DOC

2004-2005 Treatise Supplement The Fair Labor Standards - Bureau

By Shirley Ward,2014-06-28 20:19
17 views 0
2004-2005 Treatise Supplement The Fair Labor Standards - Bureau ...

2004 2005

    TREATISE SUPPLEMENT:

    THE FAIR LABOR STANDARDS ACT

    Presented by:

    American Bar Association

    Section of Labor and Employment

    Fair Labor Standards Act Subcommittee

    February 17, 2006

    Susan N. Eisenberg, Co-Chairperson

    Akerman Senterfitt

    susan.eisenberg@akerman.com

    Sam J. Smith, Co-Chairperson

    Burr & Smith, LLP

    ssmith@burrandsmithlaw.com

    i ? 2006 American Bar Association http://www.bnabooks.com/ababna/flsa/2006/eisenberg.doc

    Preface

    This report covers the period September 1, 2004 through August 31, 2005. We

    anticipate that it will be combined with prior reports and published as a cumulative

    supplement to The Fair Labor Standards Act, E. Kearns and M. Gallagher, Editors. It also serves as the 2005 report of the Fair Labor Standards Act Subcommittee.

    Acknowledgement

    The Subcommittee's Chairpersons acknowledge with great appreciation the

    following contributors:

    Jon Ashworth Madeline Eydt Nathan Oleson (Sr. Editor) Lori Baggett Jim Finberg Adele Page David Banks Noah Finkel Gregory Palmer Brett Bartlett Laura Friedel (Editor) J. Kent Pearson, Jr. Heather R.M. Becker Rob Friedman Julie Pulkrabek Adam Belzberg Ron Gaswirth Felicia Reid Jude Biggs (Editor) Karen Gillen Charles Reis David Borgen (Sr. Editor) Judd Goldberg Agnes Schipper J. Derek Braziel (Editor) Abbe Goncharsky Richard Schramm Louis Britt Wendy Harrison Lisa A. Schreter (Editor) Caroline Brown Barry Hersh Michael Sciotti Frank Brown (Sr. Editor) John Ho (Editor) Matthew Siebel Richard Brown Danny Jarrett Salvador Simao Robin Bush Kevin Johnson Ray Singleton Kris Cato Aaron Kaufmann Larry Smith David Cessante Mary C. King Sam Smith (Sr. Editor) Gina Chang Jared Kronenberg Liz Snyder Joel Cohn (Sr. Editor) Elizabeth Lawrence Maria Sowders (Editor) Jac Cotiguala (Editor) (Sr. Editor) Donald Spero (Editor) Bruce Cross Jay Lechner (Editor) Mark Stepaniak Jerry Cutler Kathy MacNett Laurence Stuart Christopher Deering Johan W.E. Maitland Lisa Sutton Dale Deitchler Jeffrey Mandel J. Nelson Thomas (Editor) David Diamond Ray Martinez John Thompson Mark DiAntonio Dennis McClelland David Timms Catherine Duclos (Sr. Editor) Robert Tollen Glenn Duhl Gregory McGillivary Pamela Walker Douglas Duerr (Editor) (Sr. Editor) J. Kellam Warren Ellen L. Eardley Kate McNamara Dorothy Weber Thomas Eden, III Sean McPartland (Editor) David Wiley Susan Eisenberg Ian Meklinsky Susan Wuchinich (Sr. Editor) T. Matthew Miller Alicia Zonetti Molly Elkin Karen Milner Susan Ellingstad (Editor) Judith Moldover

    Eddie Erwin Herb Moss

    Michelle Evans Andrew Naylor

    ii ? 2006 American Bar Association http://www.bnabooks.com/ababna/flsa/2006/eisenberg.doc

    TABLE OF CONTENTS

    Page CHAPTER 1 BRIEF HISTORY OF THE FAIR LABOR STANDARDS ACT .................... 2 CHAPTER 2 OPERATIONS AND FUNCTIONS OF THE DEPARTMENT OF

    LABOR ....................................................................................................... 4 CHAPTER 3 COVERAGE ............................................................................................... 8 CHAPTER 4 WHITE-COLLAR EXEMPTIONS .............................................................. 16 CHAPTER 5 OTHER STATUTORY EXEMPTIONS ...................................................... 40 CHAPTER 6 AGRICULTURAL EXEMPTIONS ............................................................ 53 CHAPTER 8 DETERMINING COMPENSABLE HOURS WORKED ............................. 54 CHAPTER 9 DETERMINING THE MINIMUM WAGE PAYMENT ................................. 74 CHAPTER 10 DETERMINING OVERTIME COMPENSATION..................................... 78 CHAPTER 11 GOVERNMENT EMPLOYMENT CHAPTER ......................................... 91 CHAPTER 12 NEW FLSA CHILD LABOR REGULATIONS ....................................... 115 CHAPTER 15 RETALIATION ...................................................................................... 118 CHAPTER 16 RECORD-KEEPING............................................................................. 134 CHAPTER 17 ENFORCEMENT AND REMEDIES ..................................................... 135 CHAPTER 18 LITIGATION ISSUES ........................................................................... 146 Chapter 4A WHITE-COLLAR EXEMPTIONS UNDER THE 2004 FINAL

    REGULATIONS ..................................................................................... 243 A CASE OF UNINTENDED CONSEQUENCES The Disappearance the Motor

    Carrier Act Exemption Under the FLSA? ............................................... 288

    i ? 2006 American Bar Association http://www.bnabooks.com/ababna/flsa/2006/eisenberg.doc

    CHAPTER 1

    BRIEF HISTORY OF THE FAIR

    LABOR STANDARDS ACT

    V. Relationship Between Federal and State Law

    1In Owen v. Labor Ready, Inc. the Ninth Circuit, in an unpublished opinion,

    reversed the trial court‘s order staying a consolidated federal action pending the

    outcome of a concurrent state court action against the employer for wage and

    hour law violations. Plaintiff Owen filed a class action against Labor Ready

    alleging failure to pay overtime. Two months later, plaintiff Huntley, another

    Labor Ready employee, brought a similar action with similar allegations in the

    same court. Huntley then moved to consolidate the two actions and stay or

    dismiss the consolidated action pending the outcome of a concurrent California

    action in state action against the same employer. The district court granted

    Huntley‘s motion to consolidate and stayed the consolidated action pursuant to 2the Colorado River and Younger abstention doctrines.

    On appeal, the Ninth Circuit held that the district court properly

    consolidated class actions brought by two different employees against the same

    employer alleging the same violations of FLSA. However, the Ninth Circuit

    reversed the district court‘s order granting a stay under the Colorado River and

    Younger abstention doctrines. Without much analysis, the court found that none

    of the factors considered under the Colorado River doctrine were applicable to the case. The court went on to hold the Younger abstention doctrine inapplicable because if the federal case were allowed to proceed, it would not have the same

    practical effect on the state proceeding as a formal injunction and therefore

    would not interfere with the state court action in a way that implicated Younger.

    3In McElmurry v. U.S. Bank National Association, a district court in Oregon dismissed plaintiffs‘ FLSA minimum wage claims which were based on the

    company‘s failure to pay the prevailing state minimum wage laws in Oregon,

    Washington, and California. Plaintiffs contended that because the FLSA permits

     1 Owen v. Labor Ready, Inc., 146 Fed. Appx. 139 (9th Cir. 2005) (unpublished). 2 Colorado River Water Conserv. Dist. v. United States, 424 U.S. 800, 817, 96 S. Ct. 1236, 47 L.Ed.2d 483 (1976) Under Colorado River, ―considerations of ‗[w]ise judicial administration, giving

    regard to conservation of judicial resources and comprehensive disposition of litigation‘ ‖ may

    justify a stay of a federal action pending the outcome of concurrent state court proceedings

    concerning the same matter.

    3 McElmurry v. U.S. Bank Nat. Ass’n, 2005 WL 2078334 (D. Ore. July 29, 2005) (unpublished).

    2 ? 2006 American Bar Association http://www.bnabooks.com/ababna/flsa/2006/eisenberg.doc

states to adopt minimum wage requirements that are higher than the federal

    minimum wage requirements, the higher state minimum wage is enforceable

    under the FLSA‘s minimum wage provisions. Plaintiffs rationale was based on

    29 U.S.C. ? 218 which prevents the FLSA from preempting more favorable state

    minimum wage laws. This clause has been referred to as the FLSA‘s ―savings

    clause.‖ The district court determined that this section of the FLSA was not

    intended to incorporate each state‘s more favorable minimum wage requirements

    into the FLSA for enforcement purposes. Rather, the FLSA‘s minimum wage

    provision only allows for enforcement of the federal minimum wage.

    4 a district In Sansoucie v. Reproductive Associates of Delaware, P.A.,

    court in Delaware granted defendant‘s motion for summary judgment applying

    the professional exemption to an embryologist at a reproductive clinic. The court

    noted that plaintiff‘s FLSA claimed formed the basis for her claim under the

    Delaware Wage Payment and Collection Act. Because the court found plaintiff to

    be an exempt professional employee under the FLSA, the court determined

    plaintiff‘s claim under Delaware law was moot. A detailed discussion of the

    exemption issue in this case is in Chapter 4.

    5In Wiley v. Trendwest Resorts, Inc., a district court in California

    considered plaintiffs‘ motion to remand five causes of action ostensibly brought

    solely under California state law. The district court found that plaintiffs‘ first

    cause of action for restitution of unpaid overtime wages under Section 17200 of

    the California Business and Professions Code was premised solely on alleged

    violations of the FLSA. The court found it had jurisdiction because a federal

    statute creates the cause of action under Section 17200 and resolution of the

    FLSA claim was a necessary element of the Section 17200 claim. Consequently,

    the court retained jurisdiction over that claim and the claim for waiting time

    penalties that plaintiffs admitted was inextricably intertwined with the overtime

    claim. However, the court remanded three causes of action involving improper

    chargebacks, unjust enrichment, and failure to reimburse plaintiffs for expenses.

    These latter claims were not alternative theories for the other causes of action

    and raised novel and complex issues under state law to support a remand to

    state court.

     4 Sansoucie v. Reproductive Associates of Delaware, P.S., 2005 WL 1075596 (D. Del. May 4,

    2005) (unpublished).

    5 Wiley v. Trendwest Resorts, Inc., et al., 2005 WL 1030220 (N.D. Cal. May 3, 2005)

    (unpublished).

    3 ? 2006 American Bar Association http://www.bnabooks.com/ababna/flsa/2006/eisenberg.doc

    CHAPTER 2

    OPERATIONS AND FUNCTIONS

    OF

    THE DEPARTMENT OF LABOR

    IV. Regulations, Interpretations, and Opinions

    B. Opinion Letters

    6Courts continue to apply the analysis in Skidmore v. Swift & Co.; Chevron 78U.S.A., Inc. v. Natural Res. Def. Council, Inc., and United States v. Mead Corp. to determine the weight they should give to regulations and opinion letters.

    9In Beck v. City of Cleveland, the Sixth Circuit Court of Appeals reversed

    the district court‘s entry of summary judgment for defendant concerning an

    alleged violation of the FLSA‘s compensatory time provisions. Current and

    former city police officers sued the City of Cleveland alleging the City violated the 10FLSA by denying compensatory leave requested by the officers. Plaintiffs claimed the City denied 85% of the officers‘ requests for leave to avoid paying a

    substitute officer overtime pay. The City argued that paying a substitute officer‘s overtime would unduly disrupt its operations and was therefore not required by 11the FLSA.

    The Sixth Circuit found the district court erred in refusing to give Chevron deference to DOL opinion letters and interpretive regulations which distinguished

    between the operational needs and financial concerns of government employers.

    The Court, relied on 29 C.F.R. ? 553.25 and DOL opinion letters to hold that the

    City‘s operations, not its finances, must be unduly disrupted before leave can be 12denied. The court reasoned that the Secretary‘s opinion letters were entitled to

     6 323 U.S. 134, 65 S. Ct. 161 (1944)

    7 467 U.S. 837, 104 S. Ct. 2778 (1984)

    8 533 U.S. 218, 121 S. Ct. 2164 (2001)

    9th 390 F.3d 912 (6 Cir. 2003).

    10 Id. at 914.

    11 Id. at 916.

    12 Id. at 920-21.

    4 ? 2006 American Bar Association http://www.bnabooks.com/ababna/flsa/2006/eisenberg.doc

    13 because the regulation Chevron deference under Christensen v. Harris County

    at issue was ambiguous.

    14In Chase v. Farmers Ins. Exch., the Colorado Court of Appeals declined

    to defer to a DOL opinion letter and reversed a lower court‘s holding that

    insurance claims representatives were exempt administrative employees.

    Plaintiffs brought a class action for overtime pay claiming they were not exempt 15from the state wage order. The District Court for the City of Denver granted

    defendant‘s motion for summary judgment on the ground that plaintiffs were 16exempt administrative employees.

    The Colorado Court of Appeals, in an unpublished opinion, reversed and

    remanded because genuine issues of fact existed as to the nature of the

    employees‘ duties and whether the employees exercised independent judgment 17in evaluating liability and establishing the value of the claim. The Court of Appeals rejected defendant‘s argument that a November 19, 2002, letter from the Department of Labor finding claims adjusters exempt applied to the case before it.

    The Court reasoned that the November 19, 2002, opinion letter was confined to

    facts and circumstances presented and acknowledged that different facts and 18circumstances could change that conclusion.

    19In In re Wal-Mart Stores, Inc., full-time pharmacists alleged Wal-Mart

    violated the salary basis test because the company reduced plaintiffs‘ salaries 20due to a decrease in Wal-Mart‘s workloads. The district court granted plaintiffs‘ motion for summary judgment. However, the Tenth Circuit Court of Appeals

    reversed and remanded on the ground that an employer‘s practice of

    prospectively changing salaries does not convert salaried employees to hourly 21employees unless the purported salary becomes a ―sham.‖

    The circuit court based its decision on 29 C.F.R. ? 541.3(e) and three 22Department of Labor opinion letters (and supporting case law). In the opinion

     13 529 U.S. 576, 587, 120 S. Ct. 1655 (2000).

    14 2004 WL 2278344 (Colo. App. Oct. 7, 2004).

    15 Id. at *1.

    16 Id. at *2.

    17 Id. at *4.

    18 Id. at *4.

    19th 395 F.3d 1177 (10 Cir. 2005).

    20 Id. at 1178 (citing 29 C.F.R. ? 541.3).

    21 Id. at 1179.

    22 U.S. Department of Labor, Wage & Hour Opinion Letter dated February 23, 1998, 1998 WL

    5 ? 2006 American Bar Association http://www.bnabooks.com/ababna/flsa/2006/eisenberg.doc

letters, the DOL concluded that reducing the work schedule of salaried

    employees for operational reasons with a corresponding reduction in pay does 23 not impact the employees‘ exempt status.

    24Packard v. Pittsburgh Transp. Co., involves the application of the FLSA‘s Motor Carrier Act exemption, 29 U.S.C. ? 213(b)(1) (―MCA‖). Plaintiffs were drivers who provided intrastate transportation to elderly and disabled people

    pursuant to a federally-funded program. On occasion, the drivers would

    transport passengers to and from local railway stations or the local airport.

    Defendant provided the transportation services in much the same manner as a

    cab company in that there were no set routes and pick-ups and drop-offs were to

    locations specified by each passenger. Most notably, the company did not have

    any arrangement, formal or informal, with the local railways or airlines.

    The court granted plaintiffs‘ motion for summary judgment on the ground

    that, because there was no ―through ticketing‖ arrangement between the

    interstate railway carriers or the airlines and defendant, the Secretary of

    Transportation did not have the authority to regulate defendant‘s drivers. The

    district court relied on a DOL opinion letter which was based on an alleged ―1974

    DOT ruling.‖ The opinion letter determined that in a similar factual circumstance

    the lack of a ―through ticketing‖ arrangement precluded the DOT‘s regulation of

    drivers. The district court gave the DOL opinion letter Chevron deference.

    The Third Circuit Court of Appeals affirmed the District Court‘s decision,

    but on different grounds. After a detailed analysis of the DOL opinion letter‘s

    origins and basis, the appellate court held that both the DOL opinion letter and

    the DOT ―ruling‖ were not entitled to Chevron or Skidmore deference. The court found that the DOT, not the DOL, has the authority to interpret the MCA and that

    the DOL letter was not based on a DOT interpretation, but on an ―unofficial 25interagency letter.‖ The Court went on to analyze the MCA exemption. A more

    detailed discussion of this holding is included in Chapter 5.

    26In Kitchings v. The Florida United Methodist Children’s Home, the district

    court for the Middle District of Florida determined that a not-for-profit organization

    providing residential care and treatment for abandoned, state-dependent, or pre-

852696; U.S. Department of Labor, Wage & Hour Opinion Letter dated March 4, 1997, 1997 WL

    998010; Department of Labor, Wage & Hour Opinion Letter dated November 13, 1970, 1970 WL

    26462.

    23In re Wal-Mart Stores, Inc., 395 F.3d at 1185-1186.

    24rd 418 F.3d 246 (3 Cir. 2005).

    25 Id. at 251.

    26 2005 WL 1172494 (M.D. Fla. 2005).

    6 ? 2006 American Bar Association http://www.bnabooks.com/ababna/flsa/2006/eisenberg.doc

    27 This case is delinquent children was not an ―enterprise‖ under the FLSA.

    notable in this section because the court relied on two DOL opinion letters to

    impose an additional layer of analysis under the enterprise test for this particular

    defendant. The DOL opinion letters indicate that a private charitable nonprofit

    institution providing care for neglected and dependent children is not an

    enterprise as long as the entity does not operate in conjunction with a hospital,

    covered institution, or preschool/daycare. The court indicated that these letters

    were only entitled to Skidmore deference because the underlying regulations

    were not ambiguous. Nonetheless, the court analyzed these additional

    requirements at length. A more detailed discussion of the enterprise issue in this

    case is included in Chapter 3.

    28In Mascol v. E&L Transp., Inc., et al., plaintiffs, former and present ambulette drivers, sued their employers alleging violations of the overtime 29provisions of the FLSA and New York State Labor Law. Defendants provided 30passenger transportation services for mobility-limited passengers. Defendants

    argued that FLSA exempts ―any driver employed by an employer engaged in the

    business of operating taxicabs,‖ and their business fell within this taxicab 31exemption. The court granted plaintiffs‘ motion for summary judgment holding 32the taxicab exemption did not apply.

    33The court relied on Herman v. Brewah Cab, Inc., and an April 17, 1998 Wage and Hour Division Opinion Letter in its decision. The opinion letter relied

    upon by the court limits ―taxicabs‖ to vehicles that are offered for hire to the

    general public on city streets. The court concluded that the ambulettes were not

    cabs because, among other reasons, they were not for hire to the general public

    and did not have meters. As other courts have done, the district court indicated

    that the DOL opinion letter was entitled to Skidmore deference.

     27 Id. at *1.

    28 387 F. Supp.2d 87 (E.D.N.Y. 2005). A subsequent decision, Mascol, et al. v. E&L Transp., Inc.,

    et al., 2005 WL 1541045 (E.D.N.Y. June 29, 2005) was issued to grant plaintiffs class certification.

    29 Id. at 89.

    30 Id. at 91.

    31 Id. at 97 (citing 29 U.S.C. ? 213(b)(17)).

    32 Id. at 90.

    33 992 F. Supp. 1054 (E.D. Wis. 1998).

    7 ? 2006 American Bar Association http://www.bnabooks.com/ababna/flsa/2006/eisenberg.doc

    CHAPTER 3

    COVERAGE

    II. THE EMPLOYER-EMPLOYEE RELATIONSHIP

    C. Employee or Independent Contractor

    34In Boudreaux v. Banctec, Inc., the district court denied the Defendant‘s summary judgment motion finding that there were genuine issues of material fact

    as to whether the Plaintiff, who worked under an Independent Contractor

    Agreement, was an employee. The district court found disputed issues of fact as

    to the degree of control the Defendant exercised over the Plaintiff‘s service calls.

    The district court also found unresolved disputes as to whether the Plaintiff had

    an opportunity to earn a profit. Most factors examined were inconclusive and the

    district court needed more evidence as to whether the Plaintiff had a genuine

    ability to decline service calls and make other decisions that might increase his

    own profit margins.

    35In Katz v. Enterprise Solutions, Inc., the district court denied the

    Plaintiff‘s motion for summary judgment on the issue of whether he was an

    employee or an independent contractor for the Defendant (ESI). The district

    court relied on the six-factor ―economic realities‖ test as adopted by the U.S. 36Supreme Court in Rutherford Food Corp. v. McComb. In denying the motion,

    the district court referred to unspecified disputed facts.

    F. Volunteers

    In an unpublished opinion discussing both state and federal law, a 37California Appeals panel in America Online Cases reviewed the issue of

    whether individuals may be unpaid volunteers for for-profit companies. The

    panel held that individuals may engage work for their own pleasure if there is no 38expectation of compensation.

     34 366 F. Supp. 2d 425 (E.D. La. 2005).

    35 2005 WL 1667791 (E.D. Va. June 21, 2005).

    36 331 U.S. 722, 67 S. Ct. 1473, 91 L. Ed. 1772 (1947.)

    37 2005 Cal.App. Unpub. LEXIS 4663 (Cal. App. May 26, 2005).

    38 The panel appears to reject the Treatise Supplement‘s opposite view, citing the 2002 Cumulative Supplement at page 45, as unsupported by any citation to legal authority.

    8 ? 2006 American Bar Association http://www.bnabooks.com/ababna/flsa/2006/eisenberg.doc

Report this document

For any questions or suggestions please email
cust-service@docsford.com