Authors
As Wage Theft Rises, States And Cities Crack Down, AP Reports
The AP reports that, “[a]cross the nation, the long-simmering problem of employers who don’t pay their workers appears to be getting worse, especially for immigrant laborers.
In the absence of aggressive federal action, some states and local governments have begun to tackle the issue on their own. They say employers who don’t pay overtime or minimum wage are unlikely to pay into state workers’ compensation or unemployment insurance funds — bilking taxpayers even as they’re cheating workers.
Workers rights centers say wage theft has become the No. 1 complaint they’ve heard in recent months.”
To read the entire story go to the AP’s website.
To speak with Wage and Hour Attorney Andrew Frisch call 1-888-OVERTIME or click here today.
Cintas Corp. To Pay $6.5 Million To Settle Case That Alleged It Violated L.A. ‘Living Wage’ Ordinance, L.A. Times Reports
The L.A. Times is reporting that industrial laundry company, Cintas Corp., has settled a longstanding lawsuit that alleged it violated a Los Angeles municipal ordinance pertaining to ‘living wages.’
According to the report, Cintas “[a] major firm providing laundry services to business and governments nationwide has agreed to pay $6.5 million to settle a lawsuit brought by hundreds of Southern California laundry workers who alleged the company violated Los Angeles’ “living wage” laws.
Cintas Corp., which operates industrial laundries and other facilities in the United States and Canada, denied any wrongdoing but agreed to settle the 5 -year-old case “in order to avoid the additional expense and distraction of ongoing litigation,” the Cincinnati-based company said in a statement.
Labor leaders who helped file the complaint said it was believed to be the largest monetary amount ever paid for alleged violations of living wage ordinances, which set salary and benefit standards for contractors and other firms engaged in government business.
The settlement provides $3.3 million in back wages and interest for more than 500 laundry employees who worked at Cintas facilities in Ontario, Pico Rivera and Whittier, according to Workers United/Service Employees International Union, which assisted in the lawsuit. The remainder of the $6.5 million goes to penalties and legal fees arising from the case.”
A copy of the entire story can be obtained from the L.A. Times website.
E.D.Ky.: Time Spent Attending AA Meetings Not Compensable; Although Required By Employer, Attendance At Meetings Not Primarily For Employer’s Benefit
Todd v. Lexington Fayette Urban County Government
This case was before the Court on Defendant’s Motion for Summary Judgment. The Defendant, who required Plaintiff to attend Alcoholic’s Anonymous (AA) meetings during off-duty time claimed that time spent attending such meetings was not compensable. Agreeing with Defendant and granting it summary judgment, the Court held that although required as a condition of continued employment, because the meetings primarily benefited Plaintiff, the employee, rather than Defendant, his employer, such time was not compensable under the FLSA or Kentucky wage and hour laws.
The Court found the following facts relevant to its determination:
“Todd is an employee of the LFUCG and works as a police officer for its Division of Police (“the police department”). (Rec. 33, Attach. 1, Deposition of Keith Todd, p. 3). On March 1, 2006, while Todd was off-duty and at home, he consumed alcohol and an unknown quantity of Ambien sleeping pills and blacked out. (Id. at 5). Sometime thereafter, Todd’s wife came home, discovered his condition and called 911. (Id. at 5-6). The LFUCG police department responded and an ambulance transported Todd to the University of Kentucky Hospital where he stayed for five days. (Id.). As a result of the combined effects of the alcohol and sleeping pills, Todd has no recollection of the events leading up to his hospitalization. (Id.).
While hospitalized, Todd met with Police Chaplain Welch to discuss, among other things, his need for time off to receive alcohol treatment. (Id.) After his discharge from the hospital, Todd met with his supervisors and requested time off to attend a private alcohol treatment program. (Id. at 7). This request was granted and Todd enrolled a treatment program at the Ridge Behavioral Systems facility in Lexington, Kentucky. (Id. at 9). He successfully completed the sixteen day treatment program on March 30, 2006 and was “released to return to work with no restrictions.” (Rec.18, Attach.2). During the interim, Todd was removed from his duties as a patrol officer and was reassigned to the Bureau of Administrative Services. (Rec. 33, Attach. 1, Deposition of Keith Todd, p. 10).
As a result of the hospitalization, LFUCG required Todd to undergo a “fit for duty” evaluation which was conducted by Dr. Robert Elliott, a psychiatrist. (Id. at 11-12). Upon completing the evaluation, Dr. Elliott determined that Todd was fit to return to full time duty without restrictions subject to the following conditions: (1) that Todd attend three Alcoholics Anonymous meetings (“AA meetings”) per week and provide evidence of his attendance every month by having a sponsor sign a monthly report; (2) that Todd should submit to random urine tests for drugs and alcohol twice per month for the first three months upon returning to full time duty and monthly tests thereafter if he was doing well; (3) that Todd should abstain from consuming any alcohol including over the counter medications containing alcohol; (4) that Todd was to continue being monitored by a board certified psychiatrist; and (5) that Todd should consult with his physician and psychiatrist about getting off the prescription drugs that he was taking. (Rec.18, Attach.1, p. 6-7).
After the “fit for duty” evaluation was complete, Todd met with his supervisors and representatives from LFUCG’s Human Resources Office to discuss Dr. Elliott’s findings and his future with the police department. (Rec. 33, Attach. 1, Deposition of Keith Todd, p. 20-21). During the meeting, Michael Allen, the Director of Human Resources discussed each of Dr. Elliott’s recommendations with Todd and asked whether he agreed to abide by them. (Rec. 18, Attach. 5, Letter from Kevin Sutton). Todd agreed to follow Dr. Elliott’s recommendations and understood that “his continued employment as an officer with the … [LFUCG] Division of Police … [was] contingent upon the adherence to these recommendations for the duration of his career with this government.” (Rec. 18, Attach. 4, LFUCG letter). Todd then returned to his full time duties with the police department. (Id.). However, it was understood that “any violation of these [Dr. Elliott’s] recommendations would result in his termination through the Alcohol and Drug Policy.” (Rec. 17, Deposition of Ronnie Bastin, Ex. 1, p. 14); (Rec. 33, Attach. 1, Deposition of Keith Todd, p. 22-23).
Although the record is not entirely clear, it appears that Todd was required to comply with the majority of Dr. Elliott’s recommendations outside of his normal forty hour work week and at his own expense. Police Chief Bastin testified that Todd was not permitted to attend the required AA meetings during his regular working hours. (Rec. 17, Deposition of Ronnie Bastin, p. 6). However, he testified that Todd probably would have been permitted to attend the required psychiatric appointments during regular working hours. (Id. at 7). Todd also appears to have borne the costs associated with his psychiatric evaluations. (Rec. 33, Attach. 1, Deposition of Keith Todd, p. 33-34).”
Finding the time in dispute not to be compensable, the Court stated:
“Todd argues that the FLSA and Kentucky law require LFUCG to compensate him for time spent outside his normal working hours attending AA meetings and psychiatric evaluations. He claims that they were required as a condition of his employment.
Section 207 of the FLSA states that: Except as otherwise provided in this section, no employer shall employ any of his employees … for a work week longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed. 29 U.S.C. § 207(a)(1). The FLSA defines the term “employ” to include “to suffer or permit to work” but does not define what “work” is. 29 U.S.C. § 203(g). The Supreme Court initially interpreted the FLSA in Tennessee Coal, Iron & Railroad Co. v. Muscoda Local No. 123, and explained that its provisions were “necessarily indicative of a Congressional intention to guarantee either regular or overtime compensation for all actual work or employment.” Tennessee Coal, Iron & R.R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 597, 88 L.Ed. 949, 64 S. Ct 698 (1944). The Court defined “work” to mean “physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business.” Muscoda, 321 U.S. at 598. The Supreme Court has since indicated that even work performed while off duty can qualify as work and may entitle an employee to compensation under the FLSA. See Steiner v. Mitchell, 350 U.S. 247, 256, 100 L.Ed. 267, 76 S.Ct. 330 (1944)(holding that employees must be compensated for activities performed either before or after the regular work shift if those activities are an integral and indispensable part of the principal activities for which covered employees are employed); see Brock v. City of Cincinnati, 236 F.3d 793, 801 (6th Cir.2001). In Chao v. Tradesmen International, Inc., the Sixth Circuit summarized an employer’s duties under the FLSA and clarified that “the Portal to Portal Act, which amends the FLSA, modified this judicial construction of hours worked to exclude from compensation activities that are ‘preliminary to or postliminary to said principal activity or activities.’ “ Chao v. Tradesmen Int’l, Inc., 310 F.3d 904, 907 (6th Cir.2002)(citing 29 U.S.C. § 254(a)(2); Aiken v. City of Memphis, 190 F.3d 753, 758 (6th Cir.1999)).
The state statutes at issue in this case are found in Kentucky Revised Statutes (“KRS”) Chapter 337, which is Kentucky’s analogue to the FLSA. Specifically, KRS section 337.285 provides that:
No employer shall employ any of his employees for a work week longer than forty (40) hours, unless such employee receives compensation for his employment in excess of forty (40) hours in a work week at a rate of not less than one and one-half (1-1/2) times the hourly rate at which he is employed.K.R.S. § 337.285(1). Neither party has presented any Kentucky cases applying this statute to the present issue-whether an employee is entitled to compensation for off-duty attendance at AA meetings or psychiatric evaluations. In the absence of such authority, Kentucky courts have looked to federal cases interpreting the FLSA for guidance. See, e.g., City of Louisville, Div. of Fire v. Fire Serv. Managers Ass’n, 212 S.W.3d 89, 95 (Ky.2006)(“In the absence of any Kentucky cases on point, we next look to federal cases interpreting the FLSA.”). Accordingly, the Court will apply federal law principals to both the state and federal law claims.
The United States Court of Appeals for the Sixth Circuit has adopted a three step approach to aid courts in determining whether an activity constitutes “work” for purposes of the FLSA. Thus, to determine whether Todd’s attendance at AA meetings and psychiatric evaluations constitutes “work” under the FLSA, we must consider whether: (1) LFUCG required these activities; (2) whether they were necessarily and primarily for the benefit of LFUCG; and (3) whether they were an indispensable part of Todd’s primary employment activities. See Brock, 236 F.3d at 801-04.
A. Whether Todd’s off-duty activities were required by LFUCG?
LFUCG claims that attending these sessions was not a term or condition of Todd’s employment, but was necessary for him to remain fit for duty which is a pre-condition and continuing condition of his employment. In support of its position, LFUCG draws the Court’s attention to Dade County v. Alvarez, in which the Eleventh Circuit determined that off-duty physical fitness training by police officers was not compensable “work” under the FLSA. Dade County v. Alvarez, 124 F.3d 1380 (11th Cir.1997). However, the facts of Alvarez are distinguishable from this case. In Alvarez, the Eleventh Circuit emphasized that while the officers were instructed to do whatever was necessary to maintain their physical fitness levels, they were not directed to undertake any specific off-duty work out routines or training. Id. at 1383. They were simply required to remain in good enough shape to perform their job functions and pass a physical fitness exam. Id. In remaining physically fit, they had complete discretion in deciding on the method, location and amount of off-duty training necessary. Id. In addition, it is significant for purposes of this case that in Alvarez there was no suggestion that the police officers’ employment would have been adversely affected if they failed to engage in off-duty work outs as long as they maintained an adequate level of physical fitness. Id. at 1385.
LFUCG claims that as in Alvarez, Todd’s condition of continuing employment was not that he attend the AA and psychiatric sessions, but that he remain fit for duty. This assertion is not supported by the evidence in the record. While Todd was permitted to select a psychiatrist and choose which AA meetings to attend, unlike Alvarez, he was required to attend a specific number of counseling and AA sessions. Todd was not permitted to exercise any significant discretion in maintaining his sobriety. In addition, he was required to provide documentation to prove his attendance at the AA meetings and psychiatric evaluations. Finally, and most importantly, unlike Alvarez, there is clear evidence in the record that Todd’s employment would have been adversely affected if he failed to attend any of the required sessions. In fact, Leslie Jarvis of the Division of Human Resources wrote a letter to then Chief of Police Anthany Beatty indicating that Todd’s continued employment was contingent on adhering to the recommendations for the remainder of his career.
In this case, it was not enough for Todd to maintain his sobriety and thereby remain fit for duty. Todd’s failure to attend any of these sessions would have resulted in some form of disciplinary action and may have resulted in his termination. Consequently, Todd’s attendance at the sessions was clearly required by LFUCG.
B. Whether Todd’s attendance at AA meetings and psychiatric evaluations was necessarily and primarily for the benefit of LFUCG?
LFUCG argues that these sessions were not primarily for its benefit because Todd acknowledges that treatment has improved his life by allowing him to achieve and maintain his sobriety. In addition, LFUCG relies on statements by Police Chief Bastin that LFUCG’s goal was to allow Todd to get things straightened up, not only so that he could be a successful employee but also for the sake of his home life. Finally, LFUCG claims that because Todd was able to select his own psychiatrist and the specific AA meetings that best addressed his circumstances, the sessions were primarily for his benefit.
Todd counters that the sessions were primarily for LFUCG’s benefit because his attendance was required and ensured his continued employment and contributions to the police department. Todd also draws the Court’s attention to the Seventh Circuit’s decision in Sehie v. City of Aurora, which he argues supports a determination that attendance at the AA meetings and psychiatric evaluations was primarily for LFUCG’s benefit.
In Sehie v. City of Aurora, a former emergency dispatcher sued her employer under the FLSA claiming that her time spent attending and traveling to and from counseling sessions mandated by her employer was compensable “work” under the FLSA. Sehie v. Aurora, 432 F.3d 749, 750 (7th Cir.2005). These counseling sessions stemmed from a fitness for duty evaluation that was performed after Sehie was involved in an incident at work. Id. at 750. Upon completion of the evaluation, it was recommended as a condition of Sehie’s continued employment that she attend weekly psychotherapy sessions for six months. Id. The Seventh Circuit upheld the district court’s finding that the sessions were primarily for the employer’s benefit. Id. at 752.
However, the facts of Sehie are clearly distinguishable from the instant case. First, in Sehie, the Seventh Circuit explained that because the counseling sessions were required and there was a shortage of telecommunications staff, a strong inference arose that the sessions were for the employer’s benefit. Id. at 752. In this case, no evidence has been presented that LFUCG has a shortage of police officers and that the police department needed to retain Todd’s services. As a result, the inference that the counseling sessions were for the employer’s benefit which arose in Sehie, does not arise in this case.
In Sehie, the court also found that the notion that the sessions were for the plaintiff’s benefit was undermined by the fact that she was not permitted to see the therapist with whom she had an existing treatment relationship. Id. In this case, Todd was permitted to attend sessions with the psychiatrist of his choosing and was able to attend the AA meetings that best met his needs. This supports a finding that the sessions were primarily for Todd’s benefit. Furthermore, unlike Sehie where the employer’s payment of ninety percent of the costs of the counseling sessions was found to support a finding that the sessions were for the employer’s benefit. In this case, Todd apparently bore the costs of his various treatments.
The final significant distinction is that in Sehie, the counseling sessions were required because of an incident that occurred at work. In this case, the incident giving rise to Todd’s fitness for duty evaluation occurred while he was off-duty and at home. Furthermore, the purpose of the counseling sessions in Sehie was to enable the plaintiff to “perform her job duties and relate to co-workers more effectively and at a higher skill level by addressing … personality deficiencies and problems that predated” her incident at work. Id. at 752. The sessions sought to enable Sehie to manage her emotional problems which had become an issue at work, properly respond to 911 calls and remain on the job in a position that was short staffed. Id. None of these facts are present in the instant case. There is no indication that there had been any problem with Todd’s on-duty performance. Furthermore, the counseling sessions were not designed to improve his on-duty performance, but to keep him at its existing level in the face of the reasonable threat that his substance abuse problems might make him unfit for duty and endanger himself or the public. As discussed above, there is also no indication that LFUCG received any significant benefit from keeping Todd on-duty. Even accepting that Todd was an excellent police officer, there is no indication that his position was short-staffed so that a course of treatment that allowed for his retention was primarily for LFUCG’s benefit.
As a result, the Court declines to apply Sehie’s holding to these facts. Moreover, this court heeds the 7th Circuit’s caution that “by no means does our ruling suggest that every time an employer gets help for its employees, the employee must be compensated for hours worked.” Id. at 752. Instead, the Court finds that the AA meetings and psychiatric evaluations were not necessarily and primarily for the benefit of LFUCG. The record certainly supports that Todd was a valued and capable police officer . However, there is no evidence that his retention was in any way crucial to the operations of the police department. Instead, it appears that the primary beneficiary of the psychiatric evaluations and AA sessions was Todd. He has acknowledged that sobriety has improved his life and familial relations. Sobriety has also allowed Todd to retain his employment with the police department, which was apparently threatened by his substance abuse problems. The Court cannot find that while in treatment, Todd learned any skills that enabled him to become a more effective or valuable police officer. The skills that Todd learned enabled him to keep his job and ensured that his conduct did not threaten his ability to protect his own safety, the safety of fellow officers and the safety of the public. While in other contexts, the rigid restrictions put in place by the LFUCG might lead to a different conclusion, given the safety sensitive nature of Todd’s employment as a police officer, these restrictions do not appear to be unjustified and have enured primarily to his benefit, not to the benefit of LFUCG.
C. Whether Todd’s treatment was an indispensable part of the primary activities of Todd’s Employment as a Police Officer?
The Court also finds that Todd’s treatment was not an indispensable part of the primary activities of his employment as a police officer. As LFUCG indicates, the primary activities of police officers include activities such as patrol assignments, apprehending criminals, performing investigations and responding to the various happenings of daily life affecting the public safety. Sobriety is not a primary activity of a police officer’s employment despite the fact that an officer’s lack of sobriety may have a detrimental effect on his ability to perform the requirements of his job adequately. Todd clearly was required to expend significant energy to achieve his sobriety so that he could continue to be an effective police officer. However, he performed no police work while at AA meetings or psychiatric evaluations. This is the case despite the fact that these sessions were required as a condition of his continuing employment. Consequently, these sessions themselves are not a primary and indispensable part of the duties of a police officer.
For the reasons discussed in this opinion, it is the Court’s determination that Todd’s attendance at numerous AA meetings and psychiatric evaluations since March 1, 2006, which were mandated by his employer, does not constitute compensable “work” under the FLSA.”
E.D.Tex.: Where Class Consists Of Over 1000 Plaintiffs, Court Limits Discovery To 91 Randomly Chosen Representative “Discovery Plaintiffs”
Nelson v. American Standard, Inc.
Before the Court is Plaintiffs’ motion for entry of limited discovery order, filed in support of Plaintiffs’ proposal contained in the Joint Motion for Entry of Discovery and Case Management Plan and Scheduling Order. Although the parties largely agreed on the extent of discovery to be conducted, Plaintiffs sought an Order limiting such discovery a representative sampling of 91 “discovery Plaintiffs,” while Defendants claimed they should be entitled to seek discovery from every individual class member. Agreeing with Plaintiffs, the Court pared discovery down to the 91 representative Plaintiffs.
The Court described the dispute as follows:
“[The parties] have agreed to the scope of oral discovery and to a schedule governing the deadlines in this case. The parties have also agreed that they will select individual case participants as “Discovery Plaintiffs” as a representative sample from all of the individuals who are named plaintiffs or who have opted into the litigation. The “Discovery Plaintiffs” are to be selected as follows: (1) three Named Plaintiffs (Nelson, Gross, and Dewberry); (2) 19 individuals who submitted declarations in support of the Motion for Notice; and (3) 84 opt-ins selected at random by the parties from the 1,328 individuals in the consolidated case, with a specified number of opt-ins for each location. The fundamental disagreement which remains to be resolved by the Court is the scope of written discovery. The central disagreement is that Plaintiffs seek to limit written discovery to the Discovery Plaintiffs who may be used at trial while Defendant seeks to allow written discovery to be issued to the entire class of 1,328 opt-in plaintiffs in some capacity. In the joint motion, both sides present their proposals on how written discovery should be conducted. In support of Plaintiffs’ proposal contained in the joint motion for discovery order, Plaintiffs’ also filed a motion for entry of limited discovery order. (Dkt. No. 110.) Plaintiffs seek to limit both written and oral discovery of class members to the agreed upon group of 91 Discovery Plaintiffs rather than to require all 1,328 participants to be subjected to written discovery and disclosures. Defendant seeks individualized written discovery for all opt-in plaintiffs.”
Citing other courts that have reached the same conclusion, the Court ordered representative discovery, rather than individualized discovery, stating:
“The Eastern District of Texas, and specifically this Court, is one of many jurisdictions that has ordered limited, representative discovery of the named plaintiffs and opt-in plaintiffs in FLSA actions. Schiff et al. v. Racetrac Petroleum, Inc., 2:03-cv-402-TJW, Dkt. No. 111 (E.D. Tex. June 8, 2005) (limiting discovery to a random sample of 35 opt-in plaintiffs). Numerous other courts also have found that individualized discovery is generally not appropriate in FLSA collective actions and should be limited to a representative sample of the entire group. See Smith v. Lowes Home Ctrs., 236 F.R.D. 354, 356-58 (S.D.Ohio 2006) (denying defendant’s request for individualized discovery of more than 1,500 opt-ins and instead ordering a representative sample of 90 randomly selected individuals from the opt-in plaintiffs); Cranney v. Carriage Services, Inc., 2008 WL 2457912 at *3-5 (D.Nev. June 16, 2008) (limiting individualized discovery to 10% of a relevant combination of workers and work sites for the opt-in plaintiffs). The Court finds that limiting discovery in a FLSA action to a relevant sample minimizes the burden imposed on the plaintiffs “while affording the defendant a reasonable opportunity to explore, discover and establish an evidentiary basis for its defenses.” Smith, 236 F.R.D. at 357-58. Further, the Court finds that there is no due process violation to Defendant in limiting written discovery to the Discovery Plaintiffs.
In this case “representative” discovery refers not only to the named plaintiffs but to a sample of 91 largely randomly selected individuals that the parties have agreed to designate as “Discovery Plaintiffs.” The Court finds that there is no reason that all defenses and alleged differences among class members cannot be ascertained and articulated based on the results of full discovery for the “Discovery Plaintiffs.” If the discovery shows defenses and differences for these individuals, Defendant Trane will be able to make its case for decertification or summary judgment. The fundamental precept of statistics and sampling is that meaningful differences among class members can be determined from a sampling of individuals. The Court finds that the agreed upon group of “Discovery Plaintiffs” is a statistically acceptable representative sample of the entire group of opt-in Plaintiffs. Defendant Trane has not shown that the representative sample needs expanding to all class members for discovery purposes. However, if after conducting the discovery of the representative sample Defendant Trane can demonstrate to the Court that broader discovery is appropriate and necessary, the Defendant can so move.
III. CONCLUSION
Accordingly, it is ORDERED that written discovery in this case be limited to the named plaintiffs and the 91 opt-in plaintiffs who the parties have agreed to designate as Discovery Plaintiffs. A concurrent order will be entered that adopts the parties’ joint proposal for discovery and case management plan and adopts the Plaintiffs’ proposal on written discovery, consistent with this order. Thus, Plaintiffs’ Motion (Dkt. No. 110) is hereby GRANTED.”
M.D.Pa.: Although Sovereign Immunity Bars FLSA Suit Against State Of Pennsylvania, State Official May Be Sued In His Official Capacity For Non-Monetary Declaratory Relief
Dino v. Pennsylvania
Plaintiffs filed a collective action to enforce the provisions of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., against the Commonwealth and against Defendant Beard in his official and personal capacities. Specifically, Plaintiffs allege that they were or are employed by the Commonwealth’s Department of Corrections in the job classification of Corrections Officers 3 (“CO3 s”). Plaintiffs contend that they should be classified as “non-exempt” for FLSA overtime purposes and are entitled to cash compensation for hours worked in overtime.
Both Defendants moved to dismiss or for summary judgment in the alternative citing the Eleventh Amendment. The Court granted the State’s Motion, but denied Beard’s Motion in his individual capacity, holding that the Plaintiffs properly stated a cause of action against Beard (in both his official and individual capacity) solely for non-monetary declaratory relief.
Discussing the claims against Beard the Court stated, “[t]he Supreme Court has made clear that the Eleventh Amendment bars federal courts from entertaining suits by private parties against states. Alden v. Maine, 527 U.S. 706, 752, 119 S.Ct. 2240, 144 L.Ed.2d 636 (1999). Generally, Eleventh Amendment immunity also extends to state officials sued in their official capacity because in such a case the state is the real party in interest. Melo v. Hafer, 912 F.2d 628, 635 (3d Cir.1990) (citing Kentucky v. Graham, 473 U.S. 159, 165-66, 105 S.Ct. 3099, 87 L.Ed.2d 114 (1985)). “Eleventh Amendment immunity is, however, subject to three primary exceptions: (1) congressional abrogation, (2) waiver by the state, and (3) suits against individual state officers for prospective injunctive and declaratory relief to end an ongoing violation of federal law.” Pa. Fed’n of Sportsmen’s Clubs, Inc. v. Hess, 297 F.3d 310, 323 (3d Cir.2002).
Plaintiffs argue that Eleventh Amendment immunity is inapplicable here based on the third exception, the doctrine of Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). “In Ex Parte Young, the Supreme Court carved out an exception to Eleventh Amendment immunity by permitting citizens to sue state officials when the litigation seeks only prospective injunctive relief in order to end continuing violations of federal law.” Balgowan v. State of New Jersey, 115 F.3d 214, 217 (3d Cir.1997). “The doctrine applies to violations of the United States Constitution and to violation of federal statutes.” Hess, 297 F.3d at 323. In determining whether the Young doctrine applies, a court need only go through the straight-forward inquiry of whether (1) the complaint alleges an ongoing violation of federal law and (2) whether the complaint seeks relief properly characterized as prospective. Id. at 324. “However, Young does not apply if, although the action is nominally against individual officers, the state is the real, substantial party in interest and the suit in fact is against the state.” Id. “[W]hen the action is in essence one for the recovery of money from the state, the state is the real, substantial party in interest and is entitled to invoke its sovereign immunity from suit even though individual officials are nominal defendants.” Regents of the University of California v. Doe, 519 U.S. 425, 429, 117 S.Ct. 900, 137 L.Ed.2d 55 (1997) (citation and internal quotation marks omitted).
In Balgowan, the Third Circuit addressed a case with similar facts to the one at bar. In that case, New Jersey Department of Transportation (“DOT”) engineers brought FLSA overtime compensation claims against the New Jersey DOT Commissioner. 115 F.3d at 217-18. The Third Circuit noted that it would not have jurisdiction over claims for injunctive relief, since FLSA limited such claims to those brought by the United States Secretary of Labor. Id. at 218. However, the appellate court allowed the engineers’ compensation claims to proceed against the commissioner under the Young doctrine because the engineers were seeking prospective declaratory relief. Id.
Like the DOT engineers in Balgowan, Plaintiffs have claims for declaratory relief that fall within the Young exception. First, Plaintiffs allege that Defendant Beard has violated the FLSA by failing to pay them “time and a half” for time worked in excess of the maximum hours per week period. (Doc. No. 1 ¶ 47-50.) Second, Plaintiffs seek prospective declaratory relief: a ruling that they are nonexempt employees under the FLSA and are entitled to compensation for excess hours worked. (Doc. No. 1 at 15-16.)
Defendant Beard asserts that the Young doctrine does not apply to him since the Commonwealth is the real party in interest. Yet Plaintiffs call for prospective relief that does not include recovery of money from the state. Specifically, Plaintiffs assert that Beard can: (1) remind the Commonwealth to uphold the law, (2) schedule and deploy CO3s to avoid the need for overtime, (3) direct subordinate Commonwealth staff to comply with the FLSA, or (4) resign his position. (Doc. No. 26, at 11.)
The Court finds that Plaintiffs have adequately alleged that Defendant Beard falls within the Young exception. This comports with the reasoning behind Young. Specifically, “[t]he theory behind Young is that a suit to halt the enforcement of a state law in conflict with the federal constitution is an action against the individual officer charged with that enforcement and ceases to be an action against the state to which sovereign immunity extends; the officer is stripped of his official or representative character and becomes subject to the consequences of his individual conduct…. The Young doctrine is accepted as necessary to permit federal courts to vindicate federal rights and to hold state officials responsible to the ‘supreme authority of the United States.’ “ Hess, 297 F.3d at 323 (quoting MCI Telecomm. Corp. v. Bell Atlantic-Pa., 271 F.3d 491, 506 (3d Cir.2001) (citations omitted)).
Because Plaintiffs’ allegations against Defendant Beard in his official capacity fall within the Young exception, Defendant Beard’s motion on the pleadings for immunity based on his official capacity will be denied.
B. Individual Capacity
Defendant Beard next asserts that he is entitled to qualified immunity in his individual capacity.
“The doctrine of qualified immunity protects government officials ‘from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.’ “ Pearson v. Callahan, — U.S. —-, 129 S.Ct. 808, 815, 172 L.Ed.2d 565 (2009) (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982)). In Saucier v. Katz, 533 U.S. 194, 201, 121 S.Ct. 2151, 150 L.Ed.2d 272 (2001), the Supreme Court set forth a two-tiered analysis to assist in determining whether a defendant is entitled to qualified immunity:
First, a court must decide whether the facts that a plaintiff has alleged (see Fed. Rules Civ. Proc. 12(b)(6), (c)) or shown (see Rules 50, 56) make out a violation of a constitutional right. Second, if the plaintiff has satisfied this first step, the court must decide whether the right at issue was “clearly established” at the time of defendant’s alleged misconduct. Qualified immunity is applicable unless the official’s conduct violated a clearly established constitutional right. Pearson, 129 S.Ct. at 815-16 (citing Saucier, 533 U.S. 194, 121 S.Ct. 2151, 150 L.Ed.2d 272) (internal citations removed). In Pearson, the Supreme Court clarified that the order of the Saucier analysis was flexible, and that a court should “exercise [its] sound discretion in deciding which of the two prongs of the qualified immunity analysis should be addressed first in light of the circumstances in the particular case at hand.” Bayer v. Monroe County Children and Youth Services, 577 F.3d 186, 191-92 (3d Cir.2009) (quoting Pearson, 129 S.Ct. at 818).
Whether Defendant Beard should be afforded qualified immunity is likely to turn on the second Saucier prong of whether the right at issue was clearly established. In Bayer, the Third Circuit outlined the applicable analysis:
“The relevant, dispositive inquiry in determining whether a right is clearly established is whether it would be clear to a reasonable officer that his conduct was unlawful in the situation he confronted.” Saucier, 533 U.S. at 202. “This inquiry … must be undertaken in light of the specific context of the case, not as a broad general proposition,” id. at 201, and “turns on the ‘objective legal reasonableness of the action, assessed in light of the legal rules that were clearly established at the time it was taken.’ “ Pearson, 129 S.Ct. at 822 (quoting Wilson v. Layne, 526 U.S. 603, 614, 119 S.Ct. 1692, 143 L.Ed.2d 818 (1999) (internal quotation marks omitted)) ….Bayer, 577 F.3d at 192-93. “To be established clearly, however, there is no need that ‘the very action in question [have] previously been held unlawful.’ “ Safford Unified School Dist. No. 1 v. Redding, — U.S. —-, 129 S.Ct. 2633, 2643, 174 L.Ed.2d 354 (2009) (quoting Wilson v. Layne, 526 U.S. 603, 615, 119 S.Ct. 1692, 143 L.Ed.2d 818 (1999)).
In the present case, the parties dispute whether the CO3 positions at the Department of Corrections should be exempted from the FLSA. The FLSA exempts from its overtime pay requirements “any employee employed in a bona fide executive, administrative, or professional capacity.” See 29 U.S.C. § 213(a)(1). The Code of Federal Regulations defines executive employees as those (1) who receive compensation “of not less than $455 per week”; (2) whose “primary duty” is the management of the enterprise in which the employee is employed or of a customarily recognized department thereof; (3) who customarily and regularly direct the work of two or more other employees; and (4) who have the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees are given “particular weight.” 29 C.F.R. § 541.100(a).
The Court is without the necessary facts regarding the CO3 positions in this case to determine whether their status as non-exempt was clearly established and whether it should have been clear to Defendant Beard that a failure to categorize them as such was unlawful in the situation he confronted. The Court notes that Defendant Beard points to a number of factors that help to support his position that he acted reasonably. First, his position was consistent with the Commonwealth’s analysis that police lieutenants were exempt under the FLSA. (Doc. 18-4, Ex. A-2.) Additionally, the Commonwealth’s Office of Administration had classified the CO3 position as exempt from the FLSA for approximately 30 years. (Doc. No. 18-2, Ex. A ¶ 7.).
However, absent further factual evidence regarding the pay, duties, and administrative responsibilities given to the CO3s the Court is unable to determine “whether a right is clearly established [by] whether it would be clear to a reasonable officer that his conduct was unlawful in the situation he confronted.” Saucier, 533 U.S. at 202. Therefore, the Court will allow the parties limited discovery on the qualified immunity issue in order to assist the Court in making such a determination.
IV. CONCLUSION
For the foregoing reasons, the Court finds that Defendant Beard does not have immunity in his official capacity. As a result, Defendant Beard’s motion on the pleadings as to Count I will be denied. As to Count II, the Court will allow the parties discovery in order to brief the Court as to whether Defendant Beard should be granted qualified immunity. “
S.D.Ind.: Pursuant to FRCP 9(b), Generalized Allegations Of Willfulness Sufficient To Survive Motion To Dismiss Relating To Statute Of Limitations
Bockler v. R.J. McGough & Associates, Inc.
This cause is before the Court on the Defendant’s Motion to Dismiss and Plaintiff’s Motion to Amend his Complaint. Specifically, Defendant sought to have the Complaint dismissed on statute of limitations grounds, averring that Plaintiff’s Complaint was insufficient to state of claim where the 3 year statute of limitations could be applicable, rather than the FLSA’s default 2 year statute of limitations. Denying Defendant’s Motion, the Court cited to the generalized allegations of willfulness, noting that the Complaint must be construed in favor of the Plaintiff on a Motion to Dismiss. Citing FRCP 9(b), the Court held Plaintiff’s allegations of willfulness sufficient to sustain Defendant’s Motion.
“[T]he statute of limitations for ordinary FLSA violations is two years. For willful violations of the FLSA, the statute of limitations is enlarged to three years. As the Supreme Court noted in McLaughlin v. Richland Shoe Co., 486 U.S. 128, 132 (1988), “[t]he fact that Congress did not simply extend the limitations period to three years, but instead adopted a two-tiered statute of limitations, makes it obvious that Congress intended to draw a significant distinction between ordinary violations and willful violations.”
In the instant case it is undisputed that Bockler missed the two-year deadline for filing an ordinary FLSA violation. However, Bockler’s Amended Complaint alleges that McGough willfully violated the FLSA, which adds one year to the statute of limitations and makes Bockler’s claim timely. McGough’s Motion to Dismiss alleges that Bockler “has failed to satisfy his burden for pleading a viable claim,” Def. Br. at 2, because he fails to provide “even inferential allegations as to how McGough’s conduct could be construed as ‘willful.’ “ Id. at 8.
Federal Rule of Civil Procedure 9(b) allows “[m]alice, intent, knowledge, and other conditions of a person’s mind” to be alleged generally. Accordingly, to survive a motion to dismiss, Bockler’s Amended Complaint must give McGough “fair notice of what the … claim is and the grounds upon which it rests.” Pisciotta, 499 F.3d at 633 (7th Cir.2007). Furthermore, the “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. (citation omitted). Bockler has informed McGough what the claim is and the grounds upon which it rests. The Amended Complaint clearly alleges that “Defendant knowingly, willfully, or with reckless disregard, carried out its illegal pattern or practice of failing to pay at least one and one-half times the regular rate of pay for all overtime hours with respect to Plaintiff….” Amended Compl. ¶ 25. Although McGough may dispute these allegations, as this is Defendant’s Motion to Dismiss, all reasonable inferences are drawn in Bockler’s favor. Bockler has plead enough facts to satisfy Rule 9(b). Accordingly, McGough’s Motion to Dismiss is DENIED.”
Wal-Mart To Pay $40 Million To Massachusetts Workers For Off-the-Clock Work Claims, Boston Globe Reports
The Boston Globe is reporting that the United States’ largest retailer, Wal-Mart has agreed to settle a collective action in Massachusetts for approximately $40 Million.
“Wal-Mart Stores Inc., the world’s largest retailer, has agreed to pay $40 million to as many as 87,500 current and former employees in Massachusetts, the largest wage-and-hour class-action settlement in the state’s history.
The class-action lawsuit, filed in 2001, accused the retailer of denying workers rest and meal breaks, refusing to pay overtime, and manipulating time cards to lower employees’ pay. Under terms of the agreement, which was filed in Middlesex Superior Court yesterday by the employees’ attorneys, any person who worked for Wal-Mart between August 1995 and the settlement date will receive a payment of between $400 and $2,500, depending on the number of years worked, with the average worker receiving a check for $734…
The Massachusetts case is similar to many others that have been brought against the retail behemoth by employees across the country, most alleging that the Bentonville, Ark.-based company violated laws by requiring employees to work through breaks, to work beyond their regular shifts, and similar practices. Wal-Mart has denied the allegations, but in December, the merchant agreed to pay up to $640 million to settle 63 federal and state class-action wage-and-hour lawsuits.”
To read the full story go to the Boston Globe website.
S.D.Ohio: Hybrid Salary Plus Commissions Plan Violated FLSA, Because Commissions Did Not Comprise More Than 50% Of Wages; 7(i) Exemption Not Applicable
Keyes v. Car-X Auto Services
This case was before the Court on Plaintiff’s Motion for Summary Judgment, relative to his FLSA claims. Defendants contended that they were entitled to the exemption from the overtime wage requirement under 7(i) of the FLSA, 29 U.S.C. § 207(i), the so-called “Retail Exemption,” because Plaintiff’s regular rate of pay exceeded one and one-half times the minimum wage rate and over half of Plaintiff’s compensation came from commissions earned on the sale of goods and services. The Court granted Plaintiff’s Motion, explaining that Defendants were not entitled to the benefit of 7(i), because they were unable to show that 50% or more of Plaintiff’s income was derived from commissions, as differentiated from salary.
Discussing the elements of the Retail Exemption and applying the exemption to the pay policy at issue, the Court explained, “The parties do not dispute that Defendant Car-X is a retail establishment or that Plaintiff’s regular rate of pay exceeded one and one-half times the minimum wage rate. Thus, the issue before the Court is whether more than one-half of Plaintiff’s compensation consisted of commissions on goods or services.
Federal regulations recognize that employees of retail or service establishments are usually compensated in any one of five ways:
(1) Straight salary or hourly rate: Under this method of compensation the employee receives a stipulated sum paid weekly, biweekly, semimonthly, or monthly or a fixed amount for each hour of work.
(2) Salary plus commission: Under this method of compensation the employee receives a commission on all sales in addition to a base salary (see paragraph (a)(1) of this section).
(3) Quota bonus: This method of compensation is similar to paragraph (a)(2) of this section except that the commission payment is paid on sales over and above a predetermined sales quota.
(4) Straight commission without advances: Under this method of compensation the employee is paid a flat percentage on each dollar of sales he makes.
(5) Straight commission with “advances,” “guarantees,” or “draws.” This method of compensation is similar to paragraph (a) (4) of this section except that the employee is paid a fixed weekly, biweekly, semimonthly, or monthly “advance,” “guarantee,” or “draw.” At periodic intervals a settlement is made at which time the payments already made are supplemented by any additional amount by which his commission earnings exceed the amounts previously paid.29 C.F.R. § 779.413(a).
By definition, each of these compensation plans, except for the “straight salary or hourly rate,” qualify as “bona fide commission plans” under § 207(i). Viciedo v. New Horizons Computer Learning Center of Columbus, LTD, 246 F.Supp.2d 886 (S.D.Ohio 2003).
Under Defendant’s compensation plan, employees were paid the greater of either the commission rate on the total gross sale of services and products attributable to the employee during a given pay period or a “default” guaranteed wage rate, which was calculated by multiplying the employee’s regular hourly rate by the number of hours actually worked in a given pay period. (Deposition of Robert Keyes at 14, 15-16, 101-02, 213-17; Govind Aff. at ¶¶ 10-14, Govind Dep., Ex. 3, Employee Sales/Commission Reports). Car-X did not calculate a setoff or overpayment in weeks in which Plaintiff earned extra for commissions. (Keyes Dep. at 101-102; Govind Dep. at 104-105). While Defendants avoid designating which of the above examples under 29 C.F.R. § 779.413(a) best fits the characteristics of Car-X’s compensation plan, Plaintiff argues that Defendants’ compensation plan is based on a hybrid system and is not a bona fide commission plan under the FLSA. As in Viciedo, we find the present facts remarkably similar to those in Donovan v. Highway Oil Inc., Case No. 81-4245, 1986 WL 11266 at *4 (D.Kan. July 18, 1986), in which that court found the defendant’s compensation plan possessed the characteristics of both a salary plus commission plan and a quota bonus plan. In Donovan, managers of a gas station bringing suit to recover overtime wages allegedly due under the FLSA were paid a set commission for selling a threshold amount of gasoline, and then a small commission for each additional gallon of gasoline sold in excess of the threshold amount. The court found that “the only true commission portion of the salaries appears to be those amounts over the threshold level” and that the amount of said commissions did not meet the requirements of 29 C.F.R. § 207(i) as they did not comprise more than half of the managers’ compensation. Donovan, 1986 WL 11266 at *4. While Defendants argue that all Car-X technicians were paid based on commissions from services and products sold, we find, as did the court in Donovan, that the plan’s operation, as explained by Defendants’ witness and Plaintiff himself, belies such an argument. (See Govind Dep. at 60-62, 65-66, 72; Ex. 3, Employee Sales/Commission Reports; Keyes Dep. at 14, 101-102, 213-17). For this reason, we find that the default guaranteed wage represents a salary and only that amount in excess of such constitutes the true commission portion. Defendant has failed to demonstrate that more than fifty percent of Plaintiff’s compensation for any representative period consists of commissions.”
Accordingly, the Court granted Plaintiff’s Motion for Summary Judgment as to his FLSA claim.
Latest Posts
-
N.D.Miss.: Court Rejects Retaliatory Counterclaims in FLSA Case
Hale v. KTG USA, Inc. A recent decision out of the Northern District of Mississippi underscores that courts do not look favorably upon what appear…
-
D.Ct.: Approval of FLSA Settlement Denied Based on Non-Reemployment Clause
Shorter v. Greenwich Homecare LLC Each year federal courts are asked review and approve FLSA settlements in thousands of cases. In some Circuits like the…
-
E.D.Tex.: Texas Court Strikes Down DOL Overtime Rule
Texas v. United States Department of Labor Last week, in a long-awaited decision, the U.S. District Court for the Eastern District of Texas struck down…
-
Fifth Circuit Strikes Down DOL’s Tip Credit Regulation
Restaurant Law Center v. Department of Labor Due to its conservative bent, the Fifth Circuit has long been a hotbed of litigation challenging regulations of…
DOL News
- US Department of Labor issues guidance on Registered Apprenticeship aimed at accelerating growth, reducing burdens, improving transparency
- US Department of Labor recovers more than $293K in back wages for 56 construction workers denied overtime by Idaho company
- Secretary Chavez-DeRemer statement on February jobs report
- Secretary Chavez-DeRemer statement on February jobs report
- Unemployment Insurance Weekly Claims Report
- US Department of Labor cites Florida air conditioning contractor for exposing workers to struck-by hazards after worker fatality
- US Department of Labor cites Florida petroleum tank services contractor after worker succumbs to injuries from exposure to toxic chemicals
- US Department of Labor extends comment period for pharmacy benefit manager fee disclosure proposed rule
- US Department of Labor proposes rule clarifying employee, independent contractor status under federal wage and hour laws
- Unemployment Insurance Weekly Claims Report
Overtime Law Blog 