Hoops v. Keyspan Energy

• Decision Date: 01 November 2011
• Docket Number: No. 10–CV–2777 (ADS)(ARL).,10–CV–2777 (ADS)(ARL).
• Parties: Carl HOOPS, Plaintiff, v. KEYSPAN ENERGY and National Grid USA, Defendants.
• Court: U.S. District Court — Eastern District of New York

822 F.Supp.2d 301

Carl HOOPS, Plaintiff,

v.KEYSPAN ENERGY and National Grid USA, Defendants.

No. 10–CV–2777 (ADS)(ARL).

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

Nov. 1, 2011.

Paul L. Dashefsky, Esq., Smithtown, NY, for Plaintiff.

McCarter & English, LLP, by: Patrick M. Collins, Esq., Of Counsel, New York, NY, for Defendants.

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

The plaintiff Carl Hoops (“the Plaintiff” or “Hoops”) commenced this action against his employers Keyspan Corporation and National Grid USA (the “Defendants” or “the Company”) seeking unpaid overtime compensation under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 207. Presently before the Court is the Defendants' motion to dismiss the amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) on the ground that the overtime claim is preempted by the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185 et. seq. For the reasons discussed below, the Defendants' motion is granted.

I. BACKGROUND

The relevant facts of this case are set forth in the Court's previous decision Hoops v. KeySpan Energy (“ Hoops I ”), 794 F.Supp.2d 371(E.D.N.Y.2011). The Court assumes the parties familiarity with that decision. However, a brief review of the factual and procedural background of this case is in order.

A. The Initial Complaint

Carl Hoops has been employed by the Company since 1988, and has held the position of Emergency Service Specialist since in or about 1999. As an employee of the Company, the terms of Hoops' employment are governed by a collective bargaining agreement (the “CBA”) between his union, Local 1049, International Brotherhood of Electrical Workers (“the Union”) and the Company. ( See Affirmation of Patrick M. Collins in Support of Motion to Dismiss (“Collins Aff.”), Exs. 1–3 (excerpts from the CBA).) According to Hoops, the CBA provides that certain workers, including himself, are entitled to miscellaneous shift differentials when they works certain hours. Approximately ten years ago, the Company implemented a payroll program called “Smart Time” to automatically calculate an employee's wages. Hoops contends that after the Company implemented the Smart Time payroll program, the Company stopped including certain shift differentials in the calculation of his overtime compensation in violation of the FLSA. On June 17, 2010, Hoops commenced this action against the Company, asserting, among other claims, a cause of action against the Company for willfully violating the FLSA by failing to pay him overtime (the “initial complaint”).

B. The Motion to Dismiss

On July 19, 2010, the Defendants moved to dismiss the complaint, alleging, among other things, that Plaintiff's FLSA claim was premature because his claim required the Court to decide the threshold issue of his right to receive shift differentials in his straight-time wage. According to the Defendants, because the Plaintiff's entitlement to shift differentials arose from the terms of the CBA, and the CBA requires employees to follow certain grievance procedures to dispute any violation of the agreement, the Plaintiff was required under Section 301 of the Labor Management Relations Act to exhaust his administrative remedies before commencing the instant action.

As the Court noted in Hoops I, the initial complaint created “an ambiguity as to whether: (1) the Plaintiff's claim is limited to the calculation of overtime compensation based on contractual shift differentials he received in his straight-time wage rate, or (2) the Plaintiff is also seeking an initial determination as to whether he was entitled under the CBA to receive certain contractual shift differentials.” Hoops I, 794 F.Supp.2d at 377. The Court found this distinction to be relevant because “[i]n deference to the collective bargaining process, before bringing an action under Section 301, ‘the employee must exhaust grievance procedures provided by the relevant collective bargaining agreement.’ ” Id., at 378 (quoting Dougherty v. AT & T, 902 F.2d 201, 203 (2d Cir.1990)). However, absent a clear and unmistakable waiver in the CBA, “[w]hen the dispute involves the violation of statutory rights under the FLSA ..., an employee is not required to exhaust the grievance procedure prior to bringing a federal lawsuit.” Id.

Based on a review of the applicable case law, the Court held that even where it may ultimately be necessary to decide an FLSA claim, if the threshold question is a factual dispute arising under the CBA and subject to the CBA grievance procedures, the contractual issue must be resolved before the Court can reach the FLSA claim. Although the complaint was unclear, the Plaintiff stated in his opposition brief on the motion to dismiss that to resolve his unpaid overtime claim, the Court would first have to determine “what straight-time wage rate the Plaintiff was entitled to be paid (including night differential premium pay for hours worked during night shifts)” before reaching the issue of whether the shift differentials should have been included in his regular rate for overtime purposes. Id., at 379. Thus, because the Plaintiff appeared to concede in his opposition brief that before the Court could adjudicate his right to overtime under the FLSA the Court would first need to determine what shift differentials he was entitled to receive in his straight-time wage rate—a right arising from the CBA and subject to the CBA grievance procedures—the Court held that the Plaintiff's FLSA claim was preempted by the LMRA.

However, the Court acknowledged that the Plaintiff's statement in his opposition brief may not be an accurate representation of his position, and “recognize[d] that there is a possibility that some, if not all, of the contractual shift differentials underlying the Plaintiff's FLSA claim may have been included in his straight-time wage rate and therefore would not require interpretation of the CBA.” Id., at 380. As a result, the Court afforded the Plaintiff the opportunity to serve an amended complaint “clarifying this ambiguity”. Id.

C. The Amended Complaint

On March 23, 2011, Hoops filed an amended complaint (the “amended complaint”). In the amended complaint, Hoops provided additional detail about the hours he works and his compensation. Hoops stated that he is considered a “shift worker” because his working shifts fluctuate each week between working a combination of “day shifts” (8:00 am to 4:00 pm) and “night shifts” (4:00 pm to 12:00 am and 12:00 am to 8:00 am). (Am. Compl., ¶ 8.) As set forth in the CBA, as a shift worker Hoops was entitled to receive shift differentials that fluctuate based on the type of shift he works. In particular, Hoops alleges that he receives an extra hourly sum of fifty cents ($.50) for hours worked during the day shift (the “day shift differential”) and an extra hourly sum of one dollar and ninety cents ($1.90) for hours worked during the night shifts (the “night shift differential”). (Am. Compl., ¶ 10.)

Also, Hoops alleged additional facts about the deficiencies in the Smart Time program, as well as the Company and the Union's knowledge about the alleged deficiencies with the program. According to Hoops, the Smart Time program was not designed to accommodate the fluctuating pay rates of “shift workers”. As a result, Hoops contends that when he worked a day shift immediately followed by a night shift (8:00 am to 4:00 pm and 4:00 pm to 12:00 am), the payroll program failed to include the $1.90 night differential into his rate of pay for the purposes of calculating his overtime pay. In addition to failing to incorporate the appropriate night shift differential into his regular rate of pay for overtime compensation, Hoops also alleged that the Smart Time program resulted in the Company's failure to pay him “duly earned night shift differentials”. (Am. Compl., ¶ 12.)

In or about June 2010, Hoops discussed this deficiency in the Smart Time program with Michael Whalen, the Business Representative for the Union. According to Hoops, Whalen informed him that six years prior to their conversation, the Company's Vice President of Human Resources, Robert Greenbaum, informed Whalen that he was “aware of the problem” with the Smart Time program, and that the Company expected to correct the problem by the end of the 2010 calendar year. (Am. Compl., ¶ 19.) Hoops recounted that in his conversation with Whalen, he advised Whalen that if the Union did not intend to pursue a grievance as to any past money owed to him, he would have to hire an attorney and independently pursue the claim for overtime compensation. In response, Hoops alleges that Whalen “advised [him] to do so, wished him luck, and requested that [he], ‘Let [them] know how [he] make[s] out.’ ” (Am. Compl., ¶ 20.)

Shortly after December 2010, Hoops contends that the problem with the Smart Time program was resolved, and, since that time, whenever he works a day shift immediately followed by a night shift, his overtime rate of pay has properly included the $1.90 night shift differential. In the amended complaint Hoops asserts one cause of action against the Company for willful failure to properly compensate Hoops for hours worked in excess of forty hours in a week in violation of section 207 of the FLSA.

D. The Instant Motion

On April 5, 2011, the Defendants moved to dismiss the amended complaint on the ground that despite the new allegations in the amended complaint, the Plaintiff's FLSA claim still required the Court to make the threshold determination of his entitlement to shift differentials in his straight-time wage rate under the CBA. Thus, because the Court is preempted by the LMRA from deciding the threshold issue, the Defendants argue that the amended complaint must be dismissed.

In response, the Plaintiff contends that because he pled the specific shift differentials he was entitled to in the amended complaint, his right to the shift differentials is an issue of fact appropriate for...