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The full case caption appears at the end of this opinion. LOKEN, Circuit Judge. Former employee Sandra Jarrett sued ERC Properties, Inc., for failure to payovertime mandated by the Fair Labor Standards Act (FLSA), and for wrongful discharge under Arkansas law. ERC now appeals a jury verdict in Jarrett’s favor, andJarrett cross-appeals for liquidated damages and additional attorneys’ fees. We reversethe decision to deny her liquidated damages and otherwise affirm.We review the trial evidence in the light most favorable to the jury’s verdict. ERC owns and manages federally subsidized housing projects in various Arkansascommunities. ERC hired Jarrett in May 1995 as resident site manager of the Yorkvilleapartment complex; she also conducted ERC’s “Lend-A-Hand” educational programat another complex. In November 1995, Jarrett was promoted to site manager of fourcomplexes in three different municipalities. She moved to the Booneville complex,where she lived next door to her new regional supervisor, Patsy Wilson. Jarrett’s firstsupervisor, Tammy Hester, and later Patsy Wilson told Jarrett that ERC did not pay itssite managers overtime. Jarrett was instructed to include only her “office time” — fortyhours per week — on her time sheets. On average, Jarrett worked considerably morethan forty hours per week. In March 1996, Jarrett complained to Robert Fikes, ERC’s Vice-President ofAsset Management, that Patsy Wilson’s daughter had submitted a falsely back-datedapplication to rent an apartment at the Booneville complex, and that a properly datedapplication had disappeared from ERC’s private office, to which Wilson and herhusband had access. At the time, the federally subsidized Booneville complex had awaiting list, and falsifying a tenant’s application date violated federal regulations. Fikestold Jarrett she would have to prove her allegations “beyond a shadow of a doubt” andfired her when she was unable to do so. Jarrett filed this action in February 1998, asserting claims for willful violation ofthe FLSA’s overtime requirements and wrongful discharge. The jury awarded her$11,970.08 on the FLSA claim and $33,715.04 on the wrongful discharge claim. Thedistrict court denied Jarrett liquidated damages under the FLSA and reduced herrequest for attorneys’ fees from $36,360 to $21,816. Both sides appeal. I. FLSA Issues. A. Was Jarrett an Exempt Employee under the FLSA? The FLSA requirescovered employers to compensate non-exempt employees at overtime rates for timeworked in excess of statutorily-defined maximum hours. See 29 U.S.C. � 207(a). Thestatute exempts certain employees from its overtime protections, including “anyemployee employed in a bona fide executive, administrative, or professional capacity.”29 U.S.C. � 213(a)(1). The Secretary of Labor has promulgated extensive regulationsdefining the types of employees who fall within these exemption categories. See 29C.F.R. pt. 541; Fife v. Harmon, 171 F.3d 1173, 1175-76 (8th Cir. 1999). Foremployees who earn more than $250 per week, the “administrative employee”exemption applies if the employee’sprimary duty consists of the performance of [office or non-manual workdirectly related to management policies or general business operations ofher employer or her employer's customers], which includes workrequiring the exercise of discretion and independent judgment. 29 C.F.R. � 541.2(e)(2), incorporating by reference � 541.2(a)(1). [FOOTNOTE 2] ERC argues thatJarrett was an exempt administrative employee as a matter of law. We disagree.Disputes regarding the nature of an employee’s duties are questions of fact, butthe ultimate question whether an employee is exempt under the FLSA is an issue oflaw. See Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709, 714 (1986). In this case,the district court submitted the entire issue to the jury with instructions that correctly summarized the definition of an exempt administrative employee set forth in theregulations. The jury found that Jarrett was a non-exempt employee, and the districtcourt adopted that finding. Because ERC did not object to the court’s instructions, wemust affirm on this issue if the evidence, viewed most favorably to the jury’s verdict,is sufficient to support that verdict. Jarrett testified at trial that her duties at ERC included collecting applicationsfrom prospective tenants; verifying references and other application information;contacting potential applicants regarding apartment availability; preparing “reports,”which she described as filling in blanks on printed forms; writing receipts and verifyingrent payments; performing minor repairs and getting help for repairs she could not do;picking up trash; maintaining the grounds; cleaning the laundry room, bathrooms, andcommunity room; locking and unlocking common rooms according to a scheduledetermined by her supervisor; and forwarding invoices to ERC for payment. Thesetasks resemble the work of non-exempt “bookkeepers, secretaries, and clerks ofvarious kinds [who] hold the run-of-the-mine positions in any ordinary business.” 29C.F.R. � 541.205(c)(1). Most involved “routine clerical duties,” 29 C.F.R. �541.205(c)(2), and the rest were manual labor. Jarrett also testified that her work didnot “requir[e] the exercise of discretion and independent judgment,” and ERCintroduced little or no evidence to the contrary. Though ERC argues its site managersprimarily perform administrative duties, the jury’s finding that Jarrett was a non-exemptemployee is well-supported by this record. ERC further argues that Jarrett as resident site manager was required to live atthe complex, and therefore her time outside of normal office hours was “waiting time”that counts as administrative time in determining whether her “primary duty” wasadministrative. ERC relies on Reich v. Avoca Motel Corp., 82 F.3d 238 (8th Cir.1996), where we held that motel managers’ waiting time counted as exempt time indetermining (under the long test) whether they spent at least sixty percent of their timeperforming exempt administrative duties. But this case is factually distinguishable from Avoca. Only time spent working is considered in determining an employee’s primaryduty for FLSA exemption purposes. See, e.g., 29 C.F.R. � 541.2(d); see also �541.206. Whether waiting time is work time under the FLSA is a fact-intensivequestion thoroughly addressed in the regulations. See 29 C.F.R. �� 785.14-.23. Thoseregulations create a presumption that “[a]n employee who resides on his employer’spremises on a permanent basis . . . is not considered as working all the time he is on thepremises.” 29 C.F.R. � 785.23. Here, ERC did not present evidence overcoming thatpresumption and did not object when the jury instructions failed to include the issue ofwaiting time in the primary duty instruction. In these circumstances, ERC’s belatedsuggestion that some or all of Jarrett’s unpaid, non-office hours were FLSA waitingtime that the jury should have classified as exempt time does not undermine the jury’sverdict that Jarrett was a non-exempt employee. B. Did ERC Commit a “Willful” FLSA Violation? In 1966, Congress modifiedthe two-year statute of limitations for FLSA enforcement actions by adding: “exceptthat a cause of action arising out of a willful violation may be commenced within threeyears after the cause of action accrued.” 29 U.S.C. � 255(a). Resolving a conflictamong the circuits, the Supreme Court defined a “willful” violation as one where “theemployer either knew or showed reckless disregard for the matter of whether itsconduct was prohibited by the statute.” McLaughlin v. Richland Shoe Co., 486 U.S.128, 133 (1988). Here, the jury found ERC’s violation to be “willful.” On appeal,ERC argues it is entitled to judgment as a matter of law on this issue. We disagree. At trial, Jarrett presented evidence pointing toward a willful violation. Sheintroduced portions of ERC’s Policy Manual stating that employees “are classified asnon-exempt employees or exempt employees,” that salaried non-exempt employees”will be paid . . . overtime in accordance with the law,” and that “[t]he exempt or non-exemptstatus of each employee will be determined by the Vice President of FinanceAdministration.” Jarrett testified that two immediate supervisors said she would notbe paid overtime and instructed her to record only forty hours per week on her time sheets. Another former site manager, Nelda Beasley, testified that she also was toldERC would not pay overtime despite the fact that she was listed as a non-exemptemployee “on my hiring paperwork.” ERC’s response to Jarrett’s evidence that it recklessly disregarded its FLSAobligations was to ignore the issue. No defense witness testified as to how individualsite managers were classified as exempt or non-exempt employees, or how SandraJarrett was classified at either of her site manager positions. No defense witnesscontradicted, or attempted to explain, the testimony of two former site managers thatthey were told, categorically, by two regional supervisors, that ERC would not payovertime — a generalization in clear conflict with the Policy Manual’s recognition thatthis is a fact-intensive determination. On this record, there is ample basis for areasonable jury to find that ERC willfully violated the FLSA’s overtime requirements.C. Is Jarrett Entitled to Liquidated Damages? The FLSA provides for liquidateddamages equal to the amount of actual damages. See 29 U.S.C. � 216(b). In 1947, thestatute was amended to provide that the court in its discretion may award no liquidateddamages or reduced liquidated damages “if the employer shows to the satisfaction ofthe court that the act or omission giving rise to [FLSA liability] was in good faith andthat he had reasonable grounds for believing that his act or omission was not a violationof the [FLSA].” 29 U.S.C. � 260. An award of liquidated damages “is mandatoryunless the employer can show good faith and reasonable grounds for believing that itwas not in violation of the FLSA.” Braswell v. City of El Dorado, 187 F.3d 954, 957(8th Cir. 1999). In this case, Jarrett appeals the district court’s finding of good faithand the exercise of its discretion not to award liquidated damages. Historically, we have reviewed the district court’s finding of good faith under theclear error standard of review. See Herman v. Roosevelt Fed. Sav. & Loan Ass’n, 569F.2d 1033, 1035 (8th Cir. 1978). That deference to the district court’s resolution of theliquidated damages issue is consistent with Congress’s intent in enacting the good faith defense. See Lorillard v. Pons, 434 U.S. 575, 581 n.8 (1978). However, the standardof review on appeal becomes less clear when the jury, for statute of limitationspurposes, has found a willful violation applying the Supreme Court’s restrictivedefinition of willfulness adopted in McLaughlin v. Richland Shoe. At least two circuitshave now concluded that a jury finding of willfulness requires the court to awardliquidated damages. As Judge Ralph Guy explained in his concurring opinion in EEOCv. City of Detroit Health Dept., 920 F.2d 355, 360 (6th Cir. 1990):Under the [McLaughlin] standard, the employer will not be deemed tohave acted willfully unless it knew or showed reckless disregard for thematter of whether its conduct was prohibited by the FLSA. With thatdefinition, it is hard to mount a serious argument that an employer, foundto have acted willfully, could nonetheless still be found to have acted ingood faith. Accord Brinkman v. Department of Corrections, 21 F.3d 370, 372-73 (10th Cir.), cert.denied, 513 U.S. 927 (1994). ERC argues that we implicitly declined to follow thesecases in EEOC v. Cherry-Burrell Corp., 35 F.3d 356, 363-64 (8th Cir. 1994), but inthat case the district court’s findings of non-willfulness and good faith were internallyconsistent. We agree with Judge Guy that “it is hard to mount a serious argument” that anemployer who has acted in reckless disregard of its FLSA obligations has nonethelessacted in good faith. Though we decline to go so far as to rule out the possibility ofgood faith and willfulness in an unusual case, we conclude that a district court’s findingof employer good faith in the face of a jury’s presumptively contrary finding ofwillfulness requires close scrutiny on appeal. In this case, as we have observed, ERCoffered no evidence of non-willfulness or good faith, despite having the “affirmativeburden to show both subjective good faith and objective reasonable grounds for beliefof compliance.” McKee v. Bi-State Dev. Agency, 801 F.2d 1014, 1020 (8th Cir.1986). The district court’s good faith finding was stated in conclusory fashion with no explanation. We conclude that finding was clearly erroneous. Therefore, the courtabused its discretion in refusing to award Jarrett $11,970.08 in liquidated damages. II. The Wrongful Discharge Issue. Jarrett was an “at-will” employee who could be fired at any time, with or withoutcause. However, Arkansas law recognizes a cause of action for wrongful discharge ifan at-will employee “is fired in violation of a well-established public policy of thestate.” Sterling Drug, Inc. v. Oxford, 743 S.W.2d 380, 385 (Ark. 1988). A claim thatpublic policy has been violated will lie “if an employer discharges an employee forreporting a violation of state or federal law.” Id. at 386. ERC concedes that Jarrett was fired because she reported but could notconclusively prove that her supervisor had manipulated the waiting list for federallysubsidized apartments, which is a violation of federal regulations. But ERC argues thatJarrett cannot base a wrongful discharge claim on this public policy violation becauseshe was a participant in the wrongdoing. ERC admits it has no Arkansas authoritysupporting this contention. In Webb v. HCA Health Servs. of Midwest, Inc., 780S.W.2d 571, 573-74 (Ark. 1989), the court reversed the grant of summary judgmentand ordered trial of a former employee’s claim that she had been discharged forreporting that she had been ordered to falsify regulatory compliance documents. Thecourt did not discuss whether, if the employee had participated in falsifying documents,that would preclude the wrongful discharge claim. We conclude the Supreme Courtof Arkansas would not hold as a matter of law that an employee’s participation in apublic policy violation, under duress, precludes a claim for wrongful discharge underthe doctrine adopted in Sterling Drug. Thus, Jarrett’s claim was properly submitted tothe jury, and there is sufficient evidence to support its finding of wrongful discharge. III. The Attorneys’ Fee Issue. Following entry of judgment in her favor, Jarrett filed a motion to recover$36,360 in attorneys’ fees as the prevailing party on her FLSA and wrongful dischargeclaims. The district court awarded $21,816 as a reasonable fee and later deniedJarrett’s motion for reconsideration of the fee award under the FLSA and the Arkansasstatute that permits discretionary fee awards in contract cases, see Ark. Code Ann. �16-22-308. In her cross appeal, Jarrett argues that she is entitled to the full feerequested. We review the award for abuse of discretion under both the FLSA andArkansas law. See Herman, 569 F.2d at 1036; Caplener v. Bluebonnet Milling Co.,911 S.W.2d 586, 591 (Ark. 1995). The district court expressly considered the relevantfactors in making a fee award. Jarrett complains that the court improperly consideredher contingent-fee agreement with her attorneys, but that factor was considered as wellin Chrisco v. Sun Indus., Inc., 800 S.W.2d 717, 719 (Ark. 1990). We conclude the feeaward was not an abuse of the district court’s substantial discretion. The judgment of the district court is reversed and the case is remanded withinstructions to award Jarrett liquidated damages under the FLSA in the amount of$11,970.08. In all other respects, the judgment is affirmed. A true copy. Attest: CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT. :::FOOTNOTES::: FN1 The HONORABLE RODNEY S. WEBB, Chief Judge of the United StatesDistrict Court for the District of North Dakota, sitting by designation. FN2 This “short test” applies only to more highly compensated employees. Whileemployed at the Yorkville complex, Jarrett earned less than $250 per week. Becausethe evidence supports the jury’s finding that Jarrett was a non-exempt employee underthe short test, we need not consider the more rigorous “long test” in 29 C.F.R. � 541.2.
Jarrett v. ERC Properties, Inc. United States Court of Appeals For The Eighth Circuit No. 99-1520 No. 99-1610 Sandra Jarrett, Plaintiff – Appellee/Cross Appellant, v. ERC Properties, Inc., Defendant – Appellant/Cross Appellee. Appeals from the United States District Court for the Western District of Arkansas. Submitted: December 17, 1999 Filed: May 2, 2000 Before RICHARD S. ARNOLD and LOKEN, Circuit Judges, and WEBB, [FOOTNOTE 1] District Judge.
 
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