The opinion of the court was delivered by: Yvette Kane, Chief Judge United States District Court Middle District of Pennsylvania
Before the Court are cross-motions for summary judgment pursuant to Rule 56(c) of the Federal Rules of Civil Procedure by Defendant Possum Valley Municipal Authority ("PVMA") (Doc. No. 37) and Plaintiff Thomas R. Beamer ("Beamer") (Doc. No. 41). The motions are fully briefed and are ripe for disposition. For the reasons that follow, the Plaintiff's motion will be denied and the Defendant's motion will be granted.
A. Factual Background*fn1
Defendant PVMA is a municipal authority situated in Adams County Pennsylvania formed jointly by Menallen Township's Board of Supervisors and Bendersville's Borough Council. (Doc. Nos. 39 ¶ 1; 44 ¶ 2.) PVMA owns and operates a sewage treatment plant and water facility in Aspers, Pennsylvania, and also operates the Bendersville Water System in Bendersville, Pennsylvania. (Doc. No. 39 ¶¶ 4-7.) The PVMA is governed by a board of directors ("Board"), which is comprised of five members appointed by Bendersville and Menallen. The board does not perform the day-to-day operations at PVMA, but sets policy and approves business operations by majority vote at regular monthly meetings or periodic special meetings. (Doc. Nos. 39 ¶¶ 9-11; 44 ¶¶ 5-6.)
Plaintiff Beamer is a resident of Pennsylvania and was employed by PVMA from July 15, 1986 through June 17, 2005. (Doc. Nos. 39 ¶ 2; 44 ¶ 1.) He was initially hired as a part-time operator trainee, but after obtaining his license for wastewater treatment, he became the Head Operator, a full time position paid on an hourly basis. (Doc. Nos. 39 ¶¶ 14-16; 44 ¶ 7.) In the mid 1990s, Beamer was promoted to the position of Plant Manager, a full-time, salaried position. (Doc. Nos. 39 ¶ 16; 44 ¶ 8.) As Plant Manager, Beamer reported to PVMA's Board at its monthly meetings. (Doc. Nos 39 ¶ 17; 44 ¶ 9.) During the relevant period for this lawsuit, June 2002 through May 2005, Beamer held this position. (Doc. Nos 39 ¶ 17; 44 ¶ 9.) Beamer's salary for this time period was $41,080, or $790 per week in 2002, $42,099.20 or $809.60 per week in 2003, $43,139.20 or $829.60 per week in 2004, and $44,720 or $860 per week in 2005. (Doc. No. 39 ¶¶ 23, 25, 27, 29.) Beamer was PVMA's only salaried employee; the PVMA's other employees were paid on an hourly basis for hours they actually worked, without regard to where the work was performed. (Id. ¶¶ 34-36.) PVMA's other employees were also paid time and a half for hours over 40 hours per week actually worked. (Id.) Beamer's salary was calculated each year using an hourly rate times 2,080 working hours in a year (52 weeks at 40 hours per week). (Id. ¶ 22.) Despite being a salaried employee, Beamer was eligible for additional compensation in the case of any emergency call after hours or on the weekend. (Id. ¶¶ 31-32.) He was paid for this time at a straight-time rate. (Id. ¶ 33.)
It is clear from the record that Beamer had a large number of varied duties as Plant Manager. PVMA asserts that the Board delegated day to day operations to Beamer, who ran the water and sewage operations and, in the board's view, "pretty much had total control of the day to day operations of the [PVMA]." (Id. ¶¶ 18-19.) Typically, if the Board had a concern or problem with the operations it would go to Beamer to take care of it. (Id. ¶ 20.) Beamer admits that the board placed oversight of the physical and hands-on operation of water and sewage treatment in his hands and that he reported to the board on those items. (Doc. No. 49 ¶ 18.) He denies, however, that he ran all aspects of the daily operations of the PVMA or supervised all employees, asserting that Mary Yohe handled daily administrative duties without his supervision or direction. (Id. ¶¶ 18, 37.)
Beamer was responsible for purchasing and safety at the PVMA operations. (Doc. No. 39 ¶¶ 73-75.) He had general authority, independent from the Board, to purchase supplies and materials, or hire outside vendors, suppliers, and contractors as needed if the expenditure did not exceed $5,000. (Id. ¶¶ 73-74; see also Doc. No. 40-7 Deposition of Thomas Beamer at 34:8-13, 46:1-14 (hereinafter "Beamer Dep.").) In the case of an emergency, such as homes not receiving water or a sewer main break, Beamer could spend whatever he deemed necessary to make the emergency repairs.*fn2 (See Beamer Dep. at 33:18-34:7.) He also had authority to make decisions on matters involving plant or employee safety without consulting with the Board. (Id. at 36:1-3.) While employees could make small supply purchases, such as paper or ink for a printer without approval, Beamer was generally responsible for approving large purchases, including lab equipment, chemicals, and testing gear. (Id. at 43:1-44:11.) Beamer also asserted that other employees could make certain purchases on behalf of the PVMA if he was on vacation or could not be reached for approval. (Id. at 36:9-22.)
Beamer attended all meetings of PVMA's Board in order to advise it regarding ongoing PVMA operations and business. He had several attendant responsibilities in fulfilling this function. For instance, Beamer was responsible for performing-or directing PVMA's office manager Mary Yohe ("Yohe") to perform-wage surveys to determine the appropriate annual wage increases for himself and other PVMA employees. (Doc. No. 39 ¶ 71.) He reviewed proposals for employee benefit plans, reporting his findings and recommendations about the best options to the Board. (Id. ¶ 72.) Beamer also had a significant role in preparation of the yearly budget. After gathering information from PVMA staff, including Yohe and other employees, Beamer would prepare an initial annual operating budget for presentation to the Board and then to PVMA accountants.*fn3 (Id. ¶ 80.) He also worked with PVMA auditors to answer questions and complete PVMA's annual audit, which he approved as PVMA's manager. (Id. ¶ 82.) In performing these functions, Beamer worked directly with PVMA's accountant, solicitor, and engineer. (Id. ¶ 81.)
Beamer was responsible for the day-to-day supervision of PVMA employees. (Id. ¶ 37.) This responsibility included training operators and operator trainees (Id. ¶ 53), setting work schedules and approving adjustments to the employees' work hours (Id. ¶ 54), monitoring the quality of employees' work (Id. ¶ 55), approving time sheets and overtime requests before submission to the Board (Id. ¶¶ 58-60), and approving requests for vacation and leave (Id. ¶ 61).
Beamer also handled employee discipline and was the contact for general employee complaints and grievances.*fn4 (Id. ¶¶ 64-65.) As the licensed head operator, he was directly responsible for the actions of his subordinates in ensuring that the sewage plant and water facilities were operated in accordance with state and federal regulations. (Id. ¶¶ 78-79.) Beamer also had a role in the hiring of new employees. Beamer routinely provided his opinion and made recommendations to the Board when vacancies arose. (Id. ¶¶ 66-67.) The Board hired the applicant Beamer recommended in every recorded instance, including applicants John Plitt, Kimey Bucher-McDermott, Ginger Nolder, Jeff Taylor, and Mary Yohe. (Id. ¶ 68.)
During the relevant time period, Beamer received compensation above his salary from PVMA. (Id. ¶¶ 24, 26, 28, 30.) Beamer claims that he was owed this additional compensation for emergency call outs and work at the Bendersville facility, which duties the Board considered beyond the scope of his regular work at the Aspers sewage and water facilities. (See e.g. Beamer Dep. at 87:3-9.) Beamer also received additional compensation through use of PVMA's credit card for personal purchases in an amount totaling $15,720. (Doc. No. 39 ¶ 151.) Beamer claims that he used the credit card for personal purchases to offset unused vacation time and unpaid overtime from his call-outs and work at the Bendersville facility. (Beamer Dep. at 148:1-24.) PVMA disputes that the Board approved of any compensation in excess of his salary. (Doc. No. 39 ¶ 125.) Indeed, the Board made operational policy changes in early 2005 to ensure that Beamer would not be paid additional compensation beyond his annual salary. (Id. ¶ 132.)
Beamer subsequently resigned his position as Plant Manager, effective on June 17, 2005. (Id. ¶ 133.)
Beamer filed his complaint in this action on October 6, 2006, alleging violation of the FLSA as his sole cause of action. (Doc. No. 1.) On March 16, 2007, PVMA answered Beamer's complaint and asserted a counterclaim against him for reimbursement of unearned salary and also for charges he made on PVMA's business credit card. After discovery was completed, the parties filed the present motions for summary judgment. (Doc. Nos. 37, 41.)
Both parties have moved for summary judgment pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, which provides that "[t]he judgment sought should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The substantive law identifies which facts are material, and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is genuine only if there is a sufficient evidentiary basis that would allow a reasonable fact finder to return a verdict for the non-moving party. Id. at 248-49.
The moving party has the initial burden of identifying evidence that it believes shows an absence of a genuine issue of material fact. Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 145-46 (3d Cir. 2004). Once the moving party has shown that there is an absence of evidence to support the nonmoving party's claims, "the non-moving party must rebut the motion with facts in the record and cannot rest solely on assertions made in the pleadings, legal memoranda, or oral argument." Berckeley Inv. Group. Ltd. v. Colkitt, 455 F.3d 195, 201 (3d Cir. 2006); accord Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). If the nonmoving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden at trial," summary judgment is appropriate. Celotex, 477 U.S. at 322. Summary judgment is also appropriate if the non-moving party provides merely colorable, conclusory, or speculative evidence. Anderson, 477 U.S. at 249. There must be more than a scintilla of evidence supporting the nonmoving party and more than some metaphysical doubt as to the material facts. Id. at 252; see also, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In making this determination, the Court must "consider all evidence in the light most favorable to the party opposing the motion." A.W. v. Jersey City Pub. Schs., 486 F.3d 791, 794 (3d Cir. 2007).
Beamer has brought his claim for overtime compensation under The Fair Labor Standards Act ("FLSA"), which provides in pertinent part:
Except as otherwise provided in this section, no 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 the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.
29 U.S.C. § 207(a)(1). The statute provides several exemptions to this general requirement, however, including for employees that act in a "bona fide executive, administrative, or professional capacity . . . ." 29 U.S.C. § 213(a)(1). These overtime exemptions are construed narrowly against the employer, and it is the employer's burden to establish its employees come within the scope of the claimed exemption. Davis v. Mountaire Farms, Inc., 453 F.3d 554, 556 (3d Cir. 2006). Under the FLSA, the Secretary of Labor is given authority to promulgate regulations defining and interpreting the exemptions; these regulations, "which were promulgated using notice-and-comment procedures, have controlling weight unless found to be arbitrary, capricious, or manifestly contrary to the statute." Smith v. Johnson and Johnson, 593 F.3d 280, 284 (3d Cir. 2010); see also Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 900 (3d Cir. 1991) (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)).
PVMA argues that Beamer was not entitled to overtime pay because he fell into either the executive or administrative exemption provided by the statute. In their briefs, both parties appear to have cited and relied on the most recent Labor regulations in evaluating the applicability of these exemptions, 29 C.F.R. § 541.100 for the executive exemption and § 541.200 for the administrative exemption. (Doc. Nos. 38 at 4, 11; 42 at 5, 8.) These regulations have only been applicable since August 23, 2004. Before the 2004 amendments, the Labor regulations provided a long and short form test to evaluate bona fide executive and administrative employee status, depending on the employee's income level. See Martin, 940 F.2d at 901; see also 29 C.F.R. § 541.1 (2004) (executive); 29 C.F.R. § 541.2 (2004) (administrative). While the parties appear to ignore the effect of the prior regulations, Beamer is seeking overtime compensation from June 2002 through May 2005, a time period straddling the effective date of the new 2004 amendments. In evaluating a similar scenario, the Third Circuit has noted that the regulations promulgated by the Labor Department are not generally retroactive. See Davis, 453 F.3d at 557 n.2 ("Both the parties and the District Court have proceeded on the assumption that a this regulation applies to all the overtime at issue in this case. . . . We note, however, that 'a statutory grant of legislative rulemaking authority will not, as a general matter, be understood to encompass the power to promulgate retroactive rules . . . ."); Kennedy v. Commonwealth Edison Co., 410 F.3d 365, 369 (7th Cir. 2005) (same); see also Davis v. Mountaire Farms, Inc., 551 F. Supp. 2d. 343, 348 (D. Del., 2008) ("[T]he old regulations govern the time period prior to their amendment on August 23, 2004.").
Because the parties have not addressed this issue, the Court is left to consider the appropriate manner to proceed with the analysis in this case. Under the prior regulations, as mentioned, there was both a long and short test for assessing whether an employee qualified as a bona fide administrative or executive employee. See Martin, 940 F.2d at 901; Davis 551 F. Supp. 2d. at 346. For both exemptions, the short test was applicable to any employee compensated at a rate "not less than $250 per week." 29 C.F.R. §§ 541.1(f); 541.2(f) (2004). Because both parties agree that Beamer was compensated in excess of that amount for the relevant time period, the short test would apply. The short tests for executive and administrative exemptions are similar to the formulations found in the current regulation, but they are not identical; the current regulations require a higher weekly salary and add some additional elements to the analysis. Therefore, as other courts have found, the amended regulations are at least as protective of employees as the former short test. See Beauchamp v. ...