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8th Cir.: Informal Input Regarding Personnel Decisions Does Not Satisfy Hire/Fire Prong of Executive Exemption
Madden v. Lumber One Home Center, Inc.
Following a jury verdict in favor of the defendant-employer below, the trial court granted the plaintiffs’ motion for judgment notwithstanding the verdict, holding that—as a matter of law—defendant had failed to satisfy its burden of proof regarding the executive exemption. Defendant appealed and the Eighth Circuit affirmed with respect to two of the plaintiffs, but reversed as to one. As discussed here, the Eighth Circuit’s analysis focused on the hire/fire prong of the executive exemption. Significantly, the court explained in detail what types of involvement in personnel decisions rise to the level required for application of the executive exemption.
Initially the court restated the applicable regulation:
We determine whether an employee meets the executive exemption by applying Department of Labor regulations. See Fife v. Bosley, 100 F.3d 87, 89 (8th Cir.1996). The Department of Labor defines an “executive” employee—that is, one exempt from FLSA requirements relating to overtime pay—as follows:
(a) The term ’employee employed in a bona fide executive capacity’ in section 13(a)(1) of the Act shall mean any employee:
(1) Compensated on a salary basis at a rate of not less than $455 per week (or $380 per week, if employed in American Samoa by employers other than the Federal Government), exclusive of board, lodging or other facilities;
(2) Whose primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;
(3) Who customarily and regularly directs the work of two or more other employees; and
(4) Who has 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.
The court then framed the issue before it:
At issue in this case is whether the plaintiffs’ job duties met the requirements of the fourth element. In other words, we must determine whether the jury was presented with evidence that reasonably would support an inference that the plaintiffs had the ability to hire and fire other employees, or that their hiring recommendations were given “particular weight.” The Department of Labor defines “particular weight” as follows:
To determine whether an employee’s suggestions and recommendations are given ‘particular weight,’ factors to be considered include, but are not limited to, whether it is part of the employee’s job duties to make such suggestions and recommendations; the frequency with which such suggestions and recommendations are made or requested; and the frequency with which the employee’s suggestions and recommendations are relied upon. Generally, an executive’s suggestions and recommendations must pertain to employees whom the executive customarily and regularly directs. It does not include an occasional suggestion with regard to the change in status of a co-worker. An employee’s suggestions and recommendations may still be deemed to have ‘particular weight’ even if a higher level manager’s recommendation has more importance and even if the employee does not have authority to make the ultimate decision as to the employee’s change in status. 29 C.F.R. § 541.105. The district court, in granting the plaintiffs’ motion for judgment as a matter of law, found that Lumber One presented no evidence that the plaintiffs had the authority to make personnel decisions or that Morton gave their hiring recommendations particular weight.
Clarifying what type and amount of input into personnel decisions satisfies an employer’s burden regarding the executive exemption, the Eighth Circuit explained:
We first address what type and what amount of input into personnel decisions is sufficient to satisfy the fourth element of the FLSA’s executive exemption. Second, we look at the evidence in this case. We conclude that Lumber One failed to show that Madden and O’Bar met the executive exemption standard but that Lumber One did prove that Wortman was eligible for the executive exemption.
Courts previously addressing what is required by the fourth element of the FLSA executive exemption suggest that more than informal input, solicited from all employees, is needed to prove applicability of the executive exemption. See, e.g., Lovelady v. Allsup’s Convenience Stores, Inc., 304 F. App’x 301, 306 (5th Cir.2005) (per curiam) (unpublished) (affirming the district court’s decision that plaintiff-store managers met the fourth element because their hiring recommendations were almost always followed and they could fire employees without obtaining authorization from a higher manager); Grace v. Family Dollar Stores, Inc., 845 F.Supp.2d 653, 663 (W.D.N.C.2012) (finding fourth element satisfied because plaintiff, a store manager, selected applicants for interviews, conducted interviews, and recommended employees for promotions and demotions, and her recommendations were almost always followed by the district manager); Rainey v. McWane, Inc., 552 F.Supp.2d 626, 632 (E.D.Tex.2008) (finding fourth element satisfied because plaintiff, a production supervisor, completed weekly employee evaluations, recommended employee discipline, and recommended which temporary employees should be hired permanently); Goulas v. LaGreca, No. 12–898, 2013 WL 2477030, at *10 (E.D. La. June 7, 2013) (finding fourth element satisfied because the employer was grooming the plaintiff to eventually take over the company, and the employer terminated employees based on plaintiff’s recommendations). These cases provide useful guidance for understanding what is needed to satisfy the fourth element of the executive exemption. After looking at the different factors these courts used to find the fourth element satisfied, including the offering of personnel recommendations that were acted upon by managers, involvement in screening applicants for interviews, and participation in interviews, among others, it is apparent that many different employee duties and levels of involvement can work to satisfy this fourth element. When we look at the evidence regarding how Lumber One utilized Madden and O’Bar in this case, however, we find that it simply does not meet the standard. Cf. 5 C.F.R. 551.202(e) (“[T]he designation of an employee as FLSA exempt or nonexempt must ultimately rest on the duties actually performed by the employee.”).
Discussing the law in the context of this case, the Eighth Circuit explained:
The evidence presented at trial concerning the plaintiffs’ duties consisted solely of testimony from the plaintiffs, Morton, and office manager Amy Quimby. Morton testified that none of the plaintiffs hired or fired other employees. Therefore, in order to satisfy the fourth element, Lumber One needed to present evidence at trial that the plaintiffs were consulted about personnel decisions and that Morton gave each of their opinions particular weight regarding specific hiring decisions. Prior to hiring a new employee, Morton generally asked all of the Mayflower employees if they knew the applicant and could provide information about that person, and Lumber One believes this is sufficient to support the jury’s verdict.
At trial, Morton generically described how he elicited input from employees about applicants and how he used the information he received. For example, when asked if the plaintiffs were ever consulted during the screening process for new applicants, Morton responded: “[W]e would always ask all of our people if they knew someone before we hired them. When we would be interviewing them, we would ask for input from them because these guys were from the local area and we’d always ask if they knew the people or could recommend or knew anything at all about them.” Morton also said he took this information seriously, adding that “it was good information. We’re hiring blind here, so any input we could have or reference, it was used in making that determination.” Lumber One did not present any evidence that the plaintiffs were involved in, for instance, screening applicants, conducting interviews, checking references, or anything else related to its hiring process.
In determining that Lumber One’s practice of soliciting informal recommendations from all staff members is insufficient to meet the fourth element of the executive exemption, we find Rooney v. Town of Groton, 577 F.Supp.2d 513 (D.Mass.2008), instructive. In Rooney, the court held that a police lieutenant satisfied all of the requirements for designation as an exempt executive employee. Id. at 523–32. Concerning the fourth element, the court noted that the lieutenant was a member of an interview panel that ranked applicants, discussed the merits of applicants, and made hiring recommendations. Id. at 531. In addition, the police chief took the lieutenant’s opinion into consideration when determining which employees to promote. Id. While the lieutenant had no control over the ultimate hiring and personnel decisions, the court found that he was sufficiently involved in the hiring process to classify him as an exempt executive employee. Id.
Rooney specifically addresses Lumber One’s argument that Morton could have given the plaintiffs’ recommendations particular weight even though he asked all of his employees for input. In Rooney, the lieutenant characterized his recommendations to the police chief as the same type of recommendation an ordinary patrolman could provide to the chief, so he should not have been classified as an exempt employee. Rooney, 577 F.Supp.2d at 531. The court rejected his argument, finding that the lieutenant’s recommendations were given more weight than an ordinary patrolman. The court concluded that “the regulation does not state that Rooney must be the only officer in the department whose recommendations and suggestions are given particular weight, but rather that a ‘higher level manager’s recommendation [may have] more importance.’ ” Id. (citing 29 C.F.R. § 541.105).
In the present case, Morton testified that he solicited input from all employees. He did not testify that some employees’ input had more influence than others. Lumber One argues that requiring Morton to testify that he placed “particular weight” on each plaintiff’s input, as Lumber One claims the district court did in the order granting the plaintiffs’ motion for judgment as a matter of law, is unfair because it requires a lay person to use legal jargon in his testimony. We agree that Morton was not required to use the exact phrase “particular weight.” Morton could have used any number of words to convey that he gave the plaintiffs’ recommendations special consideration when making hiring decisions. The material point, however, is that in order to meet the fourth element of the executive exemption, Lumber One must present some proof that the purported executives’ input into personnel decisions was given particular weight. 29 C.F.R. § 541.105. For example, one way they could have done this is to show that the purported executives’ input had more influence than hourly employee’ input. This is especially true if that recommendation is the only evidence relied on for the exemption, which is what happened in this case.
Lumber One also argues that because the business was struggling financially in 2008 and did not hire many employees, the plaintiffs were simply unable to participate in personnel decisions because none were being made. In this regard, we note that the Office of Personnel Management’s regulation stating that FLSA exemptions are based on actual job functions, not intended responsibilities, is persuasive in this circumstance. See 5 C.F.R. § 551.202(e) (noting that FLSA exemptions are based on “duties actually performed by the employee”). The Rooney court acknowledged that the police department in that case was small and that its size should be a factor “taken into account when determining the frequency of recommendations made by the plaintiff. It is reasonable to assume that generally a smaller police department would have correspondingly fewer new hires, fires, and promotions.” 577 F.Supp.2d at 531. The same is true with Lumber One. Morton estimated that he hired between six and eight employees during the time the plaintiffs were employed at Lumber One. Morton testified that he generally asked all of the employees if they knew applicants, but there is no evidence that the plaintiffs had any sort of involvement in the hiring process like the lieutenant in Rooney. The plaintiffs did not participate in the interviews, did not review resumes, did not rank applicants, and did not make hiring recommendations outside of informal reference checks. Contra id. at 522 (“[Rooney] has acted as a member of an interview panel, ranked applicants on account of their suitability for the position, discussed the merits of applicants, made applicant recommendations to the Chief regarding the applicant’s suitability, discussed the potential promotion of a Patrolman to the rank of Sergeant, and discussed the assignment of an officer to an administrative position[.]”). And Morton asked all employees for informal reference checks, not just the plaintiffs. Morton asserts that he would have involved the plaintiffs more if he had hired more employees. This may be true, but it requires the jury to impermissibly speculate and to rely on intended rather than actual job functions. See Clark v. Long, 255 F.3d 555, 557 (8th Cir.2001) (“[When ruling on a motion for judgment as a matter of law, t]he nonmovant receives the benefit of all reasonable inferences that may be drawn from the evidence, but those inferences may not be based solely on speculation.” (emphasis added)).
Having fleshed out the applicable law and the parties’ respective arguments, the court initially explained why two of the plaintiffs were properly held to be non-exempt:
Against this backdrop, we now turn to the evidence regarding each individual plaintiff. At trial, Morton could not recall Madden or O’Bar providing a single personnel recommendation. Morton stated that he could only recall the company’s “general policy there as to how we did that.” In response to the question, “Did any of the plaintiffs hire Lumber One employees?” Morton responded, “No, they didn’t. Well, Doug [Wortman] was involved in hiring some of the truck drivers.” When questioned if O’Bar ever provided a recommendation for an applicant, Morton responded, “Not that I recall.” Morton said he intended to include O’Bar in the hiring process, but because Lumber One was not hiring while she was employed, she never had the opportunity to participate. Later in the trial, counsel asked Morton if he could remember O’Bar recommending any applicant for hire. Morton responded, “Offhand today, I can’t tell you one, no.”
Morton similarly could not remember Madden being involved in any hiring decision. When asked about Madden, Morton again referenced only the general policy: “Once again, what we would do, anytime that we hired anybody, which we hired very, very few in this time period, and I don’t recall—you know, it depends on what time frame we’re talking about, but we would always ask all of our people if they knew someone before we hired them.” When asked again, “Is it your testimony that [Madden] did not recommend anybody for hiring?” Morton responded, “I do not remember, to be honest with you. I know that we consulted with him or asked him if he knew people.” Morton asserted that he “definitely remember[ed] asking Terry Madden if he knew people that we were interviewing,” but Morton could not provide additional information related to any recommendations Madden may have provided. When asked if Madden hired any employees, Morton replied, “No, ma’am, he did not hire any.”
Morton’s testimony is simply not enough to satisfy the fourth element of the FLSA’s executive exemption for Madden and O’Bar. To be sure, one of the jury’s main responsibilities is to make credibility determinations. However, here the jury was forced to speculate due to Morton’s lack of memory regarding specific recommendations and hiring decisions. Moreover, Morton’s admissions that Madden and O’Bar were not involved directly in hiring contradicts Lumber One’s contentions that the plaintiffs were actually Lumber One executive employees whose input was solicited and considered prior to making personnel decisions. Indeed, for a jury to reach that conclusion, a jury had to speculate that, if Morton were able to recall specifics from 2008 and 2009, he would be able to testify about Madden and O’Bar’s involvement in personnel decisions. This is not a credibility determination; this is speculation. See Wilson, 382 F.3d at 770 (“Judgment as a matter of law is appropriate only when the record contains no proof beyond speculation to support the verdict.”). While it should be rare that a judge elects to override a jury verdict, the district court was correct in this case to do so. See Hunt v. Neb. Pub. Power Dist., 282 F.3d 1021, 1029 (8th Cir.2002) (“We recogniz[e] that the law places a high standard on overturning a jury verdict … because of the danger that the jury’s rightful province will be invaded when judgment as a matter of law is misused.” (internal citation omitted)). Lumber One simply presented no evidence that would allow a jury to determine, without conjecture, that Lumber One satisfied the fourth element with respect to Madden and O’Bar.
The court went on to hold that, applying the same test, there had been sufficient evidence at trial for the jury to hold that the third plaintiff was an exempt executive:
In contrast, we conclude that Lumber One did present sufficient evidence to allow a jury to conclude that Wortman provided a recommendation for at least one employee and that Morton relied on that recommendation when deciding to hire the applicant. Accordingly, we reverse the district court’s judgment as to Wortman and reinstate that portion of the jury verdict in favor of Lumber One.
Morton testified at trial that Wortman knew two applicants, truck drivers Fred Dempsey and Anthony Dixon, and that Morton appreciated Wortman’s input regarding both applicants’ qualifications. Morton testified that “we’re brand-new, so I asked everybody there for a reference on any new hire at this point to—and [Wortman] recommended these guys, said they were good folks, Fred [Dempsey] in particular. I think he and Fred had a—somewhat of a friendship maybe in the past.” Morton later asserted that if Wortman had provided a bad recommendation, Morton would not have hired Dempsey. Morton testified that “when we did do that little bit of hiring, we asked everyone. We tapped every resource we had…. [Wortman] would put his stamp of approval on, and I’ll use Fred Dempsey, for instance, you know, if he would have said, no, we don’t want him, he would not have been there.”
Morton’s testimony provided sufficient evidence that reasonably could lead a jury to believe that Wortman provided recommendations about Dempsey and that Morton gave particular weight to Wortman’s recommendation when deciding to hire Dempsey. See 29 U.S.C. § 213(a)(1); 29 C.F.R. § 541.100. In addition, Wortman testified that although he was not hired to supervise employees, Morton occasionally had him direct the truck drivers, which included Dempsey, regarding where to make deliveries. See
29 C.F.R. § 541.105 (generally requiring that an executive’s recommendations pertain to employees whom the executive directs). Because there is evidence regarding Wortman’s involvement in at least one personnel decision, we conclude that the district court erred by overturning the jury’s verdict finding that Wortman was an executive employee who was exempt from FLSA overtime pay requirements.
Taken together, this opinion is instructive regarding the type and amount of input an employee must have in order to meet the hire/fire prong of the executive exemption.
Click Madden v. Lumber One Home Center, Inc. to read the entire Decision.
8th Cir.: NLRB’s Holding in D.R. Horton Does Not Preclude Enforcement of FLSA Class/Collective Action Waiver
Owen v. Bristol Care, Inc.
While district courts that have considered the issue since the NLRB handed down its decision in D.R. Horton last year have reached divergent opinions on its effect regarding the enforceability of class waivers, the first circuit to consider the issue has rejected D.R. Horton’s applicability in the FLSA context. By way of background, last year the NLRB held that the existence of a collective action waiver in an employment agreement constituted an unfair labor practice, because it improperly restricted the “concerted activity” of employees who are subject to same. Following the decision, courts have reached different conclusions as to whether the NLRB’s decision necessarily rendered such waivers unenforceable in the context of FLSA collective action waivers. In this case, the district court held that the parties arbitration agreement was unenforceable, because it contained such a waiver. However, on appeal, the Eight Circuit reversed, holding that the NLRB’s decision in D.R. Horton did not render the arbitration agreement at issue unenforceable.
Discussing this issue, the Eight Circuit opined that it was not obligated to defer to the National Labor Relations Board’s interpretation of Supreme Court precedent, under Chevron or any other principle:
Finally, in arguing that there is an inherent conflict between the FLSA and the FAA, Owen relies on the NLRB’s recent decision in D.R. Horton, which held a class waiver unenforceable in a similar FLSA challenge based on the NLRB’s conclusion that such a waiver conflicted with the rights protected by Section 7 of the NLRA. 2012 WL 36274, at *2. The NLRB stated that Section 7’s protections of employees’ right to pursue workplace grievances through concerted action includes the right to proceed as a class. Id. However, D.R. Horton carries little persuasive authority in the circumstances presented here. First, the NLRB limited its holding to arbitration agreements barring all protected concerted action. Id. at *16. In contrast, the MAA does not preclude an employee from filing a complaint with an administrative agency such as the Department of Labor (which has jurisdiction over FLSA claims, see 29 U.S.C. § 204), the Equal Employment Opportunity Commission, the NLRB, or any similar administrative body. Cf. Gilmer, 500 U.S. at 28, 111 S.Ct. 1647 (upholding an arbitration agreement that allowed Age Discrimination in Employment Act claimants to pursue their claims before the Equal Employment Opportunity Commission). Further, nothing in the MAA precludes any of these agencies from investigating and, if necessary, filing suit on behalf of a class of employees. Second, even if D.R. Horton addressed the more limited type of class waiver present here, we still would owe no deference to its reasoning. Delock v. Securitas Sec. Servs. USA, –––F.Supp.2d ––––, ––––, No. 4:11–CV–520–DPM, 2012 WL 3150391 (E.D.Ark. Aug. 1, 2012), at *3 (“The Board’s construction of the [NLRA] ‘is entitled to considerable deference and must be upheld if it is reasonable and consistent with the policies of the Act,’ … the Board has no special competence or experience in interpreting the Federal Arbitration Act.” (quoting St. John’s Mercy Health Sys. v. NLRB, 436 F.3d 843, 846 (8th Cir.2006))). The NLRB also attempted to distinguish its conclusion from pro-arbitration Supreme Court decisions such as Concepcion. D.R. Horton, 2012 WL 36274, at *16. This court, however, is “not obligated to defer to [the Board’s] interpretation of Supreme Court precedent under Chevron or any other principle.” Delock, –––F.Supp.2d at ––––, 2012 WL 3150391, at *3 (quoting N.Y. N.Y. LLC v. NLRB, 313 F.3d 585, 590 (D.C.Cir.2002)). Additionally, although no court of appeals has addressed D.R. Horton, nearly all of the district courts to consider the decision have declined to follow it.
The court also opined that there is nothing inherently wrong with a collective action waiver in employment agreements.
Click Owen v. Bristol Care, Inc. to read the entire Opinion.
8th Cir.: Where Employer’s Change to Workweek Was Permanent, “Legitimate Business Purpose” Not Required
Abshire v. Redland Energy Services, LLC
Following an order granting the defendant-employer summary judgment, the plaintiff appealed. At issue was whether the employer’s permanent change to its workweek- for the stated purpose of reducing overtime hours worked by its employees- violated the FLSA. The lower court held that the purpose behind the employer’s change to its workweek was irrelevant, so long as the change was intended to be permanent. Affirming the award of summary judgment, the Eighth Circuit agreed.
The facts were relatively straight-forward and not in dispute. The defendant-employer changed the designation of its workweek from Tuesday-to-Monday to Sunday-to-Saturday for employees who worked 12 hour shifts for seven consecutive days from Tuesday to Monday, followed by seven days off. The change was intended to and did result in fewer hours calculated as overtime.
Initially, the court explained that an employer may pick any contiguous 168 hours as its workweek. The court then explained:
Having concluded that the FLSA does not prescribe how an employer must initially establish its “workweek” for overtime purposes, we come to the issue raised in this case—whether the FLSA limits an employer’s freedom to change an existing workweek designation. Again, § 778.105 of the Department of Labor’s regulations directly addresses the issue: “The beginning of the workweek may be changed if the change is intended to be permanent and is not designed to evade the overtime requirements of the Act.” This sentence makes one limitation clear—a change must be “intended to be permanent.” But that is not at issue here. Appellants have never challenged Redland’s contention that the May 2009 change in the oil rig operators’ workweek was intended to be permanent. Rather, Appellants argue that Redland’s change violated § 207(a)(1) because it was made for the purpose of reducing the number of hours in their normal work schedules that must be paid at the overtime rate, and therefore it was “designed to evade the overtime requirements of the Act.”
The caution that a workweek change may not be designed to evade the requirements of § 207(a)(1) has been part of the Department of Labor’s interpretive pronouncements since the FLSA was first enacted. See Department of Labor, Interpretative Bulletin No. 4, ¶ 3 (Nov. 1, 1938), cited in Harned, 192 S.W.2d at 380. It was an understandable caution in advising how this initially controversial Act would be construed and applied. Many early FLSA cases dealt with payroll plans devised to evade the Act’s new payroll expense obligations. For example, in an early case applying § 207(a), the Supreme Court invalidated a “split-day” compensation plan “so designed as to deprive the employees of their statutory right to receive [overtime pay] for all hours worked in excess of the first regular 40 hours.” Walling v. Helmerich & Payne, Inc., 323 U.S. 37, 40, 65 S.Ct. 11, 89 L.Ed. 29 (1944). That decision is now codified in the regulations. See 29 C.F.R. § 778.501(a). But the Department has never interpreted its general caution that changes to the workweek may not be “designed to evade the overtime requirements,” nor has it attempted to clarify what constitutes “evasion.”
Citing an Illinois Minimum Wage Law case as authority, the court rejected the plaintiff’s assertion that an employer may not make a change to its workweek absent a “legitimate business purpose” (i.e. just to reduce overtime hours/pay):
The precise issue before us was presented, and Appellants’ contention persuasively rejected, in a case applying overtime requirements of the Illinois Minimum Wage Law for which administrative regulations including 29 C.F.R. § 778.105 had been adopted. Kerbes v. Raceway Assocs., LLC, –––Ill.App.3d ––––, 356 Ill.Dec. 476, 961 N.E.2d 865, 870 (2011). In Kerbes, the racetrack employer changed its designated workweek so as to split racing event weekends into two different workweeks, eliminating overtime pay for its part-time hourly employees. Concluding that an employer’s right to establish a workweek was “well-settled” by the above-cited cases, the court further concluded the racetrack’s modification of its workweek did not violate the overtime requirements of the FLSA…. [T]he FLSA does not require a workweek schedule that maximizes an employee’s accumulation of overtime pay. Thus, a schedule whereby an employee’s actual work schedule is split between two workweeks does not violate the federal legislation. If such a schedule does not itself violate the FLSA, we fail to see how a change to such a schedule could be viewed as having been “designed to evade the overtime requirements of this Act.” Id., 356 Ill.Dec. 476, 961 N.E.2d at 872. We agree with this reasoning.
Appellants argue that a workweek change intended to reduce hours of overtime earned is contrary to the purposes of the FLSA’s overtime requirements and is therefore “designed to evade” those requirements. We disagree. Appellants’ assumption that an original purpose of the FLSA was to maximize the payment of overtime rates is contrary to more contemporary authority. See Missel, 316 U.S. at 578, 62 S.Ct. 1216 (“In a period of widespread unemployment and small profits, the economy inherent in avoiding extra pay was expected to have an appreciable effect in the distribution of available work.”). Thus, an employer’s effort to reduce its payroll expense is not contrary to the FLSA’s purpose. Moreover, Christensen v. Harris Cnty., 529 U.S. 576, 585, 120 S.Ct. 1655, 146 L.Ed.2d 621 (2000), clearly teaches that courts may not imply a prohibition that cannot be found in the Act. Cases involving other FLSA requirements illustrate this principle. For example, in Lamon v. City of Shawnee, 972 F.2d 1145, 1153 (10th Cir.1992), the court concluded that a public employer’s new workweek adopted to take advantage of an FLSA amendment did not violate the Act “[e]ven if [the employer’s] sole purpose were to avoid the prospect of paying overtime rates.” And in Morehead v. City of Pearl, 763 F.Supp. 175, 176 (S.D.Miss.1990), the court noted that a scheduling change intended to reduce overtime hours was not “an evasion” of the overtime requirements; it was “straight-up avoidance” of overtime that the FLSA does not require be paid.
We reject Appellants’ contention that an employer’s permanent change in the designated workweek violates § 207(a)(1) unless it is justified by a “legitimate business purpose.” So long as the change is intended to be permanent, and it is implemented in accordance with the FLSA, the employer’s reasons for adopting the change are irrelevant. Accordingly, whether Redland in fact adopted the change in question to achieve administrative efficiencies in calculating and paying wages and overtime, and if so, whether that was a “legitimate business purpose” justifying the change, were not genuine disputes of material fact that precluded the grant of summary judgment in favor of Redland. Fed.R.Civ.P. 56(a).
Thus, the Eighth Circuit affirmed the judgment for the defendant.
Given the clear language of the CFR regulation that an employer’s change to a workweek must not be “designed to evade the overtime requirements of the [FLSA],” and the defendant’s acknowledgement here that its change was explicitly made to reduce overtime pay to its employees, while having them work the same number of hours, the Eighth Circuit’s holding is somewhat curious. At least for now however, the Eighth Circuit is the only Circuit to have pondered the issue.
Click Abshire v. Redland Energy Services, LLC to read the entire Opinion.
8th Cir.: Recording Overtime Over Defendant-Employer’s Objections Not Protected Activity Under 29 U.S.C. § 215
Ritchie v. St. Louis Jewish Light
Plaintiff brought this case under 29 U.S.C. § 215. Holding that informal complaints are not protected activity under the FLSA’s anti-retaliation provisions, the lower court dismissed and Plaintiff appealed, arguing that such informal complaints are protected activity. The Eight Circuit did not reach that issue however, because it held that Plaintiff had not even made such informal complaints, because it held continuing to record overtime worked, despite Defendants’ instructions not to does not constitute a “complaint.” As such, the Eighth Circuit affirmed the lower court’s decision.
Reasoning that Plaintiff had not engaged in activity that would be protected under § 215, even if § 215 protected informal complaints, the court explained:
“We need not decide today whether informal complaints are protected activity under the FLSA because there is nothing in Ritchie’s verified federal court complaint that alleged that Ritchie made any sort of complaint to either Levin or St. Louis Jewish Light. The verified complaint alleged that:
7. Starting on or about May or June 2009, Levin asked Ritchie to perform work (“Work”) [formerly] performed by two employees by herself which Ritchie commenced to do.
8. Levin asked Ritchie to perform the Work without recording overtime.
9. The Work required that Ritchie perform overtime hours (more than 40 hours in a week) (“Overtime”) which Ritchie recorded.
10. Levin complained to Ritchie about her recording the Overtime and again requested that she perform the Work without recording overtime.
11. When Ritchie continued to record the Overtime, she was terminated by Levin and [St. Louis Jewish Light].
(Appellant’s App. at 1-2.)
Even assuming that informal complaints are sufficient to trigger the anti-retaliation provision of the FLSA, a legal conclusion we do not make, Ritchie failed to allege sufficient facts to indicate that she made even an informal complaint to either Levin or St. Louis Jewish Light. The only complaining asserted in her pleading goes the other way-Levin complaining to Ritchie. Ritchie asserts that she complained pursuant to the FLSA when she gave “Levin notice that she believed Levin’s instructions were a violation of the law because she, in fact, recorded the overtime hours in writing despite his orders not to record them.” (Appellant’s Reply Br. at 4.) In fact, rather than constituting an affirmative complaint that would trigger the anti-retaliation provision of the FLSA, her recording of her overtime could be nothing more than mere insubordination, she having been instructed to the contrary. Insubordination is not protected under the FLSA, and insubordination is not sufficient to trigger the anti-retaliation provision in 29 U.S.C. § 215(a)(3). As appellees’ counsel noted at oral argument, if merely recording one’s overtime is a “complaint” that triggers the anti-retaliation provision of the FLSA, an employer would not be able to discipline an employee for working unauthorized overtime so long as the employee recorded the overtime.
As the Supreme Court has recently said, the plausibility standard, which requires a federal court complaint “to state a claim to relief that is plausible on its face, … asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 129 S.Ct. at 1949 (internal quotation marks omitted). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]-‘that the pleader is entitled to relief.’ “ Id. at 1950 (quoting Fed.R.Civ.P. 8(a)(2)).
To establish a prima facie case of retaliation under the FLSA, Ritchie would have to show that she participated in statutorily protected activity, that the appellees took an adverse employment action against her, and that there was a causal connection between Ritchie’s statutorily protected activity and the adverse employment action. See Grey v. City of Oak Grove, 396 F.3d 1031, 1034-35 (8th Cir.2005). The facts pleaded in Ritchie’s complaint do not permit us to infer more than the mere possibility of misconduct. Thus, Ritchie’s complaint merely alleged, but did not show, that Ritchie is entitled to relief.
Thus, the district court did not err in granting the appellees’ motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). See Carton, 611 F.3d at 454.”
Click Ritchie v. St. Louis Jewish Light to read the entire decision.
W.D.Ark.: FLSA Does Not Preempt State Common Law Claims; Claims Dismissed On Other Grounds
Montize v. Pittman Properties Ltd. Partnership No.1
This case was before the Court on one of the Defendant’s Motion for Partial Judgment on the Pleadings filed. The Plaintiffs did not file any response to the Motion. Of interest, the Court held that certain non-FLSA state law claims were not preempted by the FLSA. In so holding, the Court noted its agreement with the Ninth Circuit and disagreement with the Fourth Circuit on this issue. Nonetheless the claims at issue were dismissed for failure to state a claim, because they failed to allege, with specicificity, the facts on which such claims could rest.
The Court dicussed the following facts (as pled) as relevant to its inquiry:
“In this action, Plaintiffs were migrant agricultural workers employed by Pittman Nursery Corporation for seasonal work. They allege that a former Pittman Nursery employee, Dawood Aydani, extorted money from them over the course of several years, in the form of kickbacks, and that such extortion effectively reduced Plaintiffs’ net compensation below the federal and state minimum wage. Specifically, Plaintiffs allege that Mr. Aydani required Plaintiffs to pay him $1,000 cash to secure and keep their employment. They further allege that these funds were then shared with some of the other Defendants in this action.
Plaintiffs assert causes of action under the Fair Labor Standards Act (“FLSA”), under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), and for negligent supervision. Pittman Nursery asks the Court to dismiss the non-FLSA claims and argues that these claims are preempted by the FLSA.”
Discussing the issue of preemption, the Court held:
“The FLSA authorizes workers to file private actions to recover unpaid wages, damages, costs, and attorneys’ fees. 29 U.S.C. § 216(b). Pittman Nursery argues that, because Congress intended that these remedies be exclusive, duplicative claims seeking damages beyond those established under the FLSA are preempted by federal law. In the present case, Pittman Nursery asserts that the FLSA preempts Plaintiffs’ state law and RICO claims because these claims are duplicative. The Court does not agree.
The Eighth Circuit has not addressed the issue of whether the remedies under the FLSA are exclusive. The Court is aware that the Fourth Circuit has held that the FLSA preempts claims that “depend on establishing that [the employer] violated the FLSA.” Anderson v. Sara Lee Corp., 508 F.3d 181, 193 (4th Cir.2007). Several other district courts outside of the Eighth Circuit have ruled that state claims are preempted by the FLSA where those claims merely duplicate the FLSA claims. Id. at 194. On the other hand, the Ninth Circuit has held that the FLSA does not preempt common law fraud claims and that the FLSA does not provide exclusive remedies for violating its provisions. Williamson v. Gen. Dynamics Corp., 208 F.3d 1144, 1151-53 (9th Cir.2000). Also, several district court cases within the Eighth Circuit have held that the FLSA does not provide the exclusive remedy for its violations and does not preempt state law claims even when there is a common core of operative facts. See Cortez v. Neb. Beef, Inc., Nos. 8:08CV90, 8:08CV99, 2010 WL 604629 (D.Neb. Feb.16, 2010); Bouaphakeo v. Tyson Foods, Inc., 564 F.Supp.2d 870, 886 (N.D.Iowa 2008); Robertson v. LTS Management Services, LLC, 642 F.Supp.2d 922, 928 (W.D.Mo.2008); Osby v. Citigroup, Inc., No. 07-CV-06085-NKL, 2008 WL 2074102 (W.D.Mo. May 14, 2008). Most district courts in the Eighth Circuit agree that the FLSA’s savings clause, which allows states to enact stricter wage, hour, and child labor provisions, indicates that the FLSA does not provide an exclusive remedy for its violations. Bouaphakeo, 564 F.Supp.2d at 882. In fact, “it would seem that state law may offer an alternative legal basis for equal or more generous relief for the same alleged wrongs.” Cortez, 2010 WL 604629, at *6.
Here, the Court is more persuaded by the opinions of district courts within the Eighth Circuit and adopts the view that the FLSA does not provide an exclusive remedy for violations of its provisions. Accordingly, the Court does not agree with Pittman Nursery that Plaintiffs’ non-FLSA claims are preempted by the FLSA.”