Reich v. Monfort, Inc., s. 96-1544

• Decision Date: 22 May 1998
• Docket Number: 97-1028,Nos. 96-1544,s. 96-1544
• Citation: 144 F.3d 1329
• Parties: 135 Lab.Cas. P 33,685, 4 Wage & Hour Cas.2d (BNA) 1106, 98 CJ C.A.R. 2616 Robert REICH, Secretary of Labor, United States Department of Labor, Plaintiff-Appellee-Cross-Appellant, v. MONFORT, INC., a Delaware corporation, Defendant-Appellant-Cross-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1329

144 F.3d 1329

135 Lab.Cas. P 33,685, 4 Wage & Hour Cas.2d

(BNA) 1106,

98 CJ C.A.R. 2616

Robert REICH, Secretary of Labor, United States Department of Labor, Plaintiff-Appellee-Cross-Appellant, v. MONFORT, INC., a Delaware corporation Defendant-Appellant-Cross-Appellee.

Nos. 96-1544, 97-1028.

United States Court of Appeals Tenth Circuit.

May 22, 1998.

Daniel R. Satriana, Jr. (Alan Epstein, also of Hall & Evans, Denver, CO, with him on the briefs), for Defendant-Appellant-Cross-Appellee.

Paula Wright Coleman, U.S. Department of Labor (J. Davitt McAteer, Acting Solicitor of Labor; Steven J. Mandel, Associate Solicitor; Tedrick A. Housh, Jr., Regional Solicitor; Paul L. Frieden, Assistant Counsel for Appellate Litigation, U.S. Department of Labor, Washington, DC, with her on the briefs), for Plaintiff-Appellee-Cross-Appellant.

Before ANDERSON, LOGAN, and MURPHY, Circuit Judges.

LOGAN, Circuit Judge.

The Secretary of Labor filed this action alleging that defendant Monfort, Inc., a meat processing company, willfully violated the Fair Labor Standards Act (FLSA) by failing to compensate its employees for certain pre- and post-shift work activities. The district court found that defendant violated the FLSA, the violations were willful and thus subject to a three-year statute of limitations, and it ordered restitution and a permanent injunction. On appeal (No. 96-1544) defendant asserts that the district court erred in concluding that the de minimis exception did not apply and that defendant's violation was willful and thus subject to the three-year statute of limitations. Plaintiff cross-appeals (No. 97-1028) the district court's determination that any back pay which could not be distributed within five years due to inability to locate employees would be returned to defendant.

I

The following factual findings of the district court are not at issue in this case:

The defendant, Monfort, Inc., a subsidiary of Con Agra, owns and operates a meat packing plant in Greeley, Colorado. It is an "enterprise engaged in commerce or in the production of goods for commerce" as defined by 29 U.S.C. § 203(s)(1).

The employees at the Greeley plant involved in this case work in the slaughter and processing of beef into primal and sub-primal cuts commonly called "boxed beef." They are divided into two groups: slaughter and fabrication departments.

The plaintiff asserts that the violations at issue occurred in both departments, beginning on December 15, 1989, and continue to the present. Although some changes in the practices and work environment were made during this period, those changes are not relevant to the liability issues presented.

The employees in both departments are paid on "gang time." Accordingly, recorded work begins when the first animal or animal part arrives at the employee's individual work station on the production line and ends when the last animal or animal part leaves that station.

Employees in both departments are required to don safety and sanitary clothing and equipment after they arrive for work and before taking their places on the production line. Separate locker rooms are provided for men and women workers. This activity is not supervised.

The clothing and equipment required varies according to particular positions and job assignments. A detailed classification of the work involves about 180 job assignments in fabrication and almost 200 job assignments in slaughter. There are multiple combinations of equipment from the following list of items: hard hat, earplugs, hairnets, cotton frocks, knives, scabbards, safety boots, arm guards, arm mesh, mesh apron, back mesh, mesh gloves, a "wizard glove," gaiters, safety glasses, weight belt, rubber gloves and a rubber apron.

There are individual differences in the practices of the employees with respect to time of arrival and time spent in preparing for work. Some workers come early and socialize with co-workers and/or eat in the cafeteria. There are individual differences in the sequence of donning their work clothing and gear.

Many employees must walk to a knife room to exchange or pick up knives and waiting in line is common.

At lunch, most of the employees take off their scabbards, their knives and their gloves. Some remove parts of their protective gear. After lunch, the employees must again put on whatever equipment they previously took off.

After the shift, the employees must take off and clean certain protective equipment, as well as clean their cutting knives. Employees often wait in line at wash stations. More wash stations have been added during the past year, shortening the time required for waiting. The employees then proceed to their lockers to hang up the protective equipment. Finally, most of the employees deposit their frocks at laundry stations before they are free to go home.

From the period May, 1989, to May, 1993, between 1,537 and 1,717 employees worked in the slaughter and fabrication departments and performed these activities on a daily basis at the Greeley, Colorado plant. From May, 1993, to the present time, the number of employees in each department has not significantly changed. Two shifts are worked by both the slaughter and fabrication departments, the "A" shift, which begins around 6:00 a.m. and ends around 2:30 p.m. and the "B" shift, which begins at approximately 3:00 p.m. and ends at about 11:30 p.m.

All employees are provided with badges upon the commencement of their employment at Monfort. Upon arrival at the plant, the employees run their badges across a computer type scanner, which is part of the time clock system. At the end of their shift, the employees then "clock out" with their badges prior to waiting in line to clean their equipment.

Monfort's time clock system is used only to confirm attendance of the individual employees at the work site. It is not used to compute work time.

Questionnaires were sent out by the Department of Labor to 6,186 Monfort present and former employees. Responses were received from 888 employees and 1,417 questionnaires were undeliverable. Plaintiff's statistician, Dr. Lymberopoulos, based his conclusions on the answers provided in these responses, as well as on the answers provided by the deposition testimony of 35 Monfort former and current employees. Of 35 employees deposed, seven had responded to the questionnaire and the other 26 had not responded. Dr. Lymberopoulos gave his statistical opinion that 11.57 minutes were involved in the subject activities.

The plaintiff retained C. Leon Sherman to conduct time and motion studies at Monfort's Greeley plant. Sherman studied both the A and B shifts in both the slaughter and fabrication departments. Based on his studies, Sherman opined that Monfort employees spend, on average, between 8 and 11.5 minutes per day per employee on the above described activities, without counting the time spent in these activities at lunch.

I Appellant's App. 17-20.

The district court determined that the preliminary and postliminary activities constituted ten minutes of compensable time, rejecting defendant's argument that it should be excluded under the de minimis doctrine. The court then found that the violation was willful, and thus subject to a three-year statute of limitations. The court permanently enjoined and restrained defendant from continuing to withhold $1,570,019.34 in unpaid overtime compensation due its employees, plus pre-and postjudgment interest. The court ordered that sums which could not be paid to claimants within sixty days be deposited with the clerk of the court, and set out procedures for attempting to identify claimants. Finally the court ordered that "[l]iability of defendant to any claimant whom neither party is able to locate within five (5) years from the date of judgment shall terminate and all sums previously due such claimant, shall be returned to defendant, upon application therefor to the Clerk of the Court." Id. at 28.

II

We first consider whether the district court erred in concluding that the de minimis exemption did not apply to the pre- and postliminary activities in this case. The parties assert that the question whether the de minimis exception applies is a ruling of law, reviewable de novo. See Bobo v. United States, 136 F.3d 1465, 1468 (Fed.Cir.1998). But see Anderson v. Mount Clemens Pottery Co., 328 U.S. 680, 689, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946) (extent of actual work performed is factual issue, reviewable under clearly erroneous standard). We need not decide whether we apply a de novo or a clearly erroneous standard of review, because under either standard we would affirm the district court's conclusion.

The parties agree that the period of time spent on preliminary and postliminary activities was compensable unless it met the de minimis exception. In Anderson the Supreme Court held that otherwise compensable preliminary and postliminary activities are not included in calculating hours worked in a week if the period of time spent on an activity is so "insubstantial and insignificant" that it ought not be included in the work week. 328 U.S. at 693, 66 S.Ct. 1187. "[A] few seconds or minutes of work beyond the scheduled working hours ... may be disregarded. Split-second absurdities are not justified.... It is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved." Id. at 692, 66 S.Ct. 1187.

The factors to consider in determining whether an activity is de minimis were set out in Lindow v. United States, 738 F.2d 1057 (9th Cir.1984). The Lindow court first stated that "[a]n important factor in determining whether a claim is de minimis is the amount of daily time spent on the additional work. There is no precise amount of time that may be denied compensation as de minimis. No rigid rule can be applied with mathematical certainty." Id. at 1062. Defendant points out that the instant case involved ten-minute...