Kellar v. Summit Seating Inc.

• Decision Date: 14 December 2011
• Docket Number: No. 11–1221.,11–1221.
• Citation: 161 Lab.Cas. P 35973,18 Wage & Hour Cas.2d (BNA) 888,664 F.3d 169
• Parties: Susan KELLAR, Plaintiff–Appellant, v. SUMMIT SEATING INCORPORATED, Defendant–Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

161 Lab.Cas. P 35,973

18 Wage & Hour Cas.2d (BNA) 888

664 F.3d 169

Susan KELLAR, Plaintiff–Appellant,

v.SUMMIT SEATING INCORPORATED, Defendant–Appellee.

No. 11–1221.

United States Court of Appeals, Seventh Circuit.

Argued June 3, 2011.Decided Dec. 14, 2011.

Philip J. Gibbons, Jr. (argued), Attorney, Gibbons Jones, Indianapolis, IN, for Plaintiff–Appellant.

Christopher R. Putt (argued), Attorney, May, Oberfell & Lorber, Mishawaka, IN, for Defendant–Appellee.

Before EVANS ^* and WILLIAMS, Circuit Judges, and CONLEY, District Judge.^**WILLIAMS, Circuit Judge.

Susan Kellar contends that she is entitled to overtime under the Fair Labor Standards Act for work performed prior to the official start of her work shift. The district court granted summary judgment in favor of her employer, Summit Seating, because it found that Kellar's pre-shift activities were “preliminary,” that any work Kellar performed before her shift was “ de minimis,” and that Summit did not know that Kellar was engaging in pre-shift work. While we disagree with the district court's conclusions regarding the “preliminary” and “ de minimis ” nature of Kellar's pre-shift work, we affirm because we conclude that Summit did not know or have reason to know that Kellar was working before her shift.

I. BACKGROUND

Summit Seating (“Summit”) is a small company that manufactures seating for buses, trucks, and vans. In 2001, Susan Kellar began working for Summit as a cutter's helper, and in 2004 she was promoted to sewing manager. In that capacity, she was responsible for supplying sewers with their sewing products, tracking supplies, ensuring that work was completed on schedule, and training junior employees. Kellar managed between seven and eight employees, and was paid on an hourly basis.

In her deposition, Kellar claimed that she regularly arrived at Summit's factory between 15 and 45 minutes before the start of her 5:00 a.m. shift. When she arrived before or at the same time as her sister and co-worker, Mamie Spice, Kellar spent about 5 minutes unlocking doors, turning on lights, turning on the compressor, and punching in on the time clock. Then she prepared coffee for the rest of Summit's employees, which took her about 5 minutes. Depending on her workload, she spent 5 to 10 minutes (or longer) reviewing schedules and gathering and distributing fabric and materials to her subordinates' workstations, “so that they could go straight to work, rather than waiting for [her] to bring [fabric] to them.” For another 5 minutes, she drank coffee and smoked a cigarette. The remaining time was spent performing “prototype work” (preparing models for production), cleaning the work area, or checking patterns. According to Kellar, no one told her that she needed to come in before her shift, but she arrived early because it would have been “a hassle” to show up at 5:00 a.m. and still get her subordinates up and running close to the start of their 5:00 a.m. work shifts. Kellar's time cards reflect that she often punched in early, although on those days when she forgot to clock in, Kellar would write the official start time of her shift on her time card.

Spice, who is still employed at Summit, tells a different story. In an affidavit, Spice claimed that Kellar never performed any work before the start of her shift. Rather, after clocking in, she and Kellar would chat and drink coffee until their shifts began.

Kellar acknowledged in her deposition that many Summit employees would clock in early and socialize until the start of their shifts. And on one occasion, at her supervisor's behest, Kellar reprimanded a subordinate for punching in too early. Nevertheless, Kellar insists that, excluding a five-minute smoking and coffee break, she spent her pre-shift time at Summit working, not socializing.

If Kellar arrived early in order to work, her supervisors, Ray and Sue Fink, who were the owners and the president and vice-president of Summit, respectively, never personally observed it. They typically arrived at the factory after Kellar, between 7:00 and 8:00 a.m. Kellar testified that she had a good relationship with the Finks and felt “comfortable going to them with problems.” Kellar was also aware that Summit had a policy (outlined in its employee handbook) requiring employees to request pre-approval to work overtime. Even so, Kellar never told the Finks that she was working before the start of her shift. She also never reported errors with her paychecks, requested overtime pay, or mentioned during the weekly production meetings she attended with the Finks that her schedule needed to be adjusted to account for her pre-shift work.

In February 2009, Kellar voluntarily resigned and later sued Summit, claiming that she was not paid overtime wages in violation of the Fair Labor Standards Act (“FLSA”). The district court granted summary judgment in favor of Summit, finding that Kellar was not entitled to overtime wages. This appeal followed.

II. ANALYSIS

The FLSA requires employers to pay overtime to certain employees who work more than 40 hours in a work week. 29 U.S.C. § 207(a). The employee bears the burden of proving that she performed overtime work for which she was not properly compensated. Anderson v. Mt. Clemens, 328 U.S. 680, 686–87, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946), superseded on other grounds by statute, Portal–to–Portal Act of 1947, 29 U.S.C. §§ 251–262. The employer bears the burden to establish that an exemption from the FLSA applies. Corning Glass Works v. Brennan, 417 U.S. 188, 196–97, 94 S.Ct. 2223, 41 L.Ed.2d 1 (1974); Kennedy v. Commonwealth Edison Co., 410 F.3d 365, 370 (7th Cir.2005). We review the district court's entry of summary judgment de novo, construing all facts and inferences in the light most favorable to the non-moving party. Cardoso v. Robert Bosch Corp., 427 F.3d 429, 432 (7th Cir.2005).

A. Kellar's Pre–Shift Activity Was Non–Preliminary Work

The district court found that Kellar's pre-shift activities were non-compensable “preliminary” activities under the Portal–to–Portal Act of 1947. The Portal–to–Portal Act, in relevant part, amended the FLSA to eliminate employer liability “on account of ... activities which are preliminary to or postliminary to [principal activities,] which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal [activities].” 29 U.S.C. § 254(a). As a threshold matter, Kellar contends that it was improper for the district court to have considered whether her activities were “preliminary” because Summit did not make that argument in its motion for summary judgment.

A district court may enter summary judgment sua sponte on an issue not explicitly argued if the losing party is on notice that she has to come forward with all of her evidence. See Acequia, Inc. v. Prudential Ins. Co. of Am., 226 F.3d 798, 807 (7th Cir.2000). We agree with Kellar that she was not “on notice” that the district court would consider whether her activities were “preliminary.” In its motion for summary judgment, Summit only argued that it did not know that Kellar was working overtime and that Kellar's pre-shift work was de minimis. Summit cited the Portal–to–Portal Act, but it did not contend that Kellar's activities were “preliminary.” And the court did not apprise Kellar, before it issued its order, that it was considering whether Kellar's activities were preliminary.

Kellar, however, does not argue that she would have come forward with additional evidence had the court given her notice. Instead, she seems to be arguing that she was not given the opportunity to present argument to the court. While we agree with Kellar that the court should have given her notice and an opportunity to brief the issue, “reversal is not required in every instance of procedural shortfall. Instead, a litigant ... must show that notice and an opportunity to respond would have mattered.” See Alioto v. Marshall Field's & Co., 77 F.3d 934, 936 (7th Cir.1996). Because at this juncture the parties have presented all of their evidence, and Kellar has now had the opportunity to argue her case to us, we shall consider whether the court erred in finding that the Portal–to–Portal Act bars recovery in this case.

The Portal–to–Portal Act provides that activities that are “preliminary” to principal activities are not compensable. The Act does not purport to define “preliminary” activities further. But the Supreme Court has held that activities that are “an integral and indispensable part of [an employee's] principal activities,” are not “preliminary,” but are also “principal activities,” and are compensable even if they occur before the beginning of an employee's shift. See Steiner v. Mitchell, 350 U.S. 247, 253, 256, 76 S.Ct. 330, 100 L.Ed. 267 (1956).

Kellar testified that she began her day (after unlocking doors and making coffee for employees) reviewing work schedules and gathering and distributing fabric and materials to her subordinates' workstations. Such activities are surely “integral and indispensable” to the work that Kellar performed in her capacity as a sewing manager, such as supplying sewers with their sewing products, tracking supplies, and making sure that work was completed on schedule. See IBP, Inc. v. Alvarez, 546 U.S. 21, 33, 126 S.Ct. 514, 163 L.Ed.2d 288 (2005) (activities which are “integral and indispensable” to “principal activities” are themselves “principal activities”). Work activities that Kellar performed afterward would be covered by the “continuous workday rule,” which provides that the Portal–to–Portal Act does not apply “to the extent that activities engaged in by an employee occur after the employee commences to perform the first principal activity on a particular workday.” 29 C.F.R. § 790.6(a); IBP, 546 U.S. at 29, 126 S.Ct. 514.

The district court reached a different conclusion because it credited Mamie...