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Monthly Archives: May 2010

Working Overtime May Harm The Heart, CNN Reports

A reminder to enjoy yourself and unwind this holiday weekend, from the folks at CNN:

“If you’ve been saying for years that long hours at work are killing you, forward this article to your boss–it might literally be true. According to a new study, people who work more than 10 hours a day are about 60 percent more likely to develop heart disease or have a heart attack than people who clock just seven hours a day.

It’s not clear why this is, but the researchers suggest that all that time on the job means less free time to unwind and take care of yourself. Stress may also play a role–but not as much as you might think. Working long hours appears to hurt your heart even if you don’t feel particularly stressed out, the study found.”

To read the entire article at the CNN website click here.

5th Cir.: Hourly “Per Diem” Allowances Were Part Of Plaintiff’s Regular Rate Of Pay, Because It Appeared “Per Diem” Label Was Simply A Scheme To Avoid Paying Overtime

Gagnon v. United Technisource Inc.

This case was before the Fifth Circuit on the Defendants’ appeal from the district court’s judgment awarding Plaintiff backpay, liquidated damages, and attorney’s fees and costs under the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 20119, against Defendants.

The Court cited the following facts, as relevant to its inquiry on appeal:

“Gagnon is a skilled craftsman with many years experience in prepping and painting the exterior and interior of aircrafts. When Gagnon began working for UTI, he executed a contract in which UTI agreed to pay Gagnon $5.50 per hour for “straight time” and $20.00 per hour for overtime.   Although the record indicates differing hourly wage rates for aircraft painters in the area and at the time in which Gagnon was working, none are remotely close to the $5.50 per hour that the UTI/AIS contracts established as Gagnon’s “straight time” wage. In addition to his straight time wage, UTI also agreed to pay Gagnon $12.50 for every hour he worked each week up to forty hours per week or a maximum of $500.00. The contract referred to this additional hourly pay as “per diem.”

About a year after he began working for UTI/AIS, Gagnon received a memo that notified him of a “raise in all pay.” The memo noted that “[w]e are pleased to announce that our client [Wing Aviation] has authorized a $1.00 per hour raise in all pay starting this pay check.” To effectuate the raise, however, Gagnon was not given an increase in his “straight time” pay rate of $5.50 per hour. Rather, he received a $1.00 raise in his hourly per diem for all hours worked under forty each week and a $1.00 increase in his overtime rate. The record does not indicate that this increase in hourly per diem was based on any reasonably approximated increase in Gagnon’s expenses.”

 Ultimately, the trial court found in Plaintiff’s favor, and awarded him his full damages claimed and liquidated damages.  The Defendants appealed, asserting that the court below erred in including Plaintiff’s “per diem” pay in calculating his regular rate of pay and resulting overtime rates.  Affirming the court below, the Fifth Circuit explained:

“UTI/AIS argue that their payment scheme does not violate the FLSA because the FLSA only requires employers to pay overtime at a rate of time and a half, and UTI/AIS paid Gagnon overtime at a rate more than three times his base pay. UTI/AIS also argue that Gagnon’s per diem reasonably approximated his reimbursable expenses and should therefore be excluded from the determination of Gagnon’s regular rate for the purposes of overtime pay. According to UTI/AIS, “[i]t cannot be argued … [that] the per diem was a ploy to avoid paying Gagnon overtime compensation.” We disagree.

The FLSA requires that non-exempt employees who work more than forty hours in a work week must be paid one and one-half times their “regular rate” of pay. 29 U.S.C. § 207(a)(1). The FLSA broadly defines “regular rate” as the hourly rate actually paid the employee for “all remuneration for employment.” 29 U.S.C. § 207(e); see also Walling v. Helmerich & Payne, Inc., 323 U.S. 37, 42 (1944). “The regular rate by its very nature must reflect all payments which the parties have agreed shall be received regularly during the workweek, exclusive of overtime payments.” Bay Ridge Operating Co. v. Aaron, 334 U.S. 446, 461 (1948). The “regular rate” becomes a mathematical computation once the parties have decided on the amount of wages and the mode of payment, which is unaffected by any designation to the contrary in the wage contract. Id. The “regular rate” is not an arbitrary labelit is an actual fact. Id.

Here, UTI/AIS have tried to avoid paying Gagnon a higher “regular rate” by artificially designating a portion of Gagnon’s wages as “straight time” and a portion as “per diem.” Although per diem can be excluded from an employee’s regular rate, 29 U.S.C. § 207(e)(2); see also 29 C.F.R. § 778.217(b), the “ ‘regular rate’ of pay … cannot be left to a declaration by the parties as to what is to be treated as the regular rate for an employee; it must be drawn from what happens under the employment contract.” 29 C.F.R. § 778.108 (citing Bay Ridge Operating Co., 334 U.S. at 465). The Department of Labor has recognized that when, as here, the amount of per diem varies with the amount of hours worked, the per diem payments are part of the regular rate in their entirety.

Furthermore, we are suspicious of UTI/AIS’s claims that Gagnon’s employment contracts were not a scheme to avoid paying overtime. It is difficult to believe that a skilled craftsman would accept a wage so close to the minimum wage when the prevailing wage for similarly skilled craftsmen was approximately three times the minimum wage. We are similarly troubled by the fact that the combined “straight time” and “per diem” hourly rates approximately match the prevailing wage for aircraft painters. Further, it is suspect that a “raise in all pay” was effectuated by increasing the hourly “per diem” rate rather than the “straight time” rate. Finally, we can conceive of no reason why a legitimate per diem would vary by the hour and be capped at the forty-hour mark, which not-so-coincidentally corresponds to the point at which regular wages stop and the overtime rate applies.

We find this case analogous to other cases in which employers have sought to artificially lower an employee’s regular rate by mischaracterizing a portion of it as a bonus or where employees were paid low “straight rates” for the first hour or two worked-usually set around minimum wage-after which they earned one and one half times the straight rate, and were consequently paid no premium for their actual overtime work. See Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419, 425 (1945); see also 29 C.F.R. § 778.502.

We hold that Gagnon’s hourly per diem allowances of $12.50 and $13.50 were part of his hourly “remuneration for employment” and must be considered in his regular rate for the purpose of determining overtime pay due under the FLSA.   Helmerich & Payne, 323 U.S. at 42. Accordingly, we affirm the district court’s determination that UTI/AIS violated the FLSA by not including Gagnon’s per diem in their calculation of his regular rate.”

Not discussed here, the Court also rejected Defendants’ claim that it was entitled to prevail on its counterclaims, based on the same facts.  To read the entire decision click here.

D.Md.: Defendant Not Entitled To Offset For Room and Board Or Meals, Due To Failure to Provide Documentation Of Costs To Plaintiff During Employment and Lack Of Agreement Regarding Same

Epps v. Way of Hope, Inc.

This case was before the Court on Plaintiff’s Motion for Summary Judgment.  Plaintiff was employed by defendants as a “care provider” at defendants’ facility, where she prepared meals, cleaned, did laundry, and assisted facility residents with personal care, hygiene, and medication.  Her duties also included night care of residents, including changing sheets, monitoring residents walking the halls, and personal hygiene.  Plaintiff alleged that, while she worked seven days per week, without weekend breaks, and that “it was not uncommon for [her] to work far in excess of 40 hours per week.”  She alleges that defendants did not pay her for all hours worked and did not pay her minimum wage.  She further alleged that defendants did not direct her to record her hours.  Among other things, as discussed here, Defendant responded that they provided plaintiff with room and board, and contended that plaintiff was aware that her receipt of room and board would constitute a portion of her wages, such that the provision of same should constitute an offset to any wages found due and owing.  The Court rejected this argument, as discussed below.

Rejecting Defendant’s argument regarding offset, the Court stated:

“Plaintiff seeks summary judgment on two related issues: (1) whether defendants took “impermissible” deductions from plaintiff’s wages; and (2) whether the claimed deductions can offset or reduce the amount of wages owed to plaintiff.


Although defendants claim in their opposition to the Motion for Summary Judgment that they “furnished records to show the cost of meals, lodging and other facilities supplied to the Plaintiff” (Paper No. 22, 5), it is undisputed that defendants did not provide plaintiff with documentation showing deductions from her wages for room and board during the course of her employment. (Paper No. 1, 5; Paper No. 4, 2; Paper No. 25, 4-5). It is also undisputed that plaintiff “never signed a document authorizing Defendants to take deductions for room and board from her wages.” (Paper No. 1, 5; Paper No. 4, 2). Defendants suggest that plaintiff’s awareness and acceptance of board and lodging entitled defendants to deduct the value of board and lodging from her pay. (Paper No. 22, 5-6). However, the FLSA’s protections are construed strictly, and defendants’ failure to obtain written authorization from plaintiff or to maintain documentation showing deductions from her wages for room and board precludes them from counting room and board within the wages paid to plaintiff. See, e.g., Marroquin, 505 F.Supp.2d. at 292-93 (collecting authority supporting the proposition that an employer is not entitled to offset wages by lodging or board when it fails to maintain and preserve requisite documentation); Jones, 2009 WL 3756843 at *3 (“The failure to document the amount, the failure to obtain [ ] written authorization from Jones, and the failure to include detailed documentation on the amount of room and board all preclude the Defendants from counting room and board within the wages paid to [Plaintiff].”).

For the reasons set forth herein, the Court hereby GRANTS partial summary judgment in favor of plaintiff on the issue of “offsetting” of wages owed to plaintiff, and specifically rules that, as a matter of law, defendants cannot use room and board provided by them to plaintiff to offset the wages owed to plaintiff under the FLSA and MWHL because they failed to obtain plaintiff’s written authorization for such deductions and failed to maintain requisite documentation of deductions.”

Click here to read the entire opinion Epps v. Way of Hope, Inc.

7th Cir.: District Court Erred In Dismissing FLSA Claims; Court Was Required To Consider Most Efficient Way To Adjudicate Claims and Subclaims; Plaintiffs Have Right To Pursue Claims Individually

Alvarez v. City of Chicago

In this case a collective action had previously been consolidated with a multiple-Plaintiff non-collective action.  Each of the Plaintiffs presented a variety of claims and between the hundreds of plaintiffs there were 10 different types of claims.  The Court below granted the Defendant’s motion for summary judgment against all plaintiffs, reasoning that the plaintiffs were not similarly situated because each plaintiff raised a different combination of the ten subclaims, such that the plaintiffs could not be readily divided into homogenous subgroups.  The district court also noted that arbitration pursuant to the collective bargaining agreement, while not mandatory, might be a more efficient way to resolve the paramedics’ claims.  The court did not reach the merits of the ten subclaims raised by the plaintiffs.  Instead, it dismissed the claims of all plaintiffs, without prejudice, and directed them to pursue arbitration.  The Seventh Circuit reversed however, noting that, the Court failed to consider the efficiency of adjudicating the claims as a collective action, and, that the named Plaintiffs in each of the consolidated cases had the right to proceed with their individual claims, regardless of whether they were similarly situated to the other class members.

The Court reasoned:

“The Fair Labor Standards Act gives employees the right to bring their FLSA claims through a “collective action” on behalf of themselves and other “similarly situated” employees. 29 U.S.C. § 216(b) (2006). A collective action is similar to, but distinct from, the typical class action brought pursuant to Fed.R.Civ.P. 23. The principle difference is that plaintiffs who wish to be included in a collective action must affirmatively opt-in to the suit by filing a written consent with the court, while the typical class action includes all potential plaintiffs that meet the class definition and do not opt-out.

The City-and the district court’s opinion-relies heavily on our decision in Jonites v. Exelon Corp., 522 F.3d 721 (7th Cir.2008). In Jonites, we affirmed the dismissal of a collective action brought on behalf of more than a thousand lineman and other hourly workers employed by Commonwealth Edison. The Jonites plaintiffs alleged that two types of purportedly off-duty time were really compensable work. The first involved Com Ed’s “call-out” policy, which required off-duty workers to respond to at least 35% of the calls from their employer for additional manpower on an emergency basis. The frequency of these call-outs varied widely among workers; some were called as often as once every five and a half days on average, and others no more than once a month. The employees took the position that they were entitled to be paid for “some of the time” during which they were subject to call, with the amount to be determined by the trier of fact. The second challenge was to the lunch policy, which required workers at job sites to remain awake and be alert for trespassing and the theft of tools. However, only part of the class worked the daytime shift, to which the lunch policy applied. We held that as to both of these claims, the purported class was “hopelessly heterogenous” because liability would require significant individual fact-finding and many of the workers had no conceivable claim at all. Id. at 725-26. We further held that the individual plaintiffs must either file individual suits, create homogenous classes, or ask the union to file grievance proceedings under the collective bargaining agreement. Id. at 726. Because the purported class here is made up of plaintiffs who each have a different combination of subclaims, defendants argue that it is similarly heterogenous and was properly dismissed in favor of arbitration.

Appellants argue that this case is different from Jonites because the plaintiffs here appear to be similarly situated with regard to individual subclaims, but are heterogenous only because there are several different combinations of those subclaims. For example, whether any given paramedic is entitled to recover on the uniform pay theory depends on the legal question of whether such pay should have been included in the base rate, and the simple factual question of whether the particular paramedic received uniform pay. Instead of dismissing their claims as heterogenous, plaintiffs argue, the district court should have allowed them to split their claims into homogenous subclasses. See, e.g., Fravel v. County of Lake, No. 2:07-cv-253, 2008 WL 2704744 (N.D.Ind. July 7, 2008) (allowing plaintiffs to proceed collectively and grouping the plaintiffs into four distinct subclasses depending on which theory of liability applied to them). Plaintiffs suggest that here, as in Fravel, “[r]esolving common questions as a class, even through the additional mechanism of sub-classes, remains inherently more efficient” than splitting the action into four separate collective actions or allowing individual claims by each plaintiff. Id. at *3.

The district court appeared to agree with the plaintiffs’ characterization of their subclaims, noting that the City’s liability to any particular plaintiff on any given subclaim turns only upon a single uniform policy and whether that policy impacted that particular plaintiff. However, the district court refused to adopt the Fravel approach, concluding that the number of subclaims made the plaintiffs “hopelessly heterogenous” and that arbitration would be more efficient.

A district court has wide discretion to manage collective actions. See Hoffmann-La Roche v. Sperling, 493 U.S. 165, 171 (1989). However, it appears that here the district court may have mistakenly read Jonites to forbid it from adopting a subclaim approach merely because the variety of subclaims renders the class “heterogenous.” The problem with the Jonites class, however, was not that the plaintiffs had different subclaims, but rather that determining whether any given plaintiff had a viable claim depended on a detailed, fact-specific inquiry, and many plaintiffs lacked any conceivably viable claim altogether. Jonites, 522 F.3d at 723, 725-26; see also Mooney v. Aramco Services Co., 54 F.3d 1207, 1214-15 (5th Cir.1995), overruled on other grounds by Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003) (affirming decertification of collective action where employees who brought ADEA claim were subject to “vastly disparate employment situations” and defense was likely to center on purported reasonable factors other than age specific to each employee). If common questions predominate, the plaintiffs may be similarly situated even though the recovery of any given plaintiff may be determined by only a subset of those common questions.

Similarly, the district court mistakenly compared the efficiency of proceeding through subclaims only to the perceived efficiency of arbitration. Plaintiffs have the right to proceed individually and may be able to form more tailored classes. See Jonites, 522 F.3d at 725 (noting that a collective bargaining agreement cannot preempt or waive a worker’s right to a judicial remedy for FLSA violations). Thus, if it appears plaintiffs are prepared to proceed individually or through separate classes, the district court must consider whether these other mechanisms for judicial resolution of their claims are more or less efficient than a collective action comprised of various subclaims. Cf. Fravel, supra. In Jonites, the circumstances suggested that plaintiffs had “no stomach for proceeding case by case.” Id. at 726. Here, the twelve Caraballo plaintiffs filed their complaint as individuals and moved for summary judgment as individuals. Indeed, there is nothing apparent from the record to indicate that the fifty-four named plaintiffs in Alvarez were unwilling to proceed individually. Yet the district court dismissed their claims in favor of arbitration without considering whether it was better to address sixty-five individual claims or one collective action comprised of ten subclaims.

Finally, the district court erred when it dismissed the claims of the named plaintiffs. When a collective action is decertified, it reverts to one or more individual actions on behalf of the named plaintiffs. See Hipp v. Liberty Nat’l Life Ins. Co., 252 F.3d 1208, 1218 (11th Cir.2001) (citing Mooney, 54 F.3d at 1213-14); see also Fox v. Tyson Foods, Inc., 519 F.3d 1298, 1301 (11th Cir .2008) (affirming decertification of an FLSA collective action, dismissal of the opt-in plaintiffs, and severance of each of the named plaintiffs into separate individual actions). Defendants do not argue that arbitration under the collective bargaining agreement preempts litigating these issues in federal court. Plaintiffs are entitled, at minimum, to pursue their claims individually. Whether they are permitted to do so in one action or several is committed to the sound discretion of the district court, but misjoinder of parties is never a ground for dismissing an action. See Fed.R.Civ.P. 21. We therefore reverse the district court’s dismissal of the named plaintiffs’ claims in both the Alvarez and Caraballo actions.

Sifting through the subclaims of each of the myriad plaintiffs is an unenviable task. But plaintiffs are nonetheless entitled to their day in court. Moreover, it appears that here, common questions predominate with regard to each theory of liability. The parties have already filed cross-motions for summary judgment on the merits of these common questions. After the district court determines the validity of these subclaims, calculation of each plaintiff’s award (if any) will be largely mechanical. On remand, given that the claims of the named plaintiffs will still be before it, the district court should consider whether a collective action might be the most efficient judicial resolution of this matter after all.”

To read the entire decision click here.

N.D.W.Va.: An FLSA Employer Held Liable For FLSA Violations Has No Right To Contribution Or Indemnification; Allowing Same Would Contravene The Purposes Of The FLSA

McDougal v. G & S Tobacco Dealers, L.L.C.

This case was before the Court on the Defendant/Third-Party Plaintiff’s (and current owner of the employer) and the Third-Party Defendant’s (former employer) cross motions for summary judgment.  In a nutshell, what started as a simple FLSA claim, “expanded into contract claims for indemnification and contribution by the [current] employer [Woodward] against the former owner [Oliverios] of the company that employed Plaintiff.”

Among other issues, the Court discussed whether there was any pleaded theory that could impose a duty of indemnity or contribution on the previous owner [Oliveros] for the current owner’s [Woodward’s] non-payment of Plaintiff for the time Plaintiff worked for Defendant, subsequent to the time Woodward took ownership of the company that employed Plaintiff.  Holding that no such duty of indemnity or contribution existed, the Court explained:

“1. With respect to Woodward’s claim for indemnification, contribution and breach of statutory or agency duties, the doctrine of conflict or obstacle preemption is dispositive.

Woodward’s state common law claims of contractual and implied indemnification and contribution against Oliverios for wages and benefits damages not paid to McDougal after July 17, 2007 in violation of FLSA and WPCA are preempted by the doctrine of conflict or obstacle preemption.

On the same date the parties argued the instant cross-motions for summary judgment before this Court, the Fourth Circuit Court of Appeals published its decision in Equal Rights Center, et al v. Archstone Multifamily Series I Trust, et al, 09-1453.

The following facts and claims of Archstone are analogous to the facts and claims of the instant case: Archstone hired architect Bolton to design multi-family apartment buildings which Archstone then had various contractors build. Of the units constructed, Equal Rights Center, et al alleged 71 failed to be constructed so that they were accessible to persons with disabilities in violation of FHA and ADA. Archstone and the Equal Rights Plaintiffs entered into a Consent Decree which required Archstone to retro-fit the 71 units to make them ADA and FHA compliant and to pay 1.4 million in damages and attorneys fees and expenses. Bolton did not join in the settlement but later entered into a separate consent decree with the Equal Rights Plaintiffs which did not include any admission of liability. Archstone cross-claimed against Bolton seeking damages based on state law causes of action: express indemnity; implied indemnity; breach of contract; and professional negligence.  After lengthy discovery and immediately prior to the dispositive motions deadline, Archstone sought leave to amend its cross-claim against Bolton to include a claim for contribution. Bolton objected. The District Court denied leave to amend. Thereafter the District Court granted Bolton summary judgment reasoning that Archstone’s causes of action were indemnity and de facto indemnity claims for violations of the FHA and ADA and, because no right to indemnification exists under the ADA or FHA, the state law claims asserted by Archstone would be antithetical to the purposes of the FHA and ADA and therefore preempted under the doctrine of conflict or obstacle preemption. Archstone appealed. The Court of Appeals affirmed holding:

Obstacle preemption applies “where state law; stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.’ “ …. where a state-law claim “interferes with the methods by which the federal statute was designed to reach [its] goal.” (internal citations omitted).

Obstacle preemption has been extended to state tort claims as well as positive enactments of state law. Id. citing Geier v. Am. Honda Motor Co., 529 U.S. 861, 120 S.Ct. 1913, 146 L.Ed.2d 914 (2000).

Finding Archstone’s indemnification claims were preempted, the Court held:

Here, Archstone sought to allocate the full risk of loss to Niles Bolton for the apartment buildings at issue. Allowing an owner to completely insulate itself from liability for an ADA or FHA violation through contract diminishes its incentive to ensure compliance with discrimination laws. If a developer of apartment housing, who concededly has a non-delegable duty to comply with the ADA and FHA, can be indemnified under state law for its ADA and FHA violations, then the developer will not be accountable for discriminatory practices in building apartment housing. Such a result is antithetical to the purposes of the FHA and ADA.

The Court further held Archstone’s last minute attempt to amend its cross-claim was properly denied as prejudicial to Bolton. Moreover, the Court held: “As presented on appeal, the claim which Archstone presents in its amended complaint is a de facto indemnification claim, and such a claim is preempted under federal law. Therefore, allowing Archstone to amend under these circumstances to include a so-called contribution claim is, in any event, futile.”

A number of cases have addressed the issue of whether there is a right to contribution or indemnification for employers held liable under the FLSA and have held there is none. Herman v. R.S.R. Security Servs. Ltd., 172 F.3d 132, 143 (2nd Cir.1999). Relying on the rationale expressed in Northwest Airlines, Inc. v. Transport Workers Union of America, AFL-CIO, 451 U.S. 77, 101 S.Ct. 1571, 67 L.Ed.2d 750 (1981),  the Herman Court held:

There is no right of contribution or indemnification for employers found liable under the FLSA. The reasons are readily apparent. First, the text of the FLSA makes no provision for contribution or indemnification. Second, the statute was designed to regulate the conduct of employers for the benefit of employees, and it cannot therefore be said that employers are members of the class for whose benefit the FLSA was enacted. Third, the FLSA has a comprehensive remedial scheme as shown by the express provision for private enforcement in certain carefully defined circumstances. Such a comprehensive statute strongly counsels against judicially engrafting additional remedies. Fourth, the Act’s legislative history is silent on the right to contribution or indemnification. Accordingly, we hold that there is no right to contribution or indemnification for employers held liable under the FLSA.

In Herman, Portnoy contended that even if the FLSA did not permit contribution or indemnification, those claims could be prosecuted under New York law in much the same way Woodward contends she should be permitted to prosecute claims for indemnification against Oliverios under West Virginia law. The Herman Court held: “This view of the law is flawed because the FLSA’s remedial scheme is sufficiently comprehensive as to preempt state law in this respect.” Herman v. R.S.R. Security Servs. Ltd., supra at 144.

The Fourth Circuit held in the 1992 case of Lyle v. Food Lion, Inc. 954 F.2d 984, 987: “In effect, Food Lion sought to indemnify itself against Tew for its own violation of the FLSA, which the district court found, and we agree, is something the FLSA simply will not allow. As the fifth Circuit has noted, ‘[t]o engraft an indemnity action upon this otherwise comprehensive federal statute would run afoul of the Supremacy Clause of the Constitution’ and ‘would undermine employers’ incentives to abide by the Act. LeCompt v. Chrysler Credit Corp., 780 S.2d 1260, 1264 (5th Cir.1986).’ “

In the instant suit, Oliverios were the employers of McDougal prior to July 17, 2007 and therefore responsible for any FLSA and WPCA claims arising for work performed by McDougal up to July 17th. However, Woodward uses the warranty and indemnification clauses of the 2007 contract in an attempt to hold Oliverios liable for Woodward’s failure to pay McDougal FLSA wages after July 17, 2007. In the alternative to the contract indemnification claim, Woodward attempts to shift ultimate responsibility for payment of post July 17, 2007 FLSA wages to Oliverios using equitable principles. In every event, Woodward seeks to delegate her duty to comply with the FLSA to Oliverio for all wages and damages owed including those starting with the contract closing on July 17, 2007. This she cannot do. The FLSA does not contain language that provides for such indemnification or contribution. Woodward is not a member of the class protected by the FLSA. The FLSA is a comprehensive remedial statute designed to give employees the right to sue their employers for violations of the act. This is precisely what McDougal did in bringing his action against Woodward. Herman, supra at 144. This court cannot and will not engraft an indemnity clause on the FLSA where there is none. LeCompt, supra at 1264.

Accordingly, the Court concludes that Woodward’s Third Party Plaintiff claims against Oliverios for indemnification or contribution to McDougal’s FLSA claims arising post July 17, 2007 whether the same are based on contractual or equitable contribution, indemnification, breach of contract, breach of warranty, agency, or another state contract or equity claim, are preempted by the provisions of the FLSA; are antithetical to the purpose of the FLSA; undermine the public policy established by the FLSA; and are barred by the doctrines of Conflict and Obstacle Preemption.

Even if Woodward, in light of the absence of the availability of contribution and/or indemnification for the FLSA claims of McDougal, contends that she is entitled to contribution from Oliverios solely for WVPA damages claimed by McDougal, that contention also fails. The federal court only recognizes a right to contribution under state law “in cases in which state law supplie[s] the appropriate rule of decision.” Northwest Airlines, Inc. v. Transport Workers Union of America, AFL-CIO, supra at 97. The West Virginia’s Wage Payment and Collection Act (W.Va.Code, § 21-5-1 et seq.) provides a comprehensive method for employees forcing their immediate or ultimate employer to timely pay them in accord with law. It does not provide authorization or a method or a rule of decision for allocating claims of contribution toward the liability of the employer to timely pay his employee’s wages. Nor does it provide or recognize any method, contractual or equitable, for shifting the burden of paying wages in accord with law from the employer to a third person.”

Not discussed here, the Court held that language from the contract of sale of the employer from Oliverios to Woodward was binding, to the extent that Oliverios was required to pay the cost of Woodward’s legal defense arising from the lawsuit.

To read the entire decision, click here.

Arbitrator Rules That Massachusetts Trial Court System Must Pay Workers $30 Million In Retroactive Pay Increases, Boston Herald Reports

The Boston Herald is reporting that an Arbitrator has ruled that Massachusetts’ Trial Court system must pay its clerical workers $30 million in unpaid pay increases.

“In what is being called the costliest settlement of its type in state history, the financially strapped Trial Court system must shell out $30 million in back wages to thousands of unionized clerical workers, the Herald has learned.

In a decision reached May 7, an arbitrator ruled that the Trial Court broke its contract with Office and Professional Employees International Union, Local 6, by refusing to pay the negotiated 3 percent pay raises since 2007…

In addition to the $30 million in back pay, the Trial Court must find $17 million in unfunded raises for the union employees for the next budget year, starting in July, said Superior Court Justice Peter W. Agnes Jr., president of the Massachusetts Judges Conference.”

To read the entire article click here.

D.Colo.: Time Spent By Police Officers Donning And Doffing Their Uniforms And Equipment Is Compensable, Because It Is Integral And Indispensable To Their Police Duties

Rogers v. City and County of Denver

This case was before the Court on the parties’ respective motions for summary judgment.  Plaintiffs made several claims for unpaid wages based on a variety of “off-the-clock” claims.  Although the Court denied the parties’ motions with respect to most of the claims–either because the record was not fully developed, or because there were issues of fact–it held that the donning and doffing of uniforms and equipment by certain officers was compensable time.

“The first claim seeks compensation for time spent putting on and taking off the police uniform and equipment required for conducting police activity. For convenience of analysis, this claim is considered as it applies to patrol officers. The DPD Operations Manual prescribes the basic uniform to be worn on duty. It consists of a uniform shirt, uniform trousers, trouser belt, socks and authorized footwear. (DPD Op. Manual § 111.02.) A uniformed officer is generally required to carry a metal badge and nameplate, current DPD identification card, a valid Colorado driver’s license, and a standard uniform belt (“duty belt”) containing an authorized holster and firearm, ammunition case and ammunition, handcuffs and handcuff case, department issued tear gas and holder, flashlight, baton ring and belt “keepers.” (Id. § 111.03.) Uniformed officers are not required to wear basic hats or reflective apparel or carry batons, but officers must have those items available at all times. (Id. §§ 111.02(1), 111.02(12) & 111.03(13)). The Operations Manual describes particular situations in which basic hats and reflective apparel must be worn. The wearing of ballistic vests is encouraged, but not required. (Id. § 111.05(2)(e)).

The DPD does not require that donning and doffing the basic uniform take place at the assigned work station. Some district headquarters have storage lockers and rooms available for use at the officer’s individual choice. Some district buildings are too small and the officers must report in full uniform. The City argues that the option to put on and take off the uniform at home or elsewhere distinguishes this case from precedents established in the context of the meat industry and other hazardous occupations.

The option to change away from the duty station is not determinative. The principal activity of the patrol officers is policing the community. The police uniform is not “clothing” in any ordinary sense. It is the visible sign of authority and an essential element of the officer’s ability to command compliance with his commands and directives. It is analogous to the judicial robe. The uniform includes the equipment that are the tools that enable the officer to use physical force, including deadly force, for the protection of himself and others as circumstances require.

The City argues that the Plaintiffs’ clothes changing activities are excluded from compensation under 29 U.S.C. § 203(o). That section provides:

Hours Worked.-In determining for the purposes of sections 206 and 207 of this title the hours for which an employee is employed, there shall be excluded any time spent in changing clothes or washing at the beginning or end of each workday which was excluded from measured working time during the week involved by the express terms of or by custom or practice under a bona fide collective-bargaining agreement applicable to the particular employee.

CBAs between the City and the Denver Police Protective Association have been in effect since January 1, 1996. DPD officers have never been compensated for donning and doffing their uniforms and personal equipment. The City contends that this history of non-compensation shows an established custom or practice under the CBAs.

That argument is not persuasive.  Silence in collective bargaining is not the equivalent of a custom or practice of non-compensability.

In December 1985, the United States Department of Labor (“DOL”) issued a Wage and Hour Opinion Letter, stating that the time spent by a uniformed police officer donning and doffing the required uniform was not compensable time under the FLSA, where a collective bargaining agreement between a city and the union had no express provision regarding the compensability of clothes-changing time and there had been no custom or practice between the parties to consider such clothes changing time compensable. Wage & Hour Opinion Letter, Dec. 30, 1985, 1985 WL 1087351, Def.’s Ex. A-98. That opinion letter is not persuasive, but may be considered with respect to the issue of willfulness. Similarly, Wage & Hour Advisory Memorandum No.2006-2 dated May 31, 2006 (opining that changing into gear is not a principal activity if employees have the option and the ability to change at home) is relevant only to the issue of willfulness.

The judicially-created de minimis rule provides an exception to the FLSA’s requirement that all work be compensated.  There are genuine issues of material fact regarding the time and effort required to don and doff the DPD uniform and protective gear. The City’s de minimis defense is a factual issue for trial.

While donning and doffing the patrol officers uniform and equipment is compensable time under the FLSA as activity that is integral and indispensable to their police duties, the continuous work day does not begin or end with that activity. The plaintiffs are not asking for time spent commuting for those officers who chose to change at home. This ruling is applicable only to the uniformed officers on official duty. The facts concerning wearing uniforms and equipment during secondary employment are not adequately presented in the papers filed.   Similarly there is no clear evidentiary record concerning detectives and other non-uniformed officers.”

This decision appears to be in direct conflict with the Ninth Circuit’s recent decision discussed here, which held that time spent donning and doffing police uniforms and equipment was not compensable, because officers had the option of doing it at home.

Click here to read the entire decision.

Wal-Mart Settles Wage And Hour Lawsuit For Up To $86 Million, Reuters Reports

Reuters is reporting that Wal-Mart has agreed to pay up to $86 Million to settle a class-action lawsuit accusing it of failing to pay vacation, overtime and other wages to thousands of former workers in California.

According to Reuters, “[a]bout 232,000 people will share in the settlement, which was disclosed on Tuesday in a federal court filing.

It requires a minimum payout of $43 million, and “far exceeds other recent settlements” involving Wal-Mart, the filing shows. The accord requires court approval.”

To read the entire story click here.

W.D.Va.: Motion For Approval Of Settlement Agreement Denied, In Part, Because Of Impermissible Confidentiality Language

Poulin v. General Dynamics Shared Resources, Inc.

In a continuing trend, the Court, on the parties’ Joint Motion for approval of settlement, denied same, in part, due to the inclusion of confidentiality language in the proposed settlement agreement.  Initially, the Court denied the Motion due to the parties failure to lay out the basis for Plaintiff’s attorney’s fees.  However, the Court went on to add an alternative ground for its denial, citing to recent case law, as discussed here:

“Finally, the Settlement Agreement, as presently drafted, contains a confidentiality agreement. This, in pertinent part, provides that “Plaintiff agrees that he shall not disclose the fact of, and/or the terms and conditions of this Settlement Agreement and General Release except that Plaintiff may state that the Poulin action has been dismissed and may disclose the terms and conditions of this Settlement Agreement” under limited enumerated circumstances. Under the Settlement Agreement, “Plaintiff further agrees and acknowledges that confidentiality is a material term of this Agreement and any breach of the confidentiality provisions herein will be considered a material breach of the terms of this Agreement and he will be required to reimburse Defendant for any and all compensation and benefits paid to him or for his benefit under the terms of this Agreement.” Settlement Agreement and General Release, ¶ 13. Further, it provides that the Settlement Agreement, “as executed by the Parties, will be filed under seal.” Id. at ¶ 5.

The Court cannot approve these terms of the Settlement Agreement. The provision that “confidentiality is a material term of [the] Agreement” is in conflict with the Court’s opinions dated March 26, 2010 (docket no. 20) and April 23, 2010 (docket no. 23), which held that the parties had not identified significant interests to outweigh the public interest in access to judicial records, and required the proposed Settlement Agreement be made publicly available on the docket. Furthermore, a confidentiality provision in an FLSA settlement agreement undermines the purposes of the Act, for the same reasons that compelled the Court to deny the parties’ motion to seal their Settlement Agreement. See e.g., Valdez v. T.A.S. O. Prop., Inc., No. 8:09-cv-2250, 2010 WL 1730700, at *1 (M .D.Fla. Apr. 28, 2010); Dees v. Hydradry, Inc., — F.Supp.2d —-, 2010 WL 1539813, at *9 (M.D.Fla.2010) (“A confidentiality provision in an FLSA settlement agreement both contravenes the legislative purpose of the FLSA and undermines the Department of Labor’s regulatory effort to notify employees of their FLSA rights.”). Finally, the confidentiality provisions are likely unenforceable in light of the public filing of the Settlement Agreement. See e.g., Head v. v. & L Services III, Inc., No. 6:08-cv-917, 2009 WL 3582133, at *3 (M.D.Fla. Oct. 27, 2009) (noting that “the settlement agreements contain terms that this Court would not approve, such as the confidentiality provisions, which are partially unenforceable in light of the public filing of the agreements”). The Court cannot approve of a settlement agreement which includes these terms.”

It appears that the public policy grounds behind disallowing confidential settlement agreements in FLSA cases is beginning to pick up speed.

E.D.Pa.: Where Plaintiff Received Partial Liquidated Damages, Prejudgment Interest Due On The Remaining Unpaid Wages

Gonzalez v. Bustleton Services, Inc.

This case was before the Court on Plaintiffs’ Motion for an Award of Prejudgment Interest, subsequent to the Court’s holding that Defendant had violated the FLSA.  In its Order regarding liability, the Court awarded liquidated damages as to one aspect of Plaintiffs’ claim and denied liquidated damages as to a second component.  The Plaintiffs’ Motion sought prejudgment interest solely on the unpaid wages that the Court had not awarded liquidated damages upon.  The Court held that Plaintiffs were entitled to prejudgment interest on the unpaid wages for which they were not awarded liquidated damages.

After discussing the general presumption in favor of prejudgment interest, the Court addressed each of the Defendant’s arguments in turn:

“In response to Plaintiffs’ motion for prejudgment interest, Defendant first argues that Plaintiffs are not entitled to prejudgment interest because they have already received liquidated damages. It is well-settled in FLSA jurisprudence that a plaintiff cannot recover both liquidated damages and prejudgment interest because both serve the same purpose, namely to compensate employees for losses caused by delayed receipt of wages they are due. See Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 715, 65 S.Ct. 895, 89 L.Ed. 1296 (1945) (recovery of liquidated damages and prejudgment interest is “double compensation for damages arising from delay in the payment of the basic minimum wages”); see also Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 910 (3d Cir.1991) (describing similar purpose of liquidated damages and prejudgment interest); Starceski v. Westinghouse Elec. Corp., 54 F.3d 1089, 1102 (3d Cir.1995) (contrasting punitive nature of liquidated damages in ADEA case with non-punitive liquidated damages in FLSA case). Thus, there is no dispute that the court cannot award prejudgment interest on wages for which liquidated damages have been awarded.

Defendant takes the argument a step further and asserts that any award of liquidated damages prohibits any award of prejudgment interest, I disagree. The cases upon which Defendant relies merely stand for the proposition that the court cannot award both liquidated damages and prejudgment interest on the same unpaid wages. See Bowers v. Foto-Wear, Inc., No. 03-1137, 2007 WL 4086339, at *6 (M.D.Pa. Nov.15, 2007) (declining to award prejudgment interest where court awarded liquidated damages on all unpaid wages); Friedrich, 1995 WL 412385, at *4 (awarding prejudgment interest when liquidated damages were denied); Signora v. Liberty Travel, Inc., 886 A.2d 284, 286-87 (Pa.Super.2005) (finding award of liquidated damages would be duplicative where prejudgment interest was granted on same award of unpaid wages).

As previously discussed, the purpose of prejudgment interest is to compensate the plaintiff for losses resulting from the delayed payment of wages. See Brooklyn, 324 U.S. at 715; Martin, 940 F.2d at 910. Here, Plaintiffs received an award of liquidated damages under the FLSA for two years of unpaid wages owed for the credited overtime for which they had not been properly compensated. They have not received any compensation for the delayed payment of the third year of credited overtime or any of the uncompensated morning and evening time. The equities favor an award of prejudgment interest for these unpaid wages. See Brock v. Richardson, 812 F.2d 121, 127 (3d Cir.1987) (explaining the “usual equities favor” award of prejudgment interest in FLSA case).

Defendant also argues that the court’s denial of liquidated damages for the uncompensated morning and evening time under the FLSA precludes an award of prejudgment interest. See Def.’s Memo. at 4. This is incorrect. Although liquidated damages and prejudgment interest both seek to compensate the plaintiff for the delay in receiving his wages in the FLSA context, the denial of liquidated damages does not dictate the denial of prejudgment interest. In fact, in some of the cases cited by Defendant, the court awarded prejudgment interest while denying liquidated damages. See, e.g., Frie drich. In order to avoid liquidated damages, the burden is on the defendant to show that it was acting in good faith and “had reasonable grounds for believing that his act or omission was not a violation of the [FLSA].” 29 U.S.C. § 260. With respect to prejudgment interest, the Third Circuit has said that prejudgment interest is presumed unless the “usual equities in favor of such interest are not applicable.” Pignataro, 593 F.3d at 273 (citing Brock, 812 F.2d at 126). Here, although I find that Defendant had a reasonable basis for failing to compensate Plaintiffs for the morning and evening time, this does not change the fact that Plaintiffs were denied wages they were owed. The purpose of prejudgment interest is served by such an award in this case.

Defendant also seems to argue that because the court did not award liquidated damages on the additional year of credited overtime damages provided by PMWA, Plaintiffs’ are not entitled to now seek prejudgment interest on these additional unpaid wages because it gives Plaintiffs “a second bite at the apple.” See Def.’s Memo. at 9. The main problem with Defendant’s argument is that PMWA does not provide for liquidated damages and caselaw has not extended this remedy to PMWA cases. See 43 P.S. § 333.113 (damages available as civil remedy do not include liquidated damages). Accordingly, Plaintiffs properly did not seek liquidated damages under PMWA, see Pls.’ Proposed Findings and Conclusions at ¶ 96 n. 14, and the court did not award them. There is no bar to Plaintiffs’ request for prejudgment interest.

Next, Defendant argues that Plaintiff’s failure to request prejudgment interest prior to the filing of the current motion precludes such recovery. See Def.’s Memo. at 8. I disagree. In their Complaint, Plaintiffs seek “[c]ompensatory and back pay damages to the fullest extent permitted under federal and state law.” Compl. at Prayer for Relief. At the final pretrial conference, counsel agreed that submissions concerning the calculation of damages would follow the court’s findings and conclusions. In their Proposed Findings and Conclusions, Plaintiffs specifically reference prejudgment interest as an alternative to liquidated damages. See Pls.’ Proposed Findings and Conclusions at ¶ 99 n. 15. I also note that Defendant has suffered no prejudice based on the Plaintiffs’ request for prejudgment interest at this time.

In addition, Defendant argues that the court should decline to award prejudgment interest on the uncompensated morning and evening time because this is not an easily calculable fixed sum, particularly because “it was the Plaintiffs’ lack of credibility which led to the uncertainty.” Def.’s Memo. at 10. Defendant relies on Pennsylvania easel aw which states that interest is due “[w]henever a fixed sum of money is wrongfully withheld from a party to whom it is properly due.” Id. at 9 (quoting Friedrich, 1995 WL 412385, at *3). Here, Defendant argues that the calculation of prejudgment interest is made uncertain by Plaintiffs’ lack of credibility, itself. Thus, the award of prejudgment interest would be inequitable.

At trial, Plaintiffs testified that they arrived at the shop before work and performed work prior to leaving for the jobsite every workday. Defendant presented credible evidence that Plaintiffs left from the shop only 35% of the time and went directly to the jobsite from their homes 65% of the time. In fact, Defendant presented evidence identifying specific jobs for which Plaintiffs traveled directly to the jobsite. Therefore, I found that Plaintiffs were entitled to 35% of the total uncompensated morning and evening time. Although I agree that Plaintiffs are partially to blame for any uncertainty in the calculation of prejudgment interest, Defendant lost the Plaintiffs’ timesheets, see N.T. 10/13/09 at 87-88, and thereby contributed to the uncertainty.

Moreover, considering the purpose of prejudgment interest, I believe the equities favor such an award for the uncompensated morning and evening time. Plaintiffs were not paid the wages they were owed and have not had the use of that money. Thus, an award of prejudgment interest is appropriate.”