Pforr v. Food Lion, Inc.

• Citation: 851 F.2d 106
• Decision Date: 20 June 1988
• Docket Number: No. 87-2547,87-2547
• Parties: 28 Wage & Hour Cas. (BN 1169, 109 Lab.Cas. P 35,082 Jack L. PFORR; Timothy L. Belcher, Plaintiffs-Appellees, and Jerry S. Davis; James O. Slice, Plaintiffs, v. FOOD LION, INC., Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

Page 106

851 F.2d 106

28 Wage & Hour Cas. (BN 1169, 109 Lab.Cas. P 35,082

Jack L. PFORR; Timothy L. Belcher, Plaintiffs-Appellees, and Jerry S. Davis; James O. Slice, Plaintiffs, v. FOOD LION, INC., Defendant-Appellant.

No. 87-2547.

United States Court of Appeals,

Fourth Circuit.

Argued Nov. 4, 1987.

Decided June 20, 1988.

David Raymond Simonsen, Jr. (McGuire, Woods, Battle & Booth, Richmond, Va., on brief), for defendant-appellant.

Fred Dempsey Smith, Jr. (Minor & Smith, Richmond, Va., on brief), for plaintiffs-appellees.

Before WIDENER, CHAPMAN and WILKINS, Circuit Judges.

CHAPMAN, Circuit Judge:

This case involves a claim for compensation for alleged uncompensated overtime ("off-the-clock") hours. It stems from circumstances similar to those in this court's opinion of Davis v. Food Lion, 792 F.2d 1274 (4th Cir.1986). The present plaintiff, Pforr, along with Jerry Davis and James Slice, brought an action for unpaid overtime compensation. The district court severed the Davis claim and it was tried resulting in a verdict for the defendant. On appeal, this court affirmed. Davis v. Food Lion, supra. Pforr's case was then consolidated with that of Timothy Belcher, who had brought a similar suit. The consolidated cases were tried without a jury on December 18 and 19, 1986. The trial court found for the plaintiffs, stating, inter alia, that once it is ascertained that the employer has violated the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. Secs. 201-219 (1982 & Supp. III 1985), the employee must produce sufficient evidence to show the amount and extent of his work as a matter of "just and reasonable inference" to prove entitlement to lost wages.

Food Lion appeals, arguing that the district court erred in its definition of the plaintiffs' burden of proof, in its application of the three-year statute of limitations under Portal-to-Portal Act Sec. 6(b), 29 U.S.C. Sec. 255, and in its findings of the amount of plaintiffs' uncompensated hours. We reverse and remand.

I

Pforr and Belcher were full-time clerks in the perishables department of defendant Food Lion, Inc. The instant controversy relates primarily to their work in its Martinsville, Virginia store (Store 96). Jack Pforr was employed as a clerk from June 26, 1978 until August 20, 1983, when he voluntarily quit his employment. Timothy Belcher was employed as a clerk from May 7, 1979 until June 14, 1985, when he voluntarily quit his employment. As full-time clerks, the plaintiffs were normally scheduled to work 44 hours per week. Plaintiffs were employed at the average hourly wage of $6.45 per hour and received one and one-half times that rate for overtime. Food Lion's area perishables supervisors authorized full-time perishables clerks to work additional overtime hours as needed.

Food Lion has a stated policy that no employee is to work off-the-clock hours. The policy appears in the employees' handbook and is further disseminated by periodic memoranda to each employee and requires the signature of the employee to certify that he is aware of the policy and that he has not violated it. Despite the stated policy, there was testimony as to the existence and extent of off-the-clock work. Additionally, Pforr and Belcher testified that neither had signed the periodic memoranda.

The 44-hour-per-week allotment is part of Food Lion's "effective scheduling" system, wherein Food Lion corporate supervisors allocate hours to the stores based upon what such supervisors perceive as the necessary time to perform the various tasks. As noted in Davis, supra, "[T]he system utilizes a formula to determine the number of variable hours to be allowed individual markets based upon the quantity of products being processed, wrapped, and stocked." 792 F.2d at 1276. The testimony of the witnesses generally indicates two things. First, plaintiffs, department managers, and store managers knew of Food Lion's general policy prohibiting off-the-clock work. Second, all seemed to concede that to meet "effective scheduling," some off-the-clock work was required. There is conflicting testimony as to the extent of the knowledge of department and store supervisors as to plaintiffs' off-the-clock work. Randy Cox, Belcher's perishables manager, testified that he had caught Belcher working off the clock on one occasion and had directed him to leave. Craig Reavis, a Food Lion store manager from February 1982 to January 1983, testified that during the time Pforr worked under him, he had caught Pforr working off-the-clock on one occasion and had instructed Pforr to leave. The district court noted testimony by two of defendant's witnesses, Reavis and James Caldwell, that each was aware of a separate incident when Pforr worked off-the-clock. Upon discovery of isolated instances of plaintiffs working off-the-clock, they were told to stop work or to leave immediately.

The trial court found that the store manager and the department manager knew of this practice of working off-the-clock. Based on isolated instances detailed in the testimony, the court found that these managers were specifically aware of plaintiffs working off-the-clock. Defendant, in its proposed finding of facts, stated, "I have no doubt that Plaintiffs actually worked some hours 'off-the-clock.' Furthermore, I have no doubt that Food Lion knew or should have known about some of the off-the-clock' hours." The trial court found from the evidence and this concession that Food Lion had knowledge that plaintiffs were working off-the-clock.

Plaintiffs introduced Exhibits 4 and 7, which are estimates of their off-the-clock time. Pforr reconstructed his off-the-clock work for the period January 1981 through March 1983 as 636 hours. Defendant challenges Exhibit 4 as inaccurate. In Plaintiffs' Exhibit 7, also challenged as inaccurate by defendant, Belcher estimated his off-the-clock time for the period of August 1981 through August 1984 at a total of 937 hours. Belcher testified that on Mondays he would work 5 to 6 hours off-the-clock and that he worked all of his Saturday time off-the-clock. He stated that he would also work 3 hours off-the-clock on "truck days," of which there were three per week.

The trial court recognized certain inconsistencies among the exhibits, the testimony, and the pretrial depositions. The exhibits had been prepared shortly before trial. The court stated, however, that plaintiffs did not know that it was necessary to keep track of the off-the-clock time and therefore could not be faulted for these inaccuracies. Insofar as there were inconsistencies, the district court reduced the hours claimed to those amounts unrebutted by defendant and it gave defendant full credit for errors and inconsistencies in plaintiffs' exhibits. The court determined that Pforr's unpaid overtime hours amounted to 550 and that Belcher's were 800. Based upon their overtime wage rate, the court found that Pforr was entitled to additional wages of $5,225 and that Belcher was entitled to $7,168. The basis for this decision, as noted by the district court, was the reasonable inference that may be drawn from the evidence of the number of off-the-clock hours, and taking into account the finding that the defendant corporation had constructive or actual knowledge of the off-the-clock practice.

The district court also awarded liquidated damages in an amount equal to plaintiffs' unpaid wages. Liquidated damages are provided under the FLSA, 29 U.S.C. Sec. 216(b). However, under the Portal-to-Portal Act of 1947, at 29 U.S.C. Sec. 260 (1982), if the court finds the employer to have acted in good faith or that he had reasonable grounds to believe his act or omission did not violate the FLSA, the court may award no liquidated damages or award any amount thereof not to exceed the amount specified in Sec. 216. The district judge found that when seeking relief from liquidated damages, the burden shifts to the employer to persuade the court that it was acting in good faith and upon such reasonable grounds that it would be unfair to impose upon him more than a compensatory amount. Based upon its finding that the lower-level management had knowledge of the practice of off-the-clock work, particularly that performed by plaintiffs, the court found that liquidated damages were appropriate. He noted, "It would certainly be illogical for the court to find that Food Lion knew of the violation of the FLSA and at the same time was acting in good faith." The district court also found that the plaintiffs were entitled to reasonable attorneys' fees.

The district court also found that Food Lion knew the FLSA was applicable (i.e., "in the picture") with respect to off-the-clock hours. Under the Portal-to-Portal Act, a finding of "willful" FLSA violation subjects an employer to liability under a three-year, rather than the general two-year, statute of limitations for back wages. The court made its award to plaintiffs for three years of back wages and used the "in the picture" definition of "willful" as found in Donovan v. Bel-Loc Diner, Inc., 780 F.2d 1113, 1117 (4th Cir.1985).

II

Defendant argues that the district court erred in defining the plaintiffs' burden to prove the amount and extent of uncompensated off-the-clock hours that Food Lion "suffered" or "permitted" plaintiffs to work. The standard under Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946), does not mandate that a plaintiff prove each hour of overtime work with unerring accuracy or certainty. In Donovan v. Bel-Loc Diner, Inc., supra, this court stated that a plaintiff under the FLSA need only show the amount and extent of improperly compensated work " 'as a matter of just and reasonable inference.' The burden then shifts to the employer to rebut the prima facie case by coming forward 'with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn' from the [ ] evidence." Id. at 1116 (...