfolio.” Id. at 1 (emphasis in original). She objects to other
new information regarding her job responsibilities and LinkedIn profile, id. at 2-3, as
well as charges Bottomline with mischaracterizing the record because her “job
responsibilities did not include making recommendations regarding Bottomline’s
business.” Id. at 3-4. Finally, according to Ms. Colello, Bottomline confuses (1) a
statement of perspective with an undisputed fact and (2) case citations with facts. Id.
Bottomline’s Response to Ms. Colello’s Sur-Reply
Claiming that “nothing in Local Rule 56(d) or Local Rule 7(c) precludes [a]
party from referring to evidence in the record before the Court in its briefing of the
issues raised by its Motion for Summary Judgment,” Bottomline maintains that the
Court should consider “that Colello was the only client relationship manager assigned
to the travel industry portfolio” and her LinkedIn profile. Def.’s Resp. to Sur-Reply
at 1-2. Bottomline rejects the notion that it mischaracterized the record regarding
Ms. Colello’s recommendations, confused perspective with fact, or mistook case
citations for facts. Id. at 2-5.
Summary Judgment Standard
Summary judgment is appropriate “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” FED. R. CIV. P. 56(a). A fact is “material” if it “has the potential to
change the outcome of the suit.” Tropigas de P.R., Inc. v. Certain Underwriters at
Lloyd’s of London, 637 F.3d 53, 56 (1st Cir. 2011) (quoting Borges ex rel. S.M.B.W. v.
Serrano-Isern, 605 F.3d 1, 5 (1st Cir. 2010)). A dispute is “genuine” if “a reasonable
jury could resolve the point in favor of the nonmoving party.” Id. (quoting McCarthy
v. Nw. Airlines, Inc., 56 F.3d 313, 315 (1st Cir. 1995)).
“If the moving party has made a preliminary showing that there is no genuine
issue of material fact, the nonmovant must ‘produce specific facts, in suitable
evidentiary form, to establish the presence of a trialworthy issue.’” McCarthy v. City
of Newburyport, 252 Fed. App’x 328, 332 (1st Cir. 2007) (internal punctuation
omitted) (quoting Triangle Trading Co., Inc. v. Robroy Indus., Inc., 200 F.3d 1, 2 (1st
Cir. 1999)). In other words, the nonmoving party must “present ‘enough competent
evidence’ to enable a factfinder to decide in its favor on the disputed claims.” Carroll
v. Xerox Corp., 294 F.3d 231, 237 (1st Cir. 2002) (quoting Goldman v. First Nat’l Bank
of Bos., 985 F.2d 1113, 1116 (1st Cir. 1993)).
The Court then “views the facts and draws all reasonable inferences in favor
of the nonmoving party.” Ophthalmic Surgeons, Ltd. v. Paychex, Inc., 632 F.3d 31,
35 (1st Cir. 2011) (citing Fed. Ins. Co. v. Commerce Ins. Co., 597 F.3d 68, 70 (1st Cir.
2010)). But the Court “afford[s] no evidentiary weight to ‘conclusory allegations,
empty rhetoric, unsupported speculation, or evidence which, in the aggregate, is less
than significantly probative.’” Tropigas, 637 F.3d at 56 (quoting Rogan v. City of
Boston, 267 F.3d 24, 27 (1st Cir. 2001)); accord Sutliffe v. Epping Sch. Dist., 584 F.3d
314, 325 (1st Cir. 2009).
There are two main issues before the Court on Bottomline’s motion for
summary judgment. The first is whether Bottomline waived the administrative
exemption under Maine law. The second is whether the facts establish a genuine
dispute of material fact on the application of the administrative exemption to Ms.
Colello under federal law and—assuming no waiver—Maine law.
The Federal Rules stipulate that a party responding to a pleading must
affirmatively state any affirmative defense, FED. R. CIV. P. 8(c), and “[a]s a general
matter, unpleaded affirmative defenses are deemed waived.” Shervin v. Partners
Healthcare Sys., 804 F.3d 23, 52 (1st Cir. 2015) (citing Ramirez-Rivera, 869 F.2d at
626). The administrative exemption under FLSA “is a matter of affirmative defense
on which the employer has the burden of proof.” Corning Glass Works v. Brennan,
417 U.S. 188, 196-97 (1974). Although other circuits have been more forgiving, see,
e.g., Huff v. Dekalb Cnty., 516 F.3d 1273, 1278 n.5 (11th Cir. 2008) (not requiring a
defendant to raise FLSA exemption in its answer), the rule in the First Circuit is that
an affirmative defense to a FLSA claim is waived if not affirmatively pleaded.
Schmidtke v. Conesa, 141 F.2d 634, 635 (1st Cir. 1944) (per curiam); City of Holyoke
v. Int’l Ass’n of Firefighters (In re Lemieux), 641 F. Supp. 2d 60, 63-64 (D. Mass. 2009).
“Affirmative defenses must be pled or they will generally be deemed waived and
excluded from the case.” Jewelers Mut. Ins. Co. v. N. Barquet, Inc., 410 F.3d 2, 11
(1st Cir. 2005); Jakobsen v. Mass. Port Auth., 520 F.2d 810, 813 (1st Cir. 1975). It
follows from this basic rule that (1) if Ms. Colello raised the state-law overtime claim
in her Complaint and (2) Bottomline failed to raise the state-law affirmative defense
of administrative exemption in its answer, Bottomline waived the defense.
The record, however, makes clear that neither condition is present in a way
that demands waiver. On its face, Ms. Colello’s Complaint does not allege an overtime
claim under the relevant Maine statute: 26 M.R.S. § 663(3)(K).
Complaint states generally that “Plaintiff did not receive any payment for overtime
despite demand for that compensation.” Compl. ¶ 6.17 Even so, Bottomline knew
that she intended to assert a state-law claim under 26 M.R.S. § 663(3)(K). See
Removal Pet. ¶ 2 (“Plaintiff alleges violation of the wage and overtime provisions of
the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. [§] 201, et seq., as well
as Maine state law, 26 M.R.S.A. [§] 663(3)(K)”). Bottomline’s Answer thus “invokes
There is an error in the paragraph numbering of the Complaint such that it proceeds five, six,
seven, six, eight. Compl. The Court cites the second six here.
the defenses, protections and limitations of [FLSA] and/or any other applicable state
or federal law.” Answer at 3 (emphasis added).
While this language is somewhat general, the First Circuit has instructed that
“[i]n determining whether general, non-specific language in a defendant’s answer . .
. suffices to preserve an affirmative defense, an inquiring court must examine the
totality of the circumstances and make a practical, commonsense assessment about
whether Rule 8(c)’s core purpose—to act as a safeguard against surprise and unfair
prejudice—has been vindicated.” Williams v. Ashland Eng’g Co., 45 F.3d 588, 593
(1st Cir. 1995), overruled on other grounds by Carpenters Local Union No. 26 v. U.S.
Fidelity & Guar. Co., 215 F.3d 136 (1st Cir. 2000). Because Ms. Colello alleged her
Complaint in generalities, as is her right under the modern pleading standard, and
because Bottomline in fact raised the state-law affirmative defense in its answer,
albeit in similar generalities, the Court decides that no waiver has occurred on this
point. In the words of the Williams Court, “no ambush occurred.”18 Id.
The Administrative Exemption
The FLSA requires overtime pay for work done in excess of forty hours per
[N]o employer shall employ any of his employees . . . for a workweek
longer than forty hours unless such employee receives compensation for
his employment in excess of [forty hours] . . . at a rate not less than one
and one-half times the regular rate at which he is employed.
Given the Court’s conclusion that Bottomline did not waive the state-law exemption, the Court
need not address Ms. Colello’s argument that she suffered prejudice as a result of their supposed
waiver because, in her view, state law sets a higher bar for exemption than federal law. Pl.’s Resp. at
29 U.S.C. § 207(a)(1). The Maine overtime statute contains a nearly identical
provision: “An employer may not require an employee to work more than 40 hours in
any one week unless 1 ½ times the regular hourly rate is paid for all hours actually
worked in excess of 40 hours in that week.” 26 M.R.S. § 664(3).
Quoting 29 U.S.C. § 213(a)(1), the First Circuit noted an administrative
exemption whereby “these overtime compensation provisions do not apply to ‘any
employee employed in a bona fide . . . administrative . . . capacity . . . (as such terms
are defined and delimited from time to time by regulations of the Secretary [of
Labor]).’” Reich v. Newspapers of New England, Inc., 44 F.3d 1060, 1070 (1st Cir.
1995) (quoting 29 U.S.C. § 213(a)(1)); Hines, 665 F.3d at 241. Section 213(a)(1),
however, does not contain the requirements concerning administrative exemption.
They are set forth in the regulations established by the Secretary of Labor and are
found in 29 C.F.R. § 541.200(a).
According to those regulations, an “employee
employed in a bona fide administrative capacity” means any employee:
(1) Compensated on a salary or fee basis at a rate of not less than $ 455
per week . . . , 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
(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)(1)-(3). This tripartite test can be broken down into the salary
basis test (prong one) and the duties test (prongs two and three). McGowen v. Four
Directions Dev. Corp., No. 1:12-CV-00109-JAW, 2014 U.S. Dist. LEXIS 30515, at *5876 (D. Me. Mar. 10, 2014).
The employer bears the burden of establishing that the employee was properly
exempted. John Alden, 44 F.3d at 1070. The Court’s interpretation of the exemption
is to be “‘narrowly construed against the employer seeking to assert [it] . . . .’”
McLaughlin v. Bos. Harbor Cruise Lines, Inc., 419 F.3d 47, 58 (1st Cir. 2005) (Lipez,
J., concurring) (quoting Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960)); see
also Sec’y of Labor v. DeSisto, 929 F.2d 789, 797 (1st Cir. 1991).
“Whether or not a position is exempt from the overtime requirement is a mixed
question of law and fact.” Bolduc v. Nat’l Semiconductor Corp., 35 F. Supp. 2d 106,
114 (D. Me. 1998); see also John Alden, 44 F.3d at 1073. “If there is a genuine dispute
of fact that goes to the nature of the job duties, then it is ‘for a fact-finder and not the
Court to determine how the Plaintiff actually spent her work day.’” McGowen, 2014
U.S. Dist. LEXIS 30515, at *69 (quoting Nicholson v. Bangor Historic Track, Inc., No.
2:11-cv-00347-NT, 2013 U.S. Dist. LEXIS 25081, at *24 (D. Me. Feb. 25, 2013)). Thus,
whether an employee has been properly placed in exempt status “‘remains intensely
fact bound and case specific.’” Bolduc, 35 F. Supp. 2d at 114 (quoting Bohn v. Park
City Grp., Inc., 94 F.3d 1457, 1461 (10th Cir. 1996)).
In this case, the parties contest the two prongs of the duties test.
assuming Bottomline could meet its burden on the management or general business
operations prong, 29 C.F.R. § 541.200(a)(2), it cannot do so on the discretion and
independent judgment prong. Id. § 541.200(a)(3). To resolve the pending motion,
therefore, the Court proceeds directly to the third prong.
Deborah Colello’s Discretion and Independent
The dispositive issue before the Court is whether there is a genuine dispute of
material fact as to whether Ms. Colello’s primary duty included “the exercise of
discretion and independent judgment with respect to matters of significance.” 29
C.F.R. § 541.200 (a)(3). The regulations provide guidance as to what constitutes the
exercise of discretion and independent judgment:
(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
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.
Id. § 541.202(a)-(b).
At the outset, the Court agrees with Bottomline that Ms. Colello worked on
“matters of significance” as the regulation defines that phrase. The facts make clear
that Ms. Colello was a point person within Bottomline for problems its travel portfolio
customers experienced with its payment software.19 See, e.g., DSMF ¶ 7; PRDSMF ¶
7 (“Colello was the primary contact for key customers post-implementation”); PSAMF
¶ 30; DRPSAMF ¶ 30 (“she was hired to assure customers that there was someone
they could reach out to when there were errors in their accounts”). Having found her
duties to constitute matters of significance, the dispute homes in on whether Ms.
Colello exercised discretion and independent judgment with respect to those matters.
In answering this question, Ms. Colello in particular urges the Court to focus
on the factors set out in § 541.202(b). Pl.’s Opp’n at 17 (citing In re Novartis Wage
and Hour Litigation, 611 F.3d 141, 155-56 (2d Cir. 2010), abrogated on other grounds
by Christopher v. SmithKline Beecham Corp., 132 S. Ct. 2156 (2012)).20 She is correct
that the Court should consider these factors; the First Circuit in Hines instructed the
lower courts to apply them as part of a “circumstance-specific analysis,” while at the
same time declining to read into the Second Circuit’s Novartis opinion a requirement
of “unnecessary rigidity” regarding the factors’ application. 665 F.3d at 246. The
Based on the above citations to the record evidence, the Court infers that Ms. Colello was a
point person without relying on the information newly introduced in Bottomline’s reply that she was
the only person assigned to the travel industry portfolio. See Pl.’s Sur-Reply at 1-2; Def.’s Resp. to SurReply at 1-2.
The Novartis decision’s precedential value has been called into doubt. See, e.g., Pippins v.
KPMG LLP, 921 F. Supp. 2d 26, 92 (S.D.N.Y. 2012) (“Since the Supreme Court, unlike the Second
Circuit, concluded that the pharmaceutical representatives qualified for the sales exemption, it never
reviewed the Circuit’s alternative conclusion that they did not fall under the administrative
exemption, rendering that aspect of the Court of Appeals’ decision pure dictum”) (citations omitted).
To the extent that Ms. Colello analogizes to the facts of Novartis, see Pl.’s Opp’n at 18-19, the Court
declines her invitation to consider that analogy in ruling on discretion and independent judgment.
regulatory factors offer an “exemplary list of factors to be considered among ‘all the
facts involved in the particular employment situation in which the question arises . .
. .’” Id. (emphasis in original) (quoting 29 C.F.R. § 541.202(b)).
Ms. Colello is also correct to point out that there are factors cutting against a
finding that she exercised discretion and independent judgment. For instance, there
is at least a genuine issue of material fact as to whether the “authority to commit the
employer in matters that have significant financial impact,” 29 C.F.R. § 541.202(b),
as evidenced by the fact that she “was required to obtain approval for any billing
adjustments and could not refund monies to a customer without approval from a
Senior Executive.” DSMF ¶ 18; PRDSMF ¶ 18. The record also reveals a genuine
dispute as to whether she had the “authority to negotiate and bind the company on
significant matters,” 29 C.F.R. § 541.202(b), as she “was not involved in meetings to
discuss Bottomline’s overall vision and/or the long-term goals and objectives of
Bottomline’s customers.” DSMF ¶ 18; PRDSMF ¶ 18.
Other factors cut in favor of finding Ms. Colello exercised discretion and
independent judgment. “[W]hether 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,” 29 C.F.R. § 541.202(b), is met
because “in essence, [Ms. Colello] was hired to assure customers that there was
someone they could reach out to when there were errors in their accounts”; thus, she
occupied a particular segment of the business in which she appears to have been a
point person. PSAMF ¶ 30; DRPSAMF ¶ 30. “[W]hether the employee represents
the company in handling complaints . . . or resolving grievances,” 29 C.F.R. §
541.202(b), is also met because Ms. Colello “was hired by Bottomline to work in a
division that was charged with handling customer complaints and payment errors . .
. .” PSAMF ¶ 30; DRPSAMF ¶ 30; see also Hines, 665 F.3d at 246 n.11 (identifying
factors from the preamble to the current regulations not listed in the regulations
themselves, including “troubleshooting or problem-solving activities on behalf of
management,” “authority to handle atypical or unusual situations,” and “primary
contact to public or customers on behalf of the employer”) (quoting Defining and
Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales
and Computer Employees; Final Rule, 69 Fed. Reg. 22,122, 22,144 (Apr. 23, 2004)).
Turning to the caselaw, Bottomline and Ms. Colello spar over the trio of First
Circuit cases—Hines, Cash, and John Alden.
Bottomline contends those cases
require a finding that Ms. Colello exercised discretion and independent judgment,
while Ms. Colello insists those cases are dissimilar to her facts yet helpful to her
argument. In Hines, the First Circuit wrote that “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.” 665 F.3d at 237. Cash
addressed a plaintiff who worked with various departments “to make sure that they
outfitted and delivered each motorcycle according to the particular purchase order”
and “stay[ed] in touch with the customers . . . mak[ing] sure that they were satisfied
. . . .” 508 F.3d 680. John Alden dealt with marketing representatives who worked
without sales scripts to pique independent agents’ interest in their insurer, and if a
sale went through, they would then act as a conduit between the purchasing party
and the insurer’s underwriters. 126 F.2d at 4, 13. All three plaintiffs were found to
have exercised discretion and independent judgment.
The record establishes that Ms. Colello’s work focused on helping customers
with problems they encountered with regard to a specific software product
(Commissions Program, Paymode-X).
DSMF ¶ 1; PRDSMF ¶ 1; PSAMF ¶ 30;
DRPSAMF ¶ 30. So, for instance, if a customer had a problem with another product,
“they had contacts other than Colello at Bottomline to whom they could reach out.”
PSAMF ¶ 32; DRPSAMF ¶ 32. Though Ms. Colello presents her role as one of a
problem-solver between the customer and the company within the niche of a
particular product, there are facts suggesting she could respond with some flexibility
within that niche. See, e.g., DSMF ¶ 16; PRDSMF ¶ 16 (quoting Ms. Colello’s résumé,
which recounts her duties as developing and maintaining customer relationships,
managing financial processing, using customer relationship management strategies
to build revenues and retain accounts, etc.); PSAMF ¶ 30; DRPSAMF ¶ 30 (quoting
Ms. Colello’s position description, recounting similar duties).21
It is hard to decipher Ms. Colello’s actual duties and the scope of those duties from her résumé
as a consequence of what could be referred to résumé-speak—meaning the tendency of people to
prepare résumés so as to maximize their seeming importance while leaving the reader with only vague
notions of what they actually did. A similar brand of puffery is sometimes evident in employers’
position descriptions, presumably as employers seek to attract employees with grandiose descriptions
for humdrum jobs. So despite the language from Ms. Colello’s résumé and position description, see
DSMF ¶ 16; PRDSMF ¶ 16; PSAMF ¶ 30; DRPSAMF ¶ 30, as in Smith, the record lacks sufficient
specificity with regard to actual duties from which a finding of discretion and independent judgment
can be drawn. 2014 U.S. Dist. LEXIS 165883, at *95-96.
Viewing the facts favorably toward Ms. Colello, there are two principal ways
in which the plaintiff’s duties differ from those of the sales managers in Hines, the
customer relations manager in Cash, and the marketing representatives in John
Alden. The plaintiffs in that trio of cases performed duties that were both (1) more
comprehensive and (2) more proactive in ways that lent their positions greater
discretion and independent judgment than Ms. Colello’s. In contrast to Hines, John
Alden and to a lesser extent Cash, she was not an employee who enticed customers
in an unscripted, personalized manner to patronize the business and then broadly
managed the execution of their patronage. Such roles are more comprehensive in
that they extend beyond servicing a niche of the business and are more self-starting
in that they include a proactive element of salesmanship. The Court concludes that
there is a meaningful difference between the trio of cases and the facts in the record
as regards discretion and independent judgment.
The parties vigorously dispute the significance of recommendations made by
Ms. Colello. Ms. Colello argues that “[t]he mere ability to make suggestions to your
bosses does not indicate that an employee exercises independent judgment or
authority. If that were so, any worker that made passing suggestions about how to
improve their jobs would satisfy the ‘discretion and independent judgment’ prong . . .
Pl.’s Opp’n at 13.
Bottomline disagrees: “The fact that her decisions and/or
recommendations about how customer issues should be resolved were subject to
further review, or not ultimately accepted, does not mean that she did not exercise
the requisite ‘discretion and independent judgment’ . . . .” Def.’s Resp. at 6. Ms.
Colello has conceded that she “submitted recommendations to management
regarding enhancements for these customers,” DSMF ¶ 9; PRDSMF ¶ 9, and “made
frequent recommendations for resolution of clients’ problems” as well as “weekly
recommendations on how Bottomline could improve its customers’ businesses.”
DSMF ¶¶ 11-12; PRDSMF ¶¶ 11-12. That said, “many of these recommendations
consisted of nothing more than Colello passing on processing suggestions from those
in more technical roles at Bottomline,” PSAMF ¶ 34; DRPSAMF ¶ 34, and “none” of
her recommendations was implemented. PSAMF ¶ 37; DRPSAMF ¶ 37. The record
evidence also creates a genuine issue of material fact as to whether making
recommendations was part of Ms. Colello’s primary duty, whether she was
discouraged from making recommendations, and whether any employee could make
PSAMF ¶¶ 35, 38; DRPSAMF ¶¶ 35, 38.
recommendations—viewed in the abstract—seems likely to involve discretion and
independent judgment, the facts viewed favorably toward Ms. Colello demonstrate
that there is a genuine issue of material fact as to whether her recommendations were
perfunctory requests that Bottomline sometimes discouraged. That being the case,
Ms. Colello’s periodic recommendations do not eliminate the need for a jury to resolve
genuine issues of material fact on this prong.
In short, there is a genuine dispute of material fact as to whether Ms. Colello’s
primary duty included the exercise of discretion and independent judgment with
respect to matters of significance.
The Court concludes that there is a genuine dispute of material fact as to
whether Ms. Colello’s position qualifies for administrative exemption. It therefore
DENIES Bottomline, Inc.’s Motion for Summary Judgment (ECF No. 21).
/s/ John A. Woodcock, Jr.
JOHN A. WOODCOCK, JR.
UNITED STATES DISTRICT JUDGE
Dated this 5th day of February, 2016
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