Singer v. City of Waco, Tex.

• Decision Date: 27 March 2003
• Docket Number: No. 01-51258.,No. 01-51185.,01-51185.,01-51258.
• Parties: Joseph SINGER, Individually and on Behalf of Others Similarly Situated; Charles Lindorfer, Individually and on Behalf of Others Similarly Situated; Rosalio Amaro; Carl B. Ammann; James A. Baker; et al., Plaintiffs-Counter Defendants-Appellants-Cross-Appellees, v. CITY OF WACO, TEXAS; et al., Defendants, City of Waco, Texas, Defendant-Counter Claimant-Appellee-Cross-Appellant. Joseph Singer, Individually and on Behalf of Others Similarly Situated; Charles Lindorfer, Individually and on Behalf of Others Similarly Situated; Rosalio Amaro; Carl B. Ammann; James A. Baker; et al., Plaintiffs-Counter Defendants-Appellees, v. City of Waco, Texas; et al., Defendants, City of Waco, Texas, Defendant-Counter Claimant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

324 F.3d 813

Joseph SINGER, Individually and on Behalf of Others Similarly Situated; Charles Lindorfer, Individually and on Behalf of Others Similarly Situated; Rosalio Amaro; Carl B. Ammann; James A. Baker; et al., Plaintiffs-Counter Defendants-Appellants-Cross-Appellees, v. CITY OF WACO, TEXAS; et al., Defendants, City of Waco, Texas, Defendant-Counter Claimant-Appellee-Cross-Appellant.

Joseph Singer, Individually and on Behalf of Others Similarly Situated; Charles Lindorfer, Individually and on Behalf of Others Similarly Situated; Rosalio Amaro; Carl B. Ammann; James A. Baker; et al., Plaintiffs-Counter Defendants-Appellees, v. City of Waco, Texas; et al., Defendants, City of Waco, Texas, Defendant-Counter Claimant-Appellant.

No. 01-51185.

No. 01-51258.

United States Court of Appeals, Fifth Circuit.

March 27, 2003.

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R. John Cullar (argued), Mills, Millar & Cullar, Waco, TX, for Singer, Lindorfer, Amarro, Amman and Baker.

Lu Pham (argued), Bettye S. Springer (argued), Karger, Key, Barnes & Springer, Karen S. Precella, Haynes & Boone, Fort Worth, TX, Arthur Lee Pertile, III, Waco, TX, for City of Waco, TX.

Appeals from the United States District Court for the Western District of Texas.

Before EMILIO M. GARZA and CLEMENT, Circuit Judges, and DAVIS^*, District Judge.

EMILIO M. GARZA, Circuit Judge:

Plaintiffs, former and current employees of the Waco Fire Department ("the fire fighters"), brought suit against the City of Waco ("the City"), claiming that the City's method of calculating their overtime pay violated the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq., as well as state law, see TEX. LOC. GOV'T CODE ANN. § 142.0015. The fire fighters prevailed at trial on most of the liability issues, but appeal the district court's calculation of damages. The fire fighters argue (1) that the district court erred in calculating their regular rate of pay; and (2) that the district court erred in offsetting certain overpayments made by the City against the overall damages award. The City admits that its pay practices violated the statute, but has filed a cross-appeal, challenging other issues. The City argues (1) that the FLSA is unconstitutional as applied in this case; (2) that it established a 28-day, and not a 14-day, work period, for its fire fighters; (3) that the district court erred in assessing liquidated damages against the City; (4) that its violation of the FLSA was not willful; and (5) that the district court erred in calculating attorney's fees. Because we find no error in the district court's application of the FLSA and the relevant regulations, we affirm.

I

The fire fighters worked a regularly recurring schedule of 24 hours on-duty followed by 48 hours off-duty. According to this schedule, the fire fighters would work 120 hours in one 14-day period; 120 hours in the next 14-day period; and 96 hours in the third 14-day period, until the cycle repeated itself. The City paid the fire fighters every two weeks. Although the fire fighters worked different numbers of hours in each 14-day pay period, the City paid them the same two-week salary every pay period.

In order to calculate the fire fighters' overtime pay, the City had to determine the fire fighters' regular hourly rate of pay. To calculate the fire fighters' regular rate, the City divided the fire fighters' annual salary by 2,912, which (according to the City) represented the average number of hours that the fire fighters worked during a year. The City used the resulting figure (the fire fighters' hourly rate) to determine the fire fighters' overtime compensation. The fire fighters brought suit, claiming that the City's method of calculating their overtime compensation violated the FLSA.¹

On appeal, both the City and the fire fighters challenge various aspects of the district court's decision. We examine each issue in turn.

II

The City asserts that the FLSA is unconstitutional as applied in this case. The City contends that Congress does not have the affirmative power under the Commerce Clause to regulate the way in which a locality pays its fire fighters, because those employees perform solely local functions, and their actions do not substantially affect interstate commerce. The City relies in particular on Printz v. United States, 521 U.S. 898, 117 S.Ct. 2365, 138 L.Ed.2d 914 (1997), and United States v. Lopez, 514 U.S. 549, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995), arguing that these cases illustrate the increasing limits on Congress's affirmative authority. The City's argument is interesting, but we believe that it is presently foreclosed by the Supreme Court's decision in Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985), which upheld the constitutionality of the Fair Labor Standards Act as applied to state and local government entities. Id. at 555-57, 105 S.Ct. 1005. The Supreme Court has made clear that "`[i]f a precedent of this Court has direct application in a case, yet appears to rest on reasons rejected in some other line of decisions, the Court of Appeals should follow the case which directly controls, leaving to this Court the prerogative of overruling its own decisions.'" Agostini v. Felton, 521 U.S. 203, 237, 117 S.Ct. 1997, 138 L.Ed.2d 391 (1997) (quoting Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 484, 109 S.Ct. 1917, 104 L.Ed.2d 526 (1989)); see West v. Anne Arundel County, Md., 137 F.3d 752, 760 (4th Cir.1998) (rejecting a constitutional challenge to the FLSA and citing Agostini for the proposition that "[l]ower federal courts have repeatedly been warned about the impropriety of preemptively overturning Supreme Court precedent"). Therefore, we proceed to the merits of this appeal.

III

The FLSA generally requires an employer to pay overtime compensation (at a rate of one and one-half times the regular rate of pay) to an employee after the employee has worked over 40 hours in one week. See 29 U.S.C. § 207(a)(1). The statute provides a partial exemption, however, for municipalities and other entities that employ fire fighters. See 29 U.S.C. § 207(k); 29 C.F.R. § 553.201(a). Under 29 U.S.C. § 207(k), a municipality can take advantage of that exemption by adopting a work period of between 7 and 28 days. If the municipality adopts a 7-day work period, it need not pay overtime compensation to its fire fighters until they have worked over 53 hours in a single week. See 29 C.F.R. § 553.201(a); id. § 553.230(a). If the municipality adopts a 14-day work period, it need not pay overtime compensation to its fire fighters until they have worked over 106 hours in the two-week period. See id. If the municipality adopts a 28-day work period, it need not pay overtime compensation to its fire fighters until they have worked over 212 hours in that four-week period. See id. Thus, by adopting a § 207(k) work period, a municipality can limit the number of hours for which it must pay "time-and-a-half" to its fire fighters.

The City argues that the question of whether it established a 28-day work period is a question of law that the district court improperly submitted to the jury. It is true that the ultimate determination of whether an employer qualifies for an exemption under the FLSA is a question of law. Lott v. Howard Wilson Chrysler-Plymouth, Inc., 203 F.3d 326, 331 (5th Cir.2000). That ultimate determination, however, relies on many factual determinations that can be resolved by a jury. See Smith v. City of Jackson, Miss., 954 F.2d 296, 298 (5th Cir.1992) ("[H]istorical facts regarding the employment history, and inferences based on these facts, are reviewed under the factual standard[.]").

In this case, the "ultimate" legal issue is whether the City qualifies for a § 207(k) exemption, and neither party contests that issue. The parties agree that the City qualifies for some type of exemption, and disagree solely over the extent of that exemption. The City contends that it established a 28-day work period, and did not have to pay overtime compensation until its fire fighters worked over 212 hours in that four-week period. The fire fighters, by contrast, argue that the City established a 14-day work period, and was required to pay overtime compensation after the employees worked over 106 hours in that two-week period. This issue (whether the City established a 14-day or a 28-day work period) is a question of fact, and was properly submitted to the jury. Spradling v. City of Tulsa, Okla., 95 F.3d 1492, 1504-05 (10th Cir.1996) (observing that the establishment of a particular work period under § 207(k) is "normally a question of fact"); see also Lamon v. City of Shawnee, Kan., 972 F.2d 1145, 1147 (10th Cir.1992) (noting that the issue of whether the employer established a 28-day work period was decided by the jury).

In this case, the jury determined that the City established a 14-day work period. The City claims that the jury's decision was erroneous because the jury relied on an improper instruction from the district court. The City refers to the following language in the jury instruction:

The FLSA does not require the selection of a longer work period to be made in writing, or that certain "magic words" be used. A city may show that it has established a longer work period through documents which state that it has established a longer work period. To be established by a city, the longer work period, however, must have been put into effective operation by the city. A longer work period is put into effective operation when a city actually pays its fire fighting employees in accordance with the longer work period. A work period need not coincide with a pay period or duty cycle.

We review challenges to jury instructions for abuse of discretion and will reverse a judgment due to an improper instruction "only if the charge as a whole creates a substantial doubt as to whether the jury has been...