Flood v. New Hanover County

• Decision Date: 22 September 1997
• Docket Number: No. 97-1099,97-1099
• Citation: 125 F.3d 249
• Parties: 134 Lab.Cas. P 33,594, 4 Wage & Hour Cas.2d (BNA) 139 Julia FLOOD; Drake Fox; Robert Howlett; Katherine Johnson; Karen Keroack; Anthony Martin; James McLean; John McMillian; David Miller; Lora Miller; Michael Nave; Powell Phillips; Bobby Pierce; Jack Poplin; David Pritchard; Robert Pugh; John Sciales; Brian Simonson; Pamela Stewart; Ronald Wahab; Stanley G. Wardrip, Jr.; Sheila Youngblood, Plaintiffs-Appellants, and Russell Ashley, Plaintiff, v. NEW HANOVER COUNTY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 249

125 F.3d 249

134 Lab.Cas. P 33,594, 4 Wage & Hour Cas.2d

(BNA) 139

Julia FLOOD; Drake Fox; Robert Howlett; Katherine Johnson; Karen Keroack; Anthony Martin; James McLean John McMillian; David Miller; Lora Miller; Michael Nave Powell Phillips; Bobby Pierce; Jack Poplin; David Pritchard; Robert Pugh; John Sciales; Brian Simonson Pamela Stewart; Ronald Wahab; Stanley G. Wardrip, Jr. Sheila Youngblood, Plaintiffs-Appellants, and Russell Ashley, Plaintiff, v. NEW HANOVER COUNTY, Defendant-Appellee.

No. 97-1099.

United States Court of Appeals, Fourth Circuit.

Argued July 15, 1997.

Decided Sept. 22, 1997.

ARGUED: Gary Keith Shipman, Shipman & Associates, L.L.P., Wilmington, NC, for Appellants. Andrew William Olsen, Assistant County Attorney, Office of the County Attorney, Wilmington, NC, for Appellee.

Before MURNAGHAN, Circuit Judge, and BUTZNER and PHILLIPS, Senior Circuit Judges.

Affirmed by published opinion. Judge MURNAGHAN wrote the opinion, in which Senior Judge BUTZNER and Senior Judge PHILLIPS joined.

OPINION

MURNAGHAN, Circuit Judge:

Plaintiffs-Appellants, a group of present or former full-time emergency medical service ("EMS") personnel (collectively, the "Plaintiffs"), filed suit against their employer, Defendant-Appellee New Hanover County, North Carolina (the "County") for violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C.A. §§ 210-19 (West 1965, 1985 & Supp.1997). The district court dismissed the Plaintiffs' claims pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. For the reasons stated below, we affirm the district court's judgment.

I.

The Plaintiffs all work a nine-day regularly recurring cycle of 24.15 hours on-duty, 24 hours off-duty, 24.15 hours on-duty, 24 hours off-duty, 24.15 hours on-duty, followed by 96 consecutive hours offduty. Although their work schedule never changes, they work a different number of total hours each week depending upon the number of scheduled work days that fall within the week. Thus, their workweek ranges between 48.3 hours, 56.3 hours, 64.45 hours, and 72.45 hours, and their amount of overtime consequently ranges between 8.3 hours, 16.3 hours, 24.45 hours, and 32.45 hours. The County also requires the Plaintiffs to attend regularly scheduled shift meetings and continuing education seminars to maintain their EMS certifications. The County compensates the Plaintiffs for the time that they spend at the meetings and seminars, and it adds the hours attributable to the meetings and seminars to the Plaintiffs' regularly scheduled hours for that week.

At all relevant times, the County has compensated the Plaintiffs pursuant to a "fluctuating workweek" payment method. That method allows employers to compensate employees at a one-half time rate for overtime hours, rather than the standard one and one-half time rate, if the employment meets certain requirements. See 29 C.F.R. § 778.114 (1996). The County gave each of its employees a memorandum that clearly explained the fluctuating workweek payment method and that provided examples of how the County would calculate employees' salaries pursuant to that method. The County required each employee to sign the memorandum under a printed statement that reads, "The Fluctuating Work Week 29 C.F.R. § 778.114 of the Fair Labor Standards Act has been explained to me and I have had the opportunity to have any questions answered."

On August 5, 1996, the Plaintiffs filed suit against the County. They claimed that the County's compensation plan did not meet the requirements of the fluctuating workweek payment method. They sought declaratory relief, injunctive relief, backpay for unpaid overtime compensation, liquidated damages, and attorney's fees. The County subsequently filed a motion to dismiss the Plaintiffs' suit pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. The district court granted the County's motion to dismiss on the ground that the County's compensation plan satisfied all of the requirements of the fluctuating workweek payment method.

II.

We review the district court's decision to grant the motion to dismiss de novo. See Brooks v. City of Winston-Salem, North Carolina, 85 F.3d 178, 181 (4th Cir.1996). We must accept the factual allegations in the Plaintiffs' complaint and must construe those facts in the light most favorable to the Plaintiffs. See Estate Constr. Co. v. Miller & Smith Holding Co., 14 F.3d 213, 217-18 (4th Cir.1994). We may affirm the district court's dismissal only if it appears beyond doubt that the Plaintiffs can prove no set of facts in support of their claim that would entitle them to relief. See Rogers v. Jefferson-Pilot Life Ins. Co., 883 F.2d 324, 325 (4th Cir.1989).

III.

As a general rule, the FLSA provides that an employer may not employ an employee for a workweek longer than forty hours unless it pays its employee one and one-half times the employee's "regular rate" for all hours in excess of forty. See 29 U.S.C.A. § 207(a)(1); Monahan v. County of Chesterfield, Virginia, 95 F.3d 1263, 1267 (4th Cir.1996). The employee's "regular rate" is the hourly rate that the employer pays the employee for the normal, nonovertime forty-hour workweek. See Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419, 424, 65 S.Ct. 1242, 1244-45, 89 L.Ed. 1705 (1945). If the employer employs an employee on a weekly salary basis, it determines the employee's regular hourly rate of pay by dividing the weekly salary by the number of hours that it intends the weekly salary to compensate. See 29 C.F.R. § 778.113 (1996). ¹

However, the Department of Labor's (the "DOL") implementing regulations provide an alternative way for employers to calculate the regular rate of pay for certain salaried employees. Section 778.114 of the implementing regulations provides that a salaried employee whose hours fluctuate from week to week can reach a mutual understanding with the employer that he or she will receive a fixed amount of compensation per week, regardless of the number of hours that the employee works in that week, and that he or she additionally will receive a rate of fifty percent of the regular hourly pay for any hours over forty worked in that week. See 29 C.F.R. § 778.114(a). The employee must clearly understand that the fixed weekly amount compensates for all of the hours worked in that week, rather than a set number of hours as in the case of a regular salaried employee heretofore described, and that he or she will receive that amount every week regardless of whether he or she actually works a long or a short workweek. Id. The employer calculates the regular hourly pay by dividing the employee's fixed weekly pay by the total number of hours that the employee worked during the week. Id. ² The fixed amount must be sufficient to provide compensation at a regular rate not less than the minimum hourly rate, and the overtime premium cannot be less than one-half of the regular rate. Id. Since the employer has already paid the employee a regular rate of pay for all of the hours that the employee worked, including the overtime hours, it only has to pay an additional one-half time pay premium for the overtime hours. Id.; Monahan, 95 F.3d at 1280-81.

Thus, under the "mathematical payment structure provided under [the fluctuating workweek] method of overtime compensation, the more the employee works and the more overtime the employee logs, the less he or she is paid for each additional hour of overtime." Monahan, 95 F.3d at 1280. However, section 778.114 does not represent an "exception" to FLSA. It merely provides an alternative means by which an employer can determine its employees' regular and overtime rate of pay. See Bailey v. County of Georgetown, 94 F.3d 152, 154-55 n. 5 (4th Cir.1996).

Here, the County pays the Plaintiffs pursuant to the fluctuating workweek payment method. The starting salary for EMS personnel is $18,574. The employee therefore receives a fixed, weekly salary of $357.20 ($18,574 divided by fifty-two weeks) regardless of the number of hours that the employee works in any particular week. Pursuant to section 778.114, the County then adds fifty percent of the employee's regular rate of pay for each hour over forty that the employee works. The County determines the employee's regular hourly rate by dividing the fixed, weekly amount by the total number of hours that the employee works in a particular week. The County undisputedly calculates the Plaintiffs' salaries correctly pursuant to the section 778.114 method. The Plaintiffs argue, however, that the County must pay them the standard overtime rate of one and one-half times their regular rate because it does not meet the requirements of section 778.114.

The language of section 778.114 suggests that an employer must meet the following requirements before it can pay an employee pursuant to the fluctuating workweek method: 1) the employee's hours must fluctuate from week to week; 2) the employee must receive a fixed weekly salary that remains the same regardless of the number of hours that the employee works during the week; 3) the fixed amount must be sufficient to provide compensation at a regular rate not less than the legal minimum wage; 4) the employer and the employee must have a clear, mutual understanding that the employer will pay the employee the fixed weekly salary regardless of the hours worked; and 5) the employee must receive a fifty percent overtime premium in addition to the fixed weekly salary for all hours that the employee works in excess of forty during that...