Alabama Agr. and Mechanical University v. King

• Decision Date: 13 September 1991
• Citation: 643 So.2d 1358
• Parties: 30 Wage & Hour Cas. (BNA) 895, 119 Lab.Cas. P 35,538, 95 Ed. Law Rep. 793 ALABAMA AGRICULTURAL AND MECHANICAL UNIVERSITY v. Bernadine KING, et al. 2900214.
• Court: Alabama Court of Civil Appeals

Page 1358

643 So.2d 1358

30 Wage & Hour Cas. (BNA) 895, 119 Lab.Cas. P 35,538,

95 Ed. Law Rep. 793

ALABAMA AGRICULTURAL AND MECHANICAL UNIVERSITY v. Bernadine KING, et al.

2900214.

Court of Civil Appeals of Alabama.

Sept. 13, 1991.

Rehearing Denied Oct. 4, 1991.

Roscoe O. Roberts, Jr., Huntsville, and Macbeth Wagnon, Jr. and Bradley A. Norton of Bradley, Arant, Rose & White, Birmingham, for appellant.

John A. Wilmer, J. Michael Broom and Stuart E. Smith of Bell, Richardson & Sparkman, P.A., Huntsville, for appellees.

RUSSELL, Judge.

This case involves a claim for overtime compensation and liquidated damages under the Fair Labor Standards Act, 29 U.S.C. §§ 201-19 (1988), and the Portal-to-Portal Act, 29 U.S.C. § 255(a) and § 260 (1988).

In November 1988 nine present and former employees of Alabama Agricultural and Mechanical University ("Alabama A & M" or "the university") filed an action against the university, claiming that they were entitled to overtime compensation under the Fair Labor Standards Act (FLSA) for all time worked over 40 hours per week during the period from April 15, 1986, to November 8, 1988. The employees were employed by Alabama A & M as residence hall counselors in on-campus female dormitories. The parties have stipulated that each of the employees worked a total of 60 hours during every workweek relevant to this action and that the employees never received any overtime pay from the university.

The FLSA generally requires the payment of a minimum wage and overtime compensation for hours worked in excess of 40 per workweek. 29 U.S.C. § 207. However, employees working in an executive, administrative, or professional capacity are exempt from the requirement of overtime pay. Under the FLSA, 29 U.S.C. § 213(a)(1), the United States Secretary of Labor is given authority to promulgate regulations describing the administrative exemption from overtime compensation requirements. The pertinent federal regulation for determining the applicability of the administrative exemption under the present facts is found at 29 C.F.R. § 541.2(e)(2) (1983), which provides that an employee making at least $250 per week comes under the administrative exemption if (1) her "primary duties" consist of performing work "directly related to management policies or general business operations" of her employer, and (2) these tasks "include[ ] work requiring the exercise of discretion and independent judgment."

The record reveals that the employees who are parties to this action began working as residence hall counselors at Alabama A & M as long ago as 1964 and as recently as 1987. In late 1986 two of the employees complained to university officials about being underpaid for the hours they had worked. The university then requested its in-house counsel to conduct an investigation into whether residence hall counselors were entitled to overtime pay. Upon completing her investigation, the thoroughness of which is disputed by the parties, the university's counsel concluded that the employees' duties met the criteria of 29 C.F.R. § 541.2(e)(2), making them exempt administrative employees under the FLSA. When the university continued to refuse to pay overtime compensation to its residence hall counselors, the employees brought this action.

The case was tried before a jury in the Circuit Court of Madison County in May 1990. Prior to trial, two original plaintiff/employees withdrew from the lawsuit and an additional residence hall counselor moved to intervene in the suit without opposition from Alabama A & M. Thus, a total of eight employees remained in the case through trial. At the conclusion of the employees' case-in-chief and at the close of all evidence, the university presented motions for a directed verdict on the ground that the evidence presented showed as a matter of law that the employees were administrative employees. The trial court, however, denied these motions, and the case was ultimately submitted to the jury on the following three interrogatories:

(1) "Are the plaintiffs exempt employees who qualify for exemption as administrative employees?"

(2) "Did the defendant, Alabama A & M University, commit a willful violation of the Fair Labor Standards Act in failing to pay overtime wages to the plaintiffs?"

(3) "Did the plaintiffs and the university agree that the plaintiffs' salaries would compensate them for 40 hours per week, or did they agree that the salaries would compensate them for all hours worked?"

On May 18, 1990, the jury returned a verdict for the employees and against Alabama A & M on all three questions, answering the interrogatories "No," "Yes," and "40 hours per week," respectively. The university then filed a motion for new trial on the grounds that the jury's verdicts on interrogatories (2) and (3) were against the weight of the evidence. The trial court denied the motion.

After the jury trial the employees filed a motion for the award of liquidated damages under the Portal-to-Portal Act, 29 U.S.C. § 260 (1988), as well as a motion for an award of attorneys' fees under 29 U.S.C. § 216(b). Following ore tenus proceedings held before the trial court in July 1990, the court granted the motion for the imposition of liquidated damages and awarded attorneys' fees to counsel for the employees. The total judgment for the employees, including awards of unpaid compensation and liquidated damages, was $239,871.60. The award of attorneys' fees totalled $185,998.25.

Alabama A & M appeals the denial of its motions for directed verdict and, alternatively, for a new trial. While the university raises several issues on appeal, we find the dispositive issues in this matter to be (1) whether the trial court improperly instructed the jury in a supplemental charge on the definitions of "willfulness" and "reckless disregard" so as to constitute reversible error and (2) whether the university properly objected to the supplemental instructions so as to preserve the issue for appeal.

A showing that an employer "willfully" violated the FLSA will extend the statute of limitations and period of possible recovery for a plaintiff from two to three years. Portal-to-Portal Act, 29 U.S.C. § 255(a) (1988). In the present case, the jury's finding of "willfulness" on the part of the university extended the period of the employees' recovery back to April 15, 1986, the date on which the FLSA first became applicable to state universities. Moreover, the jury's finding of "willfulness" laid the predicate for the trial court's additional award of liquidated damages, a money amount equal to the employees' unpaid overtime compensation.

In McLaughlin v. Richland Shoe Co., 486 U.S. 128, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988), the United States Supreme Court was presented with the question of the meaning of the word "willful" as it is used in 29 U.S.C. § 255(a), the statute of limitations applicable to the FLSA. Solving a conflict among the circuits concerning the word's meaning, the Court expressly adopted as the standard for willfulness in cases tried under the FLSA the same standard it had previously approved in Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 105 S.Ct. 613, 83 L.Ed.2d 523 (1985), where the Court construed language in the Age Discrimination in Employment Act of 1967: an employer's conduct is "willful" if the employer "either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute." Richland Shoe, 486 U.S. at 133, 108 S.Ct. at 1681 (emphasis added).

In the present action the trial court's initial instructions to the jury on the issue of willful violation of the FLSA were essentially a lengthy reiteration of the Supreme Court's Richland Shoe/Thurston standard and included the following language:

"Unless you are reasonably satisfied from the evidence that the defendant university in failing to pay these plaintiffs overtime knew it was violating the statute, or that the defendant university in failing to pay these plaintiffs overtime showed reckless disregard for the matter of whether its failure to pay them overtime was a violation of the statute, then you cannot find that any violation which may have occurred was willful.

"....

"... [I]f you are reasonably satisfied from the evidence that the plaintiffs were non-exempt employees, and that Alabama A & M either knew or showed reckless disregard to the matter of whether its conduct was prohibited by the Fair Labor Standards Act as to the plaintiffs, you would then find Alabama A & M guilty of willful violation of the Fair Labor Standards Act."

(Emphasis added.)

After several hours of deliberation, the jury requested additional instructions from the court on the meaning of the terms "willful" and "reckless disregard" as they appeared in the court's instructions. The trial judge then met in chambers with counsel for the parties to disclose the jury's questions and to solicit ideas for supplemental instructions. Following this unrecorded discussion as to what the content of the supplemental instructions should be, the jury reconvened, and the trial court read a supplemental charge that included the following explanation of "reckless disregard":

"With respect to the term 'reckless disregard,' the reckless disregard standard requires an employer to make a reasonable effort to determine whether the plan it is following would constitute a violation of the law."

(Emphasis added.) The trial court then went on to restate substantially the same Richland Shoe/Thurston standard for "willfulness" it had provided in its initial instructions.

Alabama A & M alleges that the trial court's supplemental instruction to the jury that the university was required "to make a reasonable effort" to determine its compliance with the law was legally incorrect and unquestionably prejudicial in that it allowed the jury to invoke too lenient of a standard in finding willful conduct. In support of its contention, the university cites the...