Mueller v. Thompson
| Decision Date | 22 July 1994 |
| Docket Number | No. 92-C-891-C.,92-C-891-C. |
| Citation | 858 F. Supp. 885 |
| Parties | Gerald R. MUELLER, James A. Andreshak, Frederick Moeller, David Tamblyn, David Dahlk, Melvin Sensenbrenner, Richard Nelson, Roger Bohn, David Buschkopf, Curtis Paulson, Thomas M. Stemrich, Terry D. Cook, Gerard Swim, Robert Grosch, and Vernon Carlson, on behalf of themselves and all other employees of the State of Wisconsin similarly situated, and the State Engineering Association, Plaintiffs, v. Charles H. THOMPSON, Secretary, Department of Transportation; Department of Transportation; James R. Klauser, Secretary, Department of Administration; Department of Administration; George Meyer, Secretary, Department of Natural Resources; Department of Natural Resources; Gerald Whitburn, Secretary, Department of Health and Human Services; Department of Health and Human Services; Carol Skornicka, Secretary, Department of Industry, Labor and Human Relations; Department of Industry, Labor and Human Relations; George K. Steil, Sr., President, Boards of Regents of the University of Wisconsin; Board of Regents of the University of Wisconsin; Jon E. Litscher, Secretary, Department of Employment Relations; Department of Employment Relations; State of Wisconsin; Robert Reich, Secretary, United States Department of Labor; United States Department of Labor, Defendants. |
| Court | U.S. District Court — Western District of Wisconsin |
Lauri Roman, Kelly & Haus, Madison, WI, for plaintiffs.
Richard Moriarty, Asst. Atty. Gen., Madison, WI, for defendants.
This is a class action for declaratory relief and money damages brought under the Fair Labor Standards Act, 29 U.S.C. §§ 201-19 by certain employees of the state of Wisconsin who are classified as exempt from the overtime pay provisions of the FLSA. Plaintiffs allege that all of the defendants except Robert Reich and the United States Department of Labor (1) classified the individual plaintiffs improperly as "exempt" employees under the FLSA and have not paid them the overtime pay to which they are entitled for all the hours they worked in any week in excess of 40 during the period from December 3, 1989 to date; and (2) knew of the overtime requirements of the Fair Labor Standards Act, 29 U.S.C. § 207, and demonstrated reckless disregard for plaintiffs in failing to pay them overtime wages. Not alleged in the complaint but agreed upon at a conference held pursuant to Fed.R.Civ.P. 16 is plaintiffs' claim that the state defendants have threatened retaliation against plaintiffs for bringing suit on their FLSA claims.
At issue are the state defendants' policies of requiring employees classified as exempt to charge their personal absences to accrued leave and subjecting these employees to disciplinary suspensions of less than one week. Plaintiffs contend that under these policies, they cannot be considered exempt employees because they are subject to reductions in pay in violation of the "salary basis" test that the United States Department of Labor developed fifty years ago for determining when managerial level employees were to be exempted from the requirements of the FLSA. Under these regulations, employees are considered to be salaried and therefore eligible to be treated as exempt executive, administrative or professional employees if, among other things, they receive a set amount of money that does not depend on hours worked or amount of work accomplished and that is not subject to deductions in pay either for personal absences less than a full day in length or for disciplinary penalties of less than one week imposed for infractions of work rules unrelated to major safety concerns. 29 C.F.R. § 541.118. Plaintiffs maintain that the state defendants are required to treat the employees subject to these policies as nonexempt employees entitled to be paid overtime for hours worked in excess of 40 in any workweek.
The salary basis test was promulgated with only private sector employment in mind because at the time the FLSA did not extend to governmental employees. Plaintiffs' suit raises the question of the extent to which the test applies to the state, local and federal government employees to whom the FLSA has been made applicable in recent years. Plaintiffs contend that the test applies in the same manner to private and public sector employees. They maintain that the federal defendants, Robert Reich and the United States Department of Labor, acted beyond their authority in 1992, when they promulgated 29 C.F.R. § 541.5d, which changes one aspect of the salary basis test as applied to state and local government employees. The new regulation provides that exempt employees in the public sector will not lose their exemptions if their pay is reduced after they exhaust their accrued leave time or take personal leave without permission, provided that the pay system in effect is governed by principles of public accountability permitting employees to accrue leave time and requiring them to use their accrued leave for personal absences. The regulation does not change the prohibition against disciplinary suspensions of less than a week. Plaintiffs contend that the federal defendants acted arbitrarily in creating an exception that allows public employees to be treated differently from private employees for the purpose of applying the salary basis test as it relates to the use of accrued leave time. The state defendants contend that the salary basis test does not apply to state and local governments except as it has been amended in § 541.5d to reflect the demands of public accountability upon state and local governments both because Congress never intended that it would apply and because application of the test to governmental entities would raise serious constitutional questions.
The case is before the court on cross-motions by all parties for summary judgment or for partial summary judgment on the liability issues. I conclude that (1) plaintiffs have failed to show that defendants Reich and the United States Department of Labor acted illegally in promulgating 29 C.F.R. § 541.5d; (2) plaintiffs have failed to show that they lost their exempt status simply because the state defendants required them to use accrued leave time for absences of less than a full day; (3) the salary basis test in § 541.118(a) cannot be applied to state and local government employees except as it has been amended by § 541.5d because it conflicts with congressional intent; (4) plaintiffs chose to waive their claims of willfulness in return for the state defendants' agreement that they would not contest the application of the three-year statute of limitations; and (5) plaintiffs have failed to show that the state defendants either retaliated against them or threatened to do so for bringing this suit.
For the purpose of deciding these motions, I find there is no genuine dispute with respect to any of the following material facts.
Each of the individual plaintiffs is or was employed by the state of Wisconsin during the relevant time period and has been treated by the state defendants as an exempt employee under the provisions of 29 U.S.C. § 213(a)(3). Except for defendants Robert Reich and United States Department of Labor, defendants are either state agencies or heads of state agencies. Defendant Robert Reich is Secretary of the United States Department of Labor. He and the department administer the Fair Labor Standards Act. On August 19, 1992, these defendants promulgated 29 C.F.R. § 541.5d, which became effective September 18, 1992.
Since at least December 1, 1989, each individual plaintiff has been paid a predetermined amount greater than $1000.00 for each biweekly pay period constituting part or all of that plaintiff's compensation for all work weeks during which that plaintiff performed work and was categorized as exempt under the provisions of the FLSA. In addition, since July 1, 1973, state engineers, such as plaintiffs, have received straight time overtime for work performed in excess of 40 hours a week, as a consequence of a study showing that the state was losing skilled engineers to the higher-paying private sector. Straight time overtime is now incorporated into the collective bargaining agreement between the state and plaintiff State Engineering Association.
The predetermined amount paid to each plaintiff has not been subject to reduction because of variations in either the quantity or quality of work performed by that plaintiff. However, in every pay period, plaintiffs have been required to charge personal absences of less than a day to compensated leave balances.
Under Chapter 504 of the Wisconsin Personnel Manual, the state uses an Official Hourly Rate to calculate the rate of pay of all state employees including the governor and excluding only the nonclassified employees of the University of Wisconsin, regardless whether the employees are salaried and "exempt" or paid on an hourly basis and nonexempt under the FLSA. Use of this rate facilitates accurate record keeping and calculations and promotes administrative convenience and uniformity.
State engineers are eligible for straight time overtime. In order to establish their eligibility for this overtime pay and because many of them are working on projects funded by program revenue or federal money and requiring documentation of time and attendance of employees for auditing purposes, state engineers must keep accurate records of the time they work.
The state has a long-established policy requiring its employees to account for any nonwork-related absences from the work place, including those of less than one full day.
As set forth in pages 4 through 6 of Chapter 516 of the Wisconsin Personnel Manual, since at least April 15, 1986, the state has prohibited all state agencies from deducting pay for personal absences from work of less than one day from the salaries of any employee considered exempt under 29 U.S.C....
To continue reading
Request your trial
-
McGrath v. City of Philadelphia
...the same conclusion. See Stewart v. City & County of San Francisco, 834 F.Supp. 1233, 1238 (N.D.Cal.1993); Mueller v. Thompson, 858 F.Supp. 885, 896-97, 899 (W.D.Wis.1994). The Court concludes that, even before September 6, 1991, the City did not violate § 541.118 by maintaining a policy un......
-
Bowman v. City of Indianapolis, IP 91-785 C.
...effect before 1991 cannot be applied to public employees because they were contrary to intent of Congress); Mueller v. Thompson, 858 F.Supp. 885, 899 (W.D. Wis.1994) (Crabb, C.J.); McGrath v. City of Philadelphia, 864 F.Supp. 466 The Court adopts the reasoning and analysis of Service Employ......
-
Adam v. Brown County
...grounds to believe that professional employees need only meet the "duties test" to be exempt from the FLSA, citing Mueller v. Thompson, 858 F.Supp. 885 (Wis.W.D.1994), reversed, Mueller v. Reich, 54 F.3d 438 (7th Cir.1995), vacated by Wisconsin v. Mueller, --- U.S. ----, 117 S.Ct. 1077, 137......
-
Jackson v. Com. of Ky.
...decided by the Seventh Circuit, which reversed a district court decision heavily relied on by the defendant. In Mueller v. Thompson, 858 F.Supp. 885 (W.D.Wis.1994), rev'd, 54 F.3d 438 (7th Cir. 1995), the district court held that the salary test in 541.118(a) could not be applied to state a......