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11th - No class certification for claimed failure to pay for all hours worked
July 29, 2009 by Ross Runkel at LawMemo
Babineau v. Federal Express (11th Cir 07/27/2009)
Hourly employees sued claiming breach of contract and quantum meruit for the employer's failure to pay for "all hours worked." The trial court refused to certify a class of employees employed in Florida; the 11th Circuit affirmed, holding that the trial court did not abuse its discretion.
The court assumed that the plaintiffs satisfied the Rule 23(a) requirements of numerosity, commonality, typicality, and adequacy of representation, and held that plaintiffs failed as to the Rule 23(b)(3) requirement that issues as to the class must predominate over issues that are subject only to individualized proof. The court found that individualized proof was required as to whether employees were actually working during pre- and post-shift gap periods, and, even more so, as to whether plaintiffs were working during break periods.
5th - FLSA doesn’t require paying recruitment, transportation, visa expenses for foreign guest workers
July 24, 2009 by Ross Runkel at LawMemo
Following Hurricane Katrina, Decatur Hotel in New Orleans brought in a number of workers from outside the United States. Daniel Castellanos-Contreras and other guest workers (holding H-2B visas) sued the hotel, their employer, asserting a claim for failure to pay minimum wages under the Fair Labor Standards Act (FLSA).
The trial court denied the employer’s summary judgment motion, granted Castellanos-Contreras’ summary judgment motion in part, and certified an order for interlocutory appeal. The 5th Circuit reversed and rendered judgment in the employer’s favor. Castellanos-Contreras v. Decatur Hotels (5th Cir 07/21/2009)
Castellanos-Contreras alleged that the employer violated the FLSA by refusing to reimburse him for recruitment, transportation, and visa costs incurred prior to his relocation to the United States for work, since payment of those expenses resulted in less than minimum wages for his work.
As a matter of first impression, the 5th Circuit held that (1) the FLSA applies to guest workers, but (2) the FLSA does not obligate an employer to reimburse such workers for recruitment, transportation, or visa expenses incurred prior to relocation.
The court rejected the argument that 29 USC Section 203(m) of the FLSA, or 29 CFR Section 531.35, requires employers to pay these expenses.
Internal complaints are protected activity under FLSA, but must be in writing
July 01, 2009 by Ross Runkel at LawMemo
The 7th Circuit says the FLSA prohibits retaliation for internal complaints about FLSA violations, but only if those complaints are in writing.
Kevin Kasten sued his former employer, asserting a retaliation claim under the Fair Labor Standards Act (FLSA). The trial court granted summary judgment in favor of the employer. The 7th Circuit affirmed. Kasten v. Saint-Gobain Plastics (7th Cir 06/29/2009).
Kasten alleged that he was discharged in retaliation for making verbal complaints to his superiors that the employer’s placement of time clocks violated the FLSA.
The FLSA’s anti-retaliation provision prohibits an employer from retaliating against an employee because (among other things) the employee “has filed any complaint....” 29 USC Section 215(a)(3).
The court held that “any complaint” includes an employee’s internal (“intra-company”) complaint. The court noted that the majority of the circuits to consider this issue have arrived at the same conclusion.
However, the court also held that an employee does not “file” such a complaint in this context when he submits the complaint in purely unwritten form. The court reasoned, “the natural understanding of the phrase ‘file any complaint’ requires the submission of some writing to an employer, court, or administrative body.” The court observed that there exists a split among the circuits on this issue.
Supervisors can share in tips put into collective tip boxes
June 02, 2009 by Ross Runkel at LawMemo
Jou Chau, a former Starbucks "barista," brought a class action against Starbucks challenging Starbucks's policy permitting certain service employees, known as shift supervisors, to share in tips that customers place in a collective tip box.
Chau sued the employer in a class action, alleging that the employer violated California Labor Code Section 351.
After certifying a class of current and former baristas and conducting a bench trial, the trial court found Chau proved the claim, and awarded the class $86 million in restitution.
The California Court of Appeal reversed, concluding that the employer's policy did not violate Section 351. That section precludes an "employer or agent" from taking a tip that is "paid, given to, or left for an employee." The court determined that "[Section 351's] reference to an 'agent' obviously means a person different from the employee whose tip may not be taken."
Since the supervisors in this case are among the team members for whom tips are collectively left, the court reasoned that they are not precluded by Section 351 from receiving a share of those collective tips.
The case: Chau v. Starbucks (California Ct App 06/02/2009).
Also read:
Court of Appeal Stiffs Baristas, from What's New in Employment Law
California Court of Appeal Overturns Starbucks Tip Pooling Verdict, from California Labor & Employment Law Blog.
Solis will be confirmed as Secretary of Labor
February 11, 2009 by Ross Runkel at LawMemo
Contrary to my earlier prediction, Representative Hilda Solis will be confirmed as Secretary of Labor.
The Senate committee on Health, Education, Labor and Pensions voted favorably today (two Republicans voting against), so a favorable vote by the full Senate is assured.
Prediction: Taxes will scuttle Solis nomination for Labor Secretary
February 05, 2009 by Ross Runkel at LawMemo
U.S. Rep. Hilda Solis is the President's nominee for Secretary of Labor.
Yesterday, Solis' husband paid off about $6,400 worth of tax liens that had been outstanding for as long as 16 years against his business. [Article]Let's be clear. These were tax liens arising out of the husband's separately-owned business.
My prediction: Solis will withdraw her nomination. The folks on the street are weary of the parade of Obama nominees who have tax problems. Although we're talking about Solis' husband's tax problems, the folks on the street are not going to make that distinction. If the President's people are smart (and they are), they will drop Solis and move on to someone else. The short-term and long-term costs of hanging on to Solis are simply too high.
Too bad. Solis is highly qualified for the job.
"Wage controls" for bailed-out executives
February 04, 2009 by Ross Runkel at LawMemo
Bowing to populist demands, the President today announced caps on executive pay for companies that get "exceptional assistance" from the government.
My view: (1) Wage caps set a dangerous precedent. (2) Would anybody with the skills to turn-around a giant corporation be willing to work for $500,000? (3) This will play well with those who envy the high earnings of executives, but will not help turn the economy around, and will not help create jobs or preserve jobs. Symbolic window-dressing that actually will be counter-productive.
New rules"Shameful." That was the President's response last week to the news that Wall Street had doled out $18 billion in bonuses, even after the government had propped up many of the Street's most prominent firms.
Today, he and Treasury Secretary Tim Geithner took action by imposing new restrictions on executive compensation at firms taking money from the government.
"We all need to take responsibility," President Obama said. "And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves customary lavish bonuses....[T]hat's exactly the kind of disregard of the costs and consequences of their actions that brought about this crisis: a culture of narrow self-interest and short-term gain at the expense of everything else."
Features in the new rules for companies receiving "exceptional assistance" from the government include a $500,000 cap on salaries for senior executives (compensation beyond that must be in restricted stock), expanded bans on golden parachutes, and increases to "clawback" provisions.
Read the President's full remarks below.
=============================
REMARKS BY THE PRESIDENT
ON EXECUTIVE COMPENSATION
Grand Foyer, The White House
Febuary 4, 2009THE PRESIDENT: Thank you, Tim, for your hard work on this issue and on the economic recovery.
The economic crisis we face is unlike any we've seen in our lifetime. It's a crisis of falling confidence and rising debt, of widely distributed risk and narrowly concentrated reward; a crisis written in the fine print of sub-prime mortgages, on the ledger lines of once mighty financial institutions, and on the pink slips that have upended the lives of so many people across this country and cost the economy 2.6 million jobs last year alone.
We know that even if we do everything that we should, this crisis was years in the making, and it will take more than weeks or months to turn things around.
But make no mistake: A failure to act, and act now, will turn crisis into a catastrophe and guarantee a longer recession, a less robust recovery, and a more uncertain future. Millions more jobs will be lost. More businesses will be shuttered. More dreams will be deferred.
And that's why I feel such a sense of urgency about the economic recovery and reinvestment plan that is before Congress today. With it, we can save or create more than three million jobs, doing things that will strengthen our country for years to come. It's not merely a prescription for short-term spending -- it's a strategy for long-term economic growth in areas like renewable energy and health care and education.
Now, in the past few days I've heard criticisms that this plan is somehow wanting, and these criticisms echo the very same failed economic theories that led us into this crisis in the first place -- the notion that tax cuts alone will solve all our problems; that we can ignore fundamental challenges like energy independence and the high cost of health care; that we can somehow deal with this in a piecemeal fashion and still expect our economy and our country to thrive.
I reject those theories. And so did the American people when they went to the polls in November and voted resoundingly for change. So I urge members of Congress to act without delay. No plan is perfect, and we should work to make it stronger. No one is more committed to making it stronger than me. But let's not make the perfect the enemy of the essential. Let's show people all over the country who are looking for leadership in this difficult time that we are equal to the task.
At the same time, we know that this recovery and reinvestment plan is only the first part of what we need to do to restore prosperity and secure our future. We also need a strong and viable financial system to keep credit flowing to businesses and families alike. And my administration will do whatever it takes to restore our financial system. Our recovery depends on it. And so in the next week, Secretary Geithner will release a new strategy to get credit moving again -- a strategy that will reflect some of the lessons of past mistakes while laying the foundation of the future.
But in order to restore trust in our financial system, we're going to have to do more than just put forward our plans. In order to restore trust, we've got to make certain that taxpayer funds are not subsidizing excessive compensation packages on Wall Street.
We all need to take responsibility. And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves customary lavish bonuses. As I said last week, this is the height of irresponsibility. It's shameful. And that's exactly the kind of disregard of the costs and consequences of their actions that brought about this crisis: a culture of narrow self-interest and short-term gain at the expense of everything else.
This is America. We don't disparage wealth. We don't begrudge anybody for achieving success. And we certainly believe that success should be rewarded. But what gets people upset -- and rightfully so -- are executives being rewarded for failure, especially when those rewards are subsidized by U.S. taxpayers, many of whom are having a tough time themselves.
For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis isn't just bad taste -- it's bad strategy -- and I will not tolerate it as President. We're going to be demanding some restraint in exchange for federal aid -- so that when firms seek new federal dollars, we won't find them up to the same old tricks.
As part of the reforms we're announcing today, top executives at firms receiving extraordinary help from U.S. taxpayers will have their compensation capped at $500,000 -- a fraction of the salaries that have been reported recently. And if these executives receive any additional compensation, it will come in the form of stock that can't be paid up until taxpayers are paid back for their assistance.
Companies receiving federal aid are going to have to disclose publicly all the perks and luxuries bestowed upon senior executives, and provide an explanation to the taxpayers and to shareholders as to why these expenses are justified. And we're putting a stop to these kinds of massive severance packages we've all read about with disgust; we're taking the air out of golden parachutes.
We're asking these firms to take responsibility, to recognize the nature of this crisis and their role in it. We believe that what we've laid out should be viewed as fair and embraced as basic common sense.
And finally, these guidelines we're putting in place are only the beginning of a long-term effort. We're going to examine the ways in which the means and manner of executive compensation have contributed to a reckless culture and a quarter-by-quarter mentality that in turn helped to wrought havoc in our financial system. We're going to be taking a look at broader reforms so that executives are compensated for sound risk management, and rewarded for growth measured over years, not just days or weeks.
We all have to pull together and take our share of responsibility. That's true here in Washington. That's true on Wall Street. The American people are carrying a huge burden as a result of this economic crisis: bearing the brunt of its effects as well as the cost of extraordinary measures we're taking to address them. The American people expect and demand that we pursue policies that reflect the reality of this crisis -- and that will prevent these kinds of crises from occurring again in the future.
Thank you very much.
Edward Hugler is Acting Labor Secretary, awaiting Hilda Solis' confirmation
February 04, 2009 by Ross Runkel at LawMemo
Hilda Solis' appointment as Secretary of Labor is being held up in the Senate. The rumor mill says it's the fault of Republicans who are unhappy that she is an outspoken proponent of the Employee Free Choice Act. Well, maybe so, but she will no doubt get confirmed at some point in time.
Meanwhile, the Acting Secretary of Labor is Edward C. Hugler:
Deputy Assistant Secretary for Operations in the Office of the Assistant Secretary for Administration and Management (OASAM), since April 2000.
Responsible for day-to-day management of Department-level activities in the areas of Information Technology, Human Resources, Civil Rights, and General Business Services, including procurement, space, and employee safety. These management support services are delivered through some 330 National Office staff in the Frances Perkins Building and approximately 280 staff in six Federal Regions.
Career Highlights
In addition to Departmental management experience, 32-year career with the Department of Labor includes front-line agency program management and more than ten years as a lawyer in the Office of the Solicitor:
Lead the Department-wide Year 2000 transition, preparing DOL agency systems for the century date change and associated contingency planning, 1998—2000.Held several top management positions in the Mine Safety and Health Administration (MSHA) beginning in 1988, including Deputy Assistant Secretary from 1991—1997. As Deputy Assistant Secretary, managed the full range of day-to-day operations for a front-line enforcement agency with some 2,000 staff stationed around the country and a budget of more than $200 million. Substantial experience with major enforcement actions, accident investigations, rulemakings and Congressional oversight.
Served in the Office of the Solicitor from 1977—1988 as Deputy Associate Solicitor and Counsel for Standards and Legal Advice in the Mine Safety and Health Division.
Recognized with Presidential Rank Awards in 1993, 2000 and 2005, and the Philip Arnow Award (the Department of Labor’s top award for sustained performance), also in 2005. Licensed Member of District of Columbia and California Bars. Top Secret Clearance since 1989; current TS/SCI clearance with the Department of Labor.
Education: B.A. from the University of Maryland, 1973; J.D. from Pepperdine University School of Law, 1976.
Employer’s Rule 68 offer of judgment to sole plaintiff in FLSA case may have been effective preemptive strike to collective action
December 29, 2008 by Ross Runkel at LawMemo
Today's Employment Law Memo email contained the following report on a complex issue involving the Fair Labor Standards Act's collective action provision and Civil Procedure Rule 68:
Sandoz v. Cingular Wireless (5th Cir 12/23/2008)Sandoz sued the employer in a purported collective action, asserting a claim for violation of the minimum wage provisions of the Fair Labor Standards Act (FLSA). The trial court denied the employer's motion to dismiss, after the employer tendered an amount satisfying Sandoz' individual claim in full prior to the time any other employees had joined her suit. The 5th Circuit vacated, and remanded for consideration of issues relating to class certification.
29 USC Section 216 of the FLSA provides that employees may proceed in an opt-in "collective action" analogous to a class action. The court described the primary issue on appeal as "the difficult question of when an employer can moot a purported collective action under the [FLSA] ..., by paying an employee's claim in full." The court noted that this question involves "the complex interplay between Federal Rule of Civil Procedure 68, which stipulates how a defendant can make an offer of judgment that would fully satisfy a plaintiff's claim, and the FLSA's provision for collective actions under Section 216(b) [of the FLSA]."
The 11th Circuit, the only other circuit to address this issue, analyzed "whether the mootness principles in the Rule 23 class action context apply to collective actions brought under Section 216(b) of the FLSA." In Cameron-Grant v. Maxim Healthcare Servs., Inc., 347 F.3d 1240 (11th Cir 2003), the 11th Circuit concluded that the FLSA's opt-in requirements for FLSA collective actions "prohibit what precisely is advanced under Rule 23 - a representative plaintiff filing an action that potentially may generate liability in favor of uninvolved class members." Based on that conclusion, the 11th Circuit held that the employer's offer of judgment satisfying all of the named plaintiff/employee's claims mooted the employee's claims.
The court concluded, "when [the employer] made its offer of judgment, Sandoz represented only herself, and the offer of judgment fully satisfied her individual claims." The court observed, "[i]f our analysis stopped there, Sandoz's case would be moot." However, the court agreed with Sandoz' argument that dismissal of her case in this manner "would provide an incentive for employers to use Rule 68 as a sword, 'picking off' representative plaintiffs and avoiding ever having to face a collective action." The court turned to the "relation back doctrine" to avoid such a result. Applying that doctrine to this context, the court held "when a FLSA plaintiff files a timely motion for certification of a collective action, that motion relates back to the date the plaintiff filed the initial complaint, particularly when one of the defendant's first actions is to make a Rule 68 offer of judgment. If the court ultimately grants the motion to certify, then the Rule 68 offer to the individual plaintiff would not fully satisfy the claims of everyone in the collective action: if the court denies the motion to certify, then the Rule 68 offer of judgment renders the individual plaintiff's claims moot." The court remanded for consideration whether Sandoz timely sought certification of her collective action.
Paul Secunda, writing at Workplace Prof Blog, had this to say about the case:
I like the innovation of the 5th Circuit approach and the ways in which avoids the pitfalls of the 11th Circuit approach. Although this sounds like an arcane issue, with the number of FLSA collective actions out there, this could turn out to be an important decisional innovation which compromises nicely the competing employer and employee interests involved.
Home care workers lose FLSA case
June 11, 2007 by Ross Runkel at LawMemo
Home care workers don't get overtime or minimum wage coverage under the Fair Labor Standards Act (FLSA) due to an old regulation put out by the federal Department of Labor.
Today the US Supreme Court upheld the validity of that regulation. Long Island Care at Home Ltd v. Coke.
The regulation provides an exemption FLSA for workers who are “companionship” workers “employed by an … agency other than the family or household using their services.”
The Court said that the Labor Department's power to administer a congressionally created program necessarily requires the making of rules to fill any “ ‘gap’ ” left, implicitly or explicitly, by Congress. This is the rule established by Chevron USA Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 . When an agency fills such a gap reasonably, and in accordance with other applicable (e.g., procedural) requirements, that result is legally binding.
My view: This case is consistent with the Chevron USA approach. It reinforces the importance of regulations adopted by federal agencies.
The message is that changes have to come from the agencies themselves rather from the courts. And the agencies are in the hands of the executive branch. You know, the President.
Supreme Court hears FLSA case
April 16, 2007 by Ross Runkel at LawMemo
Today the US Supreme Court hears oral arguments in Long Island Care at Home Ltd v. Coke.
The 2nd Circuit refused to enforce a 30-year-old Department of Labor regulation that exempts certain home care workers even though they are actually employed and paid by an outside agency. Now the Supreme Court will decide whether DOL's regulation is valid.
[My prediction is that the Court will hold that the regulation is valid.]
Coke sued her employer - Long Island Care at Home Ltd. - under the Fair Labor Standards Act (FLSA) claiming entitlement to minimum wage and overtime. The trial court granted the employer's motion for judgment on the pleadings. The 2nd Circuit reversed in part; the US Supreme Court remanded for reconsideration in light of Department of Labor's December 2005 Wage and Hour Advisory Memorandum; the 2nd Circuit adhered to its original decision. The US Supreme Court granted certiorari to review the 2nd Circuit decision.
FLSA Section 213(a)(15) exempts employees engaged in "babysitting services" and "companionship services." The exemption applies to "any employee employed on a casual basis in domestic service employment to provide babysitting services or any employee employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves (as such terms are defined and delimited by regulations of the Secretary [of Labor]) ...." Department of Labor (DOL) regulation 29 CFR Section 552.109(a) applies the exemption to "[e]mployees who are engaged in providing companionship services, as defined in Section 552.6, and who are employed by an employer or agency other than the family or household using their services."
The 2nd Circuit held that this regulation is not entitled to deference under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), because it is an interpretive rather than a legislative regulation. The 2nd Circuit also held that this regulation is not entitled to deference under Skidmore v. Swift & Co., 323 U.S. 134 (1944), because it was inconsistent with Congress' purpose and with other regulations and with previous DOL positions, and insufficiently explained by DOL.
FLSA at the Supreme Court
March 30, 2007 by Ross Runkel at LawMemo
The Supreme Court will decide the validity of a DOL regulation exempting certain home care workers from the Fair Labor Standards Act (FLSA).
Long Island Care at Home Ltd v. Coke will be argued at the US Supreme Court April 16, 2007. [Details]
Employee: Evelyn Coke. Her job was to provide "companionship services" for individuals who were not able to care for themselves. She worked in private homes.
Employer: Long Island Care at Home Ltd, which hires employees like Coke and assigns them to work in private homes.
Statute: The FLSA has an exemption for employees engaged in "companionship services." If Coke had been paid by the families, then she clearly would not get FLSA coverage.
Regulation adopted by Department of Labor: A 30-year-old regulation says that the statutory exemption applies even if Coke is paid by an outside agency.
2nd Circuit decision: The circuit court held that DOL's regulation cannot be enforced because it was not entitled to deference under the rules of Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), or Skidmore v. Swift & Co., 323 U.S. 134 (1944).
My prediction: Coke will lose; the DOL regulation will be enforced.
The legal issue is whether the courts must defer to the DOL's regulation. The 2nd Circuit held that the regulation is not entitled to deference under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), because it is an interpretive rather than a legislative regulation.
I think that's legally wrong. The statute left a gap, DOL had authority to fill the gap, and DOL filled it after notice-and-hearing procedures. The 2nd Circuit made a big deal out of where this regulation was positioned - under the heading "Interpretation" - but that misses the point. The real question is whether DOL intended the regulation to govern the conduct of private parties as opposed to being merely guidance for its own internal purposes. This was not a mere guideline for DOL employees; it was intended to regulate private conduct. Therefore, courts must defer to DOL under Chevron even if the regulation is inconsistent with other DOL regulations (which it is).
If I'm wrong on Chevron deference and the Court applies Skidmore v. Swift & Co. instead, then Coke should win because DOL's explanation of the regulation is not persuasive at all.
IRCA did not override wage claim
March 28, 2007 by Ross Runkel at LawMemo
Another court has weighed in on the question of undocumented workers' wage claims.
Coma Corp v. Kansas Dept of Labor (Kansas 03/23/2007) rejected the idea that the federal Immigration Reform and Control Act (IRCA) preempted certain state labor laws. The Kansas court concluded that the Kansas Wage Payment Act applied to earned, but unpaid, wages of an undocumented worker.
The court found that to deny or to dilute an action for wages earned but not paid on the ground that such employment contracts were illegal, would directly contravene the public policy of the State of Kansas of protecting wages and wage earners.
Undocumented workers get prevailing wage
March 22, 2007 by Ross Runkel at LawMemo
Can undocumented workers recover wages due under California's prevailing wage law? Or is such a suit barred by the federal Immigration Reform and Control Act (IRCA) and Hoffman Plastic Compounds, Inc. v. NLRB?
According to the California Court of Appeal, the workers' suit can proceed.
Reyes v. Van Elk (California Ct App 03/14/2007)
Reyes sued the employer, seeking (among other things) wages allegedly due under California’s prevailing wage law. The trial court granted summary judgment in favor of the employer, based on its determination that 1) undocumented workers were precluded by the federal Immigration Reform and Control Act (IRCA) and Hoffman Plastic Compounds, Inc. v. NLRB, 535 US 137 (2002) from asserting such claims; and 2) the Supremacy Clause of the United States Constitution and IRCA preempted California statutes declaring immigration status irrelevant to claims under California’s labor, employment, civil rights, and employee housing laws.
The California Court of Appeal reversed.
1) In Zavala v. Wal-Mart Stores, Inc. 393 F.Supp.2d 295 (D.N.J. 2005), the court concluded that workers are not precluded by their undocumented status from obtaining relief under the Fair Labor Standards Act (FLSA) for work already performed. That position is in accord with post-Hoffman interpretations by the Department of Labor and post-Hoffman court decisions construing the FLSA to cover undocumented workers. Agreeing with the reasoning set forth in those decisions, the court concluded that the employees were not precluded from pursuing their claims.
2) California Labor Code Section 1171.5 provides that immigration status is irrelevant to claims under California’s labor, employment, civil rights, and employee housing laws. The court concluded that Section 1171.5 is not preempted by federal law. The court reasoned that “[t]he ultimate goal of the IRCA is to control illegal immigration into the United States by prohibiting the employment of unauthorized aliens …. Allowing employers to hire undocumented workers and pay them less than the wage mandated by statute is a strong incentive for the employers to do so, which in turn encourages illegal immigration.”
State controls interstate overtime
March 06, 2007 by Ross Runkel at LawMemo
Larie Bostain was an interstate truck driver who wanted to be paid overtime, as required by Washington State's Minimum Wage Act. Although he worked in excess of 40 hours per week, he did not work more than 40 hours a week within the State of Washington.
The problem for the courts was whether to count all hours worked, or only hours worked within the State of Washington.
Held, in a 5-4 vote: Overtime pay for Washington interstate truck drivers included time driving outside Washington. Bostain v. Food Express (Washington 03/01/2007) Majority Opinion | Dissenting Opinon
The issue for the Washington Supreme Court was whether the Washington State's Minimum Wage Act (MWA) applied to interstate truckers whether driving within the state or outside the state.
The court noted that Bostain was a Washington employee. The court interpreted the MWA for overtime (RCW 49.46.130) to apply to Washington employees driving in state and driving outside Washington. The court concluded that the Department of Labor and Industries rules (WAC 296-128-011 and WAC 296-128-012), defining hours for purposes of the overtime provisions, as hours worked within Washington's borders were not consistent with the plain language of the statutes being implemented, nor with the stated purpose of the MWA, nor with the principles that apply to interpretation of remedial legislation governing payment of wages in this state. The court rejected the employer's commerce clause violation argument.
The majority thought this result was required by the plain language of the statute.
The DISSENT thought the opposite conclusion was required by the plain language of the statute. In addition, the dissent thought the result was prohibited by the US constitution's commerce clause.
My view: I just love it when two groups of judges use the "plain meaning" of a statute to reach opposite conclusions. Doesn't that fact, all by itself, nean that there is no plain meaning? Go figure.
Supreme Court takes on FLSA case
January 06, 2007 by Ross Runkel at LawMemo
Must a court defer to Department of Labor regulations interpreting the Fair Labor Standards Act (FLSA) as excluding domestic employees employed by a home care agency?
This is the second time the Supreme Court has taken a look at this case.
The case: Long Island Care at Home Ltd v. Coke [Details, decisions, etc.] Certiorari granted January 5, 2007.
Coke sued her employer under the Fair Labor Standards Act (FLSA) claiming entitlement to minimum wage and overtime. The trial court granted the employer's motion for judgment on the pleadings. The 2nd Circuit reversed in part; the US Supreme Court remanded for reconsideration in light of Department of Labor's December 2005 Wage and Hour Advisory Memorandum; the 2nd Circuit adhered to its original decision. The US Supreme Court granted certiorari to review the 10th Circuit decision.
FLSA Section 213(a)(15) exempts employees engaged in "babysitting services" and "companionship services." The exemption applies to "any employee employed on a casual basis in domestic service employment to provide babysitting services or any employee employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves (as such terms are defined and delimited by regulations of the Secretary [of Labor]) ...." Department of Labor (DOL) regulation 29 CFR Section 552.109(a) applies the exemption to "[e]mployees who are engaged in providing companionship services, as defined in Section 552.6, and who are employed by an employer or agency other than the family or household using their services."
The 2nd Circuit held that this regulation is not entitled to deference under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), because it is an interpretive rather than a legislative regulation. The 2nd Circuit also held that this regulation is not entitled to deference under Skidmore v. Swift & Co., 323 U.S. 134 (1944), because it was inconsistent with Congress' purpose and with other regulations and with previous DOL positions, and insufficiently explained by DOL.
The formal Questions Presented in the Supreme Court are:
1. Whether the Second Circuit erred in refusing to give deference under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), to a thirty-year-old Department of Labor regulation - a regulation that has twice been upheld by the Tenth Circuit - on the ground that, even though it was promulgated under express grants of legislative authority and after full notice-and-comment rulemaking, the regulation was contained in a subpart headed “Interpretations.”
2. Whether, in holding that a longstanding Department of Labor regulation was not persuasive and thus undeserving of any deference under Skidmore v. Swift & Co., 323 U.S. 134 (1944), the Second Circuit erred by failing to address the governing provisions of the Fair Labor Standards Act and by declining to give any weight to the Department’s interpretation of its own regulations.
"Discharge" includes normal end of one-day assignment
July 10, 2006 by Ross Runkel at LawMemo
A model worked for one day as agreed, and got paid two months later. She should have been paid immediately, and now might get $15,000 in penalties under California's wage and hour statute.
The statute imposes a penalty for delay in payment of wages. Wages are due immediately when an employer "discharges" an employee.
The issue for the California Supreme Court was whether it's a "discharge" when the original agreement between the company and the model was that the model would work for only one day.
Yes, that's a "discharge," triggering a duty of immediate payment of wages. Smith v. Superior Court (L'Oreal) (California 07/10/2006).
Quoting the unanimous decision:
A discharge is commonly understood as referring both to an involuntary termination from an ongoing termination relationship and to a release of an employee after completion of a specified job assignment or duration of time.
As a footnote, the penalty sought by the employee kicks in only if the company "willfully" failed to pay the wages in a timely manner, and the California Supreme Court expressed no opinion on that. Seems to me that at some point during a two-month delay it becomes "willful."
Is "payment" for missed meal period a penalty or a wage?
February 23, 2006 by Ross Runkel at LawMemo
California Labor Code Section 226.7 provides:
"If an employer fails to provide an employee a meal period or rest period in accordance with an applicable order of the Industrial Welfare Commission, the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each work day that the meal or rest period is not provided."
California Courts of Appeal have been split on the issue of whether the "additional hour of pay" is a "wage" subject to a three or four year statute of limitations or is a "penalty" subject to a one year statute of limitations.
The California Supreme Court granted review in Murphy v. Kenneth Cole Productions, and is expected to resolve the conflict. The Court of Appeal in the Murphy case concluded that the payment was a "penalty."
Murphy v. Kenneth Cole Productions.
Court of Appeal decision (12/02/2005)
Order granting review (02/22/2006):
More details: Labor & Employment Law Blog
Sick leave buy-back compensation is FLSA "pay"
February 10, 2006 by Ross Runkel at LawMemo
Sick leave "buy-back" monies should be included in an employee's "regular rate of pay" under the Fair Labor Standards Act (FLSA), says the 8th Circuit. Acton v. City of Columbia (8th Cir 02/08/2006).
(The 6th Circuit holds to the contrary. Featsent v. City of Youngstown, 70 F.2d 1456 (6th Cir 1995).
Section 207(e) of the FLSA provides that "all remuneration for employment paid to, or on behalf of, the employee" must generally be included in the employee's regular rate of pay.
The employer had a program whereby employees could buy back certain unused sick leave. The court held that "sick leave buy-back monies constitute remuneration for employment" under Section 207(e) and should thus be included in an employee's "regular rate of pay."
The court relied in principal part on 29 CFR Section 778.223, which addresses whether monies paid to employees for remaining on call are excluded from the regular rate of pay under Section 207(e)(2). The court observed that "[t]he plain language of the regulation makes clear that all monies paid as compensation for either a general or specific work-related duty should be included in the regular rate." Based on that observation, the court then reasoned that "[t]he critical question before this court is whether sick leave buy-back monies compensate the [employees] for some specific or general duty of employment." The court determined that the answer to that question is "yes," stating "the primary effect of the buy-back program is to encourage [employees] to come to work regularly over a significant period of their employment tenure." Recognizing consistent attendance to be a general duty of employment, the court reached its ultimate conclusion that sick leave buy-back monies constitute remuneration for employment under Section 207(e).
Employer must pay for psychotherapy time and travel time
December 30, 2005 by Ross Runkel at LawMemo
If an employer requires an employee to have psychotherapy outside her normal work hours, is the time spent getting there, being there, and getting back, paid time under the Fair Labor Standards Act (FLSA)?
Yes, says the 7th Circuit. Sehie v. City of Aurora (7th Cir 12/27/2005).
Sehie sued her employer for violation of the Fair Labor Standards Act (FLSA) alleging failure to pay for time spent attending and traveling to and from counseling sessions mandated by the employer. There were 16 sessions, one hour each, plus two hours travel time each.
On stipulated facts, the trial court found in favor of Sehie. The 7th Circuit Court affirmed.
The court found that the trial court did not clearly err by finding that Sehie's counseling sessions were necessary and primarily for the benefit of the employer.
The employer argued that 29 CFR Section 785.43 required compensation only for that time spent by an employee in waiting for and receiving medical attention at the direction of the employer during the employee's normal working hours.
The court declined to find as a general rule that 29 CFR Section 785.43 prevented compensation for the time an employee spent during non-working hours receiving employer-required treatment for a work-related injury.
Wal-Mart lunch break verdict: $172,000,000
December 23, 2005 by Ross Runkel at LawMemo
In a class-action suit claiming that Wal-Mart did not give California employees a 30 minute lunch break, a jury brought in a verdict of $172,000,000.
The class of employees bringing the suit was about 116,000 Wal-Mart employees and former employees in California.
California law requires an employer to give a 30 minute unpaid lunch break to any employee who works over six hours. The employees claimed Wal-Mart violated that law, and the jury agreed.
The jury heard testimony for four months and deliberated for about three days before reaching a decision.
The verdict was for $57 million in general damages plus $115 million in punitive damages. Wal-Mart claims, among other things, that the California statute does not allow for punitive damages.
Wal-Mart will appeal.
Read more in Yahoo! News and at Law.com.
Sue Your Boss Law
December 08, 2005 by Ross Runkel at LawMemo
Sheppard Mullin's Labor & Employment Law Blog today is exploring the November 23 case involving California's "Sue Your Boss Law" (Labor Code Private Attorney General Act of 2004 ("PAGA")) - California Court Interprets Procedural Requirements for the "Sue Your Boss Law."
It's a bit complex. The blog says that the case, Caliber Bodyworks, Inc. v. Superior Court, "exemplifies the complex compliance requirements of California's wage and hour laws and the complex remedies and procedural requirements involved in wage and hour litigation."
Meanwhile, the blog was mentioned favorably today in a Law.com article that is oddly named Blogging Is the New Black.
Sheppard Mullin's Labor & Employment Law Blog was designed by LexBlog, a pretty happening outfit that has designed a large number of professional blogs for law firms.
Donning and doffing: IBP v. Alvarez; Tum v. Barber Foods
November 08, 2005 by Ross Runkel at LawMemo
The Supreme Court, in a unanimous opinion, held that the Fair Labor Standards Act (FLSA) requires that employees be paid wages for the time they spend walking to their work stations from the place where they put on required protective clothing. Employees also must be paid for the whole day, including time spent waiting to take off the clothing, and the day ends when they take off the protective clothing. However, there is no requirement that employees be paid for time spent waiting to put on the first piece of protective clothing.
IBP v. Alvarez; Tum v. Barber Foods (US Supreme Court 11/08/2005)
Employees working in meat-packing and chicken-cutting plants must wear special protective clothing. They show up at the plant and wait (sometimes in line) to don (put on) the clothing. Then they walk to their individual workstations. At the end of the shift they walk back to a locker room, perhaps do some waiting, and then doff (take off) the protective clothing.
What's paid and what's not under the Fair Labor Standards Act (FLSA) and Portal-to-Portal Act?
- Initial pre-shift pre-donning waiting time: Not.
- Donning time: Paid.
- Walking to the work area: Paid.
- Walking back from the work area: Paid.
- Waiting to doff: Paid.
- Doffing: Paid.
Supreme Court arguments in FLSA case
October 04, 2005 by Ross Runkel at LawMemo
I'm a daily reader of SCOTUSblog which keeps tabs on everything happening at the US Supreme Court. For a nice report on the oral arguments dealing with the interplay between the Fair Labor Standards Act (FLSA) and the Portal-to-Portal Act, see Yesterday's Oral Arguments in IBP v. Alvarez and Tum v. Barber Foods.
According to the writer (not unbiased, as she helped write the employees' brief), "The Supreme Court seemed to regard precedent as requiring the compensation of meat-processing workers for time spent ... waiting in line and walking between equipment stations in order to retrieve and return required sanitary and safety gear."
I still think the case is too close to call.
US Supreme Court argument on whether walking and waiting time are compensable
September 30, 2005 by Ross Runkel at LawMemo
Update: Supreme Court decided this case November 8, 2005.
IBP, Inc v. Alvarez; Tum v. Barber Foods
Oral Argument: October 3, 2005
Decisions below: Alvarez v. IBP, Inc. (9th Cir 08/05/2003); Tum v. Barber Foods (1st Cir 03/10/2004)
Briefs
In these consolidated cases, the Circuit Courts ruled that the employers violated the Fair Labor Standards Act (FLSA) by not paying for time employees spent donning and doffing specialized protective clothing before beginning work, at the end of work, and during unpaid lunch break.
The Supreme Court will be reviewing a narrower issue: whether waiting and walking time is compensable. Waiting time is time waiting in line to punch a time clock or to acquire protective clothing. Walking time is the time spent walking from the place where the gear is donned to the place where the work is done, and back.
- The 9th Circuit held that employees should be paid for all the time from the moment they began donning the protective gear at the beginning of the day until they doffed it at the end of the day, including the time spent walking to and from the locker room and the work station, and ruled that this time was not excluded as preliminary or postliminary activities under the Portal-to-Portal Act.
- The 1st Circuit held that the Portal-to-Portal Act specifically excluded this "walking time" from being compensable.
My view: Too close to call.
Paramedics/firefighters not exempt from FLSA
August 24, 2005 by Ross Runkel at LawMemo
Does the FLSA exemption for "firefighters" apply to cross-trained paramedics/firefighters who spend the bulk of their time providing medical services rather than fighting fires?
No, says the 9th Circuit in Cleveland v. City of Los Angeles (9th Cir 08/22/2005).
"Normal" employees get paid time and one-half after 40 hours in one week, according to the Fair Labor Standards Act (FLSA).
"Firefighters" are exempt. For them, premium pay kicks in after 204 hours within a 27 day period.
The original FLSA provision is Section 207(k). Congress adopted a new Section 203(y) on December 9, 1999.
Applying either of these sections, says the 9th Circuit, these folks were not "firefighters," and therefore came under the 40-hours-per-week rule.
Tum v. Barber Foods - Petitioners' brief
May 16, 2005 by Ross Runkel at LawMemo
Petitioning employees have filed their US Supreme Court brief [pdf] in Tum v. Barber Foods, which will be argued next fall.
Quoting from the brief:
QUESTIONS PRESENTED This Court has held that employees are entitled to compensation under the Fair Labor Standards Act, as amended by the Portal-to-Portal Act, for the time their employer requires them to spend donning and doffing health and safety equipment.
The Questions Presented are:
1. Are employees entitled to compensation for the time they must spend walking to and from required health and safety equipment distribution stations?
2. Are employees entitled to compensation for time they must spend waiting to receive equipment at required health and safety equipment distribution stations?
Courtesy of SCOTUSBlog, one of whose authors, Thomas Goldstein of Goldstein & Howe, is counsel of record for petitioners. Tom says, "Kevin Russell worked heavily on the case with a team from the Stanford Supreme Court Litigation Clinic - Rachel Kovner, Michael Mongan, and Julia Lipez."
FLSA opinion letters on line
May 04, 2005 by Ross Runkel at LawMemo
The Department of Labor web site is publishing Opinion Letters dealing with the Fair Labor Standards Act (FLSA) [here]. Nice job, DOL.
Thanks to Janell Grenier who writes BenefitsBlog and to Diane Pfadenhauer who writes Strategic HR Lawyer for tipping me off about this.
Are walking and waiting time compensable?
February 22, 2005 by Ross Runkel at LawMemo
The US Supreme Court granted certiorari in two cases that will decide whether time spent walking from the locker room to the work area, after donning special protective gear, is compensable under the FLSA.
IBP, Inc. v. Alvarez and Tum v. Barber Foods.
Employees in meat packing plants wear a lot of protective gear. For much of it, the employer and the government require that it be worn. Employees spend time donning and doffing this gear. Both the 1st and 9th Circuits agree they must be paid for that time.
But what about the time spent walking from the locker room to the place where the real work begins, and time spent waiting to put this gear away? The circuit courts split, with the 9th Circuit saying it must be compensated, and the 1st Circuit saying it need not be compensated.
It all has to do with whether this is within the FLSA's "changing clothes" exception, and whether the time is excluded by the Portal-to-Portal Act because it is preliminary or postliminary activity.
For the lower court decisions:
Alvarez v. IBP, Inc. (9th Cir 08/05/2003) [Full text pdf]
Tum v. Barber Foods (1st Cir 03/10/2004) [Full text]
Are walking and waiting time compensable?
February 22, 2005 by Ross Runkel at LawMemo
The US Supreme Court granted certiorari in two cases that will decide whether time spent walking from the locker room to the work area, after donning special protective gear, is compensable under the FLSA.
IBP, Inc. v. Alvarez and Tum v. Barber Foods.
Employees in meat packing plants wear a lot of protective gear. For much of it, the employer and the government require that it be worn. Employees spend time donning and doffing this gear. Both the 1st and 9th Circuits agree they must be paid for that time.
But what about the time spent walking from the locker room to the place where the real work begins, and time spent waiting to put this gear away? The circuit courts split, with the 9th Circuit saying it must be compensated, and the 1st Circuit saying it need not be compensated.
It all has to do with whether this is within the FLSA's "changing clothes" exception, and whether the time is excluded by the Portal-to-Portal Act because it is preliminary or postliminary activity.
For the lower court decisions:
Alvarez v. IBP, Inc. (9th Cir 08/05/2003) [Full text pdf]
Tum v. Barber Foods (1st Cir 03/10/2004) [Full text]
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