Travel Time

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Working time claims/lawsuits take many forms and often arise out of seemingly unlikely circumstances.  In a recent case, the Third Circuit ruled that temporary workers brought in to take over the jobs of locked out workers cannot receive pay under the FLSA for their time spent travelling to and crossing the picket line.  The case is entitled Smith et al. v. Allegheny Technologies Inc. et al. and issued from the Third Circuit Court of Appeals.

On Strike

The panel held that riding across the picket line in vans provided by an industrial strike staffing company was not their principal activity nor was it integral to their principal activity.  Those are the factors that determine if a particular tangential (or preliminary) activity is compensable.  The Court held that the travel time was not a principal activity just because the employer mandated particular travel procedures.  The workers were driven to the facility, across the picket line, from their hotel, which was almost an hour away.

The Court noted that “for example, a temporary workforce’s commute would be a principal activity if members of that workforce were simply hired to cross the picket line in the morning, enter its factory, and then re-cross the picket line at night.  Similarly, a complaint could allege facts that demonstrated the employee’s crossing the picket line was as important as the work the employee subsequently performed. But no such facts were alleged here.”

The Court also stated that this picket line crossing was not “integral or indispensable” to the job of making steel.  The Court stated that “taking a Strom van to work was at least two steps removed from their steel production duties.”

The Takeaway

This is the correct decision.  This was, in essence, home-to-work commuting which is never compensable under the FLSA.  Yes, there was an interesting variation on the theme but the Court found that the principle remained inviolate.  Still, employers must always be wary of the pre-work activities their employees engage in as a collective action could be lurking around the corner.

Or just down the road…

I have defended many off-the-clock working time cases and I submit that they are very dangerous for employers. This is because they are particularly amenable to class certification because it is likely that there is a common policy applicable to the members of the class. This premise is highlighted by a recent settlement for a class of security guards employed by a security and facility services at JFK International Airport. The settlement is $2.52 million deal. The case is entitled Douglas v. Allied Universal Security Services et al., and was filed in federal court in the Eastern District of New York.

The plaintiff, Kirk Douglas, requested court approval of the settlement through a motion that labeled the settlement fair and reasonable. The motion stated that “in short, while plaintiff continues to believe in his case, and class counsel has and will continue to capably represent their client’s interests in litigation and mediation, they recognize that Allied has presented significant, and potentially dispositive arguments, that pose a significant risk to their chances for class-wide recovery, and this favors preliminary approval.”

The theory of the case was that the employees were compelled to drive to their bases before they clocked out for the day and they were required to do paperwork after their shifts. There was also an allegation that the employees worked through lunch time. The employees in the class (which totaled about six hundred people) were airport security agents, operations assistants and employees dubbed Tour Supervisors, who were claimed to really not be exempt employees.

The settlement came to be after a mediation. The plaintiffs asserted that while they believed in the rightness of their claims, the Company “has mounted considerable defenses to liability and damages.” In that regard, the Company resisted the contention that the employees were actually performing “work” in these off-the-clock situations. The motion asserted that the proffered settlement was “a good value” given the risks inherent in the litigation. The motion stated that “in class counsel’s estimation, the settlement represents a meaningful percentage of the recovery that the class members would have achieved had they prevailed on all their claims, survived an appeal, and sought to enforce and collect upon a judgment.”

The Takeaway

The activities alleged to be working time in this case are troubling because they are the kind that a good-faith, well intentioned employer might not perceive to even be “work.” That is the problem. Employers have to be aware that any activity that they either compel their employees to perform or which are integral to their jobs may be working time and therefore, compensable.

At least be aware of the possibility…

 

At long last, new USDOL Opinion Letters are bursting forward.  Like Spring.  The agency just issued three new letters on a variety of topics, including one of my favorites, travel time.  The other letters address issues of compensable break time as well as the kinds of lump-sum payments that could be garnished for child support.

writing letter
Copyright: perhapzzz / 123RF Stock Photo

The new Labor Secretary stated early on that the agency was going back to issuing these letters.  I applauded that decision at the time.  These letters reflect the agency’s interpretations of various issues under the FLSA, some of them arcane and off-beat, issues that existing case law does not address.  Under President Obama, the agency ceased issuing opinion letters, but favored so-called Interpretations, which were more global in scope.

I want to focus on the travel time letter, FLSA 2018-18.  The inquiry of the submitter was whether the employer had to pay crane technicians, who worked irregular hours, for their travel time under three scenarios: 1) an employee who travels from his home state on Sunday for a training class commencing at 8AM on Monday; 2) an hourly technician who travels from his home to his work location and then to a job site; and, 3) a worker who travels from job site to job site many times during a single day.

The USDOL response was that the first scenario mandated payment for the employee if his hours of travel cut across their normal workday (which is consistent with the FLSA regulations on this point).   The Letter provided three methods to reasonably determine normal work hours for employees with irregular schedules to determine whether the time was compensable.

The first method involves a review of the worker’s hours during the most recent month of employment so that a final determination could be made on the compensability of the travel time.  The second provides that if typical work hours cannot be determined, the employer may choose the average start and end times for the workday.  Lastly, where there are truly no normal work hours, the employer and employees could negotiate a reasonable amount of time in which travel outside the home communities was compensable.

The Takeaway

I know that plaintiff side lawyers and worker advocates may feel that such letters amount to “get out of jail free” cards employers, who want to avoid liability.  The opposite is the case.  The letters provide guidance so that employers may know how to comply with the law in various situations.   That the following of the guidance in a letter gives the employer the protection of the safe harbor provisions in wage hour law is a justly deserved by product.

Keep writing, Mr. Wage-Hour Administrator…

I blog a lot about working time cases because these are the issues can sneak up on an employer, even the most well intentioned and good faith employer. Travel time is one of these murky, arcane kind of activities that go unnoticed by companies until, often, a lawsuit is filed. Another example emerges. A group of workers who constructed and maintained cellphone towers in several States gave been granted conditional certification in a FLSA collective action based on an alleged failure to pay for travel time. The case is entitled Lichy et al. v. Centerline Communications LLC, and was filed in federal court in the District of Massachusetts.

Silhouette of a cell phone tower shot against the setting sun.The judge certified a class of tower technicians and foremen. These workers can now opt into the lawsuit, which is based on the theory that the company should have compensated them for hours they spent driving company vehicles to work, over supposedly vast distances. The inclusion of foremen in the class, e.g. supervisory personnel, is quite interesting, but the Court found their duties were very similar to the rank-and-file workers and the foremen were working under the identical travel time policy.

The plaintiffs’ lawyer, naturally, applauded the decision, stating “first, the court recognized that slight differences among members of the class do not preclude conditional certification where all class members are subject to the same policy regarding payment of wages  Second, the court explicitly recognized that plaintiffs need not submit affidavits in support of their motion for conditional certification in order to prevail.”

Five tower technicians/lineworkers filed the suit. Their job duties included climbing cell towers, many times in distant locations and installing antennae, radios and cables. The Company mandated that the workers drive together to these job sites. The men were paid their regular hourly rates for the travel time between a meeting point and the job site. However, the Company failed to pay for the travel time returning to the central meeting place unless there were traffic delays or the job location was more than 130 miles from the regional workshop, according to the allegations in the case. The workers seek payment for the time driving back in Company vehicles to the central location. The Company contends that the FLSA does not mandate payment for travel time.

The Takeaway

I wonder why the company would not pay for the travel time back to the meeting place or regional office when the Company did pay for the travel time from the meeting place to the job site. That initial agreement to pay seems to undermine the defense that travel time is non-compensable. Home to work travel time is non-compensable, but when workers must first report to a central location, leave from there to the first job site and travel back to that central location, the travel time then does become compensable.

I bet this case settles…

Usually, when a party does not respond to discovery requests, it can face sanctions, including the dismissal of the case (if he/they are the plaintiff(s).  Well, that truism took a hit the other day when a New Jersey federal judge did not dismiss the claims of two opt-in plaintiffs in a FLSA collective action against General Electric Company, as the Court concluded that the delays in their responding to discovery by service technicians, who have charged they were not compensated for off-the-clock duties, did not mandate dismissal of their case.  The case is entitled Maddy et al. v. General Electric Co., and was filed in federal court in the District of New Jersey.

Copyright: marsil / 123RF Stock Photo
Copyright: marsil / 123RF Stock Photo

Although the plaintiffs had a lengthy history of delinquent discovery responses, including a year-long lack of response to certain discovery requests, the Judge refused to throw their claims out.  The Judge examined the so-called Poulis factors, the Third Circuit six-part standard  to determine whether to dismiss a case for failure to comply with discovery and concluded that, in their totality, the standards weighed against dismissal. The Court found that “the only factors which somewhat weigh in favor of dismissal are the extent of the parties’ personal responsibility and the history of dilatoriness.”

The Judge found no evidence to support the employer’s claim that it had been prejudiced by the discovery delay nor was there any evidence that the two opt-ins had acted in bad faith when eventually responded to the May 2014 request in September 2015.  Significantly, the Judge also found that the plaintiffs’ claims seemed meritorious (which is one of the Poulis factors) as the defendant had not filed a motion challenging the legal sufficiency of the claims.

The allegations were that employees were doing preliminary, off-the-clock work.  The employees charge that spent time on integrally connected tasks, including time spent logging in to the computer system in order to download jobs, responding to emails and travel time.  Importantly, they allege that their supervisors intimidated them when they tried to report the time worked on their timesheets.

The Takeaway

This case evidences the “leniency” with which courts allow plaintiffs to continue to press their claims, even in the face of dilatory (beyond words) conduct in responding to discovery.  It seems if the defendant had made some motion to dismiss or challenge the claims, on their own merits, the result might have been different.

The bigger issue is whether, in reality, the employees were working off-the-clock or performing tasks so directly connected to their primary jobs that those sideline activities became compensable.  If supervisors intimidated employees not to report the time, that is bad enough on its own and worse, it will fortify the allegations of how many hours they claimed they worked.

Arbitrate or litigate? Like everything else in the law, it depends…

Whether a claim for overtime should be arbitrated rather than fought out in court depends on whether the claim necessitates examination and interpretation of the labor contract. Under well-established legal principles, workers have an independent right to sue in court, rather than arbitrate, but if the employer successfully argues that contract interpretation is required, the lawsuit is preempted by labor law and arbitration ensues.

Indeed, I believe most employers that I deal with would rather be in arbitration than a full-blown FLSA litigation involving claims for overtime, but in a case entitled Independent Laboratory Employees’ Union Inc. v. ExxonMobil Research & Engineering Co., the Company argued that arbitration was inappropriate. A New Jersey District Court judge disagreed, holding that the grievances seeking compensation for travel time to/from job-related conferences did fall under the aegis of the parties’ labor contract.

The judge stated that “the question presented by the ILEU is whether travel time is included in those circumstances. This is an issue that requires interpretation of the CBA, and particularly in light of the broad language of the arbitration clause, is a matter which falls within the zone of interests receiving protection under the CBA.” The company defended by asserting there was no explicit reference to travel time in the labor contract and thus there was no obligation to arbitrate; the Union then moved to compel arbitration.

The Takeaway

I am somewhat surprised. I have been faced with this situation a few times and I have been the one, on behalf of a client, to argue that arbitration was required, rather than allowing a FLSA lawsuit (with its fee shifting component, doubling of damages and possible extra year of liability) to proceed. In arbitration, the Company, in addition to having the “usual” FLSA defenses (i.e. the travel time was not working time) will also have any contractual defenses it can muster.

To the Union—-Don’t wish for something because you just may get it!

When is travel time compensable?  The focus is on whether an employee is engaged in travel as part of the employee’s principal activity or for the benefit of the employer.

The Basic Rules

• Basic Rule #1:  Normal travel from home to work is not work time. This is true whether the employee works at a fixed location or at different job sites.

• Basic Rule #2:  If an employee reports to a central location to pick up equipment before proceeding to his or her assigned work site, the time spent traveling to the central location is not work time. The time spent traveling to the assigned work site is work time. There is, however, an exception to this rule – the meeting place “concept.”

• Basic Rule #3:  Overnight travel or travel away from home is work time when it cuts across the employee’s normal workday and/or requires the employee to work on weekends or days when he or she would not otherwise be required to work.

Employers must beware that travel time, like other "side"  or "subtle" activities can be compensable if they are integrally connected to the employee’s main job.  These side activities, preliminary and postliminary, form the basis of so-called off-the-clock working time cases.  I will discuss additional aspects and nuances of travel time issues in future posts.

 

When a labor contract contains provisions that address wage hour issues (such as travel time, or donning and doffing time) a defense argument to dismiss a FLSA suit is that the suit is preempted by federal labor law.  This is essentially asserting that the wage hour issue is inextricably tied with contract interpretation so it for an arbitrator, not a court.  That principle was at the heart of a recent FLSA action where the judge declined the invitation to dismiss a lawsuit alleging overtime was not aid, because the court concluded that it was still an open issue whether the parties’ labor contracted barred the claims.  The case is entitled Fenison et al. v. Prime Healthcare Centinela LLC and was filed in state court in California.

“To avail itself of [a statutory exemption to the overtime law], defendant must establish, inter alia, that there is a valid collective bargaining agreement,” the judge found, in denying the employer’s summary judgment motion. “ There is a triable issue of material fact as to whether there is one. Plaintiffs have submitted evidence which they contend supports the position that there is not, while defendants contend that there is.”

The plaintiffs alleged that they were denied overtime. In California, prior to 2000, there was no daily overtime or “clock overtime” requirement, which means that employees working more than eight hours in a day were entitled to overtime (as opposed to forty hours in a week).  Then, in 2000, the law changed and clock overtime became the law of California.  The plaintiffs allege that the hospital, in response to the law, reduced the regular rate and added on a differential payment to avoid paying the hourly employees any more than it had done when the prior law was in effect, allege the plaintiffs.

The suit seeks to cover some fourteen hundred hospital workers who worked under the allegedly improper system since 2007.  The hospital moved for summary judgment, asserting the labor contract as a defense.  “Plaintiffs’ employment with Centinela has always been governed by the collective bargaining agreement. It follows that plaintiffs’ claims for unpaid ‘wages’ is completely barred by [the statutory exemption]”

The judge, however, denied the motion, finding that there had not been enough evidence submitted to demonstrate that there was a valid labor contract between the parties and that it controlled the issue sought to be litigated.  The court will, notwithstanding this ruling, allow the employer to file a new motion, accompanied by necessary affidavits, so the hospital may still prevail on the preemption defense.

The health care industry seems to draw more than its fair share of class action lawsuits.  In another example of this trend, home-health workers have filed a FLSA class action in federal court, alleging that their employer misclassified them as exempt and thus improperly denied them overtime.  The case is entitled Cook v. Amedisys, Inc. filed in federal court in the District of Connecticut.

The theory of the suit is that the employer did not pay for actual hours worked but had implemented a point system for determining compensation.  Counsel for the plaintiffs stated that the Company’s “compensation scheme encourages employees to take on more patient visits and work longer hours, while Amedisys reaps the benefits by reducing their labor costs and boosting their profit margins.”  As the Company has more than four hundred locations and more than 16,000 employees (in 38 states), the potential expansiveness of this lawsuit is staggering.

The classifications of workers involved are home-health registered nurses, physical therapists, occupational therapists and speech language pathologists.  These employees are paid on a per-visit rate, with each visit worth between 1-2 points; there are “estimated” hours built into the system, based on an assessment of how long each type of visit should take.  Travel time is not paid for, nor is the time that must be taken to prepare necessary paperwork or to drop off the collected samples.  On the travel time issue, the complaint alleges that even travel during the day (which is clearly compensable under FLSA regulations) is unpaid.

This suit could be a real problem for the employer.  I do not believe that the exemption defense (i.e. professional) is available, as technician and technologist types of employees (with few, if any, exceptions) are non-exempt, notwithstanding that they may be highly skilled and have studied in specialized programs.

Even if the exemption argument is available, on the duties prong, the Company then has to establish that these workers are paid on a “fee basis,” which is an alternative to payment on a salary basis, which the exemption tests otherwise mandate.

In a May 9, 2011 posting in the Connecticut Employment Law Blog, Daniel Schwartz took a look at the recent decision of the Second Circuit in Kuebel v. Black & Decker.  He notes that the Court held that home-to-work commute time does not become compensable time, merely because the employee has performed work-related tasks before commuting in the morning or when he returned to his house at night.

I applaud this decision because it represents another rejection of employee claims and theories in which the employee seeks to transform commute time into compensable time.  Numerous courts have rejected such attempts in a number if scenarios.

The continuous workday theory encompasses both preliminary and postliminary tasks which are defined as those integral to the performance of the employee’s primary task and thus these tasks act to “elongate” the compensable workday.  Here, the Court concluded that there was no employer induced compulsion to perform these activities either just before the employee left for work or in the morning or immediately after he returned home in the evening.

About ten years ago, there were a number of so-called canine cases. In those cases, police officers who used dogs in their work and took the dogs home claimed, in various jurisdictions, that the fact that they transported the dog converted their home-to-work commutes into compensable time.  In an interesting published decision that I handled, which also went to the Second Circuit, Kavanagh v. Grand Union, 192 F.3d 269 (2nd Cir. 1999), the employee, a refrigeration mechanic for a chain of supermarkets, claimed that because he carried specialized tools in the trunk of his car (and his commute was very long), his commute time was compensable.  His claim was rejected on summary judgment and upheld by the Second Circuit.

Employees seem to sometimes look to try to extend their compensable work day and hook things onto their travel time or claim that the attributes of that commute time (e.g. carrying tools in trunk) make it worthy of compensation.  The best defense (as it usually is) is to be proactive.  I recommend implementing a well drafted travel time/ pay policy that specifically outlines the Company’s position on such matters, with an emphasis on the fact that home-to-work commuting is never compensable.  A variation on the theme is to agree to pay for some portion of the travel to work, e.g. after one hour.  By doing that, the Employer is spending a nickel to save a dollar in that it is evidencing that some payment will be made for the commute time, helping to negate any claim that compensation additional to that is legally mandated.