OPINION
Plaintiffs, current or former employees of defendant, brought this action seeking overtime compensation allegedly owed them by defendant under the Fair Labor Standards Act, 29 U.S.C. §§ 201-219 (“FLSA”), the Pennsylvania Minimum Wage Act of 1968, 43 P.S. §§ 333.101
et seq.
(“PMWA”), and the Pennsylvania Wage Payment and Collection Law, 43 P.S. §§ 260.
1
et seq.
(“WPCL”). On September 3, 1991, this court entered summary judgment in favor of defendant on the FLSA claims.
BACKGROUND
Defendant supplies computer hardware and software to cable television companies. It also provides installation, maintenance, and repair services for its equipment. Plaintiffs worked as field engineers in defendant’s Northeast Region Office in Broomall, Pennsylvania.
2
Their duties included driving to customer sites in Pennsylvania, New York, New Jersey, Delaware, Maryland, Virginia, West Virginia, and the District of Colombia to install, maintain, repair, and provide expertise on computer hardware sold by defendant. They carried with them tool kits and replacement parts and equipment. At issue in this case is whether plaintiffs received
This court previously has held, and the Third Circuit has agreed, that (1) plaintiffs fall within the exemption to the FLSA carved out by the Motor Carrier Act of 1935 (“MCA”), and (2) the United States Department of Transportation (“DOT”) retains the power to establish maximum hours of employment for plaintiffs, employees of motor private carriers who drive lightweight vehicles in interstate commerce. Because DOT has not exercised its power to establish maximum hours, and because the FLSA does not protect plaintiffs, they cannot recover from defendant under federal law. At issue now is whether plaintiffs can recover under state law.
Defendant’s payment scheme worked as follows: each employee had an annual salary. That annual salary was divided by 52 to determine the employee’s weekly salary. The weekly salary served as compensation for whatever hours the employee worked during a particular week. In addition, defendant paid overtime wages to the employee for any hours over 40 worked by the employee in a particular week. The overtime amount was calculated by first determining the employee’s “regular rate” for the week, which was done by dividing the employee’s weekly salary by the number of hours the employee had worked during the week. Then, to determine the overtime rate, the regular rate was halved. To figure the amount of overtime pay due the employee, the overtime rate was multiplied by the number of hours — in excess of 40 — which the employee had worked during the week. The employee’s total pay was the weekly salary plus the overtime pay.
For example, suppose an employee with a $52,000 annual salary, i.e. a $1000 weekly salary. If that employee worked 50 hours in a particular week, the employee’s “regular rate” would be $1000/50 hours = $20/hour. Thus, the overtime rate would be $20/2 = $10/hour, and the overtime pay due the employee would be $10 x 10 hours = $100. The employee’s total pay for the week would be $1000 (the weekly salary) plus $100 (the overtime pay), for a total of $1100.
DISCUSSION
Jurisdiction
Before discussing the merits of the parties’ arguments, the court must examine the issue of jurisdiction. This court originally found there to be jurisdiction under 28 U.S.C. § 1331 because of the presence of a federal question, although plaintiffs also asserted that the court had jurisdiction under 28 U.S.C. § 1332 because of the diversity of the parties’ citizenship. Although the federal claim has now been dismissed, plaintiffs ask the court to exercise pendent jurisdiction over the remaining state law claims under
United Mine Workers v. Gibbs,
However, the Third Circuit repeatedly has held “pendent jurisdiction should be declined where the federal claims are no longer viable, absent ‘extraordinary circumstances.’ ”
Shaffer v. Board of School Directors of Albert Gallatin Area School Dist.,
Plaintiffs also argue that diversity jurisdiction exists. Defendant acknowledges that complete diversity of citizenship exists, but defendant disputes that any of the plaintiffs has a claim exceeding $50,000, the monetary hurdle which diversity eases must clear. The Supreme Court has held that in class actions and other cases involving multiple plaintiffs, it is essential that the demand of each plaintiff be of the requisite jurisdictional amount.
See, e.g., Zahn v. International Paper Co.,
Summary Judgment Standard
Under Federal Rule of Civil Procedure 56(c), summary judgment is proper if “there is no genuine issue as to any material fact and ... the moving party is entitled to judgment as a matter of law.” The inquiry for the court is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.”
Anderson v. Liberty Lobby,
Applicability of 3b Pa.Code § 23143(b)
Defendant argues that its overtime compensation scheme complies with 43 P.S. § 333.104(c), which states: “[ejmployes shall be paid for overtime not less than one and one-half times the employe’s regular rate as prescribed in regulations promulgated by the secretary: Provided, ... That the secretary shall promulgate regulations with respect to overtime subject to the limitations that no pay for overtime in addition to the regular rate shall be required except for hours in excess of forty hours, in a workweek.”
Pursuant to the statute, the Secretary of Labor and Industry, through the Industrial Board of the Department of Labor and Industry, at 34 Pa.Code § 231.43, has promulgated a regulation governing the computation of the regular rate. Defendant points to subsection (b) of § 231.43, which states:
[i]f the employe is paid a flat sum for a day’s work or for doing a particular job without regard to the number of hoursworked in the day or at the job and if he receives no other form of compensation for services, his regular rate is determined by totaling all the sums received at such day rates or job rates in the workweek and dividing by the total hours actually worked. He is then entitled to extra halftime pay at this rate for all hours worked in excess of 40 in the workweek.
34 Pa.Code § 231.43(b).
It is clear from a comparison of defendant’s overtime compensation scheme,
see supra
at 472-473, and § 231.43(b) that defendant’s scheme satisfies the regulation. In fact, in a Memorandum and Order filed August 23, 1990, this court found that plaintiffs were compensated in a manner consistent with § 231.43(b).
Plaintiffs argue that they were hourly employees, not salaried, day-rate, or job-rate employees. Therefore, they say, § 231.43(b) does not apply, and they are entitled to one and one-half times their regular rate for their overtime hours under 43 P.S. § 333.-104(c). In the Memorandum and Order of August 23, 1990, this court held: “plaintiffs, contrary to their assertions, were not paid on an hourly basis, but were paid on a bi-weekly basis according to a two-week pro-rata proportion of their annual salaries.” Id., slip op. at 5 (emphasis supplied). I reaffirm that holding here.
Each plaintiff received an annual salary in 26 bi-weekly payments each year. The amount of each payment often was adjusted upward to compensate the employee for working overtime, but these upward adjustments did not change the fact that plaintiffs were salaried employees. They received a base salary plus overtime. Plaintiffs’ regular rates varied from week to week depending on the number of hours they worked. There was no consistent “hourly” rate. Many of plaintiffs’ depositions show that, when negotiating with defendant before being hired, the negotiations centered on what the employee’s annual salary would be, not what his or her hourly rate would be.
In the Memorandum and Order of August 23, 1990, I declined to enter summary judgment in favor of defendants on the FLSA claims because I found there to be an issue of fact as to whether plaintiffs and defendant had a “clear mutual understanding” that plaintiffs’ salaries were to cover all hours worked during the week or only the first 40. Id., slip op. at 5-8. However, the finding of a possible lack of mutual understanding was only with respect to the overtime scheme, not with respect to the general weekly salary scheme. I found in that Memorandum and Order, and I find again here, that plaintiffs were salaried employees, not hourly employees.
The next question which the court must address is one of first impression: does § 231.43(b), which on its face mentions only day-rate and job-rate employees, also apply to salaried (annual or weekly) employees such as plaintiffs? Defendant says that it does; plaintiffs say that it does not.
In my view, plaintiffs were not the kind of employees to whom § 231.43(b) was intended to apply. Plaintiffs had an annual salary which happened to have been paid on a biweekly basis. Defendant set up an overtime compensation which complied with § 231.-43(b), but that does not necessarily mean that that regulation actually applied to plaintiffs. Plaintiffs received the same pro-rata portion of their annual salaries every two weeks, regardless of the number of days or hours they worked, and regardless of the number or kind of assignments they completed. They had steady, consistent, year-round jobs with one employer. They received paid vacations, holidays, and sick days. While the numbers of hours or days they worked varied from week to week, their pay did not — except for the overtime.
The above job description does not fit within the category of jobs to which I believe § 231.43(b) was intended to apply. That regulation, speaking as it does in terms of flat sum payments for “a day’s work or for doing a particular job” seems to apply to employees
Defendant argues that plaintiffs received the same salaries “regardless of the number of hours worked” as the regulation requires. However, the regulation does not stop there. It says, “regardless of the number of hours worked in the day or at the job." (emphasis supplied.) Again, this language suggests an employee who receives a lump sum for day’s work or for doing a particular job, rather than an employee who works for an annual salary disbursed in bi-weekly increments.
The regulation’s next clause instructs that the regular rate is to be determined “by totaling all the sums received at such day rates or job rates in the workweek and dividing by the total hours actually worked.” (emphasis supplied.) Again, the use of the plurals “sums” and “rates” seems to contemplate an employee who contracts to earn money in diverse amounts or from diverse sources, rather than one who earns a regular salary from a single employer. In this case, defendant did not determine the regular rate by adding plaintiffs’ income from day rates and job rates for a particular week, and then dividing by the number of hours worked. Nor could it have, since plaintiffs had no day rates or job rates. Rather, defendants took each employee’s weekly salary and skipped to the second step, dividing the weekly salary by the hours worked.
Defendant argues that in- the Memorandum and Order of August 23, 1990, I found that defendant properly compensated plaintiffs under § 231.43(b). In that Memorandum and Order, I found that defendants properly calculated plaintiffs’ overtime compensation under 29 C.F.R. § 778.114, and that § 778.114 applied to plaintiffs. By implication, I found that defendants had properly calculated plaintiffs’ overtime compensation under § 231.43(b), since that regulation is “substantially identical to § 778.114 in its calculation of the regular rate ...” Slip Op. at 8-9 (emphasis supplied). I have restated that observation here: defendant did properly compensate plaintiffs, assuming that § 231.43(b) applies. However, the issue now before the court — whether § 231.43(b) applies — was not addressed in the previous Memorandum and Order. As stated above, I find that §. 231.43(b) does not apply to plaintiffs. Therefore, it is ultimately irrelevant whether defendants correctly calculated plaintiffs’ overtime compensation under that regulation.
Defendant invites the court’s attention to
South Florida Beverage Corp. v. Figueredo,
In this case, defendant has argued that it properly compensated plaintiffs under § 778.114, which governs salaried employees. It has prevailed on that argument. Section 231.43(b) of the Pennsylvania Code is analogous to 29 C.F.R. § 778.112. Both govern day-rate and job-rate employees. In fact, the two regulations are identical, word for word. There is no state-law analog to 29 C.F.R. § 778.114. Defendant argues that this lacuna in the state law must mean that salaried employees are governed by § 231.-43(b). To support its argument, defendant points to the
South Florida
court’s observation that §§ 778.112 and 778.114 are “analytically identical.”
South Florida,
This court’s research has discovered that the overtime compensation scheme outlined in the federal regulations was adopted at least as far back as 1950. See, 15 Fed.Reg. 624-25. 5 The state regulations were adopted in 1977. See, 7 Pa.Bull. 750; 7 Pa.Bull 25. The fact that § 231.43(b) is analytically identical to the two federal regulations — and exactly identical to one of them, § 778.112— indicates that the Industrial Board of the Department of Labor and Industry knew about the federal regulations when drafting the state regulations. The Industrial Board adopted — verbatim—one of the regulations, but did not adopt the other. To hold that the Industrial Board intended to adopt both federal regulations, even though the language of only one appears in the state regulations, would be to ignore what the Industrial Board actually did. While it might be convenient for defendant and other multi-state employers if federal law and Pennsylvania law were identical on the issue of overtime compensation, the fact is that they are not.
Defendant cannot have it both ways. In proving that plaintiffs were not hourly employees, defendant convinced the court that plaintiffs were salaried employees paid on a bi-weekly basis. Now defendant attempts to convince the court that plaintiffs were day-rate employees. As discussed above, they were not. Further, in prevailing on the FLSA claims, defendant convinced the court that 29 C.F.R. § 778.114 applied to plaintiffs. Now defendant attempts to convince the court that § 34 Pa.Code § 231.43(b) applies to plaintiffs. As discussed above, § 231.43(b) is identical to 29 C.F.R. § 778.112, which covers a separate and distinct class of employees from § 778.114. Plaintiffs were covered by § 778.114, not § 778.112 or § 231.-43(b). Therefore, defendant’s compliance with § 231.43(b) does not immunize it from plaintiffs’ state law claims.
PMWA Exclusion of Individuals Subject to FLSA
Before the 1988 Amendments to the PMWA, effective February 1, 1989, the PMWA excluded from its definition of “employe” “any individual to the extent that he is subject to the Federal Fair Labor Standards Act ...” 43 P.S. § 333.103(h), Historical and Statutory Notes. Defendant argues that, since plaintiffs were covered by the FLSA, they were excluded from the coverage of the PMWA before February 1, 1989. However, this court has held, and the Third Circuit has agreed, that plaintiffs were
not
covered by the FLSA’s overtime compensation requirements because of the Motor Carrier Act exemption.
The Motor Carrier Act Exemption
On July 9, 1990, the Pennsylvania General Assembly amended the PMWA by exempting motor carriers from the minimum wages portion of the PMWA. The exemption provides: “(b) Employment in the following classifications shall be exempt from the overtime provisions of this act [the PMWA]: ... (7) any motor carrier with respect to whom the Federal Secretary of Transportation has power to establish qualifications and maximum hours of service under 49 U.S.C. § 3102(b)(1) and (2). 43 P.S. § 333.105(b)(7). This court has held, and the Third Circuit has agreed, that the Federal Secretary of Transportation has the power to establish qualifications and maximum hours
Sections 4 and 5 of the Act of July 9,1990, made the motor carrier exemption immediately effective and retroactive to February 1, 1989. However, in
Sanders v. Loomis Armored, Inc.,
Defendant argues that
Sanders
is wrongly decided.
6
According to defendant, employees have no vested right to overtime compensation. However, the
Sanders
court did not hold that employees have a vested right to overtime compensation. Rather, the court held that each plaintiff had a vested right in his or her cause of action, which accrued when that plaintiff worked in excess of forty hours in a week and allegedly was paid less money than the PMWA required.
7
Indeed, in
Gibson,
the Pennsylvania Supreme Court held: “ ‘[t]here is a vested right in an accrued cause of action.’ ”
Gibson,
Since this is a question of state law, this court must predict how the Pennsylvania Supreme Court would decide it.
Dillinger v. Caterpillar, Inc.,
Given the Pennsylvania Supreme Court’s holding in
Gibson
that “the Legislature may not extinguish a right of action which has already accrued to a claimant,”
Gibson,
Statute of Limitations
Next, defendant argues that plaintiffs’ claims before March 8, 1987 are barred by the three-year statute of limitations in 43 P.S. § 260.9a(g).
8
Plaintiffs argue that the statute of limitations has been equitably tolled because defendant failed to post, in a conspicuous place, a summary of the Minimum Wage Act and any applicable regulations promulgated thereunder.
9
Defendant
The Third Circuit, in a recent case also governed by § 260.9a(g), described the Pennsylvania standard for tolling:
Under Pennsylvania law governing the doctrine of equitable tolling, it is clear that ‘the courts have not required fraud in the strictest sense, encompassing an intent to deceive, but rather have defined fraud in the broadest sense to include an unintentional deception.’ Nesbit v. Erie Coach Co.,416 Pa. 89 , 96,204 A.2d 473 , 476 (1964). Even under this broad interpretation of fraud, however, it is clear that, in order for the doctrine of equitable tolling to apply, the defendants’ actions must have amounted ‘to an affirmative inducement to plaintiff to delay bringing the action.’ Ciccarelli v. Carey Canadian Mines, Ltd.,757 F.2d 548 , 556 (3d Cir.1985). The intent of the defendant in making this affirmative inducement is irrelevant; ‘it is the effect upon the plaintiff, not the intention of the defendant, that is pertinent.’ Swietlowich v. County of Bucks,610 F.2d 1157 , 1162 (3d Cir.1979). Connors v. Beth Energy Mines, Inc.,920 F.2d 205 , 211 (3rd Cir.1990).
In
Kamens v. Summit Stainless, Inc.,
[t]he posting requirement was undoubtedly created because Congress recognized that the very persons protected by the Act might be unaware of its existence. Failure to post the required notice will toll the running of the 180-day period, at least until such time as the aggrieved person seeks out an attorney or acquires actual knowledge of his rights ... Any other result would place a duty upon the employer to comply without penalty for breach, and would grant to the employee a right to be informed without redress for violation.
Bonham,
Although both Bonham and Kamens were eases construing federal law, their reasoning is equally applicable to this case. Section § 333.108 gives employees the right to have their employers give them notice of their rights under the PMWA. Their only remedy, and the only penalty available against employers, for a violation of § 333.108 is to toll the statute of limitations with respect to the employer’s other alleged violations of the PMWA. Without tolling, the purpose of the posting requirement would not be served. Therefore, I hold that the statute of limitations did not begin to run until plaintiffs knew or should have known of their rights. Defendant has not supplied the court with sufficient information to determine with accuracy when any of the plaintiffs knew of his or her rights. That question might well be one which must be left to a jury. At this juncture, I shall deny that portion of defendant’s motion for summary judgment which is based on the running of the statute of limitations.
3k Pa.Code § 23143(d)
At oral argument, defendant asserted, for the first time, that it is entitled to summary judgment because its overtime compensation scheme complied with 34 Pa. Code § 231.43(d). That section provides that an employer shall not be deemed to have violated the overtime provisions of the PMWA if:
pursuant to an agreement or understanding arrived at between the employer and the employe before performance of the work, the amount paid to the employe for [overtime] (3) is computed at a rate not less than 1$ times the rate established by such agreement or understanding as the basic rate to be used in computing overtime compensation thereunder ...
“On-Call” Time
In their opposition to defendant’s current motion for summary judgment, plaintiffs assert, for the first time, that they are entitled to overtime compensation for all of their “on call” time — often 18-24 hours per day. Plaintiffs base this assertion on a federal regulation, 29 C.F.R. § 785.17. However, plaintiffs’ federal claims have been dismissed. I express no view as to whether plaintiffs actually would be entitled to compensation for on-call time, but I do note that the language of § 785.17 and the facts of this case are far from being mirror images of one another. Plaintiff points to no state statute or regulation which requires employees to be paid overtime for on-call time. Absent such authority, plaintiffs are not entitled to recover for on-call time in this ease, which is now based wholly on state law. Therefore, I shall enter summary judgment in favor of defendant with respect to those claims.
An Order follows.
ORDER
AND NOW, this 25th day of August, 1993, upon consideration of defendant’s Motion for Summary Judgment, plaintiffs’ response thereto, defendant’s reply, and after argument in open court and the supplemental briefs resulting therefrom, the motion is GRANTED as to plaintiffs’ claims from July 9, 1990, forward and plaintiffs’ claims with respect to “on-call” time, and DENIED as to the rest of plaintiffs’ claims.
Notes
. On December 19, 1991, this court certified the judgment for appeal under Fed.R.Civ.P. 54(b).
. Although some of the plaintiffs are still employed by defendant, for linguistic simplicity, I shall refer to all the facts of this case, including plaintiffs' employment, in the past tense.
. Plaintiffs state that their annual pay ranged from $25,000 to $40,000. Based on these figures, plaintiffs’ regular rates, using 40 hours per week as the divisor (as plaintiffs wish), were between $12.02 and $19.23. In the complaint, plaintiffs allege that they worked 55 to 75 hours per week, or 15 to 35 hours overtime per week. Plaintiffs acknowledge that they received halftime for their overtime hours, but argue that they should have received time-and-a-half. Thus, the amount in dispute is the difference between halftime and time-and-a-half, which is an amount somewhat higher than the 40-hour regular rate itself. Therefore, plaintiffs’ claims are for at least $12.02 to $19.23 per hour for 15 to 35 hours per week, which computes to $9376 to $34,999 per year.
Plaintiffs claim these amounts for each year of their employment, even those years for which the statute of limitations may have run, arguing that the limitations period should be tolled because defendant failed to post notices of the overtime payment scheme. I agree with plaintiffs that the limitations period was tolled. See, infra, at 478-479.
In addition, plaintiffs claim an entitlement to 25% of their damages claims under the WPCL. Thus, plaintiffs’ claims increase to at least $11,-720 to $43,749 per year for the entire terms of their employment up to July 9, 1990, the date on which the Pennsylvania General Assembly passed a Motor Carrier exception to the PMWA. See, infra, at 477-478.
Without an individual examination of each plaintiff’s claims, for which the parties have not provided sufficient information, these estimates are the best available to the court. Based on them, I find that each plaintiff has claimed an amount in excess of $50,000.
. As plaintiff points out, the Industrial Board knew how to use the word "salary” when it adopted § 231. See, 34 Pa.Code §§ 231.82-84. Yet, it did not use that word in § 231.43(b).
. In 1950, the exact language now embodied in § 778.112 existed as 29 C.F.R. § 778.3(b)(3), and the computation method described in current § 778.114 was set out in 29 C.F.R. § 778.3(b)(5). Section 778.114(a) was put into its present form in 1968. See, 33 Fed.Reg. 986.
. A petition for allowance of appeal in Sanders is currently pending before the Pennsylvania Supreme Court.
. The
Sanders
court cited
Miller v. Johnstown Traction Co., 167
Pa.Super. 421, 428,
. That statute provides; "No ... legal action shall be instituted ... for the collection of unpaid wages ... more than three years after the day on which such wages were due and payable.” 43 P.S. § 26'0.9a(g).
. 43 P.S. § 333.108 provides: "[e]very employer subject to this act shall keep a summary of this act and any regulations issued thereunder applicable to him, posted in a conspicuous place where employes normally pass and can read it.”
. Neither party has submitted to the court any authority on what, specifically, would constitute an “agreement or understanding" under § 231.-43(d), and the court has found none.
