Just read a great opinion reversing a district judge’s summary judgment dismissal of an overtime lawsuit in which who repaired telecommunications and cable lines in the wake of the Katrina disaster alleged that they were misclassified as independent contractors.  The opinion is entitled Cromwell v. Driftwood Electrical Contractors, Inc., 2009 U.S. App. LEXIS 22389 (5th Cir. Oct. 12, 1009).  Applying the “economic realities” test, the Circuit Court emphasized that the cable workers worked full-time and exclusively for the defendant employer and, as such, were economically dependent on the defendant employer and did not have any meaningful opportunity to operate their own businesses.

On November 20, 2009, the Second Circuit decided Davis v. J.P. Morgan Chase & Co., 2009 U.S. App. LEXIS 25481 (2d Cir.  Nov. 20, 2009), wherein it reversed a summary judgment finding against a loan underwriters who allege that they are entitled overtime pay under the FLSA.  The Court flatly rejected the district court’s holding that such employees are covered by the FLSA’s administrative exemption.  This is an important victory for loan underwriters, loan officers, staff accountants, non-licenced accountants, bank tellers, and other financial service employees who are frequently misclassified as FLSA exempt.  The Court emphasized that, to fall within the administrative exemption, employees perform work that is related to the management policies or general business operations.  In other words, true administrative employees are “at the heart of the company’s business operations,” and those “functional” employees who perform day-to-tasks of the business – even if those tasks are comples — are not covered by the exemption.  In sum, this is a big victory for the plaintiffs and their New York overtime lawyers.    

On November 17, 2009, Judge Claudia Wilken of the Northern District of California issued an extraordinarily thoughtful opinion in a case involving the overtime rights of bank employees.  Judge Wilken explained that employers who misclassify employees as exempt from overtime cannot retroactively use the dreaded Fluctuating Workweek Method (“FWM”) of overtime compensation to calculate overtime damages.  After summarizing the legal landscape in great detail, the Judge explained that it is impossible for the employer to retroactively satisfy the FWM’s prerequisites when, in fact, it never paid overtime to the misclassified employees in the first place.  The case is published at Freedman v. Wells Fargo & Co., 2009 U.S. Dist. LEXIS 107044 (N.D. Cal. Nov. 17, 2009), and it is a must-read for any trial lawyer litigating FLSA misclassification cases.

Here are brief summaries of three FLSA cases that were decided on November 25, 2009: 

The Seventh Circuit Court of Appeals affirmed summary against an FLSA class of Wisconsin paper mill employees who brought an overtime lawsuit alleging that the employer failed to pay them for: (1) time spent putting donning and doffing on and their work clothes, safety shoes, and safety glasses before and after each workday; (2) time spent showering after each workday; and (3) time spent shaving.  The court held that such activities were non-compensable preliminary and postliminary activities under the Portal to Portal Act (“PPA”).  Nothing is particularly notable in this straightforward and short opinion, which does contain a concise summary of basis PPA principles.  See Musch v. Domtar Indus., 2009 U.S. App. LEXIS 25809 (7th Cir. Nov. 25, 2009).

A Southern District of Texas judge refused decertify an FLSA collective action, wherein the employees alleged that the company failed to pay them regular and overtime pay for time spent preparing for ant taking “skills-assessment tests.”  The courts also denied most aspects of the company’s summary judgment motion.  The opinion contains a good discussion of when employee training is compensable under 29 C.F.R. § 785.27 and the pertinent caselaw.  There’s also a real good recital of the Fifth Circuit decertification standards, as the judge rejects many of the defense-bar’s standard decertification arguments and tactics, such as emphasizing “individualized” damages theories (even though damages issues are not supposed to be before the court at the decertification stage).  This opinion is worth reading.  See Maynor v. Dow Chemical Co., 2009 U.S. Dist. LEXIS 110031  (S.D. Tx. Nov. 25, 2009).

A Middle District of Florida judge refused to conditionally certify a class of call center employees who seek overtime pay.  See Tussing v. Quality Res., Inc., 2009 U.S. Dist. LEXIS 110190  (M.D. Fla. Nov. 25, 2009).  The judge emphasized that the affidavits submitted by the plaintiffs were “woefully insufficient” and was critical of the plaintiffs’ tactic of trying to certify in the same case employees that were classified as both exempt and non-exempt  from overtime.

The full panoply of wage and overtime rip-offs in the landscaping and construction industries are too vast to be covered by this mere Newsletter.  Notwithstanding, when you speak with your clients in the landscaping and construction industries, you should be on the lookout for the Company’s failure to pay for travel between the company headquarters and the work location.

Many landscaping and contracting companies require the workers to report to headquarters at the beginning of the workday.  There, the workers gather equipment and materials needed for the day’s project, load the company vehicle, and travel to the worksite.  Then, at the end of the day, the workers must return to headquarters, unload the vehicle, and perform other end-of-shift duties.

The illegality arises when the Company pays the workers only for the time spent on-site at the work location.  Under such circumstances, workers are cheated out of many hours of compensable work.  Indeed, we have represented clients who have been owed thousands of dollars for of unpaid travel time at the beginning and end of the workday.

The Department of Labor has enacted a regulation that specifically addresses travel during the (more…)

Our firm has successfully handled claims involving the overtime pay rights of drivers employed by bus companies that provide transportation to disabled and elderly passengers.  These bus companies often operate under contracts with local governments or local public transit agencies, and they employ thousands of drivers throughout Pennsylvania and elsewhere.

Many of our friends in the workplace injury bar know how hard these drivers work and how often they get hurt while lifting and assisting passengers.  But what about their overtime rights? 

For sure, many local bus companies pay their drivers the time-and-one-half overtime premium required under the Fair Labor Standards Act (“FLSA”), the Pennsylvania Minimum Wage Act (“PMWA”), and similar state laws.  Unfortunately, less-generous bus companies deny their drivers overtime pay by asserting that the drivers are covered by the Motor Carrier Act Exemption (“MCA Exemption”) to overtime coverage.

The FLSA and similar state overtime laws contain an MCA Exemption that applies to “employee[s] with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service.”  See, e.g., 29 U.S.C. § 213(b)(1); 43 P.S. § 333.105(b)(7).  But the MCA Exemption is not as broad as some employers think.  As the Department of Labor has explained, the MCA Exemption is strictly limited to employees who, among other things, “engage in activities of a character directly affecting the safety of operation of motor vehicles in the transportation on the public highways of passengers or property in interstate or foreign commerce within the meaning of the Motor Carrier Act.”  29 C.F.R. § 782.2(a) (emphasis supplied); accord Dole v. Solid Waste Services, Inc., 733 F. Supp. 895, 929 (E.D. Pa. 1989).  In other words, for the MCA Exemption to apply, the drivers must be engaged in interstate commerce.

Therein lies the problem for many private bus companies throughout Pennsylvania and elsewhere.  In providing transportation services to disabled and elderly clients, the drivers almost never cross state lines.  This is especially true when the bus company’s service area lies well within a state’s boundaries.  But it also tends to hold true for bus companies that operate close to state borders.  Simply put, the day-to-day routines of most people – including most elderly and disabled people – rarely take them over state lines.

The case of Dauphin v. Chestnut Ridge Transportation, Inc., 544 F. Supp. 2d 266, 273 (S.D.N.Y. 2008), is instructive.  There, the federal judge carefully reviewed the pertinent legal authority and concluded that, for the MCA Exemption to cover a driver, the bus company must prove that the driver’s trips across state lines are “more than de minimis” or are “a ‘natural, integral and . . . inseparable part’ of” the driver’s job.  Id. at 275.

Here’s the bottom line:  If you represent drivers who currently or formerly worked for a local bus company, you should ask them three relevant questions:  (1) Did they ever work over 40 hours per week?  (2) On such occasions, did they receive time-and-one-half overtime pay?  (3) If they did not receive overtime pay, did they regularly drive over state lines?  If you client neither received overtime nor regularly drove over state lines, we would be delighted to provide the client with a free and confidential consultation.

In June 2008, Western District of Pennsylvania Chief Judge Donetta W. Ambrose handed workers a mixed decision in a Pittsburgh-area overtime lawsuit entitled Andrako v. United States Steel Corp., 2009 U.S. Dist. LEXIS 52235 (W.D. Pa. June 22, 2009).  Here is the tally of the district court’s rulings:  (i) the protective items worn by the coke manufacturing plant employees constitute “clothing” under FLSA Section 3(o); (ii) the employees’ post-shift showering is covered by FLSA Section 3(o); (iii) the pre-shift and post-shift walking time is not covered by either FLSA Section 3(o) and does not constitute preliminary or postliminary activities under the the Portal-to-Portal Act; and (iv) the employees were not required to exhaust the union grievance process prior to filing suit because their legal claims stemmed from the FLSA rather than the collective bargaining agreement.  Two of the cases discussed extensivy by Judge Ambrose were handled by WLF.  The first case is In re Cargill Meat Solutions Wage & Hour Litig., where our overtime attorneys represented hundreds of workers from Hazleton, Pennsylvania (Luzerne County), and Wyalusing, Pennsylvania (Bradford County) who sought straight-time overtime pay for their donning, doffing, washing, and travel activities.  The second case is Gatewood v. Koch Foods of Mississippi, where we represent hundreds of Mississippi poultry workers with similar claims.  The Andreko opinion is a must-read for overtime lawyers and attorneys from Pittsburgh and elsewhere.

I recently handled an overtime lawsuit in Northeastern Pennsylvania in which the defense attorney seemed to view the recovery of attorney’s fees under FLSA Section 16(b) as a privilege rather than a right.  And this lawyer is not alone.  We get the same reaction from overtime lawyers and attorneys in Philadelphia and New Jersey.  

These defense attorneys are simply wrong, and they fail to understant that the FLSA’s fee-recovery provision is absolutely essential to the statute’s enforcement scheme.  “A successful FLSA claim carries with it the recovery of attorney’s fees.”  Gumecinda v. Ruiz, 808 F.2d 427, 429 (5th Cir. 1987) (citing 29 U.S.C. sec. 216(b)); see also Hilton v. Executive Self Storage Assocs., Inc., 2009 U.S. Dist. LEXIS 51417, *27 (W.D. Tex. June 18, 2009) (“Fee awards are mandatory for prevailing plaintiffs in FLSA cases.”); Pratter v. Commerce Equities Mgmt., Co., 2008 U.S. Dist. LEXIS 98795,*6 (S.D. Tex. Dec. 8, 2008) (same).  The Congressional purpose behind this provision “is to insure effective access to the judicial process by providing attorney fees for prevailing plaintiffs with wage and hour grievances.”  Fegley v. Higgins, 19 F.3d 1126, 1143 (6th Cir. 1994) (internal quotations omitted).  As federal courts repeatedly recognize, the FLSA’s fee recovery provision is crucial to Congress’ intent that workers be able to vindicate their FLSA rights through private litigation.  See, e.g., Fegley, 19 F.3d at 1134-35 (FLSA fee award “‘encourages the vindication of congressionally identified policies and rights’”); United Slate, Tile and Composition Roofers v. G&M Roofing and Sheet Metal Co., Inc., 732 F.2d 495, 502 (6th Cir. 1984) (purpose of FLSA fee award “is to insure effective access to the judicial process”); Maddrix v. Dize, 153 F.2d 274, 275-76 (4th Cir. 1946) (“Obviously Congress intended that the wronged employee should receive his full wages plus the penalty without incurring any expense for legal fees or costs.”); Shannon v. Saab Training USA, LLC, 2009 U.S. Dist. LEXIS 52677, *8 (M.D. Fla. June 23, 2009) (“To encourage private enforcement of statutory rights under the FLSA, Congress created a fee-shifting provision”).

In Shelton v. Ervin, 830 F.2d 182 (11th Cir. 1987), the Eleventh Circuit Court of Appeals explained that the FLSA’s fee recovery provision is not collateral to the merits of an FLSA lawsuit but, rather, is an “integral part of the merits” of the lawsuit.  The Court held:  “[FLSA] Section 216 provides for an award of attorney’s fees, as opposed to granting the court discretion in awarding such fees, to the prevailing plaintiff in FLSA cases. In consideration of the language of section 216(b) and its underlying purpose, we hold that attorney fees are an integral part of the merits of FLSA cases and part of the relief sought therein. Thus, a final determination as to the award of attorney fees is required as part of the final appealable judgment.”  Id. at 184; accord Ellison v. LeGrande, 2009 U.S. Dist. LEXIS 14127, *6 n. 3 (M.D. Fla. Feb 24, 2009).

I recently reread Chief Judge Mark E. Fuller’s terrific opinion in Burks v. Equity Group-Eufaula Division, 571 F. Supp. 2d 1235 (M.D. Ala.).  This decision is a bonanza for poultry workers and should greatly assist workers’ rights lawyers as we continue the fight for fair wages in the poultry industry.  Here is a brief summary (in order of appearance) of the various holdings in Burks: (1) the exemptions under FLSA Section 3(o) and the Portal-to-Portal Act do not apply to work done during the continuous workday; (2) FLSA Section 3(o) does not apply to the washing of work items; (3) hand cleaning is “integral and indispensible” to poultry processing and, thus, triggers the compensable workday; (4) the uncompensated work typically at issue in poultry “donning and doffing” cases is not de minimis; (5) neither FLSA Section 3(o) nor the Portal-to-Portal Act appplies to work performed during meal breaks; (6) work performed during any portion of an unpaid meal break potentially can expose the employer to liability for the entire meal break; and (7) the scheduling of two unpaid meal breaks during a single shift may violate the FLSA and render one of the breaks compensable.        

Companies opposing FLSA misclassification lawsuits regularly oppose class/collective certification by arguing that the determination of whether individual workers within a job title are exempt under the FLSA requires an “individualized” analysis that precludes class or collective treatment of the litigation.  This legal argument, however, almost always contradicts the company’s business practice of simply classifying all of the workers within the job title as exempt from the FLSA.

Here is the question we must ask corporate defendants in our FLSA misclassification cases:  If the determination of whether each individual worker really entails an “individualized” analysis, why doesn’t the company ever conduct such an analysis prior classifying each and every worker as exempt?  Corporate defendants will have difficulty answering this question where, as is often the case, they often are operating under the following double-standard:  When workers seek to enforce their FLSA rights in court, an “individualized” analysis becomes indispensible.  But when corporate executives decide to take away the FLSA rights of these same workers, sweeping, accross-the-board classifications of everyone as exempt are perfectly acceptable.

Fortunately, some federal courts are catching on to the hypocrisy of this double-standard.  In Morgan v. Family Dollars Stores, Inc., 2008 U.S. App. LEXIS 25187 (11th Cir. Dec. 16, 2008), the Eleventh Circuit Court of Appeals repeatedly addressed the double-standard in rejecting Family Dollar’s argument that the district court erred in certifying as a collective action an FLSA overtime lawsuit brought on behalf of over 1,000 Store Managers classified as exempt “executive” employees.  In one of several noteworthy passages, the Court wrote:  “Here, Family Dollar argues that the store’s size, sales volume, and location cause store managers’ job duties to vary and preclude a collective trial. The facts – that Family Dollar never examined how store managers spent their time and that none of those factors had anything to do with Family Dollar’s decision to exempt all store managers from overtime pay – counter Family Dollar’s argument in that regard.”  Id. at *76 n. 46.

Another great example of the above reasoning appears in Wang v. Chinese Daily News, Inc., 231 F.R.D. 602 (C.D. Cal. 2005):  “The Court rejects Defendant’s argument that the ‘overriding’ issue in this case is whether reporters and account executives are exempt or non-exempt from overtime requirements and that the Court must engage in an individualized inquiry into each reporter’s and account executive’s job duties, hours, and/or income in order to determine whether or not that individual should be classified as ‘exempt.’ . . . Defendant’s argument is unpersuasive because Defendant itself classifies all reporters and account executives as exempt. Defendant cannot, on the one hand, argue that all reporters and account executives are exempt from overtime wages and, on the other hand, argue that the Court must inquire into the job duties of each reporter and account executive in order to determine whether that individual is ‘exempt.’”  Id. at 613.