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News | Mar 30, 2017

Pete Winebrake Presents “Precedential FLSA Circuit Court Opinions” at NELA Seminar

On March 31st, 2017, Pete Winebrake, of Winebrake & Santillo, LLC, will present the following FLSA Circuit Court Opinions at NELA’s 2017 Spring Seminar titled “Litigating Wage & Hour Cases: Challenges & Opportunities”.

 

First Circuit

Lalli v. General Nutrition Centers, Inc., 814 F.3d 1 (1st Cir. Feb. 12, 2016)

Holding:  Employer permitted to use fluctuating workweek method of overtime calculation, see 29 U.S.C. § 778.114, even though it also paid the employees a non-discretionary sales commission in addition to the weekly salary.  However, the commission payments should be included in the “regular rate” calculation.

Comments:   This decision addresses some confusion regarding the circumstances in which extra payments (e.g., bonus payments, commissions, premium pay) can render use of the FWW method illegal.  The court surveys the caselaw and summarizes the basic rule:  Extra payments not tied to the hours worked are permissible and do not prohibit use of the FWW method (although the extra payments may factor into the regular rate calculation). In other words, extra performance-based payments are consistent with the FWW, while extra time-based payments are not.

 

Litz v. The Saint Consulting Group, Inc., 772 F.3d 1 (1st Cir. Nov. 4, 2014)

Holding:  Employees’ weekly “stipends” satisfied the “salary basis” test, enabling the company to deny overtime under the “highly compensated employee” regulation.

Comments:  Plaintiffs’ counsel made some good arguments that the employees’ weekly “stipends” violated the salary basis rules because the stipends were “subject to reductions because of variations in the . . . quantity of work performed.”  But these employees were making well over $100,000 per year, and, as the Supreme Court’s 2012 Christopher opinion demonstrates, it sure is difficult to convince judges that such well-heeled employees should get overtime pay.

 

Martinez v. Petrenko, 792 F.3d 173 (1st Cir. July 6, 2015)

 Holding:  Plaintiff whose complaint asserted that company covered under FLSA’s “enterprise coverage” provision and who did not assert “individual coverage” in the complaint, in opposition to a motion to dismiss, or during the discovery period was prohibited from asserting individual coverage for the first time in opposition to a post-discovery summary judgment motion.

 

Comments:  The FLSA creates two independent ways in which a plaintiff can assert that his/her employment is covered by the FLSA:  (i) individual coverage, which focuses on the nature of the individual plaintiff’s work and whether it entails interstate commerce; or (ii) enterprise coverage, which focuses on the interstate nature of the company’s business operations and requires, inter alia, proof that the enterprise’s “annual gross volume of sales made or business done is not less than $500,000.”  29 U.S.C. § 203(s)(1)(A).  Individual coverage generally is extremely easy to satisfy, since almost all employees’ activities have some connection to interstate commerce or require use of an “instrument of interstate commerce” such as a telephone.  Yet, because many plaintiffs’ lawyers do not understand the difference between individual and interstate commerce, they inexplicably plead out their complaints by asserting enterprise coverage.  This case demonstrates the pitfalls of neglecting to plead individual coverage.

Marzuq v. Cadete Enterprises, Inc., 807 F.3d 431 (1st Cir. Dec. 9, 2015)

Holding:  District court erred in entering summary judgment against donut shop manager who allegedly was misclassified as overtime-exempt under the executive exemption.

Comments:  This is an important and excellent decision that should be read by anyone dealing with the executive exemption.  Retired Supreme Court Justice Souter sat on the panel.  As with many executive exemption decisions granting summary judgment for the employer, the district court over-emphasized that the plaintiff  was “in charge” of the store and was the store’s highest-ranking employee and placed too little emphasis on what the plaintiff actually spent his time doing.  The First Circuit rejects The District Court’s superficial analysis and goes through each of the four factors that must be considered in determining whether a worker’s “primary duty” is “management.”  In addition, the First Circuit significantly limits its dreaded 1982 decision in Donovan v. Burger King Corp., 672 F.2d 221 (1st Cir. 1982).  Burger King has haunted overtime rights lawyers for over 30 years and has been cited to justify many unfair executive exemption outcomes.  Marzuq explains that, even under Burger King, “being ‘in charge’ is not merely a label belied by the realities of the workplace.”  Finally, the judges must ensure that the opinion contains a nice passage about the FLSA’s public policy of fighting unemployment by spreading employment. The court explains that the business model of sticking the salaried-exempt employee with all the extra hours violates this public policy.  (NELA filed an amicus brief emphasizing this argument.)

Newman v. Advanced Technology Innovation Corp., 749 F.3d 33 (1st Cir. Apr. 18, 2014)

Holding:  Because the per diem component of the plaintiffs’ pay was tied, in part, to the number of hours work, the per diem payments should have been included in determining the employees regular pay rate for overtime calculation purposes.

Comments:  This opinion cogently summarizes the rules applicable to determining when per diem payments can be excluded from the regular rate calculation.  The Court relies, in part, on the DOL Field Operations Handbook.

Perez v. Lorraine Enterprises, Inc., 769 F.3d 23 (1st Cir. Oct. 1, 2014).

Holding:  Restaurant violated FLSA by failing to provide servers with advance notice that it utilized the “tip credit” to satisfy its minimum wage obligation.

Comments:  Most notably, the Court’s rejected the restaurant’s argument that the servers were sufficiently put on notice of the tip credit based on the content of their pay stubs.

Second Circuit

 

Beaulieu v. Vermont, 807 F.3d 478 (2d Cir. Sept. 16, 2015)

Holding:  State of Vermont enjoyed general sovereign immunity from FLSA lawsuit and did not waive such immunity by removing FLSA lawsuit to federal court.

 

Comments:  This case contains a good discussion of the two distinct types of immunity that potentially apply to state employers: (i) immunity from federal court lawsuits stemming from the Eleventh Amendment and (ii) the broader concept of sovereign immunity.  The Court explains that, when a state removes an FLSA lawsuit from federal to state court, it waives the former but not the latter.

 

Brown v. New York City Department of Education, 755 F.3d 154 (2d Cir. June 18, 2014)

Holding:  Individual who performed volunteer work at public school for a three-year period was not an employee covered by the FLSA.

Comments:  Why this relatively sophisticated plaintiff would continuously work for three years without pay seems puzzling.  The facts are so extreme that this case is easily distinguishable from any case you may file.

Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2d Cir. Aug. 17, 2015)

 Holding:  FLSA lawsuits cannot be settled through a private stipulated dismissal pursuant to Federal Rule of Civil Procedure 41.  Rather, FLSA settlements must be approved by the district court or the Department of Labor.

 

Comments:  This holding is consistent with holdings and dicta from hundreds of district court decisions from throughout the country.  However, a handful of New York district courts were going against the grain by suggesting that small FLSA lawsuits could be settled and dismissed without court approval.  In Cheeks, the Second Circuit rejects such reasoning.

 

Chen v. Major League Baseball Properties, Inc., 798 F.3d 72 (2d Cir. Aug. 14, 2015)

 Holding:  Baseball fans who volunteered to work at Major League Baseball’s five-day “Fan Fest” not entitled to minimum wage and overtime pay because the Fan Fest is covered by the FLSA’s exemption for amusement or recreation establishments.  See 29 U.S.C. § 213(a)(3).

 

Comments:  The Court engaged in some fancy footwork to reach this holding.  But do we really expect judges to award money to baseball fans who volunteer at professional baseball festivities?

 

Glatt v. Fox Searchlight Pictures, Inc., 791 F.3d 376 (2d Cir. July 2, 2015)

Holding:  Reversed summary judgment entered in favor of unpaid interns who alleged that they were FLSA “employees” for their work on the Black Swan movie.  The Court rejected the six-part test endorsed by the Wage and Hour Division of the Department of Labor.  Instead the Court endorsed a more flexible test focused on “whether the intern or the employer is the primary beneficiary of the relationship” based on an analysis of seven “non-exhaustive” factors.  Case remanded to district court to review the facts based on the newly-adopted test.

 

Comments:  This very significant holding will make it more difficult for unpaid interns to prove that they are covered employees under the FLSA.  The holding recently was followed by the Eleventh Circuit in the Schulman decision discussed infra.  It will be interesting to see if another appellate court creates circuit-split enabling Supreme Court review.

 

Gortat v. Capala Brothers, Inc., 795 F.3d 292 (2d Cir. June 16, 2015)

Holding:  Prevailing plaintiff cannot recover expert fees under FLSA’s fee/cost-shifting provision, 29 U.S.C. § 216(b).

 

Comments:  This holding is unsurprising, but it is nice that the Circuit wrote this brief opinion clarifying the law.

 

Greathouse v. JHS Security, Inc., 784 F.3d 105 (2d Cir. April 20, 2015)

Holding:  Under USSC’s 2011 Kasten decision, FLSA retaliation claim can be predicated on oral complaint to employer. Previous Second Circuit authority to contrary overruled.

Comments:  This case provides a  nice summary of the FLSA’s anti-retaliation provision and exemplifies the impact of Kasten going forward.

Hill v. Delaware North Companies Sportservice, Inc., 838 F.3d 281 (2d Cir. Oct. 13, 2016)

Holding:  Company that ran the concession stands at the Baltimore Orioles’ ballpark not required to pay overtime because it fell within the “amusement or recreational establishment” exemption described at 29 U.S.C. § 213(a)(3).

Comments:  This exemption clearly applies to the baseball team.  Here, the court extensively reviewed that statutory/regulatory language, the pertinent DOL guidance, and the legislative history to determine that the exemption also extends to concessionaires and other companies that contract to provide services at the ballpark. However, these contractors must themselves satisfy the exemption’s requirement that they either (i) operate for less than seven months per year or (ii) earn less than 33.3% of their annual receipts during a six-month period.

Holick v. Cellular Sales of New York, LLC, 802 F.3d 391 (2d Cir. Sept. 22, 2015)

 Holding:  Workers asserting that, under the FLSA, they were misclassified as contractors rather than employees not required to arbitrate the dispute because the arbitration agreement did not apply retroactively.

 

Comments:  This decision turns on the specific language of the pertinent contract provisions and is unlikely to have much precedential impact.  But it is a good reminder that the purported “rule” that arbitration is favored under the Federal Arbitration Act does not override contract language stating otherwise.

Parada v. Banco Industrial de Venezuela, C.A., 753 F.3d 62 (2d Cir. Mar. 25, 2014)

Holding:  Plaintiff not entitled to equitable tolling back to the time she filed her administrative overtime complaint with DOL.

Comment:  This unsurprising decision demonstrates the risks that workers take when they rely on DOL’s investigative process – rather than trial lawyers – to recover back wages.

Perez v. City of New York, 832 F.3d 120 (2d Cir. Aug. 2, 2016)

Holding:  District court improperly granted summary judgment against park rangers who sought compensation for time associated with the donning and doffing of uniforms.

Comments:  This is an interesting opinion because it represents a pro-plaintiff application of the Supreme Court’s recent holding in Integrity Staffing Solutions, Inc. v. Busk, 135 S. Ct. 513 (2014), that, under the FLSA’s Portal-to-Portal amendments, an activity is “integral and indispensable” to a “principal activity,” and therefore compensable, “if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.”  The court holds that the rangers’ uniform changing activities might qualify as “integral and indispensible” under this standard.  Moreover, in the wake of Busk, the court limits the impact of Gorman v. Consolidated Edison Corp., 488 F.2d 586 (2d cir. 2007), which had been the leading Second Circuit case on what’s “integral and indispensible.”  Gorman is a troubling opinion that has been a thorn in the side of plaintiffs’ lawyers for years.  While Busk is not very good for workers, Gorman is even worse.  This case demonstrates how, within the Second Circuit, trading Gorman for Busk probably is a good exchange.

Pippins v. KPMG LLP, 759 F.3d 235 (2d Cir. July 22, 2014)

Holding:  Salaried, non-CPA accountants at large accounting firm are covered by the learned professional exemption.

Comment:  This holding follows a trend of decisions finding staff accountants to be exempt.  It seems like judges perceive these types of well-educated employees as merely “paying their dues” before moving up the corporate ladder.  Also, the opinion contains a good discussion of the differences between the administrative exemption and the professional exemption and demonstrates how white-collar employees can be exempt professionals even though they do not engage in the type of managerial decision-making required under the administrative exemption.   

Third Circuit

Babcock v. Butler County, 806 F.3d 153 (3d Cir. Nov. 24, 2015)

Holding:  Third Circuit adopts the “predominant benefit test” for determining whether time spent during a meal break is compensable under the FLSA.  This test entails a “necessarily fact-intensive inquiry” and requires courts to “assess[] the totality of the circumstances to determine, on a case-by-case basis, to whom the benefit of the meal period inures.”  In an unnecessarily confusing opinion, the Court characterized the predominant benefit test in two different ways:  (i) the test “asks ‘whether the officer is primarily engaged in work-related duties during meal periods;’” and (ii) the test’s “essential consideration” asks “whether the employees are in fact relieved from work for the purpose of eating a regularly scheduled meal;’”  The Court “eschewed a literal reading” of the pertinent Department of Labor regulation, which requires that “[t]he employee must be completely relieved from duty for the purposes of eating regular meals” and that “[t]he employee is not relieved if he is required to perform any duties, whether active or inactive, while eating.”  29 C.F.R. § 785.19(a).

Comments:  This opinion is disappointing.  The Circuit had an opportunity to provide clear guidance on when meal breaks are compensable.  Instead, we are left with a wishy-washy legal standard that is characterized differently within the opinion.  What seems clear, however, is that 29 C.F.R. § 785.19(a) is inapplicable within the Third Circuit.  This case reminds me of the Seventh Circuit’s recent opinion in Alvarado v. Corporate Cleaning Services, Inc., 782 F.3d 365 (7th Cir. April 1, 2015), discussed infra.  In both opinions, the Judges seem to be heavily influenced by the fact that the workers were unionized, which means that the purported FLSA violation (i) was tolerated by the unions (possibly in exchange for other employee benefits) and (ii) could be addressed during the next round of collective bargaining.  As I have said many times, it is extremely difficult to win FLSA cases on behalf of unionized workers, and plaintiffs’ lawyers really need to think twice before filing such cases.  

Davis v. Abington Memorial Hospital, 765 F.3d 236 (3d. Cir. Aug. 26, 2014)

Holding:  (1) Plaintiff asserting FLSA overtime claim “must sufficiently allege forty hours of work in a given workweek as well as some uncompensated time in excess of the forty hours” but is not required to “identify the exact dates and times that she worked overtime.”  (2) Absent a minimum wage violation, the FLSA does not permit employees to recover damages for “gap-time” (unpaid hours worked under the 40-hour threshold).

Comments:  The Court endorses a pleading requirement that does not seem very onerous to meet.  Also, the “gap time” holding is unsurprising.

Halle v. West Penn Allegheny Health System Inc., 842 F.3d 215 (3d Cir. Nov. 18, 2016)

Holding:  Opt-in plaintiffs may not appeal from district court order decertifying FLSA collective; thus, if the originating plaintiff settles or accepts a Rule 68 offer after the decertification decision, opt-ins have no avenue for appealing the decertification decision.

Comments:  Although this is an unfavorable outcome, the Court’s opinion includes some nice (and helpful) discussion of the collective action mechanism.  First, there’s a good discussion about the benefits of collective actions to the judicial system (avoidance of duplicative actions) and workers (pooling of resources).  Second, the Court explains that decertification merely results in dismissal of an opt-in’s FLSA claim without prejudice to file an individual case.  Third, the Court explains that, while opt-ins enjoy “party-status” upon joining the collective, they also are “passive observers” without any right to control the litigation.  Fourth, while the Court does not explicitly endorse representative discovery, there’s a nice passage where the Court states that collective actions “frequently” entail representative discovery and provides some examples of sampling.

Mazzarella v. Fast Rig Support, LLC, 823 F.3d 786 (3d Cir. May 23, 2016)

 

Holding:  Drivers who drove intrastate transporting  water to and from fracking wells within Pennsylvania not covered by the motor carrier exemption.

Comments:  The motor carrier exemption requires that the drivers “engage in activities of a character directly affecting the safety of operation of motor vehicles . . . in interstate commerce.”  29 C.F.R. § 782.2(a).  In cases involving drivers who transport products in commercial motor vehicles, this requirement usually is satisfied because the products themselves are part of the “stream” of interstate travel.  In this case, however, the drivers were able to convince the court that fracking water is not such a product because it is not part of a “practical continuity of movement” across state lines.  The Third Circuit describes various factors to be considered in addressing the “practical continuity of movement”. These include: the extent to which the product “pauses” in-state before reaching its final destination; whether the product is altered before heading out of state; the employer’s intent at the time of transport; and whether the employer’s business “involve[s] an integrated system of interstate shipments.”

 

McMaster v. Eastern Armored Services, Inc., 780 F.3d 167 (3d Cir. Mar. 11, 2015)

 

Holding:  Under the SAFETEA-LU Technical Corrections Act of 2008, employee who spent approximately 50% of her time driving vehicles weighing less than 10,000 pounds is not covered by the FLSA’s motor carrier exemption and is entitled to overtime premium pay.

Comments:  This is a significant opinion that rejects the flimsy reasoning of several district courts from around the country.  Under this opinion, many drivers who work for “mixed-fleet” employers are entitled to overtime premium pay.

Opalinski v. Robert Half International Inc., 761 F.3d 326 (3d Cir. July 30, 2014)

Holding:  Where an FLSA claim is covered by an arbitration agreement that does not clearly indicate whether the worker waived her right to pursue the claim as a collective action, the federal judge – not the arbitrator – determines whether class-wide arbitration is permissible.

Comments:  This represents the majority view, although this issue may eventually make it to the Supreme Court.

 

Resch v. Krapf’s Coaches, Inc., 785 F.3d 869 (3d Cir. May 12, 2015)

 Holding:  Bus/shuttle drivers who never actually drove across state lines fell under the FLSA motor carrier exemption’s requirement that employees be engaged “in activities of a character directly affecting” interstate commerce because they “reasonably could have expected to drive interstate.”

 

Comments:  The Court takes an expansive view of the motor carrier exemption, looking well beyond the actual work experiences of the plaintiffs and placing significant – and, some might say, too much – emphasis on whether the company services interstate routes.

Rosano v. Township of Teaneck, 754 F.3d 177 (3d Cir. June 10, 2014)

Holding:  (1) Governmental “law enforcement” or “fire protection” agency can calculate overtime damages using FLSA Section 7(k) methodology even if the agency did not contemporaneously intend to utilize a Section 7(k) “work period” in paying workers.  (2) Police officer uniforms constitute “clothing” under FLSA Section 3(o).

Comments:  Neither holding is too surprising.  The Section 7(k) analysis is a must-read before you file an overtime rights case on behalf of police officers, prison guards, or firefighters.

Smiley v. E.I. DuPont De Nemours & Co., 839 F.3d 325 (3d Cir. Oct. 7, 2016)

Holding:  In an FLSA action alleging off-the-clock work, an employer that pays workers for some or all of their meal breaks may not use such payments to “offset” overtime wages otherwise owed for uncompensated hours.

Comments:  This is a very nice opinion and contains a good (albeit technical) discussion of FLSA “regular rate” principles, the types of extra payments that must be included in the regular rate calculation, and the types of payments that may be used to “offset” underpayments.  The court strictly limits offsets to the three types of extra payments specifically described at 29 U.S.C. § 207(e)(5)-(7).

Thompson v. Real Estate Mortgage Network, 748 F.3d 142 (3d Cir. Apr. 3, 2014)

Holding:  Employees adequately pled that: (i) two companies were joint employers under FLSA; (ii) one of the companies could be liable under the FLSA as a “successor in interest”; and (iii) two corporate executives could be individually liable under FLSA.

Comments:  This opinion contains good language explaining that, at the pre-discovery pleadings stage, plaintiffs are not expected to have access to the type of detailed, intra-company information necessary to fully address the joint-employment, successor liability, and individual liability factors. A more thorough and recent discussion of joint employment principles can be found in the Hill opinion, which is discussed in the Fourth Circuit section of this paper.

 Fourth Circuit

 

Amaya v. Power Design, Inc., 833 F.3d 440 (4th Cir. Aug. 15, 2016)

Holding:  Workers employed on federally-funded projects covered by the Davis-Bacon Act (“DBA”) and the Contract Work Hours and Safety Standards Act (“CWHSSA”) are not prohibited from filing an overtime rights lawsuit under the FLSA.

Comments:  Neither the DBA nor the CWHSSA allow workers to bring a private lawsuit.  But, as the Court explained, this has no bearing on their right to bring an overtime rights lawsuit under the FLSA.  And when they do, the prevailing rate under the DBA and the CWHSSA is the “regular rate” to be used in calculating overtime premium pay.

Calderon v. GEICO General Insurance Co., 809 F.3d 111 (4th Cir. Dec. 23, 2015)

Holding:  District court properly found that: (i) insurance claims investigators were not covered by the administrative exemption; (ii) the violation was not “willful” and, therefore, a two-year limitations period applied and liquidated damages were not warranted; (iii) because the investigators’ salaries covered all work hours, Overnight Motors Transportation Co. v. Missel, 316 U.S. 572 (1942), requires that damages be calculated under the half-time methodology; and (iv) prejudgment interest is mandatory under the FLSA..

Comments:  The administrative exemption requires that the employee has the “primary duty of the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers.”  29 C.F.R. § 541.200(a)(2).  The court conducts a very extensive analysis of this requirement and concludes  that the authorities “indicate that employees whose primary duty is to conduct factual investigations do not satisfy the directly related element.”  The court’s additional holdings regarding “willfulness,” the Missel half-time issue, and prejudgment interest are unsurprising but worth reading for a good summary of the law in these areas.

 

Cruz v. Maypa, 773 F.3d 138 (4th Cir. Dec. 1, 2014)

Holding:  Plaintiff’s FLSA claim was equitably tolled because her employer failed to conspicuously post notice of employees’ FLSA-rights as required by 29 C.F.R. § 516.4.

Comments:  A nice decision. The plaintiff, an immigrant laborer, had been severely exploited and was sympathetic.  The Court explains: “absent a tolling rule, employers would have no incentive to post notice since they could hide the fact of their violations from employees until any relevant claims expired.”

Hall v. DIRECTV, LLC, 846 F.3d 757 (4th Cir. Jan. 25, 2017)

Holding:  Satellite dish installers seeking overtime pay and alleging that they were misclassified as non-employee independent contractors adequately pled that DIRECTV and DirectSat (which contracted with DIRECTV to provide dish installation services “through a web of agreements with various affiliated and unaffiliated service providers”) could be liable under the FLSA as joint employers.

Comments:   This important opinion will be discussed during the program.  The Fourth Circuit has been very, very good lately.  If wage and hour lawyers were hipsters, the Fourth Circuit would be Brooklyn.  This opinion clarifies the confusion that arises when a purported independent contractor seeks to recover against two or more joint employers.  Such cases require two separate “employment” inquiries, and, in this opinion, the court describes the order in which the inquiries should unfold.  The first step is to focus on whether the two defendants are joint employers with respect to the type of work performed by the plaintiff.  This requires the court to consider six non-exhaustive factors.  If the defendants are in a joint employment relationship with each other, the court turns to the second step, which entails analyzing if the plaintiff is an employee (rather than a non-employee contractor) under the familiar six-factor “economic reality” test.  Crucially, the economic reality test asks whether the two defendants’ “combined influence over the terms and conditions of the worker’s employment render the worker an employee as opposed to an independent contractor.”  In other words, once the defendants have been found to be in a joint employment business relationship, the plaintiff does not have to prove that each defendant independently employed him as a matter of economic reality.  This is a very important concept, and you probably will need to read the opinion more than once to fully absorb its analytical significance to “fissured employment” cases.  Finally, the court includes some good language stating that Rule 12(b)(6) dismissals should be rare in fissured employment cases because (i) the plaintiffs, in the absence of discovery, cannot be expected to understand the particulars of the purported joint employers’ business relationship and (ii) the cases entail the weighing of multiple factors.          

Harbourt v. PPE Casino Resorts Maryland, LLC, 820 F.3d 655 (4th Cir. April 25, 2016)

Holding:  Newly hired casino dealers adequately pled an FLSA claim that the time they spent in dealer “training school” was compensable work.

Comments:  The court explains that, in FLSA training time cases, it is important to determine whether the employer or the employee is the “primary beneficiary” of the training.  This concise opinion is consistent with other recent Fourth Circuit opinions slapping down improvidently granted motions to dismiss.

Martin v. Wood, 772 F.3d 192 (4th Cir. Nov. 18, 2014)

Holding:  Supervisors at state-owned hospital enjoyed Eleventh Amendment immunity from FLSA lawsuit because their allegedly illegal conduct was “inextricably tied to their official duties.”

Comments:  It is well-established in the Fourth Circuit that the Eleventh Amendment protects from FLSA lawsuits both state defendants and individual defendants acting in their “official capacities.”  In this opinion, the Court makes it difficult for plaintiffs to circumvent this rule by simply labeling the suit as being filed against a defendant in his/her “individual capacity.”

McFeeley v. Jackson Street Entertainment, LLC, 825 F.3d 235 (4th Cir. June 8, 2016)

Holding:  (1) Affirming jury finding that exotic dancers misclassified as non-employee independent contractors under the FLSA; (2) Adult entertainment club cannot apply performance fees or tips to offset its failure to pay the minimum wage.

Comments:  This outcome is consistent with many recent decisions in which judges reject the notion that exotic dancers are independent contractors.  Here, the district court presided over a jury trial and instructed the jury on the well-known “economic realities” test to the evidence presented.  The Circuit Court’s decision contains a nice discussion of the 6 economic reality factors and provides a good outline of what you need to prove to win an exotic dancer case.  As importantly, the Court explains that a club seeking to use the FLSA “tip credit” provisions to satisfy its minimum wage obligations must actually pay the dancers $2.83/hour and must comply with the notice requirements imposed by the tip-credit rules.  Moreover, “performance fees” cannot qualify as “service charges” that offset minimum wage payments unless they are included in the club’s gross receipts (which never is the case).

Morrison v. County of Fairfax, VA, 826 F.3d 758 (4th Cir. June 21, 2016)

Holding:  Fire Captains are not covered by the executive or administrative exemptions because their primary duty was emergency response.

Comments:  This opinion has a very good discussion of 29 C.F.R. § 541.3(b), which the Bush Administration included in the 2004 re-write of Part 541 in order to ensure that police and firefighters – unlike many other employees – did not lose their right to overtime pay.  The regulation provides that, “regardless of rank or pay level,” overtime pay must be paid to first responders “who perform work such as preventing, controlling or extinguishing fires of any type; rescuing fire, crime or accident victims; . . . or other similar work.”

 

Salinas v. Commercial Interiors, Inc., 848 F.3d 125 (4th Cir. Jan. 25, 2017)

Holding and Comments:  This is the companion case to Hall (discussed above) and was decided on the same day.  So see the Hall write-up regarding this import of this case.

Trejo v. Ryman Hospitality Properties, Inc., 795 F.3d 442 (4th Cir. July 29, 2015)

 Holding:  FLSA rules prohibiting restaurants from taking servers tips and restricting tip pooling do not apply where the restaurant does not rely on the tip credit to satisfy its minimum wage obligations to servers.

 

Comments:  This decision followed the Ninth Circuit’s holding in Crumbie v. Woody Woo, Inc., 596 F.3d 577 (9th Cir. 2010).  But, note the conflict with the Ninth Circuit’s more recent ruling in the February 2016 decision in Oregon Restaurant and Lodging Ass’n v. Perez, which is discussed in the Ninth Circuit section of this paper.

Williams v. Genex Services, LLC, 809 F.3d 103 (4th Cir. Dec. 18, 2015)

Holding:  Medical Case Managers – who were registered nurses making over $80,000 to analyzed medical costs on behalf of worker’s compensation insurance companies – were overtime-exempt under the FLSA’s professional exemption.

Comments:  This case stands for the proposition that judges do not like awarding overtime pay to well-educated employees who are paid a lot of money.  And the white collar exemptions are so subjective that the judge can easily rule against these well-paid employees in deciding summary judgment.  Be very careful about filing cases like this.

 

Fifth Circuit

   

Allen v. Coil Tubing Services, L.L.C., 755 F.3d 279 (5th Cir. June 13, 2014)

Holding:  In deciding whether employees are sufficiently engaged in “safety-affecting interstate activities” to be covered by the FLSA motor carrier exemption, courts are not necessarily required to analyze each employee’s individual work experience.

Comments:  We probably have not seen the last of this important issue, as indicated by Judge Dennis’ scholarly dissent.  However, the Third Circuit’s recent opinion in Resch, discussed supra, is consistent with the majority’s view.

Bodle v. TXL Mortgage Corp., 788 F.3d 159 (5th Cir. June 1, 2015)

 Holding:  Release of FLSA claims stemming from private settlement of state court action that did not involve wage and hour claims does not prohibit plaintiff from filing subsequent FLSA lawsuit in federal court.

 

Comments:  This holding follows the general rule – also addressed in the Second Circuit’s Cheeks decision discussed supra – that FLSA settlements must be approved by either the court or the DOL.

 

Coffin v. Blessey Marine Services, Inc., 771 F.3d 276 (5th Cir. Nov. 13, 2014)

Holding:  Vessel-based tankermen covered by FLSA’s seaman exemption.

Comments:  The Court accepted this interlocutory appeal after the employer’s summary judgment motion was denied.  In refusing to follow previous decisions that workers who load and unload cargo from ships are not covered by the seaman exemption, the Court emphasized that these particular plaintiffs lived on the vessel.

Fairchild v. All American Check Cashing, Inc., 815 F.3d 959 (5th Cir. March 18, 2016)

Holding:  An employee who sought to recover overtime pay for a handful of overtime hours during a two week period in which she was training barred from recovery because she “intentionally failed” to report her overtime work and “deliberately evade[d] the company’s timekeeping policies.

Comments:  The FLSA claim was a small part of this case. I don’t think this very fact-specific holding will have much precedential value.

Johnson v. Heckmann Water Resources, Inc., 758 F.3d 627 (5th Cir. July 14, 2014)

Holding:  In determining overtime pay, employers may utilize a recurring, seven-day workweek that does not coincide with the employees’ work schedule.

Comments:  This decision is based on well-established regulations and is entirely unsurprising.  Decision contains a concise recitation of the seven-day workweek rule and the pertinent regulations.

Montano v. Montrose Restaurants Associates, Inc., 800 F.3d 186 (5th Cir. Aug. 28, 2015)

 Holding:  Application of the rule that customer tips cannot be shared with employees who do not “customarily and regularly receive tips,” 29 U.S.C. § 203(m), requires the court to assess the extent of the tip recipient’s “customer interaction.”

 

Comments:  This decision follows the recent trend of decisions addressing this thorny issue and, in my view, contains the most cogent analysis of the issue. This holding can be used to argue that restaurant “expediters” may not participate in the tip pool.

 

Naylor v. Securiguard, Inc., 801 F.3d 501 (5th Cir. Sept. 15, 2015)

 Holding:  In determining whether company excused from paying employees for time expired during a “bona fide meal periods” of over 20 minutes, see 29 C.F.R. §§ 785.18-19, courts should subtract time attributable to activities that did not “predominantly benefit” the employees.

 

Comments:  This decision contains a good discussion of basic meal break regulations and principles.  It also is refreshing to see a district court reversed for failing to allow the jury to decide disputed facts regarding the extent and nature of unpaid work activities.

Olibas v. Barclay, 838 F.3d 442 (5th Cir. Sept. 20, 2016)

Holding:  (1) Jury verdict finding that sand hauling drivers not covered by the FLSA motor carrier exemption affirmed.  (2) Jury permitted to rely on representative testimony to estimate unpaid work hours in collective action.

Comments:  This is a good result. The motor carrier exemption requires that the drivers “engage in activities of a character directly affecting the safety of operation of motor vehicles . . . in interstate commerce.”  29 C.F.R. § 782.2(a).  The court explained that, in analyzing this requirement, the jury must consider whether the drivers are “likely to be called upon in the ordinary course of [their] work to perform, either regularly or from time to time,” interstate driving or activities.  Also,  this opinion contains some nice passages about the permissibility of using representative testimony and averaging to estimate unpaid work hours where the employer fails to maintain adequate records.

 

Orozco v. Plackis, 757 F.3d 445 (5th Cir. July 3, 2014)

Holding:  (1) Owner of franchisor is not a covered employer with respect to FLSA claims of an employee of the franchisee.

Comments:  In my view, this decision exemplifies “conservative judicial activism.”  The appellate panel overturned a jury verdict (and the district court’s decision endorsing the jury verdict) in which the franchisor’s owner was found liable based on the jury’s weighing of the “economic reality” factors.  It seems like the panel substitutes its own judgment for that of the jury.

Pineda v. JTCH Apartments, L.L.C., 843 F.3d 1062 (5th Cir. Dec. 19, 2015)

Holding:  (1) Damages for emotional pain and suffering are available in an FLSA retaliation case.  (2) Non-employee spouse may not bring FLSA retaliation claim.

Comments:  The Fifth Circuit now joins the Sixth and Seventh Circuits in allowing emotional pain and suffering in FLSA retaliation cases.  This is a good trend for plaintiffs.  The other holding – is that non-employees are prohibited from suing under the FLSA’s anti-retaliation provision in unsurprising.

Reyna v. International Bank of Commerce, 839 F.3d 373 (5th Cir. Oct. 4, 2016)

Holding:  District court faced with both  plaintiff’s motion for conditional certification and defendant’s motion to compel arbitration should decide the motion to compel arbitration first.

Comments:  This is an important issue that is popping up more and more.  The district court decisions go both ways, and few (if any) other circuit courts have addressed the issue.  Importantly, due to the language of the arbitration agreement’s delegation clause, the court’s holding does not prevent the arbitrator from conditionally certifying the FLSA collective.  So this holding would not have been too prejudicial to the workers.

Richardson v. Wells Fargo Bank, N.A., 839 F.3d 442 (5th Cir. Oct 14, 2016)

Holding:  Workers who were covered by and failed to exclude themselves from a state court class action settlement that included a waiver of FLSA claims were precluded from participating in a subsequent FLSA collective action.

Comments:  It will be interesting to see how this holding fares in other circuits.  Many judges take the position that, in private civil actions, workers must affirmatively join the collective (either during adversarial litigation or as part of a settlement claims process) in order to waive their FLSA claims.

Starnes v. Wallace, __ F.3d __, 2017 U.S. App. LEXIS 3399 (5th Cir. Feb. 24, 2017)

Holding:  (1) District court erred in deciding summary judgment against management-level employee who complained that a co-worker’s FLSA rights were being violated.  (2) FLSA retaliation plaintiff can recover emotional damages.

Comments:  The court’s analysis is similar to the analysis in Rosenfield, which is discussed in the Ninth Circuit section of this paper.  Management-level employees’ complaints are most likely to succeed as predicates for FLSA retaliation claims when FLSA compliance is outside of the employees’ job responsibilities.  The court also includes a good discussion of the burden-shifting causation analysis applicable to FLSA retaliation claims.  Finally, the court follows Pineda (discussed above) to hold that emotional damages are available in an FLSA retaliation lawsuit.

Steele v. Leasing Enterprises, Ltd., 826 F.3d 237 (5th Cir. June 14, 2016)

Holding:  When a restaurant taking a tip credit to satisfy its minimum wage obligations withholds a portion of the server’s tips received by credit card, such withholdings must be limited to the expense actually associated with collecting the credit card tips.

Comments:  This is a very good opinion.  With the exception of a valid “tip pooling” arrangement, restaurants benefiting from a tip credit must ensure that “all tips received by [the servers] have been retained by [the servers].”  29 U.S.C. § 203(m).  The court basically holds that this rule is violated when withholdings for credit card tips go beyond the fees actually charged by the credit card company.  The court also finds that liquidated damages and a three-year limitations period was not required due to a lack of “willfulness.”

Sixth Circuit

Barks v. Silver Bait, LLC, 802 F.3d 856 (6th Cir. Oct. 2, 2015)

 Holding:  Workers at worm farm covered by FLSA’s agricultural exemption, 29 U.S.C. § 213(b)(12).

 

Comments:  After substantial statutory and regulatory analysis, the court reasons that “[t]he raising and growing of bait worms – at least as practiced by Silver Bait – shares much in common with traditional farming.”  So now you know.

Craig v. Bridges Brothers Trucking LLC, 823 F.3d 382 (6th Cir. May 19, 2016)

Holding:  District court erred in issuing summary judgment against employee who purportedly “waived” her right to overtime “by not immediately claiming is.”

Comments:  This is another good decision (see also Rosenfeld in Ninth Circuit section and Bailey in Eleventh Circuit section) in which a circuit rejects the notion that workers can waive or be estopped from asserting FLSA claims by failing to affirmatively seek additional pay or complain about the unpaid hours.  The court observes that these notions of “waiver” or “estoppel” cannot be squared with the rule that workers cannot agree to FLSA violations.  The relevant question is whether the company has actual or constructive knowledge of the unpaid work.  In other words, did the company “know or have reason to believe” the work was being done?  The company can be liable if it “should have discovered [the unpaid work] through the exercise of reasonable diligence.”

 

Keller v. Miri Microsystems LLC, 781 F.3d 799 (6th Cir. March 26, 2015)

Holding:  Under “economic realities” test, jury could reasonably find that satellite dish installers are employees rather than independent contractors.  Also, where company fails to maintain time records, worker can prove his overtime hours through imprecise testimony.

Comments:  This is a significant decision that demonstrates how judges are becoming very skeptical of the independent contractor business model.  For example, outside of the FLSA context, we have seen many similar holdings from circuit courts considering whether FedEx delivery drivers are employees under state wage statutes.  See, e.g., In re. FedEx Ground Package System, Inc. Employment Practices Litig., 729 F.3d 818 (7th Cir. 2015) (drivers are employees under Kansas wage laws); Slayman v. FedEx Ground Packaging System, Inc., 765 F.3d 1033 (9th Cir. 2014) (same under Oregon wage laws); Alexander v. FedEx Ground Packaging System, Inc., 765 F.3d 981 (9th Cir. 2014) (same under California wage laws).

Killion v. Kehe Distributors, 761 F.3d 574 (6th Cir. July 30, 2014)

Holding:  District court improperly entered summary judgment against salaried sales representatives under FLSA’s outside sales exemption, where the sales representatives’ responsibilities include, inter alia, delivering products to retail stores, stocking shelves, and facilitating the automatic re-ordering process.

Comments:  It’s nice to see a reversal of summary judgment in an FLSA misclassification case.  The appellate court recognized that, based on the disputed evidence, a reasonable jury could find that the sales representatives’ primary duty was not “making sales.”  The decision contains a good discussion of what types of activities are “incidental” to making sales.

Lutz v. Huntington Bancshares, Inc., 815 F.3d 988 (6th Cir. March 2, 2016)

Holding:  District court did not err in entering summary judgment ruling that residential loan underwriters “were administrative employees within the meaning of 29 U.S.C. § 213(a)(1) and 29 C.F.R. § 541.200(a), and therefore exempt from the overtime-pay provisions because their job duties related to the general business operations of the Bank, and they exercised discretion and independent judgment when performing those duties.”

Comments:  This is a split decision.  The majority surveys the various administrative exemption decisions involving loan underwriters, and that discussion is worth reading.  The dissent convincingly argues that disputed facts regarding the administrative exemption requirements should preclude summary judgment.  Administrative exemption cases are just very tough.  The requirements described in 29 C.F.R. § 541.200, et seq., are elusive and almost always can “go either way.”  The more administrative exemption cases I read, the more I become convinced that the outcomes are almost always “results-oriented.”

Michigan Corrections Organization v. Michigan Department of Corrections, 774 F.3d 895 (6th Cir. Dec. 17, 2014)

Holding:  (1) State Department of Corrections is constitutionally immune from FLSA liability.  (2) Neither FLSA nor any other theory provides a private right of action for plaintiffs to seek injunctive relief against the Department’s Director in his individual capacity.

Comments:  Judge Sutton’s scholarly opinion contains a good discussion of the constitutional limits of the FLSA.  Very heady stuff.

Misewicz v. City of Memphis, 771 F.3d 332 (6th Cir. Nov. 14, 2014)

Holding:  Municipal paramedics’ training time is not compensable under FLSA.

Comments:  This decision contains a good discussion to the rules applicable to determining whether municipal employee training time is compensable.  The Court explains that, in refusing to pay for training time, a municipality is only required to satisfy 29 C.F.R. § 553.226(b) and is not required to also satisfy 29 C.F.R. § 553.226(a) (which applies to private employers).  Here, the paramedics were not entitled to be paid for their training time because, under § 553.226(b)(1), the training was required for their state certifications.

Monroe v. FTS USA, LLC, 815 F.3d 1000 (6th Cir. March 2, 2016)

Holding:  (1) District court properly refused to “decertify” the FLSA collective.  (2) Use of “representative testimony” at trial for both damages and liability purposes was proper.  (3) It is permissible for the judge – rather than the jury – to calculate damages based on the jury’s findings regarding hours worked by the collective.

Comments:  This is a must-read for any lawyer facing a decertification motion or going to trial in an FLSA collective action.  The court’s denial of decertification is thorough and has a great discussion of the efficiencies fostered by the collective action device and the fact that the FLSA’s “similarly situated” analysis is less demanding than Rule 23(b)(3)’s commonality and predominance inquiries. The court’s discussion of representative testimony and approximating damages under Anderson addresses some of the same themes underlying the Supreme Court’s recent decision in Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2015).  But this opinion is not as cautious as Bouaphakeo. It is a very important case for plaintiffs’ lawyers to know and cite.

Moran v. Al Basit LLC, 788 F.3d 201 (6th Cir. June 1, 2015)

 Holding:  Where company allegedly failed to maintain accurate timekeeping records, plaintiff could rely entirely on his own testimony and recollection to prove the amount of his/her allegedly uncompensated time and precision is not required.  Summary judgment in favor of company reversed.

 

Comments:  This brief opinion applies and follows the Supreme Court’s seminal decision in Anderson v. Mount Clemens Pottery Co., 328 U.S. 680 (1946).  A very concise discussion of basic FLSA principles and another example of a district court getting slapped down for improvidently granting summary judgment.

 Perez v. D. Howes, LLC, 790 F.3d 681 (6th Cir. June 22, 2015)

 Holding:  District court’s properly held that cucumber pickers were employees rather than independent contractors under, inter alia, the FLSA.

 

Comments:  This one-page opinion simply adopts the district court’s analysis, which can be found at 7 F. Supp. 3d 715 (W.D. Mich. 2014).

Seventh Circuit

Alvarado v. Corporate Cleaning Services, Inc., 782 F.3d 365 (7th Cir. April 1, 2015)

Holding:  Window washers covered by 29 U.S.C. §207(i), which covers certain “commissioned” employees working at “retail or service establishment[s].”

Comments:  The outcome of this result-oriented opinion appears to be mostly driven by the fact that the window washers were unionized and reasonably well-paid and, therefore, not the type of workers who fit Judge Posner’s mold of needing the FLSA’s statutory protections.  The Court stretches mightily to find that piece-work pay can constitute commissions under the retail or service exemption.  The “unwritten” lesson of this case: unionized employees do not evoke much judicial sympathy in FLSA cases because judges expect the union to define and protect their wage rights through the collective bargaining process.

Bell v. PNC Bank, N.A., 800 F.3d 360 (7th Cir. Aug. 31, 2015)

 Holding:  Under Federal Rule of Civil Procedure 23, district court properly granted class certification in hybrid class/collective action asserting that PNC Bank maintained an “unofficial” policy of tolerating off-the-clock work at 26 Illinois retail branch locations.

 

Comments:  This opinion, written by Judge Rovner, will be cited by plaintiffs-side class action lawyers for many years to come.  The Court explains, inter alia, that: (i) employers cannot defeat class certification by merely relying on their “official” policies prohibiting off-the-clock work; (ii) class certification merely requires that some – not all – legal and factual issues be common to all class members; and (iii) class certification can be proper even if determining each class member’s amount of unpaid wages may require individualized damages trials/proceedings.

Berger v. NCAA, 843 F.3d 285 (7th Cir. Dec. 5, 2016)

Holding:  College athletes are not employees under the FLSA.

Comments:  Although this case got a lot of media attention, the outcome is unsurprising.  However, the court struggles to reach the result and, notably, avoids applying the multi-factor “economic reality” test to the case.  According to the court, determining employment under the FLSA is a fluid process, and “multifactor tests” that “fail to capture the true nature of the relationship” can be ignored.  The court then justifies the outcome by principally relying on (i) the “long tradition of amateurism in college sports” and (ii) guidance from the DOL Wage & Hour Division’s Field Operations Handbook, which the court characterizes as “persuasive” authority.  Finally, Judge Hamilton writes a concurrence suggesting that, in his view, the outcome might have been different if the plaintiffs were scholarship athletes playing revenue-generating sports (rather than members of an Ivy League college’s track and field team).

 

Callahan v. City of Chicago, 813 F.3d 658 (7th Cir. Feb. 17, 2016)

Holding:  City’s regulation of taxi cab industry does not place it in a joint employment relationship with the cab company.

Comments:  This is an oddball case that tries to stretch joint employment principles too far.  Judge Easterbrook disposes of the arguments in a short opinion.     

 

Driver v. Appleillinois, LLC, 739 F.3d 1073 (7th Cir. Jan 15, 2014)

Holding:  Restaurant’s petition for interlocutory appeal of class certification denied.

Comments:  I am including this opinion because, notwithstanding the above holding, the opinion relies to the DOL Wage & Hour Division’s Field Operations Handbook in discussing the rules for determining when a server’s non-tip-generating work is significant enough to result in the restaurant losing its right to utilize a tip-credit in satisfying its minimum wage obligations to the server.  This topic is addressed in the Fast decision, which is summarized in the Eighth Circuit section of this paper..

Gaines v. K-Five Construction Corp., 742 F.3d 256 (7th Cir. Jan. 3, 2014)

Holding:  Truck driver not entitled to compensation for purported pre-shift truck inspection work where he failed to offer any evidence that management knew or should have known he was performing such work.

Comments:  This opinion, which is primarily dedicated to non-FLSA issues, applies a well-established FLSA rule to some very case-specific facts.  Not too noteworthy.

Melton v. Tippecanoe County, 838 F.3d 814 (7th Cir. Sept. 22, 1016)

Holding:  In case alleging off-the-clock work, summary judgment properly entered against employee who failed to present any meaningful evidence that his uncompensated work exceeded 40 hours during any week.

Comments:  This is very fact-specific opinion and is not very consequential.  However, I do like the following line for use in future off-the-clock cases:  “Relying on the employee’s recollection is permissible given the unlikelihood that an employee would keep his own records of his work hours.”  

 

Mitchell v. JCG Industries, Inc., 745 F.3d 837 (7th Cir. Mar. 18, 2014)

Holding:  Under FLSA Section 3(o), unionized workers’ clothes-changing during unpaid meal breaks is not compensable.

Comments:  This controversial Judge Posner opinion drew a strong dissent from Judge Wood.  Later, a sharply-divided Seventh Circuit denied en banc review by a 6-4 vote, with Judge Williams issuing a strongly-worded dissent on behalf of herself and Judges Wood, Rovner, and Hamilton.  In essence, this decision extends the Supreme Court’s recent Sandifer holding into the meal break.  This is controversial because FLSA Section 3(o) always has been understood to be limited to activities at the beginning and end of the workday, not during meal breaks.  Anyway, before getting too excited about this opinion, it’s important to remember that (i) Section 3(o) only applies to unionized workplaces and (ii) it is questionable whether other Circuit Courts will be influenced by this decision in light of the dissenting voices within the Seventh Circuit.

Schaefer v. Walker Brothers Enterprises, Inc., 829 F.3d 551 (7th Cir. July 15, 2016)

Holding:  District court properly held that restaurant did not violate FLSA Section 3(m) tip credit rules or notice requirements.

 

Comments:   As discussed in other sections of this paper, the FLSA allows restaurants to utilize customer tips to satisfy a portion of their minimum wage obligations to servers.  See 29 U.S.C. § 203(m).  But several courts and the DOL have explained that a restaurant utilizing a tip credit may not require servers to spend more than 20% of their time performing non-tip producing work.  See, e.g., Fast v. Applebee’s Intl., Inc., 638 F.3d 872, 879-82 (8th Cir. 2011).  Here, after giving Auer deference to the Wage & Hour Division Field Operations Handbook section establishing the 20% rule, the court holds that plaintiff failed to establish that the rule was violated.  The opinion also contains a discussion of Section 3(m)’s mandate that workers subjected to a tip credit “be informed” of the tip credit.  The court explains that the notice requirement does not need to be detailed.  The server just needs to be told the extent to which the minimum wage will exceed her pay and that either tips will make up the difference or the restaurant will cover any shortage.

 

Smith v. Dart, 803 F.3d 304 (7th Cir. Sept. 25, 2015)

 Holding:  Inmates are not covered by the FLSA.

 

Comments:  The FLSA portion of this opinion merely applies a very well-established rule.

Eighth Circuit

Acosta v. Tyson Foods, Inc., 800 F.3d 468 (8th Cir. Aug. 26, 2015)

 Holding:  Named plaintiffs who originate FLSA collective actions must file with the court a consent form, and the originating plaintiff’s failure to do so required reversal of $19 million jury verdict.

 

Comments:  This is a brutally harsh outcome for the collective members and their lawyers.  Please do not forget to obtain and file a consent form from your originating plaintiff.

 

Alexander v. Tutle & Tutle Trucking, Inc., 834 F.3d 866 (8th Cir. Aug. 22, 2016)

Holding:  Drivers who hauled “frac sand” and rarely drove out of state were nonetheless covered by the FLSA’s motor carrier exemption.

Comments:  Like Resch (discussed in the Third Circuit section) this is a very harsh decision that adopts a broad reading of the FLSA’s motor carrier exemption.  The motor carrier exemption requires that the drivers “engage in activities of a character directly affecting the safety of operation of motor vehicles . . . in interstate commerce.”  29 C.F.R. § 782.2(a).  Usually, this requirement is easily satisfied because the goods being transported are, themselves, part of the stream of interstate travel.  Occasionally, however, the goods being transported are both picked-up and delivered within the state and have no connection to any interstate “stream.”  Such was the case here.  The plaintiffs were picking-up and delivering “frac sand” within the state of Arkansas.  Thus, for plaintiffs to fall within the motor carrier exemption, they needed to actually drive over state lines.  The court found that the plaintiffs’ were exempt because, even though they almost never drove over state lines, they could be required to do so based on their job duties.  Like the Third Circuit in Resch, the court read the de minimis rule in 29 C.F.R. 782.2(b)(3) as having almost no teeth.

 

Ash v. Anderson Merchandisers, LLC, 799 F.3d 957 (8th Cir. Aug. 21, 2015)

 Holding:  Plaintiffs who filed FLSA lawsuit against three separate companies failed to plead facts adequately demonstrating joint employment.

 

Comments:  Many plaintiffs’ lawyers unnecessarily name multiple defendants without having any actual evidence of joint employment and without having any strategic rationale for this aggressive tactic.  The better approach usually is to focus on the obvious employer, unless you have reason to believe that such employer cannot satisfy a judgment.  You can always amend later if discovery demonstrates a joint employer relationship.  Also, although the Circuit Court affirmed dismissal of the complaint, it also stressed that, at the pleadings stage, plaintiffs are not expected to have highly detailed knowledge of facts relevant to joint employment.

 

Beauford v. ActionLink, LLC, 781 F.3d 396 (8th Cir. March 20, 2015)

 

Holding:  “Brand Advocates” for electronics company were not covered by outside sales or administrative exemptions.  Also, plaintiffs do not waive their right to bring FLSA action by cashing backpay checks and signing waivers that were not directly supervised by DOL.

Comments:  This significant decision takes a narrow view of the exemptions at issue and has some good passages regarding what types of activities constitute “sales” activities under the outside sales exemption.

Bouaphakeo v. Tyson Foods, Inc., 765 F.3d 791 (8th Cir. Aug. 25, 2014), aff’d, 136 S. Ct. 1036 (2015).

  

Holding:  (1) District court correctly refused to decertify an FLSA collective of meat packers seeking to recover for donning, doffing, and walking times, even though the uncompensated time of some collective members may not have crossed the 40-hour overtime threshold.  (2) Plaintiffs are permitted to estimate “class-wide” damages based on the average amount of time a statistically valid sample of employees spent donning, doffing, and walking.

Comments:  This decision was affirmed by the Supreme Court in Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2015), which, of course, is required reading for anyone handling class or collective actions.

Conners v. Gusano’s Chicago Style Pizzeria, 779 F.3d 835 (8th Cir. Mar. 9, 2015)

Holding:  Where originating plaintiffs did not sign arbitration agreements, they lacked standing to challenge the validity of arbitration agreements signed by members of the putative FLSA collective who signed such agreements.

Comments:  Because this opinion is grounded in constitutional standing, it does not address the substantive arguments regarding the propriety of arbitration agreements that employers present to putative collective members after the commencement of an FLSA collective action.

Fezard v. United Cerebral Palsy of Central Arkansas, 809 F.3d 1006 (8th Cir. Jan. 5, 2016)

 Holding:  (1) Plaintiff who provided companionship services to client within plaintiff’s home was exempt under the FLSA’s companionship exemption.  (2) District court properly granted summary judgment against plaintiff with respect to her FLSA retaliation claim.

Comments:  The companionship exemption holding does not warrant any discussion because it was decided under the old regulations that are no longer in effect.  Under the current regulations, plaintiff would have been entitled to overtime.  The retaliation claim is not too notable and is very fact-specific.  The court found that temporal proximity, standing alone, could not get plaintiff to a jury in the face of evidence that her termination was based on significant workplace misconduct.

Garrison v. ConAgra Foods Packaged Foods, LLC, 833 F.3d 881 (8th Cir. Aug. 15, 2016)

 

Holding:  Team Leaders at food processing plant were properly classified as overtime-exempt executives.

Comments:  In this case, the parties stipulated that the company satisfied all of the executive exemption requirements except for 29 C.F.R. § 541.100(a)(4)’s requirement that the Team Leaders had “the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.”  The opinion has a good discussion of this requirement and then concludes that it was sufficient that each of the nine Team leaders were “personally involved in at least one personnel decision.”  This outcome is typical of the leniency given to employers in satisfying this requirement in the wake of the 2004 amendments to Part 541.

 

Gomez v. Tyson Foods, Inc., 799 F.3d 1192 (8th Cir. Aug. 26, 2015)

 Holding:  Named plaintiffs who originate FLSA collective actions must file with the court a consent form, and the originating plaintiff’s failure to do so required reversal of $5 million jury verdict.

 

Comments:  See above comments to the Eighth Circuit’s Acosta decision.

Grage v. Northern States Power Co., 813 F.3d 1051 (8th Cir. 2015)

Holding:  District court erred in granting summary judgment in favor of salaried employee who allegedly was misclassified as overtime-exempt.

Comment:  When summary judgment is granted in favor of the worker, conservative appellate judges can become great champions of the jury trial.  For example, the court instructs:  “When analyzing a potential FLSA exemption, ‘the amount of time devoted to [administrative] duties, and the significance of those duties, present factual questions.’”  Also, “‘[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.’”  (emphasis in original)

 Guyton v. Tyson Foods, Inc., 767 F.3d 754 (8th Cir. Aug. 25, 2014)

Holding:  District court did not commit reversible error during class/collective donning and doffing trial that resulted in a defense verdict in favor of Tyson Foods.

Comments:  The errors complained of by plaintiffs are case-specific and probably do not have much application to other cases.  Like Bouaphakeo, this case exemplifies that class/collective actions can be manageably tried to verdict.

Holaway v. Stratasys, Inc., 771 F.3d 1057 (8th Cir. Nov. 6, 2014)

Holding:  Plaintiff’s FLSA claim was properly dismissed on summary judgment because he failed to present any credible evidence that he worked over 40 hours in any week.

Comments:  This opinion is very fact-specific.  The Court recognizes the rule that, when an employer fails to maintain time records, the employee can prove his/her work hours by “just and reasonable inference.”  The Court then explains that the plaintiff failed to meet this relatively low standard.

Jackson v. Old PPT, LLC, 834 F.3d 872 (8th Cir. Aug. 23, 2016)

Holding:  Because the union and the battery plant had reached an “implied-in-fact” agreement that donning and doffing time would be non-compensable, FLSA Section 3(o) precluded the employees from recovering for such time.

Comments:  This opinion contains a good discussion of circumstances under which Section 3(o)’s “custom or practice” requirement can be satisfied in the absence of a collective bargaining agreement specifically mentioning the non-compensable time.  As in many of these cases, the union contradicted Plaintiffs counsels’ Section 3(o) argument by filing grievances alleging that the uncompensated time violated the CBA.

Lochridge v. Lindsey Management Co., Inc., 824 F.3d 780 (8th Cir. June 2, 2016)

 

Holding:  The FLSA does not prohibit a prevailing defendant from seeking and obtaining costs under Federal Rule of Civil Procedure 54(d).

Comments:  This holding is straightforward and unsurprising.  Note that this case has nothing to do with defendant’s attorney’s fees.

Madden v. Lumber One Home Center, Inc., 745 F.3d 899 (8th Cir. Mar. 17, 2014)

Holding:  Jury verdict that three lumber yard supervisors were overtime-exempt executives reversed, in part.

Comments:  At trial, the jury found that all three plaintiffs were overtime-exempt executives.  The Court affirms this verdict as to two of the supervisors.  However, the Court overturns the jury verdict with respect to one supervisor who, based on the evidence, played absolutely no role in personnel decisions.  The opinion contains some good language regarding the executive exemption’s requirement that a plaintiffs “suggestions and recommendations” regarding personnel decisions be “given particular weight.”

Perez v. Contingent Care, LLC, 820 F.3d 288 (8th Cir. April 7, 2016)

Holding:  (1) Custodial day care center qualified as a “preschool” for purposes of FLSA enterprise coverage.  (2) Day care workers adequately estimated their unpaid work hours as a matter of “just and reasonable inference” under Anderson v. Mount Clemens Pottery Co., 328 U.S. 680 (1946) and its progeny.

Comments:  The FLSA’s enterprise coverage provision makes “preschools” a covered “employer” even if the annual gross sales do not exceed $500,000.  See 29 U.S.C. § 203(s)(1)(B).  The court surveys the caselaw and some DOL opinion letters in holding that custodial daycare centers are the equivalent of “preschools,” and, therefore, are covered by the FLSA. Moreover, the application of Anderson to the ‘hours worked” analysis is standard fare.

Petroski v. H&R Block Enterprises, LLC, 750 F.3d 976 (8th Cir. May 5, 2014)

 

Holding:  H&R Block tax preparers are not employed by the company during the “off-season” and, as such, have no FLSA right to be paid for time spent attending off-season training courses.

Comments:   This was a big case, and the holding seems unfair.  But the Court’s reasoning is limited to “seasonal” employees required to perform unpaid work during their off-season.  Outside of the tax preparation arena, the opinions’ reach seems limited.

Romero v. Top-Tier Colorado, LLC, __ F.3d __, 2017 U.S. App. LEXIS 3996 (10th Cir. March 7, 2017)

Holding:  FLSA’s tip credit provision requires restaurants to pay tipped employees at least $2.83/hour, even if the servers tips, standing alone, exceed the $7.25/hour minimum wage.

Comments:  This holding is unsurprising, and any other approach would violate the plain language of 29 U.S.C. § 203(m).  Court includes a somewhat interesting discussion about the distinction between “wages” and “tips.”

Williams v. Central Transport Int’l, Inc., 830 F.3d 773 (8th Cir. July 28, 2016)

Holding:  Workers who spent substantial time loading tractor trailers are overtime-exempt under the motor carrier act exemption.

Comments:  This decision contains a good discussion of the rules for determining when “loaders” are covered by the MCA exemption.  Importantly, the court refuses to follow the portion of the DOL regulation requiring that the loader “exercise[e] judgment and discretion in planning and building a balanced load . . . .”  29 C.F.R. § 782.5(a)(2).  In the court’s view, all that matters is that the worker spend “a substantial part of his time” loading.

Ninth Circuit

Avila v. Los Angeles Police Department, 758 F.3d 1096 (9th Cir. July 10, 2014)

Holding:  Jury properly found that police officer’s termination was retaliatory under the FLSA.

Comments:  This opinion does not break any new ground and is very fact-specific.  It’s not too surprising that the plaintiff police officer – who was terminated shortly after testifying against the department in a federal FLSA trial – prevailed.

Balestrieri v. Menlo Park Fire Protection District, 800 F.3d 1094 (9th Cir. Sept. 4, 2015)

Holding:  (1)  Under Supreme Court’s recent Busk v. Integrity Staffing Solutions, Inc., 135 S. Ct. 513 (2014), time spent by firefighters at their assigned firehouse to gather certain firefighting gear was non-compensable under the FLSA’s Portal-to-Portal provisions, 29 U.S.C. § 254(a).  Because the firefighters were permitted to take such gear home with them – which would have eliminated the need to gather the gear at the firehouse – such activities were not “integral and indispensible” under their firefighting duties.  (2) Payments received by firefighters when employer “buys back” unused leave time is not be included in the “regular rate” calculation for overtime pay purposes.

 

Comments:  This is the first circuit court decision applying Busk, and the result is unsurprising.  Under Busk’s interpretation of the Portal-to-Portal act, preliminary and postliminary work activities are compensable only if they are an “intrinsic element” of the employee’s primary activities and if they are activities “with which the employee cannot dispense if he is to perform his principal activities.”  Also, the “regular rate” holding breaks no new ground.

Corbin v. Time Warner Entertainment, 821 F.3d 1069 (9th Cir. May 2, 2016)

Holding:  (1) A company’s “time rounding” practices are legal as long at than are neutral as to all employees in the aggregate, even if any single employee is slightly underpaid or overpaid.  (2) Plaintiff’s attempt to recover for one minute of uncompensated time was barred by the de minimis defense.  (3) A defendant’s failure to plead the de minimis defense as an affirmative defense does not result in a waiver of the defense.

Comments:  The circuit court rightfully seemed baffled that anyone would file suit for such miniscule amounts of unpaid time, and, indeed, the facts of this case are not worthy of discussion.  However, the circuit court’s opinion contains a good discussion of both the DOL’s time-rounding regulation and the de minimis doctrine.

Flores v. City of San Gabriel, 824 F.3d 890 (9th Cir. June 2, 2016)

Holding:  (1) In calculating overtime, the City’s payments for unused benefits must be included in the regular rate determination because such payments are not among the types of payments statutorily excluded from the regular rate, see 29 U.S.C. § 207(e).  (2) The City’s violation of the regular rates rules was willful, triggering a three-year limitations period and liquidated damages.  (3) City qualified for the partial overtime exemption available to law enforcement agencies and described at 29 U.S.C. § 207(k).

Comments:  This case has a good discussion of regular rate principles and “willfulness.”  However, if you ever represent law enforcement plaintiffs, you really should read the discussion of the Section 7(k) “partial exemption.”  This provision enables governmental employees to calculate overtime based on recurring periods other than a 7-day week and can result in seriously diminished overtime.

 

Landers v. Quality Communications, Inc., 771 F.3d 638 (9th Cir. Nov. 12, 2014)

 

Holding:  Plaintiff asserting an FLSA overtime claim “must allege that she worked more than forty hours in a given workweek without being compensated for the hours worked in excess of forty during that week.”  However, the plaintiff “may establish a plausible claim by estimating the length of her average workweek during the applicable period and the average rate at which she was paid, the amount of overtime wages she believes she is owed, or any other facts that will permit the court to find plausibility.”

 

Comments:  This opinion takes an approach that is similar to the Third Circuit’s approach in Davis (discussed above).  If you are interested in the FLSA pleading issue, this opinion includes a great survey of the various circuit court authority from throughout the country.

Navarro v. Encino Motorcars, LLC, 845 F.3d 925 (9th Cir. Jan. 9, 2017)

Holding:  Auto dealership “Service Advisors” not exempt under 29 U.S.C. § 213(b)(10)(A), which applies to “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.”

 

Comments:  The Ninth Circuit reached the same outcome in 2015.  However, the Supreme Court reversed and remanded because the 2015 decision improperly relied upon a DOL regulation that, in the Supreme Court’s view, was unworthy of Chevron deference.  See  Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117 (2016).  This time around, the Ninth Circuit relied on statutory language and legislative history to hold that Service Advisors are non-exempt.

Oregon Restaurant and Lodging Ass’n v. Perez, 816 F.3d 1080 (9th Cir. Feb. 23, 2016)

Holding:  DOL did not exceed its authority in revising 29 C.F.R. § 531.52 to clarify that 29 U.S.C. § 207(m)’s restrictions on tip-pooling extend to servers for whom no tip credit is taken.

Comments:  The FLSA both allows a restaurant to utilize customer tips to satisfy a portion of its minimum wage obligations to servers and permits “the pooling of tips” among restaurant employees.  See 29 U.S.C. § 203(m).  But there’s a catch:  restaurants utilizing tips to satisfy their minimum wage obligations may not allow tip pool proceeds to be shared with restaurant employees who do not “customarily and regularly receive tips.”  29 U.S.C. § 203(m).  Courts have explained that, under this rule, employees must interact with customers in order to share in the tip pool.  See, e.g., Montano v. Montrose Restaurant Associates, Inc. (discussed in Fifth Circuit section of this paper).  The Ninth Circuit’s 2010 decision in Cumbie v. Woody Woo, Inc., 596 F.3d 577 (9th Cir. 2010), held that, if a restaurant paid its servers the full minimum wage without utilizing a tip credit, then the restaurant was not required to follow these rules.  In response, DOL amended the pertinent regulations to clarify that a restaurant must follow the tip-pooling rules “whether or not it has taken a tip credit.”  29 C.F.R. § 531.52 (2011).  That brings us to the instant Oregon Restaurant and Lodging decision.  Relying on Chevron deference principles, the Ninth Circuit explained that DOL did not exceed its authority in revising § 531.52 and that the previous Cumbie decision did not prevent the DOL from acting.

Rosenfield v. Globaltranz Enterprises, Inc., 811 F.3d 282 (9th Cir. Dec. 14, 2015)

Holding:  Management-level employee who complained to higher-ups about company’s FLSA violations was not necessarily prohibited from bringing retaliation claim as long as “FLSA compliance was not part of [the employee’s] job portfolio.”

 

Comments:  In Kasten v. Saint Gobain Performance Plastics Corp., 563 U.S. 1 (2011), the Supreme Court held that an employee alleging retaliation under the FLSA must demonstrate that her complaint “was sufficiently clear and detailed for a reasonable employer to understand it, in both content and context, as an assertion of rights protected by the [FLSA] and a call for their protection”.  Here, the Ninth Circuit applies Kasten to complaints by a management-level employee and emphasizes that FLSA retaliation cases must be decided on a case-by-case basis.  As such, it is possible for a management-level employee’s complaints to pass the Kasten test where, as in this case, her job duties did not include FLSA compliance.

Tenth Circuit

 

Albers Board of County Commissioners of Jefferson County, 771 F.3d 697 (10th Cir. Nov. 13, 2014)

Holding:  Employer did not violate the FLSA by calculating the overtime premium based upon the employee’s actual – rather than agreed upon – pay rate.

Comments:   Plaintiffs claimed that their employer paid them at an hourly rate that was lower than the agreed-upon pay rate.  Plaintiffs then tried to transform this breach of contract claim into an FLSA violation by arguing that, under the FLSA, the agreed-upon rate must be used to calculate the overtime premium.  The Court flatly rejected this argument, observing that, under the FLSA, the regular rate is the amount actually “paid to” the employee.  See 29 U.S.C. § 207(e).

Castaneda v. JBS USA, LLC, 819 F.3d 1237 (10th Cir. May 3, 2016)

Holding: “Clothes changing” that is non-compensable under 29 U.S.C. § 203(o) and Sandifer v. v. U.S. Steel Corp., 134 S. Ct. 870 (2014) cannot define the parameters of the compensable workday for purposes of applying the “continuous workday” rule.

Comments:  This complicated, pro-business opinion (with Judge Gorsuch on the panel) would have been more consequential ten years ago, when “donning and doffing” cases were at their height.  Moreover, because this is a Section 3(o) case, its holding has no application to donning and doffing cases arising in non-union plants.  So, I just don’t think this decision will have many ramifications going forward.  On the bright side, the decision does have a nice recitation of the “continuous workday” rule.

Deherrera v. Decker Truck Line, Inc., 820 F.3d 1147 (10th Cir. April 21, 2016)

Holding:  Driver of commercial motor vehicle whose job consisted of the intrastate hauling of beer and empty kegs between the brewing company’s Colorado brewery and Colorado warehouse was covered by the FLSA motor carrier exemption because the shipments were part of a “practical continuity of movement.”

Comments:  This is an interesting case that applies some of the same concepts already discussed in Mazzarella, which is discussed in the Third Circuit section of this paper.  The “practical continuity of movement” principle has really been flushed in the past two years.

 

Ellis v. J.R.’s Country Stores, Inc., 779 F.3d 1184 (10th Cir. Mar. 9, 2015)

Holding:  Employer did not lose the executive exemption by making a single, improper deduction to a manager’s salary.

Comment:   This opinion is not too surprising.  Plaintiff’s misclassification theory hinged on evidence that, on one single occasion, the employer made an improper deduction to her salary.  When this deduction was brought to the employer’s attention, it promptly reimbursed Plaintiff.  The opinion contains a good discussion of the salary deduction rules and the “window of correction” regulation.      

 

Garcia v. Tyson Foods, Inc., 770 F.3d 1300 (10th Cir. Aug. 19, 2014)

Holding:  (1) Jury in this class/collective donning and doffing lawsuit properly found in the workers’ favor and awarded class-wide damages based on the evidence presented.  (2) District court properly awarded Plaintiffs’ counsel over $3.3 million in attorney’s fees.

Comments:  This opinion – the third Tyson Foods opinion covered in this paper – provides another example of how large FLSA collective actions can be effectively tried to verdict.  Like the Tenth Circuit’s Bouaphakeo opinion (discussed above), this opinion contains some good language regarding the propriety of “representative evidence” in trying FLSA collective actions.  The portion of the opinion addressing attorney’s fees contains some good language (i) rebutting Tyson’s “partial-success” arguments and (ii) reaffirming that statutory fees under the FLSA will often exceed the amount of unpaid wages awarded to the plaintiffs.

Mencia v. Allred, 808 F.3d 463 (10th Cir. Dec. 14, 2015)

Holding:  (1) District court erred in holding that a sheep ranch worker fell within the FLSA’s “range production of livestock” exemption.  See 29 U.S.C. § 213(a)(6)(E).  (2) District court erred in holding that worker was “estopped” from bringing FLSA claim due to his failure to complain to the boss.

Comments:  The opinion contains a pretty extensive discussion of the “range production of livestock” regulations.  The court explains that, to fall within the exemption, workers must spend more than half their time working in a “remote” location where the livestock can graze.  The more far-reaching aspect of this opinion is the court’s rejection of the “estoppel” argument.  The court explains that there really is no such thing as “estoppel” in FLSA cases and that there is no requirement that workers preserve future FLSA claims by contemporaneously complaining to the boss.  Instead, in evaluating unpaid wage claims, the operative question is whether the company “knew or should have known what [the worker] was doing.”  For a similar analysis, see the Bailey decision discussed in the Eleventh Circuit section of this paper.

Perez v. El Tequila, LLC, 847 F.3d 1247 (10th Cir. Feb. 7, 2017)

Holding:  In determining damages after finding multiple FLSA violations, the district court properly included bonus payments in the “regular rate” calculation.

Comments:  There is not much discussion of the issue.  The employer claimed that the bonus payments were discretionary and, therefore, should not be included in the regular rate calculation.  In disagreeing, the court made the helpful comment that “claiming discretionary bonus is an affirmative defense for which the employer . . . bears the burden of proof.”

 

Sanchez v. Nitro-Lift Technologies, Inc., 762 F.3d 1139 (10th Cir. 2014)

Holding:  Plaintiff’s FLSA claim was covered by arbitration clause contained in a Confidentiality/Non-Compete Agreement he signed when first hired.

Comments:  The outcome of this case is both unsurprising and fact-specific.  The Court also discusses – without deciding – whether high arbitration fees can violate the Plaintiff’s substantive right to pursue his FLSA claim.

Sharp v. CGK Land (US), Inc., 840 F.3d 1211 (10th Cir. Nov. 4, 2016)

Holding:   Meal allowance payments of $35/day need not be included in the “regular rate” calculation.

Comments:  The court follows a DOL opinion letter and holds that, because the meal allowance payments only applied on days in which the workers were stationed far away from home, they were covered by 29 U.S.C. § 207(e)(2), which excludes from the regular rate “reasonable payments for traveling expenses.”

Eleventh Circuit

Bailey v. Titlemax of Georgia, Inc., 776 F.3d 797 (11th Cir. Jan. 15, 2015)

Holding:  A supervisor’s knowledge that employees are working off-the-clock is imputed to the employer for FLSA liability purposes, and, under such circumstances, the employer cannot escape liability by asserting that the employee had “unclean hands” by failing to report all of her work hours.

Comments:  This is a very important opinion.  The Court squarely addresses and rejects an increasingly prominent defense argument:  that workers are to blame for off-the-clock work by failing to comply with company policies that require employees to report all time.  As the Court explains, this argument contradicts the FLSA’s policy of addressing the unequal bargaining power between employers and employees.  If an employee is working off-the-clock and her supervisor knows or should know, then the employer is liable.

Calderone v. Scott, 838 F.3d 1101 (11th Cir. Sept. 28, 2016)

Holding:  FLSA collective actions and Rule 23 class actions may proceed together in the same lawsuit.

Comments:  This unsurprising holding brings the Eleventh Circuit in-line with other Circuits and rejects the now-discredited “inherent incompatibility” doctrine.  The decision has a nice passage comparing class actions to collective actions.  Also, the following can come in handy in opposing defense motions to “decertify” FLSA collectives:  “The certification requirements for a Rule 23 class action are more demanding.”

Garcia-Celestino v. Ruiz Harvesting, Inc., 843 F.3d 1276 (11th Cir. Dec. 15, 2016)

Holding:  Laborer asserting FLSA claim against a large citrus producer and two labor contacting companies asserted sufficient facts to make the citrus producer liable as a joint employer.

Comments:  The FLSA portion of this opinion is pretty cursory.  But the court does lay out and briefly discuss the Eleventh Circuit’s joint employment factors.  Also, the court states that, in analyzing joint employment, the judge “should separately focus on the worker’s relationships with each putative employer.”  This statement – which is made without any discussion – seems to conflict with the Fourth Circuit’s approach to joint employment in Hill, which was discussed earlier.

Pioch v. IBEX Engineering Services, Inc., 825 F.3d 1263 (11th Cir. June 14, 2016)

 

Holding:  When a highly compensated hourly employee who was exempt under the computer employee exemption, see 29 U.S.C. § 213(a)(17), had his final paycheck withheld due to alleged misconduct, the withholding did not convert him to a non-exempt employee during the final weeks of his employment.

Comments:  The court undertakes a thorough analysis of this issue.  I find the outcome to be unsurprising and this opinion to be relatively unimportant in the greater scheme of FLSA law.

Schumann v. Collier Anesthesia, P.A., 803 F.3d 1199 (11th Cir. Sept. 11, 2015)

Holding:  Agreeing with the Second Circuit, see Glatt, supra, that the six-part DOL test should be replaced with a more flexible test focused on “whether the intern or the employer is the primary beneficiary of the relationship” based on an analysis of seven “non-exhaustive” factors.

 

Comments:  See Comments to Second Circuit’s Glatt decision.

 

Walthour v. Chipio Windshield Repair, LLC, 745 F.3d 1326 (11th Cir. Mar. 21, 2014)

Holding:  The FLSA does not substantively prevent the enforcement of arbitration agreements that prevent workers from pursuing their claims on a class-wide or collective basis.

Comments:  Even under the Federal Arbitration Act, an arbitration agreement cannot be applied in a manner that violates a plaintiff’s substantive rights under another federal statute.  Unfortunately, in this case, the Court found that the FLSA’s collective action mechanism is not the type of substantive statutory right that overrides the FAA.

For a contrary view, see Gaffers v. Kelly Services, Inc., 2016 U.S. Dist. LEXIS 1/2789 (E.D. Mich. Aug. 24, 2016).

Watkins v. City of Montgomery, 775 F.3d 1280 (11th Cir. Dec. 24, 2014)

Holding:  (1) Jury in FLSA collective action properly determined that disciplinary deductions from the salaries paid to exempt fire department lieutenants did not violate the “salary basis” rules.  (2) District court properly instructed the jury with respect to the executive exemption.

Comments:  This is yet another example of an FLSA collective action that was successfully tried to verdict.  The opinion contains a good discussion of the regulations and caselaw applicable in determining whether salary deductions for disciplinary reasons violate the salary basis requirement.

District of Columbia Circuit

 

Home Care Association of America v. Weil, 799 F.3d 1084 (D.C. Cir. Aug. 21, 2015)

Holding:  Department of Labor regulations stating that FLSA’s companionship services and live-in domestic services exemptions, see 29 U.S.C. §§ 213(a)(15), (21), do not cover workers employed by third-party companies were implemented in compliance with the Administrative Procedure Act.

 

Comments:  This important – but unsurprising – opinion has enabled millions of home health aids to receive overtime pay under the FLSA.

 

Radtke v. Lifecare Management Partners, 795 F.3d 159 (D.C. Cir. July 28, 2015)

Holding:  Upholding jury verdict that medical records coders are not covered by the FLSA’s administrative or professional exemptions.

 

Comments:  Good discussion of principle that FLSA exemption determinations involve mixed questions of law and fact.  Also, in upholding the jury verdict, the Circuit Court notes that one plaintiff spent 75% of her time and the other plaintiff spent 92% of her time performing routine medical coding work.  So this opinion may be a good counterweight to other recent circuit court opinions that seem to de-emphasize the importance of time percentages in white-collar exemption cases.

Rhea Lana, Inc. v. Department of Labor, 824 F.3d 1023 (D.C. Cir. June 3, 2016)

Holding:  Letter from the DOL’s Wage & Hour Division that that employer’s continued violation of FLSA would subject it to civil penalties in the event of a future enforcement action constituted the type of final administrative agency action to trigger the employer’s right to seek injunctive relief under the Administrative Procedure Act.

Comments:  This decision is interesting, but not too consequential for private plaintiffs-side lawyers.

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