Jeff Spoerle v. Kraft Foods Global ( 2010 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 09-2691
JEFF S POERLE, et al.,
Plaintiffs-Appellees,
v.
K RAFT F OODS G LOBAL, INC.,
Defendant-Appellant.
Appeal from the United States District Court
for the Western District of Wisconsin.
No. 07-cv-300-bbc—Barbara B. Crabb, Judge.
A RGUED D ECEMBER 3, 2009—D ECIDED A UGUST 2, 2010
Before E ASTERBROOK, Chief Judge, and M ANION and
E VANS, Circuit Judges.
E ASTERBROOK, Chief Judge. The Fair Labor Standards
Act requires employers to pay workers for time spent
donning and doffing “integral and indispensable” safety
gear. See IBP, Inc. v. Alvarez, 546 U.S. 21 (2005); 29 U.S.C.
§254. It also allows labor and management to vary this
rule through collective bargaining:
Hours Worked.—In determining for the purposes
of sections 206 and 207 of this title the hours for
2 No. 09-2691
which an employee is employed, there shall be
excluded any time spent in changing clothes or
washing at the beginning or end of each workday
which was excluded from measured working
time during the week involved by the express
terms of or by custom or practice under a bona
fide collective-bargaining agreement applicable to
the particular employee.
29 U.S.C. §203(o). This appeal presents the question
whether §203(o) preempts state law that lacks an equiva-
lent exception.
Kraft Foods requires the employees who prepare
meat products at its Oscar Mayer plant in Madison,
Wisconsin, to wear safety gear, such as steel-toed boots
and hard hats, plus a smock that keeps other garments
clean. Workers must wear hair nets and beard nets to
protect the food from dandruff and other contaminants.
It takes each worker a few minutes at the start of every
day to put these items on, and a few more at day’s end
to take them off. Kraft Foods and Local 538 of the
United Food and Commercial Workers Union have
agreed that this time is not compensable. Section 203(o)
permits unions and management to trade off the number
of compensable hours against the wage rate; the workers
get more, per hour, in exchange for agreeing to exclude
some time from the base.
The plaintiffs in this suit disagree with the tradeoff
struck in the collective bargaining agreement and want
the time included—and at the higher hourly rate that
the union obtained by agreeing to exclude these few
No. 09-2691 3
minutes a day. They have two principal arguments: first
that protective gear is not “clothing” under §203(o), and
second that Wisconsin’s own wage-and-hour legislation
lacks any equivalent to §203(o). The first of these argu-
ments is a loser, for reasons given in Sepulveda v. Allen
Family Foods, Inc., 591 F.3d 209 (4th Cir. 2009). We agree
with Sepulveda and need not repeat its analysis. But the
second prevailed in the district court. The Fair Labor
Standards Act has a saving clause:
No provision of this chapter . . . shall excuse
noncompliance with any Federal or State law or
municipal ordinance establishing a minimum
wage higher than the minimum wage estab-
lished under this chapter or a maximum work
week lower than the maximum workweek estab-
lished under this chapter . . . . No provision of this
chapter shall justify any employer in reducing a
wage paid by him which is in excess of the ap-
plicable minimum wage under this chapter, or
justify any employer in increasing hours of em-
ployment maintained by him which are shorter
than the maximum hours applicable under this
chapter.
29 U.S.C. §218(a). This means, the district court con-
cluded, that donning and doffing time counts toward
the workweek (and overtime rates) if state law so pro-
vides. Kraft Foods concedes that Wisconsin requires
time spent donning and doffing safety gear to be com-
pensated at the minimum wage or higher, and that
this time counts toward the limit after which the over-
4 No. 09-2691
time rate kicks in. See Wis. Stat. §§ 109.03, 103.02;
Wis. Admin. Code § DWD 272.12(2)(e). (This makes
it unnecessary to decide whether federal law would
require payment for this time, in the absence of a §203(o)
agreement. See Pirant v. United States Postal Service, 542
F.3d 202, 208–09 (7th Cir. 2008) (discussing which kinds
of required safety gear are “integral and indispensable”
for purposes of the analysis in IBP).) Kraft Foods con-
tends, however, that §203(o) preempts Wisconsin’s law.
The district judge rejected that argument and entered
judgment in plaintiffs’ favor as a matter of Wisconsin
rather than federal law, see 626 F. Supp. 2d 913 (W.D.
Wis. 2009), a step supported by the supplemental juris-
diction of 28 U.S.C. §1367.
Kraft Foods contends that §203(o) embodies a federal
decision to permit a collectively bargained resolution
to supersede the rules otherwise applicable to deter-
mining the number of hours worked. That’s an accurate
statement, as far as it goes. But “as far as it goes” means
“as far as §203(o) itself goes.” And the statute tells us
exactly how far it goes. The first words of §203(o) are: “In
determining for the purposes of sections 206 and 207
of this title the hours for which an employee is em-
ployed . . .”. Section 206 sets the federal minimum wage
per hour worked. Section 207 specifies how many hours
a person may work in a given period before overtime
pay commences. These are rules of federal law. States
are free to set higher hourly wages or shorter periods
before overtime pay comes due. That’s what §218(a) says.
Nothing in §203(o) limits the operation of §218(a).
No. 09-2691 5
As far as we can tell, this is the first time an employer’s
argument that §203(o) preempts state law has reached a
court of appeals. All three district judges who have con-
sidered this argument have rejected it. In addition to
the decision under review, see In re Cargill Meat Solutions
Wage & Hour Litigation, 632 F. Supp. 2d 368, 392–94
(M.D. Pa. 2008); Chavez v. IBP, Inc., 2005 U.S. Dist. L EXIS
29714 at *112–22 (E.D. Wash. May 16, 2005). If Wisconsin
had provided for a minimum hourly wage exceeding
the rate in the collective bargaining agreement between
Kraft Foods and Local 538, the state law would trump
the CBA. And if this is so for the hourly rate, it must
be equally so for the number of hours, because how
much pay a worker receives depends on the number of
hours multiplied by the hourly rate. It would be sense-
less to say that a state may control the multiplicand but
not the multiplier, or the reverse, because control of
either one permits the state to determine the bottom line
(provided that the state’s number exceeds the federal
minimum; §218(a) does not allow a state to authorize
employers to pay less than the federal floor).
As Kraft Foods sees things, Wisconsin is meddling with
collective bargaining, so that federal labor law preempts
state law if §203(o) does not do the trick. Yet nothing in
the Wisconsin statutes gives a state court, or other state
official, any role in interpreting or enforcing a col-
lective bargaining agreement. What Wisconsin requires
is that the collective bargaining agreement be ignored,
to the extent that it sets lower wages or hours than
state law specifies. Cf. Lingle v. Norge Division of Magic Chef,
Inc., 486 U.S. 399 (1988) (state rules that disregard, rather
6 No. 09-2691
than interpret, collective bargaining agreements are not
preempted by federal labor policy). Suppose the CBA
set a wage of $8 per hour, higher than the current
federal minimum wage of $7.25, while Wisconsin law
set a minimum wage of $8.25. (Wisconsin’s actual mini-
mum wage is $7.25, but some states, including Illinois,
use $8.25.) No one would contend that the employer
could pay the workers $7.25 an hour, even though that
is allowed by federal law if labor and management
agree (this is the same sense that excluding donning
and doffing time is allowed by §203(o)). Which rate
would prevail: $8 from the CBA or $8.25 from state
law? According to §218(a), the employer must pay $8.25
an hour; state law supersedes the collective bargaining
agreement. And if this is so about the wage per hour,
it is equally true about the number of hours.
Nothing that labor and management put in a collective
bargaining agreement exempts them from state laws of
general application. If a CBA were to say: “the workers
will receive the minimum wage under FLSA, and not one
cent more no matter what state law provides,” that would
be ineffectual. So too would an agreement along the
lines of: “Because our base hourly rate is more than 150%
of the minimum wage, we need not pay overtime rates
under state law.” States can set substantive rules that
determine the effective net wage, even when a CBA
plays a role (as it does when a law requires overtime
pay at some multiple of the base pay set in a col-
lective bargaining agreement). Every state’s overtime-
compensation rule could affect collective bargaining—
knowing that state law requires pay at time-and-a-half,
No. 09-2691 7
labor and management might agree to a lower base rate
per hour—but that effect would not prevent application
of the state’s wage-and-hour statutes.
Management and labor acting jointly (through a CBA)
have no more power to override state substantive law
than they have when acting individually. Imagine a CBA
saying: “Our drivers can travel at 85 mph, without
regard to posted speed limits, so that they can deliver
our goods in fewer compensable hours of work time.”
That clause would be ineffectual. And a CBA reading
instead that “our drivers can travel at a reasonable rate
of speed, no matter what state law provides” would be
equally pointless. Making a given CBA hard to inter-
pret and apply (as the word “reasonable” would be)
would not preempt state law on the theory that states
must leave the interpretation of CBAs to the National
Labor Relations Board and the federal judiciary;
states would remain free to enforce laws that disre-
garded CBAs altogether. That is what Wisconsin does
when determining which donning and doffing time is
compensable.
The district court therefore did not err in concluding
that plaintiffs are entitled to be paid for all time re-
quired by Wisconsin law, and the judgment is
AFFIRMED .
8-2-10