Diane Perez v. Express Scripts Inc

NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ______________ No. 23-1730 ______________ DIANE PEREZ, individually and on behalf of all others similarly situated, Appellant v. EXPRESS SCRIPTS, INC.; EXPRESS SCRIPTS HOLDING COMPANY ______________ Appeal from the United States District Court for the District of New Jersey (D.C. No. 2-19-cv-07752) District Judge: Julien X. Neals ______________ Submitted Under Third Circuit L.A.R. 34.1(a) March 4, 2024 ______________ Before: SHWARTZ, RENDELL, and AMBRO, Circuit Judges.

(Filed: March 6, 2024) ______________ OPINION * SHWARTZ, Circuit Judge.

Diane Perez appeals the District Court’s order that granted reconsideration and entered summary judgment in favor of her employer, Defendants Express Scripts, Inc. (“ESI”) and Express Scripts Holding Company, on her claims for overtime pay under federal and state wage laws. For the following reasons, we will affirm.

I1 A ESI manages and administers pharmacy benefit programs for employers, commercial health plans, and governmental entities. Among other things, ESI communicates with its clients (and employees of those clients) about prescription drug coverage and related products.

As a Senior Program Communications Manager (“SCM”), Perez provided “operational support” for ESI’s communications campaigns. 2 App. 114. Perez testified that she was responsible for “helping to assemble letter templates,” App. 114, “consulting” with the product team about the campaigns, and “communicat[ing] information” between the product team, creative team, regulatory team, account team, production team, and email vendor to ensure the campaigns were timely and accurate.

App. 69-74. Perez also “[d]evelop[ed] and nurture[ed] relationships with stakeholders,” “creat[ed] . . . user-friendly tools” to produce uniform campaign mailings, and “[p]ropos[ed] and implement[ed]” time- and cost-saving operating procedures. App. 397-98. Perez earned over $100,000 per year and routinely worked more than forty hours per week without receiving overtime pay.

B Perez brought this collective action to recover unpaid overtime wages under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (“FLSA”), and the New Jersey Wage and Hour Law, N.J.S.A. § 34:12-56, et seq. (“NJWHL”). Defendants moved for summary judgment, which the District Court initially denied. Perez v. Express Scripts, Inc., No. 19-7752, 2022 WL 2981002, at *11 (D.N.J. July 28, 2022) (“Perez I”). The Court later reconsidered that ruling and granted Defendants summary judgment because it recognized that in initially denying Defendants summary judgment, it considered only the administrative exemption, “did not properly review whether [Perez] was exempt . . . under the highly compensated employee exemption,” and thus, incorrectly concluded that the FLSA’s overtime protections covered Perez’s job. Perez v. Express Scripts, Inc., No. 19-7752, 2023 WL 2570145, at *3-4 (D.N.J. Mar. 20, 2023) (“Perez II”).

Perez appeals.

II 3 The FLSA seeks to, among other things, “eliminate . . . ‘oppressive working hours.’” Helix Energy Sols. Grp., v. Hewitt, 598 U.S. 39, 44 (2023) (citation omitted).

To this end, the FLSA requires employers to pay their employees overtime wages when they work more than forty hours per week. 29 U.S.C. § 207. The FLSA, however, exempts from the overtime pay requirements employees who work in a “[(1)] bona fide executive, [(2)] administrative, or [(3)] professional capacity[.]” 4 29 U.S.C. § 213(a)(1).

In addition, the regulations include an exemption for highly compensated employees (“HCE exemption”). See 29 C.F.R. § 541.601.

During the relevant period, the HCE exemption applied to any employee who (1) earned more than $100,000 annually; 5 (2) primarily “perform[ed] office or non-manual work”; and (3) “customarily and regularly perform[ed] any one or more of the exempt duties of an executive, administrative or professional employee[.]” 6 29 C.F.R. § 541.601(c)-(d). Because “[a] high level of compensation is a strong indicator of an employee’s exempt status,” 29 C.F.R. § 541.601(c), an employer must show only that the employee regularly performs at least one of the duties that other statutorily exempt employees perform to invoke the HCE exemption. Helix, 598 U.S. at 46 (explaining that the HCE exemption’s duty test is met where the employee “‘regularly perform[s]’ just one (not all)” of the responsibilities of an executive, administrative, or professional employee (quoting 29 C.F.R. § 541.601(a))); see also 29 C.F.R. § 541.601(c) (providing that under the HCE exemption, the “need for a detailed analysis of the employee’s duties” is “eliminat[ed]” and “[a] highly compensated employee will qualify for exemption if the employee customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative, or professional employee”)); 69 Fed. Reg. 22174 (2004) (explaining that the HCE exemption uses a more flexible duties standard, resulting in greater exemptions). Although an employee’s performance of “isolated or one-time tasks” will not establish that the employee is “customarily and regularly” engaged in such work, the employee need not perform such work “constant[ly]” for it to be considered a customary and regular duty. 29 C.F.R. § 541.701.

It is undisputed that Perez earned at least $100,000 per year and primarily performed office or non-manual work, and no party asserts that Perez performed executive or professional duties. Therefore, we must determine whether the undisputed record shows that Perez “customarily and regularly” performed one or more tasks that fall within the duties of an administrative employee. 29 C.F.R. § 541.601(a).

Under the FLSA, a highly compensated employee performs duties that fall within the administrative employee exemption when, for example, the duties “customarily and regularly” involve 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.” 29 C.F.R. §§ 541.200, 541.601(c). 7 An employee’s work “directly relate[s] to the management or general business operations of the employer or [its] customers” if it “directly relate[s] to assisting with the running or servicing of the business.” 29 C.F.R. § 541.201(a). This includes work in areas such as “quality control,” “advertising,” “marketing,” “public relations,” “legal and regulatory compliance,” and “similar activities.” 29 C.F.R. § 541.201(b).

Perez coordinated communications to ESI’s clients about significant matters, including changes to prescription coverage and methods to obtain covered prescription medications. Perez testified that to accomplish these tasks, she consulted with employees in other ESI departments to ensure she understood their goals and that they understood the deadlines associated with the communications. Perez not only coordinated the workflow between departments, but she also brought errors to her boss’s attention, including those with possible legal or regulatory implications, and conveyed timelines to ensure that accurate communications were timely relayed to ESI’s clients. 8 Perez also “[p]ropos[ed] and implement[ed]” cost-saving standard operating procedures. App. 397- 98. Thus, Perez’s undisputed “customary and regular” duties directly related to ESI’s considered in connection with the HCE exemption, only one of the elements must be proven to be performed “customarily and regularly.” 29 C.F.R. § 541.601(a); see also Smith v. Ochsner Health Sys., 956 F.3d 681, 685 (5th Cir. 2020) (“While the [administrative exemption] elements are conjunctive in the standalone exemption[], they are disjunctive when paired with a high salary.” (citing 29 C.F.R. § 541.601(c))). general business operations. See Reich v. John Alden Life Ins. Co., 126 F.3d 1, 12 (1st Cir. 1997) (holding that “work of this nature—disseminating information to the marketplace, understanding customers and competitors, and gathering available information to be used in putting together proposals and packages that are appropriate for those customers—is directly related to [the employer’s] operations[.]”).

Perez argues that her role coordinating the creation of communication campaigns consisted of “production” duties, as opposed to “administrative” duties, therefore putting her outside the ambit of the HCE exemption. While it is true that a non-manufacturing employee can be considered a “production” employee where her job is to 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) (internal citation omitted), it is undisputed that ESI’s product is “pharmacy benefit plans,” App. 388, and Perez was “in no way involved in the design or generation of [those] p[lans]s, the very product that the enterprise exists to produce and market.” Reich, 126 F.3d at 9 (internal citation omitted).

Accordingly, she cannot be “considered [a] production employee[].” Id.; see also Jones v. New Orleans Reg'l Physician Hosp. Org., Inc., 981 F.3d 428, 434 (5th Cir. 2020) (“the [employees] did not write, produce, or sell [the company’s] product: insurance policies.”). Therefore, the District Court correctly concluded that Perez was subject to the HCE exemption and thus not entitled to overtime. As a result, Defendants are entitled to summary judgment.

III For the foregoing reasons, we will affirm.