274 F.3d 1141 | 7th Cir. | 2001
Lead Opinion
The plaintiffs in this case are police officers with the canine unit of the City of Springfield. The officers are responsible for taking care of the dogs assigned to them, but the dogs are owned by the City. Although the City provides kennels for the dogs, the officers were encouraged to care for them at home in order to maintain the relationship with the dog that makes them more effective, and each officer elected to do so.
The collective bargaining agreement (“CBA”) between the City and the Police Benevolent and Protective Association provides compensation for the “kennel time” — time spent by the officers caring for the dogs. Pursuant to that agreement, the officers are guaranteed the last hour of paid duty time worked each day for kennel time, and receive compensation for one hour of kennel time at 1 % times their regular rate of pay on each regular day off. The officers are not compensated for kennel time on vacation, personal or sick days, or on days in which they use compensatory time or have in-service training or training with their dogs. Moreover, the officers do not receive a kennel time allotment on days in which they are called into duty or have their regular shift extended.
No one contends in this case that the City has failed to comply with the provisions of the CBA. The sole issue is whether the City has violated the Fair Labor Standards Act (“FLSA”) in failing to compensate the officers for kennel time on the days not covered in the CBA. Although the
Although acknowledging that it must compensate its officers for kennel time under the FLSA, the City contends that the CBA provisions are adequate to compensate the officers for all kennel time. The City has consistently maintained that the kennel time takes less than an hour on many days, and that by compensating for a full hour on regular days and regular days off, the excess compensation on those days covered the time spent on the unpaid days, thus averaging out to the required compensation. The district court held that there was a genuine dispute of material fact on whether the compensation covered all of the kennel time, and therefore, for purposes of the summary judgment, it assumed that the payments were insufficient to cover the non-compensated days. The court nevertheless granted summary judgment for the City, holding that certain premium payments made by the City could be used to offset its overtime liability for the unpaid kennel time and that, as a matter of law, those premiums exceeded the amount of overtime liability owed. The officers appeal that determination on a number of grounds.
I
First, the officers contend that the court erred in holding that the two-year statute of limitations applied to this action. Under 29 U.S.C. § 255(a), the statute of limitations for FLSA violations is two years unless the violation was willful, in which case the limitations period is three years. The officers have failed to submit any evidence that the violation was willful in this case, and therefore the court properly held that the two-year period applied. On appeal, the officers point to cases such as Nichols v. City of Chicago, 789 F.Supp. 1438, 1445 (N.D.Ill.1992), establishing that kennel time is compensable, and to the CBA which provided compensation for kennel time on regular duty days and regular days off. According to the officers, the prior cases and the CBA itself establish the City’s knowledge that it was required to compensate the officers for all kennel time, including time spent on personal days, sick days, and days in which the officers were conducting in-service training, using compensatory time, or training with their dogs. The officers contend that the City’s failure to do so constituted at least reckless disregard of its obligations under the CBA.
The inference that the officers would have us draw from the CBA provision, however, is not a reasonable one. Because the CBA was negotiated, it would require the corresponding inference that the union was aware that all of the kennel time was compensable, and that the union nevertheless agreed to a provision that would not provide that compensation which the law requires. Although the inclusion of compensation for kennel time in the CBA may evidence knowledge that the FLSA requires compensation for that time, it does not support an inference that the compensation provided was inadequate to cover all of the days in which kennel duties were performed. The district court properly determined that there was no genuine issue of fact regarding willfulness, and that the two-year limitations period applied.
The officers also assert that the court erred in holding that they were not entitled to injunctive relief. Section 217 of the FLSA provides that courts have jurisdiction to enter injunctive relief for viola
II
Turning to the merits of the claim, the officers also contend that the court erred in determining which premium payments could be used to offset the overtime liability and in applying those premium credits. First, the officers assert that payments for court time and for regular days off should not constitute premiums which could offset overtime liability.
Pursuant to the FLSA, an employer may credit some payments against any overtime it owes. Specifically, 29 U.S.C. § 207(h)(2) provides that “[ejxtra compensation paid as described in paragraphs (5), (6), and (7) of subsection (e) of this section shall be creditable towards overtime compensation payable pursuant to this section.” Those subsections include:
(5) extra compensation provided by a premium rate paid for certain hours worked by the employee in any day or workweek because such hours are hours worked in excess of eight in a day or in excess of the maximum workweek applicable to such employee under subsection
(а) of this section or in excess of the employee’s normal working hours or regular working hours, as the case may be;
(б) extra compensation provided by a premium rate paid for work by the employee on Saturdays, Sundays, holidays, or regular days of rest, or on the sixth or seventh day of the workweek, where such premium rate is not less than one and one-half times the rate established in good faith for like work performed in nonovertime hours on other days; or (7) extra compensation provided by a premium rate paid to the employee, in pursuance of an applicable employee contract or collective-bargaining agreement, for work outside of the hours established in good faith by the contract or agreement as the basic, normal, or regular workday (not exceeding eight hours) or workweek (not exceeding the maximum workweek applicable to such employee under subsection (a) of this section), where such premium rate is not less than one and one-half times the rate established in good faith by the contract or agreement for like work performed during such workday or workweek.
29 U.S.C. § 207(e)(5)-(7). The City asserts that those subsections encompass premium payments made to the officers for holidays, for court time, and for regular days off. The officers object to the inclusion of court time and the payments made on regular days off.
We turn first to court payments. The CBA provides that an officer appear
That interpretive regulation, in relevant part, explains the statutory language as follows:
(b) Premiums for hours outside established working hours. To qualify as an overtime premium under section 7(e)(7) the premium must be paid because the work was performed during hours “outside of the hours established * * * as the basic * * * workday or workweek” and not for some other reason. Thus, if the basic workday is established in good faith as the hours from 8 a.m. to 5 p.m. a premium of time and one-half paid for hours between 5 p.m. and 8 a.m. would qualify as an overtime premium. However, where the contract does not provide for the payment of a premium except for work between midnight and 6 a.m. the premium would not qualify under this section since it is not a premium paid for work outside the established workday but only for certain special hours outside the established workday, in most instances because they are undesirable hours. Similarly, where payments of premium rates for work are made after 5 p.m. only if the employee has not had a meal period or rest period, they are not regarded as overtime premiums; they are premiums paid because of undesirable working conditions.
29 C.F.R. § 778.204(b). The parties devote much time to arguing whether court time can be considered “undesirable.” The district court also took that approach, declaring that “[b]y its very language, § 778.204(b) addresses premiums paid ‘only for certain special hours outside the established workday, in most instances because they are undesirable hours ....’” [emphasis in dist. ct. order] Order at 21. The court concluded that “[c]ourt time payments are not tied to ‘certain special hours outside the established workday,”’ and “[t]hus, the City may use court time premiums to offset the Plaintiffs’ FLSA claims pursuant to § 207(e)(7).” Id. That approach, however, elevates the examples of cases that fall outside the statute into
The officers also argue that payments made for work performed on their regular days off do not constitute creditable premiums. Section 207(e)(6) provides that premium payments made on regular days off may be used as offsets “where such premium rate is not less than one and one-half times the rate established in good faith for like work performed in non-overtime hours on other days.” [emphasis added] The officers received 1 lk times their regular pay on those days, but inexplicably contend that such compensation does not become a premium rate until it exceeds 1 $ times the employee’s regular rate. That is simply irreconcilable with the plain language of the statute, which excludes only payments less than, not equal to, 1 lk times the regular rate. Because this payment is equal to 1 /£ times the regular rate, it falls within the statutory provision, and may be used to offset the overtime liability. See Reich v. Interstate Brands Corp., 57 F.3d 574, 578 (7th Cir.1995); Nolan v. City of Chicago, 125 F.Supp.2d 324, 331 (N.D.Ill.2000).
The officers fare better with their argument that premium pay credits should only offset overtime liabilities that accrued in the same time period. As set forth above, the statute provides in relevant part that premium payments ' described in §§ 207(e)(5),(6), & (7) “shall be creditable towards overtime compensation payable pursuant to this section.” The City maintains that it can use all premium payments made during the years in issue to offset all overtime liability, regardless of when the payments were made and when the overtime was owed. The officers seek a more narrow construction of the statute that would allow such overpayments made during a given work period to be credited against amounts due during that same work period. The courts that have addressed this issue have taken divergent views, with no consensus at this point. Compare, e.g., Abbey v. City of Jackson, 883 F.Supp. 181 (E.D.Mich.1995) with Roland Electrical Co. v. Black, 163 F.2d 417 (4th Cir.1947) and Nolan, 125 F.Supp.2d at 331-33. The district court here adopted
The court’s decision was based in part on its conclusion that if the City was restricted to using premium pay offsets only in the pay period in which they were earned, the officers would receive an undeserved windfall. We disagree. In fact, if the City were able to use premium payments in the manner contemplated by the district court, the City would be the recipient of the windfall, and in fact would be placed in a substantially better position than if it had complied with the overtime requirements of the FLSA all along. An example may help illustrate this point. If the City complied with the FLSA all along, it would have paid the overtime each pay period as it accrued. Subsequent premiums payments could not be used to reduce those overtime payments, because they would have already have been calculated and paid. For instance, a premium payment made for the Thanksgiving holiday would not be used by a conforming employer to offset overtime paid back in March. But that is precisely what the City seeks to do here. It is contrary to the language and the purpose of the statute.
The credit provision must be read in the context of the statute as a whole, which is designed to protect workers from the twin evils of excessive work hours and substandard wages. Barrentine, 450 U.S. at 739, 101 S.Ct. 1437; Monahan v. County of Chesterfield, Virg., 95 F.3d 1263, 1267 (4th Cir.1996). Toward that end, the statute requires the payment of time and a half for overtime work. Courts have long interpreted the FLSA as requiring that those payments be timely made. Brooklyn Savings Bank v. O’Neil, 324 U.S. 697, 703-07, 65 S.Ct. 895, 89 L.Ed. 1296 (1945); Calderon v. Witvoet, 999 F.2d 1101, 1107 (7th Cir.1993); Rogers v. City of Troy, New York, 148 F.3d 52, 55 (2d Cir.1998). Thus, the statute is violated even if the employer eventually pays the overtime amount that was due. See id. In fact, that requirement may not be waived, and “even the workers’ enthusiastic assent to deferred payment — a form of employer — held savings account — is ineffectual.” Calderon, 999 F.2d at 1107. That principle is also found at 29 C.F.R. § 778.106, which provides in relevant part:
The general rule is that overtime compensation earned in a particular workweek must be paid on the regular pay day for the period in which such workweek ends. When the correct amount of the overtime compensation cannot be determined until some time after the regular pay period, however, the requirements of the FLSA will be satisfied if the employer pays the excess overtime compensation as soon after the regular pay period as is practicable. Payment may not be delayed for a period longer than is reasonably necessary for the employer to compute and arrange for payment of the amount due and in no event may payment be delayed beyond the next payday after such computation can be made.
Although that regulation is not entitled to deference, Shaw, 151 F.3d at 642, it is nonetheless persuasive as it is consistent with the interpretation of the FLSA that the courts have reached. Therefore, under the statute, overtime generally must be calculated and paid on a pay period by pay period basis. The City, however, advocates a method of payment that would allow it to pay its overtime obligations at a time far removed from when that overtime amount was due. That is inconsistent with the statutory requirement that overtime payments must be timely made.
The City’s argument would eviscerate the protection intended by the overtime
Other regulations similarly point to that conclusion. For instance, 29 C.F.R. § 778.104 provides that an employer may not average the number of hours worked over two weeks in order to avoid paying overtime. Therefore, if an employee works 20 hours one week and 60 the next, the employer owes overtime in the second week even though the two weeks average to 40 hours each. Just as that averaging would constitute an end-run around the overtime requirement, the City’s attempt to apply credits whenever paid to all overtime liability attempts to accomplish the same result. Accordingly, the district court erred in allowing the blanket application of all premium payments to all overtime liabilities, and in permitting the City to credit court time payments against overtime liability. We therefore remand the case in order for the court to recalculate the damages consistent with this opinion. The parties will bear their own costs of this appeal.
AFFIRMED IN PART, REVERSED IN PART, and Remanded
. Section 212 is inapplicable here because it applies to child labor provisions, and directs the Administrator to bring all actions for in-junctive relief "subject to the direction and control of the Attorney General.”
Concurrence in Part
concurring in part and dissenting in part.
Although I agree with most of the court’s analysis and conclusions of law in this case, I write separately to express my disagreement with the court’s determination that the City may use premium pay credits to offset liabilities only when they occur during the same pay period. On this issue, I respectfully dissent.
Neither the provisions of § 207(h)(2) of the FLSA, nor its accompanying regulations, require such a limitation. The reasoning articulated in Abbey v. City of Jackson, 883 F.Supp. 181, 186-87 (E.D.Mich.1995),
Forcing an employer, who has given a premium rate of pay for overtime, to forego the receipt of credit and to pay additional overtime punishes the employer without regard to whether it was attempting to avoid its obligation to adequately compensate employees for extra hours worked. Plaintiffs have not pointed to any regulations, statutes or current cases, which state that there is a congressional will to penalize an employer that inadvertently fails to follow FLSA by, in effect, assessing civil money damages beyond those enunciated in 29 U.S.C. § 216(b). Conversely, there is a clear congressional intent to allow an employer to offset premium rates of pay against overtime owed. 29 U.S.C. § 207(h). If I were to follow plaintiffs’ reasoning, plaintiffs would receive a windfall and the purposes and goals of the statute would not be served. Therefore, defendant may offset the ... premium payments against overtime owed.
This reasoning is especially persuasive in this case where, as the majority acknowledges, the officers have failed to submit any evidence that the City willfully violated the FLSA. I would, therefore, affirm the district court’s decision allowing the City to use the premium payments (i.e., those recognized by this court) to offset any overtime compensation owed to the officers under the FLSA, and remand the case back to the court for a determination as to whether summary judgment was still appropriate in light of this decision.
. See also Alexander v. United States, 32 F.3d 1571, 1577 (Fed.Cir.1994) (premium pay is creditable toward any overtime compensation due under the FLSA); Kohlheim v. Glynn County, Georgia, 915 F.2d 1473, 1481 (11th Cir.1990) (employer should be allowed to set off ‘'all'' previously paid overtime premiums against overtime found to be due and owing under the FLSA).