Mills v. State of Maine

• Decision Date: 01 June 1994
• Docket Number: Civ. No. 92-410-P-H.
• Citation: 853 F. Supp. 551
• Parties: Jon MILLS, et al., Plaintiffs, v. STATE OF MAINE, Defendant.
• Court: U.S. District Court — District of Maine

853 F. Supp. 551

Jon MILLS, et al., Plaintiffs, v. STATE OF MAINE, Defendant.

Civ. No. 92-410-P-H.

United States District Court, D. Maine.

June 1, 1994.

John R. Lemieux, Maine State Employees Ass'n, Augusta, ME, for plaintiffs.

Linda S. Crawford, Asst. Atty. Gen., Portland, ME, for defendant.

ORDER ON A STIPULATED RECORD

HORNBY, District Judge.

In the liability portion of this dispute, I ruled that the State may treat its probation officers as employees working in a law enforcement capacity under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (the "FLSA"). Order on Cross-Motions for Summary Judgment (Dec. 21, 1993) 839 F.Supp. 3. The parties have now filed cross-motions on a stipulated record on four issues affecting what damages the State must pay the probation officers. I address them in turn.

APPLICABILITY OF THE LAW ENFORCEMENT EXCEPTION

The first issue is whether the State should calculate past overtime on a 40- or a 43-hour workweek. The plaintiffs claim that the 43-hour workweek is available only to employers who have been complying with the requirements of the law enforcement exception, whereas the State has previously treated its probation officers as totally exempt from the Act. The plaintiffs claim, therefore, that the State should not now be allowed "to pretend" that it has treated them all along under the law enforcement exception.

Martin v. Coventry Fire District, 981 F.2d 1358 (1st Cir.1992), resolves this issue against the plaintiffs. In that case, the court held that an employer who violates § 207(k) of the FLSA (the partial exemption for fire-fighters and law enforcement officers) may still calculate the overtime owed its employees in accordance with the overtime definition of subsection (k). Id. at 1361. The court reasoned that the statute itself provides adequate compensation to the underpaid employees and punishment to the delinquent employer. Specifically, the employees receive what they should have been paid originally and, in addition, the employer must pay them double damages, if the violation was not reasonable and in good faith, and must suffer more serious penalties, if the violation was willful. See 29 U.S.C. §§ 216, 260. The First Circuit found no reason "for assessing an especially heavy penalty" on top of those already provided in the FLSA. Martin, 981 F.2d at 1360. Likewise, here, damages are to be determined in accordance with the subsection (k) overtime definition and the FLSA's express damage and penalty provisions.

The plaintiffs cite Holmes v. Washington, 30 WH Cases 1630, 1992 WL 247444 (W.D.Wash. Mar. 13, 1992), as holding that failure to comply with the recordkeeping requirements of § 207(k) deprives an employer of its defense. Generally, however, the significance of recordkeeping requirements in FLSA cases is not in determining the proper measure of damages but in setting respective burdens of proof on liability. See Secretary of Labor v. DeSisto, 929 F.2d 789, 792 (1st Cir.1991). Holmes is not inconsistent with this principle; it recognized a recordkeeping violation only for purposes of determining liability and did not address the proper measure of damages. Consequently, the 43-hour workweek is available to the State.

TREATMENT OF THE NON-STANDARD PAY PREMIUM

Probation officers receive a 16% pay premium under their collective bargaining agreement in exchange for being available at unusual hours and for more than 40 hours per week. The plaintiffs want to calculate their overtime at one and one-half times their total wages, the 16% included; the State wants not only to remove the 16% from the base figure before the time-and-a-half is applied, but also to use the 16% premium as an offset to any overtime found due. In certain situations, extra compensation is not included within an employee's regular rate of pay under the FLSA, 29 U.S.C. § 207(e), and sometimes the extra compensation is properly creditable toward unpaid overtime. Id. § 207(h). The 16% here, however, does not fit any of those categories.

Section 207(e)(7) excludes from the regular rate of pay a premium paid under a collective bargaining agreement

for work outside of the hours established in good faith by the contract or agreement as the basic, normal, or regular workday (not exceeding eight hours) or workweek ... where such premium rate is not less than one and one-half times the rate established in good faith by the contract or agreement.

This section, known as a "clock overtime" or "clock pattern" provision, is to accommodate those industries requiring round-the-clock operation. An employer in such an industry may comply with the FLSA by paying premiums equal to the statutory overtime rate for work during certain hours on the clock. Brock v. Wilamowsky, 833 F.2d 11, 16 (2d Cir.1987). For instance, if 9 a.m. to 5 p.m. were the regular 8-hour workday and other hours were compensated at one and a half times the "9-to-5" rate, an employee working from 5 p.m. to 4 a.m. could be paid simply one and a half times the "9-to-5" rate for all of his hours of work, instead of an extra half again as much when he exceeded 8 hours. See 29 C.F.R. § 778.204(b).

Any premium, however, must be related to hours worked outside of a basic, normal or regular work period established in a collective bargaining agreement. The State contends that the collective bargaining agreement here specifies a premium to be paid in exchange for the probation officers working erratic hours in excess of 40 hours a week. Nowhere, however, does the State suggest that the collective bargaining agreement establishes the specific hours of a normal or regular workday or workweek as required by § 207(e)(7). Moreover, the 16% premium is part of a guaranteed periodic wage that is paid regardless of whether the plaintiffs actually "work outside of the hours established ... as the basic ... workweek." See Walo Depo. at 18-19; cf. Brennan v. Valley Towing Co., 515 F.2d 100, 106 (9th Cir.1975). Consequently, the premium does not comply with the requirements of § 207(e)(7).

For the same reason, two other provisions that might allow the 16% premium to be excluded from the regular rate of pay, § 207(e)(5) and § 207(e)(6) are inapplicable.¹ Section 207(e)(5) excludes "a premium rate paid for certain hours worked by the employee ... in excess of the maximum workweek applicable to such employee ... or in excess of the employee's normal working hours or regular working hours." Section 207(e)(6) excludes "a premium rate paid for work ... on Saturdays, Sundays, holidays, or regular days of rest." As already noted, the 16% premium is guaranteed income regardless of whether the employees work outside of their normal working hours, if any exist, and is not tied to "certain hours" or specific days worked by the employees.²

Extra compensation paid as described in § 207(e)(5), (6) or (7)—and only as described in one of those sections—is creditable toward overtime compensation owed. 209 U.S.C. § 207(h); 29 C.F.R. § 778.200(c). Since the 16% premium does not fit any of those provisions, it may not be credited toward the overtime compensation owed by the State.

The parties have also made passing reference to the "Belo" provision, § 207(f), exempting employees who work irregular hours but are paid fixed weekly compensation. The Belo provision is relevant to liability, not damages, and was not raised by the State during the liability phase of this dispute. Moreover, the State does not cite the Belo provision to challenge liability, but suggests that § 207(f) offers an alternative method of measuring overtime credits or the regular rate of pay. That is not so. Section 207(f) does not provide a separate rule for calculating damages once a violation of the FLSA is found to exist. See 29 C.F.R. § 778.403; Martin v. David T. Saunders Constr. Co., 813 F.Supp. 893, 899, 902 (D.Mass.1992) (Keeton, J.) ("When a contract specifying weekly pay fails the requirements of § 207(f), the defendant is not entitled to credit its allocation of regular and overtime pay.")

LIQUIDATED DAMAGES

Since I have ruled that the State violated the FLSA, it must show that it acted both reasonably and in good faith to avoid obligatory liquidated damages. 29 U.S.C. §§ 216, 260; 29 C.F.R. § 790.22(b); Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 908-09 (3d Cir.1991), cert. denied, ___ U.S. ___, 112 S.Ct. 1473, 117 L.Ed.2d 617 (1992); Walton v. United Consumers Club, Inc., 786 F.2d 303, 312 (7th Cir.1986). This duty is ongoing. The proper characterization of the State's conduct here rests upon what, if anything, the State did after 1985 to determine the appropriateness of continuing to treat its probation officers as completely exempt from the FLSA.

The State's own witnesses portray Freeman Wood in the Bureau of Human Resources as the decisionmaker responsible for approving the probation officers' treatment. They state that the Bureau of Human Resources was responsible for making such decisions, Tilton Aff. ¶ 18; Walo Depo. at 14, and that Freeman Wood, a Merit System Coordinator there, specifically "approved" the work of the job analysts who recommended the probation officers' treatment and was involved in the ultimate decision to consider them exempt. Walo Depo. at 14; Wood Depo. at 3-4, 8. Thus, the conduct of Wood and his work group is crucial. Wood's deposition testimony and affidavit tell patently conflicting stories about whether anyone ever reviewed the initial post-Garcia exemption decision. In his deposition, Wood acknowledged that neither he nor anyone in his work group revisited the overtime-exempt status of the plaintiffs after their original decision in 1985. Wood Depo. at 8-9. In Wood's affidavit, on the other hand, he claims to have discussed 1988 Department of Labor ("DOL") opinion letters with members of the Bureau of Human Resources, the Department of Corrections and counsel and to have "continued to review information and consider whether to change the...