Overtime claims focus of action in U.S. District Court for Western

Whether an employer wrongfully failed to pay its employees for travel time to out-of-town job sites and lunch breaks they allegedly did not take were just a couple of the issues the U.S. District Court for the Western District of New York addressed in Patrick Mendez, on behalf of himself and all other employees similarly situated v. The Radec Corp., et al.

In his decision for the court, Judge David G. Larimer ruled the plaintiffs were entitled to compensation for the time they traveled to out-of-town job sites. The judge, however, denied the plaintiffs' motion for summary judgment on their claim for lunch breaks, finding that many issues of fact existed. Lastly, the judge granted the plaintiffs' request for class certification of four subclasses.

Plaintiffs' Claims

The case was initiated when the plaintiff, Patrick Mendez, filed a lawsuit against his former employer, Radec Corp., a company that provides commercial electrical construction and maintenance. On behalf of himself and other similar employees, Mendez alleged that Radec violated the Fair Labor Standards Act (FLSA) and the New York Labor Law by failing to pay overtime wages for hours worked in excess of 40 hours per week.

A total of 76 plaintiffs have currently opted into the lawsuit and requested the court grant them class certification on their state Labor Law claims. They alleged the following:

* (1) Radec failed to pay its employees during times when they allegedly could not take their lunch break;

* (2) Radec failed to properly compensate its employees for certain time spent traveling to out-of-town job sites;

* (3) Radec improperly compensated its employees for travel time by paying them a straight-time rate instead of an overtime rate; and

* (4) Radec failed to include certain bonuses in calculating its employees overtime pay.

In addition to their motion for class certification, the plaintiffs filed a motion for summary judgment on their claims.

In response, Radec moved for an order decertifying the FLSA collective action, and dismissing all putative FLSA claims without prejudice to the filing of individual FLSA actions.

Lunch Breaks

The court first addressed the plaintiffs' claim in which they alleged that Radec failed to compensate them for lunch breaks they did not take. Specifically, the plaintiffs alleged that Radec automatically deducted two and a half hours from each employee's pay each week to reflect 30 minutes' lunch time each day.

The plaintiffs contended the two and a half hours were deducted regardless of whether the employee's lunch break had been interrupted by work duties, which they alleged happened frequently. The plaintiffs argued that any work-related interruptions during their lunch resulted in the entire meal period being compensable.

To support their claim, the plaintiffs referred to 29 CFR Section 785.19(a), which provides that The employee must be completely relieved from duty for the purposes of eating regular meals. ... The employee is not relieved if he is required to perform any duties, whether active or inactive, while eating.

Radec disagreed with the plaintiffs' argument and contended that an occasional and brief interruption of an employee's lunch did not render the entire period compensable.

For example, in Reich v. Southern New England Telecommunications Corp., 121 F3d 58 (Second Cir. 1997), the U.S. Court of Appeals for the Second Circuit rejected a literal reading of the regulation as requiring employees to be completely removed from duty throughout their meal periods. Instead, the issue is whether a break itself is predominantly spent on activities for the employer's benefit, see e.g., Bernard v. IBP, Inc. of Nebraska, 154 F3d 259, 264-65 (Fifth Cir. 1998).

The court rejects plaintiffs' contention that meal periods must be compensated unless they are completely free of any work-related interruptions, wrote Judge Larimer. Rather, the issue is whether the meal period as a whole was spent predominantly for the employee's benefit, or for the benefit of Radec, the employer. Occasional, brief interruptions, then, will not render the meal period compensable.

The judge further pointed out there were issues of fact concerning the nature, frequency and extent of the work interruptions that the plaintiffs alleged occurred during their lunch breaks.

For example, while certain employees stated their lunches were frequently interrupted (35 to 100 percent of the time), Radec asserted the interruptions were rare and that employees could restart their lunch after the interruption so that they could still take a total of 30 minutes for lunch.

Radec also asserted that its employees often took more than 30 minutes for lunch but the company only required them to deduct a half hour. Moreover, Radec was able to obtain the affidavits of several employees who supported the company's claims.

I find that the court cannot decide, on the record before me, whether, or to what extent, plaintiffs' meal periods were subject to work-related interruptions of such frequency and magnitude as to make them compensable under the predominant-benefit standard, wrote Judge Larimer. The parties' versions of the relevant facts, as set forth in their affidavits, differ sharply from each other, and the court cannot resolve those differences without weighing the affiants' credibility, which would be inappropriate on a motion for summary judgment, see Curry v. City of Syracuse, 316 F3d 324, 333 (Second Cir. 2003).

As a result, the judge denied the plaintiffs' motion for summary judgment on their lunch break claims.

Overnight Travel Time

The court next found the plaintiffs were entitled to summary judgment on their overnight travel claims.

According to 29 CFR Section 785.39: Travel away from home is clearly worktime when it cuts across the employee's workday. ... The time is not only hours worked on regular working days during normal working hours but also during the corresponding hours on nonworking days.

Radec asserted that its employees who traveled from one job site to another were not entitled to be compensated based on its claim that its employees did not have normal working hours since they could be expected to work at any hour of the day or night depending on the particular job. Radec also contended that the employees who chose to return to Rochester on weekends or their days off from an out-of-town job engaged in voluntary travel and should not be compensated for that time. The court disagreed.

In particular, while the specific hours might have varied from project to project, the court found the normal working hours that a Radec employee worked did not vary within a project.

The court also determined that employees who traveled to a job site of an out-of-town project but returned home during their off- days were not engaged in voluntary travel since Radec failed to pay for their housing during their days off.

I find as a matter of law that plaintiffs have established that, at least with respect to individual jobs, they did have 'normal working hours,' that they traveled to out-of-town job sites during those hours, and that they were not compensated for that travel time, in violation of the FLSA and 29 CFR Section 785.39, determined Judge Larimer. Plaintiffs are therefore entitled to summary judgment on this claim.

'Straight-Time' Rate

The court also ruled the plaintiffs were entitled to receive overtime rates for the time they spent traveling instead of the straight-time rate that Radec paid them.

There is no basis to treat travel time differently from employees' other work-related activities, and those hours count in determining whether the employee is entitled to overtime, explained Judge Larimer.

The undisputed evidence shows that on at least some occasions, [Radec] paid [its] employees for travel time at straight-time rates, even though the employee had worked over 40 hours that week, continued the judge.

Bonuses

The court denied the plaintiffs' motion for summary judgment with regard to their claim that Radec failed to properly include certain bonuses they received for the completion of a project when calculating their overtime pay.

According to 29 CFR Section 778.209(a), [w]here a bonus payment is considered a part of the regular rate at which an employee is employed, it must be included in computing his regular hourly rate of pay and overtime compensation.

Based on the current record, the court found there was an issue of fact concerning whether the bonuses the plaintiffs received were discretionary payments that were not intended to serve as compensation for their work.

Plaintiffs' motion for summary judgment on their claim that defendants improperly failed to include bonuses in calculating employees' regular rate of pay (and hence their overtime rate of pay as well) is denied, wrote Judge Larimer. Although the record shows that defendants did make bonus payments to Radec employees from time to time, there are issues of fact concerning whether those bonuses were discretionary, and hence properly excluded from overtime calculations.

Class Certification

The court next granted the plaintiffs' motion for class certification on their state Labor Law claims for the following four subclasses:

* Subclass 2A which includes employees who were not paid wages for regular or overtime work;

* Subclass 2B which includes employees who were not paid for compensable travel time;

* Subclass 2C which consists of employees who alleged that Radec failed to include promised per-hour pay increases in calculating their regular or overtime rate of pay; and

* Subclass 2D which consists of employees who alleged that Radec failed to include bonuses in their regular or overtime pay calculation.

In granting the plaintiffs' motion for class certification, the court found they met the following requirements of Rule 23 of the Federal Rules of Civil Procedure: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative party are typical of the claims or defenses of the class; and (4) the representative party will fairly and adequately protect the interests of the class.

In particular, the court found the 76 individuals who have currently opted into the lawsuit were numerous enough to meet the first requirement, see Marisol A. v. Giuliani, 126 F3d 372, 376 (Second Cir. 1997).

The court also found that Mendez, as a class representative, had claims that were typical and common to the other plaintiffs. Specifically, the court determined it was irrelevant that Mendez had a different job title (i.e., field manager) than many of the other plaintiffs since his claims alleged that he was also subject to the same company policies as the other class members.

[P]laintiffs here are challenging certain Radec policies, which allegedly have been applied in a more or less uniform fashion to Radec employees, explained the court. Accordingly, these issues 'are subject to generalized proof, and thus applicable to the class as a whole,' and they 'predominate over those issues that are subject only to individualized proof,' In re Visa Check/MasterMoney Antitrust Litigation, 280 F3d 124, 136 (Second Cir. 2001) (quoting Rutstein v. Avis Rent-A-Car Sys., Inc., 211 F3d 1228, 1233 (11th Cir. 2000), cert denied, 532 US 919 (2001) [internal quotation marks omitted]).

Decertification Motion

Lastly, the court denied Radec's motion for an order decertifying the plaintiffs' collective action under the FLSA, and dismissing all putative FLSA claims.

I ... deny [Radec's] motion to decertify the FLSA claims, concluded Judge Larimer. I find that the class members are similarly situated in all material respects, and that this case can properly proceed as a collective action under the FLSA.

Court's Ruling

In conclusion, the court denied the plaintiffs' motion for summary judgment with respect to their lunch break and bonus claims.

However, the court granted the plaintiffs' request for class certification and found they were entitled to compensation for travel time.

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