Eighth Circuit Holds Plaintiffs Must Provide Evidence of Actual Damages Even when Employer Doesn't Keep Accurate Time Records

By Matthew Hank

In Carmody v. Kansas City Board of Police Commissioners, the Eighth Circuit Court of Appeals addressed the standard of proof in a wage and hour case when an employer fails to maintain accurate timekeeping records. The court held that, even under the “relaxed standard” established by the U.S. Supreme Court in Anderson v. Mt. Clemens Pottery Co., plaintiffs in a wage and hour case must still provide evidence of actual damages.

Carmody involved a group of police officers who sued the Kansas City Board of Police Commissioners, claiming they were given flextime instead of overtime wages as required by the Fair Labor Standards Act (FLSA). Neither the officers nor the city tracked the accrued flextime. In response to discovery requests, the officers failed to provide information about the number of uncompensated hours they claimed to have worked or the amount of money they alleged was owed. Only after the close of discovery, and after the defendants moved for summary judgment, did the officers come forth with evidence of damages: the officers’ affidavits containing precise estimations, week by week, of unpaid hours worked.

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Second Circuit Rejects FLSA Gap Time Claim, Explores Pleading Requirements

In Lundy v. Catholic Health System of Long Island, Inc., 2013 U.S. App. LEXIS 4316 (2d Cir. Mar. 1, 2013), the Second Circuit Court of Appeals recently held for the first time that the Fair Labor Standards Act (FLSA) does not provide a claim for uncompensated "gap" time wages even when employees work overtime, provided the alleged uncompensated time does not drop employees' wages below the minimum wage. Gap time is time worked under 40 hours in a week. For example, an employee may work 39 hours in a week but be paid for only 35, in which case she has four hours of uncompensated gap time. If she works 42 hours in a week but is paid for only 38, she has two hours of uncompensated gap time (hours 39 and 40) and two hours of unpaid overtime (hours 41 and 42). In Lundy, the Second Circuit held that employees must plead "some" amount of uncompensated but compensable time worked over 40 in a week, but left open the possibility, depending on the case, that employees may need to also plead an approximation of overtime hours to establish a plausible claim. The decision also bolsters employers' arguments that district courts may exercise supplemental jurisdiction to decide state law claims even where the court dismisses all federal law claims.

To learn more about the decision, please see Littler's ASAP, Second Circuit Rejects FLSA Gap Time Claims and Explores FLSA Pleading Requirements, by Bradley Strawn.

Supreme Court to Consider Meaning of "Changing Clothes" Amid Changing DOL Interpretations

By Alex Frondorf

On February 19, 2013, in Sandifer v. U.S. Steel Corp., the U.S. Supreme Court agreed to resolve a circuit split over the meaning “changing clothes” under the Fair Labor Standards Act (FLSA), 29 U.S.C. section 203(o).

Under the FLSA, employees are not entitled to compensation for time “spent in changing clothes . . . at the beginning or end of each workday” if excluded from working time under a collective bargaining agreement. While the meaning of “clothes” might seem obvious, the FLSA does not provide a definition and circuit courts have provided differing interpretations.

In Sandifer, U.S. Steel employees sued their employer for the time spent putting on and taking off protective gear in a locker room, and walking to and from the locker room to their work stations. The employees worked under a collective bargaining agreement, which did not require compensation for changing clothes. The district court found that the workers were not entitled to compensation under section 203(o).

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Seventh Circuit Concludes that "Travel Time" Following Clothing Change Is Not Compensable, Setting Up a Circuit Split

By Andrew Voss

In a case that explicitly acknowledges a consequential circuit split, the Seventh Circuit Court of Appeals has concluded that the time that an employee spends walking from the locker room to his work station after changing into work clothes is not compensable if the applicable collective bargaining agreement does not require compensation for the time spent changing clothes. Sandifer v. United States Steel Corporation, Nos. 10-1821, 10-1866 (7th Cir. May 8, 2012). The Seventh Circuit’s decision acknowledges a contrary holding in Franklin v. Kellogg Co., 619 F.3d 604 (6th Cir. 2010), but concludes that the Sixth Circuit was “clearly wrong.” The Seventh Circuit also considered and rejected the Department of Labor’s position, as articulated in recent opinion letters and in a brief filed as amicus curiae on the plaintiffs’ behalf, finding that the Department’s “gyrating agency letters” offered little to assist the court in its deliberations other than a political perspective on the law, and therefore were entitled to no deference.

The case focuses on the impact of Section 3(o) of the federal Fair Labor Standards Act, 29 U.S.C. § 203(o), which excludes “any time spent in changing clothes or washing at the beginning or end of each workday” from working time, if such time is excluded by the express terms or by custom or practice under a bona fide collective bargaining agreement. U.S. Steel’s hourly employees complained that they were owed additional wages for time spent putting on and taking off protective gear in a locker room, and walking to and from the locker room to their work stations. The applicable collective bargaining agreements did not require compensation for changing clothes, and the district court found that the exclusion under Section 3(o) applied. The court determined that the travel time to the employees’ work stations may be compensable, however, but certified the issue for appeal. The Seventh Circuit accepted the appeal.
 

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Is Rounding of Employee Time Entries Legal in California?--California Supreme Court Orders Appellate Court to Decide

By Mary Walsh

In a matter of significance for California employers, in See’s Candy Shops, Inc. v. Superior Court of San Diego, the California Supreme Court recently ordered the California Court of Appeal, Fourth Appellate District, to review a trial court decision holding that rounding employee time entries violated California law.

Last year, in an unprecedented ruling, the San Diego Superior Court held that See’s Candy Shops, Inc. (“See’s") violated California law by rounding employee time entries to the nearest six minutes. The court granted the plaintiff’s motion for summary adjudication on two of See’s rounding affirmative defenses, finding them at odds with sections of the California Labor Code dealing with the timing of wage payments.

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Seventh Circuit Requires Actual or Constructive Knowledge of Employee's Off-The-Clock Pre-Shift Work

By Milton Castro

In a recent “off-the-clock” case, the Seventh Circuit Court of Appeals affirmed an Indiana district court decision and held that the time an employee spends before his or her shift in preparation for the shift is not compensable – even if such time is in excess of 10 minutes and to the significant benefit of the employer – if the employer does not know or have reason to know that the employee is regularly working this off-the-clock time.

In the case, Plaintiff Susan Kellar alleged that she regularly arrived at Defendant Summit Seating Inc.’s (“Summit”) worksite between 15 and 45 minutes before the start of her shift. According to the plaintiff, she would then typically spend:

  • 5 minutes unlocking doors, turning on lights, turning on equipment, and punching into the time clock;
  • 5 minutes preparing coffee for herself and the rest of the employees;
  • 5-10 minutes (or longer) gathering material and distributing it to her subordinates’ workstations; and
  • 5 minutes taking a coffee / smoking break.
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Tenth Circuit Examines Time Spent Changing Clothes in Salazar v. Butterball

By Alison Hightower

“It’s not what you wear—it’s how you take it off,” an anonymous author exclaimed. Whether employees must be paid for taking off and putting on a variety of items, from aprons to mesh gloves, continues to spark controversy. In the latest pronouncement on the subject, in Salazar v. Butterball, the Tenth Circuit recently concluded that the Department of Labor’s (DOL) viewpoint on what constitutes non-compensable “time spent changing clothes” should receive no weight.

The issue that has divided the courts and the DOL is what constitutes “clothes” under Section 203(o) of the Fair Labor Standards Act (FLSA) which excludes from compensable time any time spent “changing clothes” if that time is non-compensable under either the express terms or custom and practice of a collective bargaining agreement (CBA). In other words, if a union member is covered by a CBA in which, either by express language or custom and practice, time spent changing clothes is not paid, then the employer does not have to pay for that time under the FLSA. 

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DOL Launches Smartphone "App" to Track Employee Time and Compute Wages

By Josh Kirkpatrick

On May 9, 2011, the U.S. Department of Labor announced the launch of its first smartphone application, an electronic timesheet employees can use to track their hours of work, including breaks. According to a DOL press release, the information tracked through this application “could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records.” The app, currently available in English and Spanish and only for iPhone, iPad and iPod Touch devices, allows users to input their hourly rate of pay and calculates the amount of wages due to the worker. Additionally, through the app, users can add comments related to their work hours; view a summary of work hours in a daily, weekly and monthly format; and email the summary of work hours and gross pay as an attachment. A glossary, limited information regarding wage and hour laws, and contact information for the DOL are accessible through the app. The agency stated it will pursue the development of updates that allow employees to track their tips, commissions, bonuses, deductions, holiday pay, pay for weekends, shift differentials and pay for regular days of rest, among other pay information.
 

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California Supreme Court Grants Review in Hernandez

On January 26, 2011, the California Supreme Court created more uncertainty regarding meal and rest period obligations in California by granting review of the Court of Appeal’s published decision in Hernandez v. Chipotle Mexican Grill, Inc. As we discussed more fully on November 5, 2010, in Hernandez, the Court of Appeal affirmed the trial court’s ruling that an employer need only make meal periods available to employees, and affirmed the denial of class certification, holding that individual issues predominated over common issues as some employees received both meal and rest breaks, some missed only rest breaks, some missed only meal breaks, some missed both, and even the named plaintiff admitted that the ability to take breaks depended on the location where he worked.

With the grant of review and depublication of Hernandez, employers are once again left to read the tea leaves while waiting for the California Supreme Court to decide Brinker Restaurant Corporation v. Superior Court. In October 2010, the Court granted review in Faulkinbury v. Boyd & Assocs., which had affirmed an employer’s duty to make meal periods available, but held that certification was improper in that case. In May 2010, the Court let stand the published decision in Jaimez v. Daiohs, which affirmed the lower court’s rulings that meal periods must be made available, and that in certain cases, certification of such claims is proper.

Oral argument has not been scheduled yet in Brinker.

This entry was written by Erica H. Kelley.

Photo credit: shirhan

New Jersey Adopts Federal "Rounding" Rules

State Flag of New JerseyThere is good news for New Jersey employers who utilize rounding. The New Jersey Department of Labor and Workforce Development has reconsidered its prior rejection of federal "rounding" rules. After a public comment period, the Department formally adopted a new rule which adopts, verbatim, the federal regulation regarding the use of time clocks and rounding practices. Under the new rule, rounding is lawful under New Jersey law so long as it "averages out ... over a period of time." This development means that New Jersey employers no longer need to assess the impact of rounding on a week-to-week basis. While this is a welcome development, employers who utilize rounding should remain vigilant to ensure that rounding is not "one sided" and that it does, in fact, average out over time.

This entry was written by Robert W. Pritchard.
 

Court Applies Hospital Overtime Exemption and Dismisses State Law Claims in Hospital Class Action

In a significant victory for Massachusetts healthcare employers, on December 20, 2010, the Massachusetts federal court applied the state overtime exemption available to hospitals, nursing homes, and certain other healthcare employers, and dismissed all 13 state wage-law claims in Cavallaro v.UMass Memorial Health Care. Plaintiffs in the case, a class action filed on behalf of 13,000 current and former employees of UMass Healthcare and its subsidiaries, claimed the hospital did not compensate them for time worked: (1) during meal breaks that were automatically deducted from wages; (2) before and after scheduled shifts; and (3) time spent in training sessions. To learn more about the Cavallaro decision and its implications for employers, please continue reading at Littler's Healthcare Employment Counsel blog.

Photo credit: MSRPhoto

Kaiser Settles Misclassification Class Action for $2.91 Million

A California federal court gave final approval to a $2.91 million settlement between Kaiser Foundation Hospitals and approximately 500 information technology employees who alleged they were misclassified as exempt under both the Fair Labor Standards Act and California law, and denied overtime for working through meal periods and working in excess of 40 hours per week, 8 hours per day or on the 7th consecutive day of a workweek. To learn more about the case, please continue reading at Littler's Healthcare Employment Counsel blog.

Photo credit: Bartek Szewczyk

California Court of Appeal Adopts "Provide" Standard in Meal and Rest Case

Clock in meal settingA California Court of Appeal has upped the ante in the ongoing legal debate concerning meal and rest period obligations in California (pdf), unambiguously asserting that an employer is only obligated “to ensure that its employees are free from its control for thirty minutes, not to ensure that the employees do any particular thing during that time.” This holding is all the more notable given the court’s subsequent order certifying its opinion in Hernandez v. Chipotle Mexican Grill, Inc. (pdf), No. B216004, as suitable for publication. Consequently, it is currently citable and available as precedent.

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U.S. Supreme Court Refuses to Hear Donning and Doffing Case

The United States Supreme Court recently declined to accept review of the decision in Sepulveda v. Allen Family Foods, Inc., a case in which the Fourth Circuit Court of Appeals held that time spent donning and doffing protective gear at a unionized poultry processing plant constituted “changing clothes” within the meaning of Section 203(o) of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”) and, thus, was not compensable time for which the employees must be paid. The former employee who filed the lawsuit in the first place and filed the petition before the Supreme Court presented the following question for review by the Supreme Court: “When calculating compensable time under the FLSA, does section 203(o)’s exclusion of ‘time spent in changing clothes’ apply to time spent donning and doffing protective equipment that is put on over unchanged clothes - a question on which multiple circuits have split.”

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Seventh Circuit Affirms Compensability of Donning/Doffing Time Under State Law Notwithstanding an Applicable Exception Under the FLSA

Section 203(o) of the Fair Labor Standards Act provides that time spent changing clothes or washing at the beginning or end of the workday may be excluded from hours worked pursuant to the terms of, or custom or practice under a collective bargaining agreement. Many states impose their own wage and hour requirements, however. In Spoerle v. Kraft Foods Global, Inc., the Seventh Circuit Court of Appeals concluded that Section 203(o) does not preempt state wage and hour law that does not contain an equivalent exception for time spent changing clothes or washing at the beginning or end of the workday.

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New Jersey Proposes to Bring its "Rounding" Rules into Conformity with Federal Regulations

Back in April, we reported that the Division of Wage and Hour Compliance at the New Jersey Department of Labor and Workforce Development was reconsidering its prior enforcement policy rejecting federal “rounding” rules under New Jersey law. On July 6, the Department formally announced its proposal to adopt a new rule which would adopt, verbatim, the federal regulation regarding the use of time clocks and rounding practices. The Department explained that

“[The proposed new rule would] eliminate any possible confusion regarding the Department’s wage and hour enforcement policy relative to the use of time clocks and ‘rounding’ practices.”

Specifically, the proposed rule will bring New Jersey back into conformity with federal law, creating a “straight forward and simple approach” for employers in New Jersey.

A public hearing on the proposed new rule will be held on July 29, 2010, at the office of the New Jersey Department of Labor and Workforce Development in Trenton, New Jersey.

This entry was written by Robert W. Pritchard.

DOL Issues Second Administrator Interpretation Over Time Spent Donning and Doffing Protective Equipment

On June 16, 2010, Nancy J. Leppink, Deputy Administrator of the U.S. Department of Labor, Wage and Hour Division, issued the second in her inaugural series of Administrator's Interpretations. Unfortunately, this newest interpretation (pdf), like the first, seems to reflect a continued effort by the Wage and Hour Division to reject certain key interpretations of the Fair Labor Standards Act (FLSA) issued during the Bush Administration.Row of white shirts

In the latest interpretation, the Administrator examines whether protective equipment worn by union employees can be considered "clothes" for purposes of section 203(o) of the FLSA and whether clothes changing covered by section 3(o) constitutes a principal work activity. Section 203(o) provides that time spent “changing clothes or washing at the beginning or end of each workday” is excluded from compensable time under the FLSA if the time is excluded from compensable time pursuant to “the express terms or by custom or practice” under a collective bargaining agreement. 29 U.S.C. § 203(o).

This is not the first time the Administrator has examined this issue. In fact, since 1997 the Administrator has issued a series of conflicting opinion letters. In 1997, 1998 and 2001 opinion letters the DOL concluded protective equipment was not "clothes." In contrast, in 2002 and again in 2007, the Administrator found that "clothes" included protective equipment. The newest letter reaffirms the narrow interpretation of "clothes" found in the 1997, 1998 and 2001 opinion letters and rejects the interpretation contained in the 2002 and 2007 letters that protective equipment constitutes clothes for purposes of Section 203(o).

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DOL Increases Penalties for Child Labor Violations

On May 19, 2010, the U.S. Department of Labor announced the publication of final regulations concerning child labor. Included in the regulations are increased penalties for child labor violations.

The maximum penalty for repeatedly or willfully violating the Fair Labor Standard Act’s minimum wage and maximum hours provisions, relating to wages, increased from $1,000 to $1,100 per violation.

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California Supreme Court Lets Stand Class Certification in Meal and Rest Decision

For those of you following the Jaimez v. Daiohs USA, Inc. case, on May 12, the California Supreme Court denied defendant Daiohs' requests for review and depublication of the appellate court's decision. For those of you who have not been following the Jaimez case, read on. The decisions of both the California court of appeal and California Supreme Court are as significant as they are discouraging.

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UPDATE - New Jersey Considering Whether to Adopt Federal "Rounding" Rules

Seal of New JerseyAs we reported last year, the Division of Wage and Hour Compliance at the New Jersey Department of Labor and Workforce Development rejected federal “rounding” rules for enforcement purposes under New Jersey law. Specifically, while the U.S. Department of Labor assesses the impact of rounding “over a period of time” (and allows rounding practices that “average out” over time), the Division announced that it would evaluate the impact of rounding on a week-to-week basis. According to the Division, if an employer rounds, it must be to the benefit of the employee each week in order to comply with New Jersey law.

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Officers Not Entitled to Pay For Donning And Doffing Uniforms, Ninth Circuit Rules

In a case of great significance to public employers, the Ninth Circuit issued a decision holding that the time spent putting on and taking off required uniforms and gear does not constitute compensable work for police officers. In Bamonte v. City of Mesa (9th Cir. 08-16206) the claimants were current and former police officers of the City of Mesa who contended that they ought to be paid for the time it took them to put on and take off their uniforms and gear at the beginning and end of their shift, a process referred to as donning and doffing. The City argued that although it required every patrol officer to wear a proper uniform, the City imposed no restriction on where each officer put on or took off that uniform and gear. Therefore, because officers were not required to don and doff exclusively at work, the City had no legal obligation to pay for the time devoted to donning and doffing. The trial court agreed and granted summary judgment to the City. On March 25, a panel of the Ninth Circuit affirmed the lower court's decision in a 2-1 opinion. Officers in many other law enforcement agencies throughout the West filed similar lawsuits, but the Bamonte case is the first to be the subject of a substantive decision by the Ninth Circuit.

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The Ninth Circuit Issues Subsequent Opinion on Commuting Time and Off-the-Clock Issues

The Ninth Circuit recently re-issued an opinion that illustrates the many work-time issues raised when employees commute between home and service sites in company vehicles. Rutti v. Lojack Corporation (9th Cir., No. 07-56599, Mar. 2, 2010). The court affirmed its initial, important finding that an employer can make commuting in a company vehicle a condition of employment without affecting the compensability of the commute time under the federal Employment Commuter Flexibility Act (ECFA). The court of appeals affirmed its initial finding that small amounts of time spent in the morning working out the route for the day were not compensable work time either because the time was incidental to the commute and, therefore by definition not work time, or was so de minimis as to not be considered to be work time.

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Developments in State Law from July 1 - December 31

Several new wage and hour bills made it through various state legislatures during the second half of the year. Below is a wrap up of some new developments (including regulatory updates) from July 1st through December 31st. Click here to read our post on changes to state minimum wages.

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Staffing Companies Face Potential Exposure For Interview Time

In a putative class action pending in the Northern District of California filed by Catherine Sullivan against Kelly Services, Inc. (Case No. C 08-3893 CW), Judge Claudia Wilken ruled in a summary judgment motion that the time spent interviewing by Kelly Services' employees seeking temporary work assignments with Kelly Services' clients is compensable under California law. However, Judge Wilken also ruled that the time spent preparing for and commuting to the client interviews was not compensable, and that Kelly Services was not required to reimburse the employees for expenses incurred in attending the interviews. Judge Wilken found that under the facts of this case, the employees were "subject to the control" of Kelly Services and that Kelly Services "suffered or permitted" the employees to work in connection with the interviews. She rejected the defense argument that the client interviews were "voluntary," finding that the failure to interview would prevent the employee from being considered for 50% of the job assignments . She also rejected the defense argument that the interviews were not time worked as the employees were not employed in between work assignments, finding this latter argument inconsistent with the position taken by the employer in a prior action between the parties.

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District Court Rules City is Not Responsible for Donning and Doffing Time

On January 21, 2009, the City of Phoenix obtained summary judgment in a collective action brought by approximately 600 police officers claiming millions in unpaid work. What were the officers claiming? That the City should have compensated them for time spent putting on and taking off police uniforms and gear. In the matter of Dager et al. v. City of Phoenix, Case No. 2:06-cv-01412-PHX-JWS, the U.S. District Court for the District of Arizona ruled that the City did not have an obligation to pay its police officers for the time spent donning and doffing (i.e., putting on and taking off ) their police uniforms and gear. Specifically, Judge John Sedwick held that under Ninth Circuit precedent and the persuasive guidelines of the U.S. Department of Labor, only those employees actually required to change at work could claim that the time spent donning and doffing was compensable. The evidence in the case showed that the City allowed officers to change at home or at the station, depending on their own preference, and that a significant number of officers, including some of the claimants, regularly changed into their uniforms and/or gear at home. The court also held that, although the City's police department required officers to wear certain specified uniforms and protective gear, the uniform itself was not 'necessary" to the performance of police work (as the term necessary is defined under applicable regulations and case law).

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