Walsh v. E. Penn Mfg. Co.

• Decision Date: 17 August 2021
• Docket Number: Civil Action No. 18-1194
• Citation: 555 F.Supp.3d 89
• Parties: Martin J. WALSH, Secretary of Labor, Plaintiff v. EAST PENN MANUFACTURING CO., INC., Defendant
• Court: U.S. District Court — Eastern District of Pennsylvania

555 F.Supp.3d 89

Martin J. WALSH, Secretary of Labor,¹Plaintiff

v.EAST PENN MANUFACTURING CO., INC., Defendant

Civil Action No. 18-1194

United States District Court, E.D. Pennsylvania.

Signed August 17, 2021

Filed August 18, 2021

Oscar L. Hampton, Bertha M. Astorga, Patrick M. Dalin, Alexander Edward Gosfield, Adam F. Welsh, Ethan M. Dennis, Andrea C. Luby, Christopher H. Rider, U.S. Department of Labor Office of the Solicitor, Philadelphia, PA, for PlaintiffEugene Scalia.

Andrea C. Luby, U.S. Dept. of Labor, Solicitor, Philadelphia, PA, for Plaintiff Acting Sec of Labor Milton Al Stewart.

Alexander Edward Gosfield, Andrea C. Luby, U.S. Dept. of Labor, Solicitor, Philadelphia, PA, for PlaintiffMartin J. Walsh.

Daniel B. Huyett, Stevens & Lee, Reading, PA, Michael J. Mueller, Andrea R. Calem, Evangeline C. Paschal, Geoffrey B. Fehling, Kelly R. Oeltjenbruns, Hunton Andrews Kurth LLP, Washington, DC, Gary D. Melchionni, Stevens & Lee, Lancaster, PA, Kenneth D. Kleinman, Stevens & Lee PC, Philadelphia, PA, for DefendantEast Penn Manufacturing Company, Inc.

MEMORANDUM

Pratter, United States District Judge

The Secretary of Labor initiated this action against East Penn Manufacturing Co., Inc., a battery manufacturer, alleging that East Penn has failed to compensate its employees for time spent changing into and out of uniforms and personal protective equipment and showering at the end of a work shift.East Penn does not dispute that the time spent donning, doffing, and showering is compensable under the Fair Labor Standards Act of 1938,29 U.S.C. §§ 203 et seq.The crux of the dispute is whether East Penn's pay policies, which compensate employees based on what it deems a "reasonable" time for these tasks, are sound as a matter of law and sufficient as a matter of fact.Contrary to the Secretary's contentions, East Penn disputes that it is legally required to compensate for the actual time expended by any given employee.But to the extent that such compensation as it pays is deficient, East Penn then maintains that the difference between what is "reasonable" and what would be "actual" is de minimis.Like the Energizer Bunny, the parties have pounded their steady drumbeats, with each side steadfast in its belief that it poses the correct standard of measurement.

Following an extensive discovery period and a multitude of discovery disputes, including expert discovery² , both parties moved for summary judgment.East Penn moved for partial summary judgment first on its good faith defense to the Secretary's claim for liquidated damages and to foreclose the Secretary's claim that East Penn willfully violated the FLSA. Doc. No. 155.East Penn then followed up with a second motion for partial summary judgment to foreclose certain categories of employees from a potential recovery class on the basis that the Secretary failed to produce sufficient evidence to prove uncompensated time as to them.Doc. No. 156.

In response, the Secretary filed a motion for partial summary judgment on no less than 11 separate issues.Doc. No. 161.The Secretary asks the Court first to find, as a matter of law, that East Penn must pay its employees for actual time worked, not a "reasonable" duration of time for the subject tasks.He also moves for a finding that East Penn violated the recordkeeping and overtime provisions of the FLSA, that such violations were willful, and that the uncompensated time was not de minimis.The Secretary then filed two motions to strike certain of East Penn's exhibits supporting its motion for summary judgment, Doc. No. 198, andEast Penn's Notice of Supplemental Authority, Doc. No. 231.The Court held oral argument on these fully briefed motions.

While the motions for summary judgment were pending, the parties could not resist filing additional discovery related motions.The Secretary filed a notice to amend Schedule A to his complaint, adding a few thousand additional East Penn employees to the group deserving compensation under the Secretary's theories.East Penn responded with a motion to strike.Doc. No. 251.³

Having powered through literally stacks of competing briefs, the Court finds that many of the issues raised in parties' motions for summary judgment to be premature and thus not properly resolvable at this stage of the proceeding.

TABLE OF CONTENTS

BACKGROUND ...100

A.Tracking East Penn Employees'Time...101

B. East Penn's Pay Policies for Donning and Doffing...102

C.Time Spent by Uniformed Employees on Pre and Post ShiftActivities...102

LEGAL STANDARDS ...104

I.ApplicableFLSA Law...104

II.The Secretary's Motion for Partial SummaryJudgment...106

A.UncontestedIssues...106

B.Correct Measurement of CompensableTime...106

C. FLSA RecordkeepingViolation...111

D.Whether East Penn Violated the FLSA OvertimeRequirements...113

E. East Penn's Time Clock Records as Minimum Amount of UncompensatedTime...116

F. East Penn's de minimis Defense...117

III.East Penn's Motion for Partial Summary Judgment as to Scope of Employees...119

A.Employees Who Work Outside of Pennsylvania...120

B.Continuous OperationsEmployees...120

C.Employees Who Do Not Wear a Uniform and Shower...122

D.Uniformed Employees Not at the Eight FacilitiesStudied...124

IV. Damages...126

A.Background on DOL Investigations and East Penn'sPolicies...126

i. The 2003 UniformPolicy...126

ii.Pre-2016OSHA Investigations...128

iii.The 2016 OSHA Complaint...128

iv.Wage and HourDivision Investigations...129

B.LiquidatedDamages...129

i. The Secretary'sMotion...130

ii.East Penn'sMotion...130

C.Whether East Penn's Violations WereWillful...134

i. The Secretary'sMotion...134

ii.East Penn'sMotion...136

D. InjunctiveRelief...137

V.The Secretary's Motions to Strike...137

A.The Secretary's Motion to Strike East Penn'sExhibits...137

B.The Secretary's Motion to Strike East Penn's "Notice of Supplemental Authority"...139

VI.East Penn's Motion to Strike...140

CONCLUSION ...141

BACKGROUND⁴

East Penn manufactures and recycles lead acid batteries at its Lyon Station, Pennsylvania campus.Doc. No. 156-2 ¶ 1;Doc. No. 157 ¶ 2.The Lyon Station facility consists of roughly 30 separate divisions and plants, including automotive, industrial, metals, and manufacturing support services.Doc. No. 156-2 ¶¶ 2-4;Doc. No. 157 ¶¶ 5-6, 8.East Penn employees are not union represented and have not entered into a collective bargaining agreement with their employer.Doc. No. 157 ¶ 11;Doc. No. 176-1 ¶ 11(a).

Most of East Penn's plants operate 24 hours a day, divided into three consecutive eight-hour shifts.Doc. No. 157 ¶ 19;Doc. No. 176-1 ¶ 19(a).The exception is East Penn's "continuous operations" departments which—as its name suggests—operate with partially overlapping eight-and-a-half hour shifts.Id.The overlapping scheduling ensures that the machines in those plants are never taken offline.

East Penn requires that all employees at the Lyon Station campus wear personal protective equipment, regardless of their risk of exposure to lead, chemicals, or other hazards.Doc. No. 157 ¶ 39;Doc. No. 176-1 ¶ 39(a).Because of the chemicals with which they work, certain East Penn employees are required to change out of their street clothes and into a uniform prior to entering the production floor at the beginning of their shifts.Doc. No. 157 ¶ 42;Doc. No. 176-1 ¶ 42(b).This uniform is supplied each day and the employee is required to be fully dressed in the uniform prior to entering the production floor.Doc. No. 157 ¶ 47-48;Doc. No. 176-1 ¶¶ 47(b), 48(a).Depending on the hazards associated with the job, East Penn also requires certain employees to wear additional PPE, including safety shoes, respirators, and hard hats.Doc. No. 157 ¶ 41;Doc. No. 176-1 ¶ 41(a).

At the end of their shifts, uniformed employees remove their uniforms and change back into their street clothes prior to leaving the facility.Doc. No. 157 ¶ 50;Doc. No. 176-1 ¶ 50(a).Some of them also shower as part of their end-of-shift activities.The parties dispute whether all uniformed employees are required to shower as part of the end of shift activities.Doc. No. 157 ¶ 54;Doc. No. 156-2 ¶ 109;Doc. No. 176-1 ¶ 54(b).East Penn maintains that only uniformed employees who work in defined lead exposure areas must shower.Doc. No. 176-1 ¶ 54(b).But it is undisputed that employees face disciplinary action for failing to wear their uniforms and for failing to shower, if showering is required.Doc. No. 176-1 ¶¶ 60-61.

A.Tracking East Penn Employees' Time

East Penn maintains two sets of time records for each of their employees.The first is what East Penn deems "actual" time (or "Actl" as appears on some time sheets).Per East Penn policy, all employees are required to swipe in and out using a card-scanning system located in the plant to which they are assigned.Doc. No. 157 ¶¶ 62, 63;Doc. No. 176-1 ¶¶ 62(a), 63(a).Employees are required to swipe in no more than 14 minutes before the start of their shift and 14 minutes after the end of their paid shift.Doc. No. 157 ¶ 69;Doc. No. 176-1 ¶ 69(b).The time clock system records these swipe times to the minute, which are then preserved in East Penn's "mainframe."Doc. No. 157 ¶¶ 65-67;Doc. No. 176-1 ¶¶ 65(a)-67(a).

The second set of time records is for "adjusted" time.Adjusted time corresponds to the employees' scheduled shift times and does not show the 1-14 minutes before and after shifts.⁵Doc. No. 157 ¶¶ 77, 82;Doc. No. 176-1 ¶¶ 77(b) 82(b).Both the actual and adjusted time entries appear on an employee's Payroll Transaction Edit List.Doc. No. 157 ¶ 82;Doc. No. 176-1 ¶ 82(a).East Penn does not pay for "actual" time—that is, the recorded between the swipes.Instead, East Penn pays employees based on "adjusted" time—the length of their scheduled production shift—which is paid out in 15-minute increments.Doc. No. 157 ¶ 69;Doc. No. 176-1 ¶ 69(b).Some employees swipe in when their shift time officially starts so there is no discrepancy between "actual" and "adju...