Compenstation for “On-Call” Work
January 24th, 2011
The United States Department of Labor, Wage and Hour Division (WHD) recently released a press release detailing how it recovered more than $77,000.00 in back wages for employees that were not properly paid for “on-call” work hours. Specifically, the WHD found that 21 emergency medical technicians (EMTs) in Worthington, Minnesota were required to be on-call while at home and had to be ready to report to their ambulances within six minutes during such on-call periods. The EMTs were not properly compensated for their “on call” work hours which caused them to work over 40 hours within a single workweek. Thus, the EMTs were wrongfully denied overtime compensation under the Fair Labor Standards Act (FLSA). The on-call hours in this particular case were compensable, the WHD held, because of the particularly restrictive on-call conditions that the EMTs were subject.
Tags: Call Center, Emergency Medical Technician, EMT, Fair Labor Standards Act, FLSA, Minnesota Overtime, Minnesota overtime attorney, On-Call, on-call employee, on-call overtime compensation, On-call work hours, overtime violation
Seventh Circuit Rejects “Inherent Incompatibility”
January 19th, 2011
In recent years, district courts within the Third Circuit have frequently held that workers cannot bring “hybrid” federal wage and hour claims under the FLSA as a collective action under 29 U.S.C. §216(b) along side state wage and hour class action claims under Federal Rule of Civil Procedure 23. See, e.g., Otto v. Pocono Health Sys., 457 F. Supp. 2d 522, 524 (M.D. Pa. 2006) (“To allow an Section 216(b) opt-in action to proceed accompanied by a Rule 23 opt-out state law class action claim would essentially nullify Congress’s intent in crafting Section 216(b) and eviscerate the purpose of Section 216(b)’s opt-in requirement.). The notion that such claims cannot be simultaneously pursued in federal court has become known as “inherent incompatibility.”
However, in an opinion issued on January 18, 2011, the Seventh Circuit Court of Appeals rejected this idea, holding that “there is no categorical rule against certifying a Rule 23(b)(3) state-law class action in a proceeding that also includes a collective action brought under the FLSA.” Ervin v. Os Restaurant Services, Inc., 2011 U.S. App. LEXIS 863, *3-4 (7th Cir. Ill. Jan. 18, 2011). “Nothing in the text of the FLSA or the procedures established by the statute suggests either that the FLSA was intended generally to oust other ordinary procedures used in federal court or that class actions in particular could not be combined with an FLSA proceeding.” Id. at *4.
In Ervin, former employees of an Outback Steakhouse restaurant brought claims under both the Fair Labor Standards Act and the Illinois Minimum Wage Law alleging that Outback failed to pay them minimum wage and overtime due to their tip sharing/pooling practices. The district court declined to certify the state law claims under Rule 23 because “of what he saw as a conflict between the two different forms of aggregate litigation.” Id. at *7-8.
The Seventh Circuit examined Congressional intent behind the FLSA and disagreed with the district court, noting that “[t]here is ample evidence that a combined action is consistent with the regime Congress has established in the FLSA.” Id. at *15. Moreover, the Seventh Circuit rejected the notion that §216(b)’s opt-in procedure and the opt-out nature of Rule 23 would create confusion among class members. In fact, the Court noticed that having two parallel actions, one in federal court and one in state court, would create more potential for confusion than having a class’s wage and hour claims proceed in one venue. Id. at *18-19.
The Ervin Court also addressed whether a district court could have supplemental jurisdiction over state wage and hour claims pursuant to 28 U.S.C. §1367. It held that the requirements of §1367(a) are satisfied where the state wage claims are closely related to the FLSA collective action. Id. at *21. The court also held that “a simple disparity in numbers should not lead a court to the conclusion that a state claim ‘substantially predominates’ over the FLSA action” as precluded by §1367(c). Id. at *24. In fact, the court observed that the 45 current and former Outback workers who had joined the suit (compared to the 180 to 250 who may be covered by the Rule 23 claims) was a “low” ratio ,suggesting that the state claims did not predominate over the FLSA claims in this case. Id. at *25. In closing, the Ervin court stated:
We agree with the D.C. Circuit in Lindsay and the Ninth Circuit in Wang that the Third Circuit decision in De Asencio represents only a fact-specific application of well-established rules, not a rigid rule about the use of supplemental jurisdiction in cases combining an FLSA count with a state-law class action. In our case, the record reflects no reason to doubt that it is sensible to litigate all theories in a single federal proceeding. The identity of the issues, the convenience to both plaintiffs and defendants of not having to litigate in multiple forums, and the economy of resolving all claims at once suggests that an exercise of supplemental jurisdiction will normally be appropriate. In all but the most unusual cases, there will be little cause for concern about fairness or comity.
Id. at *26.
While the Seventh Circuit’s opinion is not the first circuit court to reject inherent incompatibility, see, e.g, Wang v. Chinese Daily News, Inc., 623 F.3d 743, 753-55, 760-62 (9th Cir. 2010) (holding that a district court properly certified a Rule 23(b)(2) class along with an FLSA collective action and properly exercised supplemental jurisdiction over the state-law claim), the Third Circuit Court of Appeals has yet to address this issue. As a result, overtime lawyers in Pennsylvania, New Jersey and Delaware must still confront this issue when planning any class/collective action litigation.
Tags: class action, collective action, FLSA, New Jersey, overtime, Pennsylvania, Pennsylvania Wage and Hour Law, PMWA, tip pooling, Tip sharing, wage and hour
Salary must be “Fixed” for an Employer to Use the Fluctuating Workweek Method of Pay
January 12th, 2011
In Adeva v. Intertek USA, 2010 U.S. Dist. LEXIS 1963 (D.N.J. Jan. 11, 2010), the District of New Jersey, the Court was faced with a question of whether an employer can use the Fluctuating Workweek Method of pay (which is unfortunately sometimes referred to as “Chinese Overtime”) when it gives employees special payments for days off, off shore pay and holiday pay. Under the Fluctuating Workweek Method, an employer must pay its employees a “fixed amount as straight time pay for whatever hours he is called upon to work in a workweek.” 29 C.F.R. § 778.114(a). Judge Chesler held that when an employee receives such payments, the employer is not adhering to the regulation’s fixed salary requirement. “The record demonstrates that Plaintiffs’ compensation for non-overtime hours varied, depending upon earned offshore pay, holiday pay or day-off pay. The Court is convinced that due to such payments, Plaintiffs cannot receive the fixed salary required to apply the FWW.” Adeva, 2010 U.S. Dist. LEXIS 1963, at *7. In reaching this conclusion, the court relied on a 2007 opinion from the Southern District of New York, titled Ayers v. SGS Control Services, Inc., 2007 U.S. Dist. LEXIS 19634 (S.D.N.Y.) which held that since the plaintiffs received sea-pay and day-off pay, their salaries were not fixed, precluding the use of the FWW. Judge Chesler also relied on the First Circuit’s opinion in O’Brien v. Town of Agawam, 350 F.3d 279 (1st Cit. 2003) which held that workers who received additional compensation in the form of shift differential payments could not have received a fixed amount as required by the FWW.
Employees who are paid under the FWW method where they get “half-time” for their hours over forty should be aware if their pay is subject to the bumps described above.
Tags: Chinese Overtime, FLSA, fluctuating workweek, half-time, New Jersey, New York, non-exempt, Pennsylvania, salary plus overtime, shift differential, wage and hour
Another Favorable “Donning and Doffing” Decision
January 12th, 2011
In Franklin v. Kellog Company, 619 F.3d 604 (6th Cir. 2010), the Sixth Circuit Court of Appeals issued a decision that will be helpful to food processing workers seeking recovery for their time spent gathering, donning and doffing safety and protective gear, for time spent cleaning themselves and their gear, and for time spent traveling between the processing line and the cleaning/changing areas. The Court generally held that all of these activities are compensable work that is integral and indispensible to the food processing business. This decision will be a big help for overtime lawyers who seek unpaid overtime and wages for poultry workers, beef workers, and other food processing workers. This is especially true in Tennessee, Ohio, Kentucky, and Michigan, all of which reside within the Sixth Circuit.
Tags: Ohio overtime lawyer; Ohio overtime attorney; Kentucky overtime lawyer; Kentucky overtime lawyer; Michigan overtime attorney; Michigan overtime lawyer; Tennessee overtime attorney; Tennessee overtime
An Employee with the Job Title of “Store Manager” May Be Entitled to Overtime Compensation
January 10th, 2011
In a recent decision from the Middle District of Pennsylvania, Plaunt v. Dolgencorp, Inc., 2010 U.S. Dist. LEXIS 132135 (M.D. Pa. Dec. 14, 2010), Judge James A. Munley held that a store manager’s cause of action seeking overtime-pay under the Fair Labor Standards Act, (FLSA), 29 U.S.C. § 213(a)(1), could proceed past the summary judgment stage. In that case, the plaintiff was a former Store Manager for Dollar General. While employed as a Store Manager, the plaintiff was never paid any overtime for hours worked over forty within a workweek; instead, she was paid on a salaried basis. Defendant argued that Plaintiff was not entitled to overtime because, according to Defendant, her primary duty was management. Plaintiff in turn argued that although her job title was “Store Manager,” a review of her daily job duties demonstrated that she in actuality spent a large portion of her day performing non-managerial functions.
After a thorough review of the applicable federal caselaw and regulations, Judge Munley held that a jury could decide that plaintiff’s primary duty while employed as a store manager was not management. The District Court focused on five factors which steered its analysis: 1) the amount of time plaintiff spent on managerial duties; 2) the relative importance of the plaintiff’s managerial and non-managerial duties; 3) the frequency with which the plaintiff exercised discretion; 4) the degree to which the plaintiff was supervised; and 5) the relative salaries paid to the employee as compared to a non-exempt employee who performs the same non-managerial tasks. Within this analysis, Judge Munley found that a jury could find that the plaintiff “could not alter store hours or change the store’s layout,” “could not set pay rates, but only recommend advancements,” “could not hire or fire employees, but only make recommendations,” and that she was “required to operate within the payroll budget.” Id. at *36.
In sum, this decision indicates that one must look beyond an employee’s job title in determining whether an employee was wrongfully denied overtime compensation under federal law. As the Supreme Court of Massachusetts observed in Goodrow v. Lane Bryant, Inc., 432 Mass. 165, 296 (Mass. 2000): “A manager in name does not a manager make.”
Tags: executive exemption to overtime, Fair Labor Standards Act, federal overtime, FLSA, Massachusetts overtime, overtime compensation, overtime pay, Pennsylvania overtime, Store Manager
There is No Such Thing as a Free Lunch
January 10th, 2011
Many times employers try to squeeze unpaid work out of their employees by having them perform work during parts of an unpaid meal break period. However, the Secretary of Labor has promulgated regulations stating that:
Bona fide meal periods are not worktime. Bona fide meal periods do not include coffee breaks or time for snacks. These are rest periods. The employee must be completely relieved from duty for the purposes of eating regular meals. Ordinarily 30 minutes or more is long enough for a bona fide meal period. A shorter period may be long enough under special conditions. The employee is not relieved if he is required to perform any duties, whether active or inactive, while eating. For example, an office employee who is required to eat at his desk or a factory worker who is required to be at his machine is working while eating.
29 C.F.R. § 785.19 (emphasis supplied). Many courts have read this language to require an employee to be “completely relieved” from duty for the entire 30 minute meal period or the entire meal break should be paid. See Abendschein v. Montgomery County, 984 F. Supp. 356 (D.Md. 1997); Burks v. Equity Group, 571 F. Supp. 2d 1235 (M.D. Ala. 2008). The holding in Burks is of special note because the 30 minute meal breaks at issue in that case were only interrupted by approximately five minutes donning and doffing activities at the beginning and end of each break – providing workers with approximately 20 minutes of uninterrupted time to themselves. Yet, the Court held that the entire 30 minutes could be compensable.
Meal break violations such as this are typically found with employer timekeeping systems (such as Kronos) that are preprogrammed to automatically reduce an employee’s paid time by 30 minutes the purported meal break. Pennsylvania, New Jersey and New York overtime attorneys should be on the look out for unpaid meal break cases like these.
Tags: Montgomery County overtime, New Jersey overtime, New York Overtime, Pennsylvania overtime, Philadelphia overtime
In the Third Circuit, “Guaranteed Salary” Plans Might Not Always Satisfy the Salary Basis Test
January 9th, 2011
I recently wrote a brief in which we argued that our client was not paid on a salary basis and, therefore, could not be overtime exempt under the professional or executive exemptions to the Fair Labor Standards Act or the Pennsylvania Minimum Wage Act. In this case, the employer purportedly paid the plaintiff a “guaranteed salary” plus and hourly bonus for every hour worked over 40 in a workweek. We argue that the sceme is a sham to circumvent the overtime pay provisions of state and federal law. In this regard, we came accross the Third Circuit’s decision in Brock v. The Claridge Hotel and Casino, 846 F.2d 180 (3d Cir. 1988). Brock is very helpful in arguing that certain “guarantees salary” plans are a sham. Here is what we wrote about Brock:
In Brock, an Atlantic City casino paid certain supervisors according to a “Weekly Salary Guarantee” plan under which the supervisors were “guaranteed a weekly salary of $250.00 for any week in which [they] perform[ed] any service.” Brock, 846 F.2d at 182. In addition, the supervisors “were paid by the hour, according to the number of hours [they] worked.” Id. The supervisors almost always worked sufficient hours to exceed their guaranteed salary. See id. at 184-85.
The Brock District Court saw through the casino’s “Weekly Salary Guarantee” plan as an obvious ruse to escape its obligation to pay overtime to hourly employees: “The issue squarely before us is whether Boxpersons, Floorpersons, and Pit Bosses of the Claridge Hotel and Casino are compensated on a salary basis, or on some other basis, namely an hourly basis. Just as dressing a mannequin up in a skirt and blouse does not transform it into a woman, so too masquerading an hourly employee’s compensation as a guaranteed salary plus hour-based bonuses does not transfer the compensation scheme into a salary-based plan. We conclude that despite defendant’s designation of the supervisory employees’ compensation in terms of X amount per 8 hour day, it is nothing more than an hourly wage. Further, the $ 250.00 Weekly Salary Guarantee is nothing more than an illusion. Boxpersons, Floorpersons, and Pit Bosses are not compensated on a salaried basis.” 664 F. Supp. 899, 904 (D.N.J. 1986).
On appeal, the Third Circuit was equally unimpressed by the casino’s “Weekly Salary Guarantee.” The Court’s detailed reasoning is worth repeating: “From the record, it is plain that the district court’s finding that the supervisors’ wages were actually calculated on an hourly basis is not clearly erroneous. That fact is supported by the payroll records, which show that a supervisor’s wage can be calculated by multiplying an hourly wage by the number of hours worked. The underlying issue in this case is whether an otherwise hourly wage can be transformed into payment on a salary basis within the meaning of the regulations by virtue of the guaranteed minimum weekly payment. We hold that, in these circumstances, it cannot. Claridge claims that this minimum was a salary under 541.118(b), and that all wages above that level were “additional compensation.” The concept is fundamentally incoherent. Salary is a mark of executive status because the salaried employee must decide for himself the number of hours to devote to a particular task. In other words, the salaried employee decides for himself how much a particular task is worth, measured in the number of hours he devotes to it. With regards to hourly employees, it is the employer who decides the worth of a particular task, when he determines the amount to pay the employee performing it. Paying an employee by the hour affords that employee little of the latitude the salary requirement recognizes. Thus, a basic tension exists between the purpose behind a salary requirement and any form of hourly compensation. Brock, 846 F.2d at 184. Later in its opinion, the Court further explained why the casino’s “Weekly Salary Guarantee” conflicted with the very nature of overtime-exempt employment: “The ‘additional’ compensation claimed by Claridge . . . varies with the number of hours worked. If an incentive at all, it does not encourage the supervisor to make better use of his time, but only to work more hours. Such encouragement is inconsistent both with salary payment and executive employment. Where, as here, the employee’s usual weekly income far exceeds the “salary” guarantee, the guarantee can have no impact on the employee’s performance or his status. Id. at 185; accord Kinney, 994 F.2d at 11.
Tags: FLSA; PMWA; Pennsylvania overtime law; Pennsylvania Minimum Wage Act; overtime exempt; overtime exemption; professional exemption to overtime; executive exemption to overtime; overtime exempt manager;
Some Decisions Discounting the Importance of Plaintiffs’ Resumes in Overtime Misclassification Cases
January 9th, 2011
Often, in cases in which the Plaintiff alleges that he was misclassified under the white-collar exemptions to federal and state overtime laws, the Defendant, seeking to prove that the Plaintiff performed executive, administrative or professional tasks, often places great emphasis on the Plaintiff’s description of his former job duties on his current resume. Here are some cases in which courts have been unimpressed by such evidence, due, in part, to the common sense understanding that almost everyone (including Plaintiffs) engage in “puffery” when they prepare a resume:
Schaefer v. IMPC, 358 F.3d 394 (6th Cir. 2004): The Court observed: “Neither the job description that Schaefer wrote for his resume nor Schaefer’s failure to dispute AEP’s position descriptions or performance evaluations prior to this lawsuit preclude him from arguing that his day-to-day activities differ from those described in these documents-such actions merely raise credibility questions for the factfinder. Indeed, we have recognized that “resumes may not provide the most accurate picture of an employee’s job because resumes are typically ‘designed to enhance the employee[’]s duties and responsibilities in order to obtain a job.”
Pendlebury v. Starbucks, 518 F.Supp.2d 1345 (S.D. Fla. Sept. 21, 2007): The district court reasoned that contradictions in a misclassified employee’s resume “merely raise credibility questions for the factfinder … we have recognized that ‘resumes are typically designed to enhance the employee’s duties and responsibilities in order to obtain a job.”
Perkins v. SNTC, 669 F.Supp.2d 212, (D. Conn. Nov. 4, 2009): The district court stated: “SNET also relies on language from plaintiffs’ resumes to argue that certain plaintiffs had more discretion or a larger leadership role than that to which they testified. . . . The court does not find this argument persuasive. The Sixth Circuit has noted that, “The key to determination of whether an employee is covered by an exemption to the FLSA overtime requirements does not depend on an employee’s general characterization of his or her job in a resume designed to enhance the employee’s duties and responsibilities to obtain a job…. What is important is what an employee actually does on a day-to-day basis.
Wolfslayer v. IKON, 2005 WL 181913, (E.D. Pa. Jan. 26, 2005): The district court observed that employees’ assertions in resumes “must be taken with a grain of salt.”
Aguirre v. SBC, 2007 WL 4561145 (S.D. Tex. Dec. 20, 2007): The district court discounted the importance of the employee’s representations in resumes, explaining: “In determining whether an employee is an exempt executive, a court looks at the actual day-to-day job activities of the employee, not the labels the employee or the employer places on those duties.”
Bullard v. Babcock, 2009 WL 1704251, (N.D. Tex. June 17, 2009): The district court stated: “General job descriptions contained in an employee’s resume or prepared by the employer may be considered in determining whether employee is exempt administrative employee under overtime provisions of FLSA, but are not determinative.”
Kohl v. Woodlands, 440 F.Supp.2d 626, (S.D. Tex. 2006): The district court wrote: “In determining what an employee’s day-to-day job activities are, general job descriptions contained in an employee’s resume or prepared by the employer may be considered, but are not determinative, and descriptions contained in depositions and affidavits should be considered as well.”
Paul v. UPMC, 2009 WL 699943, (W.D. Pa. Mar. 10, 2009): The district court observed that “determination of the primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole. The focus is on the evidence of the plaintiff’s day-to-day duties, and not on job descriptions, resumes, or performance evaluations.”
Tags: Pennsylvania overtime; UPMC overtime; executive exemption; white-collar exemption; administrative exemption; professional exemption; resumes as evidence in overtime cases
MANY PACKAGE DELIVERY DRIVERS ARE ENTITLED TO OVERTIME PREMIUM PAY
October 9th, 2010
The Motor Carrier Act (“MCA”) exemption to the FLSA’s overtime pay requirement prevents many truck drivers from receiving time-and-one-half overtime pay when they work over 40 hours in a workweek. But the MCA exemption is not absolute. For example, in a case handled by our law firm, a federal court in Philadelphia explained that, due to a complicated series of legislative amendments, drivers are entitled to overtime pay for workweeks arising after June 2008 if their job duties included, in part, driving vehicles with a gross vehicle weight of under 10,000 pounds. See Mayan v. Rydbom Express, Inc., 2009 U.S. Dist. LEXIS 90525 (E.D. Pa. Sept. 30, 2009). Based on the above, package delivery drivers who always or sometimes drive vans or pick-up trucks are entitled to overtime pay. Be on the lookout for violations of this glitch in the FLSA. Our firm would be delighted to consult with any of your package delivery clients who have been denied overtime pay.
Tags: motor carrier exemption, package delivery overtime, Philadelphia FLSA, Philadelphia overtime, truck driver overtime
Recent Eastern District of Pennsylvania Decision Addresses Some Thorny FLSA Procedural Issues
September 22nd, 2010
On July 1, 2010, Judge Mary A. McLaughlin of the Eastern District of Pennsylvania issued a decision in Bambgose v. Delta-T Group, Inc., 2010 U.S. Dist. LEXIS 65586. The case involved helathcare workers who alleged that the company misclassified them as independent contractors and illegally refused to pay them overtime. In a previous opinion, the court refused to conditionally certify the FLSA class, but the conditional certification motion was merely denied without prejudice to plaintiff renewing the motion after taking some discovery and narrowing the class definition. At the time the court denied the conditional certification motion, over 50 workers already had opted-in to the lawsuit, and a few more opted-in after the decertification denial. Against this backdrop, the company moved to diamiss all opt-ins for lack of jurisdiction. According to the company, the opt-ins were dismissed from the case when the court denied the conditional certification motion. The court disagreed and held that denial of a conditional certification motion without prejudice does not result in the dismissal of opt-in’s right to remain in the lawsuit. The court explained that the opt-ins’ claims would be dismissed (without prejudice) only under two scenarios: (i) where a conditional certification motion is denied with finality or (ii) the a decertification motion is granted. Next, the court addressed the impact of the originating plaintiff’s acceptance of a Rule 68 offer made by the company in the wake of the court’s conditional certification decision. The court held that the collective action could proceed regardless of the Rule 68 offer, and, in so holding, included an excellent survey of the relevant caselaw.
Tags: FLSA; Fair Labor Standards Act; overtime; independent contractor overtime; independent contractor misclassification; healthcare worker overtime; healthcare overtime; Pennsylvania healthcare overtime;
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