Hill v. City of Greenville, Tex., CA-3-87-0084-T.

• Citation: 696 F. Supp. 1123
• Decision Date: 10 June 1988
• Docket Number: No. CA-3-87-0084-T.,CA-3-87-0084-T.
• Parties: Troy HILL and Stephen Woolbright, et al., Plaintiffs, v. CITY OF GREENVILLE, TEXAS, Defendant.
• Court: U.S. District Court — Northern District of Texas

696 F. Supp. 1123

Troy HILL and Stephen Woolbright, et al., Plaintiffs, v. CITY OF GREENVILLE, TEXAS, Defendant.

No. CA-3-87-0084-T.

United States District Court, N.D. Texas, Dallas Division.

June 10, 1988.

Thomas A. Woodley, Gregory K. McGillivary, Mulholland & Hickey, Washington, D.C., B. Craig Deats, Fickman, Van Os, Waterman, Dean & Moore, P.C., Austin, Tex., for plaintiffs.

Mick McKamie, City Atty., Greenville, Tex., Betty S. Kitch, Haynes & Boone, Fort Worth, Tex., for defendant.

MEMORANDUM OPINION AND ORDER

MALONEY, District Judge.

On October 30, 1987, Defendant filed its Motion for Summary Judgment. On December 22, 1987, Plaintiffs filed their Amended Motion for Summary Judgment, and Defendant filed its Motion for Summary Judgment on its Counterclaim.

Background

On April 15, 1985, the Supreme Court issued its final decision in Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985). In short, that case held that Congress could enforce the provisions of the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201-219, against the states and local governments. The significant effect of that holding with regard to this case is that state and local governments had to begin paying their employees overtime in accordance with § 7 of the FLSA.

In late August, 1985, Defendant implemented changes in the compensation structure for its firefighter employees. The firefighters in the City of Greenville were salaried employees who were regularly required to work overtime. Defendant recalculated the firefighters' compensation on an hourly basis and then reduced their hourly rate of pay. After the reduction in hourly pay, when the City paid the firefighters overtime, the firefighters received the same amount of compensation (with payment of overtime) as they had received before the reduction in pay (when no overtime had been paid).

On November 14, 1985, Congress enacted an amendment to the FLSA. That amendment, among other things, delayed the application of the FLSA overtime provisions until April 15, 1986. By the terms of the amendment, no state or local government would be liable to its employees for nonpayment of overtime until April 15, 1986.¹ That amendment, however, also contained an anti-discrimination section which proscribed discrimination by state and local governments against any of their employees who assert coverage under the FLSA after February 19, 1985. The application of that section, section 8, is in dispute here.

Discussion

Plaintiffs contend that Defendant's reduction of their hourly rate of pay in order to nullify the effect of overtime payments, violates the anti-discrimination provision of section 8 to the 1985 amendment to the FLSA. That section provides:

A public agency which is a State, political subdivision of a State, or an interstate governmental agency and which discriminates or has discriminated against an employee with respect to the employee's wages or other terms or conditions of employment because on or after February 19, 1985, the employee asserted coverage under section 7 of the Fair labor Standards Act of 1938 shall be held to have violated section 15(c)(3) of such Act....

Pub.L. No. 99-150, § 8, 99 Stat. 791 (November 14, 1985). Plaintiffs assert, and Defendants appear to agree, that in order to show that Defendant violated this section, Plaintiffs must show that: 1) there was an assertion of coverage under the FLSA, and 2) Defendant discriminated against Plaintiffs.

Applicability of Section 8

Defendant's first argument is that section 8 is inapplicable to Defendant's actions because section 8 was enacted after Defendant took the actions in question.² Defendant reasons that because section 8 did not exist at the time of Defendant's purportedly discriminatory actions, Defendant could not have violated section 8. Plaintiffs respond that section 8 should be applied retroactively, making discriminatory actions between February 19, 1985, and November 14, 1985, violations of section 8.

The parties to this litigation call upon the Court to determine whether section 8 is applicable to actions occurring before the 1985 amendment was enacted. Both parties have submitted excerpts from committee reports and committee hearings in order to persuade the Court of the legislative intent behind section 8. The Court is of the opinion that the excerpts submitted are inconclusive and occasionally contradictory, and are of little aid in determining the applicability date of section 8. Therefore, absent a clear Congressional intent otherwise, this Court will decline to apply retroactively a statute imposing liability. See United States v. Security Industrial Bank, 459 U.S. 70, 103 S.Ct. 407, 74 L.Ed. 2d 235 (1982).

Declining to apply section 8 retroactively, however, does not automatically relieve Defendant from all liability. Defendant could be liable after November, 1985, for its actions occurring in August, 1985, if those actions in fact violated section 8 and if they remained uncorrected after November, 1985. In other words, if Defendant's actions were discriminatory within the meaning of section 8 when they occurred in August, 1985, and the discriminatory action was not corrected when the November, 1985, amendment was enacted, Defendant would be liable for violation of section 8 after the November, 1985, amendment was enacted, even though no new and independent discriminatory action occurred. This is so because an act of discrimination which occurred before November, 1985, and which remains uncorrected, is a continual act of discrimination. The Court must therefore determine if the action of which Plaintiffs complain, violates section 8.

As stated above, the parties appear to agree that for Plaintiffs to show that Defendant violated section 8, Plaintiffs must show that: 1) there was an assertion of coverage under the FLSA, and 2) Defendant discriminated against Plaintiffs.

Assertion of Coverage

Section 8 of the 1985 amendment states that no public agency shall discriminate against an employee because the employee "asserted coverage" under the FLSA. The parties interpret this to mean that Plaintiffs must have taken some action sufficient to find that Plaintiffs made known to Defendant that they believed they were covered by the FLSA. The parties disagree, however, about what type of action is sufficient for that purpose.

Defendants put forth several reasons that Plaintiffs' actions have failed to meet this condition precedent. First, each and every Plaintiff did not take action to assert coverage under FLSA; only a few Plaintiffs purport to have asserted coverage. Second, if in fact those Plaintiffs took action to assert coverage under the FLSA, their actions only served to assert coverage for themselves, and not for Plaintiffs as a group. Third, those Plaintiffs who purport to have asserted coverage did not do so until sometime in 1986, long after Defendant had implemented the wage reduction.

The Court finds Blanton v. City of Murfreesboro, 658 F.Supp. 1540 (M.D.Tenn. 1987), helpful in the interpretation of the "assertion of coverage" provision of section 8. The court in that case stated: "The legislative history indicates that the drafters intended that an `assertion of coverage' need be only `some act constituting notification to an employer' that employees are covered by the overtime provisions of the FLSA." Blanton, at 1544.

In the case at hand, the employer (Defendant) already had notice that the employees were covered by the overtime provisions of the FLSA. Defendant's Statement of Undisputed Facts and Issues of Law, filed October 30, 1987, is replete with admissions that Defendant was aware of the Garcia decision and that the FLSA was applicable to Defendant. To require Plaintiffs to take some formal action to notify Defendant that they are covered by the FLSA would be superfluous. Because the purpose of the "assertion of coverage" provision is to put an employer on notice that its employees are covered by the FLSA, if the employer clearly already has notice of that fact, the employer needs no further notice.

Therefore, the Court concludes that because the purpose of the "assertion of coverage" requirement of section 8 was fulfilled by Defendant having notice, that requirement was satisfied without further action by Plaintiffs.

Discrimination

To violate section 8, Defendant also must have discriminated against Plaintiffs. After having notice that Plaintiffs were covered by the FLSA, Defendant unilaterally reduced Plaintiffs' hourly rate of pay in order to nullify the effect of overtime payments. Defendant argues, however, that its unilateral reduction in hourly wages was not an act of discrimination. Defendant reasons: first, Plaintiffs were not under written contracts of employment and therefore Defendant was free to adjust the terms of Plaintiffs' employment at any time; second, the unilateral wage reduction was not in retaliation to Plaintiffs' assertion of coverage; and third, Defendant had a legitimate, non-discriminatory reason for reducing Plaintiffs' hourly rate of pay.

The court in Blanton addressed some of these issues. That court concluded that the issue of whether the city's motive or intent was in fact retaliatory was not material to the resolution of the case. It is the unilateral reduction of regular pay, which was intended to nullify the legislative application of overtime compensation, which section 8 prohibits. Blanton, at 1544. This conclusion applies equally to Defendant's claim that it could reduce Plaintiffs' wages at any time because Plaintiffs were not under a contract of employment. The fact is that section 8 prohibits Defendant from reducing Plaintiffs' wages if the reduction is in response to application of the overtime provision of the FLSA.

Defendant also argues that it had a legitimate, non-discriminatory reason for reducing Plaintiffs' rate of pay: Defendant was in the midst of a...