Kurt Renfro v. Indiana Michigan Power Company, d/b/a American Electric Power

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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2004 FED App. 0161P (6th Cir.)
File Name: 04a0161p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
KURT RENFRO; WILLIAM
SOUTHWORTH; RICHARD
PETERSON; JAMES FITCHUK,
individually and as Class
Representatives on behalf of
other persons similarly
situated,
Plaintiffs-Appellants,
v.
INDIANA MICHIGAN POWER
COMPANY, d/b/a American
Electric Power,
Defendant-Appellee.
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No. 02-2342
Appeal from the United States District Court
for the Western District of Michigan at Grand Rapids.
No. 99-00877—Wendell A. Miles, District Judge.
Argued: February 4, 2004
Decided and Filed: June 2, 2004
Before: BATCHELDER, GIBBONS, and COOK, Circuit
Judges.
2 Renfro, et al. v. Ind. Mich. Power Co. No. 02-2342
_________________
COUNSEL
ARGUED: Stephen D. Turner, LAW, WEATHERS &
RICHARDSON, Grand Rapids, Michigan, for Appellants.
Joseph J. Vogan, VARNUM, RIDDERING, SCHMIDT &
HOWLETT, Grand Rapids, Michigan, for Appellee.
ON BRIEF: Stephen D. Turner, Gregory N. Longworth,
LAW, WEATHERS & RICHARDSON, Grand Rapids,
Michigan, for Appellants. Joseph J. Vogan, Peter A. Smit,
VARNUM, RIDDERING, SCHMIDT & HOWLETT, Grand
Rapids, Michigan, for Appellee.
_________________
OPINION
_________________
COOK, Circuit Judge. Plaintiffs-Appellants Kurt Renfro
and Richard Peterson, on behalf of themselves and other
similarly situated persons, appeal the district court’s grant of
summary judgment in favor of their employer, Indiana
Michigan Power Company d/b/a American Electric Power
(AEP), and denial of their motion for summary judgment on
their claims that AEP failed to pay overtime wages in
violation of the Fair Labor Standards Act of 1938 (FLSA), 29
U.S.C. §§ 201-219 (2000). Because AEP properly treated
plaintiffs as administratively exempt from the FLSA’s
overtime requirement, we affirm the district court’s judgment.
I
Indiana Michigan Power Company, doing business as AEP,
operates several power-generating facilities, including the
Cook Nuclear Plant in Bridgman, Michigan, where the
plaintiffs worked as “planners.” According to plaintiffs,
planners “take job orders that identify work (maintenance or
new construction) and prepare work packages that the plant’s

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craft workers use to perform the work in the field.”
(Appellants’ Br. at 6.) In creating work packages, planners
determine which plant procedures apply to the particular
repairs and identify any permits necessary to allow the
repairs.
During some workweeks, plaintiffs (the planners) work
more than forty hours, but AEP does not pay them time-and-
a-half for the overtime. Under section 7(a) of the FLSA, non-
exempt employees are entitled to this additional
compensation for overtime work. 29 U.S.C. § 207(a)(1).
Section 13(a) sets forth an exception from the Act’s overtime
requirement for any salaried employee who works in a bona
fide administrative or executive capacity. 29 U.S.C.
§ 213(a)(1). AEP classified the planners as administrative
employees, making them ineligible under section 13(a) for
overtime compensation. The planners, disagreeing with
AEP’s classification, filed this suit seeking damages,
attorneys’ fees, and an injunction requiring AEP to comply
with the FLSA’s overtime compensation provisions. The
district court found that the planners meet the FLSA criteria
for exempt administrative employees and therefore granted
summary judgment to AEP and denied the planners’ motion
for summary judgment.
II
This court reviews de novo the district court’s grant of
summary judgment to AEP and denial of summary judgment
to the planners, Williams v. Mehra, 186 F.3d 685, 689 (6th
Cir. 1999), applying the axiomatic standard from Celotex
Corp. v. Catrett, 477 U.S. 317, 324 (1986), and Anderson v.
Liberty Lobby, 477 U.S. 242, 251 (1986).
A. Burden of Proof
In determining whether a FLSA exemption applies to the
planners, we narrowly construe the exemption against AEP,
Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960),
4 Renfro, et al. v. Ind. Mich. Power Co. No. 02-2342
placing on AEP the burden of proving that the administrative
employee exemption applies to the planners, Douglas v.
Argo-Tech Corp., 113 F.3d 67, 70 (6th Cir. 1997). AEP must
establish each element of the exemption by a preponderance
of the clear and affirmative evidence. Ale v. Tennessee
Valley Auth., 269 F.3d 680, 691 n.4 (6th Cir. 2001).
B. The Administrative Employee Exemption
To demonstrate that the planners are bona fide
administrative employees under the applicable Department of
Labor regulations (described as the short test), AEP must
demonstrate (1) that it pays the planners at least $250 per
week on a salary or fee basis; (2) that the planners’ primary
duty consists of office or nonmanual work directly related to
AEP’s management policies or general business operations;
and (3) that the planners’ primary duty requires them to
exercise discretion and independent judgment. 29 C.F.R.
§§ 541.2(a)(1), 541.2(e)(2); see, e.g., Schaefer v. Ind. Mich.
Power Co., 358 F.3d 394, 400 (6th Cir. 2004); Ale, 269 F.3d
at 683–85.
1. Salary Basis
An employee is paid on a “salary basis” if the employee
“regularly receives each pay period on a weekly, or less
frequent basis, a predetermined amount constituting all or part
of his compensation, which amount is not subject to reduction
because of variations in the quality or quantity of the work
performed.” 29 C.F.R. § 541.118(a). Such an employee
“must receive his full salary for any week in which he
performs any work without regard to the number of days or
hours worked,” subject to certain exceptions. Id.
Although the planners concede that they receive at least
$250 per week, they argue that they cannot be exempt even
though salaried because AEP requires them to account for at
least 40 hours of work each week and to make up for partial-
day absence either by working extra hours or by taking

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No. 02-2342 Renfro, et al. v. Ind. Mich. Power Co. 5
vacation time or paid time off. An employer may require
exempt salaried employees to make up for time missed from
work due to personal business. It is only when an employer
actually deducts from an employee’s paycheck that the
employee is ineligible for the exemption. See, e.g., Cowart
v. Ingalls Shipbuilding, Inc., 213 F.3d 261, 265–66 (5th Cir.
2000) (finding that employees who were required to make up
personal time off and suffered no salary deductions for the
lost time were paid on a salary basis); Haywood v. North
Amer. Van Lines, Inc., 121 F.3d 1066, 1070 (7th Cir. 1997)
(holding that the regulations prohibit only monetary discipline
of exempt employees). Because the planners concede that
AEP has not docked their salaries for missed time from work,
their argument in this regard fails.
The planners also argue that they are not salaried
employees because AEP controls their work schedules and
does not permit them to come and go as they please. These
criteria, however, play no part in defining salaried employees.
See 29 C.F.R. § 541.118(a).
Accordingly, the district court correctly determined that
AEP demonstrated that the planners were paid on a salary
basis.
2. Nonmanual Work Directly Related to General Business
Operations
AEP must next show that the planners’ primary duty
consists of (1) office or nonmanual work, (2) directly related
to management policies or general business operations,
(3) that is of “substantial importance” to the management or
operation of AEP’s business. 29 C.F.R. §§ 541.2(a)(1),
541.205(a). The parties do not dispute that the planners’
primary duty involves preparing work repair packages.
6 Renfro, et al. v. Ind. Mich. Power Co. No. 02-2342
a. Office or Nonmanual Work
Although the planners concede that they perform much of
their work at a desk, they claim that they perform so much
manual work through the “field walk-downs” (used to assess
repair projects) that they cannot be considered white-collar
employees. Performing some manual work does not
automatically remove an employee from exempt status so
long as the manual work is “directly and closely related to the
work requiring the exercise of discretion and independent
judgment . . . .” 29 C.F.R. § 541.203(b). If, however, the
planners perform “so much manual work (other than office
work) that [they] cannot be said to be basically ‘white-collar’
employee[s],” then they are not exempt administrative
employees. Id.
The evidence, viewed in the light most favorable to the
planners, does not support their contention. The planners
admitted at their depositions that they performed most of their
work at their desks; they generally described their duties as
office-based, rather than manual. Additionally, the field
walk-downs—performed as part of the planners’ preparation
of work repair packages—are “directly and closely related to
the [planners’] work requiring the exercise of discretion and
independent judgment,” supporting exemption from the
FLSA. 29 C.F.R. § 541.203(b).
The planners further argue that because certain planners
worked without overtime pay removing ice at the Cook plant
for a month or two in 1998, the planners cannot be considered
nonmanual workers. Exempt employees’ status under the
FLSA does not change merely because they perform some
nonexempt work. See, e.g., Counts v. South Carolina Elec.
& Gas Co., 317 F.3d 453 (4th Cir. 2003) (holding that
because the language and structure of the FLSA call for a
“holistic approach” to determining employees’ primary
duties, the court need not engage in a “day by day scrutiny”
of the tasks of administrative employees). The ice removal
project does not concern the planners’ primary duty (“the

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No. 02-2342 Renfro, et al. v. Ind. Mich. Power Co. 7
major part, or over 50 percent, of the employee’s time,” 29
C.F.R. § 541.103), nor does performing this manual labor
preclude the planners from otherwise meeting the exemption.
b. Directly Related to Management Policies or General
Business Operations
AEP must also demonstrate that the planners’ primary duty
is “directly related to management policies or general
business operations.” 29 C.F.R. § 541.2(a)(1). According to
the regulations, work “directly related to management policies
or general business operations” must involve “the
administrative operations of a business as distinguished from
‘production.’” 29 C.F.R. § 541.205(a). Work concerning the
“administrative operations” of a business includes “work
performed by so-called white-collar employees engaged in
‘servicing’ a business, as for example, advising the
management, planning, negotiating, representing the
company, purchasing, promoting sales, and business research
and control.” 29 C.F.R. § 541.205(b). The planners maintain
that their work is not administrative but rather, “a
maintenance function best categorized as production.”
(Appellants’ Br. at 45.)
Under the administrative/production dichotomy analysis,
the job of “production” employees “is to generate (i.e.
‘produce’) the very product or service that the employer’s
business offers to the public.” Reich v. John Alden Life Ins.
Co., 126 F.3d 1, 9 (1st Cir. 1997). When employees engage
in work that is “ancillary to an employer’s principal
production activity,” those employees are administrative.
Martin v. Cooper Elec. Supp. Co., 940 F.2d 896, 904 (3d Cir.
1991). This analysis, however, “is only useful to the extent
that it is a helpful analogy in the case at hand.” Schaefer, 358
F.3d at 402–03. AEP’s principal production activity is
generating electricity, and the product it offers the public is
electricity; the planners’ primary duty—creating plans for
maintaining equipment and systems in the nuclear plant—is
8 Renfro, et al. v. Ind. Mich. Power Co. No. 02-2342
ancillary to AEP’s principal production activity of generating
electricity. While not precisely “administrative,” the
planners’ duties form the type of “servicing” (“advising the
management, planning,” etc.) that the FLSA deems
administrative work directly related to AEP’s general
business operations. 29 C.F.R. § 541.205(b); see, e.g.,
Cowart, 213 F.3d 261 (finding that employees responsible for
planning production work requirements in a shipyard
performed administrative work).
c. Work of Substantial Importance
The planners claim that their primary duty is not of
“substantial importance to the management or operation of
[AEP’s] business” because their work is standardized and
because it does not involve setting company policy or
performing major assignments affecting AEP’s business
operations. 29 C.F.R. § 541.205(a).
According to the Department of Labor regulations, the
category of employees whose work is of substantial
importance includes, but is not limited to, those “whose work
affects business operations to a substantial degree, even
though their assignments are tasks related to the operation of
a particular segment of the business.” 29 C.F.R.
§ 541.205(c). This does not include “routine clerical duties”
or even operating expensive equipment or activities that, if
improperly performed, would cause loss to an employer.
29 C.F.R. § 541.205(c)(2).
The planners’ primary duty can only be viewed as
substantially important to AEP’s operations. Their
work—interpreting and carrying out plant policies, creating
plans that permit the continued operation of the equipment
and systems that generate AEP’s main product—affects
AEP’s general business operations to a substantial degree.
See, e.g., Haywood, 121 F.3d at 1072 (holding that
employee’s work, while not involving the principal service of
the employer, was nevertheless “important to the success of

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No. 02-2342 Renfro, et al. v. Ind. Mich. Power Co. 9
the firm” and therefore exempt). Moreover, the planners
themselves testified that their work is crucial to keeping the
Cook plant in compliance with its licensing requirements.
And although their work may involve some routine clerical
tasks, the planners’ primary duty is not clerical in nature. See
Part II.B.3. infra.
In sum, the planners have failed to produce evidence
indicating the existence of a genuine issue as to whether their
primary duty consists of nonmanual work that affects AEP
business operations to a significant degree and is therefore of
substantial importance to the operation of AEP’s business.
3. Discretion and Independent Judgment
Finally, AEP must show that the planners’ primary duty
requires “the exercise of discretion and independent
judgment.” 29 C.F.R. § 541.2(e)(2). The planners claim that
they do not exercise discretion and independent judgment
because AEP’s procedures and other guidelines standardize
and narrowly circumscribe their work such that the planners
make no independent choices when generating repair work
packages.
“Discretion and independent judgment” generally means
“the comparison and the evaluation of possible courses of
conduct and acting or making a decision after the various
possibilities have been considered.” 29 C.F.R. § 541.207(a).
This process implies “that the person has the authority or
power to make an independent choice, free from immediate
direction or supervision, and with respect to matters of
significance.” Id. (This is distinct from “[a]n employee who
merely applies his knowledge in following prescribed
procedures or determining which procedure to follow.”
29 C.F.R. § 541.207(c)(1).) Additionally, the regulations
require exempt administrative employees to exercise
discretion and independent judgment “customarily and
regularly.” 29 C.F.R. § 541.207(g) (stating that the phrase
signifies “a frequency which must be greater than occasional
10 Renfro, et al. v. Ind. Mich. Power Co. No. 02-2342
but which, of course, may be less than constant”); see also
Schaefer, 358 F.3d at 403–04; Douglas, 113 F.3d at 72.
We disagree with the planners’ argument that the heavily-
regulated nature of their primary job duty prohibits their
exercise of discretion and independent judgment. While
“[t]he very purpose of such detailed regulations and
procedures is to create conformity which has the practical
effect of minimizing discretion,” we nevertheless examine
whether the planners, constrained by regulations, actually
exercise discretion and independent judgment. Schaefer, 358
F.3d at 404.
The process of generating repair work packages is neither
wholly mechanical nor restricted to “merely appl[ying]
knowledge in following prescribed procedures.” 29 C.F.R.
§ 541.207(c)(1). When there is no procedure that can be
applied to a particular task, the planners independently
determine the nature of the repair task and prepare a repair
plan. In those situations, planners use their own skill,
experience, judgment, and discretion in formulating a repair
solution. Additionally, the planners exercise independent
decisionmaking when choosing among various options to
remedy a problem—for example, determining whether to
replace or repair equipment. The deposition evidence
demonstrates that the planners make such independent
decisions and exercise judgment on a daily basis.
Because the summary judgment evidence shows the
planners’ primary duty of problem-solving requires them to
exercise discretion and independent judgment customarily
and regularly, we conclude that the planners have failed to
produce evidence indicating a factual dispute with respect to
whether their primary duty required the exercise of discretion
and independent judgment. See, e.g., Reich, 126 F.3d at 14
(finding that despite extensive training in sales techniques,
sales representatives still exercised discretion and
independent judgment in applying the techniques to particular
clients).

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III
For the foregoing reasons, we affirm the district court’s
judgment.

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