Metzler v. IBP, Inc., 96-3258

• Citation: 127 F.3d 959
• Decision Date: 15 October 1997
• Docket Number: No. 96-3258,96-3258
• Parties: 134 Lab.Cas. P 33,609, 4 Wage & Hour Cas.2d (BNA) 229, 97 CJ C.A.R. 2356 Cynthia METZLER, Acting Secretary of Labor, United States Department of Labor, Plaintiff--Appellee, v. IBP, INC., Defendant--Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

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127 F.3d 959 134 Lab.Cas. P 33,609, 4 Wage & Hour Cas.2d
(BNA) 229,
97 CJ C.A.R. 2356 Cynthia METZLER, Acting Secretary of Labor, United States
Department of Labor, Plaintiff--Appellee,
v.
IBP, INC., Defendant--Appellant. No. 96-3258. United States Court of Appeals,
Tenth Circuit. Oct. 15, 1997.

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Jack L. Whitacre (Michael F. Delaney and David L. Wing with him on brief), Spencer Fane Britt & Browne, Kansas City, MO, for Defendant-Appellant.

Paul L. Frieden (J. Davitt McAteer, Steven J. Mandel and William J. Stone with him on brief), U.S. Department of Labor, Washington, DC, for Plaintiff-Appellee.

Before LUCERO, McWILLIAMS and MURPHY, Circuit Judges.

LUCERO, Circuit Judge.

This appeal obliges us to revisit IBP's violations of the overtime and record keeping provisions of the Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201-216, 217-219 ("FLSA"). In an earlier phase of this litigation the Secretary of Labor sought to require IBP to record and compensate its meat-processing employees for time spent in preliminary and postliminary work activities, specifically, in picking up, putting on, taking off, cleaning, and dropping off or storing required safety and sanitary equipment before and after their regular shifts. The litigation focused on the period between April 1, 1986 and August 1, 1988 (the "relevant period"). The history of this litigation is well documented in our earlier opinion, Reich v. IBP, Inc., 38 F.3d 1123 (10th Cir.1994) ("Reich I ").

While the first phase of the litigation established that the activities in question were compensable, the second phase measured damages, by quantifying the time spent on such activities, determining whether it was

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de minimis, and deciding whether prejudgment interest should be awarded and whether a prospective permanent injunction would be appropriate. In phase one, the district court found that most of the activities performed by knife-wielding workers that related to the donning, doffing and cleaning of the specialized protective gear, the exchanging of dull knives for sharp ones, and the time needed to walk to these activities, were compensable work under the Portal-to-Portal Act of 1947, 29 U.S.C. §§ 216(b), 251-262. Reich v. IBP, 820 F.Supp. 1315, 1324-28 (D.Kan.1993). The trial court also found that the employees were entitled to compensation based on the "reasonable time," as opposed to the "actual time," required to perform these activities. Id. at 1328. We affirmed the district court in all respects relevant to this appeal. Reich I, 38 F.3d at 1127-28. The case was then returned to the district court.

In phase two, both the Secretary and IBP presented evidence regarding the amount of compensable time that was due employees for the above activities during the relevant period. The Secretary mailed out a questionnaire along with a self-addressed stamped envelope to 23,580 IBP employees who worked at some time during the relevant period. From the 5,743 responses, 4,331 of which were from knife carriers, the Secretary randomly selected for deposition 485 employees, including 378 knife carriers. At their depositions, attended by IBP counsel, these employees were asked to estimate the amount of time they spent performing various preliminary and postliminary activities. From these estimates, the Secretary's expert calculated the mean time for these activities to be 24.68 minutes.

By contrast, IBP utilized an industrial engineering time study, based on methodology set forth by its expert, Dr. Stephen Konz, in a 1990 textbook, to calculate the amount of time the compensable activities should take. IBP's industrial engineers broke down the various tasks into their component parts and timed with a stopwatch employees performing these tasks. With respect to wait times, IBP developed computer simulations based on observed arrival and wash rates. IBP submitted the total reasonable time for the compensable activities to be 4.65 minutes.

The district court considered both approaches and, in effect, split the difference. It noted that inherent problems existed in asking workers to estimate how much time it took for them to perform tasks, both because of employee self-interest in overestimation and because of the difficulty in remembering and estimating the amount of time taken by short-term tasks done in the distant past, particularly when intermingled with noncompensable tasks. The court noted that the Secretary's test estimated the actual time involved in performing the tasks, not the reasonable amount of time the tasks should take.

The district court also found IBP's time study method wanting. An underlying problem with the study was that it was conducted without the knowledge of, or any input from, the Secretary. The findings note that the study failed to account for certain items of compensable time such as the knife-room wait time, and also that it did not accurately reflect the real conditions faced by knife carriers during the relevant period. The employees used in the time study were not randomly chosen, but even so, some of their observed performance times were adjusted downward or eliminated altogether. The district court discounted the IBP study's walking time results, finding they were achieved in unrealistically simulated plant conditions, and commented that the time study of the knife-exchange ignored aspects of compensable time in the relevant period since it measured exchange times applicable after IBP installed a new knife-exchange procedure to replace the procedure actually used during the relevant period.

After considering a wealth of evidence, including in-court demonstrations of donning and doffing protective equipment, the district court made the following findings on the average reasonable time during the relevant period to perform each compensable activity: (1) three minutes to wait for and exchange knives; (2) three minutes to put on and take off personal protective equipment; (3) three minutes wait time at wash stations to clean protective equipment; (4) two minutes for

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post-shift cleaning of protective equipment; and (5) three minutes pre-shift and post-shift compensable walk time. The district court concluded that in total fourteen minutes of compensable time was due employees for the relevant period, and that this time is not de minimis, and ordered prejudgment interest be included in the backpay award. Finally, the court granted the Secretary's request for a company-wide injunction forbidding IBP from violating the FLSA in the future.

IBP filed two motions for reconsideration and an objection to the Secretary's proposed injunction, all of which the district court denied. IBP now appeals, raising only two issues. The main issue involves the district court's injunction forbidding IBP from violating the FLSA's overtime and record keeping provisions with respect to the compensable activities. IBP contends that because the current amount of time taken for these compensable activities is de minimis, the company is now in compliance with the FLSA and no injunction should have been entered. IBP also challenges the district...