The opinion of the court was delivered by: CASTILLO
This case is before us on a second round of dispositive motions, having (partially) survived an earlier motion to dismiss for lack of subject matter jurisdiction. This time, our attention turns to the merits: we must decide whether the plaintiffs, Secretary of State Police Department sergeants and lieutenants, are eligible for overtime pay under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. The defendants, all Secretary of State officials at various levels, move for summary judgment on the ground that plaintiffs are salaried employees exempt from FLSA's requirements.
Plaintiffs, however, maintain that summary judgment is inappropriate because they are "subject to" salary deductions that remove the exemption and restore their protection under the Act.
Earlier this year, we dismissed the State of Illinois from this case on Eleventh Amendment immunity grounds, following the Supreme Court's directive in Seminole Tribe v. Florida, 517 U.S. 44, 116 S. Ct. 1114, 134 L. Ed. 2d 252 (1996). See Digiore v. State of Illinois, 962 F. Supp. 1064, 1070-78 (N.D. Ill. 1997). We permitted the case to proceed against the other defendants in their individual capacities. But it ends here. Another recent Supreme Court decision, Auer v. Robbins, 519 U.S. 452, 137 L. Ed. 2d 79, 117 S. Ct. 905 (1997), dooms the case on the merits against the remaining defendants. Because we find that, under Auer, the plaintiffs are exempt from FLSA's overtime provisions,
we grant defendants' motion for summary judgment.
FACTUAL AND REGULATORY BACKGROUND
Plaintiffs are ten police officers employed by the Secretary of State ("SOS") at the rank of sergeant or lieutenant.
Pls.' Facts P 1. Because they are not covered by a union contract, all SOS sergeants and lieutenants are classified as "Merit Compensation" employees. Id. P 13. They are paid an annual salary distributed in twice-monthly paychecks, and do not receive overtime compensation for laboring beyond their shifts. Id. PP 14, 103; Defs.' Facts P 5. Nevertheless, the plaintiffs contend that they are entitled to be paid overtime under the FLSA, which requires public employers to pay law enforcement employees overtime when they exceed a certain number of work hours in a 28-day period. 29 U.S.C. § 207(a), (k) (1965 & Supp. 1997); 29 C.F.R. § 553.230(c) (1996).
Defendants are SOS officials. George Ryan has served as Illinois Secretary of State since January 1991. Defs.' Facts P 1. That year, he appointed defendants Giacomo Pecoraro and Tina Prose to their respective posts as Director of the Department of Police and Director of Personnel. Pls.' Facts PP 4, 8. Ryan and Prose remain in their jobs, but Pecoraro left the Director of Police position in 1996. Pls.' Facts PP 4, 6, 8. Plaintiffs contend that Ryan, Prose and Pecoraro are each responsible in some way for denying them overtime compensation. However, it is undisputed that the SOS office adopted its policy against paying overtime to its police sergeants and lieutenants long before any of the defendants took office.
Defs.' Facts P 5.
FLSA sets the federal standards for overtime compensation.
Its overtime requirements do not apply, however, to employees serving in a "bona fide executive, administrative or professional capacity." 29 U.S.C. § 213(a)(1). Defendants have the burden of proving that plaintiffs fall into one of these "exempt" categories, and the exemptions are to be narrowly construed. Bankston v. Illinois, 60 F.3d 1249, 1252 (7th Cir. 1995). At issue in this case is the bona fide executive exemption, which has both "salary" and "duties" components. Among them are conditions that an "executive" employee earn at least $ 250 per week on a "salary basis" and supervise two or more employees. 29 C.F.R. § 541.1(f). The parties do not question that the plaintiffs earn the requisite amount or, with the exception of Sergeant Serafini,
satisfy the duties test. What they dispute is whether plaintiffs are paid on a "salary basis," a term not applicable to employees whose pay is "subject to reduction because of variations in the quality or quantity of the work performed." 29 C.F.R. § 541.118(a).
The Police Department has had its own Accident Policy since August 1990 to "establish policy and procedure for the review of vehicle accidents to ensure the protection of the public and the investigators in matters of traffic safety." Pls.' Dep. Ex. 3, at 1. The policy applies to all "sworn personnel," that is, SOS police officers of all ranks. Id. ; Pls. Facts P 28. Under the policy, sworn personnel may be disciplined for "chargeable accidents." Pls.' Dep. Ex. 3, at 2. The penalties range from one to three days' suspension without pay or uncompensated time for the first chargeable accident; from two to five days' suspension without pay or uncompensated time for the second; and from three to ten days' suspension without pay or uncompensated time for chargeable accidents beyond the second. Id. These penalties are not mandatory; they are simply laid out as a "schedule of suggested penalties" that an administrative body, the Accident Review Board, "may recommend to the Director [of Police] for chargeable accidents." Id. The breadth of the Director's discretion is somewhat unclear, though, because this language is qualified by the statement that the "Director shall not be bound by this schedule in those cases involving gross negligence or complete disregard of traffic laws and safe driving practices." Id.
During a period when Pecoraro was absent in 1991, two plaintiffs and another sergeant (not participating in this litigation) were disciplined under this policy. Defs.' Reply Ex. D. For their involvement with chargeable traffic accidents, Sergeants Digiore, Johns and Manning were given the option of taking a one-day suspension or working an uncompensated shift. Pls.' Facts PP 45-47; Defs.' Resp. P 47. All chose to work. Defs.' Facts PP 8, 12; Pls.' Facts P 47. A lieutenant, Raymond Wood, was issued a suspension at the same time, but he retired before the suspension took effect. Pls.' Facts P 49; Defs.' Resp. P 49. No sergeant or lieutenant has suffered a partial-week suspension for violating this policy since. Nor is there evidence that these individuals were suspended at any other time.
The Police Department Accident Policy is not the sole source of disciplinary suspensions. Issued on June 7, 1992 and in force until October 21, 1996, the Police Department's Physical Fitness Policy allowed unpaid suspensions as well. Pls.' Facts P 51. Like the Accident Policy, it applied to all sworn personnel. Pls.' Dep. Ex. 4 art. I. The Fitness Policy's disciplinary section stated that "progressive discipline may be applied to those sworn personnel who do not meet the standards set forth for the physical fitness test." Id. art. IX. Officers could receive a verbal warning, a written warning or a suspension, listed as "steps" in the process but not tied to any particular action other than failure to meet the test's "standards." Id. § A. In other words, while the steps increased in severity, they did not specify what type of violation warranted what level of discipline -- the policy required only 75 days between steps. Suspensions, when imposed, were administered in four "processes" -- two-day, five-day, ten-day and twelve-day increments. Id. § E. Again, although procedurally meticulous, the suspension process did not explain under what substantive circumstances it would apply. There is no evidence that any SOS police officer at the rank of sergeant or higher has ever been suspended without pay under the Physical Fitness Policy.
The testimony from SOS officials was that the 1993 Merit Compensation disciplinary provisions were added to reflect existing disciplinary practice. Before 1993, the SOS Progressive Disciplinary Policy did not distinguish between Merit Compensation and non-Merit Compensation employees, and had provisions for partial-week suspensions. Pls.' Facts P 19. But according to Prose, SOS office practice since 1990 was to suspend Merit Compensation employees only for five-day periods -- the 1993 Merit Compensation employee provision was added simply to memorialize this practice. Prose Dep. at 136-37. The Chief Labor Negotiator for the SOS, William Rolando, agreed with Prose's assessment. Rolando Dep. at 21. He assisted in drafting the 1993 Policy revisions, see Pls.' Facts P 21, and testified that as the standards for disciplining exempt employees became clearer following the Supreme Court's 1985 decision upholding FLSA's application to the public sector,
the SOS policy revisors "decided that we should bring our policy manual at least into compliance with what the working actions of the office were," i.e., limiting exempt employee suspensions to full work weeks. Rolando Dep. at 20-21.
Even before 1993, the SOS had a mechanism for ensuring that employee suspensions comport with FLSA -- the Technical Services Division ("TSD") of the Personnel Department. The TSD reviews personnel actions for FLSA compliance. Pls.' Facts P 69; Patton Dep. at 124; Prose Dep. at 19-25. The suspension procedure begins, for SOS police officers, with the Director of Police's (Pecoraro until 1996) recommendation. Pls.' Facts P 57. The Personnel Department, through Prose, has the power to approve or deny his recommendation. After a bi-level FLSA compliance review in Technical Services, the Personnel Department may exercise its power to reject the recommendation if it would violate FLSA. Pls.' Facts PP 67-72. For example, Prose testified that in 1993 or 1994 Pecoraro recommended partial-week suspensions for two officers above the rank of Investigator. Pls.' Facts P 68. But Prose refused to process the suspensions because they did not comply with FLSA. Prose Dep. at 139.
As mentioned above, notwithstanding this review process four sergeants were issued unpaid suspensions during Pecoraro's absence in 1991 for violating the Police Department's Accident Policy. And in 1990, when plaintiff Michael Juliano was still a sergeant, he was suspended without pay. Although his suspension period was five days, it spanned two work weeks -- Wednesday, January 17 through Tuesday, January 23. Pls.' Facts PP 60-62. Asked whether this type of split-week suspension could be imposed under the 1993 Merit Compensation Progressive Discipline Policy, Pecoraro "conjectured" that it could, although no split-week suspension has been issued since Juliano's in 1990. Pecoraro Dep. at 78. These are the five suspensions on which plaintiffs rest their case. The remaining seven plaintiffs are not alleged to have ...