Service Employees Intern. v. County of San Diego

Decision Date11 February 1992
Docket NumberNo. 90-1211-GT-M.,90-1211-GT-M.
Citation784 F. Supp. 1503
PartiesSERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 102, et al., Plaintiffs, v. COUNTY OF SAN DIEGO, Defendant.
CourtU.S. District Court — Southern District of California

Craig Becker, UCLA Law School, Los Angeles, Cal., Robert A. Bush, Jesus E. Quinonez, Hope J. Singer, Taylor, Roth, Bush & Geffner, Burbank, Cal., for plaintiffs.

Lloyd M. Harmon, Jr., County Counsel, Diane Bardsley, Chief Deputy, Ian Fan, Deputy, Miriam Milich, Deputy, San Diego, Cal., for defendant.

ORDER ON PLAINTIFFS' SECOND MOTION FOR PARTIAL SUMMARY JUDGMENT

GORDON THOMPSON, Jr., District Judge.

Following briefing of these issues by the parties, these motions for partial summary judgment came on for hearing before the Court on February 10, 1992 at 10:30 a.m. The Court has fully considered this matter, including review of the papers filed by the parties, the authorities cited therein, and the arguments presented.

I INTRODUCTION

Plaintiffs' motions for partial summary judgment were presented to the Court on three issues:

(1) Whether the employer's violation was willful, thus entitling plaintiffs to damages for the three years prior to the filing of the complaint, instead of only for the two years clearly authorized by the Fair Labor Standards Act ("FLSA" or the "Act").

(2) Whether the employer's violation was willful, thus entitling plaintiffs to liquidated damages.

(3) Whether plaintiffs are non-salaried employees, and thus not exempt from bringing an action under FLSA.

Additional issues as well were addressed in the moving papers. This opinion will address these motions in two sections, (1) Damages and (2) Exemption from FLSA.

II DAMAGES
A. FACTUAL BACKGROUND

Following a complaint filed with the Department of Labor's (DOL's) Wage and Hour Division concerning lack of compensation for on-site back-up duty, the DOL assigned Compliance Officer Dean Smith to meet with various County of San Diego officials. Following his investigation, on July 10, 1987, Smith informed County Labor Relations Specialist Dan Kelley that on-site back-up duty "appears to be hours worked." He explained that the back-up duty was "hours worked because of the restriction on time."

Then, on August 4, 1987, Smith participated in a conference call with Kelley; Merrilyn Carpenter, the Department of Probation's Personnel and Training Administrator; and Pat Mahler, a personnel consultant for the County. During this call, Smith informed these County agents that the work in question was "worktime."

On September 3, 1987, Smith told Kelley that the County should "recompute hours and give back-pay." The next day, Smith stated that "he could put things in writing stating that stand-by should be counted as hours worked," but County officials "discouraged a written letter at that time."

In another meeting on September 15, 1987, Kelley took notes, with an asterisk for emphasis, which stated: "Position of DOL is if its on site, some of the time has to be counted hours worked notwithstanding District Court decision," with the reference to District Court decision apparently referring to two decisions from districts in the respective states of Louisiana and Texas.

Despite the oral comments of Smith, the County requested an opinion from the DOL's Regional Solicitor. In a letter dated August 5, 1988, received by the County on August 11, 1988, the Solicitor confirmed Smith's opinion, based primarily on his interpretation of Ninth Circuit law, that on-site back-up duty was compensable work. Upon the receipt of this letter, a County representative wrote back in November, 1988, continuing to contest the finding of the DOL.

This action was commenced on September 17, 1990.

B. CONCLUSIONS OF LAW RE: STATUTE OF LIMITATIONS

The statute of limitations for an action under FLSA is two years. However, "a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued." 29 U.S.C. § 255(a). The question in this case is not whether the action was timely filed, but instead how far back the County will be required to pay damages.

As the action was filed on September 17, 1990, there is no question that plaintiffs may recover damages incurred subsequent to September 17, 1988, two years prior to the filing of the action. In this motion, plaintiffs seek an order by summary judgment that they are entitled to damages for the three years prior to the filing of the complaint, back to September 17, 1987, based on allegations that the violation was willful within the meaning of Section 255(a).

The Supreme Court defined willful in McLaughlin v. Richland Shoe Co., 486 U.S. 128, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988). In McLaughlin, the Court held that a violation is willful if "the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute." Id. at 133, 108 S.Ct. at 1681. The currently proposed regulations of the DOL elaborate on this definition of "willful," deeming action willful when it is at variance with advice of the DOL.1 Although this proposed regulation is only proposed and thus not binding, the proposed regulation embodies the notion that an employer, informed by the DOL that its conduct is in violation of FLSA, knows that its conduct is "prohibited by the statute."

It is clear from the evidence presented that the plaintiffs have shown that the County was aware of the DOL's position. Moreover, the County, despite its reference to the subject in its points and authorities, has not presented the court with any evidence that it was unaware of the DOL's position on this matter. Instead, the County chose to ignore the DOL's findings as given to the County by Mr. Smith and then by the Solicitor in favor of its own view of the law. Quite unlike the situation discussed by the Ninth Circuit in General Electric Co. v. Porter, 208 F.2d 805, 816 (9th Cir.), cert. denied, 347 U.S. 951, 74 S.Ct. 676, 98 L.Ed. 1097 (1954) (employer not in bad faith given "uncertain state of the law"), the law in the Ninth Circuit is settled at this time. See id.; Kelly v. Ballard, 298 F.Supp. 1301 (S.D.Cal.1969). As such, the County cannot find safety in its "good faith" challenge to the law based upon decisions in other circuits. Instead, the County, resting in this circuit as it does, must obey the commands of the law in this circuit. Given the well-settled nature of the law, the County's failure to follow the precedent of this circuit clearly was done with knowledge or reckless disregard, and as such was a willful violation of FLSA.

Moreover, even without the DOL finding, given the clear state of the law in this circuit, the County's decision to ignore this law was a violation of the Act. As such, it is not necessary to address plaintiffs argument that the damages be extended back in the alternative to the date of the receipt of the written letter on August 11, 1988. Instead, the plaintiffs, as they have shown that the County was aware of the existing interpretation of the law and chose to ignore it, are entitled to damages for the full three years prior to the filing of the complaint. As a result, plaintiffs are entitled to damages beginning on September 17, 1987.

C. CONCLUSIONS OF LAW RE: LIQUIDATED DAMAGES

FLSA provides that an employer who violates the minimum wage or maximum hour provisions "shall be liable for ... the payment of wages lost and an equal amount as liquidated damages." 29 U.S.C. § 216(b). Liquidated damages are not penal in nature, but instead "constitute compensation for the retention of a workman's pay which might result in damages too obscure and difficult of proof for estimate other than by liquidated damages." Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 707, 65 S.Ct. 895, 902, 89 L.Ed. 1296 (1945). As a result, in a FLSA case, "Double damages are the norm, single damages the exception." Walton v. United Consumers Club, Inc., 786 F.2d 303, 310 (7th Cir.1986).

Although FLSA makes the award of liquidated damages mandatory, it created an exception where the court has discretion not to award liquidated damages "if the employer shows ... that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the Fair Labor Standards Act." 29 U.S.C. § 260. To benefit from this exception, the employer must pass both a subjective and an objective test. See 29 C.F.R. § 790.22(b) ("(1) The employers must show ... that the act or omission giving rise to such action was in good faith; and (2) he must show also ... that he had reasonable grounds for believing that his act or omission was not a violation of the ... Act.")

Obviously, if the County's action were "willful" as discussed in the previous section, the County cannot pass this test. Indeed, the County's action were neither subjectively or objectively reasonable. Moreover, a number of decisions have indicated in this area that once DOL has expressed its opinion on an issue, an employer can no longer act to the contrary in good faith. See, e.g., Hultgren v. Lancaster, 913 F.2d 498, 509 (8th Cir.1990); Joiner v. Macon, 814 F.2d 1537, 1539 (11th Cir.1987); Richard v. Marriott Corp., 549 F.2d 303, 304 (4th Cir.1977); King v. Board of Education, 435 F.2d 295, 298 (7th Cir.1970). As a result, the Court must award liquidated damages.

D. CONCLUSIONS OF LAW RE: SLEEP TIME

In the order of April 23, 1991, the court ruled that back-up duty is work even though employees may sleep during some of it. Moreover, the court held that the bargaining agreement could not bar relief. As such, the principles of res judicata bar the County from relitigating the issues of deductions from back-up duty pay for sleep time.

E. CONCLUSIONS OF LAW RE: MONETARY DAMAGES

Incredulously, the County argues that it should be allowed to compensate plaintiffs with time off rather than money damages. The County relies on 29...

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