Chao v. Tradesmen Intern., Inc.

• Decision Date: 15 November 2002
• Docket Number: No. 00-4434.,00-4434.
• Parties: Elaine L. CHAO, Secretary of Labor, United States Department of Labor, Plaintiff-Appellee, v. TRADESMEN INTERNATIONAL, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

310 F.3d 904

Elaine L. CHAO, Secretary of Labor, United States Department of Labor, Plaintiff-Appellee, v. TRADESMEN INTERNATIONAL, INC., Defendant-Appellant.

No. 00-4434.

United States Court of Appeals, Sixth Circuit.

Argued: April 30, 2002.

Decided and Filed: November 15, 2002.

Joan Brenner (argued and briefed), Paul Frieden (briefed), United States Department of Labor, Office of the Solicitor, Washington, DC, for Plaintiff-Appellee.

Vincent T. Norwillo (argued and briefed), Tradesmen International, Inc., Solon, OH, for Defendant-Appellant.

Before: SUHRHEINRICH and GILMAN, Circuit Judges; HOOD, District Judge.^*

OPINION

SUHRHEINRICH, Circuit Judge.

Tradesmen International, Inc. appeals from the order of the district court denying its motion for summary judgment and granting the Secretary of Labor's motion. The issue in this case is whether an employee's attendance at a safety training course is "involuntary" and within the meaning of 29 C.F.R. §§ 785.27-.28 (2002) and therefore compensable under the Fair Labor Standards Act, 29 U.S.C. §§ 201-219 ("FLSA"), where the employer makes the training a precondition of employment, but allows the employee to complete the course within a reasonable time after commencing employment, yet also establishes that the employee will be terminated if he or she does not complete the course in a timely manner. The district court held that the employees' attendance in this case was involuntary and that the employer was therefore required to compensate them for time spent attending the course. For the following reasons, we REVERSE.

I.

The facts are basically undisputed. Tradesmen is a skilled labor leasing company that provides a complete range of workers to construction contractors on an as-needed basis. It leases its employees, who are all skilled tradesmen ("field employees"), to various kinds of construction contractors. Tradesmen does not exercise control of, or supervision over, the work of its leased employees.

Tradesmen imposes a specific safety training prerequisite as part of its hiring criteria for field employees. That is, to receive a job offer from Tradesmen, field employee candidates must have completed an Occupational Safety and Health Administration ("OSHA") 10-hour general construction safety course. The OSHA course is an instructional program on general construction job site safety. OSHA determines the specific construction safety standards to be presented by this course and issues the written materials on the construction topics to which the selected safety standards apply. Tradesmen does not have any input on the safety standards covered by the course and does not edit the course to address any particular work environment of the company's employees.

Field employee candidates learn of Tradesmen's safety prehire requirement during their employment interview. Candidates are asked whether they have had any construction safety training, and specifically, whether the training included completion of an OSHA course. With proof of attendance of the OSHA course, field employee candidates are deemed immediately eligible for hire if otherwise qualified for available work.

Candidates who have not attended the OSHA course are informed that Tradesmen requires completion of the course as a condition of hire. However, applicants are also told that they may be nonetheless offered immediate employment if they commit to registering for the OSHA course within sixty days and completing the course within a reasonable time.

Candidates who choose this option may attend either an OSHA course sponsored by an instructional institution or the class offered by Tradesmen at its field offices. Once candidates who are otherwise qualified for work agree to satisfy the company's prehire safety training criteria, Tradesmen extends employment offers to them.

Tradesmen presents its OSHA course over four separate 2½ hour sessions. These classes are held in the evening, outside of regular working hours. Employees perform no work in the class and are not compensated for the time spent in the class. The class instruction provides only knowledge of general construction safety standards; it has no effect upon the trade skills of any field employee. If an employee does not complete the course within sixty days after being hired, he or she will not be sent out on new assignments, effectively terminating employment.

In 1998, the Cleveland field office of the Department of Labor ("DOL") began investigating Tradesmen. The DOL determined that the employees' attendance was involuntary, and therefore found that Tradesmen had violated the overtime provisions of the FLSA by failing to provide overtime compensation for attending the course when attendance time combined with regular work hours exceeds forty hours of work time during a week.

The DOL based its decision on references to the OSHA course in Tradesmen employment and marketing materials, showing that attendance by Tradesmen employees at the course is solely for the benefit of Tradesmen. For example, the Tradesmen's Field Employee Policy Manual states: "At Tradesmen, we take safety seriously. That is why all of our employees are required to successfully complete a 10-hour OSHA certified construction class." The manual further provides "[a]ll employees are required to have successfully completed a 10-hour course within the first 60 days of employment, [and] may not be sent on new assignments until they complete the 10-hour course."

Marketing materials also include references to the fact that Tradesmen's field employees have taken the OSHA safety course. For instance, a Tradesmen brochure includes the following paragraph, labeled "Safety is a Priority":

Tradesmen International is committed to safety. We have a certified OSHA instructor on staff to assist you in keeping within OSHA regulations to avoid costly site violation fines and maintain a safer working environment. We also offer a wide range of safety classes which are available to all our customers and our employees.

In addition, a phone message played whenever a caller is placed on hold by Tradesmen emphasizes safety as a goal of Tradesmen. It states in part, "Tradesmen International understands the importance of safety on a construction job site and has gone to great lengths to ensure the safety compliance for both its employees and clients. For our employees, completion of an OSHA approved ten-hour safety certification course with quarterly updates is strongly encouraged."

The DOL filed this action under 29 U.S.C. § 217, alleging that Tradesmen violated the FLSA by failing to compensate its employees for their time spent in attending the OSHA course. The DOL sought an injunction to prevent future violations of the overtime provisions of the FLSA, 29 U.S.C. § 215(a)(2), and to recover unpaid overtime compensation allegedly due to Tradesmen's employees. The parties filed cross-motions for summary judgment. The district court denied Tradesmen's motion and granted the DOL's. The court enjoined Tradesmen "from failing to pay overtime compensation to employees who attend the OSHA training course while employed by the company," and further ordered Tradesmen "to compute and pay all overtime back wages from two years prior to the date of the Complaint until the present to those Tradesmen employees who took the OSHA course while employed by [Tradesmen]."

Tradesmen appeals.

II.

We review the district court's grant of summary judgment de novo. Hartsel v. Keys, 87 F.3d 795, 799 (6th Cir.1996). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(c). The issue of whether a given set of facts constitutes work under the FLSA is a question of law. See Birdwell v. City of Gadsden, Ala., 970 F.2d 802, 807 (11th Cir.1992).

The FLSA requires employers to pay at least a specified minimum wage for each hour worked, see 29 U.S.C. § 206, and overtime compensation for employment in excess of forty hours in a workweek. 29 U.S.C. § 207(a)(1). Although the term "work" is not defined in the statute, the Act defines "employ" to mean "to suffer or permit to work." Id. § 203(g); see also 29 C.F.R. § 785.6. The Supreme Court has defined work to include any time "controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business." Tennessee Coal, Iron & R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 598, 64 S.Ct. 698, 88 L.Ed. 949 (1944) (footnote omitted). However, the Portal to Portal Act, which amends the FLSA, modified this judicial construction of hours worked to exclude from compensation activities that are "preliminary to or postliminary to said principal activity or activities." 29 U.S.C.A. § 254(a)(2) (West 1998); Aiken v. City of Memphis, 190 F.3d 753, 758 (6th Cir. 1999).¹

Time spent attending employer-sponsored lectures, meetings, and training programs is generally considered compensable. Aba, the fair labor standards act, 494 (Ellen C. Kearns, ed., 1999). However, DOL has promulgated interpretive regulations for defining when employee attendance at "lectures, meetings, and training programs" is not compensable hours worked. See 29 C.F.R. § 785.27.

Attendance at lectures, meetings, training programs and similar activities need not be counted as working time if the following four criteria are met:

(a) Attendance is outside of the employee's regular working hours;

(b) Attendance is in fact voluntary;

(c) The course, lecture, or meeting is not directly related to the employee's job; and

(d) The employee does not perform any productive work during such attendance.

Id. That is, when the activity meets all of the four criteria listed above, the time is not compensable.

The parties stipulated...