Bell v. Southeastern Pennsylvania Transportation Authority

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 12-4031
_____________
DAVID BELL, et al.,
Appellants
v.
SOUTHEASTERN PENNSYLVANIA
TRANSPORTATION AUTHORITY
______________
APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE EASTERN DISTRICT OF
PENNSYLVANIA
(D.C. Civil No. 11-cv-04047)
District Judge: Honorable Joel H. Slomsky
____________
Submitted Under Third Circuit LAR 34.1(a)
July 11, 2013
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Before: GREENAWAY, JR., SLOVITER and BARRY,
Circuit Judges
(Opinion Filed: August 19, 2013)
____________
Bruce Bodner, Esq.
Howard J. Kaufman, Esq.
Kaufman, Coren & Ress
2001 Market Street
Two Commerce Square, Suite 3900
Philadelphia, PA 19103
Counsel for Appellants
Jo Bennett, Esq.
Michael G. Tierce, Esq.
Stevens & Lee
1818 Market Street
29th Floor
Philadelphia, PA 19103-0000
-AND-
Zachary R. Davis, Esq.
Hangley, Aronchick, Segal, Pudlin & Schiller
One Logan Square
18th & Cherry Streets, 27th Floor
Philadelphia, PA 19103-0000
Counsel for Appellee
___________
OPINION OF THE COURT
___________
BARRY, Circuit Judge
Plaintiffs, on behalf of themselves and former and
current bus drivers and trolley operators (the “Operators”)
employed by defendant, the Southeastern Pennsylvania
Transportation Authority (“SEPTA”), brought this class
action under the Fair Labor Standards Act (“FLSA”), 29
U.S.C. §§ 201 et seq., to recover unpaid wages and overtime
compensation for work performed during morning “pre-trip”
inspections required before the start of each Operator’s daily
run. Relying on our decision in Vadino v. A. Valey
Engineers, 903 F.2d 253 (3d Cir. 1990), the District Court
granted SEPTA’s motion to dismiss on the ground that the
FLSA claim required the interpretation of provisions of three
collective bargaining agreements (the “CBAs”) between
SEPTA and the unions representing the Operators and was
therefore subject to those agreements’ grievance and
arbitration provisions. Because we conclude that the
Operators’ FLSA claim does not require the interpretation of
the collective bargaining agreements, we will vacate the order
of the District Court.
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I. BACKGROUND
A. Pre-Run Obligations
This dispute involves two sets of responsibilities each
Operator must fulfill at the start of the workday prior to
leaving the bus or trolley depots. First, SEPTA’s Bus
Operations Rules and Regulations Manual has long required
Operators to perform a series of clerical tasks each morning
(the “Reporting Tasks”). These tasks include checking in
with the dispatcher, collecting and punching passenger
transfers, filling out forms and waybills, reading SEPTA
“Bulletin Orders,” checking daily detours and operating
conditions, copying their run schedules, and determining and
walking to the location of their vehicles. Compl. at ¶ 18. The
Reporting Tasks take approximately ten minutes to complete.
Accordingly, SEPTA’s Operating Manual requires that
Operators “report for duty at the required time and at the
required location, in accordance with schedules set up in the
employees’ particular departments and locations . . . not less
than ten minutes” before the time the bus is scheduled to
leave the depot. Id. at ¶ 16. The Operators allege that, even
though they are compensated for performing the Reporting
Tasks, this time is not included in the calculation of overtime.
Since daily pre-trip vehicle safety inspections became
a federal and state requirement in 1992, SEPTA has also
required that Operators perform daily pre-trip inspections (the
“CDL Inspections”), which require them to inspect several
items on each vehicle, including the braking system, lights,
horns, doors, turn signals, wheelchair lifts, and PA system.
Id. at ¶¶ 19, 20. The CDL Inspections take approximately
fifteen minutes to complete. The Operators contend that
SEPTA fails to compensate them for these inspections, and
that they must perform them “off the clock.” According to
the FLSA, Operators must be paid 1.5 times their regular rate
of pay for all hours worked over 40 hours in a given week.
Because many Operators work 40 hours a week exclusive of
the time spent performing CDL inspections, the Operators
contend that SEPTA’s failure to compensate them for this
time results in unpaid overtime wages, constituting a willful
violation of the FLSA.
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B. The Collective Bargaining Agreements
The Operators and SEPTA are bound by the terms of
three separate collective bargaining agreements between (1)
SEPTA and the City Transit Division Operators (“CTDO”);
(2) SEPTA and the Transport Workers Union Local 234
(“TWU”); and (3) SEPTA and the United Transportation
Union Local 1594 (“UTU”). Each of the CBAs includes a
provision concerning compensation for time spent working
prior to the morning scheduled start time. The CBA between
the CTDO and SEPTA provides:
Where an employee is required to report in
advance of the scheduled starting time of one’s
run or to turn in passenger receipts or to so
report and turn in, and does so, one-quarter hour
will be added to the scheduled run time and the
employee will be paid for the one-quarter hour
at the aforesaid rate. This one-quarter hour will
be treated as time worked for all purposes
except in calculating overtime under Section
404(c).
The CBA between the TWU and SEPTA provides:
The authority will pay operators required to
report ten (10) minutes in advance of pull-out
and who are required to turn in receipts at the
completion of said work one quarter (1/4) of an
hour per day for report and turn-in allowance.
Such allowance will not be included for the
computation of overtime.
The CBA between the UTU and SEPTA provides:
An additional allowance of two-tenths (.2) of an
hour per day will be allowed all regular
Operators for reporting time for preparation of
their assignments. . . . It is understood that these
additional time allowances should not be
considered in the computing of overtime.
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Each of the CBAs also includes broad grievance provisions,
which, in sum and substance, require that parties submit to
arbitration any dispute involving the application,
implementation, or interpretation of any of the provisions of
the agreements.
Relying on our decision in Vadino, SEPTA moved to
dismiss the complaint on the ground that the Operators’
FLSA claim is dependent on the disputed interpretation of the
above CBA provisions regarding reporting time, which,
according to the CBAs’ respective grievance provisions,
require that the parties first submit the disputed issue to
arbitration. On September 28, 2012, the District Court granted
the motion to dismiss for lack of subject matter jurisdiction.
The Operators now appeal.
II. ANALYSIS
The FLSA requires that employers compensate
employees working longer than forty hours a week for time
worked in excess of forty hours “at a rate not less than one
and one-half times the regular rate at which he is employed.”
29 U.S.C. § 207(a)(1). The Operators contend that time
spent—approximately twenty-five minutes—conducting the
Reporting Tasks and the CDL Inspections prior to the start of
morning runs is compensable “time worked” for purposes of
the FLSA. The Complaint alleges that SEPTA violated
section 207(a) of the FLSA by failing to properly compensate
the Operators for this time and for failing to include this time
in the computation of overtime. 1
1
More specifically, the argument goes, it is a two-fold harm
suffered by the Operators. If SEPTA is complying with the
terms of the CBAs, Operators represented by the CTDO and
the TWU receive compensation for 15 minutes pay for pre-
trip responsibilities; Operators represented by the UTU
receive 12 minutes pay. According to the Complaint,
therefore, CTDO and TWU workers are not compensated at
all for 10 minutes of compensable work; Operators
represented by the UTU are not compensated at all for 13
minutes of compensable work. Additionally, each of the
CBAs excludes this time for purposes of calculating overtime.
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The District Court concluded, however, that the
resolution of the FLSA claim depends upon the interpretation
of provisions of the collective bargaining agreements, which,
in accordance with the grievance and arbitration provisions of
the CBAs, and the “strong federal policy in favor of
arbitration,” must be decided in the first instance by an
arbitrator. We disagree.
In Barrentine v. Arkansas-Best Freight System, Inc.,
450 U.S. 728 (1981), the Supreme Court addressed the
distinction between claims arising out of breaches of
collective bargaining agreements (in that case, under the
Labor Management Relations Act (“LMRA”), 29 U.S.C. §
185), and those brought under the FLSA. The Court
acknowledged that the LMRA governs relationships between
employers and unions by “encourag[ing] the negotiation of
terms and conditions of employment through the collective-
bargaining process,” while the FLSA reflects a different genre
of statute, one which “guarantees covered employees specific
substantive rights.” Barrentine, 450 U.S. at 734. The
minimum protections the FLSA provides to individual
workers, including 29 U.S.C. § 207(a)(1), “take precedence
over conflicting provisions in a collectively bargained
compensation arrangement.” Id. at 740-41. An employee’s
right to relief under the FLSA, therefore, is distinct from an
employee’s contractual rights as provided in a collective
bargaining agreement. Id. at 745 (“[T]he FLSA rights
petitioners seek to assert in this action are independent of the
collective-bargaining process. They devolve on petitioners as
individual workers, not as members of a collective
organization.”). The Court noted that, when vindicating
rights under the FLSA, the statute’s “enforcement scheme
grants individual employees broad access to the courts. . . .
No exhaustion requirement or other procedural barriers are
set up, and no other forum for enforcement of statutory rights
is referred to or created by the statute.” Id. at 740.
In some instances, however, an employee’s FLSA
claim is inevitably intertwined with the interpretation or
All of the class members, therefore, are deprived of 25
minutes work in the calculation of overtime.
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application of a collective bargaining agreement. We
encountered this in Vadino. In Vadino, an employee asserted
two claims against his former employer: (1) a claim under
section 301 of the LMRA, alleging that his employer
breached the applicable CBA by paying him less than the
“journeyman” wages to which he contended he was entitled;
and (2) a claim under the FLSA, contending that his employer
paid him less than one and one-half times his “regular rate”
for hours worked in excess of forty hours per week, because
his overtime rate should have been one and one-half times the
“journeyman” rate. 903 F.2d at 257. Vadino, however,
admitted that his employer paid him one and one-half times
his “normal” hourly rate for overtime hours. Id. at 264. His
FLSA claim, then, was tethered to the threshold question of
whether or not he was entitled to journeyman wages or
normal wages under the governing CBA. In this sense,
Vadino’s FLSA claim was entirely derivative of his breach of
contract claim, and, concomitantly, dependent on an
interpretation of that CBA.
To reconcile the competing interests of a strong federal
policy in favor of arbitration to settle disputes between
employers and unions over provisions of a CBA with an
individual employee’s statutory rights under the FLSA, we
held that “[FLSA] claims which rest on interpretations of the
underlying collective bargaining agreement must be resolved
pursuant to the procedures contemplated under the LMRA,
specifically grievance, arbitration, and, when permissible, suit
in federal court under [the LMRA].” Id. at 266. We set forth
the appropriate procedure in the event a FLSA claim depends
on an issue of CBA interpretation:
It follows that in the event of a dispute as to the
correct wage rate under a collective bargaining
agreement and a consequential claim under the
overtime provision of the FLSA, the procedure
we envision is to decide the contract
interpretation issue through the grievance
procedure to arbitration. If exhaustion can be
excused, then the employee may file a[n]
[LMRA] claim . . . . Concurrent with that, the
employee may bring a FLSA claim, but the
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FLSA overtime claim would be dependent upon
the resolution in the [LMRA] claim of the
contract interpretation issue.
Id. In other words, if a FLSA claim depends on the disputed
interpretation of a CBA provision, an employee must first go
to arbitration—through the representative union—before
vindicating his or her rights in federal court under the FLSA.
SEPTA contends that the reasoning of Vadino compels
the Operators to first exhaust arbitration pursuant to the
CBAs’ grievance provisions before proceeding with their
FLSA claim. Specifically, SEPTA argues that the FLSA
overtime claim requires an arbitrator to determine whether the
provisions of the CBA governing compensation for reporting
time prior to the start of daily schedules “include payment for
pre-trip inspections.” Appellee’s Br. at 20. Because there
exists no dispute over the interpretation or application of any
of the provisions of the CBAs that has any impact on the
Operators’ FLSA claim, SEPTA’s contention is unavailing.
Unlike the employee in Vadino, the Operators do not
contend that they are entitled to additional payment under a
CBA. Neither do they contend that SEPTA fails to
compensate them in the amounts set forth in the CBAs for
time spent performing their duties prior to the scheduled
starting time. Indeed, the Operators do not allege that SEPTA
has violated the terms of the CBAs in any way. Rather, they
argue, their FLSA claim exists independently of any rights
they have under their respective CBAs: (1) they are not fully
compensated for approximately fifteen minutes spent
performing CDL inspections; and (2) their pre-trip
responsibilities, the CDL inspections and the Reporting
Tasks, are not included in the calculation of overtime.
Neither of these alleged failures necessitates the resolution, as
the District Court concluded, of the “applicability of the
contractual provisions [regarding pre-trip reporting in the
CBAs] to morning inspections.” J.A. 9. Nor is the FLSA
claim at “issue in this case [] compensation for morning pre-
trip inspections pursuant to the terms of the CBAs.” Id. at 10
(emphasis added). Rather, resolution of the FLSA claim
requires a factual determination of the amount of time
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Operators are required to work prior to their scheduled start,
and a legal determination regarding whether this time is (1)
compensable and (2) subject to the overtime provisions of the
FLSA. 29 U.S.C. § 207(a)(1). Unlike Vadino, neither of
these determinations depends on the resolution of a disputed
reading of the CBAs.
SEPTA also relies on Townsend v. BC Natural
Chicken LLC, Civ. No. 06-4317, 2007 WL 442386 (E.D. Pa.
Feb. 2, 2007), in which employees alleged that certain
activities, including the “donning and doffing” of personal
protective equipment prior to and immediately after
scheduled work, constituted work for the purposes of the
FLSA. Id. at *4. The district court, citing Vadino, dismissed
the FLSA claim in favor of arbitration because it would have
been required to interpret a provision of the CBA that
provided for “twelve (12) minutes pay per week to provide
for wash up time.” Id. Although, as here, Townsend did not
involve a FLSA claim derivative of a separate breach of
contract claim, we find it readily distinguishable due to the
unique circumstances of a “donning and doffing” claim and a
quirk of the FLSA statute.
Section 203(o) of the FLSA permits parties, through
the terms of a collective bargaining agreement, to exclude
from “hours worked” an employee’s “time spent changing
clothes or washing.” In other words, unlike most of the
statute that “guarantees covered employees specific
substantive rights,” Barrentine, 450 U.S. at 734, which cannot
be abridged by contract, § 203(o) explicitly permits
employers to exclude, in the collective bargaining process,
time spent changing clothes. Accordingly, the Townsend
court dismissed the action in favor of arbitration, reasoning
that an arbitrator need first decide whether the “donning and
doffing” of protective gear was intended by the parties to be
“wash up” time under the CBA that could validly be excluded
from an overtime calculation under the FLSA. Townsend,
2007 WL 442386 at *4. If the arbitrator were to interpret the
CBA such that the “wash up” provision covered the “donning
and doffing” of protective gear, § 203(o) would authorize the
employer to limit overtime pay without running afoul of the
FLSA. Just as in Vadino, § 203(o) of the FLSA rendered
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plaintiffs’ FLSA claim dependent on a threshold
interpretation of the CBA. See id. (“[A]ny decision this Court
or any finder of fact may take regarding Plaintiff’s [FLSA
claims] requires the Court to also interpret the CBA.”). There
is no analogous statutory provision here.
Were the parties to arbitrate a dispute over the CBA
provisions governing time spent working prior to the morning
scheduled start time—to the extent there even exists a
dispute—there would be no effect on the Operators’ FLSA
claim. If, for instance, an arbitrator were to determine that
the pre-trip vehicle inspections are “covered” by the CBA
provisions, the Operators would still have a claim that their
payments under the CBA violate the FLSA. Accepting the
facts alleged in the Complaint as true, as we must, the
Operators are being compensated, pursuant to the CBAs, for
only 12 or 15 minutes of 25 minutes of compensable work,
none of which is calculated when assessing overtime. If pre-
trip vehicle inspections are not “covered” by the CBA
provisions, there is simply no provision governing
compensation for those inspections. The result is the same,
and the Operators are entitled to the same statutory relief.
This is in stark contrast to Vadino, where the very
existence of the plaintiff’s overtime FLSA claim was
“consequential” to the wage dispute under the collective
bargaining agreement. Vadino, 903 F.2d at 266. Likewise in
Townsend, the disputed work time at issue, under an express
provision of FLSA, could be altered by the terms of a CBA.
Here, where the Operators rely solely on their statutory, rather
than their contractual, rights to recovery, district courts have
had no difficulty concluding that such plaintiffs may proceed
on their FLSA claims without first seeking arbitration. See,
e.g., Barnello v. AGC Chems. Ams., Inc., Civ. No. 2:08-CV-
03505, 2009 WL 234142, at *3 (D.N.J. Jan. 29, 2009)
(distinguishing Vadino and denying motion to dismiss where
plaintiffs “do not claim that they are owed compensation
pursuant to the CBA and further emphasize that their claims
stem solely from their alleged statutory right to compensation
for time worked under the FLSA” (internal quotation marks
omitted)); Gordon v. Kaleida Health, 08-CV-378S, 2008 WL
5114217, at *9 (W.D.N.Y. Nov. 25, 2008) (distinguishing
10
Vadino where plaintiff withdrew challenge to the CBA and
claim for unpaid wages was only “statutorily based” on the
FLSA); Gallagher v. Lackawanna Cnty., Civ. No. 07-0912,
2008 WL 9375549, at *6 (M.D. Pa. May 30, 2008)
(concluding that plaintiffs’ claims “aris[ing] under and
concern[ing] the meaning of a federal statute, and specifically
the meaning of ‘compensable work’ under the FLSA” need
not be arbitrated); Andrako v. U.S. Steel Corp., Civ. No. 07-
1629, 2008 WL 2020176, at *5 (W.D. Pa. May 8, 2008)
(“[The plaintiffs’] argument is that [the disputed] time is
compensable work under the FLSA irrespective of what the
CBA provides. . . . Because . . . the FLSA claim is not
dependent on the interpretation of a disputed provision of the
CBA, it would be improper . . . to dismiss the FLSA claim on
that basis . . . .”); Moeck v. Gray Supply Corp., Civ. No. 03–
1950, 2006 WL 42368, at *3 (D.N.J. Jan. 6, 2006) (denying
motion to dismiss where “[p]laintiffs’ claims are not based on
an interpretation of the collective bargaining agreement with
respect to the appropriate wage rate, but are based on their
contention that they are entitled to overtime” under the
FLSA).
III. CONCLUSION
For the foregoing reasons, we will vacate the order of
the District Court and remand for further proceedings in
accordance with this Opinion.
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