Giles v. City of New York

• Decision Date: 10 March 1999
• Docket Number: No. 96 CIV. 2655(CBM).,96 CIV. 2655(CBM).
• Citation: 41 F.Supp.2d 308
• Parties: Sharlene GILES, Ruby Belgrove, and Mary O'Garro Greene, on behalf of themselves and all other employees similarly situated, Plaintiffs, v. CITY OF NEW YORK, Defendant.
• Court: U.S. District Court — Southern District of New York

41 F.Supp.2d 308

Sharlene GILES, Ruby Belgrove, and Mary O'Garro Greene, on behalf of themselves and all other employees similarly situated, Plaintiffs, v. CITY OF NEW YORK, Defendant.

No. 96 CIV. 2655(CBM).

United States District Court, S.D. New York.

March 10, 1999.

Joan Stern Kiok, New York City, NY, for Plaintiffs.

New York City Department of Law, by Barbara B. Butler, New York City, NY, for Defendants.

OPINION

MOTLEY, District Judge.

The plaintiffs, a class of employees of the defendant, the City of New York ("City"), brought this action to recover unpaid overtime compensation under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq. Both parties moved for summary judgment and Magistrate Judge Ronald L. Ellis recommended that the plaintiffs' motion be granted in part and denied in part and that the defendant's motion be granted. For the following reasons, the court finds that the critical contractual language is ambiguous and therefore denies both parties' motions for summary judgment.

I. Background

The plaintiffs are approximately 225 City employees working in the Administration for Children's Services ("ACS"), the Human Resources Administration ("HRA"), and the Department of Juvenile Justice ("DJJ"). With the titles of "Houseparent" and "Senior Houseparent," the plaintiffs work and reside in City facilities that house juveniles who are in City custody for various reasons.¹ Houseparents are represented by Local 371 of District Council 37, American Federation of State, County, and Municipal Employees ("Local 371" and "DC 37"). DC 37 and the City entered into three collective bargaining agreements ("CBAs") covering Houseparents' terms of employment, see Compl. ¶¶ 18-21, 27-28:(1) the Citywide Agreement, which covers the majority of the City's civilian employees ("Citywide CBA"), see Pls.' Ex. G²; (2) the 1992-1995 Social Services and Related Titles Agreement ("Social Services CBA"), which covers the bargaining unit that includes Houseparents, see Pls.' Ex. F; and (3) the 1992-1995 DC 37 Equity Panel Report of the Joint Panel ("Equity CBA"), see Pls.' Ex. E, which allocates funds to DC 37 to distribute among members for equity purposes.

Houseparents traditionally work a demanding schedule of well over 40 hours per week. Before 1986, some Houseparents regularly worked 120 hours per week; since then, the standard workweek has been 60 hours with additional hours commonly assigned. In 1986, municipal employees became covered by the FLSA, which requires an overtime pay rate of 1.5 times the worker's regular pay rate for hours in excess of 40 per week. Until July 1, 1994, the Citywide CBA and the Social Services CBA provided Houseparents an annual salary, which is easily convertible into a weekly salary, and assigned them a regular workweek of 60 hours. See Pls.' Ex. F, Art. III, § 1b; Pls.' Ex. G, p. 11. No CBA listed an hourly rate, however.

The lack of an explicit hourly rate for the period before July 1, 1994 led to overtime pay disputes. More specifically, it was unclear how many hours the weekly salary covered. This left unclear what Houseparents' regular hourly rate was, making it equally unclear how to calculate their overtime rate of 1.5 times their regular rate. In Adams, et al. v. Dep't of Juvenile Justice, et al., 1996 WL 82404, No. 93 Civ. 8042(PKL) (S.D.N.Y. Feb. 26, 1996), rev'd in part, 143 F.3d 61 (2d Cir. 1998), a class of Houseparents challenged the City's practice of calculating regular hourly rate, for overtime purposes, by dividing the weekly salary by 70 hours. On April 21, 1995, the City began dividing by 60 hours, retroactively to July 1, 1994. See Pls.' R. 56.1 Stmt. ¶ 32; Pls.' Ex. M. The City has settled all claims regarding the period before July 1, 1994 in both Adams and this case.

The only remaining dispute is whether, for the period since July 1, 1994, Houseparents' regular hourly rate is their weekly salary divided by 40 hours or their weekly salary divided by 60 hours. The Social Services CBA listed these annual salaries as based on a 60 hour workweek:

                                    Hired    Hired
                                    After    Before
                TITLE 6/30/93 7/1/93/ Maximum
                Houseparent         $25,510  $26,540  $37,004
                Senior Houseparent  $30,213  $31,433  $39,874
                

Pls.' Ex. F, pp. 13, 16. The Equity CBA of November 22, 1994 attempted to clarify the ambiguity that the other CBAs left by stating only a weekly salary. Unfortunately, the parties also assert varying interpretations of the Equity CBA, which in relevant part reads as follows:

Effective July 1, 1994, notwithstanding the current provisions of the Social Services and Related titles Agreement, the annual salaries rates [sic] for the titles of Houseparent and Senior Houseparent shall be based on a work week of 40 (forty) hours (2088 hours per annum). Effective July 1, 1994, employees hired to work on a twelve (12) hour day on a per diem basis shall continue to be paid for the first eight (8) hours at straight time (1X) and for the remaining four (4) at time and one-half (1½X) based on the hourly rates set forth below:

                                   Hired      Hired
                                   After      Before
                TITLE 6/30/93 7/1/93 Maximum
                Houseparent         $12.2174  $12.7107  $17.7222
                Senior Houseparent  $14.4698  $15.0541  $19.0967
                

Nothing set forth herein shall preclude the employer from continuing to assign employees to a work week in excess of 40 hours per week.

Pls.' Ex. E, Art. XVII, ¶ 6.

The plaintiffs contend that the rates listed in the Equity CBA are the non-overtime regular hourly rates, which would make the overtime rates one-half higher. The City counters that the Equity CBA's listed rates are not the regular rates but the time-and-a-half premium overtime rates, which would make the regular rates one-third lower. In August 1995, Local 371 filed a request for arbitration of this dispute, see Pls.' Ex. P, which went to a hearing in July 1996. Local 371 argued that the Equity CBA's plain language makes clear that its listed hourly rates are regular, non-overtime rates. The City asserted a contrary interpretation of the text and argued that DC 37 and the City, the two parties to the CBA, did not intend a reading that implausibly would allocate to a few hundred Houseparents $9 million of $15 million in equity funds that were available to 120,000 DC 37 members. See Def.'s Ex. B. On July 3, 1997 the arbitrator issued an opinion deciding the issue in favor of the City. See Def.'s Ex. A; Pls.' Ex. N.

The plaintiffs filed this action in April 1996, after Local 371 filed for arbitration but before the arbitration went to hearing. Both parties have moved for summary judgment. The City argues that the arbitrator's ruling that the Equity CBA's listed hourly rates were premium overtime rates merits adherence and binds this court under the doctrine of issue preclusion. The plaintiffs argue that the arbitrator's ruling does not lead to preclusion in this action and reflects an impermissible interpretation of how the relevant CBA language comports with the FLSA.

II. Analysis

A. Arbitration as Bar to Plaintiffs' Claims

The City presents two arguments that the CBA arbitration provisions are dispositive against the plaintiffs. First, it argues that because of a union agreement to arbitrate disputes with the employer, the proper forum for the plaintiffs' claim is arbitration, not federal court. Second, it argues that the outcome of Local 371's arbitration leads to issue preclusion, collaterally estopping the plaintiffs from asserting a CBA interpretation contrary to the arbitration outcome. The court rejects both of these arguments.

1. Exhaustion of Arbitration Remedy

The City argues that their union's agreement to arbitrate binds the plaintiffs to the extent of precluding their action in federal court:

Plaintiffs are members of a public employee union that has negotiated a collective bargaining agreement with the Defendant ... [that] specifically provides a procedure for resolution of any dispute, controversy or claim concerning or arising out of the application or interpretation of the Fair Labor Standards Act. Plaintiffs at least must exhaust this procedure before going to court. Answer ¶ 19. The Social Services CBA outlines a dispute resolution procedure culminating in binding arbitration for grievances as to: (a) CBA interpretation; (b) alleged violations of City rules; (c) worker assignments; (d) holding of examinations; (e-h) disciplinary actions and charges against workers. See Pls. Ex. F, Art. VI, §§ 1(a)-1(h). After internal dispute resolution efforts through Steps I, II, and III, Step IV is arbitration: "an appeal from an unsatisfactory determination at STEP III may be brought solely by the Union.... The costs and fees of such arbitration shall be borne equally by the Union and the Employer." Id., Art. VI, § 2. This arbitration provision seeks to be the exclusive remedy for the above-listed covered grievances:

As a condition to the right of the Union to invoke impartial arbitration ... the employee or employees and the Union shall be required to file with the Director of the Office of Collective Bargaining a written waiver of the right, if any, of the employee and the Union to submit the underlying dispute to any other administrative or judicial tribunal.

Id., Art. VI, § 3.

This CBA language does not bar the plaintiffs' FLSA complaint in federal court, however, because it does not explicitly cover claims of individual statutory rights. While one of the "guiding principles of the law of arbitration ... requires full enforcement of arbitration clauses, ... [a] second principle protects parties from being compelled to arbitrate claims they did not agree to arbitrate." N.Y. v. Oneida Indian Nation, 90 F.3d 58, 59 (2d Cir.1996). Under Wright v. Universal Maritime Serv. Corp., ___ U.S. ___, 119 S.Ct. 391, 142 L.Ed.2d 361 (1998), courts will not find that a CBA mandatory arbitration provision includes individual statutory...