Franklin v. Kellogg Co.

• Decision Date: 31 August 2010
• Docket Number: No. 09-5880.,09-5880.
• Parties: Alice FRANKLIN, Petitioner-Appellant, v. KELLOGG COMPANY, Respondent-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

619 F.3d 604

Alice FRANKLIN, Petitioner-Appellant,

v.KELLOGG COMPANY, Respondent-Appellee.

No. 09-5880.

United States Court of Appeals,Sixth Circuit.

Argued: June 18, 2010.

Decided and Filed: Aug. 31, 2010.

Rehearing and Reharing En Banc Denied Oct. 25, 2010. ^*

COPYRIGHT MATERIAL OMITTED.

COPYRIGHT MATERIAL OMITTED.

ARGUED: Rachhana T. Srey, Nichols Kaster, PLLP, Minneapolis, Minnesota, for Appellant. Maurice Wexler, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Memphis, Tennessee, for Appellee. ON BRIEF: Rachhana T. Srey, Paul J. Lukas, Nichols Kaster, PLLP, Minneapolis, Minnesota, William B. Ryan, Donati Law Firm, LLP, Memphis, Tennessee, for Appellant. Maurice Wexler, Angie C. Davis, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Memphis, Tennessee, James N. Boudreau, Greenberg Traurig, LLP, Philadelphia, Pennsylvania, for Appellee.

Before: SILER and CLAY, Circuit Judges; GRAHAM, District Judge. ^**

SILER, J., delivered the opinion of the court, in which GRAHAM, D.J., joined. CLAY, J. (pp. 620-23), delivered a separate dissenting opinion.

OPINION

SILER, Circuit Judge.

Alice Franklin, an employee at Kellogg Company's (“Kellogg”) Rossville, Tennessee Plant (“Plant” or “Rossville Plant”), filed suit on behalf of herself and all similarly situated employees to recover wages under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq., for time spent donning and doffing Kellogg's mandatory food safety uniforms and protective equipment, and for time spent walking to and from the changing area and the time clock. The district court granted summary judgment in favor of Kellogg, concluding that donning and doffing the equipment at issue here is excluded from hours worked under 29 U.S.C. § 203( o ) and that, in the alternative, Kellogg established good faith reliance on a Department of Labor (“DOL”) opinion letter under § 259(a). Franklin appeals. For the following reasons, we AFFIRM IN PART, REVERSE IN PART, and REMAND for further consideration.

I. FACTUAL AND PROCEDURAL BACKGROUND

Kellogg owns and operates the Rossville Plant, which produces frozen breakfast foods. Franklin is an hourly production employee at the Plant. She is joined in this action by approximately 243 current and former Kellogg employees who work or have worked in the Rossville Plant and other Kellogg plants across the country. The Local 400-G American Federation of Grain Millers International AFL-CIO (the “Union”) represents the hourly production and maintenance workers at the Plant. ¹ The Union is the sole and exclusive bargaining agent for all hourly production workers at the Plant. Since 1989, the Plant and its employees have operated under the terms of the Collective Bargaining Agreements (“CBAs”), which have been updated approximately every three years.

Since the Plant opened, Kellogg has required all hourly employees to wear company-provided uniforms, which consist of pants, snap-front shirts bearing the Kellogg logo and employee's name, and slip-resistant shoes (collectively referred to as the “uniform”). In addition, hourly production and maintenance employees must wear hair nets and, where necessary, beard nets, safety glasses, ear plugs, and bump caps (collectively referred to as the “standard equipment”). Kellogg requires the employees to change into their uniform and standard equipment upon arriving at the Plant, and to change back into their regular clothes before leaving the Plant, so that the uniform and equipment can be washed at the Plant. Kellogg has never paid its hourly employees for the time spent donning and doffing the uniform and equipment or the time spent walking to and from the locker room and the time clock. This nonpayment policy was in effect at the Rossville facility before it was owned by Kellogg, before it was organized by the Union, and at the time of the negotiations of each CBA.

Despite Kellogg's established history of nonpayment for the time spent donning and doffing the uniform, there is no written agreement or provision in the governing CBA addressing that policy. Additionally, all of the CBAs between the Union and Kellogg have explicitly contained the following “Local Working Conditions” provision:

The term “local working conditions” as used herein means specific practices or customs which reflect detailed application of the subject matter within the scope of wages, hours of work or other conditions of employment which the Parties reduced to writing by mutual agreement. No local working condition shall be established except as it is expressed

in writing in an agreement approved by the Plant Manager and the local Union President. Only those officials shall be empowered to change, modify or eliminate local working conditions.

Despite the Union's knowledge of the nonpayment policy, there is some evidence that it was unaware that its members may have been entitled to payment for that time. For instance, Ocie Johnson, a Union official involved in negotiations for three of the CBAs, declared that “[a]t no time during any of the negotiations for these various [CBAs] was the subject of payment for putting on and taking off mandatory food safety uniforms and protective equipment discussed or mentioned by the [U]nion or Kellogg.” He further stated that the reason the issue was not mentioned was “because the [U]nion was unaware that [its] members may have been entitled to receive compensation for this time.” Four other Union officials submitted similar declarations.

On the other hand, there is also evidence that the Union was aware of its members' right to payment for that time. For example, Teresa West, a Union executive board member between 1998 and 2000 and a local Union financial secretary between 2000 and 2003, submitted a declaration that “on at least one occasion” while she was an officer, “the Union considered including in its preliminary list of contract proposals, payment for the time bargaining unit employees spent putting on and taking off their company-furnished uniforms at the beginning and end of each shift.” However, she also stated that because she “was not an official member of the Union bargaining team, [she was] not sure the extent to which the proposal made it to the bargaining table.” In addition, in 2008, Franklin spoke with her Union steward Alicia Williams about compensation for this time. Williams told her that employees have been uncompensated for those activities “for a long time.” Franklin also stated that she talked to Union stewards about filing a grievance regarding payment for donning and doffing the uniform, but they convinced her it would be a “lost cause.”

In 2004, employees at Kellogg's Lancaster, Pennsylvania plant sued Kellogg to recover time spending donning and doffing company-issued uniforms and equipment. See Albright v. Kellogg Co., No. 04-cv-632 (E.D.Pa.). Around the time of the initiation of the Albright action, William Muth, Jr., then in-house labor counsel for Kellogg, began researching Kellogg's noncompensation policy. He analyzed the compensation policies for time spent donning and doffing at the Omaha and Lancaster plants. Based on case law and an Opinion Letter issued by the DOL in 2002 (“2002 Opinion Letter”), Muth concluded that the company's policies were consistent with § 203( o ) of the FLSA. Although Muth did not research the practices at the other plants, he assumed that, like the Omaha and Lancaster plants, they had historically not paid for time spent donning and doffing.

After the Albright action was dismissed, Kellogg held a meeting to discuss whether it should change its compensation practices related to time spent donning and doffing. During that meeting, Muth reviewed Kellogg's policies and again advised the company that its procedures conformed with the 2002 Opinion Letter. Muth, along with other Kellogg officials at the meeting, concluded that the company-provided uniform and standard equipment were “clothes” under § 203( o ). They further concluded that putting on and taking off the uniform and equipment constituted “changing clothes” pursuant to the definition provided by the 2002 Opinion Letter. They also concluded that none of Kellogg's unionized plants had ever compensated employees for this time. Thus, they believed the policy constituted a custom or practice and chose not to alter it.

After Franklin filed this suit in 2008, Kellogg moved for summary judgment arguing that the time spent donning and doffing the company-provided uniform and equipment was excluded under § 203( o ) and, alternatively, that it was entitled to the affirmative defense in § 259(a) for its good faith reliance on the DOL letters. The district court agreed and granted summary judgment in favor of Kellogg.

II. STANDARD OF REVIEW

We review de novo the district court's grant of summary judgment. Allen v. Highlands Hosp. Corp., 545 F.3d 387, 393 (6th Cir.2008). Summary judgment is proper “if the pleadings, the discovery and disclosures materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c).

III. DISCUSSION

A. Exclusion of Time Under § 203( o )

Under the FLSA, employers must pay their employees an overtime wage at “a rate not less than one and one-half times the regular rate at which [they are] employed” for hours worked in excess of forty hours per week. 29 U.S.C. § 207(a)(1); see also Allen v. McWane, Inc., 593 F.3d 449, 453 (5th Cir.2010); Turner v. City of Philadelphia, 262 F.3d 222, 224 (3d Cir.2001). However, § 203( o ) excludes changing clothes from the measured working time under § 207 if it has been excluded by custom or practice under a bona fide CBA:

Hours Worked.-In determining for the purposes of sections 206 and 207 of this title the hours for which an employee is employed, there shall be excluded any time spent in changing clothes or washing at the beginning or end of each workday which was

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