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5th Cir.: Where Employees Were Represented in Grievance Process By Their Union and Its Attorneys, Private Settlement of a Bona Fide Dispute Enforceable
August 18, 2012 10:01 am / 1 Comment on 5th Cir.: Where Employees Were Represented in Grievance Process By Their Union and Its Attorneys, Private Settlement of a Bona Fide Dispute Enforceable
Martin v. Spring Break ’83 Productions, L.L.C.
Following the entry of summary judgment on behalf of the defendants, the plaintiffs appealed. As discussed here, plaintiffs challenged the trial court’s holding that the private settlement reached between their union and one of their alleged employers was binding and enforceable. Specifically, the plaintiffs argued that absent: (1) court approval, (2) DOL supervision, or (3) a showing that they had been paid their wages in full without compromise, the settlement previously reached was not binding and/or enforceable. Affirming the decision below, the Fifth Circuit held that the settlement agreement was binding and enforceable notwithstanding the lack of court or DOL supervision, because it was a resolution of a bona fide dispute. While it is not entirely clear, it appears that the Fifth Circuit reasoned that the agreement, at least arguably could be said to be “without compromise,” thus making it binding and enforceable.
The case concerned grips and other movie production employees who worked on the set of a movie. Laying out the relevant procedural/factual background, the Fifth Circuit explained:
The plaintiffs “filed a grievance against Spring Break Louisiana alleging that they had not been paid wages for work they performed. The Union sent a representative to investigate the merits of the claims. After his investigation, the representative concluded that it would be impossible to determine whether or not Appellants worked on the days they alleged they had worked. The Union and Spring Break Louisiana entered into a Settlement Agreement pertaining to the disputed hours allegedly worked by Appellants.”
Discussing the issue of whether the private settlement here was binding and enforceable the Fifth Circuit reasoned:
The district court concluded that the plain language of the Settlement Agreement “is binding upon the [Appellants] in their individual capacities and prohibits those individuals from pursuing future legal action against Spring Break Louisiana after receiving their settlement payments.” We agree. The Settlement Agreement, in relevant part, states:
The Union on its own behalf and on behalf of the IATSE Employees agrees and acknowledges that the Union has not and will not file any complaints, charges or other proceedings against Producer, its successors, licenses and/or assignees, with any agency, court, administrative body, or in any forum, on condition that payment in full is made pursuant to the terms of this Settlement Agreement.
The Settlement Agreement also states that the Union “has the full power and authority to enter into this Settlement Agreement on behalf of IATSE Employees and bind them in accordance with the terms hereof.” By this plain language, the Appellants, who were IATSE Employees, were bound by its terms. Appellants contend, however, that the Settlement Agreement is unenforceable because they never signed it or agreed to it—instead, the Settlement Agreement was signed by Union representatives. However, Appellants do not dispute that they received full payment for their claims pursuant the terms of the Settlement Agreement. Nor do Appellants dispute that they cashed the Settlement Agreement payment checks they received. The Appellants were members of the Union and, under the CBA, Spring Break Louisiana recognized “the Union as exclusive representative of the employees in the bargaining unit.” Considering that Appellants, who were members of the Union, received and accepted full payment for their FLSA claims under the Settlement Agreement, the fact that Appellants did not themselves personally sign the Settlement Agreement does not render it unenforceable. See N.L.R.B. v. Allis–Chalmers Mfg. Co., 388 U.S. 175, 180, 87 S.Ct. 2001, 18 L.Ed.2d 1123 (1967) (“The employee may disagree with many of the union decisions but is bound by them.”).
On appeal, the plaintiffs argued that the settlement agreement was not binding and enforceable, because generally individuals may not privately settle FLSA claims. In response the defendants argued that that a private compromise of claims under the FLSA is permissible where there exists a bona fide dispute as to liability (and as to the amount of appropriate damages). After a discussion of the relevant Fifth Circuit precedent, the court agreed with the Defendants and held the settlement agreement at issue to be enforceable.
Significantly the court reasoned:
[H]ere, there is a bona fide dispute between Appellants and Spring Break Louisiana over the number of hours for which they are owed their set rate of pay. In fact, the Union representative conducted an investigation into the dispute and received conflicting information from various sources, ultimately concluding that it would be impossible to determine whether or not Appellants worked on the days they claimed they had worked in their grievance. Approving of this rationale, we hold that the payment offered to and accepted by Appellants, pursuant to the Settlement Agreement, is an enforceable resolution of those FLSA claims predicated on a bona fide dispute about time worked and not as a compromise of guaranteed FLSA substantive rights themselves. See Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 714, 65 S.Ct. 895, 89 L.Ed. 1296 (1945) (“Our decision … has not necessitated a determination of what limitation, if any, Section 16(b) of the [FLSA] places on the validity of agreements between an employer and employee to settle claims arising under the Act if the settlement is made as the result of a bona fide dispute between the two parties, in consideration of a bona fide compromise and settlement.”); see also D.A. Schulte, Inc. v. Gangi, 328 U.S. 108, 114–15, 66 S.Ct. 925, 90 L.Ed. 1114 (1946) (“Nor do we need to consider here the possibility of compromises in other situation which may arise, such as a dispute over the number of hours worked or the regular rate of employment.”); 29 U.S.C. § 253(a).
Apparently the court also believed that the settlement at issue here could arguably be said to be “without compromise” such that the third permissible basis for an enforceable private settlement was met:
Notably, in Thomas v. Louisiana, 534 F.2d 613 (5th Cir.1976), we held that a private settlement of FLSA claims was binding and enforceable where the settlement gave employees “everything to which they are entitled under the FLSA at the time the agreement is reached.” Id. at 615. We explained that, “[a]lthough no court ever approved this settlement agreement, the same reason for enforcing a court-approved agreement i.e., little danger of employees being disadvantaged by unequal bargaining power[,] applies here.” Id. Here, Spring Break Louisiana and the Union agreed in the Settlement Agreement that the payments Appellants were paid pursuant to that agreement were the “amounts due and owing” for the disputed number of hours they claimed they had worked and not been paid for. The Settlement Agreement was a way to resolve a bona fide dispute as to the number of hours worked—not the rate at which Appellants would be paid for those hours—and though Appellants contend they are yet not satisfied, they received agreed-upon compensation for the disputed number of hours worked.
Lastly, the court distinguished a settlement privately negotiated by a union and its attorneys from a situation where a labor union purports to waive an employees’ rights under the FLSA through a collective bargaining agreement, a longstanding no-no under well-established FLSA jurisprudence:
Finally, Appellants contend, citing Barrentine v. Arkansas–Best Freight Sys., 450 U.S. 728, 745, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981), that because the Supreme Court has held that a union cannot waive employees’ rights under the FLSA through a collective bargaining agreement, they cannot have settled their FLSA claims in the Settlement Agreement, which was arrived at through the Union-facilitated grievance procedure laid out in the CBA. See Barrentine, 450 U.S. at 745, 101 S.Ct. 1437 (“FLSA rights … are independent of the collective-bargaining process. They devolve on petitioners as individual workers, not as members of a collective organization. They are not waivable.”). Although the terms and conditions of Appellants’ employment with Spring Break Louisiana were covered by a collective bargaining agreement, Barrentine is distinguishable. In Barrentine, the plaintiffs’ grievances based on rights under the FLSA were submitted by the union to a joint grievance committee that rejected them without explanation, a final and binding decision pursuant to the collective bargaining agreement. 450 U.S. at 731, 101 S.Ct. 1437. Here, Appellants accepted and cashed settlement payments—Appellants’ FLSA rights were adhered to and addressed through the Settlement Agreement, not waived or bargained away. The concerns the Court in Barrentine expressed, that FLSA substantive rights would be bargained away, see id. at 740, 101 S.Ct. 1437 (“This Court’s decisions interpreting the FLSA have frequently emphasized the nonwaivable nature of an individual employee’s right to a minimum wage and to overtime pay under the Act. Thus, we have held that FLSA rights cannot be abridged by contract or otherwise waived because this would ‘nullify the purposes’ of the statute and thwart the legislative policies it was designed to effectuate.”), are not implicated by the situation here where Appellants’ Union did not waive FLSA claims, but instead Appellants, with counsel, personally received and accepted compensation for the disputed hours. We reiterate that FLSA substantive rights may not be waived in the collective bargaining process, however, here, FLSA rights were not waived, but instead, validated through a settlement of a bona fide dispute, which Appellants accepted and were compensated for. Therefore, the district court did not err by finding an enforceable release resolving this wage dispute.
Given, the somewhat unique facts of this case, it remains to be seen whether the Fifth Circuit’s decision while trigger a change in longstanding FLSA jurisprudence regarding the enforceability of privately-negotiated settlements, or whether this case will remain an outlier, largely limited to its facts. For example, it is not clear whether the settlement would have been enforced absent the fact that plaintiffs were represented by both their union and attorneys in the negotiations, or if this was a “straight time” case where there was demonstrative evidence of the precise number of hours at issue. Stay tuned, for what’s likely to be an influx of cases where defendant-employers seek to expand this case’s holding while plaintiff-employees seek to limit the holding to the facts at bar (which are not likely to be oft-repeated).
Click Martin v. Spring Break ’83 Productions, L.L.C. to read the entire Decision. For an excellent historical overview of more typical decisions regarding the enforceability of private settlements of FLSA claims click here to read an outline from the folks at Outten & Golden.
9th Cir.: Repayment Provision In CBA That Required Repayment Of Training Costs Did Not Constitute Impermissible “Kick-Back”
November 28, 2010 5:11 pm / Leave a comment
Gordon v. City of Oakland
In this case, a former employee brought a putative class action, alleging that the Defendant violated the minimum wage provisions of Fair Labor Standards Act (FLSA), and related state laws, by requiring her to reimburse it for part of her training costs due to voluntarily leaving city’s employment before completing five years of service. Holding that such repayment was not an impermissible kick-back, the lower court dismissed. The Ninth Circuit agreed and affirmed.
The Court laid out the following pertinent procedural/factual background:
“The facts here are taken from Gordon’s Proposed First Amended Complaint and the attachments thereto. Since the late 1990s, the City and the collective bargaining unit for City police officers, the Oakland Police Officers’ Association, have entered into successive collective bargaining agreements. These agreements provide that officers who voluntarily separate from the City’s employment prior to completing five years of service must repay a pro rata share of their police academy training costs. The agreement at issue here states that the cost of the training is $8,000, and it establishes the following repayment schedule:
| Length of Service | % of Repayment Due |
| Separation prior to 1 year | 100% repayment of the $8,000. |
| Separation after 1 year but before completing the second year | 80% repayment of the $8,000. |
| Separation after 2 years but before completing the third year | 60% repayment of the $8,000. |
| Separation after 3 years but before completing the fourth year | 40% repayment of the $8,000. |
| Separation after 4 years but before completing the fifth year | 20% repayment of the $8,000. |
| Separation after 5 years | 0% repayment |
Gordon was a successful applicant for the position of Police Officer Trainee. She was advised that she was required to sign the “Conditional Offer of Position as a Police Officer Trainee” (“Conditional Offer”) to complete the hiring process. The Conditional Offer restated the training repayment schedule established in the collective bargaining agreement but it did not include a statement that the City would withhold an officer’s paycheck in satisfaction of any repayment owed. Gordon accepted and signed the Conditional Offer and became a police officer trainee employed by the City. The City directed her to attend its police academy, and she successfully completed her training in June 2006. She then became a police officer for the City.
On January 25, 2008, before completing her second year of service, Gordon resigned. At that time, she was earning $37.8025 per hour. In her final two weeks of work, Gordon was compensated for sixty hours. Her regular hourly pay, combined with an educational incentive in the amount of $117.33, resulted in Gordon earning $2,385.48 in gross pay for her final two workweeks. Gordon received a final paycheck reflecting this amount.
On the same day as her resignation, the City’s Fiscal Services Division notified Gordon that the City was entitled to recover $6,400 (eighty percent of $8,000) in training costs as set forth in the Conditional Offer Gordon signed. This notification stated that the City had withheld, in partial satisfaction of these claims, the paychecks for Gordon’s accrued unused vacation ($1,295.57) and compensatory time off ($654.77). Thus, the City’s total remaining demand was $4,449.66.FN2 This unpaid demand increased to $5,268.03 in March 2008 with the addition of a “collection fee.”
Gordon, on behalf of herself and others similarly situated, filed this action in district court seeking damages and declaratory relief under the FLSA, 42 U.S.C. § 1983, and various California state laws. The district court granted the City’s motion to dismiss Gordon’s complaint for failure to state a claim and gave Gordon fourteen days within which to file a motion for leave to file an amended complaint.
Following the court’s dismissal, Gordon paid the City the $5,268.03 it claimed was due and moved for leave to file her Proposed First Amended Complaint. The new complaint eliminated all but the FLSA claims and included that she paid the City $5,268.03 for “training reimbursement” and “collection costs.” The district court concluded that the proposed amended complaint still did not demonstrate that Gordon was paid less than the federal minimum wage during any workweek, and it denied her leave to file her minimum wage claim in the amended complaint. The district court did, however, grant Gordon leave to amend to assert a claim for violation of the overtime wage requirements under 29 U.S.C. § 207(o). Gordon subsequently dismissed with prejudice all overtime wage claims under 29 U.S.C. § 207(o) and entered into a Stipulation for Judgment of Dismissal for the purpose of facilitating this appeal.”
Holding that the repayment scheme laid out in the CBA was not a prohibited kick-back, the Court reasoned:
“The issue in this case is whether the Conditional Offer’s training reimbursement agreement, which required Gordon to repay $6,400 at the time of her resignation, caused her to receive less than the federal minimum wage during her final workweek. Gordon contends that there is no legal difference between deducting a sum from an employee’s check and directly demanding the employee surrender a sum after being paid. She maintains that after subtracting the costs she paid to the City for the training program, she was actually paid a negative sum for her last week of work. The district court, however, concluded that because the City issued Gordon a paycheck exceeding the minimum wage amount, the City’s reimbursement demand did not violate the FLSA’s minimum wage provision. We affirm.
The FLSA requires all covered employers to pay their employees at least the federal minimum hourly wage every workweek. 29 U.S.C. § 206. As a “public agency,” the City is a covered employer under the FLSA and must comply with the FLSA’s minimum wage requirements. 29 U.S.C. § 203(d). Additionally, employees cannot waive the protections of the FLSA, Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 707, 65 S.Ct. 895, 89 L.Ed. 1296 (1945), nor may labor organizations negotiate provisions that waive employees’ statutory rights under the FLSA. Barrentine v. Arkansas-Best Freight Sys., 450 U.S. 728, 740-41, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981). Consequently, neither the Conditional Offer nor the collective bargaining agreement limit Gordon’s right to receive at least minimum wage.
The United States Department of Labor has adopted regulations outlining employers’ FLSA obligations. One such regulation is 29 C.F.R. § 535.31, which provides in pertinent part:
Whether in cash or other facilities, ‘wages’ cannot be considered to have been paid by the employer and received by the employee unless they are paid finally and unconditionally or ‘free and clear.’ The wage requirements of the Act will not be met where the employee ‘kicks-back’ directly or indirectly to the employer or to another person for the employer’s benefit the whole or part of the wage delivered to the employee. This is true whether the “kick-back” is made in cash or in other than cash.
Because Gordon did not allege she was paid below the federal minimum wage for any given week, the only way Gordon has stated a cognizable claim is if her payment to the City for a portion of her training costs is a “kick-back” payment as described in section 535.31.
While this court has not previously addressed this issue, we find persuasive the Seventh Circuit’s reasoning in Heder v. City of Two Rivers, Wisconsin, 295 F.3d 777 (7th Cir.2002). Heder was decided in the context of a similar reimbursement scheme for city firefighters. The City of Two Rivers funded its firefighters’ mandatory paramedic training but required a firefighter to reimburse the city for the costs of training if the firefighter left the city’s employment before completing three years of service. Id. The Seventh Circuit upheld the reimbursement agreement, comparing it to a loan; the cost of the training was a loan the city made to its firefighters, repayment of which was forgiven after three years. Id. at 781-82. If, however, a firefighter left before three years of service, the loan became due. Id. As long as the city paid departing firefighters at least the statutory minimum wage, it could collect the training costs as an ordinary creditor. See id. at 779.
The Seventh Circuit’s analysis is applicable here. The $5,268.03 payment Gordon made to the City is repayment of a voluntarily accepted loan, not a kick-back. Instead of requiring applicants to independently obtain their police training prior to beginning employment, which the City could do by only hiring individuals already possessing a POST certification,FN5 the City elected to essentially loan police officer trainees like Gordon the cost of their police academy training. The Conditional Offer Gordon signed explained that the City would forgive her repayment obligation at the specified rate and that she would owe nothing after five years of service. Gordon, however, chose not to serve the five years necessary to secure complete forgiveness. Despite the debt Gordon owed following her resignation, the City satisfied the FLSA’s requirements by paying Gordon at least minimum wage for her final week of work. The City was therefore free to seek repayment of Gordon’s training debt as an ordinary creditor.
Because Gordon’s repayment of her training costs is not a kick-back under section 531.35, the training reimbursement agreement does not violate the FLSA since she was paid at least minimum wage for her final workweek. Accordingly, we affirm the district court’s partial denial of Gordon’s Motion for Leave to File her Proposed First Amended Complaint.”
S.D.N.Y.: NYLL Unpaid Gratuities and FLSA Overtime Claims Not Precluded By LMRA or CBA; No Interpretation of CBA Required To Determine Whether Defendant Violated Law
August 28, 2010 3:55 pm / Leave a comment
Alderman v. 21 Club Inc.
Plaintiffs, unionized waitstaff who worked Defendant’s private banquets filed suit seeking the recover of unpaid tips, pursuant to the New York Labor Law, and unpaid overtime, pursuant to the FLSA. Plaintiffs specifically sought the portion of service charges charged by Defendant, but not paid to Plaintiffs as “tips” as required by New York law. The Defendant moved to dismiss, asserting that Plaintiffs’ claims for unpaid tips were precluded by the LMRA (the CBA stated that banquet waitstaff would receive the equivalent of 18% of the gross price of any banquet they worked). The Court denied Defendant’s Motion, because the claims were pendant not on the CBA, but on the NYLL.
The Court explained:
“As described earlier, plaintiffs’ first claim is under NYLL § 196-d for unpaid gratuities to plaintiffs who worked banquet events at the ’21’ Club. Defendants contend that this claim in reality is one under Section 301 of the LMRA, 29 U.S.C. § 185, which preempts the application of state labor law. Section 301 of the LMRA provides:
Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce … may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.
The Supreme Court has interpreted Section 301 “as a congressional mandate to the federal courts to fashion a body of federal common law to be used to address disputes arising out of labor contracts.” Allis-Chalmers Group v. Lueck, 471 U.S. 202, 209 (1985). When a state law claim alleges a violation of a labor contract or when the resolution of a state law claim depends on an interpretation of a collective bargaining agreement, Section 301 preempts that claim. See Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 261 (1994). But if a state “prescribes rules or establishes rights and obligations that are independent of a labor contract, actions to enforce such independent rights or rules would not be preempted by section 301.” Vera v. Saks & Co., 335 F.3d 109, 115 (2d Cir.2003). Indeed, the “bare fact that a collective-bargaining agreement will be consulted in the course of state-law litigation plainly does not require the claim to be extinguished.” Livadas v.. Bradshaw, 512 U.S. 107, 124 (1994). In order to determine whether a state law claim is preempted because it requires interpretation of a collective bargaining agreement, the court must analyze whether the “legal character” of the state law claim is truly independent of the rights conferred under the collective bargaining agreement. Salamea v. Macy’s East, Inc., 426 F.Supp.2d 149, 153-54 (S.D.N .Y.2006).
In the present case, plaintiffs bring their gratuities claim under NYLL § 196-d and not under the CBA. Both § 196-d and the CBA give employees rights in respect to gratuities, although they are worded differently in ways that have significance in this case. Specifically, the CBA guarantees gratuities in the amount of 18% of the total bill for the function. Section 196-d guarantees to the employees whatever has been charged to provide gratuities, without reference to a specific percentage. It is necessary, therefore, for the court to define exactly what plaintiffs’ claim is and then to determine whether it fits under § 196-d or under the CBA or both.
The relevant portions of the complaint are paragraphs 21 and 22 in the factual allegations and paragraphs 33 and 34 stating the claim:
21. For private events, Defendants charged gratuities to the hosts of the events equal to a percentage of the cost of the events.
22. While Defendants distributed a potion of these gratuities to the service staff that worked these parties, Defendants did not distribute all of the gratuities. Thus, Defendants illegally retained substantial portions of the gratuities paid by private event hosts, instead of distributing them in their entirety to service staff.
33. Defendants received gratuities from customers for all private banquets.
34. Defendants retained portions of Plaintiffs’ tips and Class members’ tips.
On their face, the allegations of the complaint do not refer to 18%. However, they are not precise in excluding the possibility that in fact plaintiffs are seeking the 18% referred to in the CBA. But the court believes that the December 29, 2008 letter of union president Bill Granfield is relevant in construing the nature of the gratuities claim. This letter makes a demand that the ’21’ Club pay to employees “the difference between your service charge rate and the 18% gratuity rate contained in the contract.” The reference to “the contract” presumably means the CBA. Thus, in late 2008, the Union was claiming that the service charges were greater than the 18% referred to in the CBA and was demanding that the entire amount be paid to the employees.
The court concludes that the complaint should be taken on its own terms and cannot properly be construed as actually referring only to the 18%.
The complaint asserts that it is made under NYLL § 196-d. That statute provides:
No employer or his agent or an officer or agent of any corporation, or any other person shall demand or accept, directly or indirectly, any part of the gratuities, received by an employee, or retain any part of a gratuity or of any charge purported to be a gratuity for an employee. This provision shall not apply to the checking of hats, coats or other apparel. Nothing in this subdivision shall be construed as affecting the allowances from the minimum wage for gratuities in the amount determined in accordance with the provisions of article nineteen of this chapter nor as affecting practices in connection with banquets and other special functions where a fixed percentage of the patron’s bill is added for gratuities which are distributed to employees, nor to the sharing of tips by a waiter with a busboy or similar employee.
The first sentence of the statute prevents an employer from taking the gratuities received by an employee. The relevant part of the last sentence states that nothing in the statute affects the practice in connection with functions where a fixed percentage is added to the patron’s bill for gratuities which are distributed to employees. The statute is somewhat confusing because the assurance of the employee’s rights in the first sentence is followed by the latter portion of the last sentence which states that the statute is not applicable to functions where an amount is added to the patron’s bill for gratuities.
Plaintiffs cite authorities that they contend give them rights under the statute. It is not the province of the court on the present motion to resolve questions which may arise as to the exact construction of the statute. It is sufficient to say that, as far as state law is concerned, plaintiffs would surely be entitled to attempt to recover under the statute. What defenses there may be under state law, and how the issues are resolved, remains to be seen. One thing is clear under § 196-d, and that is that there is no reference to 18% or any limit of 18%.
On the question of whether plaintiffs’ gratuities claim should be construed as in reality coming under the CBA so that federal law applies, the language of the CBA was quoted earlier in this opinion. The CBA only guarantees 18%. Consequently, a claim for more than 18% is not properly one under the CBA. It is properly made under § 196-d.
The result is, and the court so holds, that the gratuities claim is not preempted by federal law.
The court notes the contention that the history of the Union submissions by way of grievances constitutes an admission that the gratuities claim in the present case properly falls within the ambit of the CBA. The court rejects this argument. The employees did not give up their right to assert a gratuities claim under § 196-d in the present action.”
The Court also ruled that Plaintiffs were not required to submit their claims to arbitration, based on the language in the CBA.
To read the entire opinion, click here.
7th Cir.: 203(o) Does Not Preempt State Law; Notwithstanding The Fact That Time Spent Donning/Doffing Of PPE Constitutes Changing “Clothes” Under the FLSA, Such Time Is Compensable Under WI State Law And Not Waivable By CBA
August 4, 2010 9:52 am / Leave a comment
Spoerle v. Kraft Food Global, Inc.
In this case, the Plaintiff-employees brought a collective action against employer under the Fair Labor Standards Act (FLSA) and state law, contending that hourly employees at employer’s plant should be paid for time spent donning and doffing safety and sanitation articles and walking to and from their work stations at the beginning and end of their shifts. The trial court granted employees’ motion for summary judgment, and employer appealed. The Seventh Circuit held that the employees’ claims were not preempted by FLSA and affirmed.
The Court framed the issue as “whether § 203(o ) preempts state law that lacks an equivalent exception[?]” Answering in the negative, the Court reasoned:
“The Fair Labor Standards Act has a saving clause:
No provision of this chapter … shall excuse noncompliance with any Federal or State law or municipal ordinance establishing a minimum wage higher than the minimum wage established under this chapter or a maximum work week lower than the maximum workweek established under this chapter…. No provision of this chapter shall justify any employer in reducing a wage paid by him which is in excess of the applicable minimum wage under this chapter, or justify any employer in increasing hours of employment maintained by him which are shorter than the maximum hours applicable under this chapter.
29 U.S.C. § 218(a). This means, the district court concluded, that donning and doffing time counts toward the workweek (and overtime rates) if state law so provides. Kraft Foods concedes that Wisconsin requires time spent donning and doffing safety gear to be compensated at the minimum wage or higher, and that this time counts toward the limit after which the overtime rate kicks in. See Wis. Stat. §§ 109.03, 103.02; Wis. Admin. Code § DWD 272.12(2)(e). (This makes it unnecessary to decide whether federal law would require payment for this time, in the absence of a § 203(o ) agreement. See Pirant v. United States Postal Service, 542 F.3d 202, 208-09 (7th Cir.2008) (discussing which kinds of required safety gear are “integral and indispensable” for purposes of the analysis in IBP ).) Kraft Foods contends, however, that § 203(o ) preempts Wisconsin’s law. The district judge rejected that argument and entered judgment in plaintiffs’ favor as a matter of Wisconsin rather than federal law, see 626 F.Supp.2d 913 (W.D.Wis.2009), a step supported by the supplemental jurisdiction of 28 U.S.C. § 1367.
Kraft Foods contends that § 203(o ) embodies a federal decision to permit a collectively bargained resolution to supersede the rules otherwise applicable to determining the number of hours worked. That’s an accurate statement, as far as it goes. But “as far as it goes” means “as far as § 203(o ) itself goes.” And the statute tells us exactly how far it goes. The first words of § 203(o ) are: “In determining for the purposes of sections 206 and 207 of this title the hours for which an employee is employed …”. Section 206 sets the federal minimum wage per hour worked. Section 207 specifies how many hours a person may work in a given period before overtime pay commences. These are rules of federal law. States are free to set higher hourly wages or shorter periods before overtime pay comes due. That’s what § 218(a) says. Nothing in § 203(o ) limits the operation of § 218(a).
As far as we can tell, this is the first time an employer’s argument that § 203(o ) preempts state law has reached a court of appeals. All three district judges who have considered this argument have rejected it. In addition to the decision under review, see In re Cargill Meat Solutions Wage & Hour Litigation, 632 F.Supp.2d 368, 392-94 (M.D.Pa.2008); Chavez v. IBP, Inc., 2005 U.S. Dist. LEXIS 29714 at *112-22 (E.D.Wash. May 16, 2005). If Wisconsin had provided for a minimum hourly wage exceeding the rate in the collective bargaining agreement between Kraft Foods and Local 538, the state law would trump the CBA. And if this is so for the hourly rate, it must be equally so for the number of hours, because how much pay a worker receives depends on the number of hours multiplied by the hourly rate. It would be senseless to say that a state may control the multiplicand but not the multiplier, or the reverse, because control of either one permits the state to determine the bottom line (provided that the state’s number exceeds the federal minimum; § 218(a) does not allow a state to authorize employers to pay less than the federal floor).
As Kraft Foods sees things, Wisconsin is meddling with collective bargaining, so that federal labor law preempts state law if § 203(o ) does not do the trick. Yet nothing in the Wisconsin statutes gives a state court, or other state official, any role in interpreting or enforcing a collective bargaining agreement. What Wisconsin requires is that the collective bargaining agreement be ignored, to the extent that it sets lower wages or hours than state law specifies. Cf. Lingle v. Norge Division of Magic Chef, Inc., 486 U.S. 399, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988) (state rules that disregard, rather than interpret, collective bargaining agreements are not preempted by federal labor policy). Suppose the CBA set a wage of $8 per hour, higher than the current federal minimum wage of $7.25, while Wisconsin law set a minimum wage of $8.25. (Wisconsin’s actual minimum wage is $7.25, but some states, including Illinois, use $8.25.) No one would contend that the employer could pay the workers $7.25 an hour, even though that is allowed by federal law if labor and management agree (this is the same sense that excluding donning and doffing time is allowed by § 203(o )). Which rate would prevail: $8 from the CBA or $8.25 from state law? According to § 218(a), the employer must pay $8.25 an hour; state law supersedes the collective bargaining agreement. And if this is so about the wage per hour, it is equally true about the number of hours.
Nothing that labor and management put in a collective bargaining agreement exempts them from state laws of general application. If a CBA were to say: “the workers will receive the minimum wage under FLSA, and not one cent more no matter what state law provides,” that would be ineffectual. So too would an agreement along the lines of: “Because our base hourly rate is more than 150% of the minimum wage, we need not pay overtime rates under state law.” States can set substantive rules that determine the effective net wage, even when a CBA plays a role (as it does when a law requires overtime pay at some multiple of the base pay set in a collective bargaining agreement). Every state’s overtime-compensation rule could affect collective bargaining-knowing that state law requires pay at time-and-a-half, labor and management might agree to a lower base rate per hour-but that effect would not prevent application of the state’s wage-and-hour statutes.
Management and labor acting jointly (through a CBA) have no more power to override state substantive law than they have when acting individually. Imagine a CBA saying: “Our drivers can travel at 85 mph, without regard to posted speed limits, so that they can deliver our goods in fewer compensable hours of work time.” That clause would be ineffectual. And a CBA reading instead that “our drivers can travel at a reasonable rate of speed, no matter what state law provides” would be equally pointless. Making a given CBA hard to interpret and apply (as the word “reasonable” would be) would not preempt state law on the theory that states must leave the interpretation of CBAs to the National Labor Relations Board and the federal judiciary; states would remain free to enforce laws that disregarded CBAs altogether. That is what Wisconsin does when determining which donning and doffing time is compensable.
The district court therefore did not err in concluding that plaintiffs are entitled to be paid for all time required by Wisconsin law, and the judgment is AFFIRMED.”
To read the entire opinion, click here.
D.Colo.: Time Spent By Police Officers Donning And Doffing Their Uniforms And Equipment Is Compensable, Because It Is Integral And Indispensable To Their Police Duties
May 17, 2010 7:32 pm / Leave a comment
Rogers v. City and County of Denver
This case was before the Court on the parties’ respective motions for summary judgment. Plaintiffs made several claims for unpaid wages based on a variety of “off-the-clock” claims. Although the Court denied the parties’ motions with respect to most of the claims–either because the record was not fully developed, or because there were issues of fact–it held that the donning and doffing of uniforms and equipment by certain officers was compensable time.
“The first claim seeks compensation for time spent putting on and taking off the police uniform and equipment required for conducting police activity. For convenience of analysis, this claim is considered as it applies to patrol officers. The DPD Operations Manual prescribes the basic uniform to be worn on duty. It consists of a uniform shirt, uniform trousers, trouser belt, socks and authorized footwear. (DPD Op. Manual § 111.02.) A uniformed officer is generally required to carry a metal badge and nameplate, current DPD identification card, a valid Colorado driver’s license, and a standard uniform belt (“duty belt”) containing an authorized holster and firearm, ammunition case and ammunition, handcuffs and handcuff case, department issued tear gas and holder, flashlight, baton ring and belt “keepers.” (Id. § 111.03.) Uniformed officers are not required to wear basic hats or reflective apparel or carry batons, but officers must have those items available at all times. (Id. §§ 111.02(1), 111.02(12) & 111.03(13)). The Operations Manual describes particular situations in which basic hats and reflective apparel must be worn. The wearing of ballistic vests is encouraged, but not required. (Id. § 111.05(2)(e)).
The DPD does not require that donning and doffing the basic uniform take place at the assigned work station. Some district headquarters have storage lockers and rooms available for use at the officer’s individual choice. Some district buildings are too small and the officers must report in full uniform. The City argues that the option to put on and take off the uniform at home or elsewhere distinguishes this case from precedents established in the context of the meat industry and other hazardous occupations.
The option to change away from the duty station is not determinative. The principal activity of the patrol officers is policing the community. The police uniform is not “clothing” in any ordinary sense. It is the visible sign of authority and an essential element of the officer’s ability to command compliance with his commands and directives. It is analogous to the judicial robe. The uniform includes the equipment that are the tools that enable the officer to use physical force, including deadly force, for the protection of himself and others as circumstances require.
The City argues that the Plaintiffs’ clothes changing activities are excluded from compensation under 29 U.S.C. § 203(o). That section provides:
Hours Worked.-In determining for the purposes of sections 206 and 207 of this title the hours for which an employee is employed, there shall be excluded any time spent in changing clothes or washing at the beginning or end of each workday which was excluded from measured working time during the week involved by the express terms of or by custom or practice under a bona fide collective-bargaining agreement applicable to the particular employee.
CBAs between the City and the Denver Police Protective Association have been in effect since January 1, 1996. DPD officers have never been compensated for donning and doffing their uniforms and personal equipment. The City contends that this history of non-compensation shows an established custom or practice under the CBAs.
That argument is not persuasive. Silence in collective bargaining is not the equivalent of a custom or practice of non-compensability.
In December 1985, the United States Department of Labor (“DOL”) issued a Wage and Hour Opinion Letter, stating that the time spent by a uniformed police officer donning and doffing the required uniform was not compensable time under the FLSA, where a collective bargaining agreement between a city and the union had no express provision regarding the compensability of clothes-changing time and there had been no custom or practice between the parties to consider such clothes changing time compensable. Wage & Hour Opinion Letter, Dec. 30, 1985, 1985 WL 1087351, Def.’s Ex. A-98. That opinion letter is not persuasive, but may be considered with respect to the issue of willfulness. Similarly, Wage & Hour Advisory Memorandum No.2006-2 dated May 31, 2006 (opining that changing into gear is not a principal activity if employees have the option and the ability to change at home) is relevant only to the issue of willfulness.
The judicially-created de minimis rule provides an exception to the FLSA’s requirement that all work be compensated. There are genuine issues of material fact regarding the time and effort required to don and doff the DPD uniform and protective gear. The City’s de minimis defense is a factual issue for trial.
While donning and doffing the patrol officers uniform and equipment is compensable time under the FLSA as activity that is integral and indispensable to their police duties, the continuous work day does not begin or end with that activity. The plaintiffs are not asking for time spent commuting for those officers who chose to change at home. This ruling is applicable only to the uniformed officers on official duty. The facts concerning wearing uniforms and equipment during secondary employment are not adequately presented in the papers filed. Similarly there is no clear evidentiary record concerning detectives and other non-uniformed officers.”
This decision appears to be in direct conflict with the Ninth Circuit’s recent decision discussed here, which held that time spent donning and doffing police uniforms and equipment was not compensable, because officers had the option of doing it at home.
Click here to read the entire decision.
M.D.Tenn.: Even If Time Spent Donning And Doffing A Uniform Is Non-Compensable Under § 203(o), It Might Still Start The Workday Under § 254(a) And The Continuous Workday Rule
February 15, 2010 10:40 am / Leave a comment
Arnold v. Schreiber Foods, Inc.
Before the court was the Motion for Summary Judgment filed by defendant Schreiber Foods, Inc. The Court granted the defendant’s motion in part and denied in part. Of interest, while the Court determined certain time donning and doffing clothes was properly excluded from Plaintiffs’ compensable time under § 203(o), it held that such time spent donning and doffing clothes may still constitute the first activity integral to the Plaintiffs’ principle activities and start the so-called continuous workday, requiring Defendant to compensate Plaintiffs for all time spent after donning such clothes.
In discussing the applicability of § 203(0), to exclude time Plaintiffs spent “changing clothes,” the Court explained that, “[t]he defendant’s plant is unionized, and the United Food and Commercial Workers Union (“UFCW”) is the exclusive bargaining agent for all hourly employees. In September 2004, Schreiber and the UFCW negotiated a new collective-bargaining agreement. One of the UFCW’s proposals was for Schreiber to compensate employees for time spent donning and doffing uniforms at the beginning and end of the workday. After further negotiation, this proposal was withdrawn, and it was not included in the final agreement. The same thing happened when the two sides negotiated a new agreement in 2008.”
The Court next addressed Plaintiff’s argument that “because their workday begins when they don their uniforms and ends when they doff them, post-donning and pre-doffing ‘travel and waiting time’ is compensable” explaining that:
“Under the continuous workday rule, the workday begins at the commencement of the employee’s “principal activities,” which include activities that are an “ ‘integral and indispensable part of the principal activities.’ ” IBP, 546 U.S. at 30 (quoting Steiner, 350 U.S. at 252-53). The factors relevant to determining whether an activity is integral and indispensable are (1) whether the activity is required by the employer, (2) whether the activity is necessary to the employee’s principal activities, and (3) whether the benefit of the activity inures primarily to the employer. Jordan v. IBP, Inc., 542 F.Supp.2d. 790, 808 (M.D.Tenn.2008) (citing Alvarez, 339 F.3d at 902-03;Bonilla v. Baker Concrete Constr., Inc., 487 F.3d 1340, 1344 (11th Cir.2007)). “The changing of clothes may be considered integral and indispensable to an employee’s principal activities ‘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.’ ” Id. (quoting Ballaris v. Wacker Siltronic Corp., 370 F.3d 901, 910 (9th Cir.2004)).
Here, it is at least a question of fact whether the act of donning and doffing uniforms is integral and indispensable to the plaintiffs’ job. It is undisputed that Schreiber requires its employees to wear clean uniforms, as mandated by Tennessee state regulations. See Tenn. Dep’t of Agric. Rule 0080-3-3-.04(5) (requiring that dairy plant employees who engage in the “manufacturing, packaging, or handling dairy products” wear “[c]lean white or light-colored washable outer garments”). Employees are required to don the uniforms at Schreiber’s plant, and the benefit of the sanitary uniforms to Schreiber is obvious-it allows the company to create uncontaminated food products. Numerous cases involving similar circumstances have found that donning and doffing uniforms can be an integral and indispensable activity. E . g., Jordan, 542 F.Supp.2d at 810 (finding that it was integral and indispensable for meat processing plant employees to don and doff safety and sanitary gear); Johnson v. Koch Foods, Inc., No. 2:07-CV-51, 2009 U.S. Dist. LEXIS 106058, at *28-30 (E.D.Tenn. Nov. 13, 2009) (finding a question of fact as to whether donning and doffing safety and sanitary gear was integral and indispensable for chicken processing plant employees); Gatewood v. Koch Foods of Miss., LLC, 569 F.Supp.2d 687, 696-98 (S.D.Miss.2008) (same). A reasonable jury could find that, under the continuous workday rule, the plaintiffs’ workday starts when they don their uniforms and ends when they doff them.
‘[D]uring 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 excluded from the scope of [§ 254(a) ], and as a result is covered by the FLSA .’ IBP, 546 U.S. at 37. Each day, Schreiber employees spend time walking and waiting (1) after donning their uniforms but before clocking in, and (2) after clocking out but before doffing their uniforms. Disregarding § 203(o), and assuming that donning and doffing is integral and indispensable, this walking and waiting time is compensable.
This raises two questions. The first is whether § 203(o) affects the compensability of the plaintiffs’ walking and waiting time. Courts are split on this issue. Some courts have held that when donning and doffing “is excluded from hours worked under § 203(o), [post-donning and pre-doffing] walking time [does] not follow or precede a principal work activity, and therefore is not compensable.” Hudson v. Butterball, LLC, No. 08-5071-CV-SW-RED, 2009 U.S. Dist. LEXIS 104649, at *1 1 (W.D.Mo. Oct. 14, 2009); see also Sisk v. Sara Lee Corp., 590 F.Supp.2d 1001, 1011 (W.D.Tenn.2008) (“[O]nce an activity has been deemed a section 3(o) activity, it cannot be considered a principal activity.”) This accords with the Department of Labor’s current view that “activities covered by section 3(o) cannot be considered principal activities and do not start the workday.” U.S. Dep’t of Labor, Wage & Hour Div. Advisory Op. Ltr. No. FLSA2007-10.
A greater number of courts, however, have held that determining what constitutes a “principal activity” and determining what constitutes “changing clothes” are separate inquiries. Even if time spent donning a uniform is non-compensable under § 203(o), it still might start the workday, making subsequent activities compensable under § 254(a) and the continuous workday rule. See Sandifer, 2009 U.S. Dist. LEXIS 96715 at *40 (“The court can’t conclude as a matter of law that the non-compensability … under [§ 203(o) ] excludes consideration of whether, pursuant to [§ 254(a) ], those activities are an integral and indispensable part of the employees’ principal activities….”); Andrako v. United States Steel Corp., 632 F.Supp.2d 398, 412-13 (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.”); Johnson, 2009 U.S. Dist. LEXIS 106058 at *32 (“[I]f the donning, doffing, and washing excluded by § 203(o) are determined by the trier of fact to be integral and indispensable, those activities could commence the workday.”); Gatewood, 569 F.Supp.2d at 702 (“Although the statute precludes recovery for time spent washing and ‘changing clothes,’ it does not affect the fact that these activities could be the first ‘integral and indispensable’ act that triggers the start of the continuous workday rule for subsequent activities….”); Figas v. Horsehead Corp., No. 06-1344, 2008 U.S. Dist. LEXIS 87199, at *66-67 (W.D.Pa. Sept. 3, 2008) (“The Court is not convinced that § 203(o) changes the ‘principal’ nature of donning and doffing activities, or that ‘principal’ activities somehow become ‘preliminary’ or ‘postliminary’ under the Portal Act simply because they are rendered noncompensable by a collective-bargaining agreement in accordance with § 203(o).”).
The court agrees that this is the best way to reconcile the application of § 203(o) with Supreme Court precedent. In IBP, the Supreme Court made it clear that the continuous workday starts upon the employee’s first principal activity. 546 U.S. at 29, 37. Logically, whether an activity counts as “changing clothes” under § 203(o) does not necessarily affect whether it is a principal activity. One court found it odd that the uncompensated act of changing clothes might convert an employee’s subsequent, otherwise-non-compensable activity into compensable activity. Sisk, 590 F.Supp.2d at 1011. But this oddity diminishes as the period of the subsequent activity grows longer. For example, if an employer required employees to don uniforms in a company locker room and then spend 30 minutes traveling to a work site, it would not seem “illogical,” id., to require the employer to pay for the travel time. The court finds that § 203(o) does not bar the plaintiffs from receiving compensation for post-donning and pre-doffing activities.
The second question is whether the plaintiffs’ walking and waiting time is noncompensable because it is de minimis. “When the matter in issue concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded. Split-second absurdities are not justified by the actualities of working conditions or by the policy of the Fair Labor Standards Act.” Mt. Clemens Pottery, 328 U.S. at 692.
Courts look to three factors in deciding whether otherwise compensable time is de minimis: “1) the practical administrative difficulty of recording the additional time; 2) the size of the claim in the aggregate; and 3) whether ‘the claimants performed the work on a regular basis.’ “ Brock v. City of Cincinnati, 236 F.3d 793, 804 (6th Cir.2001) (quoting ( Lindow v. United States, 738 F.2d 1057, 1062-63 (9th Cir.1984)). Although there is no rigid mathematical rule, “[m]ost courts have found daily periods of approximately 10 minutes de minimis even though otherwise compensable.” Lindow, 738 F.2d at 1062;see also Von Friewalde, 339 Fed. Appx. at 454. “The burden is on the employer to show that the time consumed by the activity is de minimis.” Gilmer v. Alameda-Contra Costa Transit Dist., No. C 08-05186, 2010 U.S. Dist. LEXIS 3405, at *24 (N.D.Cal. Jan. 15, 2010) (citing Rutti v. Lojack Corp., Inc., 578 F.3d 1084, 1095 n .11 (2009)).
As explained earlier, § 203(o) covers the plaintiffs’ clothes-changing activities through the time that they retrieve and don their hairnets, beard nets, and earplugs. According to the plaintiffs’ declarations, “[o]nce the Workers retrieve their hairnets, beard nets (if applicable), and ear plugs, the Workers clock-in.” (E.g., Docket No. 42, Ex. 1 ¶ 12). The hairnet, beard net, and earplug dispensers are located approximately 40 feet from the time clocks. (Docket No. 36, Ex. 1.) Although it seems unlikely that this journey takes a significant amount of time, it is possible that employees are forced to wait for some period of time before clocking in. The defendant has not presented evidence directly addressing this matter, so it has not met its burden of showing that the walking and waiting time is de minimis. Therefore, the court cannot dismiss this aspect of the plaintiffs’ claim at this stage.”
Not discussed here, the Court denied Defendant’s Motion to the extent they sought a finding that time Plaintiffs spent sanitizing their boots should be excluded.
N.D.Ill.: Idle Hours Are Compensable “Hours Worked” For Purposes Of Labor Management Relations Act (LMRA), Because Compensable Under FLSA
December 10, 2009 12:52 pm / Leave a comment
Laborers’ Pension Fund v. Eagle America Corp.
Plaintiffs Laborers’ Pension Fund and Laborers’ Welfare Fund of the Health and Welfare Department of the Construction and General Laborers’ District Council of Chicago and Vicinity, and James S. Jorgensen, Administrator (collectively “the Funds”), brought suit against Defendant Eagle America Corporation under ERISA, 29 U.S.C. § 1132(e), and the LMRA, 29 U.S.C. § 185(a). The Funds claimed that Eagle America violated ERISA and the LMRA by failing to make proper employee benefit contributions, failing to pay proper union dues, and failing to maintain a surety bond to guarantee the payment of wages and contributions for all “hours worked.” The case was before the Court on Plaintiffs’ Motion for Summary Judgment. Finding, in part, that Plaintiffs’ members were entitled to be paid for idle time, as “hours worked” under the FLSA, the Court granted Plaintiffs’ Motion for Summary Judgment.
Of interest here, the Court analyzed Plaintiffs’ claims for unpaid idle hours under the framework of the FLSA, determining such hours to be compensable as “hours worked” under the FLSA, thereby finding Defendant liable for unpaid wages and benefits to Plaintiffs.
“Before determining whether there is a genuine dispute as to the accuracy of the audit reports, the Court must analyze the controversy over whether Eagle America is responsible for contributions to the Funds for every hour that a covered employee showed up to work. The controversy essentially boils down to a dispute over whether the requirement that Eagle America make contributions for “each hour worked” covers hours when employees are at the job site waiting for appliances to be delivered or loading docks and elevators to become available.
Eagle America argues that these were not “hours worked” because its employees were idle during these hours due to causes that were “unavoidable” from the Company’s perspective. The Company points to the CBA provision requiring the Company to give four hours payment for time lost to employees reporting for work who are not put to work. The Company notes that the provision contains an exception for occasions when the Company cannot put employees to work for “unavoidable causes.” The parties agree that the Company often has no control over whether appliances, elevators, and docks are available. Thus, the Company argues, because the CBA does not require the Company to pay the employees for these “idle hours,” it need not make contributions for these hours.
The Funds argue that the provision regarding “unavoidable causes” is irrelevant. Instead, they look to federal rules interpreting the Fair Labor Standards Act (FLSA) for guidance on the issue of what constitutes an “hour worked.” According to those rules, which clarify the concepts of compensable time and time worked under the FLSA, “[a]n employee who is required to remain on call on the employer’s premises or so close thereto that he cannot use the time effectively for his own purposes is working while ‘on call.’ ” 29 C.F.R. 785.17 (emphasis added). Eagle America argues that even if the Court looks to the FLSA as a guide, the question of whether waiting time is to be considered working time is a “question of fact to be resolved by appropriate findings of the trial court,” Skidmore v. Swift, 323 U.S. 134, 136-37, 65 S.Ct. 161, 163, 89 L.Ed. 124 (1944), and urges the Court to deny summary judgment on that basis.
This lawsuit does not arise under the FLSA. However, in construing the terms of a contract, the Court will take the legal framework in place into account. Florida E. Coast Ry. Co. v. CSX Transp., Inc., 42 F.3d 1125, 1129 (7th Cir.1994). The Court may assume that the parties understood the law in effect at the time of the CBA’s execution and interpret the term accordingly. Id. at 1129-32 (construing settlement agreement not to apply in situations where it would be illegal). Thus, the Court will assume that the parties intended the CBA to require Eagle America to compensate its employees for all hours that are compensable under the FLSA.
The Skidmore Court refused to “lay down a legal formula” as to which “waiting hours” are compensable, holding that courts must address the issue as a case-specific question of fact. 323 U.S. at 136-37, 65 S.Ct. at 162-63. While the interpretive rule cited above is more specific, it does not bind the Court. Brigham v. Eugene Water & Elec. Bd., 357 F.3d 931, 940 (9th Cir.2004) (citing U.S. v. Mead Corp., 533 U.S. 218, 232, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001)). Nonetheless, courts have frequently looked to the rules for guidance in disputes under the FLSA, id. (compiling cases), and, as the rule suggests, the question of whether an employee must remain on or near the premises while waiting is often a factor in the courts’ determinations. See, e.g., Armour & Co. v. Wantock, 323 U.S. 126, 133-34, 65 S.Ct. 165, 168-69, 89 L.Ed. 118 (1944) (affirming judgment in favor of firefighters who could spend time on call playing cards and engaging in other “amusements,” but who were required to remain on premises); see also Owens v. Local No. 169, Ass’n of W. Pulp & Paper Workers, 971 F.2d 347, 351-54 (9th Cir.1992) (compiling factors, distinguishing cases in which employees had to remain on, near, or were frequently called back to premises). In cases where on-premises hours were not considered “working hours,” the workers were allowed to use their time on premises for long resting periods, eating, and engaging in recreational activities. See, e.g., Allen v. Atl. Richfield Co., 724 F.2d 1131, 1137 (5th Cir.1984) (reversing summary judgment to plaintiffs because they were “free to sleep, eat at no expense, watch movies, play pool or cards, exercise, read, or listen to music during their off-duty time”); Rousseau v. Teledyne Movible Offshore, Inc., 805 F.2d 1245, 1248 (5th Cir.1986) (affirming dismissal of claim by plaintiffs who were “free to sleep, eat, watch television, watch VCR movies, play pingpong or cards, read, listen to music, etc….[and] seldom or never did any physical work after their shift ended”).
In this case, Eagle America has provided no facts to call into dispute whether the “idle hours” spent on the jobsite by its employees were in fact “hours worked.” Instead, the Company points to the contract language regarding “unavoidable cause” and stresses that this is a question of fact. However, Eagle America cannot survive the summary judgment phase of these proceedings merely because there is a question of fact involved. The Court will deny summary judgment if there is a “genuine issue as to [a] material fact.” Fed.R.Civ.P. 56(c). Eagle America is correct that in instances of uncertainty regarding whether “hours waiting” are “hours working” the Court “must take account of the arrangement plaintiffs themselves chose.” Binges v. Sacred Heart St. Mary’s Hospitals, Inc., 164 F.3d 1056, 1059 (7th Cir.1999). In other words, the Court will look to the CBA in cases of uncertainty. However, given Eagle America’s failure to put forward any facts regarding the freedom its workers have while waiting for deliveries, loading docks, and elevators, the Court does not find uncertainty in this case.
Assuming for the moment that there is some level of uncertainty, however, and that the CBA is relevant, the Court does not stray from its decision. The Company reads the referenced CBA provision to apply to situations when employees are waiting for elevators and the like. However, the Court reads the provision differently. The provision, which appears under the heading “Reporting for Work,” applies to employees “reporting for work” but “not put to work.” The CBA generally requires Eagle America to pay these employees four hours’ worth of pay for “lost time.” Under the Company’s reading, employees would receive this four hours’ pay regardless of whether they were sent home immediately or were sent home after waiting on the jobsite for eight hours. Or, in the case at issue here, when the Company does not put an employee to work for an “unavoidable cause” such as a late delivery, the employee might be paid nothing for waiting eight hours. The provision makes much more sense if it applies only in situations when an employee is sent home and unable to work the hours that he or she expected to work and not in situations when the employee is required to remain on premises waiting for hours at a time or waiting for minutes between tasks for an entire day.
This reading of the provision finds support in the text of the provision itself. While the Company focuses on the fact that it need not provide any pay in instances of “other unavoidable cause,” the CBA also exempts the Company from paying employees when they are not put to work because of “weather conditions, fire, [or] accident.” In cases of inclement weather, however, the CBA requires the Company to pay employees for hours spent waiting for the weather to clear up. Moreover, in the provision regarding inclement weather, the CBA alternatively refers to “reporting pay” as “show up” pay. These provisions lend a great deal of support to the notion that the parties to the CBA intended for the “Reporting for Work” provisions to require four hours’ pay for employees who “show up” for work but are sent home. They also support the notion that the parties intended workers to get paid for hours spent waiting. Finally, the Court finds further support in the fact that the CBA provides specific exceptions for “weather conditions, fire, [or] accident,” but not for the circumstances at issue in this case. If all parties understood that employees would regularly be required to wait for elevators, loading docks, and deliveries, and they intended for those circumstances to be covered by this provision, it seems unlikely that they would not have included an explicit reference to those circumstances.
The FLSA overrides contracts, so agreements such as the CBA are only relevant in close cases. Dinges, 164 F.3d at 1059. Eagle America has not placed material facts in this case in dispute, and it is therefore not a close case. Furthermore, the Court’s interpretation of the CBA favors the Funds. Thus, even making all inferences in favor of the Company, the Court can resolve this question of fact on summary judgment.”
Thus, the Court granted summary judgment in favor of the Funds on the issue of liability.
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