Walsh v. Unitil Service Corporation

57 F.4th 353

• Court: Court of Appeals for the First Circuit
• Decided: January 11, 2023
• Docket: 22-1070
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 22-1070

MARTIN J. WALSH, Secretary of Labor, UNITED STATES DEPARTMENT OF LABOR,

Plaintiff, Appellant,

v.

UNITIL SERVICE CORPORATION,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

[Hon. Landya B. McCafferty, U.S. District Judge]

Before

Gelpí, Selya, and Thompson, Circuit Judges.

Dean A. Romhilt, Senior Attorney, United States Department of Labor, with whom Seema Nanda, Solicitor of Labor, Jennifer S. Brand, Associate Solicitor, and Rachel Goldberg, Counsel for Appellate Litigation, were on brief, for appellant. William D. Pandolph, with whom Sulloway & Hollis, P.L.L.C. was on brief, for appellee.

January 11, 2023 GELPÍ, Circuit Judge. Compliance with the Fair Labor

Standards Act's ("FLSA") overtime pay requirements is critical to

ensuring worker protections. Before us, Appellant, the Department

of Labor ("DOL"), seeks overtime compensation under the FLSA for

hours worked in excess of forty hours per week for two categories

of employees -- Dispatchers and Controllers -- employed by

Appellee, Unitil Service Corporation ("Unitil Service"). Unitil

Service argues that these workers are exempt "administrative"

employees under federal law and as such are not entitled to

overtime payments. The district court found that the employees'

"primary duty" was "directly related" to the general business

operations of Unitil Service's customers and concluded that the

employees were "administrative," exempt from the FLSA, and thus

not entitled to overtime pay. Summary judgment was granted in

favor of Unitil Service. The DOL filed a timely appeal. For the

following reasons, we vacate the grant of summary judgment and

remand to the district court for further proceedings consistent

with this opinion.

I. Background

Unitil Service is a New Hampshire corporation and

wholly-owned subsidiary of Unitil Corporation ("Unitil

Corporation"), a public utility holding company that owns local

and regional utility companies providing gas and/or electricity to

approximately 200,000 residential, commercial, and industrial

- 2 - customers in New England. Unitil Corporation and its subsidiaries

do not own power plants, generate electricity, or produce any

natural gas themselves. Unitil Service provides "administrative

and professional services on a centralized basis" to Unitil Service

subsidiaries ("Distribution Operating Companies" or "DOCs"),

"including regulatory, financial, accounting, human resources,

engineering, operations, technology, energy management and

management services." More specifically, Unitil Service operates,

monitors, and controls the electrical grid and gas pipelines that

distribute electricity and gas to the DOCs' end-user customers.

This includes operating centralized electric and gas control rooms

staffed by the Electric Distribution Dispatchers ("Dispatchers")

and Gas Controllers ("Controllers") at issue here.

a. Duties of Dispatchers

Dispatchers are employed by Unitil Service in a

centralized work area known as Central Electric Dispatch.

According to Unitil Service's general position description, their

duties include:

Provid[ing] 24/7 monitoring and control of the electric transmission and distribution systems for all [DOCs]; provid[ing] outage management response and reporting for all electric [DOCs]; and perform[ing] tasks associated with compliance with regulatory requirements including but not limited to NERC (National Energy Regulatory Commission), MDPU (Massachusetts Department of Public Utilities), NHPUC (New Hampshire Public Utilities Commission) that would include

- 3 - reporting, emergency response, notifications and questions regarding the electric systems. Monitor[ing] electric [software alarm] systems and tak[ing] necessary actions to respond to current system conditions.

In total, approximately 60% of a Dispatcher's time is

spent "perform[ing] monitoring and control of electric systems and

emergency response"; 15% in "communications and notifications";

and 25% in "regulatory reporting compliance" and "documentation."

b. Duties of Controllers

Controllers are employed by Unitil Service in a similar

capacity but for gas DOCs. Their position description reads:

This position has primary oversight responsib[ility] for the operation and control of the Company's gas transmission distribution system; and the managing of pipeline and peak shaving supplies. The incumbent must ensure that the system is operated within the constraints of Federal, State and Company codes and standards as well tariff constraints for the receipt and control of the system supply. This position also provides training and daily guidance to subordinate Gas Controllers and Field Services Coordinator[s].

As a result, approximately 60% of a Controller's time is spent

monitoring and controlling gas pipeline systems, supporting

"processes related to market requirements" for DOCs, and providing

"general control, confirmation, scheduling, balancing and live gas

operations"; 30% interpreting, organizing, and executing complex

assignments, assisting with training and coordination of work for

subordinate Controllers, estimating personnel needs, scheduling

- 4 - and assigning work, and managing complex projects; and 10% serving

as "[b]ack up to [the] Field Services Coordinator as needed."

Generally speaking, both Dispatchers and Controllers

monitor their respective systems for automated alerts or other

developments and respond accordingly to keep electricity or gas

flowing safely.1 While they do not actively control the flow of

electricity or gas, they do determine whether alerts warrant

responses such as shutting off or re-routing the flow of gas or

electricity, dispatching service crews, or communicating with

local authorities and other divisions within the company. Each

role has a manual that covers standard responses to most

situations, and each role has supervisors who are available to

address major issues. Both Dispatchers and Controllers can respond

independently to some situations and deviate from certain

procedures, although the extent of their decision-making authority

and the frequency with which situations require this purported

exercise of discretion are points of dispute. Both groups reported

working, on occasion, substantially over forty hours per week.

II. Procedural History

Following a DOL investigation into the Dispatchers' and

Controllers' work, the DOL filed suit in the District Court for

We note that we group Dispatchers and Controllers here 1

because the nature of their work is similar save for one monitoring gas and the other electricity.

- 5 - the District of New Hampshire against Unitil Service alleging

violation of the FLSA's requirement that employees be paid overtime

unless they are exempt. 29 U.S.C. §§ 206-207, 213. Each

party submitted a motion for summary judgment and the district

court -- applying the summary judgment standard -- concluded that

Dispatchers and Controllers are exempt from overtime requirements

because they are "administrative" employees under the FLSA. U.S.

Dep't of Lab. v. Unitil Serv. Corp., 573 F. Supp. 3d 566, 580

(D.N.H. 2021). This appeal followed.

III. Discussion

On appeal, the DOL argues that Dispatchers and

Controllers do not satisfy the FLSA's administrative exemption and

thus are entitled to overtime pay. More specifically, the DOL

argues that the district court did not properly evaluate the job

duties of both categories of workers under the second prong of the

administrative exemption of the FLSA's regulations, discussed

infra. Rather than relying on and analogizing to the relevant

regulation's list of functional areas that can be (but are not

necessarily) administrative, as the district court did, the DOL

posits that the district court should have instead engaged in a

"relational" analysis that considers the relationship between the

job duties of the roles in question and the business purposes of

- 6 - the employer or its customers. We agree,2 acknowledge that our

circuit's precedent on this issue is limited, commend the district

court for attempting to parse out our limited jurisprudence,

clarify the application of the "relational" analysis test, vacate

the grant of summary judgment for Unitil Service, and remand to

the district court to apply the test we now outline.

a. Standard of Review

This case comes before us at the summary judgment stage.

Thus, we review the issues de novo and draw all reasonable

inferences in favor of the nonmovant -- here, the DOL. Cash v.

Cycle Craft Co., 508 F.3d 680, 682 (1st Cir. 2007). "Summary

judgment is appropriate only when the record 'show[s] that there

is no genuine issue as to any material fact and that the moving

party is entitled to judgment as a matter of law." Id. (quoting

Fed. R. Civ. P. 56(c)).

b. The FLSA

The FLSA requires that covered employers pay certain

employees an overtime premium "at a rate not less than one and

one-half times the regular rate at which [they are] employed."

29 U.S.C. § 207(a). Employees "in a bona fide executive,

2 The DOL also argues that the district court misapplied the third prong of the administrative exemption test. Because an employer must satisfy all three prongs to satisfy the administrative exemption, and because we vacate on the second prong, we need not (and do not) reach these arguments.

- 7 - administrative, or professional capacity[,] . . . as such terms

are defined and delimited from time to time by regulations of the

Secretary," however, are exempt from these provisions, and thus

not entitled to overtime payment. Id. § 213(a)(1) (emphasis

added). The Secretary's regulations define those working in an

"administrative" capacity to include those employees:

(1) Compensated on a salary or fee basis pursuant to § 541.600 at a rate of not less than $684 per week . . . exclusive of board, lodging or other facilities; (2) Whose primary duty is 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) Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

29 C.F.R. § 541.200. Thus, to fall under the exemption, each of

the three prongs must be satisfied and the employer bears the

burden of establishing each prong. See Reich v. John Alden Life

Ins. Co., 126 F.3d 1, 7-8 (1st Cir. 1997). The DOL has promulgated

additional regulations defining the terms discussed in the second

and third prongs, listing relevant factors for consideration, and

identifying examples of employees who may qualify for the

exemption. 29 C.F.R. §§ 541.201-.203.

Before us, the parties do not dispute that the first

prong -- the sufficient compensation requirement -- is met.

Instead, the dispute turns on whether the remaining two prongs

- 8 - were satisfied. Because we vacate on the second prong, we do not

address the third prong -- the discretion-and-independent-

judgment prong.

c. The Second Prong

Whether both classes of employees are administrative

employees -- and thus exempt from overtime payment -- turns on

whether their "primary duty is 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."

Id. § 541.200 (emphases added).

The parameters of the administrative exemption are

articulated in the DOL's regulations. "Primary duty" is defined

to mean "the principal, main, major or most important duty that

the employee performs," and generally means that employees spend

at least 50% of their time performing the duty. Id. § 541.700.

And "directly related to the management or general business

operations" "refers to the type of work performed by the employee."

Id. § 541.201(a). "To meet this requirement, an employee must

perform work directly related to assisting with the running or

servicing of the business, as distinguished, for example, from

working on a manufacturing production line or selling a product in

a retail or service establishment." Id. (emphasis added). This

can include "work in functional areas such as tax; finance;

accounting; budgeting; auditing; insurance; quality control;

- 9 - purchasing; procurement; advertising; marketing; research; safety

and health; personnel management; human resources; employee

benefits; labor relations; public relations[;] government

relations; computer network, internet and database administration;

legal and regulatory compliance; and similar activities." Id.

§ 541.201(b) (outlining a non-exhaustive list of examples of

"[w]ork directly related to management or business operations").

While our jurisprudence on the second prong is limited,

we clarify here that the analysis is indeed -- as described by the

DOL -- a "relational" one. Although often framed as one question,

it entails two: (1) whether the employee's role relates to "running

or servicing the business," and if so, (2) what the scope or

"generality" of the employee's role is. See Bratt v. County of

Los Angeles, 912 F.2d 1066, 1070 (9th Cir. 1990) ("The test is

whether the activities are directly related to management policies

or general business operations. . . . [This] mean[s] 'the running

of a business, and not merely . . . the day-to-day carrying out of

its affairs.'"). We explain each question in turn.

i. Whether the Employee's Role Relates to "Running or Servicing the Business"

The first question asks whether the employee's duty is

related to the goods or services offered for market or whether it

is related to running the business itself. See Bothell v. Phase

Metrics, Inc., 299 F.3d 1120, 1127 (9th Cir. 2002). One useful

- 10 - but non-dispositive distinction that courts have used is the

distinction between "administrative" staff and "production"

employees. See John Alden, 126 F.3d at 9-10 (discussing

"Administrative-Production Dichotomy"); see also 29 C.F.R.

§ 541.201(a) ("To meet this requirement, an employee must perform

work directly related to assisting with the running or servicing

of the business, as distinguished, for example, from working on a

manufacturing production line or selling a product in a retail or

service establishment.").

This administrative-production distinction was the basis

for the test that our circuit has generally applied: considering

whether an employee's duties are "ancillary" to the business's

"principal production activity" or "principal function." See John

Alden, 126 F.3d at 10; Hines v. State Room, Inc., 665 F.3d 235,

242 (1st Cir. 2011) (considering whether the employees' duty was

ancillary to the business's "principal function"); Cash, 508 F.3d

at 684-86 (not mentioning "ancillary" test but evaluating

relationship between employee duties and business purposes). John

Alden provides a clear example. There, we concluded that "the

activities of the marketing representatives [at issue]

[we]re clearly ancillary to John Alden's principal production

activity -- the creation of insurance policies -- and therefore

could be considered administrative 'servicing' within the meaning

of [S]ection 541.205(b)." John Alden, 126 F.3d at 10 (likening

- 11 - marketing representatives' activities to "'representing the

company' and 'promoting sales'" -- examples of "exempt

administrative work"). It should be noted that because the test

is "relational" and applies to more than just factory production

or retail, the administrative-production distinction is worth

employing "only to the extent it clarifies the analysis." Bothell,

299 F.3d at 1127; see Schaefer v. Ind. Mich. Power Co., 358 F.3d

394, 402-03 (6th Cir. 2004); see also Defining and Delimiting the

Exemptions for Executive, Administrative, Professional, Outside

Sales and Computer Employees, 69 Fed. Reg. 22122, 22141 (April 23,

2004) (codified at 29 C.F.R. pt. 541). Moreover, while that

question may be helpful to determining the "principal function" of

a business to distinguish between, for example, administrative and

operative roles, there is little principled basis in the text of

the regulation for differentiating between "'primary' marketplace

offering[s] and secondary or tertiary" ones. Bothell, 299 F.3d at

1127. In fact, too much focus on whether something is the

business's "primary" business purpose, or a myopic framing of that

purpose, can miss the forest -- whether work is "directly related

to the management or general business operations of the employer

or the employer's customers," 29 C.F.R. § 541.200(a)(2) -- for the

trees.

- 12 - ii. The Scope or "Generality" of the Employee's Role

The second question poses a broader inquiry meant to

ensure that courts do not miss the forest for the trees. While a

bit more subtle in our case law, it asks, even if an employee's

work is "ancillary" to the goods or services that constitute the

business's marketplace offerings, whether the employee is engaged

in "management or general business operations." Id. (emphasis

added).

To satisfy this second, more subtle, aspect of the test,

an employee's job duties must implicate or include responsibility

for "general" (i.e., higher-level or more widely applicable)

aspects of the business's operations. Put another way, the test

is not satisfied if an employee's duties include only the execution

of routine, day-to-day operations. Such tasks would not rise to

the level of "generality" across or within the organization that

is contemplated by the regulation. For instance, in John Alden,

we held that the marketing representatives at issue were exempt

administrative employees because they were responsible for

"promoting (i.e., increasing, developing, facilitating, and/or

maintaining) customer sales generally," 126 F.3d at 10 (quoting

Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 905 (3d Cir.

1991)), rather than responsible for merely performing routine

sales tasks, see Bothell, 299 F.3d at 1127 ("John Alden stressed

that the daily tasks performed . . . , including managing hundreds

- 13 - of agents and developing 'customer sales generally,' were

consistent with . . . administrative activities in [the

regulation]."). Cash v. Cycle Craft Co. serves as another example.

508 F.3d 680. There, the "New Purchases/Customer Relations

Manager" was responsible for "improving customer service

generally, by coordinating with various Boston Harley departments"

and not simply dealing with individual customer service issues.

Id. at 685-86 (emphasis added).

Examples from the regulations further illustrate this

distinction. "Human resources managers who formulate, interpret

or implement employment policies . . . generally meet the duties

requirements for the administrative exemption" while "personnel

clerks who 'screen' applicants to obtain data regarding their

minimum qualifications and fitness for employment generally do

not." 29 C.F.R. § 541.203(e). Similarly, while a higher-level

compliance employee might be considered exempt, "[o]rdinary

inspection work generally does not meet the duties requirements

for the administrative exemption." Id. § 541.203(g). And while

a buyer who evaluated pricing reports or an analyst who prepared

them would likely be considered exempt, "[c]omparison shopping

performed by an employee of a retail store who merely reports to

the buyer the prices at a competitor's store does not qualify for

the administrative exemption." Id. § 541.203(i). Just because an

employee is on the operational side of the business does not mean

- 14 - that his job duties fall on the administrative side of the line.

To be sure, the requirement of Section 541.200's third prong --

that the employee exercise discretion and independent judgment --

does some work in distinguishing these employees, but the

generality requirement of the second prong also distinguishes

them.

The history of Section 541.200(a)(2) reinforces our

conclusion that an employee's duties must rise to a level of

generality beyond responsibility for day-to-day tasks in order to

satisfy the regulation. For instance, the prior version of

Section 541.200(a)(2) referred to "management policies" rather

than "management," suggesting that an exempt employee must play

more than a purely operational role. See Defining and Delimiting

the Exemptions, 69 Fed. Reg. at 22137-22138. The DOL clarified

that the removal of "policies" was not intended to broaden the

exemption but merely meant to clarify that "exempt administrative

work includes not only those who participate in the formulation of

management policies or in the operation of the business as a whole,

but it 'also includes a wide variety of persons who either carry

out major assignments in conducting the operations of the business,

or 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.'" Id. at 22138 (emphases

added) (quoting 29 C.F.R. § 541.205(c)(2000)). To a certain

- 15 - extent, this intersects with the third prong of Section 541.200,

the exercise-of-discretion-and-independent-judgment prong, but it

is important that the job duties themselves go beyond mere

participation in day-to-day operations.

Two Sixth Circuit cases involving power plant employees

lend further support. In Schaefer v. Indiana Michigan Power Co.,

the court considered whether a nuclear waste disposal technician's

work was administrative. 358 F.3d at 398-99. The Sixth Circuit

recognized that while day-to-day waste removal is "not part of

production proper," it is neither "'administrative' [n]or part of

'servicing the business.'" Id. at 402. As such, in identifying

the limitations of the administrative-production dichotomy and the

"principal function" test, the court concluded that the

technician -- whose role was a limited and highly circumscribed

one -- was not an administrative employee. See id. at 402-03.

Further, the court noted that while some removal procedures were

unique, the scope of the technician's authority was relatively

circumscribed. See id. at 403.

Moreover, in Renfro v. Indiana Michigan Power Co., the

Sixth Circuit considered the case of "planners" responsible for

"creating plans for maintaining equipment and systems in the

nuclear [power] plant," 370 F.3d 512, 518 (6th Cir. 2004), and

managing the work of other skilled employees through those plans,

see id. at 515. The court acknowledged that the power company's

- 16 - principal production activity was "generating electricity" and the

product it offered was "electricity." See id. at 518. Thus,

because the planners "creat[ed] plans for maintaining equipment

and systems in the nuclear plant," their work was "ancillary" to

the power company's "principal production activity of generating

electricity." Id. While the Sixth Circuit noted that the planners

were clearly not production workers, it recognized that "[w]hile

not precisely 'administrative,' the planners' duties form[ed] the

type of 'servicing' ('advising the management, planning,' etc.)

that the FLSA deems administrative work directly related to [the

power company's] general business operations." Id.

iii. Dispatchers and Controllers

Having explained how to apply the "relational" analysis

test, we now turn to the case of Dispatchers and Controllers. As

an initial matter, we note that areas like the energy sector --

where power is the product, but transmission and certain other

services are inextricably linked -- and separately incorporated

services corporations (common in industries like healthcare,

insurance, and utilities) can create confusion on how to apply the

second question of the "relational" analysis test.

Turning to the facts before us, we thus ask whether

Unitil Service has conclusively shown that the Dispatchers' and

Controllers' primary duties are "directly related to the

management or general business operations of" either Unitil

- 17 - Service (the employer) or the DOCs (the employer's customers).

See 29 C.F.R. § 541.200(a)(2). If the Dispatchers' and

Controllers' primary duties relate to Unitil Service's business

purpose, in that they produce the product or provide the service

that the company is in business to provide, the second prong is

not satisfied. Id.; see id. § 541.201(a) ("To meet this

requirement, an employee must perform work directly related to

assisting with the running or servicing of the business, as

distinguished, for example, from working on a manufacturing

production line or selling a product in a retail or service

establishment." (emphasis added)).

The district court was correct in finding that the

primary duties of the Dispatchers and Controllers are to provide

the very services that Unitil Service is in the business of

providing. Unitil Service's business purpose is to provide

operational and administrative services to its subsidiaries. The

primary duties of the Dispatchers and Controllers are to provide

these various services -- to operate and monitor their respective

electrical grids and gas pipelines for the DOCs -- and thus are

the very services that Unitil Service is in business to provide.

Because the Dispatchers' and Controllers' primary duties relate to

Unitil Service's business purpose, the second prong of the

"administrative" exemption is not satisfied. Consequently, the

only way Unitil Service -- which bears the burden of establishing

- 18 - that an employee falls under the FLSA's "administrative"

exemption -- can satisfy the second prong is to show that the

Dispatchers' and Controllers' primary duties are directly related

to the general business operations of the DOCs (the employer's

customers).

To determine whether Unitil Service can satisfy the

second prong in this regard, we turn to (1) whether the

Dispatchers' and Controllers' primary duties relate to the

"running or servicing" of the DOCs, and if so, (2) what the scope

or "generality" of their role is. See Bratt, 912 F.3d at 1070

("The test is whether the activities are directly related to

management policies or general business operations. . . . [This]

mean[s] 'the running of a business, and not merely . . . the day-

to-day carrying out of its affairs.'").

As previously mentioned, the district court did not

apply this "relational" analysis. Specifically, rather than

compare the primary duties of the Dispatchers and Controllers to

the DOCs' business purposes -- to determine whether their duties

are directly related to the DOCs' general business operations or

to the day-to-day operational work related to the DOCs' business

-- the district court looked to a list of the functional areas in

Section 541.201(b) that can be, but are not necessarily,

administrative depending on the duties of the employees. Unitil

Serv. Corp., 573 F. Supp. 3d at 578. The court then concluded

- 19 - that the primary duties performed by the Dispatchers and

Controllers were analogous to the functional areas of "regulatory

compliance," "quality control," and "health and safety." Id.; see

also 29 C.F.R. § 541.201(b) (listing examples of the functional

areas related to "management or general business operations").

We conclude, however, that these analogies cannot bear

the weight that the district court placed upon them. As the DOL

points out, although the position description for Dispatchers

includes "tasks associated with compliance with regulatory

requirements," the record, including the "principal

accountabilities" section of the job description, does not

indicate that either Dispatchers or Controllers do anything beyond

engaging in their daily operational duties "within the limits of

the applicable Federal, State and Company codes and standards."

The same is true for engaging in work subject to certain compliance

and safety standards. Further, neither Dispatchers nor

Controllers play a role in testing or evaluating the DOCs'

distribution or pipeline systems outside of the day-to-day

monitoring of these systems. Dispatchers and Controllers do not

design or plan the systems, nor do they analyze how they work or

how they can be improved. See Renfro, 370 F.3d at 518 (finding

that because the "planners" at issue "creat[ed] plans for

maintaining equipment and systems in the nuclear plant," their

work was "ancillary" to the power company's "principal production

- 20 - activity of generating electricity"). Accordingly, while

analogizing to the functional areas may be useful in some cases,

here, these analogies do not address or answer the second

generality question of the "relational" analysis.

Moreover, Unitil Service's organizational makeup reveals

that the company has entirely separate departments for the very

functional areas outlined above. These include departments for

"Business Continuity & Compliance" (employing a number of health

and safety compliance specialists), "Financial Services"

(employing auditors and lawyers), and "Regulatory Services"

(employing regulatory analysts). That the Dispatchers' and

Controllers' duties may, in a limited or superficial way implicate

health, safety, and quality control tasks, does not mean that this

was their "primary duty." Further, their duties lack the level of

generality required by the regulation and the case law to conclude,

without further inquiry, that they were engaged in "management or

general business operations" as opposed to routine, day-to-day

affairs, Bratt, 912 F.3d at 1070, of the DOCs. It is not clear

that they direct business operations "generally" in the way

anticipated by the statute and understood by our case law.

Unitil Service would have us look to two unpublished

cases on which the district court relied -- Galdo v. PPL Electric

Utilities Corp., No. CV 14-5831, 2016 WL 454416 (E.D. Pa. Feb. 5,

2016) and Zelenika v. Commonwealth Edison Co., No. 09 C 2946,

- 21 - 2012 WL 3005375 (N.D. Ill. July 23, 2012). But these cases have

no role to play in our decision since they employ unpersuasive

reasoning. Zelenika involved "dispatchers" whose job was to

"monitor [an electric utility's] power distribution system,

oversee service to the system, and respond to customer complaints

and power outages." 2012 WL 3005375, at *2. The court determined

that the employer satisfied the second prong by analogizing to the

functional areas in Section 541.201(b) rather than engaging in a

"relational" analysis between the primary duty of the role and the

business of the utility. See id. at *13. However, as discussed

supra, it is not enough to look only at the list of job functions

under Section 541.201(b). Courts must also consider whether the

employee's primary duty is contributing to the "running or

servicing of the business" and, if so, whether their

responsibilities rise to the level of generality required by the

rule. Similarly, in determining that "system operators," who

monitored systems in the utility's transmission department, were

administrative employees, the Galdo court reasoned that they were

not production workers because they did not "generate . . . the

very product or service that the employer's business offers to the

public." 2016 WL 454416, at *4 (quoting Renfro, 360 F.3d at 517).

This reasoning, however, improperly reduced the second prong's

inquiry to the administrative-production dichotomy, rather than

- 22 - employ the more flexible "relational" analysis required by the

regulation.

IV. Conclusion

Accordingly, because the district court did not apply a

"relational" analysis comparing the business purpose of Unitil

Service and/or its customers to the primary duty of the Dispatchers

and Controllers, it was improvident to grant summary judgment to

Unitil Service. Unitil Service has not demonstrated that the

Dispatchers' and Controllers' primary duty consists of work

"directly related to the management or general business

operations" of its customers such that the employees fall under

the second prong of 29 C.F.R. § 541.200. We leave it to the trier

of fact to apply the "relational" analysis required by the second

prong of the test. At this stage, genuine issues of material fact

remain unresolved. Accordingly, we vacate the decision of the

district court granting summary judgment to Unitil Service and

remand for further proceedings consistent with this opinion. No

costs are awarded.

- 23 -