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W.D.Pa.: Although FLSA Does Not Provide Coverage For Work Performed In Foreign Countries, Pennsylvania Wage And Collection Act (PMWA) Does
Truman v. DeWolff, Boberg & Associates, Inc.
Plaintiff commenced this action against Defendant alleging violations of section 16(b) of the Fair Labor Standards Act of 1938 (“FLSA”) 29 U.S.C. 216(b); the Pennsylvania Minimum Wage Act of 1968 (“PMWA”) 43 P.S. §§ 333.101–333.115; and the Pennsylvania Wage Collection Act of 1961, 43 Pa. Cons.Stat. Ann. §§ 260.1-260.45. Before the Court is Defendant’s motion for Partial Summary Judgment seeking dismissal of Mr. Truman’s claim that he is due overtime pay under the FLSA for the period of time he worked outside of the United States. Defnedant filed a Reply to Mr. Truman’s Response arguing for the first time that Mr. Truman was also not entitled to overtime payments under the PMWA for the period of time he worked in foreign countries. Thereafter, Plaintiff filed a Sur-Reply opposing the imposition of Partial Summary Judgment to his PMWA claim. The Court denied the motion for Partial Summary Judgment with regards to the PMWA claim.
After discussing the statutory basis for granting Defendant’s Motion regarding the FLSA and the foreign work, the Court turned to Plaintiff’s claims for the same work under the PMWA, stating, “[t]he Pennsylvania Minimum Wage Act guarantees that employees will be paid one and one-half times their regular rate for any overtime worked. 43 P.S. § 333.104(c). Exemptions to this statutory provision are recorded in 43 P.S. § 333.105. Unlike the FLSA, the PMWA does not contain an explicit exemption for work performed outside of the United States. However, the PMWA has been construed to extend its protections to employees who work outside of Pennsylvania. Friedrich v. U.S. Computer Systems, Inc., 1996 WL 32888 (E.D.Pa. Jan.22, 1996). In Friedrich the Court permitted the PMWA to apply to Pennsylvania-based employees who perform work in states outside of Pennsylvania. 1996 WL 32888, at *8-9. Allowing employees who perform work outside of Pennsylvania to benefit from the PMWA is in accord with the PMWA’s Declaration of Policy. 43 P.S. § 333.101 (“Employes employed in such occupations are not as a class on a level of equality in bargaining with their employers in regard to minimum fair wage standards … wages in such occupations are often found to bear no relation to the fair value of the services rendered”). Thus, there is nothing within the PMWA that restricts the benefits of the PMWA to work performed within the United States.
The FLSA does not preempt state minimum wage acts from offering greater protection to state employees than does the FLSA. For example, the FLSA states that, “[n]o provision of this Act … or of any order thereunder shall excuse noncompliance with any Federal or State law or municipal ordinance establishing a minimum wage higher than the minimum wage established under this Act.”29 U.S.C. § 218(a). Additionally, several courts have found that explicit FLSA exemptions do not preempt state laws from offering state employees greater protections than FLSA. See e.g., Pacific Merchant Shipping Ass’n v. Aubry, 918 F.2d 1409, 1417 (9th Cir.1990) (“We hold that [29 U.S.C.] section 213(b)(6) does not preempt California from applying the state’s overtime pay laws to FLSA-exempt seamen working off the California coast.”); Pennsylvania Dept. of Labor and Industry v. Whipple, 1989 WL 407328, at *3 (Pa.Com.Pl., 1989) (Overtime exemptions under FLSA “do not affect coverage under Pennsylvania Minimum Wage Act”); Ploufe v. Farm & Ranch Equip. Co., 174 Mont. 313, 320, 570 P.2d 1106 (Mont.1977) (holding that FLSA did not preempt Montana from regulating overtime and wages under the Montana Minimum Wages and Hours Act). In light of the FLSA’s explicit recognition that states may offer greater protections to its employees than the FLSA, we are reluctant to find an unstated foreign-work exemption in the PMWA based solely on the fact that the FLSA contains such an exemption. Baum v. Astrazeneca LP, 605 F.Supp.2d 669, 674 (W.D.Pa.2009) (finding that “[b]ecause the FLSA is a remedial act, the exemptions are typically narrowly construed”).
In Williams v. W.V.A. Transit Co., 472 F.2d 1258 (D.C.Cir.1972), the Court of Appeals for the District of Columbia found that the District of Columbia Minimum Wage Act was not limited by an explicit FLSA exemption:
[A]n employee does not lose his status of being employed in the District merely because he receives an assignment, for a relatively short period, that calls on him to spend all his time for that period at some location outside the District. Otherwise, that status would be lost or suspended through relatively isolated or occasional employment outside the District, and from the common sense of the matter we conclude that this is not the legislative intent. 472 F.2d at 1265-1266. As in Williams, we find that, although there is an applicable FLSA exemption, we cannot find an implied foreign work exemption in the PMWA to remove coverage from Pennsylvania residents who have been given assignments outside of Pennsylvania. If the Pennsylvania legislature had wanted to exempt foreign work from the PMWA it could have expressly included that exemption within the PMWA. See Friedrich, 1996 WL 32888, at *5 (“The Pennsylvania legislature enacted the PMWA to protect those employees who do not benefit from federal protection [under the FLSA].”) Our conclusion is in accord with the FLSA and its regulations that permit state laws to offer greater protections than the FLSA. See29 U.S.C. 218(a) (Section 218“expressly contemplates that workers covered by state law as well as FLSA shall have any additional benefits provided by the state law higher minimum wages; or lower maximum work week.” Williams, 472 F.2d at 1261);29 C.F.R. § 778.5 (“[n]othing in the act, the regulations or the interpretations announced by the Administrator should be taken to override or nullify the provisions” of state and local laws.)
In support of its argument that the FLSA and PMWA should have an identical analysis, DBA relies on Paul v. UPMC Health Sys., C.A. No. 06-1565, 2009 WL 699943 (W.D.Pa. Mar.10, 2009). In Paul, the defendant argued that the plaintiff was properly classified as an administrative employee and was therefore exempt from the overtime requirements under both the FLSA or the PMWA. The Paul Court noted that the “administrative exemptions” set forth in both the FLSA and PMWA are identical, and therefore only analyzed “the applicability of the administrative exemption to plaintiff’s FLSA claim,” noting that “the same analysis, however, also applies to plaintiff’s PMWA claim.” 2009 WL 699943, at *8, n. 1. The Paul Court applied an identical analysis only because both Acts contain express administrative exemptions. The Paul case does not address the circumstance when the FLSA contains an explicit exemption and the PMWA contains no corresponding exemption.
DBA’s reliance on Mitchell v. Abercrombie & Fitch, No. C2-04-306, 2005 WL 1159412 (S.D.Ohio May 17, 2005) is also misplaced. The Mitchell case concerned application of the Ohio Minimum Fair Wage Standards Act to a plaintiff who not only did all of his work outside of Ohio, but also did not reside in Ohio. The Mitchell Court found that the Ohio legislature did not intend the Act to apply to workers, “who perform no work within the territorial limits of the State of Ohio [and that] the Commerce Clause of the United States Constitution prohibits Ohio from regulating the working conditions of a non-resident who performs work and earns wages outside of the state.” 2005 WL 1159412, at *3 (emphasis added). The Mitchell Court also noted that there was “no claim that [plaintiff] ever worked for even a brief period of time in Ohio, which would change the analysis as to the applicability of Ohio law to his employment relationship.” 2005 WL 1159412, at *4. Here, there is no dispute that Mr. Truman is a Pennsylvania-based employee.
The employer has the burden of proof of to show that an employee fits into an exemption. Baum, 605 F.Supp.2d at 674. Mr. Truman has conceded that work he performed outside of the United States is not protected by the FLSA, and thus we will grant DBA’s motion in this respect. However, DBA has failed to show that Mr. Truman is an exempt employee under the PMWA for the work performed in England and Canada. Nothing within the language of the statute implies that work performed in a foreign country by a Pennsylvania resident does not deserve the same protections as work performed within Pennsylvania by the same resident and for the same company. Accordingly, we will deny the motion for partial summary judgment with regards to the PMWA claim.”
Las Vegas Review-Journal: 3 Casino Dealers Accuse Wynn Las Vegas Of Illegal Tip Pooling
The Las Vegas Review-Journal is reporting that, “[t]hree Wynn Las Vegas dealers are taking their claims of unfair tip pooling to federal court with a new lawsuit that claims the resort’s tip sharing policy violates federal labor laws.
Attorneys for three of the plaintiffs named in a state lawsuit against Wynn Las Vegas filed the lawsuit in U.S. District Court in Nevada late Thursday. The federal lawsuit claims the Wynn tip-pooling policy violates the Fair Labor Standards Act.”
Apparently “[t]he decision to file in federal court was made in response to a U.S. Department of Labor brief that was filed siding with a worker in Oregon in a tip-pooling case — Misty Cumbie v. Woody Woo [a case now pending at the Ninth Circuit Court of Appeals]…
The Labor Department’s brief says the worker in Oregon was correct in challenging her company’s tip-pooling policy, which the department said violates the Fair Labor Standards Act.”
The story discussed Wynn’s potential defense to the case as well. “Wynn dealers attorney Robin Potter said the Oregon case marks the first time the Department of Labor has come out against tip pooling in cases in which the employer was not taking part in a “tip credit” system. Tip credits allow employers to pay less than the minimum wage to workers who can expect to earn most of their salary from tips.
Wynn Las Vegas doesn’t use tip credits and pays its workers minimum wage.
But the Labor Department said in the Woody Woo case that the tipped employees were paid minimum wage but were still required to contribute their tips to ‘an invalid tip pool,” and a portion of that pool was shared with nontipped employees.’
To read the full story go to the Las Vegas Review-Journal website.
D.Neb.: Plaintiffs’ Motion To Extend Opt-in Deadline Granted—Good Cause Shown—Over 500 Notices Initially Went To Old (Incorrect) Addresses
Cortez v. Nebraska Beef, Inc.
This matter was before the court on the plaintiffs’ Motion to Extend Deadline for Putative Class Members to Join the Collective Action. Since, it found the Plaintiffs met the requisite good cause showing, the Court granted Plaintiffs’ Motion.
The relevant facts were as follows: “On June 23, 2009, the plaintiffs filed the instant motion to extend the deadline to allow putative class members to join the FLSA claims. The plaintiffs seek an extension from June 9, 2009, to July 31, 2009. The court held a telephone conference with counsel for the parties on June 26, 2009, and scheduled expedited briefing. The plaintiffs state they contacted putative class members during the process of preparing for class certification and learned several putative class members had not received notice of their right to opt-in. The plaintiffs contend the failure was due to the notice packets being sent to old addresses. The plaintiffs show 504 notice packets (14% of the putative class) were returned as undeliverable. Conversely, 416(12%) opt-in consent forms have been received. The plaintiffs propose re-mailing notices to more current addresses and sending a reminder notice to others in an attempt to increase opt-in participation. The plaintiffs argue the defendants will not suffer undue prejudice by this procedure, which would promote the goals of the FLSA. The plaintiffs contend any putative class members who are not allowed to join this lawsuit may file a parallel lawsuit, thus wasting judicial resources.”
The defendants contended that “the plaintiffs have failed to show good cause to extend the expired opt-in deadline. First, the defendants argue the plaintiffs fail to show how (or how many) updated addresses they have received for putative class members, who have not since had an opportunity to opt-in. Second, the defendants contend the plaintiffs have failed to offer a solution for determining updated information. Third, the defendants assert other forms of notice, such as posted and radio notices, were employed to provide notice in the event the mailing was not successful. Finally, the defendants argue there is no justification to extend the deadline for putative class members who did receive the notice by mailing. The defendants contend the extension would prejudice them by allowing otherwise barred claims.
The company providing administrative services for the opt-in process notes it originally received 907 undeliverable class notices, then promptly sent out 803 notices with updated addresses. As of the date of the declaration 403 of the updated notices had been returned as undeliverable, leaving a total of 504 as “truly undeliverable.” Id. The service company described its efforts at obtaining deliverable addresses.
The court found that the plaintiffs demonstrated “good cause for the extension of time (out of time) to allow putative class members to opt-in to the FLSA claims. See Fed.R.Civ.P. 6(b) (excusable neglect); Fed.R.Civ.P. 16(b ) (good cause); Bradford v. DANA Corp., 249 F.3d 807, 809-10 (8th Cir.2001); see also Thorn v. Blue Cross & Blue Shield of Fla., Inc., 192 F.R.D. 308, 309 (M.D.Fla.2000). The defendants will not suffer unfair prejudice by an extension of time. The defendants failed to show any prejudice. The plaintiffs’ brief extension of time will not delay the resolution of the issues. Although, it is unclear how the plaintiffs would find deliverable addresses for any of the truly undeliverable notices. Similarly, it is unlikely a reminder mailer will generate opt-in responses in the time period requested. It appears the plaintiffs actually seek additional time for known putative plaintiffs to finalize their consents. Under the circumstances, the court finds good cause has been shown for the short extension of the opt-in deadline.” Therefore, Plaintiffs’ Motion to Extend the Opt-in Deadline was extended.
NY Times: A Call To Change The Unfair Wage Laws Applicable To Home Health Employees
“Change is too slow coming for the nation’s one million home care aides. In 2007, the Supreme Court unanimously upheld a 1975 federal labor regulation that defines home care aides as ‘companions.’ That definition exempts home care employers — often for-profit agencies — from having to pay the federal minimum wage or time and a half for overtime.
In explaining their decision, the justices pointed out that the law gives the Labor Department, not the court, the power to change the regulation. Yet, more than two years later, the regulation still stands.
Last month, 15 senators sent a letter to Hilda Solis, President Obama’s labor secretary, urging her to eliminate the “companion” exemption. A month earlier, 37 House members sent a similar letter. But beyond a statement from Ms. Solis expressing concern and pledging to look into the matter, there has been no progress.”
Go here, to read the entire editorial piece appearing in the July 9, 2009, New York Times.
9th Cir.: Court Abused Its Discretion In Finding Predominance Requirement Satisfied, Based-In Large Part-On Employer’s Internal Policy Of Treating Its Employees As Exempt From Overtime
In re Wells Fargo Home Mortg. Overtime Pay Litigation
The case was before the Court on Defendant’s interlocutory appeal, challenging the reasoning of the lower Court in granting class certification on Plaintiff’s California state law claims. The dispute centered around whether the lower court abused its discretion in finding that the predominance requirement of Federal Rule of Civil Procedure 23(b)(3) was satisfied, based-in large part-on an employer’s internal policy of treating its employees as exempt from overtime laws. The Ninth Circuit, remanded for further factual findings, holding that while such uniform exemption policies are relevant to the Rule 23(b)(3) analysis, it is an abuse of discretion to rely on such policies to the near exclusion of other relevant factors touching on predominance.
Analyzing the issue, the Court stated, “[u]nder Rule 23(b)(3), a class may be certified where “the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.”Fed.R.Civ.P. 23(b)(3). The predominance inquiry of Rule 23(b)(3) asks “whether proposed classes are sufficiently cohesive to warrant adjudication by representation.” Local Joint Executive Bd. of Culinary/Bartender Trust Fund v. Las Vegas Sands, Inc., 244 F.3d 1152, 1162 (9th Cir.2001) (citation and internal quotation marks omitted). The focus is on “the relationship between the common and individual issues.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1022 (9th Cir.1998).
The question here is whether the district court abused its discretion in finding Rule 23(b)(3)‘s predominance requirement was met based on Wells Fargo’s internal policy of treating all HMCs as exempt from state and federal overtime laws. To succeed under the abuse of discretion standard, Wells Fargo must demonstrate that the district court either (a) should not have relied on its exemption policy at all or (b) made a clear error of judgment in placing too much weight on that single factor vis-a-vis the individual issues.
The first line of attack, that Wells Fargo’s exemption policy was an impermissible factor, is a non-starter. An internal policy that treats all employees alike for exemption purposes suggests that the employer believes some degree of homogeneity exists among the employees. This undercuts later arguments that the employees are too diverse for uniform treatment. Therefore, an exemption policy is a permissible factor for consideration under Rule 23(b)(3).
Wells Fargo’s arguments are better construed as a challenge to the weight accorded to the internal exemption policies under the third abuse of discretion prong: mulling the proper factors but committing clear error in weighing them. To analyze this question, we first ask how much weight the district court gave to the exemption policy. Plaintiffs suggest the weight was minimal; Wells Fargo claims that the district court’s reliance was tantamount to estoppel.
A review of the California certification order lends substantial credence to Wells Fargo’s position. Although the court’s analysis of each exemption was careful and considered, its ultimate decision was clearly driven by Wells Fargo’s uniform exemption policy. Indeed, the court found “serious issues regarding individual variations among HMC job duties and experiences” but nevertheless concluded that common questions predominated because “it is manifestly disingenuous for a company to treat a class of employees as a homogenous group for the purposes of internal policies and compensation, and then assert that the same group is too diverse for class treatment in overtime litigation.”E.R. 17. As such, we must conclude that the district court’s reliance on Wells Fargo’s internal exemption policy was substantial.
This leads to the central question: whether such heavy reliance constituted a clear error of judgment in assaying the predominance factors. District courts within this circuit have split on the relevance of exemption policies. The district court relied primarily on Wang v. Chinese Daily News, Inc., 231 F.R.D. 602, 612-13 (C.D.Cal.2005), which found predominance of common issues based on an employer’s policy of treating all employees in a certain position as uniformly exempt from overtime compensation requirements. In contrast, another district court has expressed doubt about Wang, and found that uniform exemption policies are merely a minor factor in the predominance analysis. See Campbell v. PricewaterhouseCoopers, LLP, 253 F.R.D. 586, 603-04 (E.D.Cal.2008) (rejecting “estoppel” position of Wang ).
In determining which rule is appropriate, we begin by examining Rule 23 itself. A principal purpose behind Rule 23 class actions is to promote “efficiency and economy of litigation.” Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538, 553 (1974). In particular, Rule 23(b)(3)‘s predominance and superiority requirements were added “to cover cases’in which a class action would achieve economies of time, effort, and expense, and promote … uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results.'” Anchem Prods., Inc. v. Windsor, 521 U.S. 591, 615 (1997) (quoting Fed.R.Civ.P. 23(b)(3) Adv. Comm. Notes to 1966 Amendment). Thus, the ” ‘notion that the adjudication of common issues will help achieve judicial economy’ ” is an integral part of the predominance test. Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1189 (9th Cir.2001) (quoting Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir.1996)). Whether judicial economy will be served in a particular case turns on close scrutiny of “the relationship between the common and individual issues.” Hanlon, 150 F.3d at 1022.
Viewed in light of these principles, the rule espoused in Wang has little justification. Wang essentially creates a presumption that class certification is proper when an employer’s internal exemption policies are applied uniformly to the employees. Such an approach, however, disregards the existence of other potential individual issues that may make class treatment difficult if not impossible. Indeed, this case is a prime example, as the district court identified “serious issues regarding individual variations” that were not susceptible to common proof, but nevertheless felt compelled to certify the class.
Of course, uniform corporate policies will often bear heavily on questions of predominance and superiority. Indeed, courts have long found that comprehensive uniform policies detailing the job duties and responsibilities of employees carry great weight for certification purposes. Damassia v. Duane Reade, Inc., 250 F.R.D. 152, 160 (S.D.N.Y.2008) (“Where … there is evidence that the duties of the job are largely defined by comprehensive corporate procedures and policies, district courts have routinely certified classes of employees challenging their classification as exempt, despite arguments about ‘individualized’ differences in job responsibilities.”). Such centralized rules, to the extent they reflect the realities of the workplace, suggest a uniformity among employees that is susceptible to common proof.
But Wells Fargo’s blanket application of exemption status, whether right or wrong, is not such a rule. In contrast to centralized work policies, the blanket exemption policy does nothing to facilitate common proof on the otherwise individualized issues.
To illustrate, consider the federal outside salesperson exemption. This exemption applies where, among other things, the employee is “customarily and regularly away from the employer’s place of … business….”29 C.F.R. § 541.500(a). Often, this exemption will militate against certification because, as the district court noted, it requires “a fact-intensive inquiry into each potential plaintiff’s employment situation….” E.R. 11. A centralized policy requiring employees to be at their desks for 80% of their workday would change this individual issue into a common one. Therefore, such a corporate policy would be highly relevant to the predominance analysis. A uniform exemption policy, however, has no such transformative power. Whether such a policy is in place or not, courts must still ask where the individual employees actually spent their time. As one court succinctly explained, “[t]he fact that an employer classifies all or most of a particular class of employees as exempt does not eliminate the need to make a factual determination as to whether class members are actually performing similar duties.” Campbell, 253 F.R.D. at 603.
In short, Wells Fargo’s uniform exemption policy says little about the main concern in the predominance inquiry: the balance between individual and common issues. As such, we hold that the district court abused its discretion in relying on that policy to the near exclusion of other factors relevant to the predominance inquiry.”
E.D.Ark.: “Payroll Manager” Demonstrated Lack Of Discretion And Independent Judgment; Defendant’s SJ Motion On Administrative Exemption Denied
Reedy v. Rock-Tenn Co. of Arkansas
Plaintiff was, at points relevant to this case, Defendant’s “payroll manager.” The case was before the Court on Defendant’s Motion for summary judgment, based on Defendant’s assertion that Plaintiff was exempt from the FLSA’s overtime provisions under the administrative exemption. Finding issues of fact as to whether Plaintiff had the requisite discretion and independent judgment, the Court denied Defendant’s Motion.
The Court recited the following relevant facts, “Dolores Reedy worked at Rock-Tenn’s folding carton plant in Conway, Arkansas, from June 1986 until March 15, 2007, when she voluntarily resigned. Reedy, who has no college degree or formal accounting training, began as a temporary employee and later worked full-time as a payroll clerk. Rock-Tenn originally treated her as an hourly employee and paid her overtime. At some point, Reedy acquired the title of “Payroll Manager,” was paid on a salary basis, and stopped receiving overtime compensation.
Reedy was responsible for Rock-Tenn’s payroll. Rock-Tenn hired several assistants to work with Reedy in the payroll department, including Linda Suggs, Carolyn Hansen, and Denise Bent. Sometimes assistants worked only as temporary employees. Reedy’s responsibilities in the payroll department included maintaining employee files; wage garnishments; referring Family and Medical Leave Act (“FMLA”) matters to her immediate supervisor, Ken Hogan, or the Benefit Services Center; completing some Employment Eligibility Verification forms based on the documents in employees’ files; and responding to requests for information from the Arkansas Employment Security Department. At some point, Reedy composed a policy reference book for the payroll department.
Reedy says that after she stopped receiving overtime pay, she continued to log her hourly time and report her time to Hogan. She says she spoke with someone in Rock-Tenn’s corporate office about whether she should be exempt from overtime compensation under FLSA. Reedy also says that she and Hogan attended a class in which the instructors conducted an exercise to determine which persons were exempt under the FLSA, and Reedy says that at the end of the exercise she was in the group of persons who were not exempt. Reedy says that she discussed the exercise with Hogan, but Rock-Tenn made no changes to her exempt status.”
After a recitation of the relevant law, the Court applied same stating, “Reedy’s job title of “payroll manager,” standing alone, is of little use in determining whether she was exempt, and the Court must examine evidence relating to the nature of Reedy’s duties. See Lentz v. Hospitality Staffing Solutions, LLC, 2008 WL 269607, at *4 (N.D.Ga. Jan. 28, 2008). A reasonable jury could conclude that Reedy did not exercise discretion and independent judgment in her job as payroll manager. Therefore, the nature of Reedy’s duties and her position relative to the payroll assistants is a disputed issue of fact.
Regarding Reedy’s investigatory duties, Rock-Tenn asserts that she investigated alleged pay discrepancies and notified management if there were any problems requiring remedial action. Rock-Tenn argues that her investigatory duties were similar to those of the postal workers in Dymond, wherein the Eighth Circuit held that postal workers exercised discretion and independent judgment inasmuch as they determined when a situation required immediate action and whether an alleged violation was minor or required reporting to the United States Attorney for prosecution. Dymond, 670 F.2d at 95. Reedy responds that her investigatory responsibilities were distinguishable from the postal workers in Dymond.Reedy says that employees came to her about payroll discrepancies because she was the one who computed payroll, that she had no authority to issue a corrective check, and that she had to receive permission from management before taking any remedial action.
Reedy’s deposition testimony does not demonstrate that her payroll duties required independent judgment or discretion. She reviewed the payroll records in response to complaints; but she was not authorized to proceed with remedial action unless approved by management. Her responsibilities were more clerical than investigatory, unlike those of the postal inspectors in Dymond.Rock-Tenn has failed to show that, as a matter of law, her authority to investigate and remedy payroll discrepancies required the exercise of discretion and independent judgment.
As to the completion of I-9s, Reedy responds that she received no special training qualifying her to recognize a fake employment form, that her job was merely to check the documents in the employee’s personnel file, and that she then signed the I-9s to indicate that Rock-Tenn did in fact have the proper documentation on a particular employee. Rock-Tenn replies that the fact that Reedy signed the I-9s under penalty of perjury-swearing that she had examined the employee’s documents-means that she had to compare and evaluate possible courses of conduct and use her common sense. Rock-Tenn cites to Haywood v. North Am. Van Lines, 121 F.3d 1066, 1073 (7th Cir.1997), for the proposition that an employee who uses common sense satisfies the discretion and independent judgment prong of the administrative employee exception. In that case, however, the Seventh Circuit mentioned “common sense” in a footnote, referencing the employer’s guidelines which informed its employees, whose job it was to negotiate with customers, that they had considerable latitude to negotiate and were to “just use [their] common sense.” Haywood, 121 F.3d at 1073 n. 8. The Seventh Circuit did not hold that every employee who exercises common sense in the performance of a job duty is exercising discretion and independent judgment, and Rock-Tenn has cited no cases holding that completing I-9s amounts to exercising discretion and independent judgment. Furthermore, other than the I-9s and Hogan’s affidavit, there is no other evidence relating to Reedy’s completion of the I-9s, and Reedy was not questioned about the I-9s in her deposition testimony.
As to Reedy’s communications with the Arkansas Employment Security Department, Reedy seemingly characterizes those communications as routine clerical work. Rock-Tenn, relying on Hogan’s affidavit, asserts that Reedy’s responses to the Department’s requests for information often triggered Rock-Tenn’s responsibility to pay unemployment benefits. However, Rock-Tenn offers no authority for the proposition that acting as a liaison between the employer and a governmental agency in and of itself rises to the level of exercising discretion and independent judgment. It is a disputed issue of fact whether Reedy’s work in this area was routine clerical work, providing information to a state department when requested, or actually involved discretion and independent judgment.
Regarding Reedy’s understanding and application of the FMLA, Reedy responds that she was merely instructed to look for certain “red flags” that could indicate that an employee might be asking for FMLA-qualifying leave. Reedy points to Hogan’s deposition, in which he stated that Reedy would bring a potential FMLA-related request to him, and he would make the final decision. Reedy also states that FMLA issues were ultimately referred to a separate entity, the Benefit Services Center. Therefore, Reedy argues, she had no authority to exercise discretion or make decisions regarding FMLA matters. Rock-Tenn replies that Reedy exercised discretion because she stated in deposition testimony that she “felt like [she] was understanding when to ask [Hogan] if [she] should offer an employee FMLA.”Because Reedy stated that she felt like she understood FMLA well enough to notify Hogan of a potential FMLA-related request, Rock-Tenn argues that she was exercising discretion and independent judgment. Reedy characterizes her testimony as showing that she merely looked for “red flags,” whereas Rock-Tenn characterizes her testimony as Reedy touting her ability to interpret and apply the FMLA. After reviewing Reedy’s deposition testimony, it is unclear that either party’s characterization is completely accurate. Thus, the degree to which Reedy actually exercised discretion and independent judgment in reviewing leave requests for FMLA issues and the nature of Reedy’s review of those requests are issues of fact best left to a jury to resolve.
As to Reedy’s job questionnaire responses indicating that she engaged in policy clarification and research, Reedy responds that Rock-Tenn has cited no authority for the proposition that doing research requires the use of discretion or independent judgment with respect to matters of significance. Reedy also states that she eventually had to suspend her research due to other obligations, and Rock-Tenn offers no evidence showing that Reedy actually engaged in research and policy clarification during the period of time relevant to her lawsuit. Furthermore, the record is inadequate to show that whatever research and policy clarification Reedy performed involved the exercise of discretion and independent judgment.
Finally, regarding Reedy’s involvement in garnishing wages, Reedy responds that her duties consisted of merely following the court orders and company procedure, and that Rock-Tenn offers no authority for the proposition that performing wage garnishments amounts to exercising discretion or independent judgment. Rock-Tenn argues that Reedy admitted in deposition testimony that she followed the applicable garnishment laws, and that following those laws required the use of discretion and independent judgment insofar as she was required to “interpret, construe, and explain the laws, policies, and regulations applicable to her work.”In her deposition testimony, however, Reedy stated only that she followed the court orders and the applicable laws regarding precedence when there were multiple garnishments. Reedy did not talk about interpreting, construing, and explaining the laws, policies, and regulations applicable to her work, as Rock-Tenn contends. Rather, it appears from her deposition testimony that, in her position as payroll manager, Reedy simply followed the court orders she received regarding garnishments and then followed the proper procedures where there were multiple garnishments. The nature of Reedy’s work with garnishments and the extent to which her garnishment work involved discretion or independent judgment are disputed issues of fact for a jury to decide.
In summary, issues of fact remain regarding the nature of Reedy’s duties and the extent to which they involved the exercise of discretion or independent judgment.”
U.S.Jud.Pan.Mult.Lit.: First-Filed Venue Best Venue For FLSA MDL, Since Discovery Is Well Underway
In re Sepracor Inc. Fair Labor Standards Act (FLSA) Litigation
Defendant Sepracor Inc. (Sepracor) moved, pursuant to 28 U.S.C. § 1407, for coordinated or consolidated pretrial proceedings of this litigation in the Middle District of Florida or, alternatively, the District of Massachusetts. Plaintiffs in an action pending in the District of Arizona action opposed the motion or, alternatively, suggested centralization in the District of Arizona. The Court was persuaded by the Plaintiffs in the Arizona action and transferred the MDL to that District stating:
“This litigation currently consists of two actions pending in two districts, one action each in the District of Arizona and the Middle District of Florida.
On the basis of the papers filed and hearing session held, we find that these actions involve common questions of fact, and that centralization under Section 1407 in the District of Arizona will serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation. Each action brings claims under the Fair Labor Standards Act of 1938, and each alleges that defendants avoided paying overtime to employees classified as “pharmaceutical sales representatives.” Centralization under Section 1407 will eliminate duplicative discovery; prevent inconsistent pretrial rulings; and conserve the resources of the parties, their counsel and the judiciary.
We are persuaded that the District of Arizona is an appropriate transferee forum for this litigation, because the first-filed action is pending there and discovery is well underway in that action.”
NY Car Wash Chain Settles Unpaid Wages Claims For $3.4 Million
The New York Times is reporting that, “[a] New York carwash chain agreed to pay $3.4 million in back wages and liquidated damages to 1,187 current and former employees to resolve part of a lawsuit brought by the United States Department of Labor in August 2005.
The suit was filed against the chain, the Lage Management Corporation, based in Pelham Manor, N.Y., after an investigation found that its carwashes were not paying employees minimum wage, not paying them for overtime and not keeping adequate employment records. In three previous settlements in the case, more than 200 employees had already received more than $1.3 million in back wages and damages.”
To read the full article go to the New York Times website.
S.D.Fla.: Airport Shuttle Operating Within A Single State Without An Arrangement With The Air Carrier(s) Is Not Engaged In Interstate Commerce; MCA Exemption Inapplicable
Gilbert v. Southern Shuttle Services Inc.
This case was before the Court upon Defendant Motion for Judgment as a Matter of Law, or in the Alternative, Motion for New Trial (DE 90). The Motion is fully briefed and ripe for review, following a verdict for Plaintiffs, drivers for Defendant, a company that primarily provides transportation services to people who are going to and from local airports. Denying Defendant’s Motion, the Court explained the “interstate” travel requirements of a Defendant seeking to claim the Motor Carrier Act (MCA) Exemption in Order to avoid FLSA liability.
Discussing the issue before the Court, the Court stated, “Defendant challenges only the portion of the instruction regarding the interstate commerce requirement. (Mot. at 4-5). The Motor Carrier Exemption, 29 U.S.C. § 213(b)(1), mandates that overtime pay is not required for any employee with respect to whom the Secretary of Transportation (“Secretary”) has power to establish “qualifications and maximum hours of service pursuant to section 21502” of the Motor Carrier Act. Thus, the question of whether a plaintiff is exempt from the overtime provisions of the FLSA under 29 U.S.C. 213(b)(1) turns on whether the Secretary had such power with respect to the plaintiff. Baez v. Wells Fargo Armored Service Corp., 938 F.2d 180, 181 (11th Cir.1991).
A requirement of the motor carrier exemption is that the carrier transports persons by motor carrier between a place in a state and a place in another state or “in the practical continuity of movement in the flow of interstate commerce.”See Powell v. Carey Intern., Inc., 483 F.Supp.2d 1168, 1179 (S.D.Fla.2007); see also29 C.F.R. § 782.2 (“The activities of drivers … in connection with transportation which is not in interstate or foreign commerce within the meaning of the Motor Carrier Act provide no basis for exemption under section 13(b)(1) of the Fair Labor Standards Act.”); see also McIntyre v. FLX of Miami, Inc., 2008 WL 4541017, *5 (S.D.Fla.2008) ( “Transportation within a single state may remain ‘interstate’ in character when it forms a part of a ‘practical continuity of movement’ across state lines from the point of origin to the point of destination.”) (citations omitted).
Even if the passengers came from or were destined to points in another state, the carrier is not engaged in interstate commerce if the carrier operates within a single state unless there is a “common arrangement” or through-ticketing between the motor carrier and the air carrier for continuous passage or interchange. See James T. Kimball-Petition for Declaratory Order, 131 M.C.C. 908, 1980 WL 14197 (1980) ((“Kimball” );Motor Transp. of Passengers Incidental to Air, 95 M.C.C. 526 (1964); see also Powell, 483 F.Supp.2d at 1179-82 (holding that plaintiffs limousine service drivers did not fall under the jurisdiction of the Department of Transportation for purposes of the Motor Carrier Exemption where there was insufficient evidence of through-ticketing arrangement between defendants and Virgin Atlantic); Rossi v. Associated Limousine Services, Inc., 438 F.Supp.2d 1354, 1362 (S.D.Fla.2006) ( “Notwithstanding, a through-ticketing arrangement must be between the motor carrier and air carrier for continuous passage in order to render the motor carrier’s operation interstate transportation. See In re Kimball, supra.Associated has no such arrangement with any air carrier.”). A common travel arrangement with a ground transportation company or a travel agency is insufficient to meet the interstate commerce requirement. See id.; Kimball, 131 M.C.C. at 918; Morrison v. Quality Transports Services, Inc., 474 F.Supp.2d 1303, 1310 (S.D.Fla.2007). The Court concludes that the instruction given was legally correct. Accordingly, the Court finds that it did not err in instructing the jury on the Motor Carrier Exemption.
Finally, the Court rejects Defendant’s claims that the evidence at trial established that it fell within the Taxicab and Motor Carrier Exemptions to the FLSA. The jury instructions were correct, both legally and in light of the evidence presented at trial, and the jury’s verdict was not against the weight of the evidence.” Accordingly, Defendant’s Motion was denied.
7th Cir.: Although Internal Complaint OK To Trigger Anti-Retaliation Protections of 29 U.S.C. § 215(a)(3), Verbal Complaints Insufficient; Must Be Written
Kasten v. Saint-Gobain Performance Plastics Corp.
Plaintiff Kevin Kasten appeals the district court’s grant of summary judgment to defendant Saint-Gobain Performance Plastics Corporation (“Saint-Gobain”). Kasten claims that the district court erred in its interpretation of the Fair Labor Standards Act when it determined that Kasten had not suffered retaliation within the meaning of the statute. For the reasons explained below, we affirm the judgment of the district court.
The relevant testimony pertaining to Plaintiff’s claims were detailed as follows, “Plaintiff alleges (though defendant disputes) that from October through December, 2006, he verbally complained to his supervisors about the legality of the location of Saint-Gobain’s time clocks. Specifically, Kasten claims that he told his supervisors that the location of the Kronos clocks prevented employees from being paid for time spent donning and doffing their required protective gear. Regarding his complaints, plaintiff alleges (1) that he told Dennis Woolverton (his shift supervisor) that he believed the location of defendant’s time clocks was illegal; (2) that he told Lani Williams (a Human Resources generalist) that the location of the time clocks was illegal; (3) that he told April Luther (a “Lead Operator” and apparently another of Kasten’s supervisors) that the location of the time clocks was illegal; and (4) that he told Luther that he was thinking of commencing a lawsuit regarding the location of defendant’s time clocks. Saint-Gobain denies that Kasten ever told any of his supervisors or any human resources personnel that he believed that the clock locations were illegal.”
Throughout the period when Plaintiff claims he complained, he received several write-ups, and was ultimately terminated. He claimed that this retaliatory behavior resulted from his oral internal complaints (which the Defendant denied). Kasten filed suit under the FLSA, claiming that he had been terminated in retaliation for his verbal complaints regarding the location of the time clocks. The district court granted summary judgment to defendant, finding that Kasten had not engaged in protected activity because he had not “filed any complaint” about the allegedly illegal location of the time clocks. Kasten appeals.
First, tackling the issue of internal complaints as a trigger for 215 protection, the Court determined they were, explaining, “The Seventh Circuit has not directly addressed whether internal complaints are protected activity under the FLSA’s retaliation provision, though we have reviewed two cases involving internal complaints without commenting on the matter. See Scott v. Sunrise Health Care Corp., 195 F.3d 938, 940-41 (7th Cir.1999) (affirming dismissal of FLSA retaliation case because plaintiff had not shown a causal connection between her complaints and her later discharge); see also Shea v. Galaxie Lumber Constr. Co., 152 F.3d 729, 731, 734-36 (7th Cir.1998) (reversing a denial of punitive damages in a case where an employee had been discharged after complaining to the company president).
Statutory interpretation begins with “the language of the statute itself [and] [a]bsent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive.” Sapperstein v. Hager, 188 F.3d 852, 857 (7th Cir.1999) (internal quotation marks and citation omitted) (interpreting retaliation provision of FLSA but not discussing whether internal complaints were protected conduct); see also Consumer Prod. Safety Comm’n v. GTE Sylvania, 447 U.S. 102, 107 (1980). Here, the plain language of the statute indicates that internal, intracompany complaints are protected. The retaliation provision states that it is “unlawful for any person to discharge … any employee because such employee has filed any complaint…. “29 U.S.C. § 215(a)(3) (emphasis added). As Kasten points out, the statute does not limit the types of complaints which will suffice, and in fact modifies the word “complaint” with the word “any.” Thus, the language of the statute would seem to include internal, intra-company complaints as protected activity.
The majority of circuit courts considering the question have also found that “any complaint” includes internal complaints. See Hagan v. Echostar Satellite, LLC, 529 F.3d 617, 625 (5th Cir.2008) (internal complaint constitutes protected activity); Moore v. Freeman, 355 F.3d 558 (6th Cir.2004) (informal complaints are protected activity); Lambert v. Ackerly, 180 F.3d 1004, 1004 (9th Cir.1999) (section 15(a)(3) protects “employees who complain about violations to their employers”); Valerio v. Putnam Associates, Inc., 173 F.3d 35, 41 (1st Cir.1999) (“By failing to specify that the filing of any complaint need be with a court or an agency, and by using the word ‘any,’ Congress left open the possibility that it intended ‘complaint’ to relate to less formal expressions of protest … conveyed to an employer.”); EEOC v.. White & Son Enterprises, 881 F.2d 1006, 1011 (11th Cir.1989) (employees’ internal complaints to supervisor about unequal pay were assertions of rights under the Equal Pay Act, part of the FLSA); Love v. RE/MAX of America, Inc., 738 F.2d 383, 387 (10th Cir.1984) (same); but see Ball v. Memphis Bar-B-Q Co., 228 F.3d 360, 363-365 (4th Cir.2000) (holding that 29 U.S.C. § 215(a)(3) does not protect internal complaints).
Because we conclude, in line with the vast majority of circuit courts to consider this issue, that the plain language of 29 U.S.C. § 215(a)(3) includes internal complaints as protected activity, we affirm the judgment of the district court in this regard.
The Court then turned to the sufficiency of unwritten/verbal complaints. “The next question pertinent to this appeal is whether unwritten, purely verbal complaints are protected activity under the statute.
Again, we start with the language of the statute. Sapperstein, 188 F.3d at 857. The FLSA’s retaliation provision prohibits “discharg[ing] … any employee because such employee has filed any complaint….”29 U.S.C. § 215(a)(3) (emphasis added). The district court reasoned:
Expressing an oral complaint is not the same as filing a complaint. By definition, the word “file” refers to “a collection of papers, records, etc., arranged in a convenient order,” Random House Webster’s College Dictionary 489 (2d ed.1999), or, when used in verb form as it is in the statute, “[t]o deliver (a paper or instrument) to the proper officer so that it is received by him to kept on file, or among the records of his office,” Webster’s New International Dictionary of the English Language 945 (2d ed.1958). One cannot “file” an oral complaint; there is no document, such as a paper or record, to deliver to someone who can put it in its proper place.
Plaintiff disagrees with this interpretation. He argues that “to file” is a broad term that has several meanings, including, generally, “to submit.”
Looking only at the language of the statute, we believe that the district court correctly concluded that unwritten, purely verbal complaints are not protected activity. The use of the verb “to file” connotes the use of a writing. Webster’s Ninth New Collegiate Dictionary defines the verb “to file” as
1. to arrange in order for preservation and reference <“file letters”> 2. a: to place among official records as prescribed by law <“file a mortgage”> b: to perform the first act of (as a lawsuit) <“threatened to file charges against him”>
This definition accords with what we believe to be the common understanding of the verb “to file.” Although Kasten and the Secretary of Labor claim that “to file” can mean, generally, “to submit,” this seems to us overbroad. If an individual told a friend that she “filed a complaint with her employer,” we doubt the friend would understand her to possibly mean that she merely voiced displeasure to a supervisor. Rather, the natural understanding of the phrase “file any complaint” requires the submission of some writing to an employer, court, or administrative body. See United States v. Bank of Farmington, 166 F.3d 853, 860 (7th Cir.1999) (“Words in a statute are to be given their plain and ordinary meaning.”) (citing United States v. James, 478 U.S. 597, 604 (1986)).
Other circuit courts that have tackled this issue are split. The Fourth Circuit found that verbal complaints were not protected activity in Ball v. Memphis Bar-B-Q Co., Inc., 228 F.3d 360, 364 (4th Cir.2000). The court recognized that the FLSA’s “statutory language clearly places limits on the range of retaliation proscribed by the act.”Specifically, in interpreting the “testimony” clause of the FLSA’s retaliation provision, the Fourth Circuit held that the FLSA “prohibits retaliation for testimony given or about to be given but not for an employee’s voicing of a position on working conditions in opposition to an employer.”Id. (emphasis added). Although the Fourth Circuit acknowledged that the retaliation in that case-which followed an employee’s statement to the company president that, if he were deposed in a lawsuit, he would not testify to the president’s suggested version of events-was “morally unacceptable,” the court concluded that a faithful interpretation of the statute did not recognize mere statements to a supervisor as a protected activity. Id.; see also Lambert v. Genesee Hospital, 10 F.3d 46, 55 (2d Cir.1993) (“The plain language of this provision limits the cause of action to retaliation for filing formal complaints, instituting a proceeding, or testifying, but does not encompass complaints made to a supervisor.”) (citations omitted).
Other courts have found oral complaints to be protected activity, but it is difficult to draw guidance from these decisions because many of them do not specifically state whether the complaint in question was written or purely verbal, and none discusses the statute’s use of the verb “to file” and whether it requires a writing. See EEOC v. Romeo Community Schools, 976 F.2d 985, 989-90 (6th Cir.1992) (holding, without discussion of the verbal/written distinction, that plaintiff’s apparently oral complaints to supervisors were protected activity); EEOC v. White & Son Enters., 881 F.2d 1006, 1011 (11th Cir.1989) (holding, without discussion of the verbal/written distinction, that plaintiffs’ oral complaints were protected activity); Brock v. Richardson, 812 F.2d 121, 125 (8th Cir.1987) (holding, without discussion of the verbal/written distinction, that defendant’s mistaken belief that plaintiff had made apparently oral complaints to supervisors was grounds for suit); Brennan v. Maxey’s Yamaha, 513 F.2d 179, 183 (8th Cir.1975) (holding, without discussion of the verbal/written distinction, that employee’s “voicing” of concern was protected activity).
Despite these contrary findings by some other circuits, our interpretation of the phrase “file any complaint” is confirmed by the fact that Congress could have, but did not, use broader language in the FLSA’s retaliation provision. For example, analogous provisions in other statutes, including Title VII and the Age Discrimination in Employment Act, forbid employers from retaliating against any employee who “has opposed any practice” that is unlawful under the statutes. See42 U.S.C. § 2000e-3(a); 29 U.S .C. § 623(d). This broader phrase, “opposed any practice,” does not require a “fil[ing],” and has been interpreted to protect verbal complaints. See, e.g., Kotcher v. Rosa and Sullivan Appliance Ctr., Inc., 957 F.2d 59, 65 (2d Cir.1992). Congress’s selection of the narrower “file any complaint” language in the FLSA thus appears to be significant. See Ball, 228 F.3d at 364 (noting that “Congress has crafted … broader anti-retaliation provisions elsewhere” but “the cause of action for retaliation under the FLSA is much more circumscribed”); Genesee Hospital, 10 F.3d at 55 (noting that the FLSA uses narrower language in its retaliation provision than Title VII).
Finally, we are aware that ” ‘the remedial nature of the [FLSA] … warrants an expansive interpretation of its provisions….’ ” Sapperstein, 188 F.3d at 857 (quoting Herman v. RSR Security Services, 172 F.3d 132, 139 (2d Cir.1999)). But expansive interpretation is one thing; reading words out of a statute is quite another. Because we believe that the FLSA’s use of the phrase “file any complaint” requires a plaintiff employee to submit some sort of writing, we agree with the district court’s conclusion that Kasten’s alleged complaints were not protected activity under the statute.”
Thus, the Court affirmed the lower Court’s ruling, finding that Plaintiff’s internal, but verbal complaints were insufficient and therefore unprotected.
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