 Rebutting Employer’s Half-Time Arguments in FLSA Misclassification Cases
September 24th, 2008 Employers who lose white collar misclassification cases often try to blunt the worker’s damages by arguing that, under 29 CFR 778.113, the salary must be spread accross all hours worked, leaving the employer to merely pay half-time for the overtime hours.  This argument often is misplaces. 29 CFR 778.113(a)  provides: “If the employee is employed solely on a weekly basis, his regular hourly rate of pay on which time and a half must be paid, is computed by dividing the salary by the number of hours which the salary is intended to compensate.” The determination of the “number of hours which the salary is intended to compensate” is a question for the jury. See Rodriguez v. Farm Stores Grocery, Inc., 2008 U.S. App. LEXIS 4817, *21-26 (11th Cir. Mar. 6, 2008). Moreover, as with most FLSA provisions, the defendant bears the burden of proof on this issue. See Giles v. City of New York, 41 F. Supp. 2d 308, 317 (S.D.N.Y. 1999). Most importantly, the mere fact that employees worked excessive hours without receiving any pay beyond their salary is not dispositive. As observed by Judge Motley in Giles: “The fact an employee regularly works 60 or more hours does not, without more, indicate that the employee’s weekly salary was intended to include the FLSA overtime premium for all hours in excess of 40.” Giles, 41 F. Supp. 2d at 316-17. The Eleventh Circuit Court of Appeals (as well as other courts) recently agreed: “In the situation here, where the employee is paid solely on a weekly salary basis, the number of hours the employee’s pay is intended to compensate – not necessarily the number of hours he actually worked – is the divisor. Rodriguez, 2008 U.S. App. LEXIS 4817, at *22-23. Similar cases abound, but this posting is not intended to serve as a legal brief. Tags: damages, FLSA, half-time, misclassification, overtime, white collar ---------------------------------------------------------------------------------------- Federal Court in Tennessee Rejects Argument that Severance Payments Can Offset Unpaid Overtime September 14th, 2008 Companies continue to attempt to avoid their failure to pay overtime under the FLSA by arguing that other types of payments to the employee should ”offset” the unpaid overtime.  These arguments usually fail. For the most recent example, check out Mezger v. Price CPAs, PLLC, 2008 U.S. Dist. LEXIS 68859, *11-12 (M.D. Tenn. Sept. 8, 2008), where the federal court easily rejected the company’s argument that an employee’s severance payments should offset his previously unpaid overtime, even though the severence agreement did not in any way connect the severence pay to an FLSA claim. Do defense lawyers really get paid for making these kinds of arguments? Tags: FLSA, offset, severence patments, unpaid overtime ---------------------------------------------------------------------------------------- Nebraska District Court Reinforces the Principle that FLSA Collective Actions Can Proceed Alongside State Law Class Action Claims August 27th, 2008 Corporate America’s quest to convince federal judges that class action claims alleging violations of state wage laws cannot be pursued alongside FLSA collective actions continues to conflict with the reality that federal courts across the country often certify in the same action both “opt-in” collective actions asserting FLSA violations and  Rule 23 “opt-out” class actions asserting violations of state wage laws. In the latest example, Chief Judge Joseph Bataillon, in Lopez v. Tyson Foods, Inc., 2008 U.S. Dist. LEXIS 60050 (D. Neb. Aug. 7, 2008), both conditionally certified the worker’s FLSA as an opt-in collective action under 29 U.S.C. § 216(b) and certified their Nebraska Wage Payment and Collection Act claim as an opt-out class action under Federal Rule of Civil Procedure 23. Tags: class actions, collective actions, FLSA, state wage laws ---------------------------------------------------------------------------------------- District Court’s Consistently Hold That FLSA Notice Forms Should Be Based On A Three-Year Limitations Period August 24th, 2008 Companies opposing conditional certification in FLSA overtime cases often argue that, even if conditional certification is granted and notice is issued to the class, the notice mailing should be limited to class members who have been employed within two – rather than three – years from the notice date. This argument is premised on the fact that, under the FLSA, a three-year limitations period applies only if the company engaged in a “willful” violation of the FLSA.  This argument frequently is rejected by district courts. As recently explained by Judge Thomas Vanaskie of the United States District Court in Scranton, Pennsylvania, FLSA notice forms should be based on the three-year limitations period because the question of the company’s “willfulness” is a merits issue that is not properly before the court at the conditional certification stage. See Gallagher v. Lackawanna Cty., 2008 U.S. Dist. LEXIS 43722, *30-31 (M.D. Pa. May 30, 2008). This approach is consistent with the overwhelming majority cases, including the following decisions from district courts in Connecticut, Arkansas, Missouri, California, and Pennsylvania. See, e.g., Neary v. Metro. Prop. & Cas. Ins. Co., 517 F. Supp. 2d 606, 623 (D. Conn. 2007); Resendiz-Ramirez v. P&H Forestry, LLC, 515 F. Supp. 2d 937, 942 (W.D. Ark. 2007); Fast v. Applebees Int’l, Inc., 2007 U.S. Dist. LEXIS 44365, *12-13 (W.D. Mo. June 19, 2007); Agdipa v. Grant Joint Union High Sch. Dist., 2007 U.S. Dist. LEXIS 26506, *7 (E.D. Cal. Apr. 10, 2007); Romero v. Producers Dairy Foods, Inc., 235 F.R.D. 474, 484 (E.D. Cal. 2006); Chabrier v. Willmington Finance, Inc., 2006 U.S. Dist. LEXIS 90756, *11 (E.D. Pa. Dec. 13, 2006). Tags: Conditional Certification, FLSA, limitations period, notice form, overtime, three-year ---------------------------------------------------------------------------------------- Don’t Forget to Argue the Merits of “SubClassing” When Fighting for FLSA Conditional Certification August 23rd, 2008 When companies oppose FLSA conditional certification motions in collective actions seeking unpaid overtime, they often argue that the proposed FLSA class is not “similarly situated” because the class members work in different departments of the plant or work at different job sites. These arguments generally are intended to scare the court into believing that that collective litigation would be unmanageable. In response to the above argument, Trial Lawyers should argue, among other things, that “subclassing” often enables the trial judge to efficiently manage FLSA classes consisting of different groups of class members. Below, you will find citations to decisions in which the district court recognized the benefits of subclassing in granting FLSA conditional certification motions. The decisions arise out of district courts in Texas, Illinois, Kansas, New York, Mississippi, Kentucky, Virginia, Pennsylvania, and Colorado. Ryan v. Staff Care, Inc., 2007 U.S. Dist. LEXIS 49060, *13 n.3 (N.D. Tex. July 6, 2007) (while differences in employees’ pay classifications might demonstrate “the need for subclassing in this case,” such differences did not warrant denial of conditional certification) Read the rest of this entry » Tags: Conditional Certification, FLSA, Individualized, overtime, SubClassing ---------------------------------------------------------------------------------------- Poultry Industry Suffers Another Defeat in FLSA Overtime Lawsuit August 9th, 2008 Yet another federal district court has rejected the poultry industry’s attempt to avoid a jury trial addressing the practice of refusing to pay workers for activities engaged in before the workers arrive at the production line. On August 7, 2008, United States District Court in the Middle District of Alabama issued its decision in Burks v. Equity Group-Eufaula Division, LLC, 2:06-cv-1081-MEF. The district court rejected the company’s argument that time workers spend sanitizing safety and sanitary gear at the beginning of the workday is compensable. The court rejected the company’s argument that the time was exempt under FLSA Section 3(o), which exempts from FLSA coverage time spent “changing clothes or washing at the beginning or end of each workday which was excluded from measured working time during the week involved by the express terms of or by custom or practice under a bona fide collective-bargaining agreement applicable to the particular employee.” 29 U.S.C. § 201(o). As explained by the court, Section 3(o)’s “washing” provision only applies to washing the body. In addition, the court explained that time spent sanitizing gear is not covered by the Portal to Portal Act, which applies to “activities which are preliminary to or postliminary to” the workers’ “principal activities.” 29 U.S.C. § 254(a)(2). The court explained that, because sanitizing gear is “integral and indispensable” to the principal activities of poultry workers, such activities are neither preliminary nor postliminary. Tags: compensable time, poultry, safety gear, sanitary gear ---------------------------------------------------------------------------------------- Summary of FLSA Collective Action Opinions from the Fifth Circuit During 2Q 2008 July 10th, 2008 It was a busy quarter for issuing opinions in FLSA collective actions by federal district courts within the Fifth Circuit.  These opinions touched on a number of different compensation related issues, from tip sharing to conditional certification of classes alleging that they worked off-the-clock. Below is a brief summary of each of the opinions issued from March 16, 2008 through June 15, 2008 that concern FLSA collective actions. Read the rest of this entry » Tags: collective action, compensation, exempt, Fifth Circuit, FLSA, off-the-clock, overtime, tips ---------------------------------------------------------------------------------------- FEDERAL COURT CONFIRMS FLSA RIGHTS OF HAZLETON, PENNSYLVANIA BEEF WORKERS REPRESENTED BY THE WINEBRAKE LAW FIRM June 11th, 2008 On April 10, 2008, hundreds of beef workers in Wyalusing, Pennsylvania achieved an important victory over their employer, Cargill Meat Solutions, when Senior District Judge William J. Nealon denied the company’s summary judgment motion. The case, entitled In re Cargill Meat Solutions Wage and Hour Litigation, is published at 2008 U.S. Dist. LEXIS 31824 (M.D. Pa. Apr. 10, 2008). The workers are represented by The Winebrake Law Firm as well as Kenney Egan McCafferty & Young, P.C. (Plymouth Meeting, PA) and O’Malley & Langan, P.C. (Scranton, PA).The Hazleton workers, like thousands of other beef and poultry workers represented by our firm, seek compensation for all time spent performing pre-shift and post-shift activities associated with sanitation and the wearing and maintenance of gear required by their jobs. The Hazleton workers, for example, wear various combinations of gear, including hard hats, eye protection, face shields, hearing protection, mesh belly guards, mesh sleeves, mesh gloves, wizard sleeves, wizard gloves, knife scabbards, hairnets, cotton gloves, frocks, plastic aprons, rubber aprons, plastic gloves, rubber gloves, plastic sleeves, and cut resistant gloves. In addition, the Hazleton workers seek compensation for time spent traveling between the changing area and the work station. In recent decisions, the Supreme Court, the Third Circuit Court of Appeals, and the United States Department of Labor have frowned upon the continued failure of the beef and chicken industry to compensate workers for these types of activities. See IBP, Inc. v. Alvarez, 546 U.S. 21 (2005); DeAsensio v. Tyson Foods, Inc., 500 F.3d 361 (3d Cir. 2007); U.S. Department of Labor Wage and Hour Advisory Memorandum 2006-2 (May 31, 2006). Read the rest of this entry » ---------------------------------------------------------------------------------------- FLSA MYTHBUSTER: WORKERS USUALLY MUST BE PAID FOR “UNAUTHORIZED” OVERTIME June 10th, 2008 Each quarter, our FLSA Mythbuster (identity and whereabouts still unknown) visits Corporate America’s Land of Make-Believe to uncover common workplace rules that violate the FLSA. Today’s column emanates from Hazleton, Pennsylvania, where The Boss has instructed his low wage employees that working beyond the scheduled 40 hour workweek generally is not permitted and that no one will be paid for “unauthorized” overtime. Of course, The Boss almost never “authorizes” overtime, even though (i) the employees cannot possibly complete their assigned work within a 40 hour workweek and (ii) everyone, including The Boss and his middle managers, knows that the employees routinely work in excess of 40 hours. The Boss is violating the FLSA. Department of Labor regulations clearly require that: Work not requested but suffered or permitted is work time.  For example, an employee may voluntarily continue to work at the end of the shift.  He may be a pieceworker, he may desire to finish an assigned task or he may wish to correct errors, paste work tickets, prepare time reports or other records.  The reason is immaterial.  The employer knows or has reason to believe that he is continuing to work and the time is working time. 29 CFR § 785.11. Moreover, under DOL regulations, The Boss – not the employee – is responsible for ensuring that “unauthorized” work is not tolerated. In, particular: In all such cases it is the duty of the management to exercise its control and see that the work is not performed if it does not want it to be performed.  It cannot sit back and accept the benefits without compensating for them.  The mere promulgation of a rule against such work is not enough.  Management has the power to enforce the rule and must make every effort to do so. 29 CFR § 785.113. Put differently – and as recognized by several federal courts – overtime pay is due whenever The Boss has either “actual or constructive knowledge” of the overtime work. See Barvinchak v. Indiana Regional Medical Center, 2007 U.S. Dist. LEXIS 72805, * (W.D. Pa. Sept. 28, 2007). Moreover, The Boss’s knowledge “is measured in accordance with his duty to inquire into the conditions prevailing in his business.” Reyna v. Conagra Foods, Inc., 2006 U.S. Dist. LEXIS 89690, *13 (M.D. Ga. Dec. 11, 2006) (quoting Reich v. Dep’t of Conservation & Natural Resources, 28 F.3d 1076, 1082 (11th Cir. 1994)). In sum, ignorance should not be bliss for greedy employers who implement “unauthorized overtime” rules in violation of the FLSA. Tags: authorized work, FLSA, overtime, unauthorized work ---------------------------------------------------------------------------------------- Third Circuit Deems Philadelphia Paramedics Eligible for Overtime Pay June 1st, 2008 In a two to one decision, the Third Circuit Court of Appeals reversed a lower court ruling and held that paramedics employed by the City of Philadelphia were entitled to time and half pay for hours over 40. See Lawrence v. City of Philadelphia, 2008 U.S. App. LEXIS 11211 (3d Cir. May 28, 2008). This case concerned 300 individual paramedics that are assigned to units at firehouses throughout the City.    Pursuant to Section 207(k), the FLSA exempts certain categories of employees from overtime pay requirements who work for a “public agency.” Id. at *3. One of these categories concerns those individuals engaged in “fire prevention activities.” Id. “Fire prevention activities” is defined in Section 203(y) of the FLSA, which outlines the statutory requirements that an individual must meet in order to fulfill this exemption. “The individual: (1) must be ‘trained in fire suppression;’ (2) must have ‘legal authority and responsibility to engage in fire suppression;” and (3) must be ‘employed by a fire department.’” Id. at **3-4 (quoting 29 U.S.C. § 203(y)(1)) (emphasis added). In addition, the paramedic must be “engaged in the prevention, control, and extinguishment of fires or response to emergency situations where life, property, or the environment is at risk.” 29 U.S.C. § 203(y)(2). The only issue in this case, which was one of first impression within the Circuit, was whether the paramedics, who were employed by the City’s Fire Department, had “‘legal authority and responsibility’ for fire suppression activities within the meaning of the Fair Labor Standards Act, thereby bringing them among the exemptions.” Id. at **1-2. 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