Opinion
Case No. C-3-96-62.
March 30, 2000.
At all relevant times, Plaintiffs Donald Schneider, Randall Wade and Ernest Whitehead worked as firefighter dispatchers for Defendant City of Springfield. They worked an average of 53 hours per week and received overtime compensation for any hours worked in excess of 144 hours during a 19-day period. In a September 4, 1997, Decision and Entry, the Court found the City liable to Schneider for unpaid overtime wages under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 207(a)(1). (Doc. #23). Specifically, the Court determined that Schneider was entitled to overtime compensation for all hours he had worked as a dispatcher in excess of 40 hours per week. (Id.). In so ruling, the Court noted that the FLSA compels employers to pay overtime compensation to non-exempt employees who work more than 40 hours per week. The Court then found Schneider not subject to a partial overtime exemption provided by 29 U.S.C. § 207(k), which allows less generous overtime compensation for individuals "engaged in fire protection or law enforcement activities." The Court identified two reasons why Schneider, a dispatcher, was not an employee engaged in fire protection activities. First, he was not assigned as a dispatcher for purposes of training or familiarization, or because of illness, injury or infirmity, as required by 29 C.F.R. § 553.210. Second, he spent more than 20 percent of his dispatching time performing "non-exempt" work, which, pursuant to 29 C.F.R. § 553.212, precluded application of the § 207(k) partial overtime exemption. Accordingly, the Court found the City liable to Schneider for unpaid overtime wages.
The other Plaintiffs in this lawsuit, Wade and Whitehead, each filed a Consent to be Added as a Party Plaintiff (Doc. #33-34) after the Court's Decision and Entry finding the Defendant liable to Schneider for overtime wages. The Court construed the Consents as motions seeking leave to be added as party Plaintiffs and sustained the same. (See Notation Entry appearing on Doc. #34; Doc. #52).
"Section 7(k) outlines a special overtime system for employees of public agencies engaged in fire protection or law enforcement activities. As construed by the Department of Labor, this section mandates that time-and-a-half be paid to fire protection workers for every hour worked in excess of fifty-three per workweek." West v. Anne Arundel County, Maryland, 137 F.3d 752, 760 (4th Cir. 1998).
Thereafter, the Court filed a January 5, 1999, Decision and Entry sustaining in part, and overruling in part, cross Motions for Summary Judgment on the issue of damages. (Doc. #53). In that ruling, the Court concluded, as a matter of law, that the City was not immune from paying FLSA damages under 29 U.S.C. § 259(a), but that the City's FLSA violation was not a "willful" one. Finally, the Court found a genuine issue of material fact as to whether the City should be required to pay some amount of "liquidated damages."
Schneider and Wade were parties to the Plaintiffs' Motion for Summary Judgment on the issue of damages (Doc. #49). Whitehead, however, was not a party to that Motion, because he was not added as a party Plaintiff in this action until after the filing of that Motion. (See Doc. #53 at 2).
When a defendant "willfully" violates the FLSA, a plaintiff may recover unpaid overtime compensation for the previous three years. For an ordinary (i.e., non-willful) violation of the FLSA, a plaintiff may recover unpaid overtime compensation for the previous two years. McLaughlin v. Richland Shoe Co., 486 U.S. 128, 135 (1988).
When an employer violates the FLSA, the aggrieved employee ordinarily is entitled to an award of unpaid overtime compensation and an additional equal amount as liquidated damages.Featsent v. City of Youngstown, 70 F.3d 900, 906 (6th Cir. 1995). Under 29 U.S.C. § 260, however, a court may award a lesser amount of "liquidated damages," or even no liquidated damages at all, "if the employer shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the [FLSA]. . . ." Id.
After that ruling, the Court held a March 1, 1999, bench trial on the issue of damages and took the matter under advisement. (Minutes, Doc. #58). The bench trial addressed two issues: (1) whether the City is obligated to pay any "liquidated damages," in addition to unpaid overtime compensation; and (2) the proper method of computing the overtime compensation owed by the City. The parties addressed both issues at trial and in pre-and post-trial briefs. (Doc. #55-56, 60-61). Based on the evidence presented at the March 1, 1999, bench trial, the Court now sets forth the following findings of fact and conclusions of law.
The findings of fact set forth herein will be limited to the issues now pending before the Court.
At all relevant times, the Plaintiffs worked as firefighter dispatchers for the City of Springfield. They typically worked 53 hours per week, which was consistent with the terms of a collective bargaining agreement ("CBA") entered into by the City and their union, the International Association of Firefighters, AFL-CIO-CLC. The Plaintiffs' 53-hour work week was known as a "tour shift" or "tour of duty," and it was the typical schedule for firefighter dispatchers, regardless of whether they worked in the dispatch center or in the fire station. The CBA established different hourly rates of pay for firefighters who worked a 40-hour week and those who worked a 53-hour tour. For example, as of January 1, 1995, entry-level firefighters on the 40-hour schedule were paid an hourly rate of approximately $13.14, whereas entry-level firefighters on the 53-hour "tour shift" were paid an hourly rate of approximately $9.92. Regardless of whether a firefighter worked a traditional 40-hour week or a 53-hour "tour shift," however, he received compensation for every hour that he worked. While firefighters on the "tour shift" worked more hours, their hourly rate was lower. Consequently, the bi-weekly and annual compensation for 40-hour and 53-hour firefighters was identical.
At all relevant times, Donald J. Lee served as either the Chief or Assistant Chief of the City of Springfield Fire Department. Lee's responsibilities included, inter alia, negotiating CBAs with the Plaintiffs' union and reviewing employees' grievances. Lee also bore responsibility for understanding the laws applicable to compensation of the City's firefighters. He understood § 207(k) of the Fair Labor Standards Act to mean that state-certified firefighters could work 53-hour weeks, without receiving overtime compensation, even if they worked as dispatchers. Lee reached this conclusion for a number of reasons. First, he reviewed a Fair Labor Standards Handbook, which stated:
Generally, the FLSA regulations do not regard civilian dispatchers as employees in fire protection activities for the purpose of section 207(k). However, if the dispatcher were also a trained firefighter and had the legal authority and responsibility to fight a fire in an emergency or other circumstance, then he could be considered an employee in fire protection activities and covered under section 207(k).
(Defendant's Exh. #4, 5, 5.1). Lee never saw a version of the Fair Labor Standards Handbook containing language other than that set forth above. As a result, he believed that the City's compensation of firefighter dispatchers assigned to the 53-hour "tour shift" complied with the FLSA. Second, Lee consulted Department of Labor "Letter Rulings." One such Letter Ruling stated that civilian fire and police dispatchers did not come within the section 207(k) partial overtime exemption, which allowed fire protection employees to work 53 hours over a seven-day period, without receiving overtime compensation. (Defendant's Exh. 6.0-6.1). Lee inferred from this Letter Ruling that the FLSA drew a distinction between civilian dispatchers, who fell outside of section 207(k), and uniformed firefighters, who he believed came within the scope of section 207(k). Third, Lee relied on a second Letter Ruling, which stated that civilian dispatchers or radio operators who work for law enforcement agencies do not qualify for the section 207(k) partial overtime exemption. (Defendant's Exh. 7). Once again, Lee interpreted this Letter Ruling as drawing a distinction between uniformed and civilian personnel for purposes of section 207(k).Fourth, during his attendance at various professional and associational meetings, Lee never heard of any FLSA lawsuit or other challenge, in any jurisdiction, involving the scheduling of firefighter dispatchers to 53-hour "tours." When Lee mentioned the present litigation to colleagues in other jurisdictions, they were "amazed," because treating firefighter dispatchers as section 207(k) exempt was customary in other areas. Fifth, Lee has no recollection of any firefighters or anyone from the Plaintiffs' union ever challenging, either through a grievance or through the collective bargaining process, the City's compensation of firefighter dispatchers who worked 53 hours per week. Sixth, no one from the City law department ever informed Lee that treating firefighter dispatchers as section 207(k) exempt might violate the FLSA. Seventh, Lee participated in various labor-management committee meetings and never heard anyone question the manner in which the City's firefighter dispatchers were being compensated.Eighth, labor law attorneys retained by the City to participate in the collective bargaining process never warned Lee that the City's compensation of its firefighter dispatchers might be in violation of the FLSA. Ninth, Lee believed that dispatching would be considered a "fire suppression activity" for purposes of section 207(k), because firefighter dispatchers made decisions regarding the particular type of fire alarm to "call in" and the type of apparatus to dispatch.
At all relevant times, Russell Bayless worked for the Springfield Fire Department as either a Lieutenant or a Captain. In the mid-1980s, he attended a FLSA seminar on behalf of the City of Springfield. Upon his return to work, he informed representatives of the Springfield Fire Department, including Lee, that the FLSA was going to change the way "some things" had been done. However, he did not mention anything about overtime compensation for firefighter dispatchers. A second employee of the Springfield Fire Department, Thomas Beatty, reviewed various trade journals from the mid-1980s to the mid-1990s. He never saw anything in those journals concerning the application of the FLSA to uniformed firefighter dispatchers. From his review of those materials, however, he discerned that eligibility for the partial overtime exemption of section 207(k) turned on the function that an employee performed, and not on his classification as either "uniformed" or "civilian." Although Beatty was concerned about this issue, he never expressed his concerns to the Assistant Chief or the Chief of the Springfield Fire Department, the individuals who were responsible for the City's compliance with the FLSA.
II. Conclusions of Law Regarding Liquidated Damages
The Fair Labor Standards Act was enacted in 1938 to eliminate "labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers." 29 U.S.C. § 202(a). The Act requires employers to provide overtime compensation for non-exempt employees who work in excess of forty hours a week. 29 U.S.C. § 207(a)(1). In addition to paying past-due overtime compensation, an employer who violates the FLSA ordinarily must pay an equal amount as liquidated damages. 29 U.S.C. § 216(b). If an employer proves that the act or omission giving rise to FLSA liability was done in good faith, and if it had reasonable grounds for believing that its conduct did not violate the Act, then a court, in its discretion, may decline to award liquidated damages. E.E.O.C. v. City of Detroit Health Dept., 920 F.2d 355, 357 (6th Cir. 1990), citing 29 U.S.C. § 260. Even when an employer meets this burden, however, a court nevertheless "may award full liquidated damages equal to, and in addition to, the unpaid back wages." McClanahan v. Mathews, 440 F.2d 320, 323 (6th Cir. 1971). A court also retains the discretion to award liquidated damages in an amount less than a plaintiff's total unpaid overtime compensation.Featsent v. City of Youngstown, 70 F.3d 900, 906 (6th Cir. 1995). When an employer lacks good faith and reasonable grounds for believing that its conduct did not violate the Act, however, a district court must award liquidated damages. Dole v. Elliot Travel Tours, Inc., 942 F.2d 962, 967 (6th Cir. 1991).
Based on the evidence presented at the March 1, 1999, bench trial, the Court concludes that the City of Springfield did act in good faith, and with reasonable grounds for believing that its conduct did not violate the FLSA, when it failed to pay its firefighter dispatchers overtime compensation. In the exercise of its discretion, the Court also concludes that the City is required to pay liquidated damages only in an amount equal to the prejudgment interest that otherwise would be owed on unpaid overtime compensation, in accordance with McClanahan v. Mathews, 440 F.2d 320, 326 (6th Cir. 1971).
In McClanahan, the Sixth Circuit determined that a district court must award prejudgment interest on claims for unpaid wages due under the FLSA, if it chooses not to award any liquidated damages. Alternatively, if a district court elects to award less than full liquidated damages, the liquidated damages award must at least equal the amount of prejudgment interest that otherwise would have been owed by the employer on a plaintiff's clam for unpaid back wages. McClanahan, 440 F.2d at 324-326.
In reaching the foregoing conclusions, the Court finds Lee's reliance on a Fair Labor Standards Handbook to be particularly significant. As noted above, the Handbook, which was published in 1988, reasonably appears to cover the present situation. In response to a hypothetical question about whether a firefighter would be covered by section 207(k) if he exclusively performed dispatching work, the Handbook stated:
Generally, the FLSA regulations do not regard civilian dispatchers as employees in fire protection activities for the purpose of section 207(k). However, if the dispatcher were also a trained firefighter and had the legal authority and responsibility to fight a fire in an emergency or other circumstance, then he could be considered an employee in fire protection activities and covered under section 207(k).
(Defendant's Exh. #5.1).
In light of the foregoing response, Lee reasonably and in good faith could have concluded, and did conclude, that firefighter dispatchers were covered by section 207(k), which allows certain employees to work 53-hour weeks without receiving overtime compensation. Indeed, the facts of the present dispute are nearly identical to the hypothetical facts set forth in the Fair Labor Standards Handbook question and answer. In his prior Motion for Summary Judgment, Schneider admitted that he possessed the legal authority to fight a fire, notwithstanding his assignment as a dispatcher. (Doc. #18 at 23) ("Plaintiff concedes that he . . . has been trained to the extent required by State statute and local ordinance"). With respect to Whitehead and Wade, counsel for the Plaintiffs and the City stipulated during the March 1, 1999, bench trial that both men worked, at all relevant times, as "certified" firefighters. Although Schneider argued in his prior Motion for Summary Judgment that he was not "generally" responsible for fighting fires, the Handbook provision recognizes that a full-time dispatcher will not "generally" fight fires. It speaks only of having such responsibility in an "emergency or other circumstance[.]" In a prior affidavit, Schneider admitted that firefighter dispatchers could be recalled to provide assistance at "third alarm" fires and at some residential fires. (Schneider affidavit of Feb. 19, 1997, at ¶ 23, 28). Consequently, Lee had a good faith, reasonable basis for concluding that firefighter dispatchers fell within the scope of section 207(k), based on the Handbook provision set forth above.
In his prior affidavit, Schneider averred that dispatchers typically did not "fight" fires, even when they were called to the scene in an emergency. (Schneider affidavit at ¶ 23-32). Consequently, it could be argued that the Plaintiffs did not have the "responsibility to fight a fire in an emergency or other circumstance," within the meaning of the Fair Labor Standards Handbook provision quoted above. To engage in such an analysis, however, would be to stray from the issue now before the Court. The question is not whether the Plaintiffs actually fit within the scope of section 207(k), or even within the precise language of the Handbook provision quoted above. Rather, the issue is whether Lee, who is not an attorney, had a good faith, reasonable basis for believing that the Plaintiffs came within the scope of section 207(k), based on the Handbook provision and the other grounds set forth in his trial testimony.
In addition, the Court concludes that Lee had a good faith, reasonable basis for inferring from the two Department of Labor Letter Rulings that "uniformed" firefighter dispatchers would come within the scope of section 207(k), whereas "civilian" dispatchers would not. Indeed, by specifying that "civilian" dispatchers do not meet the requirements of section 207(k), the Department of Labor certainly left open the possibility that "uniformed" dispatchers would qualify for the exemption. Such an inference is particularly reasonable in light of the Fair Labor Standards Handbook provision quoted above, which also distinguished between civilian dispatchers and firefighter dispatchers. The Court stresses that the issue is not whether Lee's interpretation was the most reasonable inference to be drawn from the Letter Rulings, or whether Lee was correct in his reading of those Rulings. Rather, the issue is whether the inference Lee drew from the Letter Rulings was a good faith, reasonable one. After hearing his testimony and observing his demeanor on March 1, 1999, the Court concludes that it was.
Although Lee's reliance on these resources is insufficient to absolve the City from all liability under 29 U.S.C. § 259(a), such reliance persuades the Court that the City acted in good faith and with a reasonable basis for believing that it had complied with the FLSA. Although the Letter Rulings did not address the City's specific circumstances, the Court finds that the City acted in good faith by inferring from those rulings that it had properly compensated its firefighter dispatchers.
Additionally, the Court finds that Lee possessed a good faith, reasonable basis for concluding that the City had complied with the FLSA, given that: (1) he was unaware of any FLSA challenge, in any jurisdiction, to treating a firefighter dispatcher as partially overtime exempt, pursuant to section 207(k), even though the practice was relatively common in other jurisdictions; (2) the issue of compensating the City's firefighter dispatchers based on a 53-hour work week had never been challenged through a grievance or during collective bargaining negotiations; (3) independent, retained labor-law counsel never informed the City of a potential FLSA violation based on its compensation of firefighter dispatchers; and (4) Lee participated in various labor-management committee meetings and never heard anyone question the manner in which the City's firefighter dispatchers were being compensated.
Cf. Featsent v. City of Youngstown, 70 F.3d 900, 906 (6th Cir. 1995) ("During negotiations, the City was represented by an attorney. Presumably, the duty of the attorney was not only to represent the City's interest, but also to ascertain and follow the dictates of the law, including the FLSA. There is no evidence that at any time the City's attorney advised the City that the Agreement's method of calculating overtime compensation violated the FLSA. From its attorney's silence, the City was entitled to a reasonable belief that the Agreement did not violate the law, including the FLSA.").
In opposition to the foregoing reasoning, the Plaintiffs advance several arguments which the Court finds to be unpersuasive. First, the Plaintiffs argue that they were not even "qualified" as firefighters, because "[f]rom 1995 onward, no dispatchers at all received firefighter certified training." (Doc. #61 at 3). Second, they cite Battalion Chief Thomas Beatty's trial testimony that he believed the firefighter dispatchers were inadequately trained to fight fires, and that the City was not in compliance with the FLSA. According to the Plaintiffs, Beatty's personal belief that the City's compensation of its firefighter dispatchers violated the FLSA demonstrates "actual knowledge" of a violation on the part of the City. Third, they argue that Lee had no basis whatsoever for drawing a distinction between "uniformed" and "civilian" firefighters. Fourth, they contend Lee was aware that paramedics, as opposed to firefighters, were required to participate at a fire scene in order to qualify for the section 207(k) partial overtime exemption.
The foregoing arguments do not persuade the Court that Lee lacked a good faith, reasonable basis for believing that the City had complied with the FLSA. The Plaintiffs' first argument stems from three statements made by Lee on cross-examination. First, he agreed that "from 1995 onward the dispatchers weren't even permitted to go to the continuing education classes for paramedic certification that would have allowed them to regularly report to fires." Second, he agreed that "from 1995 onward the dispatchers were not permitted to attend classes on fire suppression techniques." He also agreed that continuing education in fire suppression techniques ordinarily would be a prerequisite for someone who regularly attended fire scenes and engaged in firefighting activities, "[i]f they were available and on duty. . . ."
In reliance on the foregoing testimony, the Plaintiffs appear to suggest that Lee could not have reasonably believed they were "qualified" firefighters who were capable of engaging in fire suppression activities, as required by section 207(k). (Doc. #61 at 2-3). The Court finds this argument unpersuasive. As an initial matter, Lee's testimony does not support the conclusion advanced by the Plaintiffs. Lee agreed only that, after 1995, firefighter dispatchers did not receive the training that "ordinarily" would be required for a person to report "regularly" to fires. It is undisputed, however, that the Plaintiffs did not "regularly" report to fires. They worked as full-time dispatchers. Notably, Lee did not testify that the Plaintiffs lacked the minimum training required by law in order to participate in fire suppression in an emergency. As set forth, supra, Schneider previously admitted that he possessed the legal authority to fight a fire, notwithstanding his assignment as a dispatcher. (Doc. #18 at 23) ("Plaintiff concedes that he . . . has been trained to the extent required by State statute and local ordinance"). Schneider also admitted that firefighter dispatchers could be recalled to provide assistance at "third alarm" fires and at some residential fires. (Schneider affidavit of Feb. 19, 1997, at ¶ 23, 28). In addition, during the March 1, 1999, bench trial, counsel for both parties stipulated that Whitehead and Wade worked, at all relevant times, as "certified" firefighters. As a result, for the reasons set forth more fully above, the Court concludes that Lee had a good faith, reasonable basis for believing that the Plaintiffs fell within the scope of section 207(k).
Cf. EF Operating Corp. v. American Bldgs., 993 F.2d 1046, 1050 (3d Cir. 1993), cert. denied, 510 U.S. 868 (1993) (reasoning that "one cannot casually cast aside representations, oral or written, in the course of litigation simply because it is convenient to do so," and that a "reviewing court may properly consider the representations made in the appellate brief to be binding as a form of judicial estoppel, and decline to address a new legal argument based on a later repudiation of those representations").
In reaching this conclusion, the Court stresses, once again, that the issue is not whether Lee was correct in his belief regarding the City's compliance with the FLSA. The Court previously resolved this issue, finding the City liable under the FLSA, as a matter of law. The issue now before the Court is only whether Lee had good faith, reasonable basis for believing, albeit incorrectly, that the City had complied with the FLSA.
The Court also finds unpersuasive the Plaintiffs' reliance on Beatty's testimony. As noted, supra, Beatty testified that he personally believed firefighter dispatchers were inadequately trained to fight fires, and that the City's compensation of its firefighter dispatchers violated the FLSA. As an initial matter, the Court finds Beatty's testimony not credible. Beatty testified that he personally determined, as early as the mid-1980s, that the City's compensation of its firefighter dispatchers likely violated the FLSA. Nevertheless, he never brought the matter to the attention of the Assistant Chief or Chief of the Fire Department, and he provided no explanation at trial for his failure to do so. In any event, Beatty's testimony does not demonstrate the absence of good faith by the City, even if his testimony is true. Notably, Beatty testified that he was not concerned about firefighter dispatchers being ineligible for the section 207(k) exemption as a result of some deficiency in their training. He also testified that he never informed the Assistant Chief or the Chief of the Fire Department about his FLSA concerns, even though those were the individuals with responsibility for assuring the City's compliance with the Act. Finally, given that Beatty was not the individual with responsibility for the City's FLSA compliance, his private concerns about overtime compensation do not demonstrate the City's "actual knowledge" of an FLSA violation. Nor do his private concerns demonstrate the absence of good faith on the part of Lee.
The Plaintiffs' third argument is no more persuasive. As noted above, the Plaintiffs contend that Lee had no basis for drawing a distinction between "uniformed" and "civilian" firefighters. This argument is belied by the Fair Labor Standards Handbook passage and the Department of Labor Letter Rulings quoted above. In retrospect, it is apparent that Lee's reliance upon these materials was misplaced. Based on the reasoning set forth above, however, the Court concludes that he relied upon them in good faith and with a reasonable basis for doing so.
Finally, Lee's alleged awareness that paramedics were required to participate at a fire scene in order to fall within the scope of section 207(k), even if true, simply does not demonstrate a lack of good faith regarding the City's compensation of firefighter dispatchers.
For the foregoing reasons, the Court concludes that Lee and the City of Springfield made a good faith attempt to comply with the FLSA, and that they had a reasonable basis for believing that their compensation of firefighter dispatchers did comply with the Act. Despite this conclusion, the Court finds it appropriate to award the Plaintiffs liquidated damages in an amount equal to the prejudgment interest on their unpaid overtime compensation. See McClanahan, 440 F.2d at 324-326 (concluding that a district court must either award prejudgment interest for FLSA violations or award liquidated damages in an amount that is, at a minimum, equal to such prejudgment interest). Such an award of liquidated damages will make the Plaintiffs whole for the City's violation of the FLSA.
III. Conclusions of Law Regarding Computation of Damages
The only remaining issue is the proper method of computing the overtime pay to which the Plaintiffs are entitled. "Overtime pay is defined as one and one-half times an employee's `regular rate.'" Rushing v. Shelby County Government, 8 F. Supp.2d 737, 743 (W.D.Tenn. 1997). In order to resolve the present dispute, then, the Court must determine the Plaintiffs' "regular rate" of pay. "The regular rate is the hourly rate actually paid to the employee for the normal, non-overtime work week for which he is employed."Aaron v. City of Wichita, Kansas, 54 F.3d 652, 655 (10th Cir. 1995). An employee's "regular rate" is calculated by dividing his pay by the number of hours for which that pay is intended to compensate. Id. The dispute in the present case involves the number of hours for which the Plaintiffs' pay was intended to compensate them. The Plaintiffs contend that their pay was intended to compensate them for only the first 40 of the 53 hours per week that they worked. According to the Plaintiffs, they worked the other 13 hours without receiving any compensation. Conversely, the City argues that the Plaintiffs' pay was intended to compensate them for the entire 53 hours that they worked. This issue is significant, because it dramatically impacts upon the amount of unpaid overtime compensation to which the Plaintiffs are entitled. Upon review, the Court concludes that the City's proposed method of calculating unpaid overtime compensation is supported by the applicable CBA provisions, Plaintiff Schneider's own understanding of his compensation and relevant case law.
If the Plaintiffs are correct, then they have received no compensation for the 13 hours a week that they worked in excess of 40. As a result, they would be entitled to one-and-one-half times their "regular rate" (weekly pay divided by 40) for each of these 13 hours. On the other hand, if the City is correct, then the Plaintiffs already have received "straight-time" for hours 41 through 53. As a result, they would be entitled to receive only an additional one-half of their "regular rate" (weekly pay divided by 53) for each of these 13 hours.
It is undisputed that the Plaintiffs were "tour" employees. Article 16, Section B of the CBA between the City and the Plaintiffs' union states that "[t]he hours of work for tour employees shall total approximately fifty-three (53) hours per week." (Defendant's Exh. 10.18). The CBA also contains both an "hourly rate" and an "annual rate" of compensation for "tour" employees. (Id. at 10.40). If the "hourly rate" is multiplied by 53 hours per week, and then multiplied again by 52 weeks per year, the result is the "annual rate." Consequently, the CBA makes clear that the Plaintiffs received pay for each of the 53 hours per week that they worked. Such a conclusion is wholly consistent with Schneider's own understanding of his compensation. During the March 1, 1999, bench trial, Schneider agreed that the CBA provided for "compensation which covered all of the hours that [he] worked[,] averaging 53 per week." Although Schneider's reading of the CBA certainly is not dispositive, it is noteworthy that his interpretation of the document is consistent with the City's interpretation.
This conclusion is also supported by Article 44, Section A of the Agreement, which provides for "tour" employees to be "paid at appropriate overtime rates for all hours worked in excess of their regular schedule" (i.e., in excess of 53 hours per week). (Id. at 10.37). The Agreement also states that the 53-hour "tour" rate will be used to compute hourly overtime. . . ." (Id.). These provisions lend additional support to the Court's determination that, under the terms of the CBA, the Plaintiffs received "straight-time" compensation for each of the 53 hours per week that they worked.
In Aaron v. City of Wichita, Kansas, 54 F.3d 652, 656 (10th Cir. 1995), the court recognized that "when determining the number of hours a salary is intended to cover, the contract between the parties is not necessarily determinative." For example, the contract or other documentary evidence will not control when such evidence is contrary to the actual practices of the parties. See, e.g., Rushing v. Shelby County Government, 8 F. Supp.2d 737, 744 (W.D.Tenn. 1997) (concluding that the parties intended the plaintiffs' salary to compensate them for all hours worked, despite the existence of documentary evidence suggesting otherwise). In the present case, however, Schneider's understanding of his compensation is wholly consistent with the CBA, and the Court has been presented with no evidence suggesting that the Plaintiffs were not compensated for each of the 53 hours that they worked.
Finally, the Court's conclusion that the Plaintiffs' pay was intended to compensate them for 53 hours of work per week is consistent with analogous FLSA case law. As "tour" employees, the Plaintiffs worked a 24-hour "tour of duty," followed by at least 48 hours off of duty. As a result of this scheduling arrangement, the Plaintiffs worked an average of 53 hours per week. (Defendant's Exh. 10.17-10.18). In Aaron, the Tenth Circuit discussed the proper method of computing overtime pay for firefighters who were employed under a similar arrangement which required them to work an average of 56 hours per week. The firefighters in Aaron argued that their "hourly rate" should be determined by dividing their salary by 40 hours. Like the Plaintiffs in the present case, the firefighters reasoned that they were entitled to one and one-half times that "hourly rate" for all hours worked in excess of 40.
Upon review, the Tenth Circuit rejected this argument. In so doing, the court noted that the crucial issue was whether the parties had intended for the firefighters' salary to compensate them for all hours worked or for only the first 40 hours worked. After reviewing certain Memoranda of Understanding and dividing the firefighters' bi-weekly salaries by the hourly rate contained in the Memoranda, the Tenth Circuit determined that they had been compensated for every hour worked, not just for the first 40 hours. Significantly, the Aaron court also found nothing in the FLSA to prohibit determining an employee's "regular rate" by dividing his salary by the total number of hours worked, even if those hours included some overtime. In reaching this conclusion, the Tenth Circuit reasoned, in relevant part, as follows:
The district court concluded as a matter of law that the City's calculation for the regular rate could not be correct, because overtime hours could not be used in calculating the regular rate. This interpretation is clearly inconsistent with FLSA regulations. The regulations provide that a base salary used to calculate a regular rate can be intended to cover more than 40 hours in one week and the regulations illustrate how to deal with the calculation of the regular rate in such a case. 29 C.F.R. § 778.325 (1993). The example given in the regulations states:
If an employee whose maximum hours standard is 40 hours was hired at a fixed salary of $275 for 55 hours of work, he was entitled to a statutory overtime premium for the 15 hours in excess of 40 at the rate of $2.50 per hour (half-time) in addition to his salary, and the statutory overtime pay of $7.50 per hour (time and one-half) for any hours worked in excess of 55. Id.
The City claims, and the [Memoranda of Understanding] indicate, that this was the type of arrangement agreed to by the City and the firefighters. The bi-weekly salaries found in the MOAs were intended to cover 112 hours of work for each pay period. Therefore, the regular rate consisted of the MOA-designated bi-weekly salary divided by 112. The MOA bi-weekly salary compensated the firefighters at that rate for up to 112 hours of work. If a firefighter worked a total of 112 hours, some of those hours would be considered overtime hours, and therefore, the firefighters would also receive one-half the regular rate for each of those hours. Any hours worked over 112 were all overtime hours and the firefighters would be entitled to one and one-half times the regular rate for those hours. This pay scheme is clearly consistent with the FLSA regulations.Id. at 655. As the Tenth Circuit recognized in Aaron, "[i]f a designated base salary is intended to cover overtime hours as well as non-overtime hours, it is necessary to divide the salary by the total hours and not just the non-overtime hours because a failure to do so will result in a rate that is not representative of the rate actually paid for the `normal, non-overtime workweek.'"Aaron, 54 F.3d at 656; see also Zumerling v. Devine, 769 F.2d 745 (Fed. Cir. 1985) ("OPM's determination that the regular rate is to be calculated based upon the total hours worked for remuneration is the proper one."); Rushing, 8 F. Supp.2d at 742 (following Aaron and computing the plaintiffs' "regular rate" by dividing their salary by all hours worked each week, not just by the first 40 hours); Zoltek v. Safelite Glass Corp., 884 F. Supp. 283 (N.D.Ill. 1995).
In opposition to the Court's conclusion that they were compensated for 53 hours of work per week, the Plaintiffs insist that their CBA "explicitly sets out a `40 hour' rate" for their "job type." (Doc. #56 at 4). In reality, the CBA does not distinguish between job types (i.e., dispatcher v. non-dispatcher) at all. It is true, however, that the CBA includes both a "tour" rate of pay and a "40-hour" rate of pay. "Tour" employees such as the Plaintiffs worked 24 straight hours followed by at least 48 hours off of duty, for a total of 53 hours per week, whereas "40-hour" employees worked five consecutive, eight-hour days. The hourly rate earned by the City's firefighters was simply a function of whether they worked a traditional five-day work week, or whether they worked the less common 24-hour "tours of duty." Although the Plaintiffs received a lower hourly rate than employees who worked a more traditional shift, the Court finds nothing in the CBA or the trial testimony to support their assertion that they were not compensated for hours 41 through 53.
The Plaintiffs concede this fact elsewhere in their Memorandum, asserting that the CBA "pay schedule does not break out `dispatcher' as a [job] `type.'" (Doc. #56 at 7).
The "40-hour" rate of pay set forth in the CBA simply did not apply to the Plaintiffs, because they worked a different type of shift with its own hourly "tour rate" of pay specifically set forth in the CBA. Although the Plaintiffs now complain that they were required to work 13 hours more per week than firefighters who were employed under the more traditional 40-hour schedule, the Court notes that they, through their union, entered into the CBA which allowed the City to schedule them to work 53-hour "tours," despite the fact that they received the same annual compensation as other firefighters who worked the more traditional 40-hour weeks at a higher hourly rate of pay. The Plaintiffs also appear to have worked the unusual 24-hour "tours of duty" (with at least 48 hours off of duty thereafter) without ever objecting to such an arrangement. No grievances were ever filed over the issue, and no one objected to the "tour of duty" shifts during collective bargaining. The Plaintiffs cannot be heard to complain about working more hours for a lower hourly rate when they, through their union, expressly entered into such an agreement with the City.
In support of their argument that they received no compensation for hours 41 through 53, the Plaintiffs rely on the trial testimony of Chief Lee, reasoning:
. . . Chief Lee admitted that he was aware of no reason why the city would have been prevented, if it had so desired, from at any time assigning [firefighter] dispatchers to a 40 hour shift. And clearly, had it done so, the [collective bargaining] agreement specified that they would have received the same weekly income for 40 hours of work as they received for 53 hours. In other words, the fact that the Plaintiffs received a given sum weekly for 53 hours' work, rather than 40 hours' work, hinged not upon the agreement, or upon the definition of their positions as dispatchers, but solely upon the city's decision to work them 13 more hours per week. Therefore, their `regular rate' was the 40 hour rate, and they were paid nothing for the next 13 hours per week.
(Doc. #61 at 7-8).
The Court finds this argument to be unpersuasive. As set forth, supra, the Plaintiffs' hourly rate of compensation "hinged upon" whether they worked 24-hour "tours of duty" or whether they worked the more traditional, eight-hour work days. The parties admit that the Plaintiffs were "tour" employees, and that their union voluntarily entered into a CBA which expressly provided for "tour of duty" workers to be compensated at a lower hourly wage than employees who worked a more traditional, eight-hour schedule. The Court finds nothing (and the Plaintiffs cite nothing) in the FLSA which prohibits an employer from paying its employees different hourly rates based on the shift that they work.
Finally, the regulations and case law cited by the Plaintiffs do not persuade the Court that their pay was intended to compensate them for only 40 hours of work each week. In support of this proposition, the Plaintiffs first cite 29 C.F.R. § 778.316 and § 778.317. (Doc. #56 at 5). The former provision merely recites the proposition that an employer may not set one hourly rate for the first 40 hours of work and a lower hourly rate for statutory overtime hours, nor provide no pay for overtime hours. The latter provision states that an employer must compensate employees for all non-overtime hours. Given that the Plaintiffs received the same hourly rate of pay for all 53 hours a week that they worked, these regulations have no applicability herein.
The Plaintiffs next rely upon Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419, 424 (1945), and 29 C.F.R. § 778.108 for the proposition that an employee's "regular rate" is an "actual fact" which must be drawn from the terms of an employment contract. The Court does not disagree with this proposition, which was recognized by the Tenth Circuit in Aaron, 54 F.3d at 656. In the present case, the applicable CBA and the actual practices of the parties have persuaded the Court that the Plaintiffs' "regular rate" must be computed by dividing their weekly pay by the 53 hours of work for which it was intended to compensate them.
The Plaintiffs also cite Baker v. Barnard Const. Co., Inc., 863 F. Supp. 1498 (D.N.M. 1993), a case which citesYoungerman-Reynolds, supra, for the proposition that an employee's "regular rate" may not be computed in a "wholly unrealistic and artificial manner." (Doc. #56 at 6). The Plaintiffs make absolutely no attempt to apply this principle to the facts of the present case, and the Court finds nothing "unrealistic" or "artificial" about the hourly "tour" rate set forth in the CBA.
The last case cited by the Plaintiffs is Martin v. David T. Saunders Const. Co., Inc., 813 F. Supp. 893 (D.Mass. 1992), which contains nothing contrary to the reasoning set forth herein.Martin involved a purported "guaranteed compensation" or "Belo" contract, which the Plaintiffs concede does not exist in the present case. (Doc. #56 at 7 n. 1). The employer in Martin paid its employees a "weekly salary" for a "maximum" of 50 hours per week, and provided additional compensation only if employees averaged more than 50 hours of work per week, over the entire course of their employment. Martin, 813 F. Supp. at 897-898. Upon review, the district court concluded that the employer was in violation of the FLSA, which does not allow "averaging" of work weeks to avoid paying overtime compensation. Id. The district court also rejected the employer's argument that the employees were entitled to overtime compensation only for those weeks in which they worked more than 50 hours. Id. at 898. For purposes of calculating damages, the district court then determined the employees' "actual rate" by dividing their total pay by their total hours worked, much as this Court has done herein. Id. at 900-901. In fact, theMartin court expressly rejected the same argument raised by the Plaintiffs in the present case, namely that the employees' total weekly pay was intended to compensate them for only the first 40 hours that they worked. Id. at 901-902. The district court noted that "[n]o case law appears to support such a contention." Id.
Based on the reasoning and citation of authority set forth above, the Court concludes that the Plaintiffs' pay was intended to compensate them for 53 hours of work each week. As a result, the Plaintiffs already have received "straight-time" pay for the 41st through 53rd hours that they worked each week. Accordingly, with respect to each of those hours, the Plaintiffs are only entitled to receive, as overtime compensation, an additional one-half of the hourly "tour" rate of pay set forth in the applicable CBA.
Of course, if the Plaintiffs worked any hours in excess of 53 in a particular week, they would be entitled to one and one-half times their hourly "tour" rate for those hours, because their regular pay was not intended to compensate them for any hours worked in excess of 53 hours per week. (See Defendant's Exh. 10.37, Article 44, Section A).
IV. Miscellaneous Issues
Although the Court has determined the City's liability for liquidated damages and the proper computation of overtime compensation, it notes that certain issues remain unresolved. Most significantly, the record does not indicate that the City has ever been found liable to Plaintiffs Whitehead and Wade for unpaid overtime compensation. In a January 5, 1999, ruling regarding the availability of various damages under the FLSA (Doc. #53), the Court noted that Whitehead and Wade had moved to be added as party Plaintiffs after the Court's September 4, 1997, Decision and Entry (Doc. #23), which found the City liable to Schneider under the FLSA. The Court also noted that Whitehead was not a party to the Court's January 5, 1999, Decision and Entry regarding the availability of certain FLSA damages. (Doc. #53 at 2 n. 1). Consequently, the Court indicated that the parties might wish to stipulate, not to the correctness of the Court's rulings, but to the fact that they applied equally to all of the Plaintiffs. (Id.). To date, however, the record does not reveal that the parties have entered into any stipulations. Absent a ruling by the Court that the City is liable to Whitehead and Wade for overtime compensation under the FLSA, it cannot enter a judgment in their favor and award them damages.
Finally, with respect to each of the Plaintiffs, the Court has been provided with pages of stipulated "damages spreadsheets," which appear to indicate, inter alia, various hours worked, hourly rates, interest due and the "FLSA pension" due. Rather than attempting to decipher the specific damages owed to each Plaintiff on its own, the Court would prefer either: (1) to give the parties an opportunity to agree upon a damages figure on their own, in light of the guidance set forth herein; or (2) to resolve the issue with counsel via a telephone conference call, during which the various figures could be discussed in greater detail. The Court also finds a need for a telephone conference call to determine the status of the FLSA claims asserted by Whitehead and Wade against the City.
Although the parties may not agree with the reasoning set forth herein, the Court suggests that they consider entering into a stipulation of damages which assumes, arguendo, the correctness of the Court's conclusions. Such a stipulation would advance this litigation quickly and efficiently, thereby providing one or more of the parties with an opportunity to pursue relief on appeal. Obviously, if any of the Court's rulings or conclusions are reversed, the damages stipulation would be vacated and of no effect.
Accordingly, counsel of record will note that a telephone conference call has been set for Tuesday, April 18, 2000, at 8:20 a.m., to discuss the foregoing issues and to establish further procedures leading to the conclusion of this litigation.