Rudy v. City of Lowell

• Decision Date: 14 March 2011
• Docket Number: Civil Action No. 07–11567–NMG.
• Citation: 777 F.Supp.2d 255
• Parties: Keith RUDY, Jr., Therese Cooper, John Davis, Francis Aubrey, Dennis Daley, Angela Maille, Denise Pelletier, Sean O'Connell, Timothy Lekites, Stephen Paris, Erin Dalton, Mildred Badillo, et al., Plaintiffs,v.CITY OF LOWELL, Defendant.
• Court: U.S. District Court — District of Massachusetts

777 F.Supp.2d 255

Keith RUDY, Jr., Therese Cooper, John Davis, Francis Aubrey, Dennis Daley, Angela Maille, Denise Pelletier, Sean O'Connell, Timothy Lekites, Stephen Paris, Erin Dalton, Mildred Badillo, et al., Plaintiffs,

v.CITY OF LOWELL, Defendant.

Civil Action No. 07–11567–NMG.

United States District Court, D. Massachusetts.

March 14, 2011.

Daniel W. Rice, Glynn, Landry & Rice, LLP, Boston, MA, for Plaintiffs.Brian W. Leahey, City of Lowell Law Department, Lowell, MA, for Defendant.

MEMORANDUM & ORDER

GORTON, District Judge.

The named plaintiffs brought suit on behalf of themselves and others similarly situated against the City of Lowell (“the City”) for violating the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 207, by under-calculating the “regular rate” of pay used to determine overtime wages. Before the Court are the defendant's motion for summary judgment as to damages and plaintiffs' motion to amend the complaint.

I. Factual Background

This case involves a technical dispute with respect to the calculation of overtime pay under the FLSA. All of the plaintiffs are or, at the time of the complaint, were employed by the City and members of the American Federation of State, County and Municipal Employees, AFL–CIO State Council 93, Local 1705. A collective bargaining agreement (“CBA”) sets forth the terms and conditions of the plaintiffs' employment.

The CBA provides that employees may receive a $3.00 per hour augmentation to their pay for plowing snow, a 5% differential for working undesirable night shifts and a $150 weekly “standby” payment to employees at its Water Distribution System. The agreement also allows employees to earn overtime pay of one-and-one-half times their regular pay if they work in excess of eight hours in one day or forty hours in one week. The crux of this dispute concerns whether the three named pay augmentations should be included in the employees' regular rate of pay for the purpose of calculating overtime wages and, if so, how the City is permitted to net out those augmentations against other “premiums” paid to employees beyond the requirements of the FLSA.

II. Procedural History

Plaintiffs filed their complaint on August 22, 2007 and filed an amended complaint two months later identifying 88 plaintiffs. In November, 2009, the parties filed cross-motions for summary judgment with respect to liability. The City then conceded that it had violated the FLSA by failing to include the snow plow stipend and shift differentials in the plaintiffs' regular rate calculations.

In a Memorandum and Order (“M & O”) on June 7, 2010, the Court found that the Water Department's $150 standby stipend also should be included in the regular rate of pay in the weeks during which employees volunteered for standby duty. Rudy v. City of Lowell, 716 F.Supp.2d 130, 133 (D.Mass.2010). As such, the Court allowed the plaintiffs' motion for summary judgment. With respect to damages, the Court stated that the parties would either resolve issues related to the calculation of back pay and damages by August 15, 2010 or, if further court intervention was necessary, the parties would submit memoranda in support of their positions by August 31, 2010.

On January 7, 2011, after two extensions of time, the City moved for summary judgment as to damages and the plaintiffs filed a memorandum addressing damages. Plaintiffs also moved to amend their complaint to add a claim for a violation of the Massachusetts Payment of Wages Law, Mass. Gen. Laws ch. 149, § 148. The parties have submitted timely oppositions to each others' motions.

III. Motion for Summary JudgmentA. Summary Judgment Standard

The role of summary judgment is “to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.” Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir.1991) (quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir.1990)). The burden is upon the moving party to show, based upon the pleadings, discovery and affidavits, “that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c).

A fact is material if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “Factual disputes that are irrelevant or unnecessary will not be counted.” Id. A genuine issue of material fact exists where the evidence with respect to the material fact in dispute “is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

Once the moving party has satisfied its burden, the burden shifts to the non-moving party to set forth specific facts showing that there is a genuine, triable issue. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The Court must view the entire record in the light most hospitable to the non-moving party and indulge all reasonable inferences in that party's favor. O'Connor v. Steeves, 994 F.2d 905, 907 (1st Cir.1993). Summary judgment is appropriate if, after viewing the record in the non-moving party's favor, the Court determines that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law.B. Application

At this point, the parties do not dispute the facts or the defendant's liability. All that remains for the Court to decide are questions of law relating to damages.

1. Offset Calculation

Section 207(h)(2) of the FLSA provides that

Extra compensation paid as described in paragraphs (5), (6), and (7) of subsection (e) of this section shall be creditable toward overtime compensation payable pursuant to this section.

29 U.S.C. § 207(h)(2). Only the “premium” portion of the contractual overtime rate (the extra one-half on top of the regular rate) may be used to offset the defendant's statutory overtime liability. O'Brien v. Town of Agawam, 350 F.3d 279, 289 (1st Cir.2003) (“ O'Brien I ”).

Here, the CBA allows employees to treat certain non-work days such as vacation, sick and personal days as hours actually worked for the purpose of determining overtime hours. The City also pays some workers time and one-half for working on holidays. The parties do not dispute that the extra compensation provided for in the plaintiffs' CBA falls within the compensation described in subsection (5), (6) and (7) and can be used to offset defendant's underpayment, pursuant to § 207(h)(2).

The parties do dispute, however, whether premium compensation earned in one week can be used to offset an underpayment in a different week. Plaintiffs argue that their damages for unpaid overtime should be calculated on a workweek basis and that any offsets pursuant to § 207(h)(2) may only be attributed to the singular workweeks in which the premiums and overtime were earned. In other words, an underpayment one week cannot be offset by a premium payment made in a different week. The defendant contends, to the contrary, that it is entitled to a “cumulative offset”, consisting of all premium payments, against any FLSA overtime it owes, regardless of when the premium payments were earned or made.

The FLSA does not provide an explicit answer to this difference of interpretation and the United States Circuit Courts have taken divergent positions. Some courts have held that § 207(h) offsets should be calculated on a workweek basis. Herman v. Fabri–Centers of Am., Inc., 308 F.3d 580, 585–93 (6th Cir.2002); Howard v. City of Springfield, 274 F.3d 1141, 1147–49 (7th Cir.2001); Roland Elec. Co. v. Black, 163 F.2d 417, 420 (4th Cir.1947); Conzo v. City of New York, 667 F.Supp.2d 279, 291 (S.D.N.Y.2009); Bell v. Iowa Turkey Growers Co-op., 407 F.Supp.2d 1051, 1063 (S.D.Iowa 2006); Nolan v. City of Chicago, 125 F.Supp.2d 324, 331 (N.D.Ill.2000). Other courts have allowed defendants to apply a cumulative offset. Singer v. City of Waco, 324 F.3d 813, 826–28 (5th Cir.2003); Kohlheim v. Glynn County, 915 F.2d 1473, 1481 (11th Cir.1990).

The First Circuit has not directly addressed this issue but other sessions in this District have. In O'Brien v. Town of Agawam, United States District Judge Michael A. Ponsor addressed facts analogous to those at bar and held that the employer could apply a cumulative offset. 491 F.Supp.2d 170, 176 (D.Mass.2007) (“ O'Brien II ”). The Court surmised that the First Circuit would hold accordingly given its holding in Lupien v. City of Marlborough. Id. at 175. In Lupien, the employer's practice of compensating employees for overtime by use of compensatory time (“comp time”), instead of in cash, violated the FLSA. 387 F.3d 83 (1st Cir.2004). With respect to damages, the First Circuit held that the employer did not have to pay its employees for overtime hours for which the employee had used comp time, regardless of when the employee used the comp time. The Court reasoned that paying the employees for overtime hours for which they had used comp time would result in double payment for the same overtime hours. In Murphy v. Town of Natick, another case analogous to this one, United States District Judge Richard G. Stearns agreed with the holding in O'Brien II and also allowed defendants to apply a cumulative offset. 516 F.Supp.2d 153, 160–61 (D.Mass.2007).

Although the two cases in this District are directly analogous to this case, the Court disagrees with them with respect to their interpretation of the FLSA and of Lupien. A further analysis of the Lupien case, the purpose of the FLSA and its interpretation by the Department of Labor (“the DOL”) and the First Circuit's language in O'Brien I all undermine the position adopted by the courts in O'Brien II and Murphy. Rather, they lead to the conclusion that § 207(h)(2) offsets should be calculated on a workweek basis for the following reasons:

1. This case is distinguishable from Lupien and other First Circuit case law indicates support for a workweek offset model. Lupi...