In Quintiliani, a unanimous three-judge panel held that whether Jennifer Quintiliani’s former position with Concentric Healthcare Solutions qualified for the administrative overtime exemption under federal wage law is a factual issue reserved for trial. The Ninth Circuit expresslyfound that the district court erred in determining that her claim for overtime failed as a matter of law.
The District Court Proceedings
Quintiliani and her coworker, Jennifer Carpenter, filed a lawsuit against Concentric Healthcare in the U.S. District Court for the District of Arizona claiming that Concentric Healthcare violated the Fair Labor Standards Act (FLSA) by failing to pay them overtime. Quintiliani and Carpenter moved for partial summary judgment, seeking a determination that their respective positions were not exempt from the FLSA’s overtime payment requirements as a matter of law. To meet the administrative exemption, an employee must meet the following criteria: (1) he or she must be “[c]ompensated on a salary or fee basis at a rate of not less than $455 per week”; (2) his or her “primary duty [must be] 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) his or her “primary duty [must] include the exercise of discretion and independent judgment with respect to matters of significance. On March 28, 2013, U.S. District Judge Stephen McNamee held that the staffing coordinator position—the position held by Quintiliani—was exempt under the FLSA’s administrative exemption because it met the first two prongs of the test and the primary duty of an employee in a staffing coordinator position involved discretion and independent judgment on significant matters, thus satisfying the third prong of the administrative exemption.
Concerning Carpenter’s compliance coordinator position, Judge McNamee concluded that the position’s “duties did not satisfy the discretion and independent judgment test for the administrative exemption.” Carpenter ultimately settled her case, and Quintiliani appealed Judge McNamee’s decision to the Ninth Circuit.
The Ninth Circuit’sReversal
In reversing the district court, the Ninth Circuit panel held that triable issues of fact exist that should be determined at trial, including Quintiliani’s ability to discipline nurses and set pay rates. The panel concluded that the district court erred when it relied on a Concentric Healthcare official’s declaration and deposition stating that staffing coordinators had the ability to discipline nurses, but ignored Quintiliani’s own testimony and the testimony of another staffing coordinator to the contrary. Moreover, the Ninth Circuit pointed out that the same company official testified in his deposition that staffing coordinators were not authorized to discipline staff and were instead limited to counseling staff by relaying client complaints to them.
Furthermore, the Ninth Circuit concluded that the district court “gloss[ed] over a genuine dispute between the parties as to the level of discretion that Quintiliani had to approve higher rates of pay within [Concentric Healthcare]’s already established billing rates.” In her reply, Quintiliani argued that a company executive testified that “recruiters actually set rates of pay and that Staffing Coordinators only have latitude to offer higher pay rates within [Concentric Healthcare]’s already established bill rates.” Since the record did not establish the extent of a staffing coordinator’s latitude in offering higher pay rates, the Ninth Circuit held that a genuine issue of material fact existed that required resolution before determining whether the administrative exemption’s discretion requirement was met.
The Quintiliani decision further complicates an employer’s classification of administrative employees as exempt under federal wage and hour law because the legal requirements for the administrative exemption remain unclear with respect to what duties constitute “discretion and independent judgment.” The Ninth Circuit’s holding may require employers to reassess the extent of discretion and independent judgment exercised by employees classified as exempt under the administrative exemption.
Jared Palmer is an associate in the San Francisco office of Ogletree Deakins. Jared’s practice focuses on counseling and defending public and private companies in class actions and single plaintiff employment disputes. Jared has extensive experience defending employers against wage and hour claims, ranging from single plaintiff administrative proceedings to class actions involving thousands of putative class members. These cases have involved the entire gamut of wage and hour claims,...