7th Cir.: Although Internal Complaint OK To Trigger Anti-Retaliation Protections of 29 U.S.C. § 215(a)(3), Verbal Complaints Insufficient; Must Be Written
Kasten v. Saint-Gobain Performance Plastics Corp.
Plaintiff Kevin Kasten appeals the district court’s grant of summary judgment to defendant Saint-Gobain Performance Plastics Corporation (“Saint-Gobain”). Kasten claims that the district court erred in its interpretation of the Fair Labor Standards Act when it determined that Kasten had not suffered retaliation within the meaning of the statute. For the reasons explained below, we affirm the judgment of the district court.
The relevant testimony pertaining to Plaintiff’s claims were detailed as follows, “Plaintiff alleges (though defendant disputes) that from October through December, 2006, he verbally complained to his supervisors about the legality of the location of Saint-Gobain’s time clocks. Specifically, Kasten claims that he told his supervisors that the location of the Kronos clocks prevented employees from being paid for time spent donning and doffing their required protective gear. Regarding his complaints, plaintiff alleges (1) that he told Dennis Woolverton (his shift supervisor) that he believed the location of defendant’s time clocks was illegal; (2) that he told Lani Williams (a Human Resources generalist) that the location of the time clocks was illegal; (3) that he told April Luther (a “Lead Operator” and apparently another of Kasten’s supervisors) that the location of the time clocks was illegal; and (4) that he told Luther that he was thinking of commencing a lawsuit regarding the location of defendant’s time clocks. Saint-Gobain denies that Kasten ever told any of his supervisors or any human resources personnel that he believed that the clock locations were illegal.”
Throughout the period when Plaintiff claims he complained, he received several write-ups, and was ultimately terminated. He claimed that this retaliatory behavior resulted from his oral internal complaints (which the Defendant denied). Kasten filed suit under the FLSA, claiming that he had been terminated in retaliation for his verbal complaints regarding the location of the time clocks. The district court granted summary judgment to defendant, finding that Kasten had not engaged in protected activity because he had not “filed any complaint” about the allegedly illegal location of the time clocks. Kasten appeals.
First, tackling the issue of internal complaints as a trigger for 215 protection, the Court determined they were, explaining, “The Seventh Circuit has not directly addressed whether internal complaints are protected activity under the FLSA’s retaliation provision, though we have reviewed two cases involving internal complaints without commenting on the matter. See Scott v. Sunrise Health Care Corp., 195 F.3d 938, 940-41 (7th Cir.1999) (affirming dismissal of FLSA retaliation case because plaintiff had not shown a causal connection between her complaints and her later discharge); see also Shea v. Galaxie Lumber Constr. Co., 152 F.3d 729, 731, 734-36 (7th Cir.1998) (reversing a denial of punitive damages in a case where an employee had been discharged after complaining to the company president).
Statutory interpretation begins with “the language of the statute itself [and] [a]bsent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive.” Sapperstein v. Hager, 188 F.3d 852, 857 (7th Cir.1999) (internal quotation marks and citation omitted) (interpreting retaliation provision of FLSA but not discussing whether internal complaints were protected conduct); see also Consumer Prod. Safety Comm’n v. GTE Sylvania, 447 U.S. 102, 107 (1980). Here, the plain language of the statute indicates that internal, intracompany complaints are protected. The retaliation provision states that it is “unlawful for any person to discharge … any employee because such employee has filed any complaint…. “29 U.S.C. § 215(a)(3) (emphasis added). As Kasten points out, the statute does not limit the types of complaints which will suffice, and in fact modifies the word “complaint” with the word “any.” Thus, the language of the statute would seem to include internal, intra-company complaints as protected activity.
The majority of circuit courts considering the question have also found that “any complaint” includes internal complaints. See Hagan v. Echostar Satellite, LLC, 529 F.3d 617, 625 (5th Cir.2008) (internal complaint constitutes protected activity); Moore v. Freeman, 355 F.3d 558 (6th Cir.2004) (informal complaints are protected activity); Lambert v. Ackerly, 180 F.3d 1004, 1004 (9th Cir.1999) (section 15(a)(3) protects “employees who complain about violations to their employers”); Valerio v. Putnam Associates, Inc., 173 F.3d 35, 41 (1st Cir.1999) (“By failing to specify that the filing of any complaint need be with a court or an agency, and by using the word ‘any,’ Congress left open the possibility that it intended ‘complaint’ to relate to less formal expressions of protest … conveyed to an employer.”); EEOC v.. White & Son Enterprises, 881 F.2d 1006, 1011 (11th Cir.1989) (employees’ internal complaints to supervisor about unequal pay were assertions of rights under the Equal Pay Act, part of the FLSA); Love v. RE/MAX of America, Inc., 738 F.2d 383, 387 (10th Cir.1984) (same); but see Ball v. Memphis Bar-B-Q Co., 228 F.3d 360, 363-365 (4th Cir.2000) (holding that 29 U.S.C. § 215(a)(3) does not protect internal complaints).
Because we conclude, in line with the vast majority of circuit courts to consider this issue, that the plain language of 29 U.S.C. § 215(a)(3) includes internal complaints as protected activity, we affirm the judgment of the district court in this regard.
The Court then turned to the sufficiency of unwritten/verbal complaints. “The next question pertinent to this appeal is whether unwritten, purely verbal complaints are protected activity under the statute.
Again, we start with the language of the statute. Sapperstein, 188 F.3d at 857. The FLSA’s retaliation provision prohibits “discharg[ing] … any employee because such employee has filed any complaint….”29 U.S.C. § 215(a)(3) (emphasis added). The district court reasoned:
Expressing an oral complaint is not the same as filing a complaint. By definition, the word “file” refers to “a collection of papers, records, etc., arranged in a convenient order,” Random House Webster’s College Dictionary 489 (2d ed.1999), or, when used in verb form as it is in the statute, “[t]o deliver (a paper or instrument) to the proper officer so that it is received by him to kept on file, or among the records of his office,” Webster’s New International Dictionary of the English Language 945 (2d ed.1958). One cannot “file” an oral complaint; there is no document, such as a paper or record, to deliver to someone who can put it in its proper place.
Plaintiff disagrees with this interpretation. He argues that “to file” is a broad term that has several meanings, including, generally, “to submit.”
Looking only at the language of the statute, we believe that the district court correctly concluded that unwritten, purely verbal complaints are not protected activity. The use of the verb “to file” connotes the use of a writing. Webster’s Ninth New Collegiate Dictionary defines the verb “to file” as
1. to arrange in order for preservation and reference <“file letters”> 2. a: to place among official records as prescribed by law <“file a mortgage”> b: to perform the first act of (as a lawsuit) <“threatened to file charges against him”>
This definition accords with what we believe to be the common understanding of the verb “to file.” Although Kasten and the Secretary of Labor claim that “to file” can mean, generally, “to submit,” this seems to us overbroad. If an individual told a friend that she “filed a complaint with her employer,” we doubt the friend would understand her to possibly mean that she merely voiced displeasure to a supervisor. Rather, the natural understanding of the phrase “file any complaint” requires the submission of some writing to an employer, court, or administrative body. See United States v. Bank of Farmington, 166 F.3d 853, 860 (7th Cir.1999) (“Words in a statute are to be given their plain and ordinary meaning.”) (citing United States v. James, 478 U.S. 597, 604 (1986)).
Other circuit courts that have tackled this issue are split. The Fourth Circuit found that verbal complaints were not protected activity in Ball v. Memphis Bar-B-Q Co., Inc., 228 F.3d 360, 364 (4th Cir.2000). The court recognized that the FLSA’s “statutory language clearly places limits on the range of retaliation proscribed by the act.”Specifically, in interpreting the “testimony” clause of the FLSA’s retaliation provision, the Fourth Circuit held that the FLSA “prohibits retaliation for testimony given or about to be given but not for an employee’s voicing of a position on working conditions in opposition to an employer.”Id. (emphasis added). Although the Fourth Circuit acknowledged that the retaliation in that case-which followed an employee’s statement to the company president that, if he were deposed in a lawsuit, he would not testify to the president’s suggested version of events-was “morally unacceptable,” the court concluded that a faithful interpretation of the statute did not recognize mere statements to a supervisor as a protected activity. Id.; see also Lambert v. Genesee Hospital, 10 F.3d 46, 55 (2d Cir.1993) (“The plain language of this provision limits the cause of action to retaliation for filing formal complaints, instituting a proceeding, or testifying, but does not encompass complaints made to a supervisor.”) (citations omitted).
Other courts have found oral complaints to be protected activity, but it is difficult to draw guidance from these decisions because many of them do not specifically state whether the complaint in question was written or purely verbal, and none discusses the statute’s use of the verb “to file” and whether it requires a writing. See EEOC v. Romeo Community Schools, 976 F.2d 985, 989-90 (6th Cir.1992) (holding, without discussion of the verbal/written distinction, that plaintiff’s apparently oral complaints to supervisors were protected activity); EEOC v. White & Son Enters., 881 F.2d 1006, 1011 (11th Cir.1989) (holding, without discussion of the verbal/written distinction, that plaintiffs’ oral complaints were protected activity); Brock v. Richardson, 812 F.2d 121, 125 (8th Cir.1987) (holding, without discussion of the verbal/written distinction, that defendant’s mistaken belief that plaintiff had made apparently oral complaints to supervisors was grounds for suit); Brennan v. Maxey’s Yamaha, 513 F.2d 179, 183 (8th Cir.1975) (holding, without discussion of the verbal/written distinction, that employee’s “voicing” of concern was protected activity).
Despite these contrary findings by some other circuits, our interpretation of the phrase “file any complaint” is confirmed by the fact that Congress could have, but did not, use broader language in the FLSA’s retaliation provision. For example, analogous provisions in other statutes, including Title VII and the Age Discrimination in Employment Act, forbid employers from retaliating against any employee who “has opposed any practice” that is unlawful under the statutes. See42 U.S.C. § 2000e-3(a); 29 U.S .C. § 623(d). This broader phrase, “opposed any practice,” does not require a “fil[ing],” and has been interpreted to protect verbal complaints. See, e.g., Kotcher v. Rosa and Sullivan Appliance Ctr., Inc., 957 F.2d 59, 65 (2d Cir.1992). Congress’s selection of the narrower “file any complaint” language in the FLSA thus appears to be significant. See Ball, 228 F.3d at 364 (noting that “Congress has crafted … broader anti-retaliation provisions elsewhere” but “the cause of action for retaliation under the FLSA is much more circumscribed”); Genesee Hospital, 10 F.3d at 55 (noting that the FLSA uses narrower language in its retaliation provision than Title VII).
Finally, we are aware that ” ‘the remedial nature of the [FLSA] … warrants an expansive interpretation of its provisions….’ ” Sapperstein, 188 F.3d at 857 (quoting Herman v. RSR Security Services, 172 F.3d 132, 139 (2d Cir.1999)). But expansive interpretation is one thing; reading words out of a statute is quite another. Because we believe that the FLSA’s use of the phrase “file any complaint” requires a plaintiff employee to submit some sort of writing, we agree with the district court’s conclusion that Kasten’s alleged complaints were not protected activity under the statute.”
Thus, the Court affirmed the lower Court’s ruling, finding that Plaintiff’s internal, but verbal complaints were insufficient and therefore unprotected.
D.Idaho: “Sales Representative” Who Educated Retailers, But Did Not “Sell” To Customers, Not Subject To Outside Sales Exemption Under FLSA
Burling v. Real Stone Source, LLC
The case was before the Court on the parties’ respective motions for summary judgment on exemption issues. The Court agreed with Plaintiff that he was not subject to the outside sales exemption, and further held that issues of fact precluded a finding regarding the applicability of the administrative exemption. Here, we discuss only the portion of the decision pertaining to the outside sales exemption.
The Court first recited the relevant facts, “Mr. Burling, was employed as a sales representative from March 15, 2006 to November 29, 2007 by Defendant Real Stone Source, LLC, d/b/a Rox Pro. Real Stone is a distributor of Rox Pro products which is a natural modular stone system used in construction. (Dkt. No. 28,Dkt. No. 27-3, p. 37). Real Stone products are distributed exclusively through a network of local dealers from whom the ultimate consumer buys the product. (Dkt. No. 26, Ex. E). Mr. Burling was hired as a Real Stone sales representative for a seven state area comprised of Washington, Oregon, Idaho, Montana, Wyoming, Utah, and Colorado. Mr. Burling was tasked with contacting existing and potential local dealers and pitching Real Stone’s products to them. For prospective local dealers, Mr. Burling’s pitch was in an effort to get them interested in serving as a local dealer of Real Stone products. Once interested, Real Stone would determine whether the prospective dealer met its qualifications and, if so, approve them as a local dealer. For existing dealers, Mr. Burling continued to educate them on Real Stone Products and also aided them in selling Real Stone products through various efforts including promotions and outreach to consumers.”
Agreeing with Plaintiff, and the cases holding that the outside sales exemption can only apply where an employee makes actual sales, the Court said, “This Court finds the cases cited by Mr. Burling to be the correct analysis to apply here. See Kuzinski v. Schering Corp., 604 F.Supp.2d 385 (D.Conn. March 30, 2009). Although the California District Court cases cited by Real Stone discuss the FLSA, they were applying California Labor Law. Notably, the Barnick court recognized that there is a distinction between the FLSA and California Labor Law. There, the court stated that the employee’s argument that he was only promoting, not selling, because he never received commitments from the physicians was “likely a correct application of the distinction between promotion and sales laid down by the Department of Labor and several federal courts with regard to the FLSA” but that it did not apply to the California Labor Law. Barnick, 522 F.Supp.2d at 1264.FN2Where, as here, the case does not raise claims of California Labor Law but, instead, the FLSA, the analysis from cases applying the FLSA are more appropriately used. As such the Court will first consider whether Mr. Burling made sales as defined by the FLSA. See Kuzinski v. Schering Corp., 604 F.Supp.2d 385 (D.Conn. March 30, 2009).”
The Court adopted the reasoning of several of the pharmaceutical sales representative cases, stating, “[t]he Court finds Real Stone has failed its burden of demonstrating that, as a matter of law, Mr. Burling was an exempt outside salesperson. The facts in the record demonstrate that Mr. Burling did not make any sales. The Court rejects Real Stone’s theory that its sales representatives were a part of every sale in their territory. (Dkt. No. 27-3, pp. 109-111), (Dkt. No. 27-4, pp. 24, 51-52), (Dkt. No. 31-2, p. 103). Mr. Burling’s job was to create a network of local dealers, educate the local dealers and contractors about the product, and bolster consumer desire to purchase the product from the local dealers who in turn bought from Real Stone. (Dkt. No. 27-3, pp. 94-96). This is consistent in the depositions of both Mr. Burling and Mr. Motarex as well as Real Stone’s “Sales Philosophy and Market Strategy” document. (Dkt. No. 26-2, Ex. E), (Dkt. No. 27-3, pp. 96-111, Motarex Depo.), (Dkt. No. 27-3, pp. 54-66, Burling Depo.). Both Mr. Burling and Mr. Motarex testified that Real Stone sales representatives were hired to establish a network of dealers in their territory, provide sales support to those dealers by promoting the products and educating the consumers, and engaging in further advanced marketing strategies to “create buzz” for the products and increase consumer purchases from the dealers. (Dkt. No. 26-2, Ex. E). In sum, to “generate” and/or “drive” sales to the local dealers. (Dkt. No. 27-3, pp. 25-28), (Dkt. No. 31-2, pp. 93, 95-96).”
Ultimately, the Court concluded, “[b]ecause the facts here do not demonstrate that Mr. Burling actually made sales, the Court finds the outside salesperson exemption does not apply. Instead the facts show that Mr. Burling’s primary duty was to promote and market the Real Stone brand in such a way so as to create a network of local dealers in his territory and to bolster a market for the products such that consumers were continually buying the products from the local dealers. Accordingly, the Court will grant Mr. Burling’s motion for partial summary judgment on this point.”
Although not discussed at length here, the Court also analyzed the applicability of the claimed administrative exemption, before ultimately deciding issues of fact precluded a finding one way or another.
D.Md.: Although Defendant Is A Motor Carrier, Factual Issues Preclude SJ On Motor Carrier Exemption, Where School Bus Drivers Drive No More Than 2 Interstate Charter Trips Per Year On Average
Hoffman v. First Student, Inc.
In this FLSA case, both the Plaintiffs, school bus drivers, and Defendant, a motor carrier, who employed them, moved for summary judgment as to whether Plaintiffs were exempt employees under the motor carrier act (MCA) exemption to the FLSA. The Court denied both motions, finding that factual issues precluded a finding one way or another.
“Under the FMCSR, First Student was a “for-hire” private motor carrier of passengers, and its school bus drivers were subject to the federal safety regulations contained in 49 C.F.R. Parts 382, 383, 387, 390-96. The FMCSR’s regulatory guidance, which can be found on the Federal Motor Carrier Safety Administration’s (“FMCSA”) website at http://www.fmcsa.dot.gov, sets forth the types of school bus services covered by the regulations. The FMCSA mandates that “anyone operating school buses under contract with a school is a for-hire motor carrier,” and when a “for-hire motor carrier transports children to school-related functions other than ‘school bus operation’ (as defined in 49 C.F.R. § 390.5), such as for “sporting events, class trips, etc., and operates across State lines,” the carrier is covered by the safety regulations. See FMCSR Regulatory Guidance Part 390.3, Question 14, available at http://www.fmcsa.dot.gov. Normal “school to home and home to school” driving activities are not covered. Id. In full accordance with this guidance, it was Defendant’s policy to pay its Baltimore bus drivers pursuant to the FLSA for “school to home and home to school” trips, but not for charter trips.
The U.S. Department of Transportation has determined that “if in the regular course of employment a driver is, or could be, called upon to transport a shipment in interstate commerce the driver would be subject” to the Department of Transportation’s jurisdiction and “even a minor involvement in interstate commerce as a regular part of an employee’s duties will subject that employee to the jurisdiction” of the Department of Transportation. See FMCSR Regulatory Guidance, Part 390.3, Question 24, at http://www.fmcsa.dot.gov. Furthermore, the U.S. Department of Labor states that:
Where safety affecting employees have not made an actual interstate trip, they may still be subject to DOT’s jurisdiction if: (1) the employer is shown to have involvement in interstate commerce; and (2) it can be established that the employee could have, in the regular course of employment, been reasonably expected to make an interstate journey. See U.S. Department of Labor, Employment Standards Administration, Wage and Hour Division, Fact Sheet # 19: The Motor Carrier Exemption Under the Fair Labor Standards Act (FLSA), available at http://www.dol.gov.
Thus, First Student posits that the drivers who volunteer to join its “charter pool” are categorically ineligible for overtime pay under the statutory and regulatory regime described above because: (1) FLSA’s overtime provisions do not apply to “any employee with respect to whom the Secretary of Transportation has power to establish qualifications and hours of service,”29 U.S.C. § 213(b) (1), and (2) the Secretary of the Department of Transportation is authorized to prescribe the “qualifications” and “hours of service” of drivers in the “charter pool.”
Plaintiffs seek to avoid this result with two arguments. First, they point to an exception set out in the Motor Carrier Act which plausibly creates a categorical exclusion for school bus drivers from the jurisdiction of the Secretary of Transportation. Second, plaintiffs contend that even if they are not categorically excluded from coverage under the Motor Carrier Act, First Student has not established the motor carrier defense as a matter of law (and summary judgment must be denied) because defendant has failed to demonstrate that, as a matter of law, plaintiffs’ involvement with interstate commerce is other than “trivial” and de minimis, or that interstate travel was a “natural, integral and … inseparable part of the position plaintiffs held,” Dauphin v. Chestnut Ridge Transportation, Inc., 544 F.Supp.2d 266, 275 (S.D.N.Y.2008), and that proper evaluation of that defense must await trial.
As explained herein, I conclude that while defendant correctly contends that the motor carrier exemption defense is available, the record does not establish the elements of that defense as a matter of law. Accordingly, defendant’s motion for summary judgment as to the overtime claims is granted in part and denied in part 2.
The Motor Carrier Act (hereafter, “the MCA”) is found at 49 U.S .C. § 13501 et seq.Section 13501 gives the Secretary of the Department of Transportation (hereafter, “the Secretary”) jurisdiction over interstate motor carriers, and a separate section, 49 U.S.C. § 31502(b)(2), empowers the Secretary to set “qualifications” and “hours of service” for employees of interstate motor carriers. As a matter of law, First Student is a form of “motor carrier” within the jurisdiction of the MCA. However, certain types of interstate travel are not within the Secretary’s jurisdiction because they are exempted from the MCA.
One exemption excludes from the Secretary’s jurisdiction “a motor vehicle transporting only school children and teachers to or from school.”49 U.S.C. § 13506(a)(1). On its face, this exemption from the Act seems to mean that the routine carriage of students by the drivers employed by contract motor carriers such as defendant on behalf of local school districts renders the drivers eligible for overtime under the FLSA, i.e., that such employees are not within the class of employees “with respect to whom the Secretary of Transportation has power to establish qualifications and hours of service.”29 U.S.C. § 213(b)(1). And, the statutory term “to or from school” could reasonably be interpreted to include not only transportation “to or from [home to] school [and back],” but also “to or from school[, including any trips from school to other locations related to the educational mission of the school, such as school-sponsored field trips, and back to school.”] Put differently, one might justifiably infer that students on field trips and/or being transported to and from athletic contests almost always depart from and return to the school location at the beginning and end of such transportation.
Mielke v. Laidlaw Transit, Inc., 102 F.Supp.2d 988, 992 (N.D.Ill.2000), essentially adopted the above interpretation of the term “to or from school” in the MCA and reasoned that, categorically, “school bus operation” (which is the Secretary’s regulatory term, meaning “the use of a school bus to transport school children and/or school personnel from home to school and from school to home,”49 C.F.R. § 390.5), is outside of the Secretary’s jurisdiction and thus is not encompassed by the FLSA’s motor carrier exception. Specifically, the Mielke court concluded that “the phrase ‘to and from school’ includes transportation to or from school sponsored events.” 102 F.Supp.2d at 990 (citation omitted).
In reaching its conclusion that school bus drivers who drove on so-called “charter trips” were entitled to overtime notwithstanding the FLSA’s motor carrier exception, the Mielke court flatly rejected defendant’s argument that the MCA’s exception for “a motor vehicle transporting only school children and teachers to or from school” applied “only to tariff, licensing, and rate regulations” governing motor carriers, and not to the Secretary’s authority to prescribe school bus drivers’ “qualifications and maximum hours of service.”Id.
At the time the case at bar was filed in June 2006, Mielke was the sole opinion by a federal court interpreting and harmonizing the FLSA motor carrier exception with the MCA’s exclusion from the Secretary’s authority “a motor vehicle transporting only school children and teachers to or from school.”In Mielke, the former gave way to the latter and school bus drivers were deemed by the court entitled to overtime pay under the FLSA.
There is now a second case elucidating this somewhat convoluted statutory and regulatory regime treating school bus drivers’ entitlement to overpay pay under the FLSA. Dauphin v. Chestnut Ridge Transportation, Inc., 544 F.Supp.2d 266 (S.D.N.Y.2008). In Dauphin, the court declined to follow Mielke and reached a contrary conclusion, namely, that the FLSA motor carrier exception potentially applied to school bus drivers (essentially on a week-by-week, employee-by-employee basis, see 544 F.Supp.2d at 275 (“However, because this testimony fails to establish whether interstate travel was part of either plaintiff’s job duties during the entire period at issue in this litigation, the Court cannot determine whether the motor carrier exemption applies to them for all the relevant workweeks.”)). Thus, the motor carrier exception would exonerate the defendant in Dauphin provided that it could show “either that the activities of the individual plaintiffs involved interstate travel of a character that was more than de minimis or that interstate travel was a ‘natural, integral and … inseparable part’ of the position plaintiffs held.”Id.
Specifically, the Dauphin court concluded, contrary to Mielke, that the limitation on the Secretary’s jurisdiction to regulate “school bus operations” had no bearing on the Secretary’s ability to set “qualifications and maximum hours of service” for school bus drivers who operated school buses in interstate commerce. Id. at 272.That is, the court reasoned that § 13506‘s limitation on the Secretary’s jurisdiction applies only to the economic and licensing authority (found in Subtitle IV of the MCA), and not to the issue of qualifications and maximum hours of service (found in Subtitle VI of the MCA).Id. (citing Bilyou v. Dutchess Beer Distribs., Inc., 300 F.3d 217, 229 (2d Cir.2002)).
Dauphin readily acknowledged that, consistent with the statutory language in the MCA, the Federal Motor Carrier Safety Regulations except from certain regulations “[a]ll school bus operations,” pursuant to 49 C.F.R. § 390.3(f).See 544 F.Supp.2d at 274. Nevertheless, the court concluded that this regulatory exclusion is not an indication that the Secretary does not have the authority to regulate school bus transportation; rather, it concluded, the exclusion reflects the Secretary’s determination that regulating home-to school and school-to-home transportation is not necessary for public safety. Id. (citing 53 Fed.Reg. 18,043 (May 19, 1988)).
I have carefully considered the conflicting approaches of the only two federal courts to have examined this awkward statutory regime. To be sure, Mielke’s approach is fully consistent with the well-settled doctrine that FLSA exemptions and exceptions are to be construed narrowly against the employer seeking to assert them, e.g., Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 4 L.Ed.2d 393 (1960) (citing Mitchell v. Kentucky Fin. Co., 359 U.S. 290, 295, 79 S.Ct. 756, 3 L.Ed.2d 815 (1959)). Nonetheless, I am persuaded that some deference is owed to the Secretary’s interpretation of his authority, acquiesced in by the Department of Labor, see29 C.F.R. § 782.2(a), to regulate the qualifications and hours of service of interstate school bus drivers. Furthermore, I am persuaded by Judge Stein’s analysis in Dauphin that the broadly-worded exception set forth in the MCA does not extend to the qualifications and hours of service of interstate school bus drivers employed by motor carriers within the jurisdiction of the Secretary. Accordingly, as in Dauphin, and contrary to Mielke, I conclude that the motor carrier defense is potentially applicable here.
Nevertheless, again as in Dauphin, the motor carrier exception defense cannot be applied on this record as a matter of law. Because an employee’s exempt status is an affirmative defense to a claim for non-payment at an overtime rate, the employer bears the burden of proving the exemption by clear and convincing evidence. Stricker v. Eastern Off Road Equip., Inc., 935 F.Supp. 650, 654 (D.Md.1996). Viewed in the light most favorable to plaintiffs, the evidence in the record shows that fewer than two interstate trips per year, on average, were worked by the employees in the First Student “charter pool” during the pendency of defendant’s contracts in Maryland. Moreover, as disclosed during the hearing in this case, each such driver seems to have had the option whether to accept an assignment to operate a vehicle outside of Maryland. See Dauphin, 544 F.Supp.2d at 274-76. Thus, to paraphrase Dauphin”whether the activities of [First Student’s] [former] drivers involve[d] interstate transportation of passengers in a way that would bring them within the scope of the motor carrier exemption from the FLSA” cannot be determined as a matter of law. Id. (alterations added).
Accordingly, I conclude that, as a matter of law, although the Secretary of Transportation is authorized to regulate the qualifications and hours of service of those members of the plaintiff class who volunteered for the “charter pool,” genuine disputes of material fact preclude a determination as a matter of law whether the FLSA motor carrier exception applies to any particular member of the plaintiff class for any particular work week. Therefore, as to the motor carrier exception, plaintiffs’ motion for partial summary judgment is denied, and defendant’s motion for partial summary judgment is granted in part and denied in part.”
S.D.Ind.: Tow Truck Driver Exempt Under Motor Carrier Act (MCA), Because Might Be Called To Perform Interstate Wrecking Services
Johnson v. Hix Wrecker Service, Inc.
The case was before the Court on several motions for summary judgment. The Court granted Defendant’s motion for summary judgment, finding that the Plaintiff was exempt from the FLSA’s overtime provisions pursuant to the Motor Carrier Act (MCA) exemption. This case contrasts the proof (and result) of a similar case discussed here yesterday.
The Court explained, “Defendant Hix Wrecker Service, Inc., (“HWS”) is an Indianapolis business that, as its name suggests, performs wrecker services; the remaining Defendants are individuals who manage and operate HWS. Plaintiff Bobby J. Johnson, Jr., worked for HWS for several months in 2006 as a tow truck driver. Johnson asserts several claims in his complaint. At issue in the instant motion is his claim that HWS violated the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., (“FLSA”), by failing to pay him overtime wages for occasions in which he worked more than forty hours in a given week. HWS argues that the FLSA overtime provisions were inapplicable to Johnson because the motor carrier exemption applied to him during his employment with HWS. The Court agrees.
The motor carrier exemption is found at 29 U.S.C. § 213(b)(1) and provides that “any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of section 31502 of Title 49” is exempt from the overtime provisions of the FLSA. Among other things, 49 U.S.C. § 31502 extends the Secretary of Transportation’s power to “employees of, and safety of operation and equipment of, a motor carrier” that transports property across state lines. “The Secretary has the power to set maximum hours for drivers if the company engages in more than de minimis interstate commerce, and that includes a company that holds itself out as an interstate company and solicits that business even though its prospect of obtaining much of that business is poor and some of its drivers never drive in interstate commerce.” Garcia v. Pace Suburban Bus Service, 955 F.Supp. 75, 77 (N.D.Ill.1996) (citing Morris v. McComb, 332 U.S. 422, 68 S.Ct. 131, 92 L.Ed. 44 (1947); Reich v. American Driver Service, Inc., 33 F.3d 1153 (9th Cir.1994); Marshall v. Aksland, 631 F.2d 600 (9th Cir.1980); Brennan v. Schwerman Trucking Co. of Virginia, Inc., 540 F.2d 1200 (4th Cir.1976)).”That does not mean, however, that the Secretary of Transportation has automatic jurisdiction over all drivers of an interstate carrier. Pursuant to a notice of interpretation, 46 Fed.Reg. 37,902, 37,903 (1981)… jurisdiction extends only to drivers who reasonably could be expected to make one of the carrier’s interstate runs, and that means more than a remote possibility.” Garcia, 955 F.Supp. at 77. Thus, as explained in the relevant Department of Labor regulation:
In a situation considered by the U.S. Supreme Court, approximately 4 percent of the total trips made by drivers employed by a common carrier by motor vehicle involved in the hauling of interstate freight. Since it appeared that employer, as a common carrier, was obligated to take such business, and that any driver might be called upon at any time to perform such work, which was indiscriminately distributed among the drivers, the Court considered that such trips were a natural, integral, and apparently inseparable part of the common carrier service performed by the employer and driver employees. Under these circumstances, the Court concluded that such work, which directly affected the safety of operation of the vehicles in interstate commerce, brought the entire classification of drivers employed by the carrier under the power of the Interstate Commerce Commission to establish qualifications and maximum hours of service, so that all were exempt even though the interstate driving on particular employees was sporadic and occasional, and in practice some drivers would not be called upon for long periods to perform any such work. ( Morris v. McComb, 332 U.S. 422, 68 S.Ct. 131, 92 L.Ed. 44)
29 C.F.R. § 782.2. In other words, it does not matter whether the driver in question actually has made an interstate run; as long as the driver is subject to being assigned to such a run at any time, the exemption applies to that driver.
HWS has the burden of demonstrating that the exemption applied to Johnson during the time it employed him. Klein v. Rush-Presbyterian-St. Luke’s Medical Center, 990 F.2d 279, 283 (7th Cir.1993). To demonstrate the application of the exemption to Johnson, HWS has submitted evidence, in the form of the affidavit of Defendant Gail Neal, the corporate secretary of HWS, which establishes the following:
1. HWS has at all relevant times held a common-carrier certificate of authority from the Department of Transportation that permits it to transport property for hire in interstate commerce.
2. Since 1973, HWS has provided its customers with both intrastate and interstate wrecker services.
3. HWS routinely provides interstate wrecker services for several of its customers.
4. All HWS drivers are subject to being assigned to an out-of-state run, either as a driver or as a helper, as needed.
5. Johnson was subject to being assigned to an out-of-state run at all times during his employment with HWS.
Thus, HWS has submitted evidence sufficient to establish that the motor carrier exemption to the FLSA was applicable to Johnson during his employment with HWS.” Therefore the Court granted Defendant’s motion.
N.D.Tex.: Absent Proof Of Likelihood Of Interstate Trips, Plaintiff Truckdrivers Not Subject To Motor Carrier Act (MCA) Exemption; Summary Judgment Held In Abeyance
Songer v. Dillon Resources, Inc.
Here, the parties moved by cross Motions for Summary Judgment for a determination as to whether the Plaintiff-truckdrivers were subject to the so-called Motor Carrier Exemption of the FLSA, based on the nature of their duties driving for Defendant, an interstate motor carrier. The Court held the Motions in abeyance, questioning the quality of proof offered by the Defendant.
After acknowledging the parties agreed Defendant was a “motor carrier” the Court examined the necessary proof the Defendant was required to come forward with in order to meet its burden of proof on the exemption, and concluded Defendant had failed to do so, “[c]oncluding that plaintiffs, as truck drivers, are subject to the Motor Carrier Act exemption, however, does not end the court’s inquiry. The court is not persuaded that the exemption bears the unlimited scope and duration defendants have suggested. In support of their respective positions, the parties argue regarding the application and authority of a number of interpretive guides, including an Interpretive Bulletin of the Department of Transportation, Federal Highway Administration, 46 Fed.Reg. 37902, 1981 WL 115508; the DOL Field Operations Handbook; and Opinion Letters of the DOL’s Wage and Hour Division. All of these sources, while not controlling or entitled to deference, are “entitled to respect” to the extent they are persuasive or offer guidance. Christensen v. Harris County, 529 U.S. 576, 587-88 (2000); Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944). All of these sources lead to the same conclusion: a driver is subject to the jurisdiction of the Secretary, and thus under the Motor Carrier Act exemption, for a “4-month period from the date of the proof” that he was, or could have been, called upon to engage in interstate commerce. 46 Fed.Reg. 37902, 37903.
Although the court concludes that plaintiffs, as drivers for at least one motor carrier, are subject to the Motor Carrier Act exemption to some extent, defendants have failed to adduce summary judgment evidence of the specific application of the exemption as to each plaintiff for these defendants. The summary judgment evidence submitted by defendants sets forth generally the dates of plaintiffs’ employment and states generally the number of interstate trips made by that plaintiff. However, defendants have adduced nothing as would show, as to each plaintiff, proof of when he or she was, or could have been, called upon to transport goods in interstate commerce such that the exemption clock began ticking as to that plaintiff.
Defendants submitted summary judgment evidence that purports to be bills of lading or similar types of work tickets showing that various plaintiffs transported goods across state lines or within Texas in the intrastate flow of interstate commerce. Insofar as the court can tell, none of these items show any of the defendants as the employer or trucking company of record. For example, many of the work tickets, under the heading “Carrier,” list “Sunset Transp” or, in some cases, “Sunset Trucking.” Neither of these entities is a party to this action, nor have defendants pointed the court to any summary judgment evidence explaining the relationship, if any, between them and either of those entities.
The court also has concerns about defendants’ summary judgment evidence generally. Defendants’ appendices as assembled do not correspond to either the tables of contents or to internal citations to exhibits within affidavits. By way of example, in volume I of the appendix, the affidavit of Edward Brady refers to exhibits A, B, C, etc., attached thereto. The exhibits themselves, however, are tabbed as number 1, 2, 3, etc., making it difficult for the court to identify exactly to which exhibit the affidavit refers. This pattern is repeated as to each affidavit with exhibits. Further, the affidavits contain many conclusory assertions and do not properly authenticate the documents attached thereto as exhibits. As the court would find it helpful for the parties to provide additional briefing and evidence on the limited issues set forth below, it is expected that any additional evidence submitted will be properly assembled and identified and internally consistent. Therefore,
The court ORDERS that plaintiffs’ partial motion for summary judgment, and defendants’ motion for summary judgment, be, and are hereby, held in abeyance pending further consideration by the court of the parties’ supplemental filings ordered below.”
S.D.Fla.: Enterprise Coverage Properly Asserted Where Employer Grossed $500K And 2 Or More Employees Handled Goods Which Had Traveled In Interstate Commerce; “Ultimate Consumer” Not Applicable To This Prong Of Enterprise Coverage
Diaz v. Jaguar Restaurant Group, LLC
This case was before the Court on Defendants’ Motion for Summary Judgment, based on an asserted lack of enterprise coverage under the FLSA. The Court denied Defendants’ Motion, based on the fact that Plaintiff demonstrated that 2 or more employees handled goods which had traveled in interstate commerce. While, this appears to be an unquestionable correct reading of the statute, it is significant, because several courts within the Southern District of Florida, have inexplicably failed to read the statute on its face to allow for coverage under similar circumstances.
After considering the historical perspective (and changes) to the FLSA, the Court stated, “in a case where materials are at issue under the second prong of the definition of an enterprise, the “ultimate consumer” limitation has no application. See also Exime, 591 F.Supp.2d at 1371 (Court should “give effect, if possible, to every word and clause” contained in a statute, citing Lowery v. Ala. Power Co., 483 F.3d 1184, 1204-05 (11th Cir.2007)).
Finally, if we step back to ask what the Congress meant in the original 1938 statute with its “goods” limitation found in section 203(i), as opposed to what a very different Congress meant in 1974 by adding “materials” to the enterprise coverage provision in question, the answer is evident from the quite disparate contexts in which these provisions were adopted. The original definition of goods was adopted in a FLSA statute that was purposefully limited to only those individual employees who were themselves participating in interstate commerce. The context of the 1974 amendments was precisely the opposite. A far more liberal Congress was certainly seeking to expand enterprise coverage even further than it did in 1961 and 1966, for employees who were not directly engaged in interstate commerce.”
Addressing recent 11th Circuit case law related to coverage (and distinguishing same), the Court stated, “Fast forward then to 2006 and beyond. We recognize that the cases relied upon by Defendant (including several recent Southern District cases interpreting language found in two Eleventh Circuit cases) ostensibly support a far different construction of enterprise coverage that takes us back to where we were prior to 1974. See, e.g., Thorne v. All Restoration Servs., Inc., 448 F.3d 1264, 1267 (11th Cir.2006) (citing Dunlop in part for the proposition that “[w]hen goods reach the customer for whom they were intended, the interstate journey ends and employees engaged in any further intra state movement of the goods are not covered under the Act.”) (emphasis in original) (citations omitted); Lamonica, 578 F.Supp.2d at 1367 (“[A] customer who purchases an item from Home Depot is not engaged in commerce even if Home Depot previously purchased it from out-of-state wholesalers.”); Navarro, 533 F.Supp.2d at 1226 (“[T]he out-of-state shippers send the parts to the local dealer, where they are kept until they are purchased in the local market. Therefore, the interstate journey stops when the parts reached [sic] the local dealer.”).
To the extent these district court were applying the second prong of enterprise coverage under section 203(s)(1)(A)(i), which is at issue here, they may be over-relying on distinguishable, but more recent, Eleventh Circuit cases, and overlooking the analysis of the question in Dunlop following the 1974 amendments to the FLSA.
So where did the confusion originate? It seems to have begun with the Eleventh Circuit panel decision’s summary discussion of Dunlop in Thorne v. All Restoration Services, which was a case decided entirely under the individual coverage provisions of the FLSA. A worker, Thorne, who was employed by a small mold restoration company sued for overtime compensation under the FLSA. Thorne claimed that the company was covered by the enterprise coverage as well as the individual coverage provisions of the statute. At trial, however, only Thorne testified in his case in chief. The trial court, Judge Cohn from our district, entered Rule 50 judgment as a matter of law on both the enterprise coverage and individual coverage components of the case. SeeCase No. 04-60095, D.E. 46 (S.D. Fla. Feb 1, 2005).
On appeal to the Eleventh Circuit, Thorne did not challenge Judge Cohn’s finding that enterprise coverage had not been established as a matter of law. Apparently there was no testimony in the record at that point in the trial that even the $500,000 sales threshold had been met. See Brief for Appellant, 2005 WL 4814060, at *3-7 (11th Cir. May 31, 2005). The Court’s opinion expressly acknowledged that enterprise coverage was no longer at issue on appeal. 448 F.3d at 1265 n. 1.
The Court then examined whether Judge Cohn’s determination as to individual coverage should be upheld. The individual coverage issue, as the Court pointed out, turned on whether Thorne was “directly participating in the actual movement of persons or things in interstate commerce by (i) working for an instrumentality of interstate commerce, e.g., transportation or communication industry employees, or (ii) by regularly using the instrumentalities of interstate commerce in his work, e.g., regular and recurrent use of interstate telephone, telegraph, mails, or travel.” Id. at 1266.That is undoubtedly the test for individual coverage under 29 U.S.C. § 207(a)(1) and the regulations thereunder, 29 C.F.R. §§ 776.23(d)(2), 776.24 (2005).
The statutory definition for enterprise coverage, by contrast, does not only apply to employees with “direct participation” in the “actual movement” of things in interstate commerce. That is a far narrower test found in the first prong of the statute, which is precisely why the 1961, 1966 and 1974 amendments created and expanded enterprise coverage under the statute. See29 U.S.C. § 203(s)(1)(A)(i) (“has employees engaged in commerce or in the production of goods for commerce, or that has employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person”) (emphasis added).
It is telling, for instance, that many of the primary decisions cited by the Eleventh Circuit’s decision in Thorne were from the 1940’s. 448 F.3d at 1266-68 (citing McLeod v. Threlkeld, 319 U.S. 491, 496-97 (1943) (finding that plaintiff’s activities were purely local, and he was not individually engaged in commerce when he merely cooked and cleaned for railroad workers); Kirschbaum v. Walling, 316 U.S. 517, 518-526 (1942)).
The outcome in Thorne is thus entirely expected and non-controversial. The same cannot be said, as it turns out, of the Court’s citation and reliance on the Fifth Circuit’s decision in Dunlop as follows:
Courts distinguish between merchants who bring commerce across state lines for sale and the ultimate consumer, who merely purchases goods that previously moved in interstate commerce for intrastate use. Therefore, a customer who purchases an item from Home Depot is not engaged in commerce even if Home Depot previously purchased it from out-of-state wholesalers.
In Dunlop v. Industrial America Corporation, 516 F.2d 498, 499 (5th Cir.1975), the court was faced with the question of whether a business which consumes gasoline and oil in the process of providing services to its customers is the “ultimate consumer” of those goods, and therefore not subject to FLSA coverage. The defendant corporation operated a wholly intrastate garbage removal service, and its only tie to interstate commerce was that its employees used gasoline and oil products which had moved in interstate commerce in operating and maintaining the company’s trucks. The court held that the defendant was not covered because it was an “ultimate consumer” of the goods. Id. at 499-502.
448 F.3d at 1267-68.
From this discussion, one is left with two important impressions. One is that Dunlop stands for that proposition today. And, two, is that this proposition applies equally to individual coverage cases like Thorne, as well as enterprise coverage cases like Dunlop.Both impressions are flatly incorrect. First, Dunlop does not stand for the proposition that, even after the 1974 amendments, enterprise coverage under the second prong of subsection s(1)(A)(i) fails when an entity is the ultimate consumer of “materials” as well as goods that have moved in interstate commerce in the past. The Thorne decision never explained that the holding in Dunlop was out-dated by the Court’s own admission after 1974. That omission was not critical, of course, to the outcome in Thorne.Frankly, the entire citation and reference to Dunlop was indeed dicta because the holding in Thorne was expressly not applicable to enterprise coverage.
Second, Dunlop also does not apply to individual coverage analysis.Dunlop was focused on the second prong of the enterprise definition. Unlike the first prong of that definition, individual coverage analysis is entirely distinct from the “goods or materials” prong of the statute. Dunlop thus has no relevance to a case limited to individual coverage. Similarly, Dunlop has no application to an enterprise coverage case that is based on the first prong of the statute. And, for the same reason, Thorne has no relevance to a case governed by the broader second prong of subsection s(1)(A)(i). Yet, Thorne’s reliance on Dunlop seems to suggest quite the opposite.
That is also evident from a later Eleventh Circuit case, Scott v. K.W. Max Invs., Inc., 256 Fed.Appx. 244 (11th Cir.2007). That case, at first blush, appears to have relied on Thorne’s individual coverage analysis and the “ultimate consumer” limitation to decide an enterprise coverage claim. And it has been cited as such by some district court opinions, infra.Yet that opinion did not once mention Dunlop or distinguish its analysis of the expansion of enterprise coverage via the “materials” prong added in 1974. It did not need to do so, in fact, because it was deciding the enterprise coverage issue primarily on the “first prong” of the statute. The court’s holding as to enterprise coverage claim was focused on whether there was any evidence in the record of any “actual movement” of goods in commerce. None was presented except for a single isolated purchase of lumber in interstate commerce that did not qualify as a regular and recurrent practice. With respect to the second prong of enterprise coverage, “goods or materials” that had been moved in commerce in the past, the Court’s discussion was quite limited. “Scott offers no specific argument or any evidence that any of the goods purchased from Home Depot had been moved in or produced for interstate commerce.” Id. at 248.Therefore, we do not read Scott as holding in any way that the ultimate consumer limitation applies to “materials” under the second prong of the statute.
Unlike Judge Seitz’s opinion in Exime, however, several Southern District cases rely on the conclusion that Scott permits the use of individual coverage case definitions to decide enterprise coverage cases as a general matter. This is simply too broad a proposition. With respect to the “goods or materials” prong of the statute, as discussed earlier, the 1974 amendments significantly broadened that definition of enterprise coverage, extinguishing the “ultimate consumer” issue altogether from that prong of the statute. This significant change to the text of the statute did not apply to individual coverage cases governed by 29 U.S.C. § 207(a)(1), nor did it apply to the first prong of the definition of an enterprise under 29 U.S.C. § 203(s)(1)(A)(i).
Like Judge Seitz, we do not choose to follow those cases that read more into the holding in Scott and the dicta in Thorne, and overlook the significance of the holding and analysis found in Dunlop. See, e.g., Lamonica, 578 F.Supp.2d at 1366; Ben-Aime, 572 F.Supp.2d at 1317; Polycarpe, 572 F.Supp.2d at 1321. We certainly do not question the outcome of these decisions to the extent they were based, as several seem to be, on the first prong of the enterprise coverage provision. The ultimate consumer doctrine certainly continues to apply, as it does for individual coverage, to enterprise coverage cases that are so limited. If, on the other hand, the “goods or materials” prong of the statute applies, then there is no longer any need to address the ultimate consumer or “come to rest” doctrine. The dispositive question simply asks whether two or more employees are handling materials, that have traveled in interstate commerce at some point in the past, for an enterprise with at least $500,000 in sales. And while it is true, as Defendants contend, that fulfillment of the statutory business volume requirement is not itself sufficient to create enterprise coverage, “[m] ost, if not every, Circuit Court that has spoken on this issue [including the 11th Circuit, as well as some lower federal courts] ha[ve] … construed the 1974 amendment as expanding enterprise coverage to virtually all employers, so long as that employer satisfies the $500,000 gross sales requirement.”Exime, 372 F.Supp.2d at 1370. “Thus the enterprise commerce test, quite simply, embraces all businesses whose employees regularly handle materials previously moved across inter-state lines.”Id. at 1372.
Having determined, under the current version of the FLSA, Defendants’ employees handled materials that are still “in commerce,” the Court then found that Plaintiff had produced sufficient evidence that they did so on a “regular and recurrent” basis. Therefore, the Court denied Defendants Motion for Summary Judgment.
Although not mentioned by the Court, many of the cases holding contra are up on a consolidated appeal at the 11th Circuit. Therefore, this case, which appears to correctly annunciate the scope of enterprise coverage under the circumstances, will stand if the 11th Circuit similarly reverses the prior contra holdings of several the Florida district courts distinguished by this Court.
Agee v. Wayne Farms LLC
The litigation in this case arises from the allegations that the Defendant has violated the Fair Labor Standards Act (“FLSA”) by failing to compensate a number of its employees for work-related activities. See generally29 U.S.C.S. § 201 et seq. The Plaintiffs in this case contest a specific pay practice: the use of a master time card to track the work hours of employees assigned to a processing line at the Defendant’s Laurel, Mississippi plant. The Plaintiffs contended that this pay practice allows the Defendant to forego paying them for time spent on activities that are compensable under the FLSA. The case was before the Court on Defendant’s motion for partial summary judgment. Finding that Defendant’s could not properly off-set time worked by Plaintiffs but not properly paid by Defendant, the Court denied Defendant’s Motion.
The Plaintiffs filed this action against Wayne Farms claiming violations of the minimum wage and maximum hour (overtime) requirements of the FLSA. see29 U.S.C. §§ 206, 207. In their motion for summary judgment, Defendant contended that the Plaintiffs’ complaints ignored Defendant’s practice of paying each employee for 11 extra daily minutes in addition to those minutes actually worked. Six of these eleven extra daily minutes are paid as “personal time.” Defendant alleged that it “adds another five paid minutes to each day by giving Laurel plant employees a thirty-five minute lunch break, while deducting only thirty of those minutes from paid time.” Defendant contended that when the additional 11 daily minutes are factored in, the 17 Plaintiffs listed above no longer allege viable FLSA claims.
Addressing this argument, deemed one of first impression by the Court, the Court explained, “[e]ven assuming that Wayne Farms has established that there is no genuine issue of material fact, this Court cannot grant the instant motion for summary judgment unless it is convinced that Wayne Farms is also entitled to judgment as a matter of law. FED R. CIV. P. 56(b). Wayne Farms has failed to cite even a single legal authority supporting its contention that it need not compensate its employees for work performed but can simply credit it against payments made to its employees for a paid lunch period or a paid personal time period . In light of Wayne Farms’ utter failure to cite legal authority in support of its contention, combined with the results of the Court’s independent research, the Court is not convinced that Wayne Farms would be entitled to judgment as a matter of law even if the facts of the case are as Wayne Farms represents them to be.
The question of whether an employer can lawfully credit “personal time” payments and “paid lunch” payments against compensation due to the employees under the FLSA appears to be one of first impression in this district. The Court notes, however, that one district court in this circuit has considered and rejected a similar argument. In addition, at least one circuit court has rejected a similar argument.
Section 207(h) of the FLSA governs compensation creditable toward minimum wage and overtime compensation. See§ 207(h)(1). Generally, “sums excluded from the regular rate … shall not be creditable” toward such wages. Id. Instead, only the “[e]xtra compensation paid as described in [§ 207(e)(5)–(e)(7) ] shall be creditable ….” § 207(h)(2).Sections 207(e)(5) through (e)(7) list only the “extra compensation provided by a premium rate” and are therefore inapplicable in the case at bar. As a result, the Court concludes that § 207(h) prohibits the manner of offsetting that Wayne Farms seeks to employ.
In Duplessis v. Delta Gas, Inc., 640 F.Supp. 891 (E.D.La.1986), a district court in this circuit interpreted § 207(h) with similar results. In Duplessis, the defendants sought “a credit against [the] plaintiffs’ award of overtime compensation for the extra compensation paid for nonproductive time and year end bonuses.”Id. at 896.Noting that the payments made were not “related to the performance of overtime, and instead [were] ‘payments made for occasional periods when no work is performed’ ” the Duplessis court held that the payments were not creditable as overtime. Id. at 897 (citing §§ 207(e)(2), (e)(3), and (h)).
The United States Court of Appeals for the Ninth Circuit held that an employer could not “lawfully credit the ‘paid lunch’ time payments against overtime compensation due the employees.” Ballaris v. Wacker Siltronic Corp., 370 F.3d 901, 903, 913-14 (9th Cir.2004). In Ballaris, the plaintiff employees received two meal periods: a 30-minute unpaid meal period and a 30-minute paid meal period. Id. at 906.The court noted that “the parties treated the half-hour paid lunch period as non-working time.”Id. at 909.Consequently, the court found “that the payments for the lunch periods constituted an additional benefit for employees and not compensation for hours worked.”Id. Denying the defendant’s request to credit the “paid lunch” compensation against the compensation required by the FLSA, the court relied primarily on § 207(h).See id. at 913-14.The court noted that “compensation for paid lunch periods is excluded from the regular rate under section 7(e)(2)” and that, as a result, any “offset of wages or overtime compensation due for hours worked is in direct violation of the express provisions of section 7(h).”Id at 913.In addition, the court noted that such a practice “would undermine the purpose of the FLSA” and would constitute a “false and deceptive ‘creative’ bookkeeping.” Id. at 914.
As these non-binding cases are consistent with this Court’s interpretation of the FLSA, the Court concludes that the motion for summary judgment should be denied.”
E.D.Cal.: Settlement Of Rule 23 And 216(b) Class Hybrid Action Requires Simultaneous Notice; Opt-out Notice Alone Insufficient To Bind Class On FLSA Claims
Wright v. Linkus Enterprises, Inc.
Plaintiffs filed this action against Defendant for violation of various state and federal labor laws. Before the Court was Plaintiffs’ Unopposed Motion for Preliminary Approval of Settlement of their hybrid action, which consisted of both a Federal Rule of Civil Procedure 23(b)(3) class action and a Federal Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 216(b), collective action. Though the Motion was essentially unopposed, the parties did disagree as to one issue pertaining to release of claims by currently absent parties, regarding notice required to the class members (Defendant proposed an opt-out Rule 23 notice alone). The Court resolved that dispute by ordering that the parties’ existing agreement and forms be modified to provide both “opt-out” procedures as allowed under Rule 23 and “opt-in” procedures as required by the FLSA.
Explaining that opt-in notice as well as opt-out notice must be provided to class members in such a hybrid action, the Court stated, “According to Defendants, the Rule 23 opt-out procedures, under which potential plaintiffs are bound by the terms of the settlement unless they affirmatively opt out, should apply to both the state law claims and to those claims arising under the FLSA. Plaintiffs disagree arguing that, while Rule 23 applies to their state law claims, the FLSA requires potential plaintiffs to opt-in to this action in order to release any claims they may have under the FLSA. The Court agrees with Plaintiffs.
In a collective action brought under the FLSA, “[n]o employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.”29 U.S.C. § 216(b). Congress enacted this provision for the purpose of “limiting private FLSA plaintiffs to employees who asserted claims in their own right and freeing employers of the burden of representative actions.” Hoffman-La Roche Inc. v. Sperling, 493 U.S. 165, 173 (1989).
Conversely, a class action brought pursuant to Rule 23(b)(3) mandates notice informing potential plaintiffs that they can avoid being bound by the terms of a settlement or judgment if they so inform the court. SeeFed.R.Civ.P. 23(c)(2)(B)(v). Thus, a plaintiff that does not affirmatively “opt-out” from the class may be bound by the disposition of the case, regardless of whether he received actual notice. Amchem Products, Inc. v. Windsor, 521 U.S. 591, 614-15 (1997).
In Kakani v. Oracle Corp., the Northern District examined the relationship between the two regimes and held that the use of “opt-out” notice would violate the FLSA.2007 WL 1793774, at *7 (N.D. Cal. June 19, 2007). That court stated that it would have been “unconscionable to try to take away the FLSA rights of all workers, whether or not they choose to join in affirmatively.”Id. (emphasis in original).
Defendants’ authority to the contrary is inapposite. First, Defendants cite Hoffman-La Roche Inc. for the proposition that district courts possess discretion over the procedural methods used to join multiple parties in a single case. However, Defendants interpret Hoffman-La Roche too broadly. That case merely established that district courts may authorize notification of potential plaintiffs regarding the opportunity to “opt-in” to a collective action. 493 U.S. at 169. Hoffman La Roche does not stand for the proposition that this Court may substitute Rule 23 “opt-out” notice for the “opt-in” notice expressly required by 29 U.S.C. § 216(b).
Defendants also cite two district court opinions, one in which the court stated without analysis that “opt-out” procedures would be used to settle both FLSA and state law claims, and one in which the federal court simply refused to enjoin a state court from releasing FLSA claims as part of a settlement that utilized “opt-out” notice. Frank v. Eastman Kodak Co., 228 F.R.D. 174, 179 (W.D.N.Y.2005); Dibel v. Jenny Craig, Inc., 2007 WL 2381237, at * 1 (S.D. Cal Aug. 10, 2007). This Court finds neither of these cases persuasive and now holds that “opt-in” procedures must be provided for the release of the instant FLSA claims.
M.D.Fla.: Question Of Fact For Jury Whether “Field Coordinator” For Cable Company, Who Managed Subcontractors, Administratively Exempt; Summary Judgment Denied
Driggers v. Cable Television Intsallation & Service, Inc.
This case was before the Court on Defendant’s Motion seeking summary judgment finding that Plaintiff was subject to the Administrative Exemption of the FLSA. Reviewing the evidence in the light most favorable to the Plaintiff, as the non-moving party, the Court denied Defendant’s Motion.
The Court assumed the following facts, as averred by Plaintiff:
“Plaintiff was employed by CTIS, a cable and internet installation services provider. He began his employment in dispatch and then became a cable installer (“Subcontractor”) for two to three years. Subcontractors are independent contractors required to use their own equipment and tools in their installation work as well as provide their own insurance. In May 2005, Plaintiff began working as a Field Coordinator, later called a Field Advisor, and continued in this position until he was terminated in May 2008.
As Field Coordinator, Plaintiff was assigned a hub, which was a geographical area based on zip code. Each morning, he handed out work assignments to subcontractors in his hub, making the assignments based on the time of the scheduled work and, when the workload permitted, on subcontractor ability and experience. Plaintiff also reviewed and entered subcontractor paperwork, which included checking billing documents to assure they were filled out in compliance with the standards of CTIS and its customer Bright House. He adjusted billing codes to comply with the job specifications and billing rules, often seeking guidance from Bright House.
Plaintiff was responsible for informing the subcontractors in his hub of changes to job specifications put out by Bright House and CTIS. He sometimes explained what the changes meant and suggested approaches to performing the job to the new specifications. If a subcontractor had a problem with an installation, Plaintiff would try to help the subcontractor figure out how to make the job comply with specifications, and if he could not, he would contact Bright House for further instructions. Plaintiff did not have the authority to deviate from job specifications without first consulting Bright House.
In the afternoons Plaintiff performed inspections. He had the authority to inspect installations of his choice to ensure compliance with job specifications. The number of these quality control inspections varied based upon Plaintiff’s workload in the office and number of damage inspections assigned by Bright House. If his quality control inspection revealed deviations from specifications, Plaintiff would have the installation subcontractor fix the problem to meet job specifications or assign another subcontractor to do so. Occasionally Plaintiff performed the repair work himself When customers had complaints about installations, they contacted Bright House or CTIS who in turn would contact Plaintiff, instructing him to inspect the damage. Plaintiff performed these inspections to determine if the subcontractor was responsible for the damage. If the subcontractor made a mistake that caused the damage, the subcontractor and his insurance were responsible. If the damage was caused by the subcontractor following specifications, Plaintiff would contact CTIS for approval of a repair or assign another subcontractor to handle the issue. If the subcontractor was not responsible for the damage, Plaintiff would not offer repairs and the customer would have to contact CTIS to take the claim further.”
The Court noted, “[i]n their filings, both parties state that Plaintiff satisfies the first and second prongs of the administrative exemption. Defendant has described Plaintiff’s primary duty as quality assurance, including assigning work orders, communicating changes in job specifications, checking subcontractor paperwork for compliance with policy, and ensuring subcontractor installations met specifications and quality standards. For the purposes of summary judgment, Plaintiff has agreed to this description and its satisfying the second prong. Plaintiff challenges only the use of discretion and independent judgment with respect to matters of significance in the performance of Plaintiffs primary duty as required in the third prong.”
Although the Court agreed with Defendant, that a jury could find that, since 4 or the 10 tests for independent judgment and discretion laid out in the CFR were satisfied, it was a question of fact of the jury whether Plaintiff met the requisite independent judgment and discretion element of the Administrative Exemption. Thus, the Court denied summary judgment stating, “[t]he undisputed facts allow a jury to reasonably find that Plaintiff has met some or none of the factors to be considered for the applicability of the third prong of the administrative exemption. The jury could determine that Plaintiffs use of skill and experience in the performance of his primary duty and his limited leeway in decisions do not allow him to qualify under the administrative exemption. Cotton v. HFS-USA, Inc., No. 8:08-cv-251-T-33TGW, 2009 WL 1396351 (M.D.Fla. May 18, 2009) (summary judgment order) (finding an employee who performed quality control inspections through comparison to standards and who assigned subcontractor work and repairs without direct supervision did not exercise discretion and independent judgment because most of his decisions were based on experience in the industry, well-established standards, and the use of common sense, and because he sought approval for deviations from specifications and frequently spoke with his superiors). The motion for summary judgment is therefore denied.”
W.D.Tenn.: “Maintenance Director” Not Executive Exempt; Management Not Primary Duty; Defendant Failed To Establish Plaintiff Supervised 2 Or More Co-Employees
Jones v. FMSC Leasehold, LLC
Before the Court was Plaintiff’s Motion for Partial Summary Judgment seeking a finding that he was not executive exempt as a matter if law, because management was not his primary duty, and because he did not supervise 2 or more employees. The Court granted Plaintiff’s Motion, agreeing that neither of these required elements of the executive exemption were present here.
Plaintiff was employed at High Pointe Health and Rehabilitation Center (“the facility”) from June 19, 2005 to February 5, 2008. Starting in November 2005 and continuing until his employment ended, Plaintiff served as Maintenance Director at the facility. Plaintiff averred that he had only one assistant reporting to him during that time, and Sanford Mann, the administrator of the facility, verified that Plaintiff had only one assistant during the time Mann worked at the facility from June 2007 to January 2008. Plaintiff contended that his primary job duty as Maintenance Director was manual labor performing general maintenance tasks at the facility. Plaintiff received a salary and was not compensated by the hour. During weeks in which he worked more than forty (40) hours, Plaintiff was not paid one and one-half (1.5) times his regular rate of pay. Plaintiff argued that Defendant could demonstrate that Plaintiff was an exempt employee for purposes of overtime pay as defined under the FLSA and its regulations.
First, the Court discussed Defendant’s failure to raise an issue of triable fact regarding Plaintiff’s primary duty, stating, “[t]he Court holds that Defendant has failed to carry its burden as to the second element, whether Plaintiff’s primary duty was management. Defendant argues that Plaintiff held the title “Maintenance Director” at the facility and his primary duty was to manage the maintenance department and the assistants who reported to him. According to Defendant, Plaintiff had input on the hiring, firing, promotion and assignment of his assistants and was able to set his own work schedule. Plaintiff disputes that he ever had actual managerial duties and argues that his duties were limited to only maintenance tasks.
Rather than rely on a job description or an employee’s job title, the Court must analyze an employee’s “actual duties” in light of the factors set forth and defined in the Department of Labor regulations. With respect to this second element of the exemption, Defendant must prove that Plaintiff’s primary duty was “management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof.”The regulations implementing the FLSA define “management” to include activities such as interviewing, selecting, and training of employees; setting and adjusting their rates of pay and hours of work; directing the work of employees; maintaining production or sales records for use in supervision or control; appraising employees’ productivity and efficiency for the purpose of recommending promotions or other changes in status; handling employee complaints and grievances; disciplining employees; planning the work; determining the techniques to be used; apportioning the work among the employees; determining the type of materials, supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked and sold; controlling the flow and distribution of materials or merchandise and supplies; providing for the safety and security of the employees or the property; planning and controlling the budget; and monitoring or implementing legal compliance measures.
The phrase “a customarily recognized department or subdivision” indicates “a unit with permanent status and … a continuing function.” Furthermore, “[c]ontinuity of the same subordinate personnel is not essential to the existence of a recognized unit with a continuing function.”
Perhaps most importantly, the Court must determine that management was the employee’s primary duty in order for the exemption to apply. A “primary duty” means “the principal, main, major or most important duty that the employee performs.”
Based on the record before the Court, Defendant has failed to adduce evidence from which a reasonable juror could conclude that Plaintiff’s primary duty was management. In his affidavit Plaintiff has stated that his primary job duties were as follows: manual labor such as replacing lights, replacing receptacles, cutting the lawn, law (sic) maintenance, cleaning and servicing heating and air units, minor plumbing, painting, carpeting, tiling floors, minor pipe replacement, some small motor repair, and other preventive maintenance including record keeping and documentation….
Defendant has not demonstrated the amount of time Plaintiff spent performing exempt work or the scope of discretion Plaintiff was granted in performing that work. Defendant has presented no evidence concerning Plaintiff’s relative freedom from direct supervision other than to state Defendant could set his own schedule. Defendant has failed to provide evidence about wages paid to other employees including employees Plaintiff allegedly supervised for the same kind of nonexempt work performed by Plaintiff. As a result, Defendant has provided very little from which a reasonable juror could find that this element is satisfied.
Defendant has proffered a job description for Plaintiff’s position. However, there is no corroborating evidence that the duties listed in the five-page job description were the actual duties carried out by Plaintiff….
Having failed to meet its burden as to this element, the Court concludes that Defendant is not entitled to the affirmative defense that Plaintiff was an exempt employee.”
The Court further held that Defendant could not satisfy the so-called 2 or more element either.
Therefore, the Court held that, as a matter of law, Plaintiff was not subject to the FLSA’s executive exemption.