Wage & Hour - Development & Highlights

Another Assistant Manager Case: The Time Bomb Keeps Exploding

Mark Tabakman — Mon, 08 Mar 2010 15:31:21 -0500

Only a few weeks ago, I posted and commented upon the never-dying issue of whether Assistant Managers are exempt under the Fair Labor Standards Act and the threat of collective and class actions from these employees. That time bomb has gone off again, this time with an Assistant Manager working for Big Lots filing a collective action on behalf of allegedly “hundreds” of similarly situated employees. The case is entitled Omiatek v. Big Lots, Inc. and was filed in federal court in the Western District of New York.

It is a typical Assistant Manager case. The allegation is misclassification, charging that the employees are not exempt from overtime under the executive or administrative exemptions. It charges (as they all do) that these employees spend the vast majority of their time unloading trucks, unloading boxes, cleaning the store and arranging merchandise. The suit also charges that the employees do not exercise managerial authority, i.e. hiring, firing, disciplining employees, or making decisions on their compensation.

There is an interesting wrinkle to the case. The granting of conditional certification (and the maintenance of that certification, as a class) hinges on a showing that they are similarly situated. To achieve this, the plaintiffs need to show that a common policy or practice applied to all potential members of the class. If the defendants are successful in showing that individual assessment of each plaintiff is necessary, then the motion for class certification will fail.

In 2008, in another Assistant Manager lawsuit filed against this company, that is exactly what happened. The court in that case (filed in federal court in Louisiana) determined that at least some of the plaintiffs had been properly classified as exempt and thus a class action was inappropriate. This is a distinct possibility when hundreds and hundreds of employees are involved. There is a more than a good chance that some of them do, in fact, exercise the requisite managerial authority to fit within the exemptions. It takes skillful deposing of the plaintiffs and perhaps expert reports/testimony as well, but it can, and, indeed, must be attempted by the defendants to defeat the motion for class certification.

Plaintiff's Bar Seeks To Circumvent Class Action Fairness Act In FLSA Collective Actions

Mark Tabakman — Mon, 01 Mar 2010 15:46:07 -0500

Five years ago, the Class Action Fair Act (“CAFA”) was enacted to deal with the onslaught of class action cases and to ensure, if I may say, fairness in the manner in which these cases were litigated but it appears that the ever active and creative plaintiffs bar is coming up with new ways to allow cases to remain in state court, rather than going to federal court where perhaps they feel or believe that the chances of winning are slimmer. Defense counsel must adjust and adapt, quickly.

What some plaintiff counsel are doing is structuring and narrowing their Complaints so they can circumvent the jurisdictional diversity that the law mandates be applied. The fact is that CAFA was enacted to prevent abuse of the class action procedure/device. The law eased the rules for establishing diversity jurisdiction so plaintiff lawyers could not engage in ting forum-shopping and lodge their suits in what they believed were states friendly to the plaintiff’s side. In this manner, defendants were able more facilely to remove cases to the federal courts.

The trick that has been discovered is to plead the case quite narrowly, in a real focused manner. For example, if the case is filed for less than one-hundred plaintiffs and damages of less than five million dollars are sought, the lawyers may be able to salvage keeping the case in state court, which they may perceive as a tactical advantage or may, in fact, be a tactical advantage. In this analysis, the particular venue and/or the particular judge that preside over the case.

Often, class action cases settle. Rarely do they go to trial, given the enormous risks for the employer, i.e. fee-shifting, as well as for plaintiffs and their lawyers, who stand to realize nothing from a case if the class action motion is defeated or the case falls on the merits, e.g. employees found exempt, as a class. Thus, there is much machination to get a case before the “right” judge who may broker. Whether with heavy hand or not, a settlement.

A recent, illustrative example. In a 2008 case involving Abbott Laboratories, a federal judge in the Eastern District of Tennessee ruled that the plaintiffs were trying to evade the dictates of CAFA by filing eleven class action Complaints, which mirrored each other, except that the period of time for which recovery was sought was different for each “class.” The various complaints defined the class period as various one-year periods ranging from 1990-2008.

However, each of the discrete Complaints included contentions relating to the entire reach of the charged conspiracy for all of the separate time periods in the ten years at issue. The judge held that these artificial time demarcations were an attempt to ensure that the damages in each case were less than five million dollars, in order to circumvent CAFA. Essentially, he found that the plaintiffs were “gerrymandering” the cases to avoid the application of the CAFA.

Department of Labor Secures Large Dollar Overtime Awards for Katrina Workers

Mark Tabakman — Fri, 19 Feb 2010 14:46:37 -0500

The US Department of Labor has resolved a legal action against a Texas company, Flour Enterprises Inc. for its failure to pay relief workers who participated in the Katrina clean up and rehabilitation efforts. The company will pay one million dollars to 154 workers. The case is entitled Solis v. Universal Project Mgmt., Inc., and was filed in the Southern District of Texas.

The DOL had also secured a default judgment against another Houston, Texas company for wages due workers which arose from the same investigation. That case is entitled Solis v. Universal Project Mgmt., Inc., and was filed in the same federal court..

Fluor, an engineering and construction firm, functioned as the General Contractor when it contracted with the Federal Emergency Management Agency after the devastation caused by Hurricane Katrina. In turn, Fluor Enterprises subcontracted the work of inspecting trailers for the displaced people who were left homeless by the disaster to Universal Project Management.

The field investigation conducted by the DOL revealed that the companies did not pay time and one-half overtime, but rather (and against the law) paid only straight time for overtime hours. A DOL official explained that “some employees involved in the inspection of trailers during the hurricane recovery worked up to 84 hours in a week without the required overtime compensation for hours worked over 40 in a workweek.”.

The Secretary of Labor observed that “workers who help rebuild our communities and secure the safety of local residents following natural disasters should be fairly and legally compensated for the work they perform.”

It is shameful that these employers should disregard such a basic tenet of wage-hour law, i.e. paying proper overtime, especially to workers who were likely not earning that high of an hourly wage to begin with. The mind boggles. I often take issue with Departments of Labor when defending/representing clients, but I applaud this use of the agency’s investigative and enforcement powers.

Is It Working Time Or Not? Employer Compulsion Is The Key Element

Mark Tabakman — Thu, 11 Feb 2010 11:29:59 -0500

The electronic giant, Best Buy, has requested that a judge approve a $900,000 settlement in a New York State wage-hour class action in which the plaintiffs sought payment for time worked “off-the-clock.” That working time was the minutes spent going through security clearings at the end of the work day, assumedly to ensure that employees did not steal anything during their shifts. The case is entitled Turner v. Best Buy Company, Inc.

Although the case was filed in state court, the employer had removed the case to federal court under the Class Action Fairness Act of 2005. After going through a great deal of discovery, the parties decided to settle the action, although they maintained their respective positions. The company maintained that it properly paid all employees for all time worked, while plaintiffs took the view that going through the security check was an employer instigated “activity” that required compensation.

Interestingly, and significantly, the employer has agreed to modify its operating procedures to allow all employees to remain on the clock until their manager allows them to leave the store. Thus, although the employer denied any culpability, the remedial action it took suggests that it knew that there was an issue here.

The key to determining whether preliminary or postliminary activities are compensable is the element of employer compulsion or the lack thereof. I equate this activity to the employer ordering a retail cashier to report ten minutes early to balance out the cash drawer or to stay ten minutes after the shift ends to do the same. It is a safe bet that where employer ordering, or direction or compulsion of an activity related to the main job is involved, the activity is working time and compensable. The other benchmark is how integrally related to the main job is the side activity.

I have often commented on these preliminary and postliminary issues. They are a real danger to the employer because oftentimes, the employer may not even appreciate that this “little” activity or routine or inconvenience to employees is actually “work,” which can then lead to a single employee filing an action (as was done here) and everybody else coming on board. The proactive approach is to analyze every non-exempt job and ascertain if there are preliminary or postliminary activities involved or related to it and then apply the above-referenced analysis and make the call on whether it is or is not working time.

The Difficulty of Fitting Employees Into The Administrative Exemption Rears Its Head Again

Mark Tabakman — Wed, 03 Feb 2010 15:39:11 -0500

The Second Circuit Court of Appeals has reversed a lower court and held that a regional director of advertising sales for the Elite Traveler magazine was non-exempt under the Fair Labor Standards Act. The Court rejected the contention that the employee fell within the administrative exemption. The case is entitled Reiseck v. Universal Communications of Miami Inc.

In the 1990s, there was a rash of cases involving inside sales people and whether they fit within the administrative exemption. Courts have held that such employees are “white collar production employees” in that they are really only “producing” the goods of the employer and not engaging in the ancillary, back-office kinds of duties that are deemed administrative under the FLSA. In this case, the Second Circuit continued that line of reasoning.

The Court found that as the primary duty of the employee was selling advertisements to individual customers and not promoting sales generally, the employee was only a producer, not an administrative employee.

The magazine was free and thus advertising sales made up the predominant component of its revenue. There were salespeople who sold advertising space and, significantly, a marketing staff that was charged with the primary function of creating promotional material to increase advertising sales. The Court determined that the employee was not involved with the market creation work, as she was selling specific advertising space and advertising sales were a critical source of revenue, the Court therefore concluded that advertising space was the Company’s “product.”

As the employee’s primary duty was the sale of that product, she was a sales employee, not an administrative employee. This was the Court’s conclusion notwithstanding that there was evidence that Ms. Reiseck developed new clients with the goal of increasing advertising sales generally. Her primary duty remained selling specific advertising space to clients.

I have often commented on the grayness of the administrative exemption. There is a continuing, if you will, eternal, tension between whether an employee is merely producing goods (whatever those good may be) or is performing the more esoteric duties that support and comprise the business. Those duties are administrative, but precise definitions are difficult to come by. Fair warning to the employer----if you choose the administrative exemption, be prepared to defend it (probably in court).

The Vagaries of the Professional Exemption Continue

Mark Tabakman — Mon, 25 Jan 2010 12:01:15 -0500

In a January 21, 2010 posting in the New York Labor and Employment Law Report, Joseph Dole reported on a case entitled Young v Cooper Cameron Corporation, recently issued by the Second Circuit. The case concerned the applicability of the professional exemption to an individual performing engineering design work on sophisticated equipment. While he had twenty years of experience, he only had a high-school degree. The court ruled that the employer incorrectly classified him as exempt.

The issue rose and fell on the absence of a college or higher degree in a specialized field of training. To me, this is the completely wrong result. The proposed new professional regulations had sought to allow a claim of professional exemption even without the "degree," if experience and education were deemed to fit the exemption.

The final regulations stepped back from this and hearkened back to the old tests. They do leave a crack open, attesting that there is the "possibility" that an individual may fit the professional exemption as an attorney, for example, even if he did not go to law school, like, for example, Supreme Court Justice William O. Douglas. The regulations, however, envision this as a one in a million occurrence and I think, especially in the computer and technology fields,. experience of a professional nature is often supplanting the straight, "pure" education.

In fact, I understand that Bill Gates did not finish college. Under the rationale of this case and the current FLSA regulations, this billionaire would be found to be non-exempt and entitled to overtime.

Funny, ain't' it?

Improper Overtime Calculation Leads to FLSA Collective Action

Mark Tabakman — Wed, 20 Jan 2010 13:59:10 -0500

A federal judge has agreed to a settlement between the parties in a Fair Labor Standards Act (“FLSA”) collective action where a group of former employees sued the employer, a cement company, for overtime. The case, filed in federal court in Florida, is entitled Webster v. Cemex Inc.

Interestingly, the lead plaintiff, Timothy Webster, will recover only $2,600. Payments to the other class members have not been disclosed. The basis of the suit was that the Company paid the drivers by the delivery and did not pay overtime when the actual work hours exceeded forty (40). The plaintiffs sought compensation for unpaid overtime for three years (seeking a willfulness finding) as well as liquidated damages and attorneys’ fees.

Although the Company asserted it had strong defenses against the claim, it settled this case, which had been consolidated with a second FLSA action against Cemex; that action was also lodged by drivers.

The issue comes back to exemption status. If the drivers were non-exempt, they were entitled to overtime when they worked more than forty hours. There is a computational formula built into the FLSA for determining how to compute overtime to workers paid by the delivery, or by the “stop” or on a commission basis, or a day rate, or any other form of compensation. Ultimately, the employer must figure out the regular rate and then determine the overtime.

These drivers might or might not have fit within the motor carrier exemption, but likely no other exemption, certainly not the white collar exemptions as they were not paid a salary. The lesson for employers is simple----absent an applicable exemption, all workers are entitled to overtime, regardless of the applicable computational methodology.

"Where's My Raise"--Webinair To Be Held January 27, 2010

Mark Tabakman — Mon, 11 Jan 2010 16:44:07 -0500

If the economy rebounds in 2010, employees will be looking for enhanced raises to offset the dismal or non-existent raises of 2009. If the economy does not rebound, employers will be faced with tough decisions and even tougher conversations with their employees concerning this lack of increases.

There are legal pitfalls to be avoided in making these decisions and having these (often difficult) talks. Learn how to manage worker expectations, realistic or otherwise, interact with employees who are not getting hoped-for raises and, most importantly, what legal issues (e.g. discrimination?) inform these decisions and discussions.

Come join me in a webinair I am conducting on January 27, 2010 from 1:30-3PM, EST, where these issues will be examined. The registration link is:

hrtrainingcenter.com/showWCDetails.asp

Store Managers Always Pose Thorny Issue on Exemption Question

Mark Tabakman — Wed, 06 Jan 2010 15:36:39 -0500

In a recent posting in the Connecticut Employment Law blog, http://www.ctemploymentlawblog.com/2009/12/articles/wage-and-hour/a-dollar-here-35-mi Steve Lavelle wrote about a recent case in involving the exemption status of Store Managers for Family Dollar Stores. The evidence showed that the employees rarely, if ever, discharged managerial duties and spent the vast amount of their time in performing duties identical to subordinates and thus their classification as exempt from overtime was erroneous. He warns that the employer must always be be vigilant about properly classifying employees as exempt or non-exempt.

I have often advised clients that, sometimes, it is safer to treat titles such as Assistant Manager as non-exempt, from the outset. Pay them hourly and time and one-half OT, but compute, or "back into" the proper hourly rate by determining the number of hours that will be routinely worked (e.g. 45, 50) in given weeks. In such a manner, the exempt/non-exempt issue never becomes an issue.

The other option for employers is to enhance the actual job duties of these and similarly titled employees so that they do, insofar as possible, exercise managerial functions (e.g. hiring, firing, input into raise/promotions). This is harder to do, takes significant managerial oversight and must be monitored. It can be done, however, and then the person or persons will truly be exempt, whether under the Fair Labor Standards Act or any state wage-hour law.

Law Firm Sued by Legal Secretary on Exemption Misclassification Theory

Mark Tabakman — Mon, 04 Jan 2010 11:13:06 -0500

Law firms are usually defending clients in wage-hour suits where the allegation is that the employee claims he/she has been misclassified as exempt when they are really not and are due overtime. But, law firms themselves must be diligent about properly classifying their own employees, especially when they categorize employees exempt under the administrative exemption. This is the lesson being learned by the so-called boutique intellectual property law firm of Turocy & Watson LLP, where a legal secretary has filed a class action, charging that the firm did not properly pay the “class” of secretaries overtime.

The case is docketed as Osolin v. Turocy & Watson, LLP et al filed in federal court in the Northern District of Ohio and charges a violation of the Fair Labor Standards Act.. The plaintiff believes there are approximately 30 legal secretaries in the class. All of these secretaries were paid a salary and were allegedly misclassified as exempt.

The complaint alleges that none of the plaintiffs did any managerial work or directed the work of employees, or had authority to hire and fire. Under that factual predicate, the plaintiffs would not fit within the executive exemption, but the firm will likely defend on the basis that they are administrative employees. As I have often warned, this is the most difficult exemption to prove and if the facts show that the secretaries performed secretarial, clerical work the majority of the time, this exemption will not be available as it will founder on the “discretion and independent judgment” element.

It is highly doubtful that the firm could show they were professional employees, even if the employees were given the moniker “paralegal,” as paralegals are explicitly deemed non-exempt under the federal regulations.

The burden of proof is always on the employer in an exemption case. This behooves employers, law firms or otherwise, to make reasoned, defensible exemption determinations and classifications at the time of hire, because it only takes a single plaintiff to start a world of trouble. In sum, these lawyers need a lawyer.

Independent Contractor Issues Will Remain in 2010

Mark Tabakman — Tue, 29 Dec 2009 11:55:16 -0500

John Ho, in the New York Labor and Employment Law Report, writes that in difficult economic times, employers may resort more to the use of so-called independent contractors, to avoid all personnel/administrative costs affiliated with bringing statutory employees on board. I agree that this will continue to be a flashpoint in the coming year, but one that hearkens back to longstanding problems for putative employers.

He notes that different statutes have different tests. There are two things, however, that remain constant throughout all of these different statutory tests--control and proof of an independently established business. I know, in New Jersey, which uses the A-B-C test, the "C" element, i.e. independent business, is the one that most employers get into trouble on. The putative contractor must be shown to be in his own business, such as evidencing that the business is incorporated, having liability insurance, business cards, advertising and, most importantly, doing work for more than just one employer.

If there is not a spread of work done for a number of different employers, a Department of Labor and its sub-divisions, such as Unemployment, and Wage-Hour, will, in knee-jerk fashion, assert that the person or persons are employees. That leads not only to demand for payment of back-due premiums, but also, more dangerously, assessment of penalties, which could, under many state constructs, be escalated geometrically.

John's piece can be viewed at http://www.nylaborandemploymentlawreport.com/articles/wage-and-hour/

FLSA Donning and Duffing Class Action Defeated Because of Labor Contract Provision

Mark Tabakman — Thu, 17 Dec 2009 10:18:25 -0500

I have posted a few times about Fair Labor Standards Act donning and doffing cases. The general rule is that donning and doffing is compensable if these preliminary and postliminary activities are integral to the performance of the employee’s primary job.

For a rule, there is always an exception. In a case entitled Johnson v. Koch Foods Inc., filed in the Eastern District of Tennessee, a federal judge has ruled that because the parties’ labor contract applicable to covering chicken processors working at a cut and kill plant explicitly excluded compensation for time spent donning and doffing certain sanitary and safety gear, the workers were not entitled to compensation for the time it took to put and remove the gear.

The judge analogized the putting on/taking off of the gear to “changing clothes,” which is not compensable under Section 203(o) of the Fair Labor Standards Act. The court did warn, however, that of a jury determined that such activities were integral and indispensable, they then could be compensable under the “continuous workday rule.”

This result seems anomalous because the workers were required to put on the protective gear prior to reporting to the production line, to begin their primary work, but they were only compensated for the time actually on the line.

There is a divergence in the federal Circuits as to what constitutes “clothes.” The Ninth Circuit has held that the “changing clothes” safe harbor applies only when the items at issue are clearly and unmistakably clothing, as is commonly understood. However, the Eleventh Circuit has held that the term applies to hairnets, gloves and hearing protection equipment. The US Department of Labor has issued an Opinion Letter concluding that the Section 203(o) definition of clothes “includes items worn on the body for covering, protection, or sanitation.”

This issue may ultimately have to be decided by the US Supreme Court. In the meantime, employers need to make assessments of the indispensability of the preliminary activity to the main job and start the analysis of compensability from that vantage point.

US DOL Finds 4000 Nurses at SSM Health Care Owed One Million Dollars Over Missed Lunches

Mark Tabakman — Mon, 14 Dec 2009 14:46:03 -0500

Under the Fair Labor Standards Act, there is no law requiring employees receive a lunch period or break times. However, when the employer gives time for lunch, the employees must receive at least thirty minutes and the time must be uninterrupted. Put differently, the employees must be completely relieved from duty. When employees are not so relieved, they must then be compensated for that time, i.e. the half-hour, which all becomes “converted” into working time.

This is what the DOL found happened in this investigation, which ultimately included 4000 nurses. Some of the nurses answered phones while on lunch and others performed “some” duties. The result, however, is the same---all of the time is converted.

The hospitals also had an automatic deduction policy, by which one-half hour was automatically deducted from the nurses’ time for that day, on the assumption that the lunch was taken. Although the hospitals had a policy about not working during lunch (i.e. not carrying the hospital-provided phones during meal breaks) and also had a policy that allowed nurses to cancel the automatic deduction if they performed actual, productive work. The hospitals claimed that the nurses did not follow the policy. The result was a supervised settlement providing for 1.7 million dollars to be paid to the affected employees.

I have clients who have these automatic deduction systems for lunch time. As this makes clear, the automatic is not so automatic. There must still be supervisory oversight and intervention in issues where employees may have worked through lunch, to ensure that proper payment is made. The employer must have a system where employees can report that they worked through lunch and the employees, in my view, must be given training on the system, so all productive time is paid for and the DOL does not come knocking on the door.

In sum, a policy, a piece of paper, will not provide a defense to claims of uncompensated working time. More is required of the employer.

Working Time FLSA Class Action Hits Amazon Over Punch In/Punch Outs

Mark Tabakman — Mon, 07 Dec 2009 10:08:35 -0500

In what is a troubling trend, an employee of Amazon.com Inc. has filed a FLSA collective action for unpaid overtime. The thrust of the allegations is that the rounding policy, which rounds to the nearest fifteen minutes, violates the Fair Labor Standards Act and deprives employees of compensation for alleged productive working time. The case is docketed as Austin v. Amazon.com, Inc.

The suit is particularly dangerous because it evidently seeks a nationwide class action of all Amazon “warehouse associates” who were employed over the past three years. There are facilities in several states, such as Arizona, Delaware and Texas. If certified as a class, there could possibly be more than 21,000 employees involved. The total exposure on such an action could run to the millions of dollars.

Apparently, the Company forbids employees from punching in early; this creates an anomaly because those employees who get to work “first” get paid for their entire shift, while those who are compelled to wait in line to punch in and do so eight or nine minutes after start time, find their time rounded up to fifteen minutes after the start time and start being paid only from that point on. Under law, if employees punch in and immediately begin productive work, they must be paid from that minute on, without the benefit of rounding.

The situation is complicated due to the advent of electronic timekeeping, including so-called “smart clocks,” which do not allow employees to punch in before their start times. The plaintiff’s attorney called attention to this issue and urged that the electronic technology in fact allowed for payment to the minute, so there was no reason not to properly pay the employees. He also conceded that some employees could benefit from the policy by deriving some extra minutes from the rounding system, but stressed that the majority of employees would lose money from the rounding procedure.

If the allegations are true, then the actual impact of the policy is that workers work “off the clock,” depriving them of straight time and overtime wages. I believe this is a real problem in the industrial world and is complicated by the advanced technology of timekeeping. Employees must be paid for all productive work and a timekeeping system cannot act to deprive the employees, of those wages. Employers should institute appropriate policies and, more importantly, must exercise supervisory and managerial oversight to ensure that employees are paid for all hours actually worked.

Another FLSA Class Action on Exempt Status of Dispatchers: The Threat Grows

Mark Tabakman — Mon, 30 Nov 2009 11:01:54 -0500

A federal judge has ruled that a dispatcher, who was suing as the named plaintiff in a FLSA collective action seeking overtime, was not able to prove that he was “similarly situated” to other employees and this the judge refused to grant even the conditional certification necessary to keep the case going. The case is entitled Landry v Peter Pan Bus Lines and is being litigated in the District of Massachusetts.

Although dismissed, the case raises the specter of the exempt status of dispatchers in the trucking and bus industry. I believe this is a pervasive issue/problem for this industry, as many trucking and bus employers classify their dispatchers as exempt from overtime, believing that they are part of “management.”

Although, in a real-world sense, these important employees are part of the management “team,” under the FLSA exemption regulations, they must meet certain criteria. If they do not meet the criteria, both work duties and salary minimums, they are non-exempt and overtime eligible, notwithstanding their importance to the transportation operations.

The plaintiff had alleged that his job did not require the exercise of independent judgment, which is the hallmark of the administrative exemption, nor that he performed any “managerial responsibilities,” which impacts upon both the executive and administrative exemptions. These theories were never tested, as the plaintiff sought to secure class certification too early, before any discovery had been taken. If the case was re-filed with another lead plaintiff and the plaintiff’s lawyers were a littler more patient, i.e. allowing for a period of discovery, the case might have turned out differently.

Employers in the transportation industry should pay special attention to the job duties of their dispatchers. If the employer concludes that these employees are currently non-exempt, it is possible to enhance their job duties so that they evolve into exempt employees. Another possibility is that the dispatchers may fit within the motor carrier exemption, but they must affect safety for this exemption, rather than simply dispatch vehicles.

In any event, the time to analyze the dispatcher exemption issue is now, before the threat of a lawsuit looms.

Judge Gives Early Thanksgiving Treat To Employer In FLSA Donning and Duffing Class Action

Mark Tabakman — Mon, 23 Nov 2009 11:22:47 -0500

A federal judge in charge of a Fair Labor Standards Act (“FLSA”) action involving workers for the turkey producer, Butterball, has rejected an attempt by the workers to compel the poultry company to adopt measures that would provide accurate records of the time workers took donning and doffing their special work clothing. The case is entitled Martinez-Hernandez v. Butterball, LLC. and is being litigated in the Eastern District of North Carolina.

As I have written about numerous times, these donning and doffing, working-time cases, are very difficult to defend, as well as to prosecute, given the problems associated with amount of time actually spent in donning/duffing, as opposed to the amount claimed,

The plaintiffs had sought time records that showed this data but Butterball asserted that it did not keep specific records of those activities. In response to this, the plaintiffs requested that the court to compel Butterball to permit the workers to install timekeeping equipment at the plant to monitor the activity, but the company refused.

The court agreed that there was no legal obligation for Butterball to do that and that the plaintiffs’ request overreached as it would impose new obligations on Butterball to collect this data on the employees.

The claim was employees should be paid for the time walking from one work station to the next, the time putting protective clothing on and the time cleaning up after their shifts ended. The employees also claimed illegal deductions were made in the form of making them pay for their personal protective equipment.

When do employees start working? The basic rule of thumb is when they undertake activities that are directly connected to their work, that is, that they would be unable to do their primary job if they had not engaged in the preliminary or postliminary activity, such as putting on protective work clothing, especially if mandated by federal or state regulations or health laws.

Motor Carrier Exemption FLSA Class Action Defeated On Interstate Commerce Issue

Mark Tabakman — Wed, 11 Nov 2009 16:00:53 -0500

The federal motor carrier exemption from overtime, 29 USC 213(b)(1), which applies to safety workers (e.g. drivers) engaged in interstate commerce, has been found to exempt Ray’s Trash Service, Inc. drivers from their right to overtime under the Fair Labor Standards Act even though the drivers do not cross state lines. They were held to nevertheless be in the stream of interstate commerce. The case is entitled Craft v. Rays, LLC which had been filed in the U.S. District Court for the Southern District of Indiana.

The judge held that the transportation of recyclables across state lines sufficed to bring the drivers into the “practical continuity” of interstate commerce. As the judge noted, “although plaintiffs never transported the recyclables across state lines, the court finds that their transportation was part of a practical continuity of movement across state lines.”

The drivers filed a class action in May 2008, alleging their pay was improperly docked, but the main thrust of their class action was a claim for overtime. The employees claimed that the interstate commerce ended when the movement of the goods was interrupted and because the employer did not have the “fixed and persisting intent” to ship the goods out of state. That intent is necessary to show that interstate commerce still continues despite the fact that the driver drives only within a State.

The judge rejected those arguments, holding that the company did not just have a speculative intention to ship out of state, as more than half of the recyclables were, in fact, sent to out-of-state recipients. The court held that the activities the drivers engaged in – included baling and consolidating recyclables, were no more than “repackaging,” which, under the law, did not interrupt the flow of interstate commerce.

One commentator has suggested that this ruling will have special relevance today, for FLSA motor carrier overtime cases, as all of us are living and working in a “green economy” in which numerous recyclables will be shipped out of state. From my perspective, it means that a lot of drivers will not be seeing or getting any green.

Mere Conclusions as to Employer Status will Result in Dismissal

Lee A. Sevier — Mon, 09 Nov 2009 10:18:21 -0500

In Chen et al. v. Domino's Pizza Inc. et al., the U.S. District Court for the District of New Jersey dismissed Domino's Pizza Inc. from a proposed class action. The action alleged that the company, and a select number of New Jersey franchisees, failed to pay delivery drivers proper overtime wages in violation of the Fair Labor Standards Act and the New Jersey Wage and Hour Laws.

Specifically, the plaintiffs asserted that as delivery drivers, they regularly worked 60 or more hours per week without any regular meal or break periods, and that they were required to clock in several hours after they began work. The complaint also alleged the plaintiffs were terminated after they complained about the alleged overtime denial.

The court found, however, that the plaintiffs failed to set forth sufficient facts to show an employment relationship existed between them and Domino’s, and only made a “conclusory statement that Domino's is an employer 'within the meaning of 29 U.S.C. § 203(d) and N.J. Stat. Ann. § 34:11-56a1(g).” In dismissing the company from the action, the court reasoned that the plaintiffs were employees of the franchisee and not the corporation. The plaintiffs also attempted to set forth a joint employer argument, but the court struck down this argument on the grounds that these allegations were not in the complaint.

This decision is a win for employers. Indeed, it shows would-be plaintiffs that a mere conclusory statement regarding the employer status of a company will be insufficient to sustain a claim in court.

Mere Conclusions as to Employer Status will Result in Dismissal

Lee A. Sevier — Mon, 09 Nov 2009 10:18:21 -0500

Mere Conclusions as to Employer Status will Result in Dismissal

Lee A. Sevier — Mon, 09 Nov 2009 10:18:21 -0500