Summary
In Alvarez, the Supreme Court held that “during a continuous workday, any walking time that occurs after the beginning of the employee's first principal activity and before the end of the employee's last principal activity is excluded from the scope of [the Portal–to–Portal Act], and as a result is covered by the FLSA.” Alvarez, 546 U.S. at 37, 126 S.Ct. 514.
Summary of this case from Lopez v. Tyson Foods, Inc.Opinion
No. CT-98-5005-RHW
September 14, 2001
FINDINGS OF FACT AND CONLUSIONS OF LAW
Trial to the bench commenced on September 27, 2000 and concluded on October 27, 2000. A hearing on objections to the Court's proposed findings and conclusions was held on July 27, 2001. An order on objections was issued on August 2, 2001. A hearing on the rest break claim was held August 29, 2001. Throughout this action, Plaintiffs were represented by William Rutzick, Kathryn Goater, and David Mark; Defendant by Douglas Smith, Barbara Duffy, Nancy Anderson, and Sarah Haushild. This constitutes the Court's final findings and conclusions required by Federal Rule of Civil Procedure 52(a).
BACKGROUND
This is a class action brought under the Fair Labor Standards Act ("FLSA") and related Washington state laws by production line workers at IBP's Pasco, Washington plant seeking compensation for unpaid activities prior to the arrival of the first piece of meat, during the unpaid "30-minute" meal break, and after the last piece of meat.
A. The Pasco Plant
IBP owns and operates a beef slaughter and processing plant in Pasco, Washington ("The Pasco Plant"). The class members engaged in production line work in two different sections of IBP's Pasco Plant: the Slaughter and Processing divisions. Cattle are slaughtered and processed into carcasses and other products while moving along a series of consecutive chains in the Slaughter Division. After that, the carcasses are stored in a cooler for at least 24 hours, then wend their way along a chain and moving belts through the Processing Division, where they are further processed. Each worker on the processing line typically performs one or two discrete operations in a disassembly line process.
The Slaughter Division runs one shift beginning operations at 6:30 a.m. A standard slaughter division crew is approximately 178 employees, with approximately 113 job classifications. The Processing Division runs an A shift that starts at 5:45 a.m., and a B shift that starts at 3:15 p.m. These shifts have a combined crew of approximately 800 line workers, with approximately 145 job classifications. On the processing line there are eight processing belts, each dropping carcasses onto a line. Each line is a separate department, with 25-40 employees working side by side. At the end of each line are two to five packaging department employees, who bag pieces of meat. There also are two departments located on the side of the processing floor: the hamburger department and the bones department.
The job classifications focus on the particular cut the employee makes. Many classifications are staffed with multiple workers, and workers who work alongside each other on the same line, using virtually the same equipment, will have different classifications.
B. Gang Time Pay
Employees at the Pasco plant are paid on a gang time basis, which means pay is based on the time that employees are cutting and bagging meat. Pay begins with the first piece of meat and ends with the last piece of meat. IBP posts the scheduled start of the shift. However, it does not post the times that workers are required to be at their specific lines and work locations, which vary depending on the work location. IBP superintendents did not know what times employees were required to be at specific work locations. Employees expressed confusion about start times. Employees clock-in and out using a swipe card at the beginning and end of each day. The system records the clock-in and out times, but these are not used to determine pay.
Since October 1995, slaughter division employees have been eligible for "sunshine pay" for the "time by which a shift's scheduled hours exceed the killout time of the scheduled number of head." Sunshine pay "is possible where downtime is minimized during the shift and/or where chain speed is increased." (Exhibit 73a.) Sunshine pay is extra compensation for working more efficiently and more quickly.
C. Bargaining History
The majority of the workers at IBP's Pasco plant are Hispanic and are represented by Teamsters Local Union No. 556, affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America ("the Teamsters"), under a series of collective bargaining agreements between the Teamsters and IBP. The 1976 collective bargaining agreement between Local 556 and Columbia Foods included 30 minutes per week for "clothes changing." (Ex 216.) IBP purchased the Pasco operation from Columbia Foods in the late 1970's and a similar provision was included in the first collective bargaining agreement between IBP and Local 556 in 1979. (Ex. 217.) In 1982, "clothes changing" time was removed from the collective bargaining agreement. (Ex. 218.) In 1982, 1986, and 1992, "clothes changing time" was negotiated and left out. In 1999. clothes changing and clean-up time were negotiated and left out again.
D. DOL Litigation
IBP also operates a number of non-union plants. The United States Department of Labor ("DOL") was involved in ongoing litigation involving 11 of IBP's non-union plants. The courts decided the damages and injunction issues in Reich v. IBP, 3 Wage Hour Cases 2d 324 (D. Kan. 1996); 3 Wage Hour Cases 2d 863 (D. Kan. 1996). (Ex. 221.) IBP was held liable for 14 minutes per shift back pay to knife users and was permanently enjoined to comply with the FLSA at its non-union plants. The courts also held IBP liable for unpaid pre-shift and post-shift donning, doffing, and cleaning of special packinghouse industry safety equipment and for the time between waiting to pick up and return knives, which were held to be the first and last activities of the work day. Reich v. IBP, Inc., 38 F.3d 1123 (10th Cir. 1994).
In December 1997, IBP received a copy of a 29 U.S.C. § 203(0) Opinion letter issued by the Administrator of the Wage and Hour Division of the United States Department of Labor. The Administrator concluded that donning and doffing packinghouse protective equipment was not § 3(o) "changing clothes, " because this type of equipment was not clothing. He also cited language from the legislative history indicating that Congress intended § 3(o) "washing" to refer to washing the person, not equipment washing. (Ex. 64.) In April 1998, the Department of Labor filed a second suit seeking back pay for post- Reich violations at IBP's non-union plants. Herman v. IBP, Inc., 98-CV-2163-JWL (D. Kan.) (Ex 237.) This is when IBP began to pay 4 minutes per day for pre-and post-shift activity at its non-union plants.
29 U.S.C. § 203(o) creates an exclusion from compensable time for time "spent in changing clothes or washing at the beginning or end of each work day which was excluded from measured working time during the week involved by he express terms of or by custom or practice under a bona fide collective-bargaining agreement applicable to the particular employee."
IBP claimed to have reduced the compensable time from 14 minutes to 4 minutes by moving knife distribution and by installing additional equipment washing sinks to reduce waiting time. In late 1998 and early 1999, IBP and DOL negotiated and agreed to 4 minutes of compensation at the non-union plants for pre-and post-shift activities.
Prior to July 1998, IBP scheduled 8-hour shifts, plus a 30-minute unpaid meal break at the Pasco Plant. In July 1998, IBP started paying production line workers 4 minutes of "clothes" time and reduced the shift to 7 hours and 56 minutes. In the fall of 1999, the company reduced the shift to 7 hours and 51 minutes, plus a 30-minute meal break and 4 minutes of "clothes changing time."
E. Pre-and Post-Shift Activities
Employees are required to wear a variety of outer garments and personal protective equipment. IBP documents describe "Minimum Safety Equipment" requirements. (Ex. 90-93.) All employees are required to wear a sanitary outer garment provided by IBP. IBP launders the outer garments each night. All employees are required to use a plastic hard hat, a hair net, and ear plugs. All employees, except those in the slaughter division gutter job, are required to wear either safety glasses or a face shield. The vast majority wear safety glasses. IBP requires employees to clean and store equipment and tools in a company-provided locker at the end of each shift. There are four locker rooms, one each for men and women in the slaughter division and in the processing division. "Knife users" are required to wear a variety of protective equipment for the hands, arms, torsos, and legs. This includes "wire mesh," which is chain-linked metal. Mesh items include aprons, aprons with leggings, vests, sleeves, and gloves. Employees also use puncture-resistant protective sleeves and Kevlar gloves, also referred to as "can't cut" or "Polar" gloves. Knife users also wear plexiglass arm guards on one or both arms. Employees also wear other gloves. In the processing division, employees wear yellow cotton gloves. These gloves facilitate gripping knives or other tools and provide warmth. Some slaughter division employees also wear yellow cotton gloves. Slaughter division employees typically also wear rubber and/or plastic gloves. These facilitate grip a protect against blood and water saturation. Employees also wear liquid repelling sleeves, aprons, and leggings, including yellow plastic sleeves, clear plastic sleeves, clear plastic leggings, and rubber aprons. Saw operators and some packaging employees also wear these items. Employees also wear safety shoes or boots, which must be wiped off or hosed down after each shift. Many employees also wear weight belts to prevent back injuries. Employees also are assigned various equipment; for example, steels are assigned to employees who use knives.
The processing floor is between 38 and 42 degrees Fahrenheit.
Slaughter employees begin their day by picking up supplies at the supply room, then go to the locker room, where they retrieve their assigned protective equipment, steels, and tools. Most slaughter employees don most of their safety equipment in the locker room. After leaving the locker room, they proceed toward the slaughter floor. Once on the slaughter floor, many go to the knife room to receive sandpaper for sanding steel. There are four or five knife distribution points on the slaughter floor, although some employees pick up knives at the knife room. Knife users sand their steel, and air knife users wipe and wash grease from the air knife prior to using it. Employees are required to be at their work stations and ready to work on the first cow or meat as it arrives.
On the processing side, employees must line up to get their frocks and go to the locker room. They obtain safety equipment and tools, which IBP requires be stored in the lockers, and then proceed to the processing floor. Much of the pre-shift routine for processing surrounds the distribution of glove pins with yellow cotton gloves, and protective sleeves and gloves.
Employees receive a 15-minute paid rest break after 2 hours of line operation, and a 30-minute unpaid meal break after approximately another 2 hours of line operation. Breaks begin when employees receive their last piece of meat and end when employees receive their next piece of meat. During the meal breaks, employees must remove certain equipment to go to the cafeteria or to use the restroom. IBP strongly encourages employees to use the restroom during the unpaid meal break and permits such use during work periods only on an emergency basis. Other workers must do the work of the absent worker, making use of the restroom inconvement for other workers. A majority of employees use the restroom during the meal break. IBP requires employees to remove most equipment prior to entering the restroom. Workers are required to remove outer garments, gloves, scabbards, and chains prior to entering the cafeteria. IBP requires employees to be back at the work station and ready to work on the first piece of meat with their equipment on at the end of the meal break.
Employees do not have to remove hard hats, hairnets, earplugs, safety glasses, and boots to enter the restroom.
After their last piece of meat, workers must clean their equipment and return their equipment to the supply room and to their lockers. There are wash stations located throughout the slaughter floor. Most workers hose down and scrub aprons, sleeves, rubber gloves, and boots. Knife users return the knives to collection boxes. Workers return soiled protection gloves and sleeves as well as cotton gloves to the supply window. Processing workers clip their soiled gloves and protective sleeves onto their glove pin and return them. Knife users put the knives in buckets that are passed along the production lines. Washable protective equipment and some tools need to be washed at equipment wash sinks, including scabbards, chains, mesh gloves, steels, plastic sleeves, aprons, meat hooks, scissors, and boots.
CLAIMS AND DEFENSES
A. Uncompensated Activities
This case involves unpaid activities prior to the first piece of meat, during the unpaid "30-minute" meal break and second rest break, and after the last piece of meat, under the FLSA, 29 U.S.C. § 206 and 207, and the Washington Minimum Wage Act, RCW 49.46.010 et seq., RCW 49.12 et seq., RCW 49.52 et seq.
Most workers begin the work day in the locker room by donning safety equipment. They then engage in a variety of additional activities prior to the start of the paid work day, such as sanding the steel used by knife users to sharpen knives, retrieving cloth gloves, protective gloves, and protective sleeves that are laundered each night, and various other preparatory activities. During the 30-13 minute unpaid meal break employees are required to doff and hang up the safety equipment they are wearing before they can begin to use the break as their own time. They also are required to don the equipment and be back at their work stations ready to begin cutting meat at the end of the 30-minute break. After working on their last piece of meat, the workers are on the production floor and are required to wash their equipment and doff and store their equipment upon returning to their lockers.
B. Union Negotiations of Clothes Changing Time
IBP urges that 29 U.S.C. § 203(o) permits private negotiations between unions and meat industry employers as to whether to include such pre-and post-shift activities in their employees' paid work time. There was a provision for clothes changing time in the Collective Bargaining Agreement at IBP's Pasco Plant for the year 1976 and for the years 1979-1982, but such a provision was eliminated in 1982 and renegotiated and left out in 1992. IBP argues that it relied on the collective bargaining agreements in effect at the Pasco Plant during the relevant time periods, which excluded clothes changing time, and that those agreements prevent Plaintiffs from asserting these claims, as the Union had bargained away these fights on behalf of the employees.
C. IBP's Reliance on DOL
IBP was involved in litigation with the Department of Labor ("DOL") regarding similar pre-and post-shift activities at its non-union plants. IBP urges that it relied on DOL's exclusion of union plants in this litigation to conclude that clothes changing time was not compensable at union plants. IBP claims it is entitled to this reliance under 29 U.S.C. § 259(a). As a result of this litigation, IBP came to a negotiated settlement with DOL of 4 minutes for clothes changing time at its non-union plants. IBP argues that when the DOL indicated in December 1997 that clothes changing may be compensable at union plants, IBP, although concluding that the DOL was wrong, changed its policy to comply with IBP's 4-minute compensation policy at non-union plants. Starting on July 30, 1998, IBP began to pay its union employees at the Pasco Plant an extra 4 minutes per day compensation for clothes changing.
D. Other Claims Re: Noncompensability
IBP also claims that these pre- and post-shift activities are not compensable under the Portal to Portal Act, 29 U.S.C. § 254(a) because they are not integral and indispensable to the employees' performance of their jobs.
IBP argues further that the meal break time is not compensable because it is primarily for the benefit of the employees.
Finally, as to the state law overtime claims, IBP argues that Washington law is to be interpreted consistently with the FLSA and because, they argue, the pre-and post-shift activities are not compensable under the FLSA, they should not be compensable under Washington law. IBP also argues that the Washington Supreme Court's decision in Inniss adopts a weekly standard for minimum wage compliance and, therefore, absolves IBP of overtime liability under state law.
DISCUSSION
I. Jurisdiction
The Court has jurisdiction over the class members' FLSA, 29 U.S.C. § 201-219, claims under 29 U.S.C. § 216(b) and 28 U.S.C. § 1331. The Court has supplemental jurisdiction over the class members' state law claims under the MWA, RCW chapter 49.46, and related exemplary damage claims under RCW chapter 49.52, pursuant to 29 U.S.C. § 1367.
The class members' employment at the Pasco plant has been part of an enterprise engaged in commerce and in the production of goods for commerce, as these terms are used in Sections 6 and 7 of the FLSA, 29 U.S.C. § 206-07, and IBP is, therefore, subject to the overtime provisions of 29 U.S.C. § 207.
IBP is an employer for purposes of RCW chapter 49.46 in that it is a corporation acting as an employer in relation to an employee. See RCW 49.46.010(4). IBP is, therefore, subject to the requirements of the MWA, RCW chapter 49.46.
II. The Class
The class has been certified as a § 16(b) FLSA, 29 U.S.C. § 216, opt-in class, as follows:
All IBP processing or slaughtering division employees at defendant's Pasco, Washington plant from June 30, 1995 to [August 24, 1999], but specifically excluding all supervisors managers, quality control employees, guards, mechanics, laundry room employees, janitors, knife room employees, rendering employees, and packing employees who perform work away from the production lines.
Pretrial Order (Ct. Rec. 102).
The Court finds that the hides division is separate from both the processing and slaughter divisions and, therefore, employees working solely in the hides division are not members of this class. Both the superintendent of the kill floor and the superintendent of "A" shift processing testified that hides is a separate division from processing and slaughter. The hides division is located off the kill floor and the processing floor, and hides employees are not allowed to "bid" on jobs in either processing or slaughter. A hides division employee testified that neither the superintendent of processing nor the superintendent of slaughter was his boss and that he does not work in the slaughter area. The class is comprised of 815 slaughter and process division employees, who opted in pursuant to the procedure stipulated to by the parties and approved by the Court. (Ex. 266, 341, 253(a).)
IBP has requested reconsideration of class certification based on the difficulty in calculating damages. Again, this is based on a misunderstanding of the Court's findings, and an attempt to distort the concept of individualized damages. The Court is requiring individualized damages calculations in an over-abundance of caution to the Defendant. The Court could have determined that the evidence was sufficient to permit a more generalized damages calculation, but because the evidence and testimony permitted a more discrete determination as to timing by job description, equipment list, and activities testified to, the Court determined that this calculation would lead to a recovery that relates to what work was actually performed. Defendant's objection is denied, based on the findings of adequate representative evidence.
III. Representative Evidence
The use of representative evidence is well accepted for determining liability in FLSA cases. See Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946). The Second Circuit explained the principles of representative evidence in Reich v. Southern New England Telecomms., 121 F.3d 58, 66-67 (2nd Cir. 1997) in the following way:
When a defendant in a suit for lost wages under the FLSA fails to maintain employment records as required by the Act, an employee . . . may submit sufficient evidence from which violations of the Act and the amount of an award may be reasonably inferred.
. . . In meeting the burden under Mt. Clemens, the Secretary not present testimony from each underpaid employee; rather it is well-established that the Secretary may present the testimony of a representative sample of employees as part of his proof of the prima facie case under the FLSA. See Reich v. Southern Maryland Hosp., Inc., 43 F.3d 949, 951 (4th Cir. 1995); Reich v. Gateway Press, Inc., 13 F.3d 685, 701-2 (3d Cir. 1994).
The burden originally is on the employees to demonstrate with sufficient evidence that the employees have, in fact, performed work for which they were improperly compensated, and to produce sufficient evidence to show the amount and extent of that work "as a matter of just and reasonable inference." Mt. Clemens, 328 U.S. at 687. The burden then shifts to the employer, and if the employer fails to produce "evidence of the precise amount of work performed or evidence to negative the reasonableness of the inference to be drawn from the employee's evidence. . . . [t]he court may then award damages to the employee[s], even though the result be only approximate." Mt. Clemens, 328 U.S. at 687-88.
A. IBP's Records Are Inadequate
The representative evidence standard set forth in Mt. Clemens applies here since IBP failed to maintain employment records of pre-and post-shift work, as required by the FLSA. See Southern New England Telecomms., 121 F.3d at 66-67. The testimony was that IBP does not require employees to clock-in before donning protective equipment at the beginning of the day or at the end of lunch breaks, and does not have employees wait until after doffing such equipment to clock-out. While employees do clock-in and out, IBP does not use those records to determine hours worked, nor does IBP require when clock-ins or clock-outs occur. Thus, the clock-ins and clock-outs are not an indication of the precise amount of work performed. Some employees clock-in when they arrive at the plant, while some wait until after they get their equipment to clock-in. IBP documents indicate that employees were informed in July 1998 that they are to clock-in "no more than 7 minutes before your scheduled start time," and to clock-out at the "end of your shift as you leave your work area." (Ex. 76.) This policy ensures that the clock-in and clock-out procedures are not an adequate measure of the time employees spend donning and doffing equipment. Thus, the Mt. Clemens' precondition to representative evidence is met in this case.
B. Employee Burden
The burden is on the Plaintiffs to demonstrate with sufficient evidence that the employees have, in fact, performed work for which they were improperly compensated, and to produce sufficient evidence to show the amount and extent of that work, as a matter of just and reasonable inference. Mt. Clemens, 328 U.S. at 687. Employee testimony, documentary evidence, and expert testimony are appropriate methods of making a prima facie showing of a pattern or practice of unpaid time and wages. See Castillo v. Givens, 704 F.2d 181, 195 (5th Cir. 1983) cert. denied 464 U.S. 850 (1983) (holding "plaintiffs met their burden of proof by demonstrating that they performed work and were not compensated . . ." where 13 plaintiffs testified regarding the hours they and members of their families worked and plaintiffs' statistics expert testified and calculated a minimum and maximum number of hours each plaintiff worked.) See also Reich v. Waldbaum, 833 F. Supp. 1037, 1042 (S.D.N.Y. 1993) rev'd on other grounds, 52 F.3d 35 (2d Cir. 1995); Herman v. Davis, 21 F. Supp.2d 130, 133 (N.D. N.Y. 1998), rev'd on other grounds, 196 F.3d 354 (2d Cir. 1999).
Defendants cite New England Telecomms. for the proposition that variation among workers and job positions at IBP's Pasco plant requires Plaintiffs to provide testimony from a plaintiff who has been employed in every position. (Ct. Rec. 552.) However, the court in New England Telecomms. held that it was "untroubled by the quantum of representative evidence in this case because the testimony covered each clearly defined category of worker; there was actual consistency among those workers' testimony both within each category and overall . . ." New England Telecomms., 121 F.3d at 67. The Court is similarly untroubled here, based on the combination of employee testimony, documentary evidence, and expert testimony. See also McLaughlin v. Ho Fat Seto, 850 F.2d 586, 589 (9th Cir. 1988) (holding that while the testimony of the five employee witnesses was inconsistent in terms of exact days and hours of overtime, they had established "`as a matter of just and reasonable inference' that all of the employees regularly worked over eight hours on weekdays and over six hours on many Saturdays.") (internal citation omitted); Donovan v. Bel-Loc Diner, 780 F.2d 1113, 1116 (4th Cir. 1985) (holding that the inconsistency in the pattern or practice does not make the court's factual determination clearly erroneous).
The employee testimony established that pre-and post-shift and meal-time work activities were unpaid, what activities were being performed during these times, and the time each activity takes to complete. Just over 40 employees of IBP's Pasco Plant testified at trial; 25 employees from the Processing Division testified, and employees from the Slaughter Division testified to over 40 job positions. Each employee testified to their various pre-and post-shift activities, as well as their donning and doffing practices during the 30-minute meal break period. While it is true that employees vary in some of the equipment they are required to don and doff, each employee spent some uncompensated time both pre-and post-shift and during the 30-minute meal break. Most employees share at least some of the required protective equipment and the time ranges for pre-shift protective equipment between processing and slaughter are from 30 to 45 minutes in processing, and from 15 to 45 minutes in slaughter.
Furthermore, even if, as Defendant claims, Plaintiffs were required to produce evidence regarding every position at the Pasco plant, the documentary and expert testimony provide the evidence for jobs not testified to by employees. IBP documents identify what jobs at the Pasco plant require protective equipment. (Ex. 74.) Documents also identify jobs for which protective equipment is not required. (Ex. 75.) Internal documents demonstrate which equipment must be removed prior to employees going to lunch or to break. (Exs. 82 and 83.) Other evidence presented indicated what jobs require which items of personal safety equipment. (Exs. 90-93.) Plaintiffs' expert developed avenge observed times for most activities performed by employees. (Ex. 1035.) Both IBP's and Plaintiffs' experts performed auditing exercises for certain activities for each position. (Ex. 358-363.)
Plaintiffs' time-study expert, Dr. Kenneth Mericle, also time-studied a variety of pre-shift, post-shift, and meal-break activities based on repeated observation of these activities in 2 days of plant visits and review of 2 days of videotape taken by Plaintiffs in early 1999. Defendant's expert, Dr. Radwin, criticized Dr. Mericle for not making enough observations of each activity to give estimated times to a 95% confidence interval. However, Dr. Mericle made more observations than IBP in its Pasco plant time-study, made more observations than IBP made of most activities in its non-union plant time-studies combined, made more observations than were made in Dr. Radwin's 3-day aborted study, and made more observations than were made for almost every element in the Dr. Fernandez Report. (Ex. 241.) Dr. Mericle's practice with respect to sample size and calculation of confidence intervals is consistent with the practice and experience of the witnesses called by IBP. For example, Jeffrey Fernandez testified about a time-study he had done at two other IBP plants. Many of his reported times did not meet a 95% confidence interval, and he generally obtained fewer observations than did Dr. Mericle. (Trial Exhibit 241.) IBP's own Pasco time-study, performed by Cody Hostick, did not include a confidence interval calculation, and included many fewer observations than did Dr. Mericle's study. While testimony to a 95% confidence interval study would be desirable from an academic standpoint, and would likely be afforded more weight, the Mericle study was sufficiently detailed and consistent with the Radwin study, such that it would be the type of study relied upon in the industry and is entitled to some evidentiary weight herein. The Court finds the study by Dr. Mericle to be reliable.
The combination of this evidence convinces the Court that employees have, in fact, performed work for which they were improperly compensated, and that they have produced sufficient evidence to show the amount and extent of that work "as a matter of just and reasonable inference."
C. Employer Rebuttal
Once plaintiffs have established that the employees were performing unpaid work and provided evidence as to the extent and amount of the unpaid work, the burden then shifts to the employer to demonstrate the precise amount of work performed or evidence to "negative the reasonableness of the inference to be drawn from the employee's evidence." Mt. Clemens, 328 U.S. at 687-88.
IBP has failed to rebut the Plaintiffs' evidence that they were not paid for the time they spent in pre- and post-shift activities, and in activities during their meal break. The employee manual for IBP states that employees are to find out their correct starting time from their supervisor. (Ex. 1 page 18.) ( See also testimony of Barb Salter.) The manual also notes that "[w]ork schedules are posted daily on the bulletin board, and it will be the responsibility of each employee to read." (Ex. 1 page 18.) The testimony and evidence were that the employees arrive up to 40 minutes early to retrieve and don their required equipment. (Testimony of Pedro Galvan Juarez, Modesto Reynada, Amir Mustafic.) The swipe card evidence bolsters this claim.
IV. Statute of Limitation
Under the FLSA, the statute of limitation for willful violations is 3 years. 29 U.S.C. § 255(a). A violation is willful if the employer "knew or showed reckless disregard for the matter of whether its conduct was prohibited by the [FLSA]." McLaughlin v. Rickland Shoe Co., 486 U.S. 128, 133 (1988).
IBP's violations herein were willful. In early 1996, IBP was aware of the meal-break issue, based on Kimbro's review of the Legal Master Narrative Report. (Kimbro; Exhibit 192.) IBP also knew that in Reich v. IBP, the court had determined that donning and doffing activity was work when performed pre-shift and post-shift. Kimbro recklessly assumed that employees spent only 1 or 2 minutes in meal-break donning and doffing, based on a fundamental misunderstanding of company policy requiring doffing and donning to use the restroom. IBP also knew or showed reckless disregard of the FLSA in concluding that § 3(o) excluded union plant compensation for activities such as sanding steels, glove pin distribution, cleaning protective equipment, retrieving tools (such as meat hooks and air knives), and the various types of non-clothing pre-shift and post-shift activities commonly performed by class members. Therefore, the court will apply the 3-year FLSA statute of limitation to Plaintiffs' claims.
V. FLSA Claims
A. Overtime Under the FLSA
Plaintiffs are entitled to recover for unpaid work performed in excess of 40 hours a week. Under the FLSA, work for which the employees must be compensated means "mental or physical exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer." Tennessee Coal, Iron R.R. v. Muscoda, 321 U.S. 590, 598 (1944). "Subsequently, the Court ruled that there need be no exertion at all and that all hours are hours worked which the employee is required to give his employer . . ." 29 C.F.R. § 785.7 (citing Armour Co. v. Wantock, 323 U.S. 126 (1944) and Skidmore v. Swift, 323 U.S. 134 (1994)). An employer is, thus, liable for all work that it permits. i.e., all work of which it has actual or constructive knowledge. See, e.g., Forrester v. IGA, 646 F.2d 413, 414 (9th Cir. 1981). An employer is liable for pre-shift work it permits, even though it does not require the employees to arrive prior to the start of the shift. Lindow v. United States, 738 F.2d 1057, 1060 (9th Cir. 1984).
The FLSA requires employers to pay employees overtime for hours worked in excess of 40 per week. 29 U.S.C. § 207(a). "The principal congressional purpose in enacting the Fair Labor Standards Act of 1938 was to protect all covered workers from substandard wages and oppressive working hours, `labor conditions [that are] detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers.'" Barrantine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 739 (1981) ( citing 29 U.S.C. § 202(a).) Under the FLSA, an employer must compensate employees at one and one-half time their regular rate of pay for all hours worked in excess of 40 in a week. 29 U.S.C. § 207. For employees paid solely by the hour, their regular rate of pay for overtime purposes is the hourly rate. 29 C.F.R. § 778.110
B. Compensable Time
The donning, doffing, and cleaning of personal protective equipment is work: it is time employees are required to give their employer at IBP's Pasco plant. See 29 C.F.R. § 785.7. Protective equipment also is integral and indispensable to the job, as is evidenced by IBP's lists of required protective equipment and eventual payment of 4 minutes time for clothes changing. For employees required to wait to receive or wash this equipment, this time also is compensable. Waiting time is compensable if an employee is "engaged to wait" and cannot otherwise "use the time effectively for his own purposes." 29 C.F.R. § 785.15. See also Skidmore v. Swift Co., 323 U.S. 134, 137 (1944). Pasco plant employees are required to wait to obtain their gloves and to wash their equipment. This time is compensable.
Walking time is compensable if it occurs after the start of the work day. 29 U.S.C. § 254(a). Walking time is excluded under the Portal to Portal Act only if it occurs "either prior to the time on any particular work day at which such employee commences, or subsequent to the time on any particular work day at which he ceases, such principal activity or activities." Id. The work day begins with the commencement of an employee's principal activity or activities and ends with the completion of the employee's activity; thus, the conclusion of Dr. Mericle's walking time as compensable time. 29 C.F.R. § 790.6(b). Protective equipment is integral and indispensable to the work of employees required to wear such equipment. Employees who wear protective equipment begin their day upon donning their first piece of compensable protective equipment. This equipment is stored in the employee locker, as per IBP policy. The Court acknowledges that there are considerable differences in how and where each employee dons and doffs his or her equipment. Given these differences, the compensable time for each activity is on the basis of a reasonable time, rather than the actual time required for each activity. Evidence of reasonable time was supplied by employee and expert testimony supplied by the Plaintiffs, and not rebutted by IBP. Therefore, the reasonable walking time from the locker to workstation and back, as indicated below, is compensable for employees required to don and doff compensable personal protective equipment stored in their lockers, as is the walking time thereafter, as it occurs during the "work day."
Donning and doffing other, non-unique protective equipment, including and limited to hard hats, earplugs, frocks, safety goggles, a hair net, and boots is also work: it is time required by the employer from the employee, but it is not integral and indispensable to the job. Although the Court disagrees with the court's holding in Reich, supra, that these activities are not work, the Court does agree with how the court characterized such activities, "[t]he placement of a pair of safety glasses, a pair of earplugs and a hard hat into or onto the appropriate location on the head takes all of a few seconds and requires little or no concentration." 38 F.3d 1123, 1126. Therefore, the time required to don, doff, and clean the non-unique protective equipment is not compensable.
Alternatively, the time it takes to complete such work is de minimis as a matter of law.
Dr. Mericle estimates that employees spend an avenge of 9.73 minutes in pre-shift activities and a 5.43 minutes in post-shift activities for a total of 15.16 minutes in pre-and post-shift activities. Dr. Mericle did not include times for various activities in his average time calculations. (Ex. 1035.) His average did not include time for donning and doffing yellow plastic sleeves, clear plastic sleeves, clean-cut gloves, clear plastic leggings, sanding steels, cleaning saws, donning and doffing boots and weight belts, and cleaning or washing knifes. The Court will not adopt Dr. Mericle's average time totals, as the FLSA rights are individual rights and compensation should be administered on an individual basis, and the time required for each job varies with the equipment required. For example, the time required to don equipment can range from 2.497 minutes on line 710B as a flanker, to 5.827 minutes on 710B on lips. (See Ex. 1033 and 1024.)
Plaintiffs' expert, Dr. Mericle, has prepared average times for particular pre-and post-shift and meal-time work activities. Dr. Mericle's times as to these activities are accepted by the Court for three reasons: first, Defendant did not offer an alternative time-study; second, the methodology of Dr. Mericle was followed by the DOL in its time studies involving IBP, and seems to be accepted in the meat packing industry (Test. of Dr. Fernandez and Exs. 241, 103); and, finally, the testimony presented convinces the Court that these times are the reasonable times required for performance of each activity. Employee testimony also supported these times.
The Court finds the following activities are work, and that the following times are the reasonable amount of time required to perform each activity:
Equipment put on: take off: Equipment put on: take off: Walking kill: process: Other activities kill: process:
All times are indicated in minutes.
Times not indicated were not measured or presented to the Court.
As to all items marked, while the Court finds the activity compensable, the time is excluded under 3(o), as it applies to pre-and post-shift duties, but not as it applies to meal-time breaks. See VI.A. infra.
Items not separated between the kill floor and slaughter floor were the same for each floor.
No testimony was presented as to the length of time it takes to complete this work item.
The inclusion of compensation for yellow gloves justifies further discussion and illustrates the practical effect of the performance of otherwise small tasks. IBP suggests that the yellow gloves are provided only as a convenience to the workers and, therefore, the effort expended in acquiring, putting on, and taking off the gloves is not work. The testimony of the workers, some supervisors, and the actions of IBP show otherwise.
The workers testified that they could not hold the knives safely without the clean gloves because of the blood and fat that made them slip. Many workers changed their gloves multiple times a day in order to keep them clean. Some had as many as six to eight pairs that they changed throughout the day. In addition to safety concerns, the employees testified that the gloves were necessary as insulation from the cold of the refrigerated carcasses and the cold temperature of the processing floor. Cold hands made it more dangerous to use knives, saws, and other types of cutting equipment. Each employee turned in the dirty gloves to the laundry room at the end of the shift and spent considerable time before shift locating their own set after the gloves were returned from the laundry room.
IBP's actions with the gloves supports the workers' testimony. IBP furnishes new gloves to the workers on a weekly basis. IBP provides pins to the workers to collect their dirty gloves at the end of each shift. IBP washes the gloves overnight and provides them for pick-up the next day before the shift begins. If a worker's gloves are missing, a foreman will assist in providing others. It is doubtful that IBP would expend this type of effort on something that was not integral and indispensable to the performance of the work. IBP's superintendent of the "B" shift in processing, Jack Ross, said as much.
IBP chooses to store the safety equipment in each worker's locker and to make the worker responsible for the storage and cleaning of the equipment. IBP chooses to dispense the gloves in various locations in the plant. While an employee is not necessarily working when he or she arrives at his or her locker, the fact that the necessary equipment is stored there and must be put on thereafter makes the work day start at a point in time that a worker must arrive at the locker to complete the donning and obtaining of necessary compensable equipment. The amount of time it takes to obtain and don the equipment varies in accordance with the equipment used. For instance, it is likely that an employee who is required by the company to wear only a frock, safety glasses, hard hat, ear plugs, and hair net, would not be considered to be working upon arrival at his or her locker. On the other hand, a worker who is required to come to work 15 minutes early to turn on equipment that needed to warm up before work started probably would be engaged in work for the full 15 minutes, even though inactive after the first task. An employee who turned on his or her equipment immediately before starting is probably not engaged in work, even though some time is spent in doing this task before starting.
The Court finds that the representational testimony was adequate in proving what additional equipment was required beyond the Required Equipment Lists and equipment beyond the minimal equipment list and allocation of activities to work codes shall be in accordance with the Court's Order on Objections.
C. Meal Breaks. 29 C.F.R. § 785.19 29 C.F.R. § 785.19 provides, in relevant part' that:
Bona fide meal periods are not worktime. . . . The employee must be completely relieved from duty for the purposes of eating regular meals. Ordinarily 30 minutes or more is tong enough for a bona fide meal period. A shorter period may be long enough under special conditions. The employee is not relieved if he is required to perform any duties, whether active or inactive, while eating.
There are no cases discussing what "special conditions" would permit an unpaid meal break of less than 30 minutes under 29 C.F.R. § 785.19(a). Regardless, 29 C.F.R. § 785.18 provides that no "special conditions" would permit an unpaid meal break of less than 20 minutes. "Rest periods of short duration, running from 4 minutes to about 20 minutes are common in industry. They promote the efficiency of the employee and are customarily paid for as working time. They must be counted as hours worked." Id.
1. Relieved of Duty Test
The Ninth Circuit has adopted the completely-relieved-of duty test to determine whether an employee is relieved of his duties during meal breaks. See Brennan v. Elmer's Disposal Serv., Inc., 510 F.2d 84, 88 (9th Cir. 1975) (holding "[a]n employee cannot be docked for lunch breaks during which he is required to continue with any duties relating to his work"); see also Biggs v. Joshua Hendy Corp., 183 F.2d 515 (9th Cir. 1950). The completely-relieved-of duty test looks to whether the employee is, indeed, completely free of any work-related tasks. See Wahl v. City of Wichita, 725 F. Supp. 1133, 1143-44 (D. Kan. 1989); see also Donovan v. Bel-Loc Diner, Inc., 780 F.2d 1113, 1115 n. 1 (4th Cir. 1985) (holding "[t]o qualify as a bona fide non-compensable break, the respite must be uninterrupted and at least thirty minutes in duration, and the employee must be completely relieved from duty.") "The employer bears the burden to show that meal time qualifies for this exception from compensation." Bernard v. IBP, 154 F.3d 259, 265 (5th Cir. 1999), citing Roy v. County of Lexington, South Carolina, 241 F.3d 533, 544 (4th Cir. 1998).
2. IBP-Failure of Relief of Duties During Meal Break
There is sufficient evidence to find that employees at IBP's Pasco plant are not completely relieved of duty during their meal break. IBP's own management testified that as early as 1988, IBP received complaints of employees receiving only 15-20 minutes at lunch. (See testimony of Ken Kimbro and Ex. 192.) Mr. Kimbro testified that IBP should have investigated these complaints, but decided not to do so. Furthermore, Defendant's own internal documents indicate that employees were required to remove certain equipment before lunch and, by implication, were required to don equipment after lunch. In an internal IBP memo dated August 6, 1999 from Barb Salter, superintendent of the kill floor, to Lee Baczwaski, plant manager at Pasco, Ms. Salter states that when employees go to lunch and breaks "the employee must remove rubber apron, apron, gloves, sleeves and scabbard with chain. Frocks also for those that wear one. All other equipment is allowed to remain on." (Ex. 82.) The memo goes on to state that, when using the restroom, employees must remove "rubber apron, gloves, sleeves, mesh equipment scabbard with chain, frocks for those that wear one." Ms. Salter notes that "20% of slaughter employees wear no mesh equipment or scabbard and chain." (Ex. 82.) A similar memo was prepared on August 5, 1999 by Gary Johnson, superintendent of A shift, directed to Lee Baczwaski. Mr. Johnson states that when going to lunch or break, "employees must remove their gloves, sleeves, and frock." When going to the bathroom "they must remove their frocks, gloves, sleeves, and mesh equipment."
The IBP employee manual makes it clear that no frocks or knife equipment are allowed in the cafeteria and that "any type of protection worn outside of the frock must be removed." (Ex. 1 page 17.) The same is true of the bathroom. "All equipment must be removed before entering restrooms except hard hat." (Ex. 1 page 19.) The employee manual for IBP also notes that "employees MUST be at their work stations at the end of breaks, and rest periods. Failure to do this will be counted as an unexcused tardy." (Ex. 1 page 17; emphasis in original.)
3. Compensable Meal Break Time
Based on the compensable time categories above in section IIIB, if any employee receives 20 minutes or more during his or her lunch break, exclusive of time to don and doff the required equipment, he or she will receive that portion of her meal break that is spent donning and doffing. It in the calculation for a particular employee under the times outlined above, an employee falls under the required 20-minute break for her meal period, he or she is to be compensated for the entire 30-minute break. For example, an employee working on the kill floor who is paid at meal time for donning and doffing his or her rubber apron, apron, gloves, sleeves, and scabbard with chain, and mesh equipment and walking times, would be spending 8.251 minutes of the meal time for compensable work activities, and should recover for 8.251 minutes. (See Ex. 1042.)
The Court finds that employees are required to use the restroom during meal-time breaks.
VI. Defenses
Sections 206 and 207 of Tide 29 provide for minimum and overtime wages for employees. 29 U.S.C. § 206, 207. Section 203(o) creates an exclusion from compensable working time.
In determining for the purposes of 206 and 207 of this title the hours for which an employee is employed, there shall be excluded any time spent in changing clothes or washing at the beginning or end of each work day which was excluded from measured working time during the wee involved b the express terms of or by custom or practice under a bona fide collective-bargaining agreement applicable to the particular employee.29 U.S.C. § 203(o).
Courts have found a negotiated and subsequently deleted clothes-changing provision to be sufficient evidence of a custom or practice. See, e.g., Nardone v. General Motors, Inc., 207 F. Supp. 336, 340 (D.N.J. 1962) (holding that policy of non-compensation for changing time existed because the negotiations were on an equal basis and the "collective bargaining agreement negotiations encompassed" the issue); Hoover v. Wyandotte Chems. Corp., 455 F.2d 387, 389 (5th Cir. 1972); Arcadi v. Nestle Food Corp., 38 F.3d 672, 675 (2nd Cir. 1994) (holding "[i]f the parties to a collective bargaining agreement negotiate over an issue and have an understanding that resolves it, then a `practice' exists, even in the absence of express written terms.")
Defendants claim that because the clothes-changing provision was once in the collective bargaining agreement and has since been negotiated out, there is a custom or practice at IBP's Pasco plant. There was a provision for clothes changing time in the CBA's for the year 1976 and for the years 1979-1982, but such a provision was eliminated in 1982 and renegotiated and left out in 1992. The negotiated provision read "[c]lothes changing time for one-half hour per week shall be granted to all employees required to change their clothing before performing their work assignments." (Ex. 217 page 37.) John Carter testified that in 1999, the Union negotiated for 10 minutes a day of "clean-up time." (Ex. 249, page 1.) Mr. Carter testified that this was to include pre-and post-shift time, including washing mesh, putting on and taking off clothes and safety equipment. Mr. Carter did not know if this time included sanding steel. He also testified that the company would figure out if this time was overtime, or if they would start the chain later or end it earlier.
Even if the union did bargain away rights under 3(o), they are unable to negotiate and bargain beyond clothes changing and washing time. Union representatives may not bargain away employee rights under the FLSA. See Featsent v. City of Youngstown, 70 F.3d 900, 905 (6th Cir. 1995), citing Walling v. Harnischfeger Corp., 325 U.S. 427, 431-32 (1945). The Ninth Circuit has held "that the FLSA's minimum wage and overtime provisions . . . are guarantees to individual workers that may not be waived through collective bargaining." Albertson's, Inc., v. United Food Commercial Workers Union, AFL-CIO CLC, 157 F.3d 758, 761 (9th Cir. 1998) ( internal quotations omitted) citing Local 246 Utility Workers Union v. Southern Cal. Edison Co., 83 F.3d 292 (9th Cir 1996) (holding that where employees' claim is based on substantive rights under the FLSA no resort to arbitration under the CBA is required). See also Collins v. Lobdell, 188 F.3d 1124, 1127-28 (9th Cir. 1999) (holding that congressionally granted FLSA rights take precedence over conflicting provisions in a collectively bargained compensation arrangement). The Supreme Court also has held that FLSA rights "cannot be abridged by contract or otherwise waived because this would `nullify the purposes' of the statute and thwart the legislative policies it was designed to effectuate." Barrantime v. Arkansas-Best Freight Sys., 450 U.S. 728, 740 (1981) ( citations omitted.) Conflicting provisions between FLSA and collective bargaining agreements are resolved in favor of the FLSA. See id.
Clothes changing and washing of the person will be excluded from compensability, as will donning and doffing of hard hat, ear plugs, safety glasses, boots, and hairnet. Clothes changing is limited to changing into and out of the frock, and washing time is limited to washing of the person. The union is not capable of bargaining away the union members' rights to overtime pay for pulling on and taking off safety equipment but, rather, only has authority to negotiate clothes changing and washing under 3(o).
Section 3(o) does not apply to meal-time claims by its express language and, therefore, frock time is excluded from pre- and post-shift activities, but not from meal-break compensability measures.
B. Good Faith Reliance- 29 U.S.C. § 259 (a)
Section 259(a) of the FLSA provides the following affirmative defense.
In action or proceeding based on any act or omission on or after the date of the enactment of this Act, no employer shall be subject liability or punishment for or on account o the failure of the to any employer to pay minimum wages or overtime compensation under the Fair Labor Standards Act of 1938, as amended . . . . if he pleads and proves that the act or omission complained of was in good faith, in conformity with and in reliance on any written administrative regulation, order, ruling approval, or interpretation, of the agency of the United States specified in subsection (b) of this section [the Department of Labor], or any administrative practice or enforcement policy of such agency with respect to the class of employers to which he belonged.
The test under section 259 is an objective one. See Hultgren v. County of Lancaster, 913 F.2d 498, 507 (8th Cir. 1990) (holding no good faith reliance where employer's policy was not in conformity with the opinion letters upon which it alleged reliance).
IBP contends that it relied upon the issuance of several DOL letters and the DOL's practice of excluding IBP's union plants from litigation in making its decision not to compensate union employees for activities such as clothes changing, washing, sanding steel, and donning and doffing personal protective equipment. IBP's claim seems to be that because the non-union plant litigation covered both clothes changing and washing, which would be excluded from compensable time at the union plants by 3(o), and other activities, such as sanding steel and donning protective equipment, that DOL's policy position was that 3(o) covered all activities at the union plants, not just those specifically excluded by 3(o).
The evidence suggests, however, that the DOL never took a position beyond stating that 3(o) excludes union plants for clothes changing and washing time. Kenneth Kimbro, Sr., Vice President for Human Resources at IBP, testified that he relied on materials he reviewed from the DOL. Mr. Kimbro testified that he relied on DOL's Response to IBP's objections to the injunction in the Kansas litigation. (Ex. 230.) In that response, DOL says that the decree does not apply to union plants and, in doing so, quotes the language of 3(o). This does not suggest that the DOL is altering or expanding the scope of 3(o) to include activities other than clothes changing and washing. Mr. Kimbro also testified that he had reviewed the DOL's pre-trial brief in the Kansas litigation and knew that the DOL was making a distinction between work clothing and personal protective equipment. (Ex. 1056.) The other documents upon which Mr. Kimbro testified that he relied are of similar substance. In a letter from Solicitor of Labor, Marshall Breger, to IBP attorney Eizenstat, Breger paraphrases section 3(o) and does not define clothes changing or washing. (Ex. 224.) In letters from Eizenstat to Breger, Eizenstat says what Eizenstat thinks 3(o) means. (Ex. 225.) Mr. Kimbro also testified that he knew the language of 3(o) does not apply to lunch breaks.
Mr. Kimbro testified that in December 1997, the DOL changed its previous position on clothes changing at union plants. (Ex. 64). But the letter, in fact, states that putting on, taking off, and washing of protective safety equipment are compensable activities under the FLSA if they are integral to an employee's principal activities. The DOL had never taken a position about the compensability of these activities. IBP, therefore, had nothing upon which to rely, other than its assumptions about what clothes changing and washing were included under 3(o).
C. Portal to Portal- 29 U.S.C. § 254(a) and "integral and indispensable"
The Portal to Portal Act limits compensable activities under the FLSA.
[N]o employer shall be subject to any liability or punishment under the Fair Labor Standards Act of 1938 . . . on account of the failure of such employer to pay an employee minimum wages, or to pay an employee overtime compensation, for or on account of any of the following activities of such employee (1) walking, riding or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform, and (2) activities which are preliminary to or postliminary to said principal activity or activities which occur either prior to the time of any particular work day at which such employee commences, or subsequent to the time on any particular work day at which time he ceases, such principal activity or activities.29 U.S.C. § 254(a).
The Supreme Court has created a narrow exception to the rule of noncompensability under the Portal to Portal Act when the activities "are an integral and indispensable part of the principal activities for which the [employees] are employed." Steiner v. Mitchell, 350 U.S. 247, 256 (1956). In Steiner, the Court held that post-shift washing by employees exposed to highly toxic lead compounds and fumes during the work day were compensable. Id. The test the Court created for finding which activities were integral and indispensable is whether (1) it was made necessary by the nature of the work, and (2) it fulfilled the mutual obligations between employer and employee. Id. at 256. See also Mitchell v. King Packing Co., 350 U.S. 260, 263 (1956) (holding that knife sharpening is "principal" activity of butchers in meat-packing plant).
IBP claims that the activities claimed to be compensable by Plaintiffs fall under the Portal to Portal Act exception and were found not to be integral and indispensable by the Tenth Circuit in Reich v. IBP, 820 F. Supp. 1315, 1319 (D. Kan. 1993), aff'd, 38 F.3d 1123, 1125 (10th Cir. 1994) (holding only knife carrying employees performed any compensable activities and that standard protective items "were not so uniquely and closely related to the dangers inherent in meat production to make the wearing them an integral and indispensable part of the meat production workers' jobs.")
The evidence suggests, however, that at Pasco, donning and doffing personal protective equipment and sanding steel are made necessary by the nature of the work and fulfill mutual obligations between IBP and its employees. In an internal IBP memo dated August 6, 1999 from Barb Salter, superintendent of the kill floor, to Lee Baczwaski, plant manager at Pasco, Ms. Salter states that when employees go to lunch and breaks, "the employee must remove rubber apron, apron, gloves, sleeves and scabbard with chain. Frocks also for those that wear one. All other equipment is allowed to remain on." (Ex. 82.) The memo goes on to state that when using the restroom, employees must remove "rubber apron, gloves, sleeves, mesh equipment scabbard with chain, frocks for those that wear one." Ms. Salter notes that "20% of slaughter employees wear no mesh equipment or scabbard and chain." (Ex. 82.). A similar memo was prepared on August 5, 1999 by Gary Johnson, superintendent of A shift, directed to Lee Baczwaski. Mr. Johnson states that when going to lunch or break "employees must remove their gloves, sleeves, and frock." When going to the bathroom "they must remove their frocks, gloves, sleeves, and mesh equipment."
In addition, there was presented a "Required Personal Protective Equipment List, Pasco Complex, Minimum Safety Equipment Requirements, Slaughter Kill Floor." (Ex. 90.) The first line of text indicates that the list below is the minimum requirements "to be worn by ALL IBP Personnel while performing the following jobs." (Emphasis in original.) Similar documents were admitted for processing employees. (Ex. 91, 92, and 93.) This evidence suggests that the wearing of protective equipment is made necessary by the nature of the work.
While cloth gloves are not on these lists, testimony from employees suggested that these, too, were made necessary by the nature of the work. (Testimony of Ranoulfo Gutierez.)
Frocks also are not on this list Testimony from James Lochner, CEO of fresh meat division at IBP, indicated that frocks were necessary to detect possible contamination. In any case, frock-changing time is found to be not compensable under 3(o), as it qualifies as changing clothes.
Hard hats, safety goggles, earplugs, a hairnet, and boots are not made necessary by the nature of the work.
Finally, there is some dispute about whether sanding steel is necessary by the nature of the work. The testimony presented indicates that for knife users, sanding steel is required to keep the edge of the knife straight. The evidence is that a straight-edged knife reduces danger to the employee and improves the employee's ability to perform his or her job. IBP's employee manual directs employees to sand their steel. (Ex. 1.)
The representative evidence establishes that class members engaged in both a pattern and a practice of pre-shift and post-shift FLSA work not subject to § 4(a) Portal to Portal Act, 29 U.S.C. § 254(a) restrictions.
VII. State wage and hours claim. RCW §§ 49.46.020, .130; 49.12.005; 49.52.050-.070 A. Overtime Claims-RCW §§ 49.46.020, .130
RCW § 49.46.130 provides that "every employer shall pay to each of his or her employees who has reached the age of eighteen years wages at a rate of not less than [the minimum wage] except as may be otherwise provided under this section."
RCW § 49.46.130 provides that "[e]xcept as otherwise provided in this section, no employer shall employ any of his employees for a work week longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed."
WAC 296-126-002(8) defines hours worked as including "all hours during which the employee is authorized or required by the employer to be on duty on the employer's premises or at a prescribed work place." The Washington Supreme Court has looked to the FLSA for guidance in interpreting "hours worked." However, there is no 3(o) or Portal to Portal equivalent under state law. Interpretive Guideline No. ES-016 does state that "preparatory and concluding activities" are generally included in the definition of "hours worked," and RCW 49.12.187 states that "[t]his chapter shall not be construed to interfere with, impede, or in any way diminish the right of employees to bargain collectively with their employers through representative of their own choosing concerning wages or standards or conditions of employment."
B. The MWA Provides A Minimum
The class members were employed by IBP on an hourly basis and, therefore, the MWA requires IBP to pay the class members at least the state minimum wage for all hours worked. See SPEEA v. Boeing, 139 Wn.2d 824 (2000). The state minimum wage was $4.90 per hour at the start of the MWA damages period herein on June 30, 1995; it increased to $5.70 per hour on January 1, 1999, and to $6.50 per hour on January 1, 2000. See RCW 49.46.020.
Other provisions permit collective bargaining to establish wages or other conditions of work only "in excess of the applicable minimum under the provisions of this chapter." RCW 49.46.110. See also Lundborg v. Keystone Shipping Co., 138 Wn.2d 658, 669-70 (1999). Washington and Ninth Circuit courts have held that rights provided by the Minimum Wage Act may not be waived or altered by a collective bargaining agreement. See Ervin v. Columbia Distrib., Inc., 84 Wn. App. 882, 891 (1997), citing Local 246 Utility Workers Union v. Southern Cal. Edison Co., 83 F.3d 292 (9th Cir. 1996). See also Schneider v. Snyder's Foods, Inc., 95 Wn. App. 399, 402 (1999) (holding that in enacting the protections under the Minimum Wage Act, "the Legislature has stated that collective bargaining agreements may establish wages or other work conditions only in excess of the statutory minimums").
C. IBP and State Law Claims-Overtime
The same analysis applies here to overtime claims as under the FLSA. The Washington standard may be more liberal but, in either case, the activities of donning and doffing safety equipment, getting cloth gloves, sanding steel, and frocks are compensable. WAC 296-126-002(8) defines hours worked as including "all hours during which the employee is authorized or required by the employer to be on duty on the employer's premises or at a prescribed work place."
D. Inniss
Inniss was decided after the court denied IBP's motion for summary judgment on Plaintiffs' claims for minimum wage under the Washington Minimum Wage Act, and denied IBP's motion for reconsideration of the May 24 order. Defendant contends that the Supreme Court expressly adopted a "weekly" standard for minimum wage compliance in Inniss, and again requests reconsideration of their motion or, in the alternative, certification of the issue to the Washington Supreme Court.
In Inniss, the Washington Supreme Court held that the employment practice of a "fluctuating workweek" did not violate the Washington Minimum Wage Act, chapter 49.46, when calculating overtime compensation at "one and one half times the regular rate" under RCW 49.46.130(1). Inniss v. Tandy Corp., 141 Wn.2d 517 (2000). The relevance of this decision to the regular rate determination for hourly employees is unclear. The court specifically refers to 29 C.F.R. § 778.114, which relates to the regular rate in the context of a fluctuating workweek and provides that "[t]he `fluctuating workweek' method of overtime payment may not be used unless the salary is sufficiently large to assure that no workweek will be worked in which the employee's average hourly earnings from the salary fall below the minimum hourly wage rate applicable under the Act . . ." The regulation also provides, "such salaries are paid to employees who do not customarily work a regular schedule of hours and are in amounts agreed on by the parties as adequate straight time compensation for long workweeks as well as short ones. . .". See 29 C.F.R. § 778.14(c). The Inniss decision is particular to determining the regular rate for employees under a fixed salary with fluctuating hours. However, the court declared that the WMWA was not violated "because the actual weekly compensation for each Petitioner was never less than the total weekly compensation based upon the minimum hourly wage under RCW 49.46.020." 141 Wn. 2d at 533-34. This Court can only apply, not expand, state law and, therefore, absent a clear indication from the Supreme Court, it will use an hourly standard.
E. State Meal Break Claims
In the Order on Objections the Court clarified its conclusion relating to state law meal break claims under WAC 296-126-092(1) to only allow recovery for the time spent working during the meal break up to 10 minutes under the state law claim, holding "[i]f the time spent working during the meal break exceeds 10 minutes, so that the total uninterrupted meal break is less than 20 minutes, the entire 30 minute period shall be recoverable." This conclusion was based on the fact that the Plaintiffs' claim under the MWA is brought to compensate employees for time worked for which they were not compensated. The interpretive guideline under the WAC 296-126-092 indicates that if an employee works during the meal period, the period is to be extended to give the employee a 30-minute meal break. This indicates to the Court that the purpose of both the MWA and the regulation are to allow for time as a remedy for a violation, not necessarily monetary compensation for the entire meal break, when only a portion of the meal break is spent working. This finding also is consistent with the FLSA provision for meal-break violations.
If the Court is reversed on appeal on its meal break ruling and Plaintiffs are held entitled to 30 minutes compensation for each meal break during which work was performed, then Plaintiffs would be able to recover $7,297,517, with interest thereon at the rate set by 28 U.S.C. § 1961, for damages calculated through May 14, 2000 and comprised of $5,487,561 in MWA overtime damages, $905,028 minimum wage damages, and $904,928 in rest break damages under Washington law (which includes (1) rest break prejudgment interest, and (2) meal break prejudgment interest for individuals who are not eligible for meal break double damages.)
F. Rest Break
On May 18, 2001, the Court granted Plaintiff's Motion for reconsideration of rest break claims. (Ct. Rec. 669.) The Court held that in Wingert v. Yellow Freight Sys., Inc., 104 Wn. App. 583 (2001), the Washington Court of Appeals held that an implied cause of action exists under the Industrial Welfare Act for damages for lost wages relating to violations of Wash. Admin. Code § 296-126-28 092. The Court recognized that this decision was contrary to the Court's April 1999 order (Ct. Rec. 69) wherein the Court granted Defendant's Motion for Summary Judgment on Plaintiffs' separate claims for meal and break period violations, holding that Plaintiffs did not have a private right of action under Washington's Industrial Welfare Act.
The Court has denied Defendant's Motions to certify the question of the implied right of action to the Washington Supreme Court and also has denied Defendant's Motions to stay the rest break hearing until after the Washington Supreme Court determines whether it will review Wingert.
WAC 296-126-092 provides the following: "[e]mployees shall be allowed a rest period of not less than 10 minutes, on the employer's time, for each 4 hours of working time. . . . No employee shall be required to work more than three hours without a rest period." The court in Wingert held that this regulation does give rise to a private right of action and that this right cannot be negotiated away through union bargaining. Wingert at 595. Defendant points the Court to a DLI Interpretive Guideline ES0026 (1992) that stated that collective bargaining agreements supersede WAC 296-126-092. The Court finds this argument unpersuasive. IBP's own personnel manager testified that he was unaware of this guideline, so IBP could not have relied on it. Greg Mowat testified at trial that the DLI intended to remove that sentence, and the Supreme Court has held that state minimum substantive labor guarantees do not interfere with collective bargaining rights. See, e.g., Bradshaw v. Livadas, 512 U.S. 107, 128-130 (1994); Metropolitan Life Ins. Co. v. Davis, 471 U.S. 724, 748-49 n. 27 (1985). The Court also rejects Defendant's argument that the difference in language between RCW 49.46.110, which provides that collective bargaining agreements can negotiate conditions above the minimum, and RCW 49.12.187, which contains no such limitation, suggests that unions can bargain away employees' rights to a second 10-minute rest break under the regulation.
The parties have stipulated that after the meal break, employees typically completed their shifts without a paid break. The Court finds that IBP is liable for a second 10-minute rest break, where employees worked 8 hours or more and no second rest break was provided. The Court will not offset the second 10-minute rest break by 5 minutes as a result of the first 15 minute break, as requested by IBP. The regulation requires a break every 4 hours, and providing one longer break period does not avoid the obligation for a second break, as required by the regulation.
G. Preemption
Finally, the Court rejects Defendant's preemption arguments. Under the preemption doctrine expressed in Machinists, the NLRA preempts state laws and state causes of action that regulate activity Congress intended to leave unregulated. Lodge 76, Int'l Ass'n. of Machinists Aerospace Workers v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 141 (1976); Metropolitan Life Ins., 471 U.S. at 749. However, the Machinists preemption doctrine does not preempt a state law which "establishes a minimal employment standard not inconsistent with general legislative goals of the NLRA." Metropolitan Life Ins., 471 U.S. at 757; see also Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1 (1987). "Federal labor law in this sense is interstitial, supplementing state law where compatible, and supplanting it only when it prevents the accomplishment of the purposes of the federal act." Metropolitan Life Ins., 471 U.S. at 756 (citing Hines v. Davidowitz, 312 U.S. 52, 67, n. 20 (1941)); see also Dillingham Constr. N.A., Inc. v. County of Sonoma, 190 F.3d 1034, 1038 (9th Cir. 1999). The regulations at issue here establish minimal employment standards and Defendant has not pointed to, nor has the Court found, any legislative goals of the NLRA inconsistent with the regulations at issue providing for meal and rest breaks.
VIII. Damages
The representative evidence establishes that class members performed off-the-clock work, i.e., unrecorded and uncompensated work, pre-shift, post-shift, and during uncompensated meal breaks. Moreover, IBP failed to keep and maintain records of this off-the-clock work. As the FLSA and MWA protect individual rights, the Court holds that the recovery should also be based on an individualized basis as much as possible.
The Court holds that the Plaintiffs shall submit each employee's damage calculation. The Plaintiffs shall add the times required for each item of equipment, taking into account, if multiple items are used ( i.e. four pair of cotton gloves), and the number of times the items are donned and doffed ( i.e. may be donned and doffed twice, once at the beginning and end of work day and once at beginning and end of lunch). This calculation is to include equipment, not just from the employee's required equipment list, but also from the exhibits, testimony, and representative evidence indicating the equipment actually worn. Plaintiffs shall then add the time allotted for these activities with the time for walking and waiting calculated by Dr. Mericle. This information will then be aggregated to calculate the total amount of time worked by each employee. The Court believes that the evidence presented at trial allows for more narrow definitions of job categories, and that calculating damages on the more narrow categories is the most accurate method of determining damages. Exhibits 178a, 178b, and 178c summarize class member damages based on the individual class member's work histories, individual statute of limitation dates, weekly on-the-clock work paid at regular hourly rates, and the payroll data CD-ROM produced by IBP. Plaintiffs shall substitute the above-described calculations for their current class member work performed for work codes set forth in Exhibits 74, 75, 1048 and the record herein. Plaintiffs are permitted to rely upon representative testimony to establish the equipment used and work performed by class members in job codes, as long as the evidence was introduced at trial. Work codes will be included if admissible evidence was introduced at trial about the job so that the appropriate equipment can be determined from the admitted evidence. The foundation for determining what job categories were entitled to damages and in what amount, are to be determined by reference to the representational evidence. The Court holds that the representational evidence was adequate to determine what work was done and in what amounts.
Plaintiffs are to give 4 minutes credit in their damages calculations of clothes changing time credit since July 1998, as Defendant has provided 4 minutes of paid clothing time since that date.
A. Liquidated Damages Under the FLSA
The FLSA provides for liquidated damages awards equal to back pay. 29 U.S.C. § 216(b). This is considered "`compensation for the retention of a workman pay which might result in damages too obscure and difficult of proof for estimate other than by liquidated damages.'" Reich v. Southern New England Telecomms. Corp., 121 F.3d 58, 71 (2d. Cir. 1997). Section 11 of the Portal to Portal Act allows for a discretionary reduction of liquidated damages if the employer proves it acted in "good faith" with reasonable grounds for believing it was not violating the FLSA. 29 U.S.C. § 260. The employer "bears the burden of establishing, by "plain and substantial evidence subjective good faith and objective reasonableness." Id. "It requires that an employer first take active steps to ascertain the dictates of the FLSA and then move to comply with them." Id.
The Court holds FLSA liquidated damages are appropriate in this case. IBP has failed to prove § 11 Portal to Portal Act good faith. IBP has never attempted to measure, record, or compensate for substantial amounts of pre-shift, meal-break and post-shift work. When sued herein, IBP reacted by instructing employees to alter clock-in and clock-out closer to their production work times. (Ex. 16; Hester.) IBP was informed of employee complaints regarding meal time work in 1988, and failed to investigate. (Ex. 192; Kimbro.) IBP has failed to present any equitable considerations that would warrant denial of liquidated damages.
B. Double Damages Under State Law
Under RCW 49.52.050 .070, an employer is liable for double damages if it "[w]ilfully and with intent to deprive the employee of any part of his wages, shall pay any employee a lower wage than the wage such employer is obligated to pay such employee by any statute. . . ." "Wilful means merely that the person knows what he is doing, intends to do what he is doing, and is a free agent." Schilling v. Radio Holdings, Inc., 136 Wn.2d 152, 159-160 (1998) (internal quotations omitted.) "Under a narrow exception to these statutes, double damages are not available if a `bona fide dispute exists as to obligation of payment.'" DLI v. Overnite Transp. Co., 67 Wn. App. 24, 34 (1992). "The dispute must be `bona fide,' i.e., a `fairly debatable' dispute over whether an employment relationship exists, or whether all or a portion of the wages must be paid." Schelling, at 162; DLI at 35-36. Exemplary damages may be ordered on part of the wages owed where the amount of those wages is not subject to dispute. See Schilling, at 161 (citing Brandt v. Impero, 1 Wn. App. 678, 682 (1969)).
The Court holds IBP liable for exemplary damages for the meal-break violations, but not the rest break violations. IBP knew that meal breaks in Washington had to be "at least 30 minutes" and paid if work was performed. IBP never attempted to provide the employees with a 30-minute meal break. IBP knew employees had to d doff and on equipment and that this took some amount of time. The Court finds that the record does not support a finding that class members knowingly submitted to these MWA damages. The Court finds that the FLSA and MWA recoveries are duplicative and, therefore, plaintiffs will only be able to collect judgment on one of the two claims.
The Court will not hold IBP liable for exemplary damages on the second rest break. The Court finds that while IBP willfully deprived employees of this second rest break, it reasonably believed that this rest period was negotiable. This is evidenced by the regulation that suggests cooperative bargaining is appropriate under this regulation, and the extensive negotiation history with the Teamsters regarding rest breaks. Therefore, the Court holds that as to the second rest break, a bona fide dispute existed regarding whether all or a portion of the wages must be paid." Schelling, at 162; DLI, at 35-36.
C. Attorney Fee
Plaintiffs are entitled to an attorney fee award pursuant to 29 U.S.C. § 216(b), RCW 49.46.090(1), RCW 49.48.030, and RCW 49.52.070, and are directed to file an attorney fee petition. Plaintiffs also are entitled to recover costs under 28 U.S.C. § 1920.
D. Sunshine Payments
IBP has sought to treat Sunshine payments as an offset. The Court finds that these Sunshine payments are in the nature of incentive pay, i.e., a reward for working more efficiently and at greater speeds. In effect, IBP has been making these payments to slaughter division employees for their production floor performance during their work shift. Sunshine pay is notpayment for off the-clock work, nor is it the type of premium pay that could offset overtime pay obligations under U.S.C. § 207(h). Similarly, Sunshine pay is not compensation for MWA off-the-clock work and does not offset MWA damages.
E. Prejudgment Interest
Prejudgment interest also is awarded on Plaintiffs' state law meal and rest break claims. Prejudgment interest is allowable only when (1) an amount claimed is "liquidated;" or (2) the amount of an "unliquidated" claim is for an amount of money that is "determinable by computation with reference to a fixed standard contained in [a] contract, without reliance on opinion or discretion." Prier v. Refrigeration Eng'g Co, 74 Wn.2d 25, 32 (1968). A "liquidated" claim is defined as one whose "exact amount is fixed and known." Prier, 74 Wn. 2d at 32, citing Charles T. McCormick, Damages (Hornbook Series), § 54 (1935); See also Taylor v. Shigaki, 84 Wn. App. 723, 732 (1997). Defendant argues that the meal-break claims are not for a sum determinable without reliance on opinion or discretion, as there is no precedent in this area. This argument rests on a misperception of the requirement of a fixed standard and of what pre-judgment interest is designed to accomplish.
Prejudgment interest is not awarded only in those cases where the law is clear on whether the amount claimed is owed but, rather, once it is determined that the amount is owed, whether the amount can be determined with exactness. "The fact that a dispute exists over all or part of a claim does not make the claim unliquidated. This is true `even thought the adversary successfully challenges the amount and succeeds in reducing it.'" Aker Verdal v. Neil F. Lampson, Inc., 65 Wn. App. 177, 190 (1992), quoting Pier at 33. "It follows from the foregoing that, where the amount sued for may be arrived at by a process of measurement or computation from the data given by the proof, without any reliance upon opinion or discretion after the concrete facts have been determined, the amount is liquidated and will bear interest." Prier at 33-34. Here, the amount of recovery for the time spent working during the meal period is the time spent working, and if that time extends beyond 10 minutes, the entire 30-minute period is recoverable. The compensable time is easily determined by looking to the pay rates for employees and calculating the time spent working during the meal break on days where a meal break was required. Finally, prejudgment interest is not to punish Defendant but, rather, to compensate the Plaintiffs for money wrongfully withheld. "Prejudgment interest is not a penalty imposed on a defendant for wrongdoing nor is its purpose to deter wrongdoing." Hansen v. Rothaus, 107 Wn.2d 468, 475 (1987).
IT IS HEREBY ORDERED:
1. Plaintiffs are to present a proposed judgment consistent with this Order and with the Court's Order on Objections. 2. The Court will hear telephonic oral argument on the issue of injunctive relief on October 4, 2001 at 1:30 p.m. If the parties request oral argument in person they shall notify the Courtroom Deputy, Michelle Fox, by October 1, 2001.
IT IS SO ORDERED. The District Court Executive is directed to enter this order and to provide copies to counsel.