Court: Court of Appeals for the Ninth Circuit; August 5, 2003; Federal Appellate Court
The class action lawsuit centers on whether IBP, Inc. should compensate its Pasco, Washington employees for time spent changing into required protective clothing and safety gear. The court concludes that IBP must provide this compensation, affirming certain aspects and reversing others. The meat packing industry, highly regulated since the Meat Inspection Act of 1906, remains dangerous, with significant injury rates reported by the Department of Labor. IBP, the largest producer of fresh beef and pork, operates a "kill and processing plant" in Pasco, where employees must be ready to work as production starts. Before and after shifts, employees engage in specific preliminary and post-liminary tasks, including gathering and donning equipment in locker rooms. Shift structures have changed since July 1998, reducing work hours slightly to accommodate a "clothes" time of four minutes. Overall, the court emphasizes the necessity of compensating employees for the time spent in essential preparatory activities.
In fall 1999, the Pasco plant of IBP reduced its shift time to seven hours and fifty-one minutes, influenced by ongoing litigation with the USDOL regarding wage and damage issues, primarily affecting non-unionized plants, as seen in Reich v. IBP, Inc. (1994). Employees' time is meticulously regulated, with breaks starting only after the last piece of meat passes the production line, and they must be ready to work immediately after breaks. Employees can only leave certain protective gear in place when exiting the processing areas. The donning and doffing rules impact their unpaid thirty-minute meal breaks.
IBP employs a computerized "swipe card" system to track employee times, but it does not use this data for payroll, instead using a "gang time pay" model that only compensates for the actual time spent cutting and bagging meat, excluding pre and post-shift routines. In 1999, employees filed a class action lawsuit under the FLSA and Washington's Minimum Wage Act, claiming unpaid work time related to pre-shift preparations, meal breaks, and post-shift routines. IBP responded with motions for summary judgment, which the district court partially granted and denied. The court noted that Washington state courts were likely to adopt a per-hour minimum wage compliance standard, differing from the FLSA's workweek standard, referencing a precedent set in Seattle Professional Engineering Employees Association v. Boeing Co. (2000).
A month after initial proceedings, the district court issued an order excluding plaintiffs from the exemption for "agricultural workers" under Revised Code of Washington § 49.46.130(2)(g)(ii), and found that IBP’s potential willful violations of plaintiffs' rights prevented summary judgment on their exemplary damage claims. The court deemed IBP's good faith insufficient to warrant summary judgment and declined to adopt the Reich precedent regarding compensable activities. Following a twenty-day bench trial, plaintiffs filed a motion for reconsideration concerning the summary judgment granted to IBP on their separate rest-break claim under the Washington Administrative Code § 296-126-092 (1999). Citing Wingert v. Yellow Freight Systems, Inc., the court reversed its earlier decision on the implied right of action for such claims.
Subsequently, the court allowed plaintiffs to recover payment for lost meal breaks and established methodologies for calculating damages based on job categories. It determined that donning and doffing protective gear constituted the first and last "compensable activities," respectively, and included additional time for walking to and from workstations, as well as handling and cleaning necessary equipment. On September 14, 2001, the court issued detailed findings, applying a three-year statute of limitations under 29 U.S.C. § 255(a) to the federal claims and affirming that plaintiffs were entitled to compensation for all work time, including donning, doffing, cleaning gear, and time spent waiting and walking during shifts and breaks. For the state law claims, the court ruled against IBP’s preemption arguments and confirmed violations of plaintiffs' rights under Revised Washington Code § 49.46.020 and § 49.46.030 (1999), paralleling FLSA in awarding damages for meal-break claims, while rejecting IBP’s defenses based on state law and FLSA.
The district court ruled that the Washington Supreme Court's decision in Inniss v. Tandy Corp. did not require the adoption of a workweek standard for hourly employees. Additionally, the court determined that 29 U.S.C. § 203(o), which excludes "clothes changing" and "washing" time from compensable hours when collectively bargained, did not apply to IBP since it only pertained to specific clothing-like items and not to protective gear. It concluded that IBP acted in bad faith and that the Portal-to-Portal Act did not disadvantage the plaintiffs, as donning, doffing, and cleaning of protective gear were "integral and indispensable" to their jobs. Walking and waiting time during the workday were deemed compensable. As a result, the court awarded liquidated damages for FLSA and state-law violations, including double damages for state meal-break claims and prejudgment interest. Subsequently, the court denied a motion for injunctive relief, held a hearing on fees and sanctions, and issued a detailed fee order, denying IBP's motions under Federal Rules of Civil Procedure 52 and 59, and plaintiffs' motion to strike parts of the record. Both parties appealed, and jurisdiction was established under 28 U.S.C. § 1291. It was determined that the activities cited by the plaintiffs—donning and doffing, waiting, and walking—qualify as "work" under the FLSA, as defined by the Supreme Court, which includes any exertion controlled by the employer for the employer's benefit. While these activities are considered "work," it does not automatically imply they are compensable. The Portal-to-Portal Act allows employers to exclude compensation for activities that are preliminary or postliminary to principal job functions unless those activities are integral to the primary work, as established in precedent cases.
An activity classified as 'preliminary' or 'postliminary' in one context can be deemed a principal activity in another. The Supreme Court's analysis of what constitutes a "principal, integral and indispensable" duty is context-specific. To meet the "integral and indispensable" standard, an activity must be essential to the principal work and executed for the employer's benefit. In this case, the donning and doffing of protective gear by employees at the Pasco plant fulfills the "integral and indispensable" criteria established in Steiner v. Mitchell. This requirement is enforced by legal mandates and IBP's own regulations, necessitating employees to don and doff protective gear at specific times and locations on-site. Compliance with USDA sanitation standards and OSHA regulations further supports this requirement, as these activities help maintain safety and sanitation, essential for IBP's operational processes.
Additionally, while the donning and doffing of both unique (e.g., Kevlar gloves) and non-unique (e.g., hardhats) gear are deemed "integral and indispensable," the district court noted that the time spent on non-unique gear is not compensable due to its de minimis nature. Generally, employees cannot recover for minimal time spent performing tasks that extend beyond scheduled hours. The Supreme Court has ruled that minor time discrepancies, often only seconds or minutes, do not warrant compensation under the Fair Labor Standards Act (FLSA).
The Tenth Circuit's alternative conclusion in Reich asserts that the time spent putting on and taking off non-unique protective gear—though necessary for the job and mandated by the employer—is considered de minimis under the law due to its insubstantial nature and difficulty in monitoring. This position aligns with legal reasoning, indicating that while donning such gear is not trivial, the Fair Labor Standards Act (FLSA) does not warrant compensation for this time. The donning and doffing of protective equipment is deemed integral to the employees' primary work activities and generally compensable, except for the minimal time associated with non-unique items like hardhats and safety goggles. The FLSA includes an exception for time spent changing clothes, which may exclude such time from compensation if stipulated by a collective-bargaining agreement. The core issue involves whether donning and doffing protective gear qualifies as "changing clothes" under the relevant statute, a question not previously defined by the statute or case law. The court notes that the term "clothes" lacks a precise definition in the statute, leading to an examination of its ordinary meaning. IBP contends that "clothes" should encompass any covering for the body, including a wide range of protective gear.
Plaintiffs argue that "changing clothes" is narrowly defined as covering worn for decency or comfort, contrary to IBP's broader interpretation. The interpretive standard for FLSA exemptions is to construe them narrowly against employers, as established by Supreme Court precedents, including Arnold v. Ben Kanowsky, Inc. and others. The court emphasizes that the protective gear in question does not clearly fit within the definition of "clothing" in § 203(o) of the FLSA, requiring this exemption to be construed against IBP. Additionally, specialized protective equipment differs fundamentally from standard clothing, as recognized by OSHA, which defines personal protective equipment as items worn for protection against hazards, distinct from general work clothes. Thus, the district court properly ruled that time spent donning personal protective equipment does not fall under the "changing clothes" exception in § 203(o). Furthermore, IBP contests the district court's determination regarding the compensable workday, asserting that time spent walking to and from plant stations after donning protective gear should not be compensated. According to the Portal-to-Portal Act, employees are compensated only for time spent on work-related activities within the defined "workday."
Employees are not entitled to overtime pay for activities that are merely preliminary or postliminary to their main job responsibilities unless those activities are deemed "integral and indispensable" to their primary work duties, as outlined in § 4 and clarified in Steiner v. Mitchell. The district court correctly ruled that certain preliminary activities, such as the time spent walking to and from work stations while donning and doffing required personal protective equipment, are compensable. The court determined that these actions are essential to the principal work activities, thus the entire time from the start of donning protective gear to the completion of work is continuous and compensable.
IBP's argument that § 254(a)(1) serves as a standalone exclusion for walking time is rejected, as Steiner emphasizes that integral activities are included in the workday. The law does not support the notion that a workday can be interrupted by walking; rather, such movement is part of the continuous workday.
Additionally, IBP claims protection under the Fair Labor Standards Act's (FLSA) good faith defense provisions, specifically § 259, which shields employers from liability if they acted based on a reasonable interpretation of the law as provided by a government agency. To qualify for this defense, an employer must demonstrate good faith, conformity with the Department of Labor’s regulations, and reliance on official interpretations. This requires both an objective assessment of the employer’s actions and a subjective evaluation of the employer's intentions and knowledge of relevant circumstances.
Employers have an affirmative duty to investigate uncertain Fair Labor Standards Act (FLSA) coverage issues, which shifts the risk of good faith cases onto them. A good faith defense is not applicable if the employer knowingly follows a more favorable rule despite conflicting regulations. The burden of proof lies with the employer to demonstrate entitlement to this defense. IBP's arguments for good faith hinge on a past litigation strategy by the USDOL and an alleged four-minute compliance plan, but these do not meet the necessary criteria for administrative rulings or interpretations. Court decisions and agency litigation positions differ from formal agency rulings, which arise from thorough deliberation rather than case-specific strategies aimed at favorable outcomes. The district court found that IBP's claims lacked sufficient basis, rejecting its good faith theory, especially regarding the interpretation of clothing-related provisions under § 203(o). If an employer's actions are deemed a willful violation of the FLSA, the statute of limitations can extend from two to three years. Determinations of willfulness involve mixed questions of law and fact, which are reviewed de novo, while factual findings are assessed for clear error.
The district court correctly applied the three-year statute of limitations under § 255 to the plaintiffs' Fair Labor Standards Act (FLSA) claims, as established in Reich v. Monfort. An employer does not need to knowingly violate the FLSA for this extended term to apply; it suffices if the employer recklessly disregarded the possibility of a violation. The Supreme Court requires evidence of an employer's "knowing or reckless disregard" to establish willfulness under § 255. The record supports the district court’s conclusion that IBP recklessly ignored potential FLSA violations, despite being aware of its compliance obligations and failing to take necessary actions to meet them. IBP's attempts seemed more focused on evading compliance than ensuring it.
The court properly awarded liquidated damages under the FLSA, which are compensatory rather than punitive, meant to address delays in wage payments. While courts have discretion under 29 U.S.C. § 260 to withhold or reduce liquidated damages if an employer demonstrates subjective good faith and objective reasonableness, IBP did not meet this burden. The standard is challenging for employers, and where they fail to prove compliance efforts, liquidated damages are mandatory. IBP's justifications did not constitute the affirmative steps needed for compliance, and it provided no evidence of active efforts to adhere to FLSA requirements.
IBP failed to provide evidence demonstrating compliance with the Fair Labor Standards Act (FLSA), which supported the district court's decision to award liquidated damages. The court found that an employer's non-willfulness does not prevent such an award. Additionally, the court dismissed IBP's argument that it was exempt from Washington's overtime wage laws under the "agricultural worker" exemption. This exemption applies only to specific farm-related activities, and the court determined that IBP's plant operations did not meet this definition. Although some language in the exemption could be interpreted broadly, the court concluded that the workers at the Pasco plant did not qualify for the exemption based on established statutory and regulatory context, as well as interpretations by the Washington Department of Labor and Industries. The court emphasized that the exemption applies only when an agricultural product is first marketed, and under Washington law, statutory meaning must reflect legislative intent, prioritizing the protective spirit of employee rights.
A strong policy exists in Washington favoring the payment of wages due to employees, supported by a comprehensive statutory framework. Revised Code of Washington 49.46.130(2)(g) has a narrow focus, specifically excluding from the Washington Minimum Wage Act (WMWA) protections only those engaged in agricultural or horticultural work during the harvest season. Exemptions under the WMWA are to be interpreted narrowly to align strictly with the statute's intent. The individual plaintiffs do not clearly fit within the exemption outlined in 49.46.130(2)(g). In cases of ambiguity, Washington law favors deference to state agency interpretations of statutes they enforce, particularly when the agency has expertise in the matter. Testimonies from Washington Department of Labor and Industries (WDLI) officials emphasized that the agricultural worker exemption does not extend to employees involved in the commercial processing of agricultural products from other sources. A 1997 WDLI enforcement letter reinforced the interpretation that the exemption applies strictly to workers essential for the operation of agricultural enterprises. Although this interpretation is not binding, it is likely indicative of how the Washington Supreme Court would rule on the matter, leading to the conclusion that the agricultural exemption does not apply to employees at the IBP packing plant.
The WMWA mandates that employers pay at least the minimum wage, similar to the Fair Labor Standards Act (FLSA). Courts have determined that under the FLSA, the right to recover minimum wage accrues weekly rather than hourly. It remains unclear under Washington law whether the WMWA provides a right to minimum wage on a workweek basis or if employees have a per-hour right, as Washington courts have not conclusively addressed this issue.
The district court determined that Washington courts are likely to adopt a per-hour pay standard for hourly employees under the Washington Minimum Wage Act (WMWA). This conclusion was supported by three main factors: (1) the absence of the phrase "in any workweek" from the WMWA, which is present in the Fair Labor Standards Act (FLSA); (2) the Washington Supreme Court's lack of criticism regarding the use of a per-hour measure in the SPEEA case; and (3) the Washington Department of Labor and Industries (WDLI) interpretation that the per-hour standard applies to hourly workers.
The district court's reasoning is bolstered by regulatory provisions that specifically categorize "hourly" employment and limit the work-week measure to certain types of employment. The court noted that if the legislature intended to apply the workweek measure to hourly employees, it would have specified this in the same manner it did for other employment types.
Additionally, the regulations stipulate that employees are entitled to a paid meal period of at least 30 minutes, with specific timing requirements for when the meal period should commence. The WDLI argues that these regulations establish a clear requirement for meal breaks that must be paid if the employee is required to remain on duty. The district court interpreted the regulation to mean that employees would be compensated for any meal break that is interrupted by work duties, but would only receive full pay for the meal period if more than ten minutes were lost to such interruptions. This interpretation, while potentially consistent with the FLSA, conflicts with the mandatory language of the Washington regulation regarding meal breaks.
Washington Administrative Code 296-126-092 mandates a duty-free thirty-minute meal break for employees, without exceptions or reductions as seen in the Fair Labor Standards Act (FLSA) provisions. The term "shall" in the statute indicates an imperative duty, supporting the requirement for a full meal period. If an employee's meal period is interrupted by work tasks, they must be compensated for the entire thirty minutes, regardless of the interruptions. The Washington Department of Labor and Industries (WDLI) has evaluated this provision, confirming that any intrusions necessitate payment for the whole meal period.
The court grants deference to WDLI’s interpretation as agency constructions are given significant weight in Washington law. Consequently, any infringement on the mandated meal period requires full compensation, leading to the reversal of the district court’s decision to bifurcate damages under this code. The case cites the Supreme Court’s ruling in Mt. Clemens, which allows for approximate damages to employees, and the Tenth Circuit’s precedent that supports using reasonable time measures for damage calculations.
While the district court's discretion in determining compensable time based on reasonable assessments is acknowledged, the plaintiffs' interpretation of the court's findings is disputed. The court clarifies that the district court did not overlook actual time findings; rather, it justifiably relied on a reasonable time standard for calculations in this context.
The district court did not determine that any plaintiff's work was unreasonable or non-compensable, opting instead for a compensation measure based on a reasonable quantification of work time. This approach aligns with Tenth Circuit precedent, allowing for approximate awards when plaintiffs can show they performed work without proper payment under the Fair Labor Standards Act (FLSA), with the only uncertainty being the damage amount. Although approximated time and reasonable time are not interchangeable, the uniform nature of the plaintiffs' tasks justified the district court's analysis, indicating no abuse of discretion in its damage calculation.
IBP argued that the district court mistakenly recognized an implied cause of action under Washington regulations, but the Washington Supreme Court subsequently confirmed such a right exists, negating this argument. The judgment of the district court is partially affirmed and partially reversed, with a remand for recalculation of damages, and each party to bear its own costs.
The record details extensive requirements for protective clothing and equipment for employees at the Pasco plant, including sanitary outer garments, safety gear like hard hats and gloves, and additional protective equipment for knife users. Historically, a collective bargaining agreement from the early 1970s allocated thirty minutes per week for changing clothes.
In 1976, IBP acquired the Pasco plant from Columbia Foods, incorporating a "clothes changing" provision in the 1979 bargaining agreement. However, subsequent agreements from 1982 to the present have negotiated but excluded "clothes changing time." Following IBP's changes to its production layout, an agreement with the USDOL reduced the initial fourteen minutes for changing time to four minutes in 1998. That same year, the Department of Labor filed a complaint against IBP for FLSA violations at non-union plants. IBP encourages employees to use restrooms only during unpaid meal breaks, limiting non-break restroom use to emergencies deemed very rare. The district court ruled that donning and doffing non-protective gear is non-compensable and takes minimal time. The U.S. Secretary of Labor, as amicus curiae, supports IBP's definition of "changing clothes," which includes protective gear. However, this contradicts earlier opinions from the Department of Labor that excluded protective gear from the definition of "clothes." The Supreme Court's precedent suggests that conflicting agency interpretations receive less deference. Previous case law, such as Tum v. Barber Foods, affirmed that donning and doffing activities may not be compensable. IBP's reliance on Service Employees International Union Local 102 v. County of San Diego is deemed irrelevant due to differing case facts. Under Section 260 of the FLSA, courts may waive liquidated damages if an employer proves good faith and reasonable belief of compliance, a point raised by IBP only in a pretrial motion, which plaintiffs argue constitutes a waiver. The court noted it typically does not review issues raised solely in summary judgment but acknowledged an exception for legal matters post-bench trial. Washington’s overtime provision requires employers to compensate employees at one and one-half times their regular rate for hours exceeding forty per week, though the federal preemption of state law was not contested by IBP on appeal.
