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11th Cir.: Intrastate Travel Of SuperShuttle Drivers Satisfied Motor Carrier Act Exemption, Because Many Customers Were “Through Ticketed” Based On Internet Travel Packages
Abel v. Southern Shuttle Services, Inc.
This case was before the Eleventh Circuit for the second time. Plaintiff, a former driver of Defendant Southern Shuttle Services, Inc.’s airport shuttle vans, filed the action under the FLSA seeking unpaid overtime pay. In the first appeal, the Eleventh Circuit vacated the district court’s entry of summary judgment in Southern Shuttle’s favor because Southern Shuttle’s airport shuttle service did not fall within the “taxicab exemption” to the FLSA’s overtime provisions. See Abel v. S. Shuttle Servs., Inc., 301 F. App’x 856 (11th Cir.2008). After remand, Southern Shuttle filed a second motion for summary judgment, arguing that its airport shuttle van drivers fall under the Motor Carrier Act exemption in 29 U.S.C. § 213(b)(1). The district court agreed and granted Southern Shuttle summary judgment. On appeal, the Eleventh Circuit affirmed.
The Court outlined the following facts pertinent to its inquiry:
“Southern Shuttle operates a shared-ride airport shuttle, known as “SuperShuttle,” that transports passengers to and from three South Florida airports (Miami International Airport, Palm Beach International Airport and Fort Lauderdale-Hollywood International Airport). From December 19, 2005 to June 24, 2007, Abel worked for Defendant Southern Shuttle as a shuttle driver, driving passengers to and from airports. Abel, like all shuttle drivers, was paid commission and tips, but not overtime compensation. Abel’s employment ended after he refused to transport a passenger with a payment voucher and made the passenger exit the shuttle van, in violation of Southern Shuttle’s policy.
The shuttles are large nine- and ten-person passenger vans. The shuttles pick up passengers at one of the airports and take them to any location in the area (such as a residence, office or hotel), or pick them up at any location in the area and take them to one of the airports. Shuttle drivers do not transport passengers to or from locations outside of Florida. Some shuttle passengers are transported to the airports so they can travel via air carrier to other states or countries. Other shuttle passengers are transported from the airports after having flown from other states or countries.
Many shuttle passengers arrange for shuttle transportation by contacting Southern Shuttle directly. Passengers traveling to the airport make reservations ahead of time and schedule a trip to the airport. Similarly, passengers traveling from the airport check in at a SuperShuttle airport kiosk or counter or with a curbside representative to be assigned to the next available shuttle.
Southern Shuttle’s president, Mark Levitt averred that: (1) “[a] large portion of the reservations made with Southern Shuttle are through internet package deals wherein a traveler buys a package deal from a third party company that includes airfare, hotel accommodations and transportation to and from the airport”; (2) “the traveler receives a voucher for free transportation to and from the airport and provides the voucher to Southern Shuttle in lieu of payment”; and (3) “Southern Shuttle then prepares an invoice to the third party company for payment.” These third party companies include internet travel web sites such as Expedia.com, Travelocity, Orbitz, CheapTickets, a German company called Viator, a company in the United Kingdom called Get a Bed, and American Express, among others.”
Affirming the lower court’s decision, the Eleventh Circuit reasoned:
“[T]he Supreme Court’s Morris decision involved a general cartage business that primarily transported steel around the Detroit area either within local steel plants or to and from local steel plants. 332 U.S. at 427, 68 S.Ct. at 133. A small percentage of the employer’s trips, roughly four percent, involved transporting miscellaneous freight to and from Detroit boat docks, railroad depots and freight terminals. Id. at 427 & n. 7, 68 S.Ct. at 133 & n. 7. Although these trips did not cross state lines, they nonetheless met the de minimus interstate commerce requirement because they transported freight “in interstate commerce, either as part of continuous interstate movements or of interstate movements begun or terminated in metropolitan Detroit.” Id. at 427, 432-33, 68 S.Ct. at 133, 136.
Other cases make clear that trips within a single state are made in interstate commerce when they are part of “a practical continuity of movement of the goods” in interstate commerce. Walling v. Jacksonville Paper Co., 317 U.S. at 568, 63 S.Ct. at 335 (involving wholesale distributor of paper products made outside the state but transported only to customers within the state); see also Baez, 938 F.2d at 181-82 (involving armored trucks delivering to Florida banks checks and other instruments bound for banks outside Florida); Galbreath v. Gulf Oil Corp., 413 F.2d 941 (5th Cir.1969) (involving oil company’s transport within Georgia of petroleum products originating from refineries in Texas and Mississippi); Opelika Royal Crown Bottling Co. v. Goldberg, 299 F.2d 37 (5th Cir.1962) (involving wholesale soft drink distributor transporting drinks bottled in Georgia from Alabama warehouse to Alabama customers and returning empty bottles to Alabama warehouse, where other trucks took them back to Georgia).
The Third Circuit distinguished the transportation of passengers from goods. See Packard v. Pittsburgh Transp. Co., 418 F.3d 246 (3d Cir.2005). The employer in Packard provided transportation to the elderly and disabled in Allegheny County, which included trips to train and bus stations and to the airport. Id. at 248-49. The Third Circuit concluded that this transportation service did not fall within the Secretary’s jurisdiction because it was not “in practical continuity with a larger interstate journey.” Id. at 258. Because Morris involved transportation of goods not passengers, the Third Circuit looked at cases arising in other contexts that defined interstate transportation of passengers, including United States v. Yellow Cab Co., 332 U.S. 218, 67 S.Ct. 1560, 91 L.Ed. 2010 (1947), overruled on other grounds by Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984), a Sherman Act case.
In Yellow Cab, the Supreme Court described interstate commerce as “an intensely practical concept drawn from the normal and accepted course of business.” Id. at 231, 67 S.Ct. at 1567. Because “the limits of an interstate shipment of goods” may be different than “the commonly accepted limits of an individual’s interstate journey,” courts must “mark the beginning and end of a particular kind of interstate commerce by its own practical considerations.” Id. In light of these practical considerations, the Supreme Court concluded that, “in the absence of some special arrangement,” a taxi ride to or from a railroad station at the beginning or end of an interstate journey ordinarily is a local trip that is not within interstate commerce. Id. at 231-32, 67 S.Ct. at 1567. However, where the railroad “contract[s] with the passengers to supply between-station transportation in Chicago,” the taxi ride “is clearly a part of the stream of interstate commerce.” Id. at 228, 67 S.Ct. at 1565-66. The Supreme Court explained that “[w]hen persons or goods move from a point of origin in one state to a point of destination in another, the fact that a part of that journey consists of transportation by an independent agency solely within the boundaries of one state does not make that portion of the trip any less interstate in character.” Id. at 228, 67 S.Ct. at 1566.
Relying on the distinctions drawn in Yellow Cab, the Third Circuit noted that the transportation of the elderly and disabled in Packard “involves no joint fare or ticketing arrangement, and no prior arrangement of any kind, contractual or otherwise, with the railroads, airlines, or other companies.” Packard, 418 F.3d at 258. The Third Circuit cited “through ticketing” as “one example of a common arrangement involving both intra and interstate portions of passenger transport” but concluded that it was “not the only means of establishing that passenger transport operating intrastate is in practical continuity with a larger interstate journey.” Id. (emphasis omitted). Highlighting the “lack of coordination with other transportation,” such as through “a prepackaged tour,” the Third Circuit concluded that the transportation service in Packard was “purely intrastate.” Id.
4. Southern Shuttle
Guided by the interstate commerce principles in Walters, Morris and Yellow Cab, we conclude that the purely intrastate transport of passengers to and from an airport may, under certain circumstances, constitute interstate commerce and thus bring the transportation company within the jurisdiction of the Secretary of Transportation. Those circumstances are present here.
Many of Southern Shuttle’s passengers to and from the airport have either just flown from, or are about to fly to, places outside the state of Florida. A large portion of Southern Shuttle’s reservations are made via travel websites on the internet. Travelers buy package deals from these internet travel companies that include hotel accommodations and airfare in addition to transportation to and from the airport. The internet travel companies provide their package-deal customers with a voucher for free airport transportation, which the customers use to board Southern Shuttle’s airport shuttles. Southern Shuttle then uses the collected vouchers to invoice the internet travel company for payment. In other words, Southern Shuttle’s local transport of these package-deal travelers has a “practical continuity of movement” with the overall interstate journey.
Furthermore, Southern Shuttle’s arrangement with internet travel companies to provide airport shuttle service for their package-deal customers meets the “common arrangement” requirement discussed in Walters. Indeed, Southern Shuttle’s voucher system resembles in many respects the voucher system the bus company used for cruise ship passengers in Walters. In sum, we conclude that Southern Shuttle has shown that it is subject to the Secretary of Transportation’s jurisdiction under the MCA.
C. Secretary’s MCA Jurisdiction over Abel’s Work-Related Activities
We next address the second requirement: whether the Secretary’s jurisdiction extends to Abel’s work-related activities at Southern Shuttle. To satisfy this requirement, Southern Shuttle must show that Abel “engage[d] in activities of a character directly affecting the safety of operation of motor vehicles in the transportation on the public highways of passengers or property in interstate or foreign commerce within the meaning of the Motor Carrier Act.” 29 C.F.R. § 782.2(a). Abel does not dispute that, as an airport shuttle driver, he engaged in activities that directly affected the safety of operation of motor vehicles in the transportation of passengers on the public highways. Thus, the only issue presented is whether Abel’s activities as an airport shuttle driver constituted “interstate commerce” within the meaning of the MCA. Here, the issue is easily resolved because Abel performed Southern Shuttle’s core airport shuttle transport activity. Having already concluded that Southern Shuttle’s airport shuttle service was transportation of passengers in interstate commerce that subjected it to the Secretary’s jurisdiction, we conclude that Abel’s activities in driving the airport shuttle also constitute interstate commerce.”
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Oregon State Minimum Wage To Rise By .10¢ Per Hour In January, Stateman Journal Reports
StatemanJournal.com is reporting that Oregon is set to raise the State Minimum Wage by .10¢ per hour in January.
“Oregon’s minimum wage will rise to $8.50 per hour on Jan. 1, State Labor Commissioner Brad Avakian said Monday.
The 10-cent increase mirrors a 1.15 percent increase in the Consumer Price Index since August 2009. Oregon’s minimum wage rate has been $8.40 per hour since January 2009.
Washington, where the minimum wage is currently $8.55 per hour, will announce its adjustment on Sept. 30.”
According to the story, “Ballot Measure 25, enacted by Oregon voters in 2002, requires a minimum wage adjustment annually based on changes in inflation as measured by the Consumer Price Index. The Commissioner of the Bureau of Labor and Industries is directed to adjust the minimum wage for inflation every September, rounded to the nearest five cents.”
To read the entire article, click here.
Two Boca Raton Business Owners Accused Of Slavery Plead Guilty, Palm Beach Post Reports
The Palm Beach Post reports that:
“Two Boca Raton business owners accused of pressing Filipino workers into slavery pleaded guilty to federal criminal charges, the U.S. Justice Department announced today.
Sophia Manuel, 41, and Alfonso Baldonado Jr., 45, owners of Quality Staffing Services Corporation, pleaded guilty to conspiring to hold 39 Filipino nationals in compelled service at country clubs and hotels in South Florida, a Justice Department news release stated. A sentencing date is pending.
Manuel also pleaded guilty to making false statements to the U.S. Department of Labor in an application to obtain foreign labor certifications and visas, the release stated.
Manuel and Baldonado pressed the Filipino nationals into work for little or no pay, forced them to sleep on kitchen and garage floors, fed them rotten vegetables and chicken innards, and threatened to have them deported, according to court documents.”
To read the entire article, click here.
S.D.Ohio: Inclusion Of Maître D’ In Tip Pool Not Necessarily Illegal; Evidence Demonstrated Maître D’ Lacked Management Duties To Make Him An FLSA Employer, If He Did Not Hire Or Fire
Strange v. Wade
This case was before the court on plaintiff’s motion for summary judgment regarding a variety of issues. Although the court granted the motion in some respects, as discussed here, it denied the motion with respect to plaintiff’s claim that defendant’s inclusion of the maître d’ in its tip pool was illegal and invalidated the tip pool. The court held that on the record before it, it was not possible to conclude that the maître d’ was a management employee rather than a properly tipped service employee.
Discussing this issue the court reasoned:
“The FLSA expressly prohibits employers from participating in employee tip pools. “Congress, in crafting the tip credit provision of section 3(m) of the FLSA did not create a middle ground allowing an employer both to take the tip credit and share employees’ tips.” Chung v. New Silver Place Rest., Inc., 246 F.Supp.2d 220, 230 (S.D.N.Y.2002); Wajcman v. Investment Corp. of Palm Beach, No. 07-80912-CIV, 2008 WL 783741, *3 (S.D.Fla. March 20, 2008) (“The theory here is that employees who exercise substantial managerial authority over the day to day operations of the business are functionally the ‘employers’ themselves”). Where employers participate in a tip pool, the pool is invalid. See Ayres v. 127 Restaurant Corp., 12 F.Supp.2d 305 (S.D.N.Y.1998) (tip pool violated FLSA where general manager, who had authority to suspend, hire and fire employees and analyze payroll costs, was allowed to participate in the pool).
Plaintiff argues that Pigall’s tip pool was invalid because Brown was a manager and shared in the pool. (Doc. 22-1.) In support of its argument, Plaintiff points to Brown’s guaranteed compensation, his participation in the opening of the restaurant, his authority to train, schedule and supervise the wait staff, and his authority to hire and fire employees. (Id.) Plaintiff cites to the depositions of Brown and de Cavel, wherein both men testified that Brown was considered part of the restaurant’s management team. (de Cavel Dep. 50:13-14; Brown Dep. 59:17-22.) These facts, Plaintiff argues, unequivocally establish that Brown was an employer for purposes of the FLSA. See Ayres, 12 F.Supp.2d at 307-08 (general manager of restaurant, who had full authority to suspend or terminate employees, supervised wait staff, made hiring decisions, assumed responsibility for budget and received weekly salary of $2000 was not an employee who “customarily and regularly received tips” under the FLSA).
Defendants agree that Brown participated in the tip pool but argue that he was not a manager and, thus, the tip pool was not invalid by virtue of the fact that Brown participated in it. Defendants point to Dole v. Continental Cuisine, Inc., 751 F.Supp. 799 (E.D.Ark.1990), to support their contention that Brown cannot be considered an employer under the Act. In Continental Cuisine, the individual in question was the maître d’ of the restaurant alleged to have violated the FLSA. 751 F.Supp. at 802-03. The maître d’ was responsible for setting up the dining room, seating and greeting customers, serving the first drink to customers, scheduling shifts for the wait staff, interviewing applicants for positions as waiters and waitresses, and recommending that persons be hired or fired. Id. at 800. Because the maître d’ did not have final authority to hire and fire employees, set wages, control restaurant operations, or control payroll, he was not considered an employer for purposes of the FLSA. Id. at 803. Defendants argue that, similar to the maître d’ in Continental Cuisine, Brown did not have the requisite managerial authority to be considered an employer under the Act.
The Court agrees with Defendants that there is a genuine issue of material fact as to whether Brown is an employer under the FLSA. Although the parties appear to agree on many of the duties that Brown performs, there is conflicting testimony regarding whether Brown had full authority to hire and fire workers and how much control Brown exercised at the restaurant. For example, although Brown testified that he made final hiring decisions, he acknowledged that he was “not at liberty to hire someone” without de Cavel first meeting with that person. (Brown dep. 53:3-54:15.) Meanwhile, de Cavel testified that Brown was part of his management team and “fire[d] a few people without [his] agreement” (de Cavel dep. 50:13-14; 20:9-10). Conversely, Brown testified that he had no responsibility “for any decision that involved spending money.” (Brown dep. 51:19-20.) Based on the current record, and construing all facts in favor of Defendants, the Court believes that genuine issues of material fact preclude summary judgment on this issue. Plaintiff’s motion for summary judgment regarding the validity of the restaurant’s tip pool is DENIED.”
To read the entire decision, click here.
EDITOR’S NOTE: In a recent decision going one step further, a court in the Northern District of Texas held on similar evidence, that as a matter of law, the inclusion of a maître d’ did not render a tip pool illegal. Rudy v. Consolidated Restaurant Companies, Inc., 2010 WL 3565418 (N.D.Tex. Aug. 18, 2010).
It is clear from both of these decisions that while there is room for the argument that inclusion of a maître d’ may render an otherwise valid tip pool invalid, it is a very fact intensive issue and plaintiff attorneys would be wise to fully develop their factual record on issues of hiring/firing powers if they prosecute these claims.
Click here, to read more about the rules, regulations and laws applicable to Tipped Employees.
D.Minn.: “Insurance Investigators” Were Non-Exempt, Because Their Duties Lacked Independent Judgment and Discretion
Ahle v. Veracity Research Co.
Among other motions, the case was before the Court on the parties’ cross-motions for summary judgment. Of note here, the parties asked the Court to determine whether Plaintiffs, who were “Insurance Investigators” qualified as Administrative Exempt or not. Holding that their duties did not require the independent judgment and discretion necessary, the Court held that Plaintiffs were non-exempt under the FLSA.
Examining the Plaintiffs’ duties the Court explained:
“Veracity is a full-service investigative firm specializing in insurance defense investigations. Answer to Compl., Defenses and Am. Counterclaim (Counterclaim) [Docket No. 29] ¶ 5. Named Plaintiffs Ahle, Jordan, and Wiseman formerly worked as investigators for Veracity. Id. ¶¶ 6-8; Collective Action Compl. [Docket No. 1] ¶¶ 4-6. Approximately 150 other individuals have opted into this litigation. The plaintiff class members are current or former investigators for Veracity.
Veracity is hired by insurance companies, third-party administrators, and law firms to investigate suspect claims. Morgan Decl., May 13, 2010 [Docket No. 186], Ex. 1 (Foster Dep.) 45:22-46:8. Veracity categorizes its investigators by title and level; the titles and levels that are at issue in this litigation are surveillance investigators (levels 1-3), claims investigators (level 4), and senior field investigators (level 5). Morgan Decl., May 13, 2010, Ex. 2 (Doyle Dep.) 60:10-19. Surveillance investigators primarily work in the field conducting surveillance, undercover investigations, and background checks. Id. 50:15-21; Foster Aff ., July 7, 2009 [Docket No. 59], ¶ 7. Claims investigators generally perform the same duties as surveillance investigators, but they also interview witnesses, obtain statements, take photographs, and, occasionally, perform sales functions. Foster Aff., July 7, 2009, ¶¶ 8, 10-11. Senior field investigators supervise and manage surveillance and claims investigators in the field, train new investigators, and perform occasional promotion and sales duties. Id. ¶ 13. Thus, all of the titles and levels of investigators at issue have in common some surveillance duties, although the parties dispute whether the primary duty of investigators in each of these titles and levels is surveillance.
After receiving an assignment from Veracity but before driving to the surveillance site, the investigator typically completes several tasks including reviewing the assignment sheet, performing a background check on the subject, matching the name of the subject to an address, mapping out directions to the surveillance site, and ensuring that the investigator’s camera, laptop computer, and cellular phones are fully charged. Morgan Decl., May 13, 2010, Ex. 8 at VRC001063-64. According to Plaintiffs, investigators also are required to perform maintenance including cleaning the windows and filling the fuel tank on their vehicles before leaving for a surveillance site. Morgan Decl., May 13, 2010, Exs. 13, 14, ¶ 6. At the surveillance site, investigators monitor and video record the subject and take notes of their observations. Morgan Decl., May 13, 2010, Ex. 13, ¶ 5. Claims investigators may also interview witnesses, obtain statements, and collect documents. Foster Dep. 149:7-23.
Investigators record their activities in a daily investigative report (“DIR”). Morgan Decl., May 13, 2010, Exs. 13, 14 ¶ 7. An investigator’s DIR discloses when the investigator left home for the surveillance site, the drive time, the arrival time, observation notes, the departure time from the site, and the arrival time back at the investigator’s home. Id. Once completed, the investigator sends the DIR online to Veracity. Id. Investigators send any video recording taken during the day to their managers by depositing the tapes at a FedEx drop-off location. Id .
The dispute in this action centers on whether Plaintiffs, given their daily duties, were properly classified as FLSA “exempt” employees who are not required to be paid overtime for work in excess of forty hours per week. Based on Veracity’s founders’ view of the “industry standard,” Veracity classified its investigators as exempt when it began business in 1995. Doyle Dep. 15:10-17:6. Plaintiffs initiated this action on January 8, 2009, claiming that they were improperly classified as exempt and, therefore, were wrongfully denied compensation for overtime hours allegedly worked while employed by Veracity as investigators.”
After concluding that it lacked information sufficient to determine whether the second prong of the Administrative Exemption was met or not here, the Court held that Defendant could not, as a matter of law, establish that Plaintiffs’ activities required the independent judgment and discretion required for application of the exemption:
“Discretion and Independent Judgment
Although claims investigations is directly related to the management or general business operations of Veracity’s clients, such a primary duty must also involve the exercise of discretion and independent judgment with respect to matters of significance for claims investigators to meet the final element of the definition of administrative employees. DOL regulations explain that “the exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered.” 29 C.F.R. § 541.202(a).
Factors to be considered when determining whether an employee exercises discretion and independent judgment with respect to matters of significance include, but are not limited to: whether the employee has authority to formulate, affect, interpret, or implement management policies or operating practices; whether the employee carries out major assignments in conducting the operations of the business; whether the employee performs work that affects business operations to a substantial degree, even if the employee’s assignments are related to operation of a particular segment of the business; whether the employee has authority to commit the employer in matters that have significant financial impact; whether the employee has authority to waive or deviate from established policies and procedures without prior approval; whether the employee has authority to negotiate and bind the company on significant matters; whether the employee provides consultation or expert advice to management; whether the employee is involved in planning long- or short-term business objectives; whether the employee investigates and resolves matters of significance on behalf of management; and whether the employee represents the company in handling complaints, arbitrating disputes or resolving grievances. Id. § 541.202(b). “The exercise of discretion and independent judgment implies that the employee has the authority to make an independent choice, free from immediate direction or supervision,” but “employees can exercise discretion and independent judgment even if their decisions or recommendations are reviewed at a higher level,” and discretion and independent judgment can “consist of recommendations for action rather than the actual taking of action.” Id. § 541.202(c). However, “[t]he exercise of discretion and independent judgment must be more than the use of skill in applying well-established techniques, procedures or specific standards described in manuals or other sources.” Id . § 541.202(e).
In support of their argument that the duties of the claims investigators do not involve the exercise of discretion and independent judgment regarding matters of significance, Plaintiffs again cite Gusdonovich, as well as Fenton v. Farmers Insurance Exchange, 663 F.Supp.2d 718 (D.Minn.2009), a case from this district. In Gusdonovich, the court concluded that the insurance “investigators were merely applying their knowledge and skill in determining what procedure to follow, which … is not the exercise of discretion and independent judgment contemplated by the [DOL] regulation[s].” 705 F.Supp. at 265.
The plaintiffs in Fenton were insurance investigators employed by a company to investigate potentially fraudulent insurance claims. 663 F.Supp.2d at 721. The court held that the job duties of such “special investigators” did not involve a sufficient exercise of discretion and independent judgment to qualify for the administrative exemption. Id. at 726. Instead, the special investigators’ job duties were “sufficiently aligned with the employment circumstances” of (1) the insurance investigators who were the plaintiffs in Gusdonovich, (2) the employees performing background investigations discussed in the 2005 DOL Opinion Letter, and (3) the police investigations addressed in DOL regulation 29 C.F.R. § 541.3(b)(1). Id. at 726. In reaching that conclusion, the court noted that the employer’s written guidelines explained in great detail how the investigators should approach issues that often arise in conducting and documenting an investigation, there was “nothing in the residual discretion available to investigators that [was] sufficient to justify exemption,” and there was no dispute that the investigator’s subjective opinions and conclusions were excluded from their written reports. Id. at 726-27. In addition, written guidelines instructed the investigators to include, with equal detail and emphasis, all inculpating and exculpating information in their reports, and investigators had no authority to determine whether a claim should be denied or whether the insurance company should seek to negotiate a settlement. Id. at 727.
Like in Gusdonovich and Fenton, Plaintiffs’ duties as claims investigators for Veracity do not involve a sufficient degree of discretion and independent judgement with respect to matters of significance. Claims investigators do not have the discretion to decide when to conduct an investigation, where to conduct it, or the length of time to spend on it. Morgan Decl., May 13, 2010, Ex. 13, ¶ 6. In addition, Veracity does not allow claims investigators to (1) make any recommendations or give their opinions as to whether fraud occurred when submitting their DIRs or (2) recommend or participate in the decision whether to deny or pay a claim or whether to conduct further investigation. Id. ¶ 8. Furthermore, Plaintiffs’ declarations state that they received guidelines and manuals describing how claims investigations are conducted and that they are “expected to follow such guidelines and manuals when conducting day-to-day investigations.” Id. ¶ 11. For example, a Veracity document entitled “Introduction to Claims Investigation and Responsibilities” informs claims investigators as follows:
Your job will be to obtain facts that relate to a specific claim. This will include, but is not limited to, taking recorded statements from the person making the claim …, witnesses to the specific incident, [and] persons that may have direct knowledge about the incident…. Your responsibility is to get the facts of the case by means of questioning or research. At times you will be called upon to obtain needed documentation to include medical records, receipts …, employment information, and police reports. You will have to develop comprehensive investigative and communication skills, and you must be able to decide which leads must be followed, and which ones should be reported but need no further effort.
One of the most challenging areas of [your job as a claims investigator] will be your ability to transfer the information that you gather into a coherent and informative report…. [I]n most cases you will not have the opportunity to speak directly with the client and therefore your report must be accurate, concise, easily understood, and complete. Morgan Decl., May 13, 2010, Ex. 9 at VRC001154.
The manual includes outlines to follow when taking a recorded statement in all investigations and in particular types of investigations (e.g., employment injuries, motor vehicle accidents resulting in deaths, products liability, property loss or theft, vehicle or property damage). Id. at VRC001167, 1176, 1216, 1230, 1233, 1240. Although claims investigators are not required to follow the outlines verbatim, the outlines do command, in several instances, that some specific information is not optional, employing language such as, “must be on every recorded statement,” “must be covered,” or “must be asked.” Id. at VRC001167, 1176, 1216, 1230, 1233, 1240. Furthermore, the outlines instruct investigators to “obtain all of the facts,” and remind the claims investigators that it is Veractiy’s responsibility to “obtain the information and then let the [client] and their legal department make the determination.” Id. at VRC001230.
The record establishes that (1) Veracity’s written guidelines explain in great detail how claims investigators should conduct an investigation, (2) the claims investigators are required to obtain all the facts regardless of their impact, and (3) the claims investigators do not include their own opinions, conclusions, or recommendations regarding the decision whether to pay or deny the claim. Because the claims investigators do not provide opinions and conclusions about their investigative observations, they are significantly different than the insurance investigators in Foster v. Nationwide Mutual Insurance Co. See 695 F.Supp.2d 748, 761 (S .D.Ohio 2010) (concluding that genuine issues of material fact exist as to whether the plaintiffs, insurance investigators, exercised discretion and independent judgment because “[m]ost significantly, there is a factual dispute as to whether Special Investigators’ primary duty encompasses providing their opinions and conclusions regarding their investigative findings”). Admittedly, claims investigators do make decisions regarding the precise manner in which they conduct an investigation-creating action plans, deciding who to interview, what documents to review, what leads to follow, and whether to recommend hiring an expert-however, such decisions are more appropriately viewed as choices among “established techniques, procedures or specific standards described in manuals or other sources,” which do not amount to the exercise of discretion and independent judgment with respect to matters of significance. 29 C.F.R. § 541.202(a), (e); see also 2005 Opinion Letter at 4-5 (advising that “prioritizing the pursuit of particular leads, assessing whether the leads … have provided information that requires further investigation, determining which potential witnesses to see and which documents to review, and making similar decisions that promote effective and efficient use of … work time in performing assigned investigative activities” do not involve the exercise of discretion and independent judgment with respect to matters of significance); Auer v. Robbins, 519 U.S. 452, 461 (1997) (stating that the DOL’s interpretation of its own regulations are “controlling unless plainly erroneous or inconsistent with the regulation”).
The cases cited by Veracity are unavailing. In Stout v. Smolar, the court viewed evidence that a private investigator had the authority to make decisions as to how to “investigate the scene of an accident, including determining what materials to be preserved and whether expert witnesses would be required” as showing that the investigator exercised discretion and independent judgment. No. 1:05-CV-1202, 2007 WL 2765519, at *6 n. 2 (N.D.Ga. Sept. 18, 2007). The court also commented that treating insurance investigators as not qualifying for the administrative exemption “would appear contrary to the insurance claims adjuster example of administrative exemption cited by the [DOL].” Id. This Court finds more persuasive the reasoning in DOL regulations, cases such as Fenton, and the 2005 Opinion Letter, which suggest that having discretion over the types of matters discussed in Stout does not equate to having discretion and independent judgment with respect to matters of significance. See Foster, 695 F.Supp.2d at 761 (recognizing, in light of the 2005 Opinion Letter, that deciding who to interview, what documents to review, what leads to pursue, and “similar tactical matters” were “fact-finding logistics [that] do not necessarily rise to the level of discretion and independent judgment contemplated by DOL regulations, for they do not amount to matters of significance”).
Equating Veracity’s claims investigators to claims adjusters is not a fair comparison or particularly helpful. The core function of a claims adjuster is to decide whether and to what extent an insurance claim should be paid, a task that requires considerable exercise of discretion on a matter of significance. Inclusion of the term “adjuster” in the title of the job strongly suggests that conclusion. All employees exercise some discretion in deciding how to perform their jobs, and the way in which they exercise that discretion likely will affect matters of significance. In the case of claims investigators, how they exercise their discretion in conducting an investigation will impact or affect how a claims adjuster working for one of Veracity’s clients decides the significant matter of the value of the claim. But an exercise of discretion that impacts or affects a matter of significance is not exercising discretion with respect to a matter of significance. If the rule were otherwise, all employees would arguably meet the third element of the definition of administrative employees. Because the analogy to claims adjusters is not persuasive, Veracity’s reliance on cases such as Roe-Midgett, 512 F.3d at 874, where the Seventh Circuit held that claims adjusters routinely used their discretion and independent judgment to make choices that impact damage estimates, settlement, and other matters of significance, does not alter the result here.
The Court concludes that Veracity has failed to demonstrate a triable issue as to whether the duties of claims investigators include the exercise of discretion and independent judgment with respect to matters of significance. Because claims investigators do not meet the third element of the definition in 29 C.F.R. § 541.200(a), they do not qualify for the administrative exemption.”
Not discussed here, the Court also held that the Plaintiffs lacked the requisite duties to be deemed outside sales exempt. Further, the Court held that certain time claimed as compensable by the Plaintiffs was not and that the appropriate method for determining Plaintiffs damages–as “salaried misclassified” employees was the Fluctuating Workweek (“FWW”), adopting the reasoning in the recent Seventh Circuit decision discussed here. Lastly, the Court denied Defendant’s motion for decertification of the collective action.
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5th Cir.: As Plaintiffs’ Joint Employer, Staff Leasing Company Qualified As “Motor Carrier” Subject To MCA Exemption From FLSA’s Overtime Pay Requirements, Because “Actual” Employer Was A “Motor Carrier”
Songer v. Dillon Resources, Inc.
This case was before the Fifth Circuit on Plaintiffs’ appeal of an Order granting Defendant, a staff leasing company, summary judgment finding that they were entitled to assert the MCA exemption, because the company they leased Plaintiffs to was a motor carrier entitled to assert the exemption. The Fifth Circuit affirmed the decision, essentially holding that the staff leasing company Defendant was entitled to assert the exemption of the actual employer.
Plaintiffs did not dispute that Sunset Ennis and Sunset Logistics (the “actual” employers), two trucking companies, were motor carriers subject to the Secretary’s power. Instead, they argued that Dillon, a staff leasing agency, was not a motor carrier within the meaning of the MCA. Defendants assert that because the Sunset companies are motor carriers and the Sunset companies are joint employers with Dillon, Dillon is also a motor carrier within the meaning of the MCA.
Reasoning that the the staff leasing company was entitled to assert the Motor Carrier Exemption, if the “actual” employer was entitled to assert same, the Fifth Circuit stated:
“While Fifth Circuit precedent is limited on this issue, other courts have held that a staff leasing company who provides employees for a motor carrier and operates as a joint employer with the carrier meets the requirements of 29 C.F.R. § 782.2(a)(1). See, e.g., Moore v. Universal Coordinators, Inc., 423 F.2d 96, 99-100 (3d Cir.1970) (holding that truck drivers were employees of both noncarrier truck driver leasing company and private motor carrier and therefore MCA exemption extended to leasing company). The Moore court analyzed the MCA and the FLSA, and determined that Congress intended to regulate employees of carriers in the interest of safety. Id. at 99. Therefore, the Secretary’s power had to extend to leased drivers and to the leasing company that employed them. Id. at 99-100.
In a more recent case, the district court cited Congressional safety concerns as the rationale for extending the exemption:
The [MCA] exemption, as explained in Moore, safeguards the Secretary[‘s] authority to regulate the qualifications and maximum hours of employees whose work affects the “safety of operation” of a motor carrier…. Refusing to extend the [MCA] exemption to the staffing agency defendants would therefore facilitate what Congress sought to prohibit-circumvention of the Secretary’s regulatory authority. Tidd v. Adecco USA, Inc., No. 07-11214-GAO, 2010 WL 996769, at *2 (D.Mass. Mar.16, 2010) (citing Moore, 423 F.2d at 98-99).
Applying Moore and Tidd, the evidence supports a finding that Dillon, as joint employer with Sunset Logistics and Sunset Ennis, is a carrier subject to the Secretary’s jurisdiction. Dillon is a staff leasing company who provides drivers to Sunset Logistics and Sunset Ennis to fulfill interstate work orders from clients for compensation. Our review of the record reflects the following evidence: Dillon hires and trains the drivers and is responsible for their payroll, the Sunset companies are responsible for control of the drivers’ day-to-day operations, and Dillon is reimbursed for wages and benefits paid to the drivers and receives a fee when the drivers are assigned. These facts are similar to Tidd, in which the staffing agency defendants were held as joint employers to FedEx, a motor carrier, and, therefore, subject to the Secretary’s jurisdiction. See Tidd, 2010 WL 996769, at *2-3. Accordingly, we hold that the first requirement for jurisdiction under the MCA-i.e., that Plaintiffs work for carriers engaged in interstate commerce-is met. See Barefoot, 1994 WL 57686, at *2.”
To read the entire opinion, click here.
3d Cir.: Flat-rate Payment Scheme Constituted Commissions; Nutrisystem Sales Associates 7(i) Exempt
Parker v. Nutrisystem, Inc.
This case was before the Third Circuit on Plaintiffs appeal of summary judgment in favor of Defendant. Plaintiffs were sales associates, employed in Defendant’s call center, who completed sales orders on behalf of Defendant. It was undisputed that Defendant’s business was “retail” in nature. Thus, the only issue before the court was whether the District Court correctly concluded that NutriSystem’s method of compensating its call-center employees constituted a commission under the FLSA so that Nutrisystem was exempt from paying Appellants overtime. The court concluded that the compensation constituted a commission and affirmed the ruling below.
Describing the pay methodology at issue, the Court said:
“In March 2005, NutriSystem implemented the compensation scheme for sales associates at issue in this case. Under the plan, sales associates receive the greater of either their hourly pay or their flat-rate payments per sale for each pay period. The hourly rate is $10 per hour for the first forty hours per week, and $15 per hour for overtime. The flat rates per sale are $18 for each 28-day program sold via an incoming call during daytime hours, $25 for each 28-day program sold on an incoming call during evening or weekend hours, and $40 for each 28-day program sold on an outbound call or during the overnight shift. These flat rates do not vary based on the cost of the meal plan to the consumer.
The majority of the sales associates are compensated based on these flat rates, not their hourly earnings. Under the compensation plan, sales associates do not receive overtime compensation when they are paid the flat rates for the sales made. There is no change to the flat rates when a sales associate works more than forty hours in one week.”
In affirming the decision that this pay constituted commissions under the FLSA, for the purposes of the 7(i) exemption, the Court reviewed the legislative history of the applicable regulations, the limited case law and the DOL’s opinions and reference materials.
Dissenting, Judge Cowen took issue with the majority’s holding that commissions were proportional to the sales prices of the good sold here. First, Judge Cowen noted:
“Unlike the majority, I would afford Skidmore deference to the Department’s view that in order to constitute a commission for purposes of § 7(I), the amount of compensation paid to the employee must be proportionally related to the amount charged to the customer. Because NutriSystem failed to demonstrate the requisite proportionality, its compensation plan cannot be considered a bona fide commission plan under § 7(I).”
Applying this definition to commissions, Judge Cowen reasoned that here, because the flat rates were not proportional to the products sold, the flat rates did not constitute commissions:
“The majority then concludes that NutriSystem’s compensation plan meets this definition because the payments made to its sales associates are “sufficiently proportional” to the cost to the consumer. Id . While I do not object to the majority’s contention that § 7(I) requires a proportional relationship between employee compensation and customer costs, I cannot agree that NutriSystem has demonstrated such a proportional relationship here.
It is undisputed that NutriSystem’s meal plans vary in price depending on the type of meal plan the customer chooses and the length of the customer’s commitment. It is likewise undisputed that the flat-rate fee paid to a sales associate does not vary depending on the type of plan the customer chooses or the length of the customer’s commitment. NutriSystem clearly has not demonstrated that the flat-rate fees are proportionally related to the cost to the customer. While neither the plaintiffs nor the Department suggests that a commission must be based on a strict percentage of the end cost to the consumer, the flat-rate payments in this case do not correspond at all with the end cost to the consumer. Rather, the flat-rate payments are based on the time the sale is made and whether it results from an incoming or outgoing call. The fact that NutriSystem can perform math to portray its flat-rate fees as percentages of customer costs does not transform the fees into commissions.
Therefore I am unable to agree with the majority and would reverse and remand for further proceedings.”
To read the entire decision and dissent click here.
D.Neb.: Defendant Limited To Full Discovery For 2 Plaintiffs and Representative Discovery From 15% of Class Where Almost 300 Opt-ins
Morales v. Farmland Foods, Inc.
This matter was before the court on the plaintiffs’ Motion for Protective Order, seeking protection from responding to discovery requests including interrogatories, requests for production, and requests for admission served on nearly all of the almost 300 FLSA opt-in plaintiffs.
Granting Plaintiffs’ Motion, the court reasoned:
“As a starting point, “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense-including the existence, description, nature, custody, condition, and location of any documents …” Fed.R.Civ.P. 26(b)(1). However, “[t]he District Court does have discretion to limit the scope of discovery.” Credit Lyonnais v. SGC Int’l, Inc ., 160 F.3d 428, 431 (8th Cir.1998). To determine if a matter is discoverable, the court must first evaluate whether the sought discovery is relevant to a claim or defense. Accordingly, although limited, relevant evidence includes “any matter that could bear on, or that reasonably could lead to other matter that bears on” the claims or defenses of any party. Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978). “Some threshold showing of relevance must be made before parties are required to open wide the doors of discovery and to produce a variety of information which does not reasonably bear upon the issues in the case.” Hofer v. Mack Trucks, Inc., 981 F.2d 377, 380 (8th Cir.1992). “Determinations of relevance in discovery rulings are left to the sound discretion of the trial court and will not be reversed absent an abuse of discretion.” Hayden v. Bracy, 744 F.2d 1338, 1342 (8th Cir.1984). Once the requesting party meets the threshold relevance burden, generally “[a]ll discovery requests are a burden on the party who must respond thereto. Unless the task of producing or answering is unusual, undue or extraordinary, the general rule requires the entity answering or producing the documents to bear that burden.” Continental Ill. Nat’l Bank & Trust Co. of Chicago v. Caton, 136 F.R.D. 682, 684-85 (D.Kan.1991) (citation omitted).
The defendant has met its burden of showing the discovery sought is relevant to the claims and defenses in this matter, in a broad sense. Similarly, the plaintiffs have met their burden to show the plaintiffs are subject to unusual, undue or extraordinary burden by having to respond on behalf of each separate opt-in class member. Allowing the defendant to obtain the discovery sought from each opt-in class member is inappropriate in this FLSA lawsuit. See Reich v. Homier Distr. Co., 362 F.Supp.2d 1009, 1015 (N.D.Ind .2005) (“The individual discovery required … would destroy ‘the economy of scale envisioned by the FLSA collective action procedure.’ ”). The defendant seeks to obtain information about the differences between each opt-in class member, however the defendant fails to explain how the representative sampling method suggested by the plaintiffs is deficient for the purpose of establishing (or refuting) similarity between the opt-in class members. Furthermore, the extensive nature of the discovery sought outweighs the benefit. See Geer v. Challenge Fin. Investors Corp., No. 05-1109, 2007 WL 1341774 (D.Kan. May 4, 2007) (finding “the burden and expense the requested discovery (depositions of [each of the 272] opt-in plaintiff[s] ) would impose on Plaintiffs clearly outweighs the likely benefit of such discovery”); see also Fast v. Applebee’s Int’l, Inc., No. 06-4146, 2008 WL 5432288 (W.D.Mo. Dec. 31, 2008) (denying motion to compel interrogatory responses from each opt-in plaintiff). The plaintiffs’ generous proposal of limiting discovery to a random sample of fifteen percent of the opt-in class members is reasonable. See Nerland v. Caribou Coffee Co., Inc., 564 F.Supp.2d 1010, 1016 (D.Minn.2007) (noting the court had “authorized individualized discovery for eighty-five randomly selected opt-in plaintiffs through completion of questionnaires and a limited number of depositions”). The court will not determine the content of the discovery requests as it appears the parties will be able to resolve the issue without court intervention. Upon consideration,
IT IS ORDERED:
The plaintiffs’ Motion for Protective Order (Filing No. 158) is granted as follows.
1. The defendant may take full discovery of the two named plaintiffs.
2. The defendant may serve discovery on a random sample of fifteen percent of the FLSA opt-in class members.
3. No opt-in class member will be allowed to testify at trial unless first responding to the discovery discussed in paragraph 2 above.”
6th Cir.: Although Changing Into PPE At Food-Processing Plant Is “Changing Clothes” and Excluded Under 203(o), It Is A Principle Activity And Begins The “Continuous Workday”
Franklin v. Kellogg Co.
This case was before the Sixth Circuit on appeal from the order at the court below granting Defendant summary judgment in all respects with regard to Plaintiff’s claims that she was entitled to be paid for changing into required personal protection equipment (“PPE”) each day, before she could perform their work on Defendant’s plant floor. The Court affirmed the lower court’s holding that time spent changing into the PPE could be properly excluded by continued practice under 203(0), but remanded the case to determine whether there was significant time the that elapsed after the donning of the PPE, before Plaintiff was put “on the clock,” because such time was compensible under the “continuous workday” if it was not deemed de minimus.
“B. Post-Donning/Pre-Doffing Walking Time
Franklin argues that if we conclude that her time spent donning and doffing the uniform and equipment is excluded under § 203(o), she is still entitled to compensation for her time spent walking between the locker room and the time clock, because those activities are “principal activities.” Under the “continuous workday” rule, “the ‘workday’ is generally defined as ‘the period between the commencement and completion on the same workday of an employee’s principal activity or activities.’ “ IBP, Inc. v. Alvarez, 546 U.S. 21, 29 (2004) (quoting 29 C.F.R. § 790.6(b)). In addition, “during a continuous workday, any walking time that occurs after the beginning of the employee’s first principal activity and before the end of the employee’s last principal activity is … covered by the FLSA,” and must be compensated. Id. at 37. Principal activities are those that are an integral and indispensable part of the activities which the employee is employed to perform. See Steiner v. Mitchell, 350 U.S. 247, 256 (1956).
1. Does Exclusion Under § 203(o) Affect Whether an Activity is a Principal Activity?
One court recently explained that “[t]he courts have taken divergent views” on the issue of whether activities deemed excluded under § 203(o) may still constitute “principal activities.” In re Tyson Foods, Inc., 694 F.Supp.2d 1358, 1370 (M.D.Ga.2010). Some courts have concluded that time that is excluded under § 203(o) may still be a “principal activity,” because § 203(o) only addresses the compensability of the time, not whether it is integral and indispensable. See, e.g., id. at 1371 (“After considering both of these positions, the Court concludes that § 203(o) only relates to the compensability of time spent donning, doffing, and washing of the person and that it does not mean that § 203(o) tasks cannot be considered principal activities that start the continuous workday.”); Andrako v. U.S. Steel Corp., 632 F.Supp.2d 398, 413 (W.D.Pa.2009) (“Section 203(o) relates to the compensability of time spent donning, doffing, and washing in the collective-bargaining process. It does not render such time any more or less integral or indispensable to an employee’s job.”); Gatewood v. Koch Foods of Miss., LLC, 569 F.Supp.2d 687, 702 (S.D.Miss.2008) (“Although the act of ‘changing clothes’ itself is barred based on § 203(o) …, the activities that occur after changing into sanitary gear and before changing out of sanitary gear are not impacted by the defense.”); Figas, 2008 WL 4170043, at *20 (“[T]he character of donning and doffing activities is not dependent upon whether such activities are excluded pursuant to a collective-bargaining agreement.”). In contrast, some courts-including the district court presiding over the instant case-have concluded that “once an activity has been deemed a section 3(o) activity, it cannot be considered a principal activity.” Sisk v. Sara Lee Corp., 590 F.Supp.2d 1001, 1011 (W.D.Tenn.2008); see also Salazar v. Butterball, LLC, No. 08-cv-02071-MSK-CBS, 2009 WL 6048979, at * 14 (D.Colo. Dec. 3, 2009) (following Sisk); Hudson v. Butterball, LLC, No. 08-5071-CV-SW-RED, 2009 WL 3486780, at *4 (W.D.Mo. Oct. 14, 2009) (“Because time [plaintiff] spent sanitizing, donning, and doffing is excluded from hours worked under § 203(o), the walking time did not follow or precede a principal work activity, and therefore is not compensable.”). Although the latter position was consistent with the 2007 Opinion Letter, the June 16 Interpretation rejected that position and concluded that “clothes changing that is covered by § 203(o) may be a principal activity.” Compare 2007 Opinion Letter with June 16 Interp.
We agree with the courts that have taken the position that compensability under § 203(o) is unrelated to whether an activity is a “principal activity.” Accordingly, we must consider whether time spent donning and doffing the standard equipment and uniform is integral and indispensable to Franklin’s job.
2. Integral and Indispensable
Kellogg asserts that even though it requires its employees to wear these items, changing into them is not “integral and indispensable” under the FLSA. In Steiner, the Supreme Court concluded that changing into protective gear before beginning the shift and showering and changing out of the protective gear at the end of the shift was an integral and indispensable part of employment at a battery-manufacturing plant. 350 U.S. at 256 (“[I]t would be difficult to conjure up an instance where changing clothes and showering are more clearly an integral and indispensable part of the principal activity of the employment than in the case of these employees.”) The Court did not address whether “changing clothes and showering under normal conditions” was integral and indispensable to the principal activity of work, and it did not explicitly hold that changing clothes and showering can only be integral and indispensable when the working environment was toxic or lethal. See id. at 249, 256. Nonetheless, at least one court applying Steiner has made that distinction. See Gorman v. Consol. Edison Corp., 488 F.3d 586, 594 (2d Cir.2007). In Gorman, the Second Circuit held that donning and doffing of protective gear-helmet, safety glasses, and steel-toed boots-was not integral and indispensable to employment at a nuclear power plant. Id. It distinguished Steiner because “the environment of the battery plant could not sustain life-given the toxic substances in liquid, solid, powder, and vapor form (and in the dust of the air) that ‘permeate[d] the entire [battery] plant and everything and everyone in it.’ “ Id. at 593 (quoting Steiner, 350 U.S. at 249) (alterations in original). It interpreted Steiner narrowly for the proposition “that when work is done in a lethal atmosphere, the measures that allow entry and immersion into the destructive element may be integral to all work done there.” Id. However, under Gorman, when such a lethal environment is not present and the gear is not literally required for entry into the plant, donning and doffing gear is not integral.
The Second Circuit’s position appears to be unique. The Ninth and Eleventh Circuits have both interpreted Steiner less narrowly. For example, relying on 29 C.F.R. § 790.8(c), the Ninth Circuit explained that “ ‘where the changing of clothes on the employer’s premises is required by law, by rules of the employer, or by the nature of the work,’ the activity may be considered integral and indispensable to the principal activities.” Ballaris v. Wacker Siltronic Corp., 370 F.3d 901, 910 (9th Cir.2004), quoting Mitchell v. King Packing Co., 350 U.S. 260, 262-63 (1956) (holding that changing into and out of plant uniforms was integral and indispensable to the principal activities because the employer required its employees to wear the uniforms and doing so was performed for the benefit of the company); see also Alvarez, 339 F.3d at 902-03 (“To be ‘integral and indispensable,’ an activity must be necessary to the principal work performed and done for the benefit of the employer.”). Similarly, the Eleventh Circuit held that the following three factors are relevant to the issue of whether an activity is integral and indispensable: “(1) whether the activity is required by the employer; (2) whether the activity is necessary for the employee to perform his or her duties; and whether the activity primarily benefits the employer.” Bonilla v. Baker Concrete Constr., Inc., 487 F.3d 1340, 1344 (11th Cir.2007) (concluding that time spent going through security screening made mandatory by the FAA was not integral and indispensable because it was not for the benefit of the employer). We follow the reasoning of Ballaris and Bonilla.
Under the broader interpretation of integral and indispensable, donning and doffing the uniform and equipment is both integral and indispensable. First, the activity is required by Kellogg. Second, wearing the uniform and equipment primarily benefits Kellogg. Certainly, the employees receive protection from physical harm by wearing the equipment. However, the benefit is primarily for Kellogg, because the uniform and equipment ensures sanitary working conditions and untainted products. Because Franklin would be able to physically complete her job without donning the uniform and equipment, unlike the plaintiffs in Steiner, it is difficult to say that donning the items are necessary for her to perform her duties. Nonetheless, considering these three factors, we conclude that donning and doffing the uniform and standard equipment at issue here is a principal activity. See IBP, Inc., 546 U.S. at 37 (“[A]ny activity that is ‘integral and indispensable’ to a ‘principal activity’ is itself a ‘principal activity.’ ”) Accordingly, under the continuous workday rule, Franklin may be entitled to payment for her post-donning and pre-donning walking time. Because there are questions of fact as to the length of time it took her to walk from the changing area to the time clock and whether that time was de minimis, however, we reverse and remand to the district court for further consideration of this issue.”
To read the entire opinion, click here.
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