Brian F. MONAHAN; Robert E. Balducci, Jr.; Paul Blocker; N. Scott Meyerhoffer; Timothy D. Morton, II; Michael S. Schipinski; James A. Venti; Keith Vincent; Geoffrey Scott Evans; Kenneth S. Crews, Plaintiffs-Appellees, and David J. Higgins; Richard R. Reid, Jr., Plaintiffs, v. COUNTY OF CHESTERFIELD, VIRGINIA, Defendant-Appellant.
No. 95-1944
United States Court of Appeals, Fourth Circuit
Sept. 17, 1996
95 F.3d 1263
Argued May 9, 1996.
II.
For these reasons, I am convinced that the district court‘s decision was correct and should be affirmed in its entirety. To the extent that the majority opinion fails to do this, I am compelled to dissent therefrom.
I am authorized to state that Judges HALL, MURNAGHAN, HAMILTON, MICHAEL and MOTZ join in this concurring and dissenting opinion.
ARGUED: Michael Paul Falzone, Hirschler, Fleischer, Weinberg, Cox & Allen, Richmond, Virginia, for Appellant. Michael Tarcissius Leibig, Zwerdling, Paul, Leibig, Kahn, Thompson & Driesen, Fairfax, Virginia, for Appellees. ON BRIEF: Steven L. Micas, County Attorney, Michael P. Kozak, Assistant County Attorney, Wendell C. Roberts, Assistant County Attorney, Chesterfield, Virginia, for Appellant. Carla M. Siegel, Zwerdling, Paul, Leibig, Kahn, Thompson & Driesen, Fairfax, Virginia, for Appellees.
Before WILKINSON, Chief Judge, MICHAEL, Circuit Judge, and NORTON, United States District Judge for the District of South Carolina, sitting by designation.
OPINION
NORTON, District Judge:
This is a case brought by Plaintiffs-Appellees, a group of police officers employed by Defendant-Appellant Chesterfield County, Virginia (“County“), for back pay compensa-
We disagree with the lower court that summary judgment for Plaintiffs was appropriate. Instead, after reviewing the record and the FLSA, we believe that summary judgment should have been granted for the employer County. We find that fundamental to determining the validity of an employee‘s straight time claim under the FLSA is a determination by the trier of fact of the terms of the employee‘s express or implied employment agreement. If the employee has been paid for all nonovertime hours at a lawful rate pursuant to an employment agreement to which that employee has impliedly or expressly agreed, and the employee has also been paid at a lawful rate for all overtime hours, then the employee does not have a claim for an hourly compensation dispute under the FLSA. Additionally, we disagree with the lower court that the FLSA is the proper vehicle to pursue back pay for straight time in pay cycles in which an employee has worked no overtime and has been paid at least minimum wage for all hours worked. Considering the evidence in the record with respect to the terms of Appellees’ employment agreements in conjunction with the FLSA‘s express remedies and historical purpose, we reverse the judgment of the lower court and instead grant summary judgment for Defendant-Appellant.
I.
We review the district court‘s grant of summary judgment de novo. Miller v. FDIC, 906 F.2d 972, 974 (4th Cir. 1990). In reviewing a district court‘s grant of summary judgment, the “appellate court is required to apply the same test the district court should have utilized initially.” Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977). All evidence must be viewed in the light most favorable to the nonmoving party. Perini Corp. v. Perini Constr., Inc., 915 F.2d 121, 123-24 (4th Cir. 1990). “[W]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, disposition by summary judgment is appropriate.” Teamsters Joint Council No. 83 v. CenTra, Inc., 947 F.2d 115, 119 (4th Cir. 1991). Further, “when an appeal from a denial of summary judgment is raised in tandem with an appeal of an order granting a cross-motion for summary judgment, we have jurisdiction to review the propriety of the denial of summary judgment by the district court.” Sacred Heart Medical Ctr. v. Sullivan, 958 F.2d 537, 543 (3d Cir. 1992) (citing Nazay v. Miller, 949 F.2d 1323, 1328 (3d Cir. 1991)). “In addition, where, as here, the facts are uncontroverted, we are free to enter an order directing summary judgment in favor of the appellant.” Id. at 543 (citing Nazay, 949 F.2d at 1328).
II.
This case was brought by twelve1 Chesterfield County police officers who request straight time back pay and maintain that the County pay system violates the Fair Labor Standards Act. As law enforcement personnel, the police officers are paid a salary pursuant to a partial exemption to the FLSA provided for law enforcement and fire protection personnel under
Each officer is paid an annual salary that the County converts to a biweekly paycheck equal to a non-fluctuating base amount of 1/26th of his annual salary. The County converts their annual salaries to an hourly rate solely to determine the officers’ applicable overtime rate. All advertisements placed by the County for job openings solicited applicants for salaried positions. Applicants are also informed of their potential compensation in terms of an annual salary during the interview process. The officers are listed in the Chesterfield County personnel manual as FLSA nonexempt3 salaried employees. Since June 1, 1990, the County has had in place a policy stating that the officers would be paid overtime in addition to their salary whenever they exceed the 147 hour overtime threshold.
The officers regularly work hours above the normally scheduled 135 hours, and the County has paid overtime at a rate equal to time and a half for all hours worked in excess of the 147 hour overtime threshold. Additionally, the County pays the officers overtime for all call-outs, extra shifts, court appearances, and special assignments during off duty hours even if the officers have not reached the overtime threshold during a pay cycle. There are numerous times when the officers worked more than the regularly scheduled 135 hours, but did not exceed the 147 hour overtime threshold.
At issue in this action is back pay at a straight time rate for any of the hours worked “in the gap” during cycles in which the police officers have worked in excess of the regularly scheduled period.4 The officers’ claims can be divided into two separate groups. The first category are the claims (collectively referred to as “Claim 1“) in which the officers exceeded the 147 hour overtime threshold and are therefore paid overtime for all hours worked in excess of the overtime threshold in addition to their normal salary. With respect to Claim 1, the County contends that the officers’ salaries compensated them for all hours up to the 147 hour threshold whereas the officers contend that their salaries did not pay them for the time in the gap. The lower court coined the term “overtime gap time” to describe Claim 1 circumstances. The second category, called “pure gap time” (collectively referred to as “Claim 2“), consists of the circumstances in which the officers have exceeded the 135 hour regularly scheduled time period, but have not exceeded the 147 hour overtime threshold and therefore are paid their normal salary, but are not due any overtime. Similar to Claim 1, the County contends with respect to Claim 2 that the officers are due no further compensation because their salaries compensated them for all gap time in cycles wherein they worked no overtime.
By ruling in favor of Plaintiffs’ summary judgment motion, the lower court held that the County was liable under the FLSA for both Claim 1 “overtime gap time” and Claim 2 “pure gap time.” We disagree with the district court‘s interpretation of the applicability of the FLSA under the circumstances of this case. Today we attempt to place some common sense limitations on claims for straight time brought pursuant to the FLSA.
III.
As noted by the district court, the FLSA has been termed the “minimum wage/maximum hour law.” Monahan v. Chesterfield County, Va., Civil No. 3:94CV844, at 4 (E.D.Va., Apr. 4, 1995) (hereinafter “Order“), J.A. 93. “The two central
In a period of widespread unemployment and small profits, the economy inherent in avoiding extra pay was expected to have an appreciable effect in the distribution of available work. Reduction of hours was a part of the plan from the beginning. “A fair day‘s pay for a fair day‘s work” was the objective stated in the Presidential message which initiated the legislation. That message referred to a “general maximum working week“, “longer hours on the payment of time and a half for overtime” and the evil of “overwork” as well as “underpay.”
Id. at 578, 62 S.Ct. at 1220 (quoting 81 Cong. Rec. 4983, 75th Cong., 1st Sess. (1937)); see Mullins v. Howard County, Md., 730 F.Supp. 667, 672 (D.Md. 1990). “The substantive sections of the FLSA, narrowly focusing on minimum wage rates and maximum working hours, bear out its limited purposes.” Lyon, 45 F.3d at 764. Made applicable to state and municipal governments by the Supreme Court‘s landmark decision in Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985), the FLSA promulgates specific minimum wage and maximum hour requirements.
IV.
Historically, the majority of FLSA claims in federal court are employee claims for minimum wage and maximum hour violations, but recently employees have been adding on claims for straight time under the auspices of the FLSA. There are not many recent cases addressing this straight time or “gap time” pay issue; however, two cases, both originat-
In early 1991, the issue of straight time pay under the FLSA was addressed by Lamon v. City of Shawnee, Kan., 754 F.Supp. 1518 (D.Kan. 1991) (hereinafter “Lamon I“), aff‘d in part, rev‘d in part, vacated in part, 972 F.2d 1145 (10th Cir. 1992) (hereinafter “Lamon II“), cert. denied, 507 U.S. 972, 113 S.Ct. 1414, 122 L.Ed.2d 785 (1993). Lamon I was an FLSA case brought by a group of Shawnee, Kansas, police officers. Id. at 1521-21. Lamon I came before the court on the issue of damages under the FLSA subsequent to a jury trial in which the jury found “that defendant had established a 28-day work period which partially exempts defendant from paying overtime compensation at a rate of one and one-half times plaintiffs’ regular hourly wages for hours worked from 160 to 171 per 28-day work period.” Id. at 1520; see
The jury specifically found that plaintiffs were not completely relieved of their duties during meal periods. Therefore, plaintiffs are entitled to compensation under the FLSA. The jury further found that defendant has established a 28-day work period; thus, the rate of compensation owed for these hours, although hours worked in excess of 40 per week, is at plaintiffs’ regular hourly rate. Consequently, defendant has failed to compensate plaintiffs for their meal periods as required by the FLSA.
Id. at 1521 (footnote omitted). Therefore, as a result of the jury‘s determination, the Lamon I court held that plaintiffs were entitled to compensation for meal time under the FLSA. Id. The court then had to determine the rate of back pay for these unpaid meal periods. Plaintiffs argued that the unpaid meal hours should be paid at an overtime rate. On the other hand, the City claimed that because these unpaid meal hours did not total more than ten hours per 28-day cycle and since the City had properly compensated plaintiffs at an overtime rate for all hours over 171, any hours between 160 and 171 were compensable only at minimum wage. See id.; 972 F.2d at 1155. Because the compensable meal hours, when added to all other hours worked in a cycle, did not exceed the 171 hour overtime threshold, the court found that the City was liable for an amount equal to the unpaid meal hours at plaintiff‘s regular hourly rate. Lamon II, 972 F.2d at 1149. The court noted the City‘s contention that there was no requirement under the FLSA to pay for the hours between 160 and 171 per pay cycle, but rejected this argument explaining in footnote one of the Lamon I opinion:
The court notes defendant‘s extensive briefing of its argument that there is no express requirement under the FLSA that plaintiffs be paid for the hours between 160 and 171 which are statutorily exempt from the normal requirement that these
hours are compensable at an overtime rate. However, the court finds defendant‘s argument to be unreasonable in view of the remedial purpose of FLSA. The court finds the requirement that plaintiffs be paid compensation at their regular hourly rate to be implicit in the framework of the FLSA. The court further notes that defendant has conceded that if plaintiffs work more than 171 hours, hours worked between 160 and 171 are compensable at plaintiffs’ normal hourly rate. The court finds there to be no principled reason for the requirement that plaintiffs work over 171 hours before they are entitled to be paid for time spent working between 160 and 171 hours.
In 1992 both parties in Lamon I appealed, resulting in a written opinion of the Tenth Circuit Court of Appeals in Lamon II, 972 F.2d 1145. One of the appellate issues was “the proper calculation of mealtime compensation.” Id. at 1155 & n. 4. Although the jury found these meal periods were compensable and the district court determined they were compensable at the regular rate, defendant argued that the hours between 160 and 171 were not compensable under the FLSA when the 171 hour threshold was not exceeded, Lamon I, 754 F.Supp. at 1520, but if compensable, that minimum wage was the proper rate. Lamon II, 972 F.2d at 1155. The Tenth Circuit affirmed the lower court on the meal time rate issue stating that “the trial court correctly calculated the rate at which Plaintiffs would be compensated for mealtimes, if adjudged compensable.” Id. at 1159 (emphasis added). The court explained:
The appellate record suggests no basis for doubting the district court‘s finding that each Plaintiff took no more than ten hours in meal periods within a 28-day period. This fact, along with the unassailed testimony that Plaintiffs received overtime compensation for all other time worked in addition to their regular 40 hours per week or 160 hours per 28 days, forms the factual basis for the district judge‘s legal conclusion that mealtime hours, all of which fell within the range of 160 to 171 hours per 28 days, would be appropriately compensated at a regular hourly rate. See 754 F.Supp. at 1521 n. 1. We affirm this decision for the reasons expressed in the district judge‘s opinion. As long as time spent for meal periods, together with the rest of an officer‘s compensable time at a regular wage, would not exceed 171 hours per 28 days, no overtime wages would be due for that total time, a result consistent with FLSA. Simply because Defendant chose, after adopting the § 207(k) plan, to continue paying an overtime wage for all hours worked over 160 hours per cycle, while not paying compensation for meal periods, does not compel the conclusion that, were mealtime to be adjudged compensable, the Defendant should be penalized for its own liberality. However, as the district court held, even if the City is not required to pay overtime, compensation for meal periods at a rate less than a regular rate would be contrary to the FLSA.
Id. at 1155 (emphasis added). In affirming that the regular rate was the proper rate of compensation for the meal periods, the Tenth Circuit cited to footnote one in the Lamon I opinion. In so doing, the Tenth Circuit was simply following labor regulations that require all hours worked up to the overtime threshold, including compensable meal time hours, be paid at the regular rate. See
In 1994 the same judge who heard Lamon I also presided over another Kansas case brought under the FLSA by approximately 401 law enforcement plaintiffs. Schmitt v. Kansas, 844 F.Supp. 1449, 1451 (D.Kan. 1994)
Addressing the straight time claims for periods with no overtime first, the Schmitt I court noted the State‘s position as follows:
The State argues that plaintiffs cannot prevail on their straight time claim, at least for work periods in which they worked no overtime, because plaintiffs admit that their total compensation for any period divided by the hours worked in that period always exceeds the minimum wage. In support, the State forcefully argues that, according to case law and DOL Letter Opinions, the general rule is that an employee cannot state a claim under the FLSA if her average wage, for a period in which she worked no overtime, exceeds the minimum wage. The court acknowledges that there is a body of authority which supports the State‘s “general rule.”
Id. at 1457 (emphasis added) (footnotes omitted).7 Along with the abundant case law supporting the State‘s position, the Schmitt I court also recognized a 1987 Department of Labor Letter Ruling by stating:
In pertinent part, the Letter Ruling provides as follows:
The City has chosen a 28-day work period for the purpose of applying the provisions of section 7(k) of FLSA. During these 28 days, police officers are normally scheduled for twenty, 8-hour tours of duty, or a total of 160 hours for the work period. However, under the terms of a collective bargaining agreement, the police officers must report for a roll-call formation 15 minutes before the start of each 8-hour tour of duty. You are concerned that these additional 5 hours (20 × 1/4 hour) of work are not being properly compensated under FLSA.
As you were advised in telephone conversations with a member of my staff on March 4 and March 6, the law enforcement employees to whom you refer have been properly compensated under FLSA when, for any work period during which they have worked less than the applicable maximum hours standard, they have received at least the minimum wage ($3.35 an hour) for all of their hours worked.
For example, a police officer who is paid at a rate of $10.50 an hour for 160 hours ($10.50 × 160 hours = $1,680) is paid in compliance with FLSA even though he or she actually works a total of 165 hours during a 28-day work period ($3.35 × 165 hours = $552.75).
Id. at 1457 (quoting DOL Letter Ruling, unnumbered, Oct. 22, 1987 (hereinafter “1987 DOL Letter Ruling“)) (emphasis added). In addition to the case law supporting the general rule and the 1987 DOL Letter Ruling, the court recognized that
Indeed, the Tenth Circuit specifically endorsed not only the decision to compensate plaintiffs at their regular hourly rate but also the very reasons given in the footnote supporting the decision to compensate plaintiffs at their regular rate....
In Lamon [I], partially exempt plaintiffs were uncompensated for up to ten hours worked between 160 and 171 per 28-day work period. This court awarded plaintiffs compensation for those hours at their regularly hour rate. The Tenth Circuit clearly and explicitly affirmed the award.
Id. at 1458 (emphasis added). Judge Saffels noted a similarity between the issues presented in Lamon and Schmitt and stated: “Accordingly, plaintiffs argue that, like the employees in Lamon, they are entitled to be compensated at their regular rate for all hours worked between 160 and 171....” Id. at 1458. The Schmitt I court made this determination although recognizing in a footnote that the basis of the Lamon I decision was compensation for unpaid meal time at the regular rate. The court noted:
In Lamon [I], it was undisputed that plaintiffs received no compensation at all for meal times. This court found that plaintiffs’ meal times did not exceed 10 hours in any given 28-day work period. Thus, plaintiffs’ claim was for 10 unpaid hours worked between 160 and 171 in each 28-day period. Similarly, plaintiffs’ claim in the instant case is for up to 11 unpaid hours worked between 160 and 171 in a given 28-day period.
Id. at 1458 n. 10 (emphasis added). The Schmitt I court denied the State‘s motion for summary judgment because the State was unable to provide controlling authority contrary to the Lamon II holding which the court thought, as Tenth Circuit authority, was “good law and relevant.” Id. at 1459. Therefore, although Judge Saffels saw these cases to be factually similar, there is clearly a basic difference between the Lamon meal time, which fell in the gap, and the Schmitt pure gap time claim.
With respect to straight time for periods in which plaintiffs worked overtime, the Schmitt I court also denied the State‘s motion for summary judgment. Id. at 1459-60. In so doing, the court found
After a denial of both parties’ summary judgment motions, the Schmitt I case proceeded to a nonjury trial in which the State ultimately prevailed. Schmitt v. Kansas, 864 F.Supp. 1051 (D.Kan.1994) (“Schmitt II“). Although noting his displeasure with the ultimate result because he felt that the State had not “treated the plaintiffs fairly” as law enforcement officers, Judge Saffels reluctantly found that the State‘s 28-day compensation plan was “within the law.” Id. at 1052-53. As in Schmitt I, the Schmitt II opinion again recognized that plaintiffs’ straight time claim was “contrary not only to the discussion found in
In summary, we see the Lamon cases as standing for the proposition that meal time hours must meet the requirements of
V.
We find that based on the evidence in the record, the employees in this case were properly compensated by an annual salary for all nonovertime hours for which they either expressly or impliedly agreed to work. Because we are hearing this appeal on cross-motions for summary judgment, we reverse the district court‘s ruling in favor of Plaintiffs on Claim 1 and Claim 2 and instead grant summary judgment in favor of Defendant-Appellant with respect to both Claims.
In granting summary judgment for Plaintiffs on Claim 1, overtime gap time, the district court relied on the official interpretations promulgated by the Department of Labor, in particular
In this case, we believe that there was more than ample evidence in the record for the court to determine the terms of Plaintiffs’ employment agreements and that those terms as a matter of law did not violate the FLSA. The overwhelming evidence leads to but one conclusion: these officers knew they worked on a salaried basis and knew or should have known that their salary was intended to compensate them for all hours worked up to the overtime threshold.
In determining Plaintiffs should be compensated for gap time when overtime hours were worked during a pay cycle, the district court first looked to
In determining the number of hours for which overtime compensation is due, all hours worked (see
§ 778.223 ) by an employee for an employer in a particular workweek must be counted. Overtime compensation, at a rate not less than one and one-half times the regular rate of pay, must be paid for each hour worked in the workweek in excess of the applicable maximum hours standard. This extra compensation for the excess hours of overtime work under the Act cannot be said to have been paid to an employee unless all the straight time compensation due him for the nonovertime hours under his contract (express or implied) or under any applicable statute has been paid.
First, considering the evidence in the record concerning the terms of the employment agreement, Defendant presented the affidavit of the Chesterfield County Chief of Police, Joseph E. Pittman, who served as the Chief for over nineteen years and had been employed in the County Police Department since 1957. Pittman Aff. ¶ 1, J.A. 44. Referring to the County‘s “Classification and Compensation Plan, Fiscal Year 1994-1995,” he testified that the officers are “classified by the County as non-exempt salaried employees.” Id. ¶ 2. He further stated that the annual salary paid to Plaintiffs “is intended to apply to all hours worked up to the FLSA overtime threshold.” Id. ¶ 3. Additionally,
I. POLICY:
It is the policy of the Department to comply with the provisions of the Fair Labor Standards Act, as well as the Chesterfield County Personnel Regulations and the Chesterfield County Procedure pertaining to attendance, leave and FLSA. This policy establishes procedures to ensure compliance.
II. PURPOSE:
To inform all Police personnel of the proper procedure for completing the standardized Time Accounting sheet (PD-160), general payroll procedure, and procedures for making payroll complaints.
III. PROCEDURES:
A. The established work period for nonexempt full time employees varies depending upon the FLSA category.
1. Sworn nonexempt uniformed operations personnel are designated to work a 24 day cycle that has a 146.6 hour threshold or 28 day cycle that has a 171 hour threshold. When this threshold is exceeded within the cycle the officer will be paid for overtime.
...
B. Overtime will be paid to nonexempt employees exclusive of the FLSA threshold in the following circumstances:
1. For all call-outs.
2. For court attendance during off duty hours.
J.A. 53-54 (emphasis added). Under this policy, if overtime is paid for all hours worked in excess of a set threshold, the only reasonable inference is that the salary paid to the officers compensated them for all hours worked up to that overtime threshold.
The Chesterfield County Police Department‘s Human Resources Administrator, John McLenagen, presented an affidavit in which he stated:
2. Patrol officers are classified as salaried employees by the County. All advertisements to the general public for openings with the Police Department state that the position is compensated on an annual salary.
3. During the initial screening and up through a candidate[‘]s offer of employement [sic], applicants are told of the compensation in terms of an annual salary.
McLenagen Aff. ¶¶ 2-3, J.A. 58. Attached to McLenagen‘s affidavit are copies of five separate classified ads from 1992 to 1995, all of which advertise openings in the County Police Department, solicit applicants and describe the benefits of and qualifications for the jobs. In each ad, the compensation is listed in terms of an annual salary ranging from $23,455 to $24,628. McLenagen‘s affidavit provides support to the proposition that any applicant responding to the advertisements knew or should have known that the County police officer position was a salaried position.
In spite of this evidence, Appellees repeatedly claim that the County never specifically told them the number of hours for which their salary was intended to compensate. For example, Appellees’ Brief states:
Advertisements for the hiring of officers state that newly hired officers receive an “annual salary“.... However, nowhere in either the advertisements for the position of patrol officer or in the County‘s Compensation and Classification Plan (which establish salary ranges for given positions) is there any mention of the number of hours to which the “salary” corresponds. Further, the policy which calls for overtime when an officer works beyond 146.6 hours does not state that an officer‘s salary fully compensates him or her up to the overtime threshold. The County has no collective bargaining agreement or contract or other agreement with the plaintiffs pertaining to this issue. Similarly, there is no statute or other law governing the number of hours the annual compensation covers.
Where the parties’ actions and the circumstances demonstrate that the plaintiff was aware of a particular condition of employment, the employee‘s acceptance of, and continued, employment manifests acceptance of the condition. However, if the employee contemporaneously protests, there is no implied agreement to the condition.
Id. at 286 (citations omitted) (citing Bodie v. City of Columbia, S.C., 934 F.2d 561, 566 (4th Cir.1991), and Johnson v. City of Columbia, S.C., 949 F.2d 127, 131 (4th Cir.1991)). Although there were no written contracts between the officers and the County, there clearly existed an employment agreement. Further, we do not believe that there needs to be any written contract, state law, regulation or statute, nor any collective bargaining agreement to reveal what is obvious from the terms of the written County Policy in addition to the parties’ conduct. The County hired and consistently paid the officers a salary and told them the hourly threshold during the work cycle that they would begin receiving overtime. The officers knew their compensation in terms of an annual salary, they accepted a biweekly check for the same non-fluctuating base amount every two weeks, they repeatedly worked hours above and below the normally scheduled 135 hours per pay cycle, and they were always paid overtime after 147 hours. We believe that the well-educated and intelligent men and women serving as law enforcement officers today, including those in Chesterfield County, are clearly capable of comprehending the material terms of their employment. Further, we do not find that the FLSA places the burden on the employer to hold an employee‘s hand and specifically tell him or her that the salary “fully compensates him or her up to the overtime threshold,” if that fact can be easily gleaned from employment policies, practices, and procedures.12
Looking to the hourly pay system the County utilized, it complied with the applicable labor regulations and was even financially beneficial to the officers in numerous respects. The labor regulation that lists the maximum hours for work periods for law enforcement officers states:
(b) For those employees engaged in law enforcement activities (including security personnel in correctional institutions) who have a work period of at least 7 but less than 28 consecutive days, no overtime compensation is required under section 7(k) until the number of hours worked exceeds the number of hours which bears the same relationship to 171 as the number of days in the work period bears to 28.
...
| Work period (days) | Maximum hours standards Law enforcement |
|---|---|
| 28 | 171 |
| 27 | 165 |
| 26 | 159 |
| 25 | 153 |
| 24 | 147 |
The word “overtime” is a misnomer and does not correctly describe the hours noted in this column. All patrol officers receive the premium rate for these hours worked regardless of the number of total actual hours worked in the FLSA cycle. Thus, literally, hours in this column are not “overtime” within the meaning of the FLSA. These premium hours in this case would be likely “Court time” and “call back” time.
J.A. 67 n. 1.
In spite of the County‘s compliance with the maximum hour mandates of the FLSA, Plaintiffs contend in Claim 1 that because the County regularly scheduled them for 135 hours per cycle, instead of the 147 maximum allowed, their salary only compensated them for those 135 hours and that they are therefore due the gap compensation when overtime hours were worked. This argument seems counter-intuitive and rather absurd for several reasons. First, if the County had scheduled the officers for all hours up to the 147 hour threshold per cycle, Plaintiffs would not be before us today because there would be no “gap time” issue, but the officers would be working three to twelve more hours per pay cycle14 and approximately 135 more hours per year for the same salary amount. Additionally, if the County did not have the policy that provided that the officers always receive premium pay for special appearances, court time, and call back time regardless of their normally scheduled hours, but rather had insisted that the first three to twelve hours of such non-regularly scheduled work backfill the gap, Plaintiffs would not have any proposed FLSA straight time claim because again there would be no gap time issue and no minimum wage/maximum hour violation. Finally, accepting Appellees’ contention would mean that any time a government employer, attempting to balance budgetary constraints with FLSA compliance, adjusts or reduces the hours its police officers work in a given pay cycle, the employer would face an FLSA straight time claim. This would be true even if the employer has not violated the law‘s minimum wage/maximum hour mandates. Such a proposition would leave an employer little, if any, flexibility before it is subject to being haled into court to face a purported “FLSA” claim.
Not only did the County comply with the FLSA‘s maximum hour mandates, but it also complied with its minimum wage and overtime calculation provisions. The County paid the officers a salary that converted to a regular hourly rate well in excess of the statutory minimum wage. From 1991 to 1994, the converted hourly wage of Plaintiffs varied between $10.01 per hour and $16.09 per hour. Powers’ Aff., J.A. 32. The County‘s method of determining the overtime or premium rate paid to the officers did not
Again, the officers put forth an argument that is contrary to their best financial interests in attacking the County‘s calculation of their overtime rate. They implicitly argue that the County should have used a higher divisor equal to the annual number of 2,234 threshold hours.16 However, use of such higher number of annual threshold hours would have resulted ultimately in their being paid approximately 7% less for overtime hours.17 Plaintiffs contend, and the lower court apparently agreed, that the County‘s use of the 2,080 hour divisor evidenced an inference that the County intended the annual salaries to compensate the officers for approximately 139 hours per cycle, which is less than the threshold number of hours. Order at 3 n. 2 (citing
We think manipulating the math to create such an inference is a stretch at best. More plausible and quite logical is that the County used the base number of 2,080 hours per year because this number reflects an employee working 40 hours of straight time per week and the FLSA is based on an overtime compensation scheme for hours worked in excess of 40 per week. We note other municipalities have used the 2,080 hour divisor without impunity under similar circumstances. See e.g., Schmitt II, 864 F.Supp. at 1055, 1057 & nn. 8-9. Therefore, we do not believe that use of the 2,080 divisor was in any way violative of the law nor could rationally lead to an adverse inference that the agreed upon salary was intended to compensate the officers for an amount of hours below the threshold.
In deciding Plaintiffs were due straight time compensation for Claim 1 overtime gap time hours, the district court also relied on
An agreement not to compensate employees for certain nonovertime hours stands on no better footing since it would have the same effect of diminishing the employee‘s total overtime compensation. An agreement, for example, to pay an employee whose maximum hours standard for the particular workweek is 40 hours, $5 an hour for the first 35 hours, nothing for the hours between 35 and 40 and $7.50 an hour for the hours in excess of 40 would not meet the overtime requirements of the Act. Under the principles set forth in
§ 778.315 , the employee would have to be
paid $25 for the 5 hours worked between 35 and 40 before any sums ostensibly paid for overtime could be credited toward overtime compensation due under the Act. Unless the employee is first paid $5 for each nonovertime hour worked, the $7.50 per hour payment purportedly for overtime hours is not in fact an overtime payment.
The lower court also indicated, by citation only, a reliance on
If an employee whose maximum hours standard is 40 hours was hired at a salary of $200 for a fixed workweek of 40 hours, his regular rate at the time of hiring was $5 per hour. If his workweek is later reduced to a fixed workweek of 35 hours while his salary remains the same, it is the fact that it now takes him only 35 hours to earn $200, so that he earns his salary at the average rate of $5.71 per hour. His regular rate thus becomes $5.71 per hour; it is no longer $5 an hour. Overtime pay is due under the Act only for hours worked in excess of 40, not 35, but if the understanding of the parties is that the salary of $200 now covers 35 hours of work and no more, the employee would be owed $5.71 per hour under his employment contract for each hour worked between 35 and 40. He would be owed not less than one and one-half times $5.71 ($8.57) per hour, under the statute, for each hour worked in excess of 40 in the workweek. In weeks in which no overtime is worked only the provisions of section 6 of the Act, requiring the payment of not less than the applicable minimum wage for each hour worked, apply so that the employee‘s right to receive $5.71 per hour is enforceable only under his contract. However, in overtime weeks the Administrator has the duty to insure the payment of at least one and one-half times the employee‘s regular rate of pay for hours worked in excess of 40 and this overtime compensation cannot be said to have been paid until all straight time compensation due the employee under the statute or his employment contract has been paid. Thus if the employee works 41 hours in a particular week, he is owed his salary for 35 hours—$200, 5 hours’ pay at $5.71 per hour for the 5 hours between 35
and 40—$28.55, and 1 hour‘s pay at $8.57 for the 1 hour in excess of 40—$8.57, or a total of $237.12 for the week.
There is no evidence in the record indicating that the officers were hired for any fixed hourly “work period”18 nor that there was any understanding by the parties that the officers’ hours were reduced to another “fixed” work period. Although Plaintiffs were regularly scheduled to work 135 hours during the 24-day cycle, the hours actually worked more often than not varied above and below 135 hours. See J.A. 67.19 Because there is no evidence that there was any kind of understanding by the parties to reduce the terms of employment from one fixed hourly amount to another fixed hourly amount, this aspect of the interpretation does not apply. On the other hand, this interpretation clearly supports the County‘s position with respect to Claim 2. It states: “In weeks in which no overtime is worked only the provisions of section 6 of the Act, requiring the payment of not less than the applicable minimum wage for each hour worked, apply so that the employee‘s right to receive $5.71 per hour is enforceable only under his contract.” Id.; see Schmitt I, 844 F.Supp. at 1459 n. 11; Schmitt II, 864 F.Supp. at 1062. Therefore,
Having concluded that summary judgment for Plaintiffs on Claim 1 overtime gap time was inappropriate, we find that summary judgment should be granted instead for the County. The evidence of the employment agreements leads to only one rational conclusion—that Plaintiffs were properly paid an annual salary to which they either expressly or impliedly agreed and they worked under an employment agreement which in no way violated the FLSA.20 For all Plaintiffs, whether hired before or after the June 1, 1990 Policy, even in the absence of a written contract, an employment agreement existed based upon the County‘s written policy and more importantly the employees’ continual and repeated acceptance of their paychecks without objection under the 24-day/147 hour pay cycle. See Bodie v. City of Columbia, S.C., 934 F.2d 561, 564-65 (4th Cir. 1991) (“[C]ontinuance in the job and acceptance under the new plan of payment was sufficient to create a valid agreement, even though the agreement was implied and not in writing“) (citing Rousseau v. Teledyne Movible Offshore, Inc., 805 F.2d 1245 (5th Cir. 1986), cert. denied, 484 U.S. 827, 108 S.Ct. 95, 98 L.Ed.2d 56 (1987); Rotondo v. City of Georgetown, S.C., 869 F.Supp. 369, 376-77 (D.S.C. 1994)) (citing Harrison v. City of Clarksville, Tenn., 732 F.Supp. 810, 815 (M.D.Tenn. 1990)). “[W]e will also not allow employees merely to grumble about the compensation scheme and then later spring a surprise attack on an employer who has tried to comply with the options that the FLSA provides.” Holb v. City of Beaufort, Nos. 91-2068, 92-1427, slip op., 1993 WL 219806 at *5 (4th Cir. June 22, 1993) (unpublished opinion, full text available on Westlaw) (citing Bodie, 934 F.2d at 564). Any dispute between these two parties about the number of hours for which the employees’ salary was intended to compensate them
VI.
We now turn to Plaintiffs’ Claim 2 for “pure gap time.” We also find that there is no cause of action under the FLSA for pure gap time when there is no evidence of a minimum wage or maximum hour violation by the employer. Again, because we are hearing this appeal on cross-motions for summary judgment, we reverse the district court‘s ruling in favor of Plaintiffs on Claim 2 and instead grant summary judgment in favor of Defendant-Appellant.
The lower court erroneously relied on
In this case, the officers contend that their salary only compensated them for the 135 regularly scheduled hours whereas the County contends the agreed upon salary compensated the officers for all hours up to the 147 hour threshold. Regardless of which way this contractual dispute is resolved, we see no FLSA violation under either circumstance. Logically, in pay periods without overtime, there can be no violation of
Although one of the County‘s contentions below was that it was operating in compliance with the fluctuating workweek exemption of
Having looked to this section, the district court took the “clear mutual understanding” test, which an employer must prove to utilize the fluctuating workweek method of overtime payment, and imposed it as a burden on the County with respect to pure gap time claims when there was not any overtime issue. The court stated: “Thus, the crux of the instant matter is whether or not the parties had a clear mutual understanding that an officer‘s salary is fashioned to compensate all hours worked up to the overtime threshold.” Order at 14, J.A. 103. In fact, we see nothing in the regulations, interpretations or the FLSA law that requires an employer to demonstrate that there exists a clear mutual understanding with respect to the number of nonovertime hours for which an employee‘s salary is designed to compensate if no overtime is worked. That issue is simply one of contract law. Rather,
In addition to erroneously relying on
This Court agrees with the Lamon [I] court‘s rationale. Specifically, the Court finds no principled reason to require Plaintiffs to work in excess of 146.6 hours before all straight time hours are compensated, especially where their salary may compensate them for only a 135 hour (or, at times, a 144 hour) regular schedule. Absent a clear bilateral agreement or policy to the contrary, law enforcement officers who have spent time protecting the citizens of their jurisdiction should be compensated for all straight time hours worked whether or not they actually worked overtime.
Order at 17, J.A. at 106 (emphasis added). We obviously agree that employees should be compensated for all hours due them under the terms of their employment agreement. The primary purpose of
We believe our interpretation is consistent with not only the remedial purposes and historical intent of the FLSA, but also with a long history of FLSA case law, the current labor regulations and interpretations, and the 1987 DOL Letter Ruling. As noted in Schmitt I & II, there is a considerable body of case law that supports our conclusion, including the 1969 opinion of this Court in Blankenship v. Thurston Motor Lines, Inc., 415 F.2d 1193, 1198 & n. 6 (citing United States v. Klinghoffer Bros. Realty Corp., 285 F.2d 487 (2d Cir. 1960)). Schmitt I, 844 F.Supp. at 1457 n. 6; Schmitt II, 864 F.Supp. at 1062 n. 18. Additionally, we find rather persuasive the recent opinion in Arnold v. Arkansas, 910 F.Supp. 1385 (E.D.Ark.1995), in which the court held that a pure gap time claim had no basis in federal court because there was no FLSA violation under the circumstances. Similar to the facts at hand, facing the Arnold court were claims for overtime gap time and pure gap time, id. at 1393 n. 32, and the plaintiff employees had been properly compensated for all overtime hours. Id. at 1391 & n. 36. The court recognized that the “two central themes of the FLSA are its minimum wage and overtime requirements.” Id. at 1392. Addressing the pure gap time claim, the Arnold court noted that “the relief afforded an employee aggrieved by a violation of section 206 or 207 is limited to ‘their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional amount equal as liquidated damages.‘” Id. at 1393 (quoting
As further recognized by Schmitt I & II, we believe the current DOL interpretations of the FLSA are supportive of our position. In fact, we do not believe that
The discussion in the prior section sets forth one result of reducing the workweek from 40 to 35 hours. It is not either the necessary result or the only possible result. As in all cases of employees hired on a salary basis, the regular rate depends in part on the agreement of the parties as to what the salary is intended to compensate. In reducing the customary workweek schedule to 35 hours the parties may agree to change the basis of the employment arrangement by providing that the salary which formerly covered a fixed workweek of 40 hours now covers a variable workweek up to 40 hours. If this is the new agreement, the employee receives $200 for workweeks of varying lengths, such as 35, 36, 38, or 40 hours. His rate thus varies from week to week, but in weeks of 40 hours or over, it is $5 per hour (since the agreement of the parties is that the salary covers up to 40 hours and no more) and his overtime rate, for hours in excess of 40, thus remains $7.50 per hour. Such a salary arrangement presumably contemplates that the salary will be paid in full for any workweek of 40 hours or less. The employee would thus be entitled to his full salary if he worked only 25 or 30 hours. No deductions for hours not worked in short workweeks would be made.
Finally, we find additional support in the 1987 DOL Letter Ruling quoted in Schmitt II above. “While opinion letters are not binding on the courts, they do constitute ‘a body of experienced and informed judgment’ which have been ‘given considerable and in some cases decisive weight.‘” Schultz v. W.R. Hartin & Son, Inc., 428 F.2d 186, 191 (4th Cir.1970)
[T]he law enforcement employees to whom you refer have been properly compensated under FLSA when, for any work period during which they have worked less than the applicable maximum hours standard, they have received at least the minimum wage ($3.35 an hour) for all of their hours worked.
1987 DOL Letter Ruling. As applied to this case, whether the officers’ salaries compensated them for a minimum of 135 hours or a maximum of 147 hours, it is undisputed they received at least the minimum wage for all hours worked. Therefore, in accordance with the DOL Letter Ruling, the officers have been properly compensated under the FLSA.
Having looked to the case law, the legislative intent in enacting the FLSA and the current DOL regulations and interpretations, we feel that the greater weight of authority, along with common sense, supports the position that we reach with respect to pure gap time claims. We therefore reverse the ruling of the district court on this issue and instead grant summary judgment for the County.
VII.
In conclusion, although we recognize the importance of the FLSA‘s broad protections, we believe that freedom of contract between an employer and an employee is one of the precepts of the free market economy upon which this nation was founded. In evaluating a potential straight time claim, the trier of fact must look to the terms of the employment agreement and determine those terms based on the evidence of the implied or express agreement between the parties. That agreement can be determined by a written contract as well as by the everyday employment practices of the parties. As in this case, we do not believe that employees can feign ignorance of employment terms when their actions simultaneously demonstrate otherwise. For there to be an overtime gap time cause of action under the FLSA, a violation of section 206 or 207 of the Act must first exist. If the employee has been properly paid at or above minimum wage for all nonovertime hours under the terms of the employment agreement and at a proper overtime rate for all overtime hours, then the employees must look to contract law for relief concerning any disagreements about the number of hours for which his or her salary was intended to compensate. Simply put, if the terms of the employment agreement do not violate the FLSA, freedom of contract prevails.
Absent a minimum wage/maximum hour violation, we find no remedy under the FLSA for pure gap time claims. Our ruling precludes an employee from invoking the jurisdiction of federal court on a pure gap time claim allegedly under the FLSA when there is no minimum wage/maximum hour violation. We further believe this ruling is consistent with the cautious and guarded invocation of federal jurisdiction. American Fire & Cas. Co. v. Finn, 341 U.S. 6, 17, 71 S.Ct. 534, 541-42, 95 L.Ed. 702 (1951). Based on our analysis of the record, we believe summary judgment for Plaintiffs was inappropriate. We reverse the judgment of the lower court and grant summary judgment for the County.
REVERSED.
Notes
Monahan Aff. ¶ 3, J.A. 42.Throughout my tenure in the Chesterfield Police Department, I have been told by numerous supervisors that I would not be paid for the time it takes to put gasoline in my police vehicle prior to roll call, for the time it takes to go to the property room to recover physical evidence prior to court appearances, or for the time it takes to travel to and from and to conduct business at the State Laboratory.