Smiley v. E.I. Dupont De Nemours & Co.

Decision Date07 October 2016
Docket NumberNo. 14-4583,14-4583
Citation839 F.3d 325
Parties Bobbi–Jo Smiley; Amber Blow; Kelsey Turner, Appellants v. E.I. Dupont De Nemours and Company; Adecco USA, Inc.
CourtU.S. Court of Appeals — Third Circuit

Thomas M. Marrone, Esq. [ARGUED], MoreMarrone, 1601 Market Street, #2500, Philadelphia, PA 19103, Patricia V. Pierce, Esq., Greenblatt Pierce Engle Funt & Flores, 123 South Broad Street, Suite 2500, Philadelphia, PA 19109, Counsel for Appellants, Bobbi-Jo Smiley, Amber Blow, and Kelsey Turner

David S. Fryman [ARGUED], Ballard Spahr, 1735 Market Street, 51st Floor, Philadelphia, PA 19103, Amy L. Bashore, Ballard Spahr, 210 Lake Drive East, Suite 200, Cherry Hill, NJ 08002, Counsel for Appellee, E. I. du Pont de Nemours and Company

A. Patricia Diulus-Myers, Jackson Lewis, 1001 Liberty Avenue, Suite 1000, Pittsburgh, PA 15222, Eric R. Magnus, Jackson Lewis, 115 Peachtree Street, N.E., Suite 1000, Atlanta, GA 30309, Counsel for Appellee, Adecco USA, Inc.

Rachel Goldberg, Esq. [ARGUED], United States Department of Labor, Division of Fair Labor Standards, Room N2716, 200 Constitution Avenue, N.W., Washington, DC 20210, Counsel for Amicus Curiae, Secretary, United States Department of Labor

Before: VANASKIE, KRAUSE, and RENDELL, Circuit Judges

OPINION

RENDELL

, Circuit Judge.

Plaintiffs Bobbi-Jo Smiley, Amber Blow, and Kelsey Turner appeal the District Court's grant of summary judgment in favor of Appellees E.I. DuPont De Nemours & Company and Adecco USA, Inc. (collectively, “DuPont”) on their claims under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq.

and Pennsylvania's Wage Payment and Collection Law (“WPCL”), 43 P.S. § 260.1, et seq. Plaintiffs filed a putative collective action and class action against DuPont, seeking overtime compensation for time they spent donning and doffing their uniforms and protective gear and performing “shift relief” before and after their regularly-scheduled shifts. DuPont contended that it could offset compensation it gave Plaintiffs for meal breaks during their shift—for which DuPont was not required to provide compensation under the FLSA—against such required overtime.

The District Court agreed with DuPont. We conclude that the FLSA and applicable regulations, as well as our precedent in Wheeler v. Hampton Twp. , 399 F.3d 238 (3d Cir. 2005)

, compel the opposite result and will therefore reverse the District Court's grant of summary judgment and remand for further proceedings.

I.

Appellants worked twelve-hour shifts at DuPont's manufacturing plant in Towanda, Pennsylvania.1 In addition to working their twelve-hour shifts, Plaintiffs had to be on-site before and after their shifts to “don and doff” uniforms and protective gear. DuPont also required them to participate in “shift relief,” which involved employees from the outgoing shift sharing information about the status of work with incoming shift employees. The time spent donning, doffing, and providing shift relief varied, but ranged from approximately thirty to sixty minutes a day.

DuPont chose to compensate Plaintiffs for meal breaks2 —despite no FLSA requirement to do so—during their twelve-hour shifts. The employee handbook set forth DuPont's company policy for compensating meal breaks, stating that [e]mployees working in areas requiring 24 hour per day staffing and [who] are required to make shift relief will be paid for their lunch time as part of their scheduled work shift.” Employees who worked twelve-hour, four-shift schedules, as did Plaintiffs in this case, were entitled to one thirty minute paid lunch break per shift, in addition to two non-consecutive thirty minute breaks. The paid break time always exceeded the amount of time Plaintiffs spent donning and doffing and providing shift relief.

DuPont treated the compensation for meal breaks similarly to other types of compensation given to employees. It included the compensation given for paid meal breaks when it calculated employees' regular rate of pay, and meal break time was included in employees' paystubs as part of their total hours worked each week.

Plaintiffs brought this putative collective action and class action against DuPont, claiming that DuPont violated the FLSA and WPCL by requiring Plaintiffs to work before and after their twelve-hour shifts without paying them overtime, i.e., time and one-half, compensation. Plaintiffs sought to recover overtime compensation for time spent donning and doffing their uniforms and protective gear and performing shift relief. DuPont argued that their claims fail because it could offset the paid breaks DuPont voluntarily provided Plaintiffs against the unpaid donning and doffing and shift-relief time. Plaintiffs filed a motion to conditionally certify a FLSA collective action, which the District Court granted. Plaintiffs' counsel sent a notice of the FLSA class to the prospective class members, and more than 160 workers opted in. Following the close of discovery, DuPont filed its motion for summary judgment.

The District Court granted DuPont's motion for summary judgment, holding that the FLSA allowed DuPont to use paid non-work time to offset the required overtime and dismissing the lawsuit entirely.3 The District Court held that Plaintiffs were not owed any additional compensation because the amount of paid non-work time exceeded unpaid work time. Although it recognized that [t]he FLSA does not expressly grant employers permission to use paid non-work time to offset unpaid work time,” App. 12, the District Court nonetheless concluded offset was not specifically prohibited and therefore granted summary judgment in favor of DuPont.

Prior to oral argument, we invited the Department of Labor (“DOL”) to file an amicus brief to assist us in understanding the intricacies of the important FLSA issue presented by this case. At our request, the DOL and DuPont each filed letter briefs further addressing how we should analyze the issue of offsetting paid non-work time against unpaid time worked under the FLSA. We are to give deference to the DOL's position and guidelines under Skidmore v. Swift , 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944)

II.

The District Court had jurisdiction pursuant to 28 U.S.C. §§ 1331

and 1367(a). We have jurisdiction under 28 U.S.C. § 1291. We exercise plenary review over the District Court's interpretation of the FLSA and its grant of summary judgment. Rosano v. Twp. of Teaneck , 754 F.3d 177, 184 (3d Cir. 2014). Additionally, we note that “the FLSA must be construed liberally in favor of employees” and “exemptions should be construed narrowly, that is, against the employer.” Lawrence v. City of Philadelphia , 527 F.3d 299, 310 (3d Cir. 2008).

III.

To provide context for the ultimate issue before us, we begin by reviewing the contours of the FLSA and the circumstances in which an employer may offset compensation already given to an employee against required overtime.4

A. Overtime and Calculating Regular Rate Under the FLSA

We have noted that the FLSA has a “broad remedial purpose.” De Asencio v. Tyson Foods, Inc. , 500 F.3d 361, 373 (3d Cir. 2007)

. “The central aim of the Act was to achieve ... certain minimum labor standards.” Mitchell v. Robert DeMario Jewelry, Inc. , 361 U.S. 288, 292, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960). The Act established baseline standards through “federal minimum-wage, maximum-hour, and overtime guarantees that cannot be modified by contract.” Genesis Healthcare Corp. v. Symczyk , ––– U.S. ––––, 133 S.Ct. 1523, 1527, 185 L.Ed.2d 636 (2013)

.

Among the bedrock principles of the FLSA is the requirement that employers pay employees for all hours worked. 29 C.F.R. § 778.223

(“Under the Act an employee must be compensated for all hours worked.”); see also

Ballaris v. Wacker Siltronic Corp. , 370 F.3d 901, 913 (9th Cir. 2004) (“One of the principal purposes of the FLSA is to ensure that employees are provided appropriate compensation for all hours worked.”) (emphasis in original). Pursuant to the FLSA, employers cannot employ any employee “for a workweek longer than forty hours unless such employee receives compensation for his employment ... at a rate not less than one and one-half times the regular rate at which he is employed.” 29 U.S.C. § 207(a)(1). In other words, employers are required to compensate employees for time in excess of forty hours with overtime compensation, which is paid at a rate of one and one-half times the employee's regular rate of pay.

The regular rate at which an employee is paid for “straight time”—or the first forty hours of work in a week—is integral to the issue of overtime payment under the FLSA. The regular rate is determined by way of a calculation. It is a “rate per hour” that “is determined by dividing [the] total remuneration for employment (except statutory exclusions) in any workweek by the total number of hours actually worked by him in that workweek for which such compensation was paid.” 29 C.F.R. § 778.109

. Thus, the regular rate is a readily definable mathematical calculation that is explicitly controlled by the FLSA. Walling v. Youngerman

Reynolds Hardwood Co. , 325 U.S. 419, 424–25, 65 S.Ct. 1242, 89 L.Ed. 1705 (1945) (“Once the parties have decided upon the amount of wages and the mode of payment the determination of the regular rate becomes a matter of...

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