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Overtime oddities: 8th Circuit rejects two claims

By

“It’s exhausting when you have to work

overtime to make something work.”

Actress Patti LuPone

Overtime compensation seems, on the surface, to be relatively straightforward. Eligible employees are entitled to be paid 1½ times their normal compensation for work in excess of 40 hours per week.

But the law concerning overtime pay poses a number of peculiarities. There are parallel federal and state laws in most jurisdictions including Minnesota, although they contain some significant differences. The federal statute, known as the Fair Labor Standards Act, 29 U.S. C. 1001 et seq. provides for liquidated, or double, damages as well as attorney’s fees, a pair of potent remedies lacking under Minn. Stat. § 177.23 which does not apply until more than 48 hours of work was performed in a week.

A couple of other oddities were reflected in two recent rulings of the Eighth Circuit Court of Appeals. Addressing FLSA claims, it denies a pair of lawsuits by employees. In one, the clam was precluded by a phantom collective bargaining agreement. The other turned on a narrow exemption to coverage under a different federal statute.

Doffing and donning denial

The recurring issue of overtime pay for time spent by employees putting on (donning) and taking off (doffing) required work apparel and gear ended unfavorably for employees in Jackson v. Old EPT, LLC, 834 F.3d 872 (8th Cir. Aug. 23, 2016) The lawsuit was brought by a group of production workers at a battery-manufacturing facility in Missouri, who sought overtime pay for pre-work donning and post-shift doffing of plant required clothing and safety glasses. As members of a labor union, they sued for overtime pay after their collective bargaining agreement expired. The trial court rejected their claim on grounds that the doffing and donning time was not covered under the FLSA.

The Eighth Circuit affirmed, but on different grounds. Without addressing the merits, it reasoned that the workers were ineligible for overtime because there was a custom or practice of not paying for donning and doffing time after the union contract expired.

The company established an interim labor agreement after the collective bargaining agreement terminated. The union implicitly accepted it by continuing to work while filing grievances under the arrangement. This created an implied-in-fact contract between the employer and the union, which extended the previous practice of excluding pre- and post shift donning and doffing time from compensable working time. Accordingly, the employees were not entitled to compensation under the non-existent labor contract.

Supreme suits

The decision came a few months after the U.S. Supreme Court last term affirmed an Eighth Circuit decision upholding a $2.9 million verdict for “donning and doffing” time for more than 200 workers at an Iowa food processing plant. Tyson Foods, Inc. v. Bouaphakeo, 136 S.Ct. 1036 (May 20, 2016). The high court held that the verdict was substantiated by “representative” or sample evidence on behalf of some workers applicable to all of them.

That was one of a pair of overtime suits the court addressed last term. In the other one, Encino Motorworks, LLC v. Navarro, 136 S.Ct. 2117 (2016), the justices remanded a lawsuit by so-called services advisers who sell repair work for vehicle dealers who were seeking overtime pay based upon a regulation of the Department of Labor that deemed them outside of an FLSA exemption for sales personnel. The court held that the department’s interpretation of the statutory exemption did not warrant the deference given to it by the Ninth Circuit.

Trucks thwarted

Truck drivers seeking overtime pay under the FLSA were thwarted by an exception in a different federal law, the Motor Carrier Act, in Alexander v. Tutle and Tutle Trucking, Inc., 834 F.3d 866 (8th Cir. Aug. 22, 2016). The action by 11 drivers for related hydraulic fracking companies was rejected by the trial court, and the Eighth Circuit affirmed.

The Motor Carrier Law, 29 U.S.C. § 207(a)(1), excludes those subject to qualifications and maximum hours of service by the Department of Transportation. The drivers were covered by the Department of Transportation regulations because there is a reasonable expectation that they will engage in interstate driving, which they occasionally did. Their work also affected safety/operation of motor vehicles, and had a sufficient connection to interstate commerce to invoke the exemption, making them ineligible for overtime pay.

Minnesota matters

While workers were dismayed by these two setbacks, they were pleased by the expansion earlier this year by the Obama administration of overtime eligibility. Announced last spring, new regulation by the Labor Department, effective December 1, 2016, would have doubled the threshold for overtime eligibility to employees making up to $47,476 annually. This would extend overtime to about 4.2 million additional workers, covering approximately 35% of the work force.

But the outgoing administration suffered a severe jolt right before Thanksgiving when a federal judge in Texas blocked the new regulations from going into effect in response to a lawsuit by 21 states claiming that the rules deviate from congressional intent. Nevada v. Dept of Labor, No. 116-00407 (E.D. Tex.Nov 22, 2016).

At any rate, the regulations are unlikely to survive in the new Trump administration and, some suspect, there may be some rollbacks in store for employees working overtime hours, which could lead to more state court litigation in Minnesota and elsewhere.

PERSPECTIVES POINTERS

Some exemptions from Minnesota mini-FLSA

  • Many farm workers.
  • Executives, administrators, and professional personnel.
  • Police and firefighters.
  • Elected officials.
  • Sales people with 80 percent “outside” sales.
  • Baby sitters.

 

As originally published in Minnesota Lawyer.