Seets v. Anne Arundel County , 40 F. App'x 744 ( 2002 )


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  •                        UNPUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    BETTY J. SEETS, for herself and      
    others similarly situated; MERRELL
    A. ALLEN; PATRICIA F. AMANTEA;
    CONNIE M. BAKER; PATRICIA A.
    BELL; STACEY L. BOSWELL;
    ROSEMARY BREWSTER; DELEPHINE G.
    BROWN; LEONARDO D. COLEMAN;
    CARLO A. BRUNORI; DEBORAH L.
    CZAKO; CRAIG L. DARBY; KIM J.
    DELASHMUTT; ROBERT W. DECKER;
    TRACY V. FRYE; SUSAN E.
    GREENTREE; IDELLA GREGORY;
    BRENDA GRIFFEY; IRIS D. HARLEY;
    YVONNE HAWKINS; MELISSA
    HOFFMAN; KATHLEEN HORA; ANGELA
    M. HILZ; THERESA M. HOWELL;             No. 99-1838
    CHERI L. KASE; BARRY KEEL; JOHN
    P. LAWRENCE; BARRY R. LAURENT;
    LISA LAWRENCE; GORDON L. LEWIS;
    CAROLYN R. LIGHT; KEVIN S. LYLE;
    LISA M. MACKEY; MARY A. MASSEY;
    DONNA J. MCADAMS; JOHN P.
    MCGROARTY; DELIA V. MCKEE;
    NANCY L. MERKLE, a/k/a Nancy L.
    Masse; MICHELLE MONGELLO; DAWN
    L. MILLER; TAMMY M. MORTON;
    JANICE K. NEWMAN; CAROLINE
    RATCLIFF; JOAN L. RHODES; EDITH G.
    ROBERTSON; BONNIE A. SAGHY;
    RICHARD SAGHY; BONNIE K. SCHLINE;
    DEBORAH A. SCOTT; BILLIE R. SEARS;
    
    2                  SEETS v. ANNE ARUNDEL COUNTY
    LINDA M. SHARP; ANGELA L.                
    SINCLAIR; BRENDA L. SKINNER;
    CAROL A. SLOMSKI; ANGELA
    MURRAY-SPENCER; FRANCES SWANN;
    MARTHA L. THAMES; TARA IMHOF;
    MLADEN STANICIL; MORRIS JONES,
    JR.; ALLAN A. WHYTE; KATHERINE V.
    CIALKOWSKI; GLADYS JEANNE
    HUMPHREY; VICKI M. SITAR; NANCY
    L. BASSIN; LARRY S. BRANSON;
    CARNELL T. WEST; LOUIS V. GERBER,
    JR.; LILA SAMPSON; LINDA J. DARR;
    JENNIFER GILLESPIE; RAYMOND F.
    BATEMAN; SONIA L. BLONDIN; LESLIE
    R. WARD; CAROL A. BUTTRUM;
    THOMAS C. GAMBRILL; FELECIA J.
    GASTON; BARBARA COLLINS; PATRICE
    L. JOHNSON; ERIC J. LOVE; GEORGE
    W. MIKE; JULIE RABBITT; GRACE M.         
    WATKINS; JULIA A. COOK; KYLIA A.
    BOWEN; WALTER E. COOK; ETHEL
    MARSTELLER; HUGH H. MILLS, JR.;
    JOYCE M. ROSENBALM; JAMES R.
    WELLMAN, JR.; WILLIAM J. BARGAR;
    EDWARD I. FORSHT; WILLIAM A.
    HOLLAND; ERNEST R. LOWMAN; KURT
    A. SALIGER; MONIQUE A. JACKSON;
    DEBORAH S. JOHNSON; WILLIAM H.
    BEALL, JR.; KATHERINE S.
    NOVAKOWSKI; MICHAEL V. NORRIS;
    CRAIG A. ROBINSON; AUDDREY DIANE
    HARP,
    Plaintiffs-Appellants,
    v.
    ANNE ARUNDEL COUNTY,
    Defendant-Appellee.
    
    SEETS v. ANNE ARUNDEL COUNTY                     3
    Appeal from the United States District Court
    for the District of Maryland, at Baltimore.
    Joseph H. Young, Senior District Judge.
    (CA-96-144-Y)
    Argued: April 4, 2000
    Decided: June 24, 2002
    Before WIDENER and WILKINS, Circuit Judges, and
    Claude M. HILTON, Chief United States District Judge for the
    Eastern District of Virginia, sitting by designation.
    Affirmed by unpublished per curiam opinion.
    COUNSEL
    ARGUED: Francis Joseph Collins, KAHN, SMITH & COLLINS,
    P.A., Baltimore, Maryland, for Appellants. William Davidson Evans,
    Jr., Senior Assistant County Attorney, ANNE ARUNDEL COUNTY
    OFFICE OF LAW, Annapolis, Maryland, for Appellee. ON BRIEF:
    Linda M. Schuett, County Attorney, ANNE ARUNDEL COUNTY
    OFFICE OF LAW, Annapolis, Maryland, for Appellee.
    Unpublished opinions are not binding precedent in this circuit. See
    Local Rule 36(c).
    OPINION
    PER CURIAM:
    I.
    Plaintiffs in this case are police communication operators and evi-
    dence technicians for Anne Arundel County, Maryland (the County).
    4                  SEETS v. ANNE ARUNDEL COUNTY
    Plaintiffs sued the County to recover unpaid overtime compensation,
    wages, liquidated damages, and attorneys’ fees under § 16(b) of the
    Fair Labor Standards Act of 1938 (FLSA), as amended, 
    29 U.S.C. § 216
    (b). We affirm the judgment for the defendant.
    Plaintiffs work what is called a "6/3" schedule, which requires
    them to work six consecutive days followed by three consecutive days
    off. Each plaintiff’s workday consists of 8.25 hours. Based upon the
    6/3 schedule, a plaintiff’s nine-week work cycle includes five work-
    weeks of 33 hours, two workweeks of 41.25 hours, and two work-
    weeks of 49.5 hours.
    Plaintiffs are paid at a rate specified by the County’s general salary
    schedules for their pay step and grade within their appropriate classi-
    fication. In accordance with the FLSA, during the weeks in which a
    plaintiff’s hours worked exceed 40 hours, the plaintiff is paid one and
    one-half times their regular rate of pay for the excess hours. 
    29 U.S.C. § 207
    (a). Additionally, although not mandated by the FLSA, the
    County pays the plaintiffs overtime whenever they work in excess of
    their regular schedules, regardless of whether those hours are in
    excess of 40 hours.
    Prior to 1986, although the plaintiffs may have worked fewer than
    40 hours per week, their positions were classified in the County Code
    as 40-hour positions, and they were paid a bi-weekly salary in equal
    installments. In 1986, in an effort to comply with the Supreme
    Court’s interpretation of the FLSA, the County sought to place the
    plaintiffs on a normal 40-hour per week schedule. However, after
    negotiations, the County and the employees’ union agreed to retain
    the 6/3 schedule. To implement this agreement, legislation was intro-
    duced before the Anne Arundel County Council on March 17, 1986.
    The March 13, 1986 Legislative Summary explained the bill to the
    County Council by stating:
    The primary purpose of this bill is to permit Police Com-
    munications Workers and Evidence Technicians to remain
    on a six-day on and three-day off workweek after April 15,
    1986. It is on that date that the County becomes subject to
    the Fair Labor Standards Act. The bill permits the mainte-
    nance of the existing six/three schedule without any fiscal
    SEETS v. ANNE ARUNDEL COUNTY                        5
    impact by causing the designated employees to be paid on
    an hourly basis for actual hours worked. At the present time,
    those employees are paid weekly regardless of the hours
    they work. Although paying them for actual hours worked
    results in some overtime pay obligations, the final yearly
    payroll costs are essentially equal to those incurred at the
    present time.
    Based on this agreement, plaintiffs were then paid on a weekly
    basis for the hours they worked within that work period. The city used
    the following method to calculate plaintiffs’ weekly pay. First, a
    plaintiff’s annual salary is divided by 2,080,1 which result represents
    the regular hourly rate for that plaintiff. This regular rate is then mul-
    tiplied by the number of hours worked during the relevant pay period.
    The result of this final calculation equals the plaintiff’s weekly pay.
    Although under the 6/3 schedule the plaintiffs are scheduled to work
    only 2,002 hours per year, the County still used the 2,080 divisor to
    determine the weekly pay of its employees.2
    In addition to the above calculations, in 1986 the County and the
    Union representing the plaintiffs, Local 2563, agreed to an addendum
    to the original contract between the parties. The parties implemented
    this addendum in an effort to bring the agreement between the County
    and the plaintiffs into compliance with the FLSA. The addendum was
    incorporated as Appendix V in all subsequent contracts between the
    County and the individual plaintiffs. Among other things, Appendix
    V guaranteed that the plaintiffs would receive, at the very least, the
    same annual gross wages they had received prior to the implementa-
    tion of the new 6/3 schedule.
    In 1992, the United States Department of Labor investigated the
    County’s pay practices regarding the plaintiffs. Testimony at trial
    indicated without contradiction that after reviewing the County’s pay-
    1
    The number 2,080 is computed by multiplying a 40 hour workweek
    by 52, the number of weeks in a calendar year.
    2
    The County’s use of 2,080 as the divisor, as opposed to 2002, results
    in the hourly rate being a lower number. As a result, when this hourly
    rate is multiplied by one and one-half, for the purpose of calculating
    overtime pay, the rate paid for hours worked overtime will also be lower.
    6                  SEETS v. ANNE ARUNDEL COUNTY
    roll record and procedures and interviewing County employees, the
    Department of Labor advised the County that it found no violation of
    the FLSA.
    Four years later, in January of 1996, plaintiffs brought an action
    against the County to recover unpaid overtime compensation, unpaid
    wages, liquidated damages, attorneys’ fees, and costs under 
    29 U.S.C. § 216
    (b) of the FLSA. On April 21, 1999, the jury found in favor of
    the County. The district court entered a final judgment and denied the
    plaintiffs’ motion for a new trial. Plaintiffs assert on appeal that (1)
    the district court erred in failing to instruct the jury on the proper
    method of calculating the regular rate of pay under the FLSA, (2) the
    district court’s instruction to the jury regarding the statute of limita-
    tions was erroneous, and (3) the district court improperly instructed
    the jury that it must render a verdict for the defense if it should find
    that the plaintiffs were paid by the hour. Because we find that the
    County’s payment scheme and procedures are valid and the district
    court’s instructions were free from reversible error, we affirm.
    II.
    A.
    In February 1985, the Supreme Court decided in Garcia v. San
    Antonio Metro Transit Authority, 
    469 U.S. 528
     (1985), that state and
    municipal employers must comply with the wage and hour provisions
    of the FLSA. On November 14, 1985, Congress temporarily allevi-
    ated Garcia’s fiscal effect on state and municipal employers by
    amending the FLSA so that these employers would not be required to
    pay overtime under the FLSA until April 15, 1986.3 Thus, Congress’
    amendments excluded city and municipal employers from complying
    with the overtime requirements of the FLSA and its regulations retro-
    actively from February 19, 1985, the date of the Garcia decision, until
    April 15, 1986. See York v. Wichita Falls, 
    48 F.3d 919
    , 922 (5th Cir.
    1995); Knight v. Columbus, 
    19 F.3d 579
    , 583-84 (11th Cir. 1994);
    3
    See Fair Labor Standards Amendments of 1985, Pub.L. No. 99-150,
    §§ 2(c) & 6, 1985 U.S.C.C.A.N. (99 Stat.) 787, 788-89 & 791.
    SEETS v. ANNE ARUNDEL COUNTY                           7
    Anderson v. Bristol, 
    6 F.3d 1168
    , 1170 (6th Cir. 1993). During this
    grace period on April 7, 1986, the County passed its Bill No. 30-86.4
    The FLSA requires an employee working over 40 hours in a week
    to be paid overtime at a rate not less than one and one-half times the
    regular rate of an employee’s compensation. 
    29 U.S.C. § 207
    (a)(1)
    (1988). Under the Department of Labor’s current regulations, earn-
    ings under the FLSA may be expressed in a salary basis in an employ-
    ment contract; however, overtime compensation must still be
    calculated based upon the hourly rate derived from this salary. 
    29 C.F.R. § 778.109
     (2001). The hourly rate of an employee is deter-
    mined by dividing the employee’s total remuneration for employment
    by the total number of hours actually worked. 
    29 C.F.R. §§ 553.233
    ;
    778.109.
    B.
    Plaintiffs first argue that the district court erred in failing to instruct
    the jury on the proper method of calculating the regular rate of pay
    under the FLSA. In reviewing a district court’s jury instructions, we
    must keep in mind that a "district judge has broad discretion in fram-
    ing his jury instructions. If the instructions correctly state the law and
    adequately cover the issues in the case, the charge is sufficient." Lohr-
    mann v. Pittsburgh Corning Corp., 
    782 F.2d 1156
    , 1164 (4th Cir.
    1986). We examine the district court’s instructions to determine
    whether, when "construed as a whole, and in light of the whole
    record, [the instructions] adequately informed the jury of the control-
    ling legal principles without misleading or confusing the jury to the
    prejudice of the objecting party." Spell v. McDaniel, 
    824 F.2d 1380
    ,
    1395 (4th Cir. 1987).
    Plaintiffs assert that the proper calculation of the regular rate is
    essential in order to determine what one and one-half times that regu-
    lar rate is for the purposes of overtime, and to determine whether the
    County violated the FLSA by underpaying the plaintiffs. Plaintiffs
    4
    The bill was subsequently approved and enacted into law on April 14,
    1986. The bill’s enactment was prior to the April 15, 1986 date at which
    time the FLSA and Department of Labor regulations became applicable
    to the County.
    8                   SEETS v. ANNE ARUNDEL COUNTY
    argue that the regular rate must be calculated by dividing the annual
    salary that each plaintiff is scheduled to make by 2,002, the number
    of hours each plaintiff is to work. Plaintiffs do not contend that the
    County refused to pay one and one-half times the regular rate deter-
    mined by the County, rather, they contend that the rate used by the
    County was incorrectly calculated, and thus, the one and one-half
    time figure is lower than if their annual salary had been divided by
    2,002 hours.
    Plaintiffs appeal the district court’s refusal to instruct the jury on
    the proper calculation of the regular rate as established by the regula-
    tions provided for the FLSA. See 
    29 C.F.R. §§ 778.100
    -.118. The
    necessity of such an instruction depends on whether the County’s cal-
    culation of the plaintiffs’ regular rate was invalid under the FLSA. If
    the County’s calculation of the regular rate was not an error, then no
    such instruction would be necessary.
    Although we have not had the occasion to address the specific
    issue of proper calculation of a regular rate under the FLSA, other cir-
    cuits have. The Fifth, Sixth, and Eleventh Circuit Courts of Appeals
    have all addressed issues nearly identical to this one. See York, 
    48 F.3d at 922
     (5th Cir. 1995); Anderson, 
    6 F.3d 1168
     (6th Cir. 1993);
    Wethington v. Montgomery, 
    935 F.2d 222
     (11th Cir. 1991). Each of
    these cases involved firefighters whose payment plans were altered in
    an effort to bring their employers into compliance with the FLSA. In
    each case, the employer calculated, and lowered, the firefighters’ reg-
    ular rate of pay using fictitious amounts of hours that the firefighters
    were to work. In each of these decisions, the court found that the new
    payment scheme was valid under the FLSA. For the reasons discussed
    below, we are in agreement with the analysis of these cases and find
    that an instruction on how to calculate the regular rate under the cur-
    rent regulations was unnecessary because the rate used by the County
    does not violate the FLSA.5
    5
    The dispute as to whether the regular rate was appropriately calcu-
    lated under the current Department of Labor regulations may depend on
    whether the plaintiffs were salaried or hourly employees. Although the
    March 13, 1986 Legislative Summary clearly indicates the intent to
    maintain the 6/3 schedule without any fiscal impact by causing the desig-
    SEETS v. ANNE ARUNDEL COUNTY                        9
    Plaintiffs argue that the County’s calculation of the regular rate uti-
    lizing the fictitious 2,080 hour total violates 
    29 C.F.R. §§ 553.233
    ,
    778.113. This argument, however, "blurs the difference between the
    [County’s] initial calculation of the regular hourly rate and the ongo-
    ing calculation of the regular rate." Wethington, 
    935 F.2d at 227
    .
    Assuming the plaintiffs are salaried employees, it may even be that
    the County violated the current Department of Labor regulations by
    using a fictitious number of hours to calculate the plaintiffs’ regular
    rate — namely the 2,080 hour figure. In other words, if the FLSA and
    Department of Labor regulations had applied at the time the County
    was paying the plaintiffs under the old salary system, the FLSA
    would have required the County to calculate the regular rate using the
    pay rate and hours worked under that system as mandated by 
    29 C.F.R. § 778.113
    (b). See Wethington, 
    935 F.2d at 227
    . The County
    would have been required to calculate the regular rate based on the
    plaintiffs actual hours, 2,002, rather than the fictitious 2,080 hour fig-
    ure the County used. Moreover, had the FLSA applied at that time
    and mandated using the 2,002 hour figure, the properly calculated
    regular rate would have been higher than that currently used by the
    County.
    This case, however, like that in Wethington, "does not present an
    issue of whether the Act barred the calculation of the regular rate
    based on artificial hours, because here Congress delayed application
    of the FLSA until April 15, 1986." Wethington, 
    935 F.2d at 228
    .
    Thus, at the time the County and the plaintiffs agreed to retain the 6/3
    schedule and began calculating the regular rate of pay for the plain-
    tiffs, and at the time the County passed and enacted Bill 30-86, the
    County was not bound by the requirements of the Department of
    Labor’s regulations. As such, we agree with the Eleventh Circuit that
    "because the calculation occurred prior to the Act’s effective date, the
    [plaintiffs] cannot argue that the Act governs those calculations."
    nated employees to be paid on an hourly basis, we express no opinion
    as to whether it effectively does so. As our opinion makes clear, the Act
    and the regulations did not apply to the County at the time it adopted the
    policy of paying employees a specific rate for the hours they worked dur-
    ing the current week, plus one and one-half times that amount for over-
    time hours.
    10                  SEETS v. ANNE ARUNDEL COUNTY
    Wethington, 
    935 F.2d at 228
    . See also York, 
    48 F.3d at 922
     ("FLSA
    and accompanying regulations did not apply to [City] in May of 1985
    when the City calculated the plaintiffs’ ‘regular rates’ and began
    using its adjusted pay system.").
    Applying relevant case law, we find no authority to support the
    plaintiffs’ assertion that an otherwise valid payment system violates
    the FLSA merely because the employees’ regular rate of pay was cal-
    culated prior to the applicability of the FLSA and its regulations.
    Indeed, other circuits have concluded that calculating the regular rate
    in a way which might violate the current regulations of the FLSA
    does not invalidate an otherwise valid payment system. See, e.g.,
    York, 
    48 F.3d at 922
    ; Anderson, 
    6 F.3d at 1173-74
    ; Wethington, 
    935 F.2d at 228
    .6
    In conclusion, prior to the FLSA’s applicability, nothing prohibited
    the reduction of a regular rate using fictitious hours. We are of opin-
    ion that the County’s method of lowering the plaintiffs’ regular rate
    does not violate the FLSA. As the Supreme Court held in Walling v.
    A. H. Belo Corp., 
    316 U.S. 624
    , 630 (1942), "nothing in the Act bars
    an employer from contracting with his employees to pay them the
    same wages that they received previously, so long as the new rate
    equals or exceeds the minimum required by the Act." There is no
    question of minimum wage in this case. The Walling contract was the
    same type of contract that exists in this case which was agreed to by
    the Union and the County. As such, we are of opinion that the County
    did not violate the FLSA or the Department of Labor regulations,
    which did not take effect until April, 15 1986, and we hold that the
    district court did not err in failing to instruct the jury on the proper
    6
    Adding considerable support to our conclusion is the fact that in 1992,
    the United States Department of Labor investigated the County’s pay
    practices regarding the plaintiffs. Although the actual report is not con-
    tained in the record, unrefuted testimony at trial indicated that after
    reviewing the County’s payroll procedure, and interviewing County
    employees, the Compliance Officer advised the County that it found no
    violation of the FLSA. This report should be entitled to considerable
    weight.
    SEETS v. ANNE ARUNDEL COUNTY                        11
    calculation of the regular rate under these regulations because such an
    instruction was unnecessary.7
    C.
    Plaintiffs also argue that the district court erred by instructing the
    jury on the issue of whether the plaintiffs’ claim was barred by the
    applicable statute of limitations. More specifically, plaintiffs argue
    that by continuing to pay overtime based on the regular rate calcu-
    lated using the 2,080 hour figure, the County committed a continuing
    violation of the FLSA, causing a new cause of action to accrue with
    each paycheck. We cannot agree.
    The district court instructed the jury that:
    If you find that the County has actually paid the plaintiffs
    based on an hourly rate of pay and has paid them one and
    one-half times their regular rate of pay during the applicable
    limitations period, then you would . . . [return] a verdict in
    favor of the County. If you find the violation claimed by the
    plaintiffs occurred prior to the applicable limitations period,
    and the County has not altered its method of payment to the
    plaintiffs during the limitations period, you would then
    return a verdict for the County.
    We are of opinion that this instruction properly states the relevant
    law.
    7
    We are confident that our holding is equitable and fair for all parties
    in this case. This conclusion is supported by the fact that under the agree-
    ment between the plaintiffs and the County, the plaintiffs are paid over-
    time at a rate of one and one-half times their hourly rate for working
    hours in excess of those they are regularly scheduled to work. The plain-
    tiffs receive this overtime rate regardless of whether these unscheduled
    hours exceed 40 hours during the workweek. Further, pursuant to Appen-
    dix V of the plaintiffs’ contract, the plaintiffs are guaranteed to receive,
    at the very least, the same annual gross wages they received prior to the
    new 6/3 schedule. Thus, if the plaintiffs’ gross earnings are less than that
    listed on the general salary schedule for their appropriate grade and step,
    the plaintiffs are paid the difference at the end of the year.
    12                   SEETS v. ANNE ARUNDEL COUNTY
    In our previous discussion, we have demonstrated that the County’s
    payment system does not violate the FLSA. For these same reasons,
    the plaintiffs’ continuing violation argument is inapplicable to the
    present case. To hold otherwise would require this court to find that
    the County’s payment system, which was lawful when enacted on
    April 14, 1986, became unlawful after April 15, 1986. As stated by
    the Fifth Circuit, "[f]or there to be a continuing violation, there must
    be at least a violation." York, 
    48 F.3d at 922
    . Here, no violation
    occurred. The hourly system that the County has used since 1986
    meets the requirements of the FLSA — the plaintiffs are paid a speci-
    fied rate per hour for regular hours that they actually work, and one
    and one-half times that amount for any overtime. As such, plaintiffs’
    continuing violation argument must fail.8
    D.
    Lastly, plaintiffs argue that the district court erred by instructing
    the jury that if the plaintiffs were paid hourly they must return a ver-
    dict for the County. Plaintiffs do not contest that this instruction is a
    correct statement of the law. Rather, plaintiffs assert that the district
    court failed to define what the regular rate of pay was and that there
    was insufficient evidence to warrant giving the instruction. Because
    we find that the regular rate instruction was unnecessary, the district
    court’s instruction accurately states the relevant law, and the instruc-
    tion would not have misled the jury, we are of opinion that the district
    court did not err in giving this instruction.
    The judgment of the district court is accordingly
    AFFIRMED.
    8
    Our conclusion is again supported by the Department of Labor’s 1992
    finding that the County’s pay practices did not violate the FLSA.