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City of Louisville, Division of Fire v. Fire Service Managers Ass'n Ex Rel. Kaelin
212 S.W.3d 89
Ky.
2006
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*1 JOHNSTONE question presented. cautiously ponder the WINTERSHEIMER, JJ., join this luxury adjudication ais reflective Such dissenting opinion. like by appellate judges enjoyed primarily the other my brethren. On myself and

hand, enjoys a more direct judge the trial trial, at presented

connection to evidence or in stand from the witness

whether lim-

chambers, even when evidence This connection imperfect.

ited or to ob- ability trial court’s

grounded and interact with the rele- first-hand serve LOUISVILLE, DIVISION CITY OF and, familiarity usually, a vant witnesses FIRE, Appellant, OF locale, combination of which with grasp to a better ultimately leads a more robust of the facts and nuances ASSOCI MANAGERS FIRE SERVICE trial.

understanding of the situation President, By Through its ATION Thus, may have though the trial court even KAELIN, L. Matthew L. Matthew it proceed, information on which to limited individually, Kaelin, Appellees. аlways position almost in a better 2004-SC-0443-DG. No. appellate court. evaluate the facts than advantage this The trial court’s relative Kentucky. Court of Supreme accepted, provides generally respect 22, 2006. Nov. allowing rationale for powerful, and indeed as to broad discretion the trial court 2007. Feb. Rehearing Denied This broad grant whether to mistrial. to the requires that we defer

discretion court, substituting than our

trial rather long of the situation after

own assessment

the fact. mind, transcript I this in think the

With reasonably can

makes clear that no one trial court’s decision to

conclude that the arbitrary, unrea-

grant the mistrial “was unfair,

sonable, by sound unsupported English, S.W.2d

legal principles.” presented with The trial court was con- possibly improper witness

evidence defendant of a criminal

tact relative behest of the defendant.

and at based

Though the trial court’s decision doubt hurried and no

this evidence

difficult, capricious. not baseless or it was

Thus, that the decision only I can conclude to an not amount a mistrial did grant Thus, I respectful- its discretion.

abuse of

ly dissent.

(“Cabinet”) against City Louisville’s of Fire reimbursement of Division ‍​‌​​​​‌​​‌​‌‌‌​​‌​​​​​​‌​​​‌‌​‌‌‌​‌‌‌‌​​​‌‌‌​‌‌​‍time-and-a-half overtime Dis- allege unlawfully withheld trict *3 May of KRS 337.285. On contravention tentative find- the Cabinet made that the Dis- ings of fact which conclude per- supervisory, were salaried trict Chiefs denied illegally who were not time- sonnel overtime in contravention of pay and-a-half appealed, but KRS 337.285. FSMA 16, 2002, May affirmed the Cabinet its final findings of fact order. tentative 13B.140, to the FSMA Pursuant KRS to the Cabinet’s final order the appealed Court, March Circuit but on Jefferson sides, briefing the by after both Jef- the ferson Circuit Court affirmed Cabi- in all respects. actions The District net’s again appealed, and the Court of Chiefs reversed, the District Appeals finding to the enhanced over- Chiefs were entitled provided under KRS pay time 337.285. agree we both the Cabinet Because with and the Jefferson Court the Circuit supervisory, District Chiefs are pay un- personnel not entitled to overtime 337.285, der KRS we reverse decision of the Court of and reinstate the Hopson, Wyrick, Lisa Edwin S. Mitzi D. decision of the Jefferson Circuit Court. Dejaco, Tarrant & Wyatt, Catherine Plaza, Combs, Louisville, Citizens Counsel I. Facts for Appellant. findings factual Cabinet’s Sales, Kelley, L. Kenneth Paul Jason a showing are entitled deference absent Sales, Tillman, Wallbaum, Sat- Catlett & clearly Ky. are Un erroneous.

terley, Appellees. Counsel for Landmark employment Ins. Comm’n Inc., of the Court Opinion Newspapers Ky., Justice 91 S.W.3d Cmty. GRAVES. (Ky.2002). party As neither has compel a conclusion presented evidence to L. Kaelin is Matthew a District Chief contrary, adopt accept to the of Fire for of Louis- Division According findings. factual Cabinet’s Fire president ville and the Service Cabinet, findings factual made (“FSMA”). Association Managers comprised of District Chiefs the FSMA associ- unincorporated District Chiefs—an department. District in the fire Kaelin ation—are members the FSMA. “FSMA”) major; stipulated rank of and as carry the (collectively and the filed FSMA supervisory all parties, Cabinet constitute Kentucky claim with Labor Act, analogue one of the Fair Labor personnel. District Chiefs work Standards schedules, a comprised §§ two 40-hour week 201-219. Under U.S.C. KRS of five 8-hour shifts or a 56-hour work 337.285, an “employee” must be at a alternating and 72- comprised week rate of hour time-and-a-half hour weeks that include either two or forty during worked over a workweek. three 24-hour shifts. Each District Chief FSMA contends that the District Chiefs salary regardless of whether he statute, “employees” under this 40- or 56-hour schedule. or she works a thus, are entitled to the time-and-a-half time Whenever a District Chief works forth set therеin. hours, excess scheduled “Employee” as used in 337.285 is *4 compensatory time is awarded on hour- defined as follows: However, if per-hour basis. overtime is (a) “Employee” any person employed is fire, to a responding earned while by permitted or for or suffered work a on the straight is rate based employer, an but shall not include: hourly of pay, District Chiefs rate into calculation of which takes account the per

number of hours week he or she is in Any employed 2. individual normally scheduled. executive, administrative, bona fide professional capacity supervisory, or District Chiefs must miss time

When work, they are re- ... ad- from their scheduled as the terms are defined leave, quired approval to obtain to use sick regulations ministrative execu- leave, Fur- compensatory annual or time. .... tive director thermore, District Chiefs are allowed to 337.010(2) added). (emphasis trade shifts with other District Chiefs. regulation KAR 1:070is the administrative by supervi- trading approved Shift must be of the executive director which defines the 40-hour-per- sors. District Chiefs on above, in 20023 it terms set forth and may trade shifts with week schedules stated as follows: A 56-hour-per-week those on schedules. 4. The term “individual em- Section report duty who fails to for District Chief supervisory capac- in a bona ployed fide under a shift trade will be considered 337.010(2)(a)(2) in KRS ity” ] used [as regularly assigned If the District AWOL.1 any employee: shall mean shift, may he Chief cannot then cover the (1) customarily di- Who although of vacation payroll,2 be off use (2) rects the work of two or more (Standard may permitted. Oper- be time employed; where he is employees 103.14) ating [hereinafter Procedures (2) not devote more than Who does “SOP”]. (20) twenty of his hours of percent Analysis II. to activities of the workweek nature un- the same as statutes at issue this case are 337, Kentucky’s his Chapter supervision; der contained KRS actually acrоnym Out trict Chief has been docked "Absent With 1. AWOLis for Leave.” from a traded shift. event of absence payroll” "off means It is unclear whether section was amended in 2005 and 3.This pay for Chief would be docked that District 1:070(10). now found 803 KAR shift, simply that a traded or an absence from analysis affect the amendments do not Regard- he or she would be deemed absent. judice. in the case sub issue less, no evidence that a Dis- there has been (3) the work compensated quality quantity his ser- in the or Who salary performed. Subject exceptions vices on a basis at a rate of not to the week, below, than exclusive of must re- per provided employee less $155 board, facilities; lodging, other week in pro- salary any or ceive his full vided, employee that an who is com- performs any work without which he at a pensated rate days the number or hours regard to week, not than per less exclusive subject is also policy $250 worked. This board, facilities, lodging, or other employee rule that an need general primary duty and whose consists of work week in which customarily regularly directing no work. performs he the work of two or more other (a) employee An will not be consid- employees, shall be deemed to meet if de- ered to be “оn a basis” requirements all of the of this section. predetermined ductions from his

compensation are made for absences occasioned added). (Emphasis operating requirements of the busi- ‍​‌​​​​‌​​‌​‌‌‌​​‌​​​​​​‌​​​‌‌​‌‌‌​‌‌‌‌​​​‌‌‌​‌‌​‍parties concede that if the District Accordingly, if the ness. satisfy requirements the three *5 work, ready, willing and able to de- above, they Section 4 set forth cannot be may ductions not be made for time “employees” classified as pursuant to KRS when work is not available. thus, 337.285 and are not entitled to the (b) made, may Deductions be howev- time-and-a-half overtime set forth er, employee when the absents himself therеin. It is further conceded that the day from work a or more for District Chiefs are supervisory to the ex- for reasons, personal other than sickness they satisfy require- the two tent first Thus, or accident. if an regulation. ments of that See Kaelin v. day longer absent for a or to handle No.2003-CA-000740- of affairs, personal his salaried status

MR, slip op. (May WL if 2004). will not be affected deductions are Thus, the determinative issue salary made his for such ab- our consideration is whether the District sences. satisfy require- the third and final 1:070(4)(2002). (c) ment of 803 KAR may Deductions also be made day a or more occasioned absences of requirement The third аnd final of disability, sickness or if the deduc- 1:070(4) (2002) KAR is whether the Dis- with a tion is made accordance bona trict compensated salary Chiefs are a “on of plan, policy practice provid- fide or salary basis.” The term “on a basis” ing compensation for loss of regula- defined within the administrative sickness and dis- occasioned both tions as follows: ... ability. Salary Basis. An em- Section 1:070(7) (2002) added). (emphasis 803 KAR ployee will be considered to “on be herein, For the reasons set forth our inter- a salary meaning basis” within the of pretation regulation of this leads us to if regulation this administrative under conclude that the District Chiefs are employment agreement his he a and thus cannot be “on basis” pay period weekly, receives each on a basis, “employees” pursuant classified as to KRS frequent a predetermined less Accordingly, we reverse the constituting part amount all or of his 337.285. ruling compensation, which amount is not sub- Court of reinstate ject to reduction because variations of the Jefferson Circuit Court. A. Burden pursuant KRS 337.285 constitutes an of Proof. defense, thus, affirmative the burden Initially, we must dispute address a be- establishing one’s exclusion from the parties tween the concerning who bears requirements of KRS 337.285 is on the the burden of establishing whether review, City. Upon agree we with the District Chiefs are entitled to time-and-a- proper interpretation that a of KRS half pay pursuant to KRS 13B.090(7), conjunction with KRS 337.285. As this case involves the review 337.285, places the burden this case on decision, of an administrative look party proposing FSMA as “the 13B.090(7), which reads as agency take action or grant a benefit.” follows: .090(7). KRS 13B In all administrative hearings, unless An affirmative defense need not provided by otherwise statute or federal until pled plaintiff presents first law, party proposing agency take Hardin, prima case. Whittaker v. facie grant action or has the burdеn benefit (Ky.2000); Equity S.W.3d Life to show the propriety agency ac- Soc’y Bailey, Ky. Assurance U.S. v. tion or sought. entitlement to the benefit (1926). party S.W. “The agency has burden to show the having proof burden before an ad propriety penalty imposed of a or the agency ministrative must sustain bur of a previously granted. removal benefit den, and necessary agency it is not party asserting de- affirmative negative to show the an issue when a has the burden to establish that fense prima positive case as to the has not facie party with the burden of defense. Heck, been established.” Pers. Bd. v. proof issue has the burden *6 (Ky.App.1986) (emphasis S.W.2d going forward and the ultimate burden added). persuasion as to that issue. The ulti- party When a initiates claim be mate persuasion burden of all admin- fore the Cabinet for entitlement to over hearings istrative a preponder- is met 337.285, pay proof time under KRS that a ance of evidence the record. Failure claimant is an “employee” pursuant to that to meet the proof grounds burden of statute is of his or prima her facie for a recommended order from the hear- Thus, issue, case. negative of that ing officer. that a claimant “employee,” is not an added.)

(Emphasis not, argues, as the FSMA affirmative interprets Cabinet KRS defense for which the bears the bur 13B.090(7) as imposing the burden on the proof. Hospi den of Gordon v. NEC Cf. party proposing agency FSMA—“the tals, Inc., (Ky. 887 S.W.2d 362-63 13B.090(7). take action” under KRS See 1994) (exclusivity liability un provision Managers Fire Serv. Assoc. v. Compensation der the Workers’ statute Louisville, 01-LABC-0369, slip op. No. defense); amounts to Curry affirmative (Labor 2002). Cab. Feb. FSMA Equitable Cincinnati Ins. 834 S.W.2d (ERISA excluding any personnel asserts that (Ky.App.1992) pre 703-704 defense).4 receiving pay emption time-and-a-half overtime amounts to affirmative support argument, fending against 4. To its the FSMA cites to an otherwise valid claim. involving remedy provisions cases exclusive Conversely, showing that a claimant is an However, statutory preemption. and federal "employee" under KRS 337.285 is an element clearly distinguishable these cases are be- argue of the claim itself. To that the burden employers cause the in those are de- -cases 756, 759-60, Court of 3 L.Ed.2d 815 Appeals cited Corn 79 S.Ct. Brennan, (1959). ing Accordingly, properly Glass Works 417 U.S. the Cabinet (1974), 94 S.Ct. L.Ed.2d 1 to the proof allocated the burden of holding of its support “the FSMA, holding Appeals’ and the Court of bears the burden of em showing contrary to the error.

ployee exempt pay from overtime re B. Salary Basis Test. quirements.” Kaelin v. No.2003-CA-000740-MR, 2004 WL Having concluded that the FSMA 2004). slip op. (May at 11 establishing bears the burden of However, Coming Glass v. Bren Works “employees” District are under interpreted nan the federal Fair Labor 337.285, we now turn to the merits of (“FLSA”), Act Standards 29 U.S.C. City’s look to appeal. We first Ken FLSA, §§ employ 201-219. Under the all tucky jurisprudence nothing and find other automatically ees are entitled to time-and- than in in the statutes themselves to aid a-half employ unless those terpreting presented the issue which is specified “exemption.” ees fall under a today. In before us the absence of 207(a)(1). § specified U.S.C. One of these Kentucky point, cases on next look to exemptions under the “any FLSA is em interpreting federal cases the FLSA. Al ployee employed executive, in a bona fide though the cases that allocate the burden administrative, professional capacity.” proof under the are not applica FLSA 213(a)(1) § (“Exemptions”). U.S.C. In Chapter point, ble under KRS 337 for that contrast, employed individuals who are in a FLSA, provisions the substantive bona supervisory capacity fide are specifically basis test for 337.285, “employees” at all under KRS employees, bona fide executive are sub thus, completely excluded from the stantially Chapter similar to those in KRS scope. statute’s regula 337 and the relevant administrative This distinct structural difference be- Accordingly, tions. we look to the federal tween the FLSA and KRS 337.285renders guidance analysis cases for as the con federal case law cited the Court of involving tained therein Likewise, Appeals inapposite.5 federal test pertinent is relevant and to our re *7 cases upon by relied the that FSMA re- view. quire “exemption” narrowly be con- beginning analysis, In our first we against strued the similarly adopt determining must a standard for here, inapplicable since drafting the of salary whether the basis has met 337.010(2)(a) test bеen to exclude bona ‍​‌​​​​‌​​‌​‌‌‌​​‌​​​​​​‌​​​‌‌​‌‌‌​‌‌‌‌​​​‌‌‌​‌‌​‍fide any in particular case. Under federal supervisory employees scope from its does caselaw, employ while consideration of not an exemption. constitute See Arnold Inc., 388, 392, policy important, ment Kanowsky, practice, v. Ben is actual 361 U.S. 453, 456, (1960); application policy, height 80 S.Ct. 4 L.Ed.2d 393 i.e. of that is of 290, Ky. Mitchell v. Fin. 359 importance making U.S. 295- ened when such a de- See, Brennan, 196-97, prove e.g., a falls on the that claimant is 417 U.S. at 94 supervisory capacity 2229; not in a bona fide under Douglas Argo-Tech Corp., S.Ct. at v. essentially argu- KRS 337.285 67, amounts to an (6th Cir.1997); 113 F.3d 70 Belcher v. presumed ment that all individuals are to be Inc., 1010, Shoney’s, F.Supp.2d 1018 "employees” under KRS 337.285 unless such (M.D.Tenn.1998). See also cases cited in the presumption employer. is rebutted the We Appellee, Brief for the at 8 n. 8. find no indication whatsoever Gener- Assembly presumption. al intended such a Yet, of that Appeals peals’ application termination. the Court view actual of em- contrary, held that the “ac- finding ployment policy irrelevant when deter- application” not policy particu- tual of was mining salary whether basis test has larly determining relevant when whether adopt forth been met and the standard set salary the District Chiefs had satisfied the in Auer above. basis test. Kaelin v. mind, Auer With the standard in No.2003-CA-000740-MR, 2004 WL pertinent next in review facts this case 2004). 7, In slip op. (May at 14 light applicable lan- statutory Robbins, v. Auer U.S. S.Ct. 1:070(7) (2002) KAR guage. 803 defines (1997), 137 L.Ed.2d 79 the United basis,” being “on a compensated salary Supreme that States Court determined ac- pertinent part, regularly receiving as practice importance, tual of seminal “predetermined amount or constituting all adopted following standard: compensation, his which amount salary-basis exempt [T]he test denfies] subject not to reduction because of varia- status when are covered quality quantity tions in or policy permits or other disciplinary However, Id. performed.” “if an mat- pay practical deductions “as a day longer is absent for a to handle That ... ter.” standard is if there met affairs, his salaried personal status will either an practice making actual if be affected are made deductions poli- deductions or an employment such salary his such absences.” Id. cy “significant creates likelihood” findings, to the Cabinet’s Pursuant such deductions. policy have a written mak- did not Auer, at 911. U.S. 117 S.Ct. ing less deductions for absences of approach uniformly This has since been day.6 than a full also find We no evidence See, е.g., followed the federal circuits. indicating there was unwritten (6th Cir.2001); 246 F.3d v.West policy to effect. this County, Arundel 762-

Anne 137 F.3d (4th Cir.1998); practice, In actual Court of Stanley City Tracy, (9th Cir.1997); following found the facts to be 183-84 Bel relevant Inc., F.Supp.2d v. Shoney’s, cher whether the District Chiefs satisfied the (M.D.Tenn.1998); 1018-19 DiGiore “on a basis” test: were (N.D.Ill. Ryan, shifts, required to work scheduled amount- 1997). week; ing per to a certain number of hours (2) they permitted to were trade shifts agree with the federal courts that a

We other, and trading with each shifts is on adopted wooden standard less should basis; furthermore, per- hour-for-hour interpreting when whether the *8 initially assigned respon- son shift any has beеn met in case. was particular test Accordingly, reject of Ap- person the Court sible for an absence if the who disagreement Appeals 6. There was a the Cabi- not in The Court before effect. of found regarding Department which finding net official Fire regard sup- Cabinet’s in this to be ("Rules”) Regulations and were in ef- therefore, Rules ported by substantial evidence and 1207, among at the relevant time. fect Rule Ky. Unemployment v. conclusive. Ins. Com’n rules, disputed stated: "No of the member Inc., Cmty. Newspapers Ky., 91 Landmark of duty, of Fire shall Division be absent 575, (Ky.2002). 578 We S.W.3d affirm except injury, in the case of with- sickness or thus, point Court of on this do and granted authority. by proper leave out No particular pur- this not consider Rule for the paid absent from member... can for time opinion. poses of this duty.” The 1207 was Cabinet found that Rule

97 subsequently agreed ability to cover the shift of District Chiefs to accrue (3) shift; report failed to for the every when overtime for hour worked in excess time changes annually, twice their their shifts is also of scheduled hour, reduced or increased one accord- irrelevant to their status as salaried em (4) ing change; they to the time were ployees. [Department “The of has Labor] required complete time sheеts docu- consistently and declared unequivocally (5) week; menting they hours worked each compensation that additional in the form of required get approval were to use vaca- hourly ‍​‌​​​​‌​​‌​‌‌‌​​‌​​​​​​‌​​​‌‌​‌‌‌​‌‌‌‌​​​‌‌‌​‌‌​‍payment not does defeat compensatory tion or time in order to take exempt salary-basis status under the test.” (6) work; time off they permitted were Co., 1279, Boykin Boeing v. 128 F.3d 1281 accrue overtime in the form compensa- of Cir.1997). (9th compensation “Additional time; tory in one instance Dis- does not alter the status of em salaried Chief, Ott, Major trict disciplined was ployees, receipt so the of overtime doеs an unrelated administrative violation plaintiffs’ not defeat the basis of days. the loss of two vacation employment.” West v. Anne Arundel light (4th Cir.1998).

When these facts are reviewed 752, County, 137 F.3d 762 statutory language perti- and the Tulsa, Spradling See also v. 95 of caselaw, nent we do not they believe are (10th 1492, Cir.1996); F.3d 1500 York v. sufficient to meet the FSMA’s burden of Falls, 236, 944 F.2d 242 Wichita proving that the District Chiefs are “em- (5th Cir.1991); v. Caperci Corp., Rite Aid Moreover, ployees” under KRS 337.285. (D.Mass.1999); F.Supp.2d 95 Aiken we hold that the Labor Cabinet’s and the County Hampton, F.Supp. Jefferson Circuit ruling Court’s (D.S.C.1997); Aaron v. Wich District Chiefs are “on a basis” (10th 1995). ita, 54 F.3d Cir. as the term was defined in 803 KAR Additionally, City’s requirement 1:070(7) (2002) supportеd by substantial District maintain timesheets is evidence in the record. finding inconsistent with a The fact that District Chiefs are employees. salaried Ind. Schaefer required to work scheduled shifts does not Co., (6th Mich. Power 358 F.3d deprive them of their status as salaried Cir.2004) (salary-basis test satisfied even employees. Employer control of though employee required to account “play[s] schedules no in defining forty hours worked each week on time- employees.” v. Ind. Mich. Renfro sheet). justified by This measure is both (6th Power 370 F.3d Cir. practicality ensuring that the Dis 2004). also Rush-Presbyteri See Klein v. trict Chiefs are time worked Ctr., an-St. Luke’s Med. 990 F.2d Aaron, amount, over the scheduled (7th Cir.1993) (“Of course, when a nurse is necessity public and the account shift, assigned particular she cannot sim ability accompanying any government- ply arrive work or leave whenever it organization. funded service Aiken v. her; pleases necessarily she must be there Carolina, County Hampton, South assigned begins when her shift (D.S.C.1997); F.Supp. Kuchins ends.”). Indeed, necessity imposing County, kas v. Broward enforcing especially scheduled shifts is *9 (SD.Fla.1993). fields, critical in emergency response the requirement As for the that the imperative where it is firefighters get District approval using related administrators be on hand at all Chiefs for vacа compensatory times. tion time or time order to reasons, personal larly take time off for assigned to work cannot be requirement practical such a is both reached or another member cannot work necessary to efficient ensure institutional trade, regularly assigned the mem- functioning especially municipal with a (off ber payroll). will be absent government body accountability is where may given Consideration for be use of Kuchinskas, needed. See at vacation time. (policy requiring employees to obtain The effect SOP 103.14 is that a District approved “premised leave is on thе con- Chief will be considered absent without cept public accountability” which is “not if the person excuse with whom the trade inconsistent with the FLSA” and “do[es] to agreed. was made fails cover the shift as negate ‘salary Plaintiffs’ status as Although such language arguably could employees”). good based’ No reason com- designate policy reducing a District pels this interpret Court to ba- less, day for of a or require employer sis test to that an absence permit employees its to absent ambiguous language themselves such isolated and falls personal work for reasons without prior establishing far from “аn actual practice of permission long so as had accrued making such deductions or an employment some form of leave time. The policy ‘significant that creates a likelihood’ compen- test is concerned with the basis of Auer, of such deductions.” U.S. employee sation for an and not the abso- 460-61, fact, In non- S.Ct. 910-11. lute to an granted employee freedom to existing may policy enforcement of an ac determine his or her own schedule. tually support employer’s an claim that its Balgowan are salaried. See City’s policy next address the We (3d Jersey, New Cir. that allowed Distriсt Chiefs to trade shifts 1997) (“Furthermore, nonen- DOT’S City’s with each other.7 The Standard disciplinary policy forcement of its and the Operating Procedure Rule 103.14 states engineer fact that no has ever suffered a pertinent part: in pay policy, provide reduction under the A failing report duty member on stronger even an authorized evidence DOT’s trade will be considered If regu- disciplinary policy A.W.O.L. the member who was is not one under which (1) passing City's argument trading 7. We note in of time is done voluntari- 1:063, to, explicitly pertaining KAR ly by inter employees participating in the alia, 337.285, any forecloses consider- program and not at the behest of the trading ation shift or the effect it has an employer; However, employee’s status as salaried. this due, (2) trading The reason for time is interpretation persuasive. is not 803 KAR employer's operations, not to the business 1:063 states: employee's but to the desire or need to practice agree- Section 1. A common matters; personal attend to among employees engaged pro- ment in fire employ- A record is maintained substituting tection activities ... is that of employees. er of all time traded his another on one scheduled added.) (Emphasis language "will thereof) (or duly for some tours of deemed to have no effect on hours of work” is permit to absent him- order protect practice intended to of shift trad- purely from work to attend to self or herself ing employees and not warrant personal pursuits. practice This is com- discipline by method monly "trading referred to as time.” trading gone awry. shift practice “trading Section 2. The time” will be deemed to have no on hours effect following work the criteria are met: if *10 up to make for each week and ‘significant a likelihood’ of deduc- work there is tions.”). working by either partial-day absence by taking vacation time extra hours or or in- As for the bi-annual decrease may paid employer time off. An by crease one hour of the District Chiefs’ employees to exempt salaried require day- changes, to account for time “a ” time missed work due up make is light savings policy dispositive.... not for from only when business. It is personal Md., Quirk County, v. Baltimore an actually deducts (D.Md.1995). employer an 773, Fur- 781 n. from employee that the employee’s paycheck thermore, for District who have exemption. ineligible employed complete year, fiscal been for policy they of this is that suffer effect will Co., Michigan Power v. Indiana Renfro in pаy. no deduction (6th Cir.2004) (emphasis 370 F.3d added). Ingalls Ship v. See also Cowart remaining The final fact that Court (5th Inc., 261, 265 Cir. building, 213 F.3d holding considered in 2000) (“There in the case law support is no “employees” pursuant District Chiefs were proposition requiring for the single KRS 337.285was administrative up to make time missed from disciplinary incident a District where Chief, Ott, personal inappro business is Major due to agreed to surrender two priate. Although salary regula basis days of accrued vacation The Court leave. employ from an prohibits to tion deductions Appeals considered this occurrence of less personal be “irrefutable evidеnce that District ee’s absences salaried, hourly, day, regulation prohib Chiefs are treated as not than a does not employees,” Kaelin v. employer requiring employee it an from o.2003-CA-000740-MR, N 2004 WL misses.”); up the time he make Schaefer 7, 2004), slip (May at op. 12-13 F.3d Michigan v. Indiana Power reasoning that annual “the loss of time is (6th Cir.2004) status, (“Exempt effectively a reduction in an pay because however, only by monetary affected de nual time has an actual dollar value.” Id. not ductions for work absences and at 14. non-monetary fringe ben deductions time.”); Bar personal efits such as or sick

However, great majority оf cases Novato, 17 F.3d 1261- rier v. employ- hold reductions a salaried (“We (9th Cir.1994) conclude that ee’s accrued vacation or compensatory Thus, ‘salary.’ ‘amount’ refers to ‘cash’ or leave does not constitute a reduction in the leave time does reduction “pay” purposes Plaintiffs’ status as salaried em majority test.8 affect the The Sixth Circuit is Omaha, ployees.”); of this trend: McDonnell (8th Cir.1993), overruled Although planners concede that Auer, grounds on other U.S. week, they they per receive least $250 (1997); 905, 137 L.Ed.2d 79 Ca 117 S.Ct. even argue exempt cannot be Corp., F.Supp.2d v. Rite Aid pera AEP though requires salaried because (D.Mass.1999); of 94 Cruz McAllister them to account for least 40 hours Labor, Wage squarely supported by Rulings: Dept. and Hour position 8. This also Moreover, Div., opinion 1987. "Deductions separate two letters the United Jul. may employee’s Department leave “[A]n States of Labor. be made from future of less than a full require an to substitute accrual for absences can Rulings: Dept. losing day....” Admin. Letter leave for such absences without Labor, Div., Wage Nov. exemption that week.” Admin. Letter and Hour *11 100 (D.P.R.

Bros., Inc., 269, 52 290 from the empt provisions overtime of KRS F.Supp.2d 1999); Corp., practice City v. Gen. 993 The of reduc- Dynamics Cooke 337.285. 50, (D.Conn.1997); cоmpensation 53-55 Aiken v. the district chiefs F.Supp. ing of County Hampton, F.Supp. quantity prohibited 397 on the of 977 based of (D.S.C.1997); clearly Broward it is with sala- Kuchinskas v. because inconsistent (S.D.Fla. 337.010(2)(a)(2). County, F.Supp. ried The status. 1993); City are Fighters hourly employees Int’l Ass’n v. district chiefs and Fire Alexandria, 1230, 1232 to overtime to the stat- pursuant entitled (E.D.Va.1989).9 Thus, involv the incident ute. insufficient ing Major support Ott is to overwhelming clearly The dem- evidence are claim the District Chiefs FSMA’s City the district pays onstrates subject pay to for variations deductions on the of hours chiefs based number quality per in the of work quantity work, than value of rather the so-called formed. must Everything they thеir work. do record in its en- When the is reviewed for on hourly accounted basis. tirety, sup- find to substantial evidence City pays the evidence indicates that the port the conclusion that the District Chiefs chiefs in the fashion that it district same term “on a basis” as that line a review compensates firefighters and 1:070(4) (2002). in 803 KAR was defined case further of this illustrates are, therefore, supervi- The District present to the con- has failed evidence personnel sory, salaried not entitled trary. opinion Ap- Court under KRS time-and-a-half peals should be affirmed.

337.285. SCOTT, JJ., join. McANULTY ‍​‌​​​​‌​​‌​‌‌‌​​‌​​​​​​‌​​​‌‌​‌‌‌​‌‌‌‌​​​‌‌‌​‌‌​‍and judgment the Court

reversed, and the of the Labor judgments and the Circuit Court

Cabinet Jefferson

are reinstated.

LAMBERT, C.J., MINTON, GRAVES, ROACH, J.J. concur. ROBINSON, Appellant, Clarence v. WINTERSHEIMER, J„ in a dissents separate opinion McANULTY which KENTUCKY, COMMONWEALTH OF SCOTT, J.J., join. Appellee. WINTERSHEIMER, Justice, No. 2005-SC-000750-MR. dissenting. Kentucky. Supreme Court of I from the ma- respectfully must dissent Nov. 2006. jority opinion Ap- the Court of because Rehearing 2007. Denied Feb. required correct it peals was when chiefs are prove the district ex- consequently Reich, (7th Cir. upon by the Several of the relied Mueller F.3d cases monetary 1995), involve deductions grounds by FSMA actual Wisconsin vacated other employee’s paycheck Mueller, sched- from an for each S.Ct. 519 U.S. missed, of work and are therefore uled hour (1997); Drug v. Carls L.Ed.2d Donovan See, e.g., inapposite. Spradling v. Tul- Cir.1983). (2d Cir.1996); sa, (10th F.3d 1500-01

Case Details

Case Name: City of Louisville, Division of Fire v. Fire Service Managers Ass'n Ex Rel. Kaelin
Court Name: Kentucky Supreme Court
Date Published: Nov 22, 2006
Citation: 212 S.W.3d 89
Docket Number: 2004-SC-0443-DG
Court Abbreviation: Ky.
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