*2 CLAY, Circuit Before SILER and WILLIAMS, Judge.* District Judges; opinion of the CLAY, J., delivered 593), WILLIAMS, delivered (p. D.J. court. * sitting by designation. Williams, Virginia, trict of Senior Unit- M. Honorable Glen Dis- Judge the Western States District ed separate opinion concurring in the result. employers covered employees for
SILER, 593-94), (pp. J. delivered a longer hours worked than forty in a work- separate dissenting opinion. week at a rate not less than one and one- half times the rate at they
OPINION *3 employed. are 207(a)(1). § 29 U.S.C. 11(c) Section requires employers covered CLAY, Judge. Circuit “make, keep, preserve and such records Plaintiff, Herman, Alexis M. former persons employed by him and of the Secretary of Labor of the United States wages, hours, and other conditions and (“the Department Secretary”), of Labor practices of employment maintained appeals from judgment ordering De 211(c). him....” § 29 U.S.C. Under sec- fendant, America, Fabri-Centers of Inc. 15(a)(2), tion it is unlawful for any person (“FCA”), $431,948.58 for its viola “to any of provisions violate of section 15(a)(2) 7, 11(c), tions of sections and 206 or section 207 of this title.” 29 U.S.C. 15(a)(5) of the Fair Labor Standards Act 215((a)(5)). § 15(a)(5) Section makes it (“the FLSA”), of 1938 29 U.S.C. unlawful any “to violate provisions of the 207(a)(1), 215(a)(2) § 211(c), § 211(c)....” section 29 U.S.C. 215(a)(5).1 The district court deter 215(a)(5). 11, 1998, On June the Secre- mined FCA owed aggregate tary voluntarily dismissed un- Rosskamm $545,262.21 amount of for its overtime lia 41(a)(1). der Fed.R.CivP. FLSA, under the bilities but that FCA was entitled to an compensation” “extra parties The prepared then and filed a $113,313.63pursuant credit of to 29 U.S.C. joint stipulation of the facts on September 207(h)(2). appeal, On the Secretary 2, 1998, 1998. On October parties challenges the district court’s award respective filed their motions for summary extra compensation credit FCA. For judgment under Fed.R.Civ.P. 56. The below, the reasons set forth we AFFIRM Secretary sought a determination of the part, in part, REVERSE and RE amount of the overtime liabilities that FCA MAND for further consistent proceedings workers, owed to FCA, while in its with opinion. cross-motion, petitioned for compen- extra sation over- determined
BACKGROUND time liabilities under the FLSA. History A. Procedural The district court issued a memorandum 24, 1998, April On Secretary opinion September 29, 2000, and order on brought this enforcement action under granting part the Secretary’s Rule 56 section 17 of the motion and granting part FCA’s cross- in the United States District Court the motion summary judgment. Pursuant Ohio, enjoin Northern District of FCA joint to a stipulation, aggregate officer, and its chief executive Alan Ros- amount of FLSA overtime that FCA was skamm, violating 7, 11(c), from sections $545,262.21. liable to pay However, was 15(a)(2) 15(a)(5) of the FLSA. In the the district court determined that FCA complaint, Secretary sought overtime was entitled to an “extra compensation” liabilities on behalf of $113,313.63. FCA’s unionized credit the net employees. warehouse 7 requires Section amount that FCA owed as a result of the 43(c)(2), R.App. Pursuant to Fed. P. automatically Elaine substituted proper plain- as the Chao, Labor, L. Secretary current tiff in this case. in calcu- shortcomings any alleged A offset $431,948.58. was order court’s district pay. lating joint stip- incorporating the judgment final 21, 2000. Herman, Secretary on November entered Plaintiff, M. ulation Alexis timely appeal. filed a Department Labor, The States (“DOL”), contends Labor History B. Substantive all em- incorporate dictates (or the base rates into ployee undisputed. FCA facts are relevant The rate) purposes. for overtime stores, various retail operates owns premi- contends that DOL further of Jo-Ann names under the principally only off- by employees earned ums World, Crafts, New Cloth Fabrics work- the same due within set fabrics, Jo-Ann, to sell Fabrics, and *4 York that the rebuttal, argues FCA week. operates It also crafts. notions overtime the total can offset premiums for the center distribution warehouse FCA, at investigations spot After due. at notions fabrics, crafts sale of retail of behalf action on brought this DOL Hudson, Pur- Ohio. Road Darrow overtime recover employees to FCA “enterprise is an FCA to the suant owed un- allegedly that is compensation of production in commerce engaged plan. compensation the former der under for commerce” goods under “employer” 203(s)(l) and is 18-19.) (J.A. at Thus, undisputed 203(d). it is the com questions was to these Central provisions to the subject FCA is to deter FCA used formula pensation the FLSA. employees of warehouse wages mine explained succinctly April dispute, period court district time during The follows: The dispute warehouse 1998.2 May nature of repre (“the employees”) were employees is FCA’s this action gravamen Steelworkers by the sented rene- Prior overtime. calculation (Upholstery America, ALF-CIO-CLC agree- bargaining the collective gotiating Division), Local Union Industries Allied employees for FCA ment, pay overtime assigned were employees 48U.3 The No. rate of their solely on base based home base their represented job code rates the other Notwithstanding pay. where Hudson, warehouse Ohio within hours FCA, all overtime at pay available assigned typically were employees the lowest at compensated were collective Under their work. however, perform undisputed, It possible. employees agreement, bargaining allowed plan compensation at their working rate” when a “base paid in excess premiums earn employees in the job codes or home location primary premiums These standards. of FLSA “regular Their Hudson, warehouse. Ohio employ- whether regardless accrued their multiplying by determined pay” was ques- overtime. worked ees times hours job worked weekly in-home is wheth- this matter at the heart tion rate. hourly base their plan under er did question employees out, warehouse 3. The no pointed court the district 2. As formula, representatives, sales supervisors, elimi- include compensation longer uses the ware- employees in challenged by Secre- clerical part-time or nating policies the collective when present appeal, tary in the house. May on amended agreement was bargaining 17, 1998. employees For who worked outside of Employees received when job codes, their home “regular their pay” they worked more eight than hours per by was determined the higher of one day, they or when worked Saturdays after two formula, formulas. Under the first working if forty hours during the work week. “average calculated rate” resulted in Employees were paid twice their hourly compensation that was greater than the base rates for all Sunday work hours. employees’ non-home base hours multi- Employees also received “holiday pay,” plied by their hourly plus base rate “bonus which was by calculated virtue of the num- pay,” then the employees were entitled to ber of holiday hours worked times the upon based their non-home “average rate” for that employee. “Aver- base hours worked multiplied by rate,” their cal- age “bonus pay,” “downtime pay” culated “average rate.” The employees’ and “shift differentials” were not included “average rate” by was calculated dividing in hourly base rate for purposes of the employees’ aggregate earnings, includ- calculating ing “overtime pay,” for a six-month worked more than forty per hours work and dividing the aggregate amount the week. “Downtime pay” was calculated aggregate number of hours worked the multiplying the employees’ downtime rate *5 employees, including hours, overtime by their hourly downtime hours. period. six-month If the use of the As the district recognized, court FCA “average rate” employees for the working did not contest the threshold issue of outside of their job home code did not whether it violated the by FLSA calculat- result in higher figure, a then “regu- their ing payments overtime using only the em- pay” lar determined multiplying ployees’ base rate. As matter, to this their hours worked times their hourly rate district court found that FCA violated the plus pay.” “bonus failing to include the nondiscre- Under the second formula used for em- bonuses, tionary rate,” “average and other ployees performed who work outside of “shift differentials” as part of “regular job their codes, home the employees re- rate.” the district court held that ceived pay.” “bonus FCA determined “bo- the Secretary was entitled to judgment nus pay” by (1) using either the units of aas matter of law on its claim that FCA’s merchandise completed at each bonus tier calculation of “regular rate” for over- multiplied by a set bonus rate for each time purposes was in violation of the tier, such or special bonuses calculated FLSA. job identification. If the “average Instead, argument FCA’s in the district rate” for employees working outside their court focused solely on whether it could job home code did not result in higher credit the contract premiums paid to its
figure, then wage equaled the product employees against the of hours worked multiplied by the base was owed them. Specifically, FCA, in its plus pay.” “bonus In other cross-motion for summary judgment, words, compensation equaled the number sought to offset the that was of hours worked times rate, the base to owed with the premiums contract that it pay” “bonus was added. had paid in excess of require- FLSA’s FCA’s warehouse also were ments. In opposition, the Secretary paid “overtime pay,” which was calculated claimed that under 29 207(h), U.S.C. by the aggregate “overtime” hours multi- FCA was allowed a credit only for the plied by 1.5 times their hourly base rates. premiums that during the same maintains, under 29 up court district summed workweek. 207(h).4 This Court reviews district following terms: “FCA dispute grant summary judgment de court’s credit- premiums all are claiming that Foods, 176 Herman v. Collis novo. they were of the workweek regardless able (6th Cir.1999). When the facts of premi- DOL contends that paid, while the undisputed, are and the sole issue case the same only offset within ums can legal question, this is a before Court overtime.” as the missed legal is reviewed de novo. Id. In question argument, In with FCA’s agreeing case, in grant this court erred the district court, upon Abbey City relying district ing summary judg cross-motion (E.D.Mich. Jackson, F.Supp. by finding ment that FCA was entitled upon plain 1995), “[b]ased found that apply con under 29 U.S.C. law, 207, existing case language tract total ... history [a]ll legislative overtime owed. can be credited toward premium payments The district overtime owed.” the total Analysis B. was no specifically court noted there case, we are deciding limiting in the statute “qualifying language guided by principles inter The district on a workweek basis.” credits statute, pretation. interpreting a When nothing in court also stated that there was begin plain must with its lan this Court Secretary’s § 207 or the language resort to a of con guage, review required it “to read a regulations that history legislative only gressional intent statutory language.” qualifier into clear the statute is not language *6 a of law to granting judgment as matter Inc., Comshare, 542, In re 183 clear. crediting about regarding its claim FCA Cir.1999) (6th (citing 549 Consumer Prod. liabili toward the overtime past premiums Inc., Sylvania, 447 v. GTE Safety Comm’n owed, the court conclud ty that it district 102, 108, 2051, 100 64 L.Ed.2d S.Ct. U.S. specified per have a “Congress could ed: (1980)). language the literal 766 “Where 207(h) § if it saw limitation in conclusively reveal statute does not stands, language, it and there fit. As intent, look legislative courts must be limitation, in does not exist fore that provi yond meaning, analyzing literal 207(h), supply § and Court refuses to the whole.” In re in context with sion that limitation.” Cir.1984) 358, Arnett, 731 F.2d 642, Belford, 417 U.S.
(citing Kokoszka
(1974)).
2431,
650,
S.Ct.
of the earlier statutory language, selected and varying tenses of the verbs ghost “the ... ‘credited any toward used under section also betray premium compensation due’ [language] Congress’ clear intent.” Defendant’s Br. continues to haunt the statute’s intent.” at 26. Specifically, FCA argues that Br. Defendant’s at “while the statute uses rear-looking, past ‘paid’ tense to describe the extra com- However, construction pensation offset, to be it in marked con- §of is at variance with appli- trast uses the forward-looking verbs ‘cred- principles cable of statutory interpretation. itable’ ‘payable’ to describe the crux of As the Secretary correctly points out, the legislated benefit employers.” De- fact that Congress “any” deleted fendant’s Br. at 26. According FCA, amending the statute means pre- it “[t]he clear message sent the word sumed that the omitted term was in- ‘payable’ is that it applies to pay- future tended to any have effect on present ments, not those already paid.” Defen- version the statute. See Russello v. dant’s Br. at 27. States, 464 23-24, S.Ct. (“[W]here L.Ed.2d 17 FCA’s explanation as to lin- Congress’ Congress particular includes language guistic intent falters in respect be- one section of a statute but omits it in cause the “payable” term is not customari- another Act, section of the gen same it is ly understood to relate to future payments. erally presumed Congress acts inten “Payable” is defined in Black’s Law Dictio- tionally and purposely in disparate in nary: clusion or exclusion.... We would not Capable being paid; suitable to be presume to ascribe this difference to a paid; admitting or demanding payment; simple (inter mistake in draftsmanship.”) due; justly legally enforceable. A sum nal quotation omitted); marks see Pe also money is said to payable when a trey City Toledo, F.3d person is under an obligation it. (6th Cir.2001). Here, Congress specifical Payable may signify an obli- therefore ly removed the language in question gation at time, but, a future had inserted in previous version before qualification, used without the enactment of the revised statute. This term normally means that the debt
provides greater even support pre payable once, at as opposed to “owing.” sumption that the language removed Black’s Law ed.1990) Dictionary 1128 not intended to have effect on the (emphasis added);6 see also Trujillo v. meaning of the amended statute. See Cyprus Amax Minerals Co. Ret. Plan v. Ragland, Stewart 934 F.2d n. Comm., Cir.2000) (9th Cir.1991) (“When legislators delete (noting that the term “payable” under the language, we may assume that in they Employee Retirement Income Security tended to eliminate the previ effect of the Act ‘[c]apable “means being paid; suit ous wording.”). paid; able to be admitting or demanding *9 Nevertheless, FCA maintains that the payment; justly due; legally enforce clearly statute allows “extra compensation” able’ ’’Xquoting Black’s Law Dictionary (cid:127) 6. Similarly, "payable” is ment) defined in Black's that paid. is to be An may amount be (7th Law Dictionary ed.1999) as follows: payable being without due. Debts are com- "(Of money a sum negotiable of or a monly instru- payable long they before fall due.” any em- employ employer any year, F.2d ed.1990)); Ripley, re In (6th industry]”)(emphasis the tobacco ployee [in Law Cir.1991) Black’s (citing (5th 440, 444 added). in sec “payable” interpret Dictionary to to Bankruptcy Code 1305(a)(1) the of Labor of addition, Department
tion the pay ‘become that have “taxes Act that the implementing (“DOL”) mean regulations now”).7 paid be must overtime, that sug- those are able’ of payment prompt support custom is “payable” the term cred- Because be should that the gesting pay future to apply to arily understood in workweek same the ited within that argument ments, reject we 29 C.F.R. Specifically, paid. they were 207(h)(2), evinces §in found as “payable,” part: pertinent in provides § 778.106 compensa “extra to allow intent Congress’ com- rule that overtime is general any overtime credited tion” to be work- particular a in earned pensation FLSA. the under liability due regular pay on the paid must be week work- such in which period the day for imple- and its a whole as FLSA 2. The of amount correct When ends. week menting regulations deter- be cannot compensation overtime as a whole the FLSA of analysis An regular after time some until mined also favors regulations implementing however, requirements period, pay Secretary’s view employ- if the be satisfied Act will a work- include interpreted be should compensa- overtime the excess pays er theAs restriction. period or work week period pay after the as soon tion aas whole out, Secretary points may not be Payment practicable. as is regulations implementing the DOL’s is rea- longer than period for a delayed primacy highlight the Act employer necessary for the sonably provi- First, various concept. workweek arrange payment compute pri- note explicitly of the FLSA sions may pay- no event and in due amount See the workweek. macy of pay- next beyond delayed ment provided otherwise 207(a)(1) (“Except as made. can be computation such day after employ shall section, employer no in this Inter- v. Reich See § 778.106. 29 C.F.R. any workweek inwho any his 574, 576 F.3d Corp., 57 Brands state ... for work- in engaged commerce rule is Cir.1995) “general (noting ”) (em- ... forty hours than longer week partic- in a earned 207(l) (“No added); 29 phasis regu- on the must be in ular workweek employee any employ shall such in which period day for lar long- a workweek ... service domestic 29 C.F.R. ends”) (quoting ”) add- (emphasis ... forty hours than er § 778.103 29 C.F.R. 778.106); also see 207(m) (“For or ed); 29 U.S.C. due (directing employers work- fourteen than not more periods § 778.104 basis); 29 C.F.R. weekly aon calendar aggregate in the weeks Royal being paid’"); 'due,' 'capable Methorst, or Johnson See also Hosp., 953 Heights Wyckoff Indemnity Co. v. Cir.1997) “Web- (noting n. 3 ("Although (E.D.N.Y.1996) 460, 466 ed.1984) (2d F.Supp. de- Dictionary World ster’s New obligation a future mean might 'payable' payment '[r]equiring part 'payable' fines Policy, circumstances, in the is used some "); Cathey v. United DUE' date: aon certain that it understanding is only reasonable (S.D.Tex.1998) States, F.Supp.2d including 'paid' meaning of adds agree on "English (noting dictionaries obligated, enforceably due which is sum defining to mean meaning payable, remitted.”). actually yet can, paid,' but not may, or should '[t]hat alia inter *10 590
(stating that employer cannot average 1473, (11th Cir.1990) 1481 (holding “that the number of hours worked over two county should be allowed to set-off all weeks in order avoid paying overtime); previously paid premiums ... 778.202(c) 29 (finding C.F.R. that credits against overtime found to be due and ow- may given be for daily compensation ing during the damages phase of the tri- “against the which al”); Abbey v. City Jackson, 883 is due under the statute for hours in ex- F.Supp. (E.D.Mich.1995) 181 (holding that workweek”). cess of 40 in that premium payments for overtime hours
Thus, while plain language of may be used to offset all deficiencies in 207(h)(2) speak does not directly to the FLSA). overtime under the present issue and while the Secretary has not promulgated published any regula- Notwithstanding, the case law tion pertaining to provision, supporting the Secretary’s interpretation provisions these other in the FLSA and its appears to be persuasive. more Specifical implementing regulations support lend to ly, as by noted the Seventh Circuit in the Secretary’s position premium Howard, allowing pre use 207(h)(2) credits by § allowed should be miums to offset the liability total is incon limited to the same workweek or work sistent with the language and purpose of period in which premiums these paid. were the statute:
3. Case law interpreting
provision
must be read in
the context of the
whole,
statute as a
Given the silence in the statute as to
which is designed
protect
workers
when overtime compensation may be cred
from the twin evils of
ited
excessive work
and the lack of an implementing regu
hours and
wages.
substandard
issue,
lation on this
Barren
precise
it is perhaps
[v.
tine
not surprising
Freight System,
Arkansas-Best
that divergent case law has
Inc.,
728,
450
739,
U.S.
1437,
arisen. One
101
line
case
S.Ct.
supports
law
(1981)
67
641
Secretary’s
];
L.Ed.2d
interpretation
Monahan v.
County
Chesterfield,
credits
Virg.,
allowed
95 F.3d
should be
1263,
Cir.1996).
limited
1267
to the same workweek
Toward
or work
end,
period in
statute
requires
these
payment
paid.
See
time and a
Howard v.
half
City
Springfield,
for overtime
274
work.
1141,
(7th Cir.2001)
F.3d
Courts
long
have
interpreted
(holding
the FLSA
that employer
requiring
apply certain
payments
those
credits
be
timely
overtime owed on a pay period
made.
Brooklyn Savs. Bank v.
basis);
O’Neil,
period
City
697,
Nolan
703-07,
Chica
go,
(N.D.Ill.
F.Supp.2d
89 L.Ed.
(1945);
331-33
Rogers v.
2000) (holding
City
N.Y.,
that “the
Troy,
offsets
(2d
should
148 F.3d
calculated on a period
basis”).
Cir.1998);
Witvoet,
Calderon v.
999 F.2d
Another
fine of case
supports
Cir.1993).
law
interpretation. See Alexander v.
statute is
violated
if
even
the employer
States,
(Fed.Cir.1994)
eventually pays the overtime amount
(noting that
the “1931
[premium
Act
that was due.
Rogers,
See
148 F.3d at
pay pursuant
(5)
to subsections
fact,
that requirement may not
207(e)
] is creditable
toward
waived,
over
and “even the workers’ en
time compensation
FLSA”);
due under the
thusiastic assent to
payment—
deferred
Kohlheim v.
Ga.,
Glynn County,
915 F.2d
a form of employer-held savings ac-
*11
wages con-
payment of
late
Calderon,
employer’s
an
ineffectual.”
count—is
wage
minimum
of the
a violation
stituted
is also
principle
1107. That
at
F.2d
in 29
provision stated
requirement
778.106,
pro-
§
at 29 C.F.R.
found
207(h)(2),
206(a).
there is
Similar
part:
in relevant
vides
206(a) specifying
§in
language
express
no
com-
overtime
is that
rule
general
The
206(a)
the
Analyzing
apply.
is to
when
work-
particular
in a
earned
pensation
whole, the Ninth
as a
statutory scheme
regular
on the
paid
be
must
week
206(a)
be
that
should
concluded
Circuit
work-
in which such
period
the
day for
as the
standard
the workweek
applied with
correct amount
the
When
ends.
week
Cir-
In
the Ninth
Biggs,
point.
reference
cannot
compensation
the overtime
pay the
obligation [to
“[t]he
noted that
cuit
after
time
until some
determined
be
employee
kicks in once
wage]
minimum
however, pay period,
regular
workweek,”
work
covered
has done
be sat-
of the
will
requirements
without
passed
payday
has
that “[i]f
and
pays the excess
if the employer
isfied
met
cannot have
employer
payment,
after
soon
as
at
As
‘pay’.” Id.
1539.
obligation to
his
practica-
as is
pay period
“[ujnless
is a due date
noted,
there
Biggs
for
delayed
may not be
Payment
ble.
un-
wages become
minimum
after which
reasonably
than is
longer
period
unpaid
liability for both
paid, imposing
to com-
for
necessary
damages
liquidated
wages
minimum
of the
payment
arrange
pute
rea-
The same
meaningless.” Id.
would be
may pay-
in no event
due and
amount
or work
using the
workweek
soning
pay-
next
beyond
delayed
be
ment
respect
with
applies
also
period standard
can be
computation
day after such
206(h)
employers
compels
since
made.
con-
overtime in
payments of
timely
make
not enti-
regulation
Although
the Act. See
C.F.R.
formity with
deference,
...
it is nonetheless
tled to
pay-
timely overtime
(requiring
778.106
with
it is consistent
persuasive
v.
Brooklyn Savs. Bank
ments);
also
see
the FLSA
interpretation
O’Neil,
709 n.
324 U.S.
Therefore, under
reached.
have
courts
(“The
necessity
89 L.Ed.
be
must
statute,
generally
wages
to workers
payment
prompt
pay period
on a
calculated
Congress as
recognized
long
has
been
however,
City,
basis.
pay period
legislatures.”)
byas
state
well
payment
a method
advocates
obli-
its overtime
it to
allow
would
out,
Further,
Secretary points
removed from
at a time far
gations
Black,
163 F.2d
v.Co.
Electric
Roland
That is
was due.
amount
that overtime
Cir.1947)
idea that
supports the
require-
with
inconsistent
op-
should
in question
statutory provision
must
payments
that overtime
ment
basis.
work
on a
erate
made.
timely
Circuit, interpret-
Roland,
Fourth
In
Howard,
effect,
274 F.3d at
then
of the FLSA
ing the version
pay overtime
employer must
that an
opinion held
addition,
Circuit’s
the Ninth
al-
and is not
when due”
“promptly Wilson,
Cir.
Finally,
opinion
we
letters in question
note
the Secre
tary’s
interpretation
directed to
parties,
thud
has
FCA. See
been set forth in
Wage-Hour
several
States v.
opin
Corp.,
Mead
533 U.S.
ion
(2001)
letters issued
Wage
S.Ct.
and Hour
which can be deference under Chev- Therefore,
ron. for the same re- reasons by Judge
lated in Abbey, Feikens I would
affirm the of the decision district court
here. *14 BELL, Jr.,
Earnest Plaintiff-Appellant, JOHNSON, al.,
Robert Defendants, et Stimpson; Blatter,
Mark Allen
Defendants-Appellees.
No. 01-1286. Appeals, States Court of
Sixth Circuit.
Argued: Aug. 2002.
Decided and Filed: Oct.