Mo. Corr. Officers Ass'n v. Mo. Dep't of Corr.

• Decision Date: 27 August 2013
• Docket Number: No. WD 75418.,WD 75418.
• Parties: MISSOURI CORRECTIONS OFFICERS ASSOCIATION, Appellant, v. MISSOURI DEPARTMENT OF CORRECTIONS, Respondent.
• Court: Missouri Court of Appeals

409 S.W.3d 499

MISSOURI CORRECTIONS OFFICERS ASSOCIATION, Appellant,

v.MISSOURI DEPARTMENT OF CORRECTIONS, Respondent.

No. WD 75418.

Missouri Court of Appeals, Western District.

Aug. 27, 2013.

Chris Koster, Attorney General, and J. Andrew Hirth, Deputy General Counsel, Jefferson City, MO, for Respondent.

Heidi D. Vollett, William E. Peterson, and Shelly A. Kintzel, Jefferson City, MO, for Appellant.

Before Division One: MARK D. PFEIFFER, P.J., and VICTOR C. HOWARD and ALOK AHUJA, JJ.

ALOK AHUJA, Judge.

Appellant, The Missouri Corrections Officers Association, Inc., is a labor organization whose members include the corrections officers who staff prisons run by the Missouri Department of Corrections (“the Department” or “DOC”). The Association is the exclusive bargaining representative for these officers. The Association and DOC entered into a Labor Agreement in 2007. In response to reductions in its budget, the Department changed its personnel policies in 2009 to limit officers' accrual of state compensatory time. The Association contends that these policy changes violate the Labor Agreement. The Association filed this lawsuit in the Circuit Court of Cole County seeking declaratory relief for DOC's alleged violation of the Labor Agreement. The circuit court granted DOC's motion for summary judgment, and the Association appeals. Because the Department's revisions to its method of calculating state compensatory time violate the parties' Labor Agreement, we reverse.

Factual Background

With exceptions not relevant here, the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 207(a)(1), 207( o)(1), requires DOC to compensate corrections officers who actually work more than forty hours in a single work week at “a rate not less than one and one half hours for each hour of employment for which overtime compensation is required.” See also29 C.F.R. § 553.22(b). Corrections officers may also be eligible to receive compensation, paid at their regular (i.e., “straight time”) pay rate, for working hours in excess of an assigned daily shift, even if they do not meet the forty-hour FLSA threshold. We refer to this latter benefit as “state compensatory time.”

In February of 2007, DOC and the Association entered into the Labor Agreement which remains in effect today. The Agreement gives DOC the authority to direct the corrections officers and conduct business as it sees fit, “except as modified by the terms of this Agreement.” The Department explicitly retains the right to “hire, assign, reassign, transfer, promote and to determine hours of work and shifts and assign overtime.” The Labor Agreement also authorizes DOC to “temporarily assign employees to a different work assignment on a daily basis.”

Under the FLSA and the Labor Agreement, the Department may compensate corrections officers for federal overtime or state compensatory time by providing them with compensatory paid time off. The Agreement specifically addresses use of compensatory time in the form of paid leave. Section 7.9 of the Agreement provides:

Employer is responsible for compensatory time off and proper staffing of facilities. Employees may request to utilize compensatory time. The Employer will respond to the Employee's written request either approved or denied no later than fourteen (14) days after receiving the request. Employer will provide fourteen (14) days prior notice before scheduling mandatory compensatory time reduction.

(Emphasis added.) The parties agree that § 7.9 requires DOC to give officers at least fourteen days' notice before requiring them to use “banked” state compensatory time as compensatory leave.

Although the Labor Agreement contains no definition of “compensatory time,” DOC does not dispute that the definitions and terminology in its Department Manual are incorporated into the Labor Agreement. The Department Manual defines how state compensatory time and federal overtime are earned by correctional officers. The Manual differentiates between “code 1” and “code 2” employees. All officers that would be affected by the outcome of this case are classified as code 2 employees. Code 1 employees are “exempt” employees who do not qualify for overtime pay under the FLSA.¹ Both code 1 and code 2 employees can earn “state compensatory time,” however. The Manual describes the accrual of state compensatory time differently for each category of employee. It states:

State Compensatory Time: Hours calculated at straight time when:

1. A code 1 employee works in excess of an assigned daily shift or physically works over 40 hours in a standard work week.

2. A code 2 employee works in excess of an assigned daily shift, but has not physically worked in excess of 40 hours during a standard work week.

The Manual also provides that, with the exception of certain employees who work twelve-hour shifts, a code 2 employee earns federal overtime, at a time and one-half rate, when he or she “physically works in excess of 40 hours during a work week.”

Due to significant overtime budget cuts, the DOC modified the “Compensatory Time Control” section of its Department Manual in March 2009. Section III.H of the Department Manual was changed to read as follows (additions denoted in bold italics, deletions by strikethrough):

H. Compensatory Time Control

1. The chief administrative officer/designee will continuously monitor compensatory time balances in an attempt to keep those balances at reasonable levels.

2. Code 2 employees who work at a correctional center, community release center, or community supervision center:

a. In order to manage the accrual of federal overtime or state compensatory time, the chief administrative officer/designee may adjust the work schedule of such an employee during the employee's standard work week.

(1) Overtime worked and compensatory time used within the same week will be documented via the Application for Leave/Overtime form and entered accordingly into the SAM–II Payroll System.

(a) The chief administrative officer should notify the employee about the schedule change at the earliest practical time.

(b) No schedule change may be made for the purpose of managing overtime or compensatory time unless the employee is notified 12 hours prior to the start of the affected shift or unless the employee volunteers for the schedule change.

b. These employees may use accrued balances of federal overtime, state compensatory time, or holiday time as compensatory leave when both the employee and supervisor agree on such use, however III.H.2.a is also applicable to state compensatory time usage. c. The chief administrative officer/designee may not require these employees to use federal overtime, state compensatory time, or holiday time as compensatory leave.

Following the March 2009 modifications to the Department Manual, DOC took the position that it could adjust corrections officers' schedules mid-week to prevent them from accruing state compensatory time. According to the Department, state compensatory time is only available if an officer (1) works hours in excess of an assigned daily shift, (2) does not physically work over forty hours during the work week in question, and (3) is compensated for more than forty hours of work in that week (this could happen, for example, where part of the officer's compensation during the week is due to a paid holiday, or sick leave). Therefore, the Department contends that, if an officer works hours in excess of an assigned shift earlier in a work week, it can reduce the officer's hours later in the same week, keep the officer from being compensated for more than forty total hours, and thereby prevent any state compensatory time from accruing.

The Department's position is highlighted by the following example, which was offered by one of the Department's witnesses during his deposition:

Example 3: The officer works two extra hours on Monday, then works his regular shift the rest of the week, but leaves two hours early on Friday. The officer records 40 hours at the end of the week.

DOC contends that in this scenario, the officer earns no state compensatory time, because he is not being paid for more than forty hours during the work week.

The Association argues that the Department's interpretation of its scheduling authority violates § 7.9 of the Labor Agreement, because the DOC is effectively requiring officers to use state compensatory time earned earlier in a work week as compensatory leave later in the same week, even though § 7.9 requires DOC to give officers fourteen days' notice before a “mandatory compensatory time reduction.” ² The Association filed this lawsuit in the Circuit Court of Cole County, seeking a declaratory judgment that the Department's position concerning the accrual of state compensatory time violates the Agreement. The circuit court ultimately granted summary judgment to DOC, accepting its interpretation of the Labor Agreement and Department Manual. The Association appeals.

Analysis

Because this case was decided on summary judgment, and the disputed issues involve contract interpretation, we review the circuit court's judgment de novo, with no deference to its decision. ITT Comm. Fin. Corp. v. Mid–Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993); Matt Miller Co. v. Taylor–Martin Holdings, LLC, 393 S.W.3d 68, 72 (Mo.App. S.D.2012).

The Association argues that the circuit court erred in granting DOC's motion for summary judgment because the Department's interpretation of how state compensatory time operates is inconsistent with the Labor Agreement, and the definition of “state compensatory time” in the Department Manual. We agree.

“The primary rule in interpretation of contracts is to ascertain the parties' intent and give effect to that intent. To do that, this court is to rely on the plain and ordinary meaning of the words in the contract and consider the document as a whole.” Exec. Bd. of Mo. Baptist Conv'n v. Windermere Baptist Conf. Ctr., 280 S.W.3d 678, 687 (Mo.App....