UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA
August 18, 2008
DANA WILBUR, PLAINTIFF,
SILGAN CONTAINERS CORPORATION, DEFENDANT.
The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge
MEMORANDUM AND ORDER
Silgan Containers Corporation ("Defendant" or "Silgan") manufactures and supplies cans for Campbell's Soup and other customers. Dana Wilber ("Plaintiff") worked as a production supervisor at Defendant's Sacramento plant from August 2001 through May 2006. In 2003, with financial support from Defendant, Plaintiff returned to school and obtained an MBA. In 2005, Plaintiff's immediate superior was promoted to plant manager. Shortly thereafter, Plaintiff realized he would not be selected to fill the position his former superior had vacated.
Plaintiff resigned from Silgan, and began working as a production supervisor for another can manufacturing company. On July 12, 2006, Plaintiff filed a Complaint against Defendant, alleging failure to pay overtime compensation, failure to provide adequate meal and rest periods, and failure to itemize wage statements. Defendant countered that Plaintiff was a salaried executive and therefore exempt from overtime compensation under state and federal law. Defendant counterclaimed, alleging Plaintiff must repay Defendant $10,300.00 in educational loans because Plaintiff severed his employment before the minimum two-year service requirement. For the following reasons, Defendant's Motion for Summary Judgment is GRANTED as to all of Plaintiff's claims and as to Defendant's counterclaim.*fn1
Silgan's Sacramento plant manufactures cans for Campbell's Soup and other customers. The plant has two production departments: "D & I" ("drawn and iron") and "Three Piece." D & I is the principal production department, and typically operates 24 hours a day, 365 days a year. The D & I Department employs fifty-two production employees, four production supervisors, one assistant superintendent, and one plant manager. The 92,000 square foot D & I facility can produce over $70,000.00 worth of product in one 12-hour shift.
From 2002 to 2006, production workers at Defendant's Sacramento plant were represented by Teamsters Local 228. During this period, Defendant entered into two separate collective bargaining agreements with the union. Section 4.6 of both agreements provides: "Salaried personnel shall not perform work covered by the terms of the contract. The Company shall restrict all salaried employees from performing manual labor normally performed by members of the bargaining unit except for the purpose of instructing or taking appropriate action in the case of emergencies."
During Plaintiff's tenure at Silgan, production employees were divided into four different crews of twelve or thirteen. Each crew worked in twelve-hour shifts. For most of Plaintiff's term, the day shift was from 6:00 a.m. to 6:00 p.m., and the night shift was from 6:00 p.m to 6:00 a.m. When fully staffed, each crew consisted of seven mechanics, one machinist, one electrician, two lift truck drivers, one packaging mechanic (added in 2004), and one palletizer operator. The production supervisors, who typically worked four days on and four days off, reported to the Department Manager of D & I, who in turn reported to the plant manager. Because the Department Manager of D & I and the plant manager worked during the day only, the production supervisor was typically the only salaried employee on the premises from early evening until the early morning.
Defendant expected production supervisors to provide front-line day-to-day management and supervision of the personnel and machinery. They were not expected to perform production work. A production supervisor's duties included assigning and directing the work of production workers, examining the cans inspected by production workers, and producing a variety of reports tracking production and quality statistics.
In addition to these day-to-day responsibilities, production supervisors engaged in a variety of other duties. Production supervisors regularly evaluated temporary agency workers. Based largely on these evaluations, Defendant would determine whether to offer these workers a "probationary" job. Production supervisors would also evaluate probationary workers. Defendant would consider these evaluations in determining whether to sever the employment relationship or allow probationary workers to achieve "seniority" status. Production supervisors were also empowered to discipline employees. Although the collective bargaining agreement set forth a formal process for progressive discipline, production supervisors could immediately suspend employees engaging in egregious misconduct.
In or around early 2003, Plaintiff began to pursue an MBA at the University of Phoenix in Sacramento, California. He applied for tuition assistance under Defendant's Education Reimbursement Policy, receiving disbursements of $4,356.00 on August 10, 2004, $633.00 on November 23, 2004, $4,764.00 on July 12, 2005, and $2,666.00 on October 11, 2005.
Under the terms of the Education Reimbursement Policy agreement, Plaintiff agreed to repay these loans if he terminated his employment within two years of receiving tuition assistance.
In October 2005, the Department Manager of D & I, Jim Moses, replaced Dave Rex as the plant manager of Silgan's Sacramento facility. Plaintiff thereafter understood that one of his colleagues would be selected to replace Mr. Moses as Department Manager of D & I. Plaintiff believed he deserved additional compensation for the extra shifts Mr. Moses asked Plaintiff to work. Mr. Moses disagreed, and Plaintiff began looking for a new job. He resigned from his position at Silgan on May 31, 2006.
In August 2006, Plaintiff applied for a production supervisor position at a Los Angeles-based can manufacturing company, Rexam. He was hired and subsequently classified as an exempt employee.
On July 12, 2006, Plaintiff filed a Complaint against Defendant in Sacramento County Superior Court. The Complaint alleged failure to pay overtime compensation, failure to provide adequate meal and rest periods, failure to itemize wage statements, and a penalty for willful refusal to pay owed wages under California Law. The Complaint also alleged a federal claim for failure to pay overtime compensation under the Fair Labor Standards Act ("FLSA"). Defendant removed this case to this Court and counterclaimed asserting that Plaintiff breached his contract to repay loans under Defendant's Education Reimbursement Policy. Defendant now moves for summary judgment on all Plaintiff's claims and Defendant's counterclaim.
The Federal Rules of Civil Procedure provide for summary judgment when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). One of the principal purposes of Rule 56 is to dispose of factually unsupported claims or defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).
Rule 56 also allows a court to grant summary adjudication on part of a claim or defense. See Fed. R. Civ. P. 56(a) ("A party claiming relief may move ... for summary judgment on all or part of the claim."); see also Allstate Ins. Co. v. Madan, 889 F. Supp. 374, 378-79 (C.D. Cal. 1995); France Stone Co., Inc. v. Charter Twp. of Monroe, 790 F. Supp. 707, 710 (E.D. Mich. 1992).
The standard that applies to a motion for summary adjudication is the same as that which applies to a motion for summary judgment. See Fed. R. Civ. P. 56(a), 56(c); Mora v. ChemTronics, 16 F. Supp. 2d 1192, 1200 (S.D. Cal. 1998).
Under summary judgment practice, the moving party always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. at 323 (quoting Rule 56(c)).
If the moving party meets its initial responsibility, the burden then shifts to the opposing party to establish that a genuine issue as to any material fact actually does exist. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-87 (1986); First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968).
In attempting to establish the existence of this factual dispute, the opposing party must tender evidence of specific facts in the form of affidavits, and/or admissible discovery material, in support of its contention that the dispute exists. Fed. R. Civ. P. 56(e). The opposing party must demonstrate that the fact in contention is material, i.e., a fact that might affect the outcome of the suit under the governing law, and that the dispute is genuine, i.e., the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 251-52 (1986); Owens v. Local No. 169, Assoc. of W. Pulp and Paper Workers, 971 F.2d 347, 355 (9th Cir. 1987). Stated another way, "before the evidence is left to the jury, there is a preliminary question for the judge, not whether there is literally no evidence, but whether there is any upon which a jury could properly proceed to find a verdict for the party producing it, upon whom the onus of proof is imposed." Anderson, 477 U.S. at 251 (quoting Schuylkill & Dauphin Improvement Co. v. Munson, 81 U.S. (14 Wall.) 442, 448 (1872)). "When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts....
Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no 'genuine issue for trial.'" Matsushita, 475 U.S. at 586-87.
In resolving a summary judgment motion, the evidence of the opposing party is to be believed, and all reasonable inferences that may be drawn from the facts placed before the court must be drawn in favor of the opposing party. Anderson, 477 U.S. at 255. Nevertheless, inferences are not drawn out of the air, and it is the opposing party's obligation to produce a factual predicate from which the inference may be drawn. Richards v. Nielsen Freight Lines, 602 F. Supp. 1224, 1244-45 (E.D. Cal. 1985), aff'd, 810 F.2d 898 (9th Cir. 1987).
I. THE FAIR LABOR STANDARDS ACT CLAIM
The FLSA requires employers to pay their employees time and one-half for work exceeding forty hours per week. 29 U.S.C. § 207(a)(1). The FLSA provides an exemption from overtime for persons "employed in a bona fide executive, administrative, or professional capacity" and grants the Secretary of Labor the authority to set forth regulations "to define and delimit" the scope of the exemption. 29 U.S.C. § 213(a)(1). An "employer who claims an exemption from the FLSA has the burden of showing that the exemption applies." Donovan v. Nekton, Inc., 703 F.2d 1148, 1151 (9th Cir. 1983).
Because the FLSA "is to be liberally construed to apply to the furthest reaches consistent with Congressional direction ... FLSA exemptions are to be narrowly construed against ... employers and are to be withheld except as to persons plainly and unmistakably within their terms and spirit." Klem v. County of Santa Clara, 208 F.3d 1085, 1089 (9th Cir. 2000) (internal quotation marks and citations omitted).
The applicable regulations define a "bona fide executive" as any employee (1) compensated on a salary basis at a rate of not less than $455.00 per week; (2) whose primary duty is management of the enterprise or of a customarily recognized department or subdivision thereof; (3) who customarily and regularly directs the work of two or more other employees; and (4) who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight. 29 C.F.R. § 541.100(a)(1)-(4).*fn2
"The criteria provided by regulations are absolute and the employer must prove that any particular employee meets every requirement before the employee will be deprived of the protection of the Act." Bothell v. Phase Metrics, Inc., 299 F.3d 1120, 1125 (9th Cir. 2002) (quoting Mitchell v. Williams, 420 F.2d 67, 69 (8th Cir. 1969)). Silgan must therefore prove that Plaintiff meets all of the requirements of 29 C.F.R. § 541.100(a) before he can be held exempt under the FLSA.
To qualify as a "bona fide executive," an employee must receive a salary of at least $455.00 per week. 29 C.F.R. § 541.100(a)(1). Plaintiff does not dispute that Defendant paid him $55,800.00 per year (approximately $1,073.00 per week) when he began working at the Silgan Sacramento plant. (Pl.'s Statement of Genuine Issues or Disputed Facts #16.) Nor does Plaintiff dispute that his salary increased to $63,900.00 per year (approximately $1,229.00 per week) by August 1, 2005. Plaintiff's salary therefore satisfies the first prong of the test for an executive exemption.
B. Primary Duty
To qualify as a "bona fide executive," the employee's "primary duty" must be the "management of the enterprise ... or of a customarily recognized department or subdivision thereof."
29 C.F.R. § 541.100(a)(2).
The federal regulations describe "management" as inclusive of, but not limited to activities such as interviewing, selecting, and training of employees; setting and adjusting their rates of pay and hours of work; directing the work of employees; maintaining production or sales records for use in supervision or control; appraising employees' productivity and efficiency for the purpose of recommending promotions or other changes in status; handling employee complaints and grievances; disciplining employees; planning the work; determining the techniques to be used; apportioning the work among the employees; determining the type of materials, supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked and sold; controlling the flow and distribution of materials or merchandise and supplies; providing for the safety and security of the employees or the property; planning and controlling the budget; and monitoring or implementing legal compliance measures.
29 C.F.R. § 541.102.
An exempt executive's "primary duty" must be the performance of exempt work. The regulations define "primary duty" as "the principal, main, major or most important duty that the employee performs." 29 C.F.R. § 541.700(a). "Determination of an employee's primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee's job as a whole." Id. Some factors a court may consider include "the relative importance of the exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee's relative freedom from direct supervision; and the relationship between the employee's salary and the wages paid to other employees for the kind of nonexempt work performed by the employee." Id.
A court may also consider the amount of time an employee spent performing exempt work. 29 C.F.R. § 541.700(b). While "[t]ime alone ... is not the sole test," "employees who spend more than 50 percent of their time performing exempt work will generally satisfy the primary duty requirement." Id. However, "[e]mployees who do not spend more than 50 percent of their time performing exempt duties may nonetheless meet the primary duty requirement if the other factors support such a conclusion." Id.
This Court notes at the outset that Plaintiff's title is insufficient to establish him as a "bona fide executive." 29 C.F.R. § 541.2. "The exempt or nonexempt status ... must be determined on the basis of whether the employee's salary and duties meet the requirements of the regulations...." Id. That Plaintiff's title as "production supervisor" is therefore irrelevant to this analysis.
Silgan's official job description portrays the supervisor position as encompassing many of the duties listed under 29 C.F.R. § 541.102. According to this description, the production supervisor's general responsibility is to "[e]ffectively supervise assigned employees to efficiently produce a quality product." (Moses Decl. Ex. 10.) Specific duties are divided into four distinct areas: quality, production, employee relations, and resource control. Id. "Quality" responsibilities include reviewing inspection reports, personally inspecting products, and receiving verbal reports. Id.
"Production" responsibilities include training personnel, maintaining equipment, following standard practices, personally observing ... problem areas, reviewing production reports, and receiving verbal reports. Id. "Employee" responsibilities include directing and assigning work to the employees, administering the labor contract, administering policies and procedures, enforcing safety rules, enforcing housekeeping practices, and promoting and maintaining communications with employees, peers, staff and management. Id. Finally, "resource control" responsibilities include administering established standards, practices and procedures, reviewing employees' operating procedures, personally inspecting ... work force and material usage, reviewing reports, and receiving verbal reports. Id. Plaintiff admitted to performing all these duties at some point during his employment. (Douglas Decl. Ex. 3, 75:4-14.) Although this admission does not establish that these were Plaintiff's "primary duties," it does verify that Plaintiff engaged in managerial duties throughout his tenure at Silgan.
Plaintiff's own statements underscore the managerial nature of the production supervisor position. On his résumé, Plaintiff described himself as "a member of Silgan change management." (Douglas Decl. Ex. 5, Wilber Résumé (Ex. 70)).
He listed among his production supervisor duties "participat[ing] in a major long-term change management," "planning and supervising" "several semi-annual can-size change-overs," "supervis[ing] 14 factory workers daily," "participat[ing] in roughly 12 semi-annual change-over and overhaul periods of various equipment ... and packaging equipment," and "instruct[ing] and train[ing] mechanics both technically and professionally." Id. These satisfy several of the management criteria under 29 C.F.R. § 541.102: "training ... employees," "planning the work," "determining the techniques to be used," and "determining the type of ... machinery, equipment or tools to be used."
Plaintiff also "apprais[ed] employees' productivity and efficiency for the purpose of recommending promotions or other changes in status." 29 C.F.R. § 541.102. The record includes over fifty probationary employee evaluations Plaintiff completed during his tenure as production supervisor. (Moses Decl. Exs. 14-16.) Two questions Plaintiff was required to answer on each probationary employee evaluation were "Do you recommend this employee to become a regular seniority employee?" and "Do you recommend this employee for rehire?"
It is also well-documented that Plaintiff routinely "disciplin[ed] employees." The record includes nine demerits Plaintiff issued during his tenure for poor attendance or tardiness. (Moses Decl. Ex. 18.) All bear his signature.
That the collective bargaining agreement expressly prohibited production supervisors from doing production (non-exempt) work, coupled with Plaintiff's awareness of this prohibition, further supports a finding that his duties were predominantly managerial (exempt). Section 4.6 of the 2000-2003 collective bargaining agreement between Silgan/Campbell Soup and Teamsters Local 228 provides that "[s]alaried personnel shall not perform work covered by the terms of the contract. The Company shall restrict all salaried employees from performing manual labor normally performed by members of the bargaining unit except for the purpose of instructing or taking appropriate action in the case of emergencies." (Downey Decl. Ex. 1.) The 2003 collective bargaining agreement, effective from February 10, 2003 through July 2, 2006, contains an identical clause under § 4.6. (Downey Decl. Ex. 2.) Plaintiff does not dispute that while employed at Silgan Sacramento, he understood he was not to perform production work. (Pl.'s Statement of Genuine Issues or Disputed Facts # 11.)
Plaintiff regularly participated in meetings to discuss issues that included the "safety and security of the employees." Production supervisors working the day shift were required to attend daily "Staff Meetings." (Pl.'s Statement of Genuine Issues or Disputed Facts # 82.) The plant manager, the plant superintendent, the plant's office manager, the production planner, and the plant superintendent -- all classified as exempt employees -- attended these meetings. Id.
Plaintiff does not dispute that the purpose of these meetings was "to discuss safety, quality and production issues, to formulate actions [sic] plans to respond to issues, to discuss policy and procedure and to communicate information regarding corporate initiatives and receive feedback from front line managers." Id.
"Directing the work of employees" is one exempt duty under 29 C.F.R. § 541.102. Plaintiff admitted he "tried to use ... peripheral vision" to "observe and direct or redirect actions based on policies" "probably a half of the hour, on average every hour." (Douglas Decl. Ex. 3 115:13-17.) By his own admission, Plaintiff spent approximately half his time performing exempt work.
The percentage of time Plaintiff spent producing reports, monitoring machinery, and operating machinery is not, however, dispositive to a finding that his primary duty was management. A store manager who spent ninety-five percent of his time doing non-exempt work, but who also performed important managerial duties, exercised discretion, and was relatively free from supervision was found to be an exempt executive under the FLSA. Moore v. Tractor Supply Co., 352 F. Supp. 2d 1268 (S.D. Fla. 2004). The First and Second Circuits have held that assistant managers of Burger King restaurants were bona fide executives under the short test even though they spent more than fifty percent of their time performing such non-exempt tasks as preparing and serving food. Donovan v. Burger King Corp., 672 F.2d 221 (1st Cir. 1982); Donovan v. Burger King Corp., 675 F.2d 516 (2d Cir. 1982). In those cases, the assistant managers' exempt and non-exempt duties were not readily distinguishable.
The First Circuit reasoned that "one can still be 'managing' if one is in charge, even while physically doing something else. The 50 percent rule seems better directed at situations where the employees' management and non-management functions are more clearly severable than they are here." 672 F.2d at 226. The Ninth Circuit found that managers of a recreational vehicle park who spent more than fifty percent of their time on plainly nonexempt manual tasks nonetheless satisfied the short test for an executive exemption. Baldwin v. Trailer Inns, Inc., 266 F.3d 1104 (9th Cir. 2001). Although Plaintiff spent at least half his time "us[ing] ... peripheral vision" to "observe and direct or redirect actions based on policies," the percentage of time spent on non-exempt duties is of greater importance under the state law claims, as discussed below. For the purposes of exemption under the FLSA, however, it is sufficient that other factors support a finding that Plaintiff's primary duty at Silgan was exempt work.
That Plaintiff does not plan to raise the issue of misclassification as an exempt employee with his new employer also supports an inference that his primary duty at Silgan was management. After leaving Silgan, Plaintiff began working as a production supervisor for Rexam -- a Los Angeles-based can manufacturer -- where he is classified as an exempt employee. (Pl.'s Statement of Genuine Issues or Disputed Facts # 156.) Although Plaintiff indicated he had more "hourly tasking" and was required to do more quality checks at Silgan than at Rexam, he could not identify other material differences between the two jobs. (Pl.'s Statement of Genuine Issues or Disputed Facts # 159-160.) According to Plaintiff, the jobs are "very similar."
(Pl.'s Statement of Genuine Issues or Disputed Facts # 160.) Plaintiff has not raised the issue of improper classification as an exempt employee with Rexam and testified that he does not intend to do so. (Pl.'s Statement of Genuine Issues or Disputed Facts # 158.)
Plaintiff's argument that Defendant failed to introduce any evidence showing he was in charge of a recognized department or subdivision is unconvincing. As Defendant points out, courts have long held that a shift may be a department or subdivision for purposes of the executive exemption. See Walling v. Gen. Indus. Co., 330 U.S. 545, 549 (1947). This Court is persuaded by the fact that Plaintiff, when working the night shift, was frequently the only supervisor on duty at the Sacramento plant. Although he occasionally split or rotated shifts with another production supervisor, and sometimes worked with different twelve- or thirteen-person crews, Plaintiff was in charge of a given crew for the duration of his shift. These facts also demonstrate Plaintiff's "relative freedom from direct supervision."
During his tenure at Silgan, Plaintiff trained employees, directed their work, appraised their productivity and efficiency for the purpose of recommending promotions or other changes in status, disciplined them, planned the work, determined the techniques to be used, maintained production records, determined the type machinery and equipment to be used, and provided for the safety and security of the employees.
Accepting all Plaintiff's arguments, this Court must still conclude that his primary duty was "management of the enterprise or of a customarily recognized department or subdivision thereof."
C. Directing the Work of Two or More Other Employees
The third requirement for qualification as a "bona fide executive" under the FLSA is that an employee must customarily and regularly direct the work of two or more other employees. 29 C.F.R. § 541.100(a)(3). Plaintiff does not dispute that at all times during his tenure as production supervisor at Silgan Sacramento, there were twelve or thirteen production workers on any given shift in the D & I Department: seven mechanics, one machinist, one electrician, two lift truck drivers, one packaging mechanic (after 2004), and one palletizer operator. (Pl.'s Statement of Genuine Issues or Disputed Facts # 27.) Although Plaintiff claims he was "not in charge of the D & I department and was not in charge of any other fixed department at any time" (Wilber Decl. 2:17-18), this Court still finds that he customarily and regularly directed employees and that the employees he directed were subordinate. Moreover, the undisputed facts demonstrate that Plaintiff's primary duties included directing employees. (Pl.'s Statement of Genuine Issues or Disputed Facts # 63.) Defendant has therefore demonstrated that Plaintiff regularly directed the work of two or more other employees, satisfying the third prong of the test for an executive exemption.
D. Authority to Hire or Fire
Finally, a "bona fide executive" must have the authority to hire or fire other employees, or the employee's suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight. 29 C.F.R. § 541.100(a)(4). In making this determination, a court should consider "whether it is part of the employee's job duties to make such suggestions and recommendations; the frequency with which such suggestions and recommendations are made or requested; and the frequency with which the employee's suggestions and recommendations are relied upon." 29 C.F.R. § 541.105. "An employee's suggestions and recommendations may still be deemed to have 'particular weight' even if a higher level manager's recommendation has more importance and even if the employee does not have authority to make the ultimate decision as to the employee's change in status." Id.
Although Plaintiff did not have the power to hire or fire employees unilaterally, it is undisputed that Defendant relied on Plaintiff's suggestions and recommendations in deciding whether to hire, fire, advance, and promote employees under his supervision. Former Department Manager of D & I and current plant manager James Moses afforded great (and usually dispositive) weight to the evaluations and recommendations productions supervisors made as to whether probationary employees should continue in employment or be terminated. (Pl.'s Statement of Genuine Issues or Disputed Facts # 128.)
Plaintiff completed evaluations of probationary employees on at least seven different occasions. (Pl.'s Statement of Genuine Issues or Disputed Facts # 129.) In all cases, Defendant followed Plaintiff's recommendations to hire the employees. Id. On one occasion, when Plaintiff recommended that a particular probationary employee not become a regular seniority employee, that recommendation was afforded significant weight. (Pl.'s Statement of Genuine Issues or Disputed Facts # 131-132.)
Defendant has shown that no genuine issue of material fact exists as to Plaintiff's executive status as production supervisor during his tenure at Silgan. The evidence clearly establishes Plaintiff was a "bona fide executive" under the FLSA, falling squarely within the Act's executive exemption. Plaintiff has failed to show that any genuine issue exists. Defendant's Motion for Summary Judgment as to the Sixth Cause of Action is therefore GRANTED.
II. CALIFORNIA LABOR CODE CLAIMS
California law similarly requires employers to pay their employees time and one-half for work exceeding eight hours per day or forty hours per week. Cal. Lab. Code § 510(a). As with the FLSA, exemptions exist for persons employed in "administrative, executive, or professional capacities" in the manufacturing industry. Cal. Code Regs. tit. 8, § 11010(1)(A). A person employed in an executive capacity means any employee:
(a) whose duties and responsibilities involve the management of the enterprise or of a customarily recognized department or subdivision thereof; and (b) who customarily and regularly directs the work of two or more other employees; and (c) who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight; and (d) who customarily and regularly exercises discretion and independent judgment; and (e) who is primarily engaged in duties which meet the test of the exemption.... (f) Such an employee must also earn a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment.
Cal. Code Regs. tit. 8, § 11010(1)(A)(1). Although closely related, a few differences exist between the test for an executive exemption under California law and the test under the FLSA. First, an employee's suggestions and recommendations as to the hiring or firing of other employees must be given particular weight separate from the weight afforded to suggestions and recommendations as to the advancement and promotion or any other change of status of other employees. Second, an employee serving in an executive capacity must also customarily and regularly exercise discretion and independent judgment. Third, the employee must be primarily engaged in exempt duties, which include all work "directly and closely related to exempt work and work ... properly viewed as a means for carrying out exempt functions." Cal. Code Regs. tit. 8, § 11010(1)(A)(1)(e). The amount of time the employee spends on exempt work, together with the employer's realistic expectations and the realistic requirements of the job, must also be considered. Id. Fourth, the employee must earn a monthly salary equivalent to no less than twice the state minimum wage for full-time employment.
As of January 1, 2002, this was $6.75 per hour (Douglas Decl. Ex. 6.), which corresponds to an annual wage of $14,040.00 per year. Because Plaintiff earned at least $55,800.00 per year while at the Silgan Sacramento plant (Pl.'s Statement of Genuine Issues or Disputed Facts #16) -- well over $28,080.00 (twice the annual salary of a minimum wage earner) -- this Court will address only the first three differences.
A. of Other Employees Particular Weight as to the Advancement and Promotion
Silgan afforded particular weight not only to Plaintiff's suggestions and recommendations as to the hiring or firing of other employees, but also to Plaintiff's suggestions and recommendations as to the advancement, promotion, and change of status of other employees. As discussed, supra, Plaintiff does not dispute that former Department Manager of D & I and current plant manager James Moses afforded great (and usually dispositive) weight to Plaintiff's evaluations and recommendations as to whether probationary employees should continue in employment or be terminated. (Pl.'s Statement of Genuine Issues or Disputed Facts # 128.) Separate from the evaluation of probationary employees, Plaintiff, on at least nine separate occasions, completed performance evaluations which would ultimately determine whether an employee was entitled to a pay increase. (Pl.'s Statement of Genuine Issues or Disputed Facts # 136.) Production supervisors also made recommendations as to whether individuals hired for skilled positions should advance from "trainee" to "non-trainee" status.
Management afforded these recommendations significant weight. (Pl.'s Statement of Genuine Issues or Disputed Facts # 140.) Thus, in addition to the particular weight afforded Plaintiff's suggestions and recommendations as to the hiring or firing of Silgan employees, Defendant separately afforded particular weight to his suggestions and recommendations as to the employees' advancement, promotion, and change of status.
B. Discretion and Independent Judgment
Contrary to his assertion that he was merely an "automaton whose every action was ... controlled and monitored" (Pl.'s Opp'n to Mot. Summ. J. 1:5-6), Plaintiff's own admissions demonstrate he customarily and regularly exercised discretion and independent judgment. Plaintiff was generally the highest ranking supervisor working from approximately 5:30 p.m. to 7:00 a.m. (Douglas Decl. Ex. 4, 193:6-10.) Plaintiff had to exercise discretion and independent judgment every time a new situation arose, which occurred regularly. (Douglas Decl. Ex. 4, 220:24-221:1) ("[t]here's always going to be something new that comes up, and frequently it resulted in us getting berated in the morning.") When a new situation affecting "just an hour's production" presented itself, Plaintiff did not call Mr. Moses. (Douglas Decl. Ex. 4, 223:1-12.) Whenever a production crew was understaffed, Plaintiff had to decide whether to call in a D & I employee not scheduled to work, whether to call in a D & I employee from another work classification, or whether to call a "Three Piece" employee to cover that particular shift.
(Douglas Decl. Ex. 4, 245:12-24; 258:8-11.) Plaintiff prioritized which equipment needed maintenance. (Douglas Decl. Ex. 4, 248:7-14.) He ascertained whether production workers responded appropriately to problems. (Douglas Decl. Ex. 4 317:12-15.) Plaintiff would coach, train, discipline, and instruct; and observe, address, and delegate housekeeping on a daily basis. (Douglas Decl. Ex. 4 355:13-21; 362:13-15.) These admissions firmly establish the extent to which Plaintiff customarily and regularly exercised discretion and independent judgment.
C. Primarily Engaged in Exempt Duties
To qualify as an executive in the manufacturing industry in California, an employee must primarily engage in exempt duties, which include all work "directly and closely related to exempt work and work ... properly viewed as a means for carrying out exempt functions." Cal. Code Regs. tit. 8, § 11010(1)(A)(1)(e). Activities constituting exempt and non-exempt work under California law "shall be construed in the same manner" as those under the FLSA "effective as of the date of this order" --January 1, 2001. Id. Exempt work need not consist exclusively of duties listed as exempt under the FLSA, but also work "directly and closely related to exempt work." Id. Thus, while the California test is stricter than the FLSA's "primary duty" test (i.e., in California, more than half the work must be exempt), the duties themselves need not be absolutely exempt, but merely "directly and closely related to exempt work."
Unlike the "primary duty" test, in which a court must consider current FLSA regulations, California law requires courts to consider activities as described in the FLSA as of January 1, 2001. Cal. Code Regs. tit. 8, § 11010(1)(A)(1)(e). Under 29 C.F.R. § 541.108(e) (2001), "a supervisor who spot checks and examines the work of his subordinates to determine whether they are performing their duties properly, and whether the product is satisfactory, is performing work which is directly and closely related to his managerial and supervisory functions."
Plaintiff admits "the routine inspection of cans" occupied a "significant portion" of his time -- somewhere between 33% and 50% of any given shift. (Pl.'s Opp'n to Mot. Summ. J. 3:24-4:3.) Although Plaintiff disagrees with Defendant's characterization of this task as "spot checking," his argument is unconvincing. It was Plaintiff who used this very term in his April 7, 2007 deposition to describe his inspection of cans. (Douglas Decl. Ex. 3 94:18-95:8.) Thus, by Plaintiff's own admission, he spent between 33% and 50% of his time performing work directly and closely related to his managerial and supervisory functions.
"A supervisor who watches the operation of the machinery in his department in the sense that he 'keeps an eye out for trouble' is performing work which is directly and closely related to his managerial responsibilities." 29 C.F.R. § 541.108(f) (2001).
Plaintiff admitted he "tried to use ... peripheral vision" to "observe and direct or redirect actions based on policies" "probably a half of the hour, on average every hour" (Douglas Decl. Ex. 3 115:13-17), and that when he performed quality checks he was "consistently watching [his] surroundings and observing" (Douglas Decl. Ex. 4 331:9-18). Again, by his own admission, Plaintiff spent approximately half his time performing work directly and closely related to his managerial responsibilities.
"Maintaining control of the flow of materials," is an exempt function. 29 C.F.R. § 541.108(c) (2001). Plaintiff would check the line speed and line control functions "constantly throughout the course of the shift." (Douglas Decl. Ex. 4 324:15-19.)
Thus, during any given shift, Plaintiff was "constantly" performing an exempt function.
Defendant has demonstrated that no genuine issue of material fact exists as to any prong of the test for executive exemption in the manufacturing industry under California law. Plaintiff has failed to show that any genuine issue exists. As an exempt executive, Plaintiff was not entitled to overtime compensation. Since Defendant did not fail to pay unpaid wages, it is therefore not liable for waiting time penalties. The requirement for employers to provide adequate meal and rest periods, and to itemize wage statements "shall not apply to persons employed in ... executive ... capacities." Cal. Code Regs. tit. 8, § 11010(1)(A). Accordingly, Defendant's Motion for Summary Judgment as to the First, Second, Third, Fourth, Fifth, and Sixth Causes of Action is GRANTED.
III. DEFENDANT'S COUNTERCLAIM FOR BREACH OF CONTRACT
To prove breach of contract under California law, a party must demonstrate the existence of a contract, plaintiff's performance of the contract or excuse for nonperformance, defendant's breach, and the resulting damage to plaintiff. See, e.g., McDonald v. John P. Scripps Newspaper, 210 Cal. App. 3d 100, 104 (Cal. Ct. App. 1989).
Plaintiff began to pursue an MBA at the University of Phoenix in Sacramento in or around early 2003. He obtained this degree in 2005. (Pl.'s Statement of Genuine Issues or Disputed Facts # 194.) Plaintiff and Defendant entered into a Graduate Program Educational Reimbursement Agreement on April 28, 2004. (Downey Decl. Ex. 5; Pl.'s Statement of Genuine Issues or Disputed Facts # 196-198.) By signing the agreement, Plaintiff "unconditionally and irrevocably agree[d] to repay Silgan Containers Corporation & Subsidiary's [sic], if [he] terminate[d] [his] employment within two (2) years of receiving such reimbursement, for the amount of such reimbursement." (Downey Decl. Ex. 5.) Defendant paid Plaintiff $4,356.00 on August 10, 2004; $644.00 on November 23, 2004; $4,764.00 on July 12, 2005; and $266.00 on October 11, 2005. All disbursements were for educational expenses. (Downey Decl. Ex. 7; Pl.'s Statement of Genuine Issues or Disputed Facts # 201-205.) Plaintiff resigned from his position as production supervisor at Silgan Containers Corporation effective May 31, 2006. (Pl.'s Statement of Genuine Issues or Disputed Facts # 205.)
At the time of Plaintiff's resignation, he had incurred educational expenses totaling $10,300.00. (Pl.'s Statement of Genuine Issues or Disputed Facts # 206.) To date, Defendant has not received repayment from Plaintiff for these educational expenses. (Pl.'s Statement of Genuine Issues or Disputed Facts # 206.)
Plaintiff "does not oppose the Cross-Complaint motion." (Pl.'s Opp'n to Mot. Summ. J. 14:11-12.) Because there is no genuine issue as to any material fact relating to Defendant's counterclaim against Plaintiff for breach of contract, Defendant's Motion for Summary Judgment as to this claim is GRANTED.
The pleadings, depositions, answers to interrogatories, and admissions reveal no genuine issues as to any material fact surrounding Dana Wilber's employment status during his tenure at Silgan. He was a salaried employee whose primary duties involved the management of the Sacramento plant. He customarily and regularly directed the work of approximately thirteen employees. His suggestions and recommendations as to the hiring and firing of production workers, and as to their advancement and promotion, were given particular weight. He customarily and regularly exercised discretion and independent judgment, and he was primarily engaged in exempt work or work directly and closely related to exempt work.
For these reasons, he "plainly and unmistakably" falls within the terms and spirit of the executive exemption for overtime compensation under the FLSA and California law. Defendant's Motion for Summary Judgment as to the First, Second, Third, Fourth, Fifth, and Sixth Causes of Action is therefore GRANTED.
Under the Graduate Program Educational Reimbursement Agreement, Defendant paid Plaintiff $10,300.00 in educational loans so that Plaintiff could obtain his MBA. The Agreement required Plaintiff to repay these loans if he terminated his employment within two years of the disbursements. Plaintiff resigned less than two years after receiving these disbursements, but never repaid Defendant. Plaintiff does not oppose Defendant's counterclaim. For these reasons, Defendant's Motion for Summary Judgment as to its cross-claim for breach of contract is GRANTED.
IT IS SO ORDERED.