94 F.3d 152 (4th Cir. 1996), 95-1923, Bailey v. County of Georgetown

Docket Nº:95-1923.
Citation:94 F.3d 152
Party Name:(BNA) 776 Christopher C. BAILEY; Armand Berube; Terryl J. Cobb; Jerry L. Farr; Martha J. Hunt; James R. Jackson; Kenneth M. Johnson; Drury L. Keesler, Jr.; Larry M. Lewis; Joseph D. Livingston; J. Barry Marsh; David W. McConnell; Samuel Moudtrie, Jr.; Edward Wayne Pope; Walter Allen Poston; Isaac L. Pyatt; Thomas L. Rea; Terri Sisinni; George W. Sm
Case Date:August 29, 1996
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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Page 152

94 F.3d 152 (4th Cir. 1996)

(BNA) 776

Christopher C. BAILEY; Armand Berube; Terryl J. Cobb;

Jerry L. Farr; Martha J. Hunt; James R. Jackson; Kenneth

M. Johnson; Drury L. Keesler, Jr.; Larry M. Lewis; Joseph

D. Livingston; J. Barry Marsh; David W. McConnell; Samuel

Moudtrie, Jr.; Edward Wayne Pope; Walter Allen Poston;

Isaac L. Pyatt; Thomas L. Rea; Terri Sisinni; George W.

Smith; Wilbert H. Thacker, Jr.; William M. Tisdale, Jr.;

Gary W. Todd; Alan Wayne Walters; David A. Wheeler;

Willie B. Grate; David L. Barr; Darryel C. Carr; Leroy

Gasque; William Mark Mullins; Lawrence B. Smalls; David

Altman, Jr.; Tyrun Y. Greene; Anthony Craig Mitchum;

Joseph E. Howell; Fred Lytle; Ernest A. Hampton; Wallace

E. Dingle; Wallace C. Medlin; Anthony L. Feagin; Ursular

L. Armstrong; Denise G. King; Matthew Grayson; William A.

Pierce; Michael Cox; Kenneth Wayne Davis; Detective

Benito Reves; Marybeth Morris as the Personal

Representative for the Estate of William Robert Morris, Jr.,

Plaintiffs-Appellants,

v.

COUNTY OF GEORGETOWN, Defendant-Appellee.

No. 95-1923.

United States Court of Appeals, Fourth Circuit

August 29, 1996

Argued May 6, 1996.

Page 153

ARGUED: Michael Kurt Kendree, Law Offices of William Stuart Duncan, Georgetown, South Carolina, for Appellants. Stephen Terry Savitz, Gignilliat, Savitz & Bettis, Columbia, South Carolina, for Appellee. ON BRIEF: William S. Duncan, Law Offices of William Stuart Duncan, Georgetown, South Carolina, for Appellants. Linda Pearce Edwards, Gignilliat, Savitz & Bettis, Columbia, South Carolina, for Appellee.

Before MURNAGHAN, WILLIAMS, and MOTZ, Circuit Judges.

Affirmed by published opinion. Judge MURNAGHAN wrote the opinion, in which Judge WILLIAMS and Judge MOTZ joined.

OPINION

MURNAGHAN, Circuit Judge:

I.

On July 6, 1994, Appellants--forty-seven current and former deputy sheriffs 1 for Georgetown County, South Carolina--filed an amended complaint against Georgetown County in the United States District Court for the District of South Carolina. In their complaint, Appellants alleged that the County had violated sections 6 and 7 of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 206, 207, by failing to pay them for overtime work at rates required by that statute. Appellants requested an award of all unpaid overtime wages covering the preceding three years, as well as liquidated damages, attorneys' fees, and an injunction prohibiting the County from violating the FLSA in the future. Appellants demanded and received a jury trial. The district court bifurcated the case in the manner described below.

Much of the evidence presented during the first stage of the trial concerned the "fluctuating pay plan" that the County adopted for the deputies in 1990 after the United States Department of Labor determined that overtime wages to which the deputies were entitled under the FLSA were unlawfully being withheld. Linda J. McCants, the County's payroll supervisor, explained the pay plan as follows. Each deputy sheriff is paid a specified annual salary; no additional compensation is paid unless the deputy works more than 171 hours during a given twenty-eight-day cycle. For each hour in excess of 171 hours worked by a deputy during such a cycle, the deputy receives overtime pay. The overtime rate to be paid to the deputy is determined by dividing his or her base salary for that twenty-eight-day period by the total number of hours worked, yielding an adjusted hourly rate of pay. An overtime premium of one-half of that adjusted hourly amount is

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then paid for each hour worked in excess of 171 hours. 2

The principal dispute during the first stage of the trial concerned whether the deputy sheriffs had clearly understood the manner in which their overtime pay was being calculated under the plan. The issue is potentially made significant by section 7 of the FLSA and by 29 C.F.R. § 778.114. Section 7 requires that overtime wages be paid "at a rate not less than one and one-half times the regular rate at which [an employee] is employed." 29 U.S.C. § 207(a) (Supp.1996). Section 778.114 describes one of the means by which a salaried employee's "regular rate" of pay may be determined. 3 That regulation states:

An employee employed on a salary basis may have hours of work which fluctuate from week to week and the salary may be paid to him pursuant to an understanding with his employer that he will receive such fixed amount as straight time pay for whatever hours he is called upon to work in a workweek, whether few or many. Where there is a clear mutual understanding of the parties that the fixed salary is compensation (apart from overtime premiums) for the hours worked each workweek, whatever their number, rather than for working 40 hours or some other fixed weekly work period, such a salary arrangement is permitted by the [Fair Labor Standards] Act if the amount of the salary is sufficient to provide compensation to the employee at a rate not less than the applicable minimum wage rate for every hour worked in those workweeks in which the number of hours he works is greatest, and if he receives extra compensation, in addition to such salary, for all overtime hours worked at a rate not less than one-half his regular rate of pay. Since the salary in such a situation is intended to compensate the employee at straight time rates for whatever hours are worked in the workweek, the regular rate of the employee will vary from week to week and is determined by dividing the number of hours worked in the workweek into the amount of the salary to obtain the applicable hourly rate for the week. Payment for overtime hours at one-half such rate in addition to the salary satisfies the overtime pay requirement [of section 7 of the FLSA] because such hours have already been compensated at the straight time regular rate, under the salary arrangement.

§ 778.114(a) (emphasis added). 4 The County argued that its pay plan was of the fluctuating variety described in section 778.114. Appellants contended that they did not clearly understand the manner in which their overtime pay was calculated, that the requirements of section 778.114 had therefore not been met, and that the plan therefore violated the FLSA's requirement that overtime be paid at the rate of one and one-half their regular rate of pay. 5

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After both sides had rested, Appellants asked the district court to instruct the jury that the County was required to prove that each of them had clearly understood the manner in which his or her overtime pay was being calculated. The court refused to do so, finding that such an understanding is not required under the FLSA and section 778.114. Instead, the court told the jurors that it was their task to determine whether the County had shown, by a preponderance of the evidence, that each deputy had clearly understood (1) "that he was paid an annual salary in a certain amount, and that that annual salary was paid to him in twenty-six biweekly installments of a certain amount;" (2) "that the work year is divided into thirteen work periods of twenty-eight consecutive days each, and that no matter how many or how few hours a deputy worked during any such twenty-eight-day work period, he or she would be paid only [his or her] annual salary as straight time during that work period;" and (3) "that the deputy will be paid an overtime premium for all hours in excess of 171 worked by that particular deputy during any twenty-eight-day work period."

On March 24, 1995, the jury found that each deputy had clearly understood each of the three propositions enumerated by the district court.

In the second stage of the trial, the parties took up the question of whether the County had known that approximately twenty of the forty-seven deputies had been working hours that were not being recorded on their time sheets. If the County had had such knowledge, the deputies argued, it was required under the FLSA to compensate them for those unreported hours. After the parties presented testimony on the matter, the court entered a directed verdict in favor of the County. The court found that there was "absolutely nothing in this record, not one iota of evidence that would support knowledge on the part of the County of a consistent plan of working off-the-clock hours by the deputy sheriffs of Georgetown County during the period in question."

The...

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