Fulmer v. City of St. Albans , 125 F. App'x 459 ( 2005 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 03-2223
RICHARD L. FULMER; JAMES M. BEANE; BRENT A.
CLEVINGER; DAVID L. FULKS; BRIAN N. SHARP;
JAMES A. HILL; SCOTT D. DAVIDSON; JOHN O.
PHILPOTT; DANIEL J. TAAFFE; BOYD R. POFF, III;
DWIGHT PETTRY; KENNY R. ROMINE; JEREMY
RONCAGLIONE; REX EGGLETON; BOYD R. POFF, II;
ERIC MITCHELL; LANCE W. CARNEY; CHARLES E.
SMITH, and other employees similarly situated,
Plaintiffs - Appellants,
and
JERRY D. BOSTIC,
Plaintiff,
versus
THE CITY OF ST. ALBANS, WEST VIRGINIA, a West
Virginia Municipal Corporation,
Defendant - Appellee.
Appeal from the United States District Court for the Southern
District of West Virginia, at Charleston. Joseph Robert Goodwin,
District Judge. (CA-02-1053-2)
Argued: October 27, 2004 Decided: January 7, 2005
Before WILKINS, Chief Judge, NIEMEYER, Circuit Judge, and Glen E.
CONRAD, United States District Judge for the Western District of
Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion. Chief Judge Wilkins
wrote an opinion concurring in part and dissenting in part.
ARGUED: Scott Allen Damron, Huntington, West Virginia, for
Appellants. Bryan Rex Cokeley, STEPTOE & JOHNSON, Charleston, West
Virginia, for Appellee. ON BRIEF: Robert L. Bailey, II, STEPTOE &
JOHNSON, Charleston, West Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
2
PER CURIAM:
This appeal arises out of a claim for unpaid overtime
compensation brought by nineteen professional firefighters employed
by the City of St. Albans, West Virginia (the City). The
firefighters allege that the City's method of calculating their
regular rate of pay violates the Fair Labor Standards Act (FLSA),
29 U.S.C.A. §§ 201-219 (1998). The district court, concluding that
the City's method of compensation complies with the FLSA, entered
an order granting summary judgment to the City. We affirm the
judgment of the district court.
I.
The parties' stipulated facts indicate that the City's
firefighters are scheduled to work one twenty-four hour shift
followed by forty-eight hours off. During a three week cycle, each
firefighter works two forty-eight hour weeks and one seventy-two
hour week. The firefighters are scheduled to work an average of
2,912 hours per year. This total includes 2,080 scheduled straight
time hours, or hours within a forty hour workweek, and 832
scheduled overtime hours.
The City pays the firefighters a regular hourly rate for all
hours worked up to and including forty hours per week. The
firefighters are paid an overtime rate of one and one-half times
their regular hourly rate for all hours worked in excess of forty
3
per week. The City's wage classification plan expresses the
firefighters’ base pay as a total annual salary. In order to
calculate the firefighters' regular hourly rate, the City divides
the firefighters' annual salary by 3,328 hours. This divisor
equals the number of hours for which the firefighters are scheduled
to be paid. Since the firefighters are scheduled to work 832
overtime hours, and since they are compensated at a rate of one and
one-half times their regular rate for these hours, the City adds
1,248 hours (832 hours multiplied by 1.5) to the firefighters'
2,080 scheduled straight time hours to arrive at 3,328 hours.
The City's method of calculating the firefighters' regular
hourly rate has been in practice since 1989. When the City
interviews individuals for the firefighter positions, the City
explains that the firefighters work rotating shifts, consisting of
one twenty-four hour shift followed by forty-eight hours off. The
City also explains the firefighters' total annual pay.
In July 2002, the firefighters filed a complaint against the
City in West Virginia state court, alleging violations of the FLSA.
The case was timely removed to the United States District Court for
the Southern District of West Virginia. The firefighters’ second
amended complaint alleges that the City fails to properly
compensate the firefighters for overtime work. The firefighters
claim that the regular hourly rate, on which their overtime rate is
based, is incorrectly calculated by the City. The district court
4
granted summary judgment in favor of the City. The district court
concluded that the firefighters' annual pay includes an overtime
premium, and that the City properly deducts the overtime premium
when calculating the firefighters' regular hourly rate. The
firefighters appeal the district court's decision.
We review a grant of summary judgment de novo, viewing all
facts and inferences in the light most favorable to the nonmoving
party. Love-Lane v. Martin, 355 F.3d 766, 775 (4th Cir. 2004).
Summary judgment is appropriate if "there is no genuine issue as to
any material fact and ... the moving party is entitled to judgment
as a matter of law." Fed. R. Civ. P. 56(c).
II.
The overtime provision of the FLSA requires employers to pay
nonexempt employees at least one and one-half times their "regular
rate" for all hours worked in excess of forty per week. 29
U.S.C.A. § 207(a)(1) (1998). The "regular rate" refers to the
hourly rate an employer pays an employee "for the normal,
non-overtime workweek for which he is employed." Walling v.
Youngerman-Reynolds Hardwood Co., 325 U.S. 419, 424 (1945). In
this case, it is undisputed that the City pays the firefighters
overtime wages when the firefighters work more than forty hours in
one week. The firefighters argue, however, that the City's formula
for determining their regular hourly rate fails to comply with the
5
FLSA regulations. The firefighters contend that when calculating
their regular hourly rate, the City must reduce their annual salary
to its workweek equivalent and divide the workweek equivalent by
the actual number of hours worked. See 29 C.F.R. §§ 778.109 and
778.113(b).
Although the regulations cited by the firefighters give some
direction for calculating the regular hourly rate for an employee
who is paid an annual salary, the regulations do not address the
situation of an employee whose salary already includes a premium
for overtime work. When an employee is hired on a salary basis,
"the regular rate depends in part on the agreement of the parties
as to what the salary is intended to compensate." 29 C.F.R.
§ 778.323. "[I]f the annual salary was properly intended by the
parties to account for both a regular rate and an overtime rate,
the contemplated arrangement is in compliance with the FLSA."
Adams v. Dept. of Juvenile Justice, 143 F.3d 61, 68 (2nd Cir.
1998).
We agree with the district court that the parties agreed to
include an overtime premium in the firefighters' annual pay. It is
undisputed that the City explains the total annual pay to the
firefighters when they are first interviewed. The City also
explains the firefighters' rotating shifts. The City's method of
calculating the firefighters' regular hourly rate has been in
practice since 1989, and the firefighters did not formally petition
6
the City to change its method prior to filing this lawsuit. There
is simply no evidence to support the firefighters' contention that
they did not agree for their annual pay to include an overtime
premium. The firefighters place great emphasis on the deposition
testimony of a City Council member, who testified that firefighters
complained in the past about their overtime pay. While this
testimony may suggest that the firefighters became unsatisfied with
their wages, it does not contradict the conclusion that the
firefighters' agreed to their annual pay, and the included overtime
premium, at the time they were hired.
We also agree with the district court that the City's method
of calculating the firefighters' regular hourly rate complies with
the FLSA. Since the firefighters' annual pay includes an overtime
premium, the City properly deducts the overtime premium when
calculating the firefighters' regular hourly rate. As previously
stated, an employee's regular hourly rate is the rate an employer
pays for the normal, non-overtime work period. Walling, 325 U.S.
at 424 (emphasis added). See also 29 U.S.C. § 207(e) (1998)
(providing for the exclusion of any overtime premium when
calculating the regular rate); Bay Ridge Operating Co. v. Aaron,
334 U.S. 446, 464 (1948) (noting that Congress clearly "intended to
exclude overtime premium payments from the computation of the
regular rate of pay."). If the City did not convert the
firefighters' scheduled overtime hours into straight-time hours
7
before calculating their regular rate, the firefighters' regular
rate would be inflated. "To permit overtime premium to enter into
the computation of the regular rate would be to allow overtime
premium on overtime premium –- a pyramiding that Congress could not
have intended." Bay Ridge Operating Co., 334 U.S. at 464.
III.
Because the undisputed facts with regard to the firefighters'
claims for unpaid overtime compensation demonstrate that the City
is entitled to judgment as a matter of law, the district court's
entry of summary judgment in favor of the City is
AFFIRMED.
8
WILKINS, Chief Judge, concurring in part and dissenting in part:
The majority opinion affirms the grant of summary judgment
against each of the Appellants. Although I concur in that result
with regard to all but two of the Appellants, I respectfully
dissent from the holding that the City was entitled to summary
judgment against Lance W. Carney and Charles E. Smith.
We review the grant of summary judgment de novo, viewing the
disputed facts in the light most favorable to Appellants. See
Figgie Int’l, Inc. v. Destileria Serralles, Inc., 190 F.3d 252, 255
(4th Cir. 1999). Summary judgment is appropriate “if the
pleadings, depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any, show that there is
no genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.” Fed. R. Civ. P.
56(c).
When employees are hired at a particular salary for hours that
the parties contemplate will exceed 40 per week, the FLSA entitles
the employees to a statutory overtime premium for each hour that
they work in excess of 40 in a given week, in addition to the
salary to which they agreed. See 29 C.F.R. § 778.325 (2004).1 The
majority holds, however, that the City properly paid Appellants
1
Section 778.325 explains, for example, that when an employee
whose maximum hours standard is 40 (such as Appellants) is hired at
a salary of $275 per week for 55 hours, he is entitled to receive
the $275 for a 55-hour workweek plus a statutory overtime premium
for each of the 15 hours he worked in excess of 40.
9
only their agreed-upon salary because, as a matter of law, the
parties agreed when Appellants were hired that the salary already
included the statutory overtime premiums. See ante, at 6-7;
29 U.S.C.A. § 207(e)(5) (West 1998 & Supp. 2004) (providing that an
employee’s regular rate shall not include compensation provided at
a premium rate for overtime hours).
This holding is not supported by the record. The parties
stipulated that “[t]he City’s Wage Classification Plan specifies a
firefighter’s base pay as a total annual, rather than hourly, pay
based on the firefighter’s rank.” J.A. 93. They also stipulated
that “[w]hen the City first interviews a firefighter before hiring,
the City explains to that firefighter the nature of the rotating
24-hour-on / 48-hour-off shifts” and that “[w]hen the City first
hires a firefighter, the City explains to that firefighter his or
her total annual pay.” Id. at 94. No other stipulations or
evidence forecasted in the record indicates what Appellants and
City representatives discussed when Appellants were hired.
The majority apparently interprets the stipulation that the
City explained to the firefighters their “total annual pay” to mean
that the City specifically explained that Appellants’ salary
represented the total amount of compensation--including statutory
overtime premiums--that they would receive for working the agreed-
upon hours. But that is an erroneous interpretation, in my view.
In the parties’ stipulations, the term “total annual [pay]” is
10
contrasted with “hourly [pay]” simply to explain that the City’s
Wage Classification Plan sets forth Appellants’ salaries in annual
rather than hourly terms. Id. at 93. Thus, the stipulation that
the City explains a firefighter’s “total annual pay” to him at the
time of his hiring cannot establish as a matter of law anything
more than that the City explains a firefighter’s base annual salary
to him. See Rice v. Paladin Enters., 128 F.3d 233, 253 (4th Cir.
1997) (holding that, on review of grant of summary judgment to
defendant, stipulation must be interpreted in the light most
favorable to plaintiff). The stipulation states nothing about
whether the City informed Appellants that their base salary already
included statutory overtime premiums.2
The City contends that even if Appellants did not agree at the
time they were hired that their annual salary already included
statutory overtime premiums, it established as a matter of law that
Appellants subsequently agreed to that arrangement. The City
argues that the paychecks of each Appellant clearly explained that
2
It also appears that the majority may place the burden on
Appellants to prove the nonexistence of such agreements. See ante,
at 6-7 (“There is simply no evidence to support the firefighters’
contention that they did not agree for their annual pay to include
an overtime premium.”). But, in fact, the City bears the burden of
proving the existence of the agreements because the City is
attempting to use the agreements to justify its exclusion of a
portion of Appellants’ wages in determining Appellants’ regular
rates. See 29 U.S.C.A. § 207(e)(5); cf. Clark v. J.M. Benson Co.,
789 F.2d 282, 286 (4th Cir. 1986) (holding that employer bears the
burden of proving applicability of FLSA exemptions). The City
correctly conceded as much at oral argument.
11
his agreed-upon salary already included a statutory overtime
premium and thus, by continuing to work without filing a formal
complaint, Appellants implicitly agreed with the City’s
determination of their regular rate.
I agree with the City with regard to most of the Appellants.
See Bodie v. City of Columbia, 934 F.2d 561, 564 (4th Cir. 1991)
(en banc) (quoting with approval statement in Shepler v. Crucible
Fuel Co., 140 F.2d 371, 374 (3d Cir. 1944), that “continuance in an
employment under a new method of computing pay creates a new
contract and that the employee’s consent to the new arrangement may
be found from the continuance” (internal quotation marks omitted));
id. at 566 (citing with approval General Electric Co. v. Porter,
208 F.2d 805, 813 (9th Cir. 1953), which held that employees, by
continuing to work, implicitly agreed to employer’s unilateral
change in method of payment that resulted in employees no longer
receiving overtime). But see Mumbower v. Callicott, 526 F.2d 1183,
1187 (8th Cir. 1975) (holding that an agreed-upon salary for
agreed-upon hours does not include a statutory overtime premium
unless the employer proves that the parties explicitly agreed that
it would); Brennan v. Elmer’s Disposal Serv., 510 F.2d 84, 86 n.1,
88 (9th Cir. 1975) (same). The record here demonstrates that most
of the Appellants claim that their FLSA rights had been violated
for at least three years, see Rule 26(a)(1) Disclosures of Pls.,
Richard L. Fulmer, et al., at 2-6 (filed Dec. 2, 2002), a
12
sufficient time to establish as a matter of law their awareness of
the City’s regular rate computation and their implied consent to
that calculation.
Appellants argue, however, that there is no basis to impute
knowledge of, and agreement to, the City’s payment methods to all
Appellants. Indeed, I can find no evidence in the record regarding
how long Carney and Smith worked for the City prior to joining this
lawsuit. As far as the record reflects, these employees may have
promptly joined in this suit shortly after beginning work with the
City. Considering that each of the Appellants bargained separately
with the City and was not part of a collective bargaining unit, I
would hold that the City failed to prove as a matter of law that
Carney and Smith agreed--implicitly or otherwise--that their base
salary already included statutory overtime premiums. I therefore
respectfully dissent from the majority opinion to the extent that
it holds to the contrary.
13