Bernard v. IBP, Inc of Nebraska

UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 97-10955
JIM BERNARD; WILLIAM T. CLYMER; JESSE ESPARAZA; ROGER GRAVES;
RAMANY KHAMMANH; ALFREDO MARQUEZ; NOUCHANH PHONMASAK;
EDDIE ROBERTS; J. D. VATOLE; DONOVAN WALTERS JR; GLEN WEBB,
Plaintiffs-Appellees,
VERSUS
IBP, INC. OF NEBRASKA,
Defendant- Appellant.
*****************************************
JOHNNY LEE JAMES; NORMAN TIMOTHY JONES; ANH TUAN TRAN;
TOBY VERWEY; LARRY DUANE STEPHENS; JOHNNY GUILLEN,
Plaintiffs-Appellees
VERSUS
IBP, INC. OF NEBRASKA
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Texas
September 21, 1998
Before WISDOM, WIENER, and DENNIS, Circuit Judges.
WISDOM, Circuit Judge:
IBP, Inc. of Nebraska, the operator of a beef processing and packaging plant in Amarillo,
Texas, appeals from an adverse jury verdict awarding sixteen current and former maintenance
workers monetary damages for IBP's violations of the Fair Labor Standards Act (FLSA).1 We find
that (1) this suit is not precluded by the collective bargaining agreement (CBA) under which the
plaintiffs are employed, (2) the evidence supports the jury's verdict, (3) the district court did not err
in rejecting IBP's requested jury instructions, (4) the district court did not err in sustaining the
plaintiffs' objection to IBP's closing argument, and (5) the district court did not err in awarding
liquidated damages to the plaintiffs. We affirm.
I.
IBP employed the plaintiffs, who were members of Teamsters Local Union Number 577,
under a CBA providing for one thirty minute meal break during each shift. IBP paid the plaintiffs
time and one-half for overtime worked. IBP did not compensate its employees for their thirty minute
meal break, however. Under the CBA and the FLSA, IBP maintained that the plaintiffs' meal breaks
were personal time for which they were not entitled to compensation. The plaintiffs filed this suit
under the FLSA, arguing that they were entitled to payment for their meal breaks because they were
not free to use the time for their own purposes. The breaks, they maintained, were for the benefit of
IBP. The plaintiffs did not pursue their claims through the mandatory grievance handling and
arbitration procedures of their CBA.
The jury heard conflicting evidence concerning the plaintiffs' responsibilities during their meal
breaks. The plaintiffs testified that they were not relieved of their responsibilities as maintenance
workers during these breaks. They testified that they were interrupted frequently by supervisors who
often asked them to repair equipment that was crucial to IBP's beef packaging and processing
operations. If the plant shut down because of an equipment failure, IBP would lose between $1,000
1
29 U.S.C. § 216 (b).
2
and $1,300 a minute. Horns and sirens would sound, marking the period of shut-down. Even when
their breaks were not interrupted, the plaintiffs testified that they were not free to do as they pleased.
They were required to stay on the premises, and supervisors often used the meal break as a time to
meet with their maintenance crews to discuss the afternoon work schedule. IBP's testimony
directly contradicted the plaintiffs' assertions. Several supervisors testified that the maintenance
employees, including the plaintiffs, were free to leave the plant during their meal breaks. Only on rare
occasion did the supervisors interrupt a meal break. When they did, the maintenance workers were
granted an additional thirty minute meal break during their shift. The plaintiffs also could refuse to
allow interruptions of their meal break to perform maintenance duties without their being subjected
to any adverse consequences.
At the close of the evidence, IBP moved for a judgment as a matter of law. The district court
denied that motion, and the case was submitted to the jury. The jury returned a verdict in favor of
the plaintiffs, awarding wages and overtime compensation for the meal breaks during the period in
question. The jury also awarded liquidated damages under the FLSA, attorneys' fees, and costs.
IBP filed another motion for a judgment as a matter of law. Once again, the district court
denied that motion and IBP appeals.
II.
IBP argues that the district court should have dismissed this case because the plaintiffs’ FLSA
suit was preempted by their CBA. Article 10 of the CBA between IBP and the plaint iffs’ union
provides that “Should the Union or any individual employee desire to pursue a grievance pertaining
to the violation of the Agreement, or violation of employee’s working conditions, the matter shall be
handled according [to the CBA’s procedures].” Arbitration of the dispute is the final step provided
3
for in the CBA. IBP maintains that the plaintiffs’ suit is one filed under the agreement, and, therefore,
is subject to Article 10's arbitration clause. The plaintiffs argue that their suit is one to enforce rights
created by statute that are separate from the CBA.
In Barrentine v. Arkansas-Best Freight System, Inc., the Supreme Court held that employees
could pursue a claim under the FLSA even though they had pursued unsuccessfully a similar claim
under the grievance-handling procedures of their CBA. The Court wrote:
“While courts should defer to an arbitral decision where the employee’s claim is based on
rights arising out of the collective-bargaining agreement, different considerations apply where
the employee’s claim is based on rights arising out of a statute designed to provide minimum
substantive guarantees to individual workers.”2
The Court continued:
“This Court’s decisions interpreting the FLSA have frequently emphasized the nonwaivable
nature of an individual employee’s right to a minimum wage and to overtime pay under the
Act. Thus, we have held that FLSA rights cannot be abridged by contract or otherwise
waived because this would ‘nullify the purposes’ of the statute and thwart the legislative
policies it was designed to effectuate. . . . Moreover, we have held that congressionally
granted FLSA rights take precedence over conflicting provisions in a collectively bargained
compensation agreement.”3
The Court also acknowledged that arbitration of FLSA claims is inadequate because the FLSA
provides for liquidated damages, attorneys’ fees, and costs.4 In general, arbitrators do not have
authority to award these special damages.5 Under Barrentine, then, the plaintiffs’ right to pursue a
2
Barrentine v. Arkansas-Best Freight System, 67 L. Ed. 2d 641, 651 (1981).
3
Id. at 653-4 (citations omitted).
4
Id. at 656.
5
Id.
4
suit under the FLSA is completely independent from their rights under the CBA.6
IBP relies upon Leahy v. City of Chicago, Illinois7 to argue that the CBA precludes the
plaintiffs’ suit under the FLSA. In Leahy, a panel of the Seventh Circuit, over a vigorous dissent,
concluded that police officers seeking overtime pay for meal breaks were required to pursue their
complaint under the grievance handling procedures of the officers’ CBA.8 In his dissent, Judge
Cudahy wrote: “the assertion that merely by providing for overtime pay in its collective bargaining
agreement an employer may insulate itself from FLSA scrutiny borders on the preposterous. Yet the
majority’s opinion essentially boils down to just such an assertion.”9 Not only is the majority position
“preposterous”, it completely ignores the Supreme Court’s decision in Barrentine. In the present
case, then, the district court correctly concluded that the plaintiffs’ suit was not preempted by the
CBA.
III.
Next, IBP argues that the district court erred by denying its motion for a judgment as a matter
of law or, in the alternative, a new trial. We review the district court's denial of a motion for a
judgment as a matter of law t o determine whether there is a legally sufficient evidentiary basis to
support the jury's verdict. 10 A motion for a judgment as a matter of law should be denied when,
viewing all of the evidence in the light most favorable to the jury's verdict, a reasonable jury could
6
See Wahl v. City of Witchita, Kansas, 725 F. Supp. 1133, 1145 (D. Kansas 1989).
7
96 F.3d 228 (7th Cir. 1996).
8
Id. at 232.
9
Id. at 235 (Cudahy, J., dissenting).
10
Fed. R. Civ. P. 50 (a) (1).
5
have found as this jury did.11 We review the denial of a motion for a new trial for abuse of
discretion.12 "A jury verdict . . . may be reversed and a new trial ordered only if the verdict is against
the great weight of the evidence."13 IBP maintains that the jury's verdict is not supported by the
evidence or, at least, is against the great weight of the evidence.
“Bona fide meal periods are not worktime.”14 To be classified as a bona fide meal period, 29
C.F.R. § 785.19 provides that an employee “must be completely relieved from duty for the purpose
of eating meals” during that period.15 When applying this test, courts have employed a “predominant
11
Bellows v. Amoco Oil Co., 118 F.3d 268, 273 (5th Cir. 1997); Boeing v. Shipman,
411 F.2d 365, 374-5 (5th Cir. 1969) (en banc) overruled on other grounds, Gautreaux v.
Scurlock Marine, Inc., 107 F.3d 331 (5th Cir. 1997) (en banc).
12
Keeler v. Richards Mfg. Co., 817 F.2d 1197, 1200 (5th Cir. 1987).
13
Id.
14
29 C.F.R. § 785.19.
15
The Code of Federal Regulations provides for meal periods as follows:
(a) Bona fide meal periods. Bona fide meal periods are not work time. Bona fide
meal periods do not include coffee breaks or time for snacks. These are rest periods. The
employee must be completely relieved from duty for the purposes of eating regular meals.
Ordinarily, 30 minutes or more is long enough for a bona fide meal period. A shorter
period may be long enough under special conditions. The employee is not relieved if he is
required to perform any duties, whether active or inactive, while eating. For example, an
office employee who is required to eat at his desk or a factory worker who is required to
be at his machine is working while eating. ...
(b) Where no permission to leave premises. It is not necessary that an employee
be permitted to leave the premises if he is otherwise completely free from duties during the
meal period.
29 C.F.R. § 785.19.
6
benefit test”.16 The critical question is whether the meal period is used predominantly or primarily
for the benefit of the employer or for the benefit of the employee.17 The employer bears the burden
to show that meal time qualifies for this exception from compensation.18
Whether meal time is predominantly for the benefit of the employer is a question of fact that
is ordinarily resolved by the trier of fact after hearing all of the evidence.19 Our role is not to reweigh
the evidence, substituting our credibility choices for that of the jury.20 Instead, we view the evidence
in the light most favorable to the jury's verdict.21 In the present case, we conclude the evidence is
sufficient to support the jury's verdict. Several maintenance workers testified that they were required
to wear their radios and tools during lunch. They could not leave the premises during their breaks.
Often, their lunches were interrupted by maintenance problems requiring the workers’ immediate
attention. In these circumstances, we conclude that the meal periods were predominantly for the
16
See Roy v. County of Lexington, South Carolina, 141 F.3d 533, 544 (4th Cir.
1998); Reich v. Southern New England Telecommunications Corp., 121 F.3d 58, 63-5 (2d Cir.
1997); Leahy v. City of Chicago, Illinois, 96 F.3d 228, 230-1 n.2 (7th Cir. 1996); Henson v.
Pulaski County Sheriff Dept., 6 F.3d 531, 534 (8th Cir. 1994); Lamon v. City of Shawnee,
Kansas, 972 F.2d 1145, 1155 (10th Cir. 1992). In Lee v. Coahoma County, Mississippi, we
considered whether sheriff's deputies were entitled to compensation for their meal breaks when
those breaks were short, unscheduled, and subject to interruption for work-related reasons. 937
F.2d 220, 225 (5th Cir. 1991). We concluded that the deputies were not entitled to compensation
for their meal breaks. Although we did not expressly adopt the "predominant benefit test" in that
case, our analysis clearly shows that this is the test we were applying. See id. at 225. Today, we
adopt the "predominant benefit test" used by most circuit courts.
17
Roy, 141 F.3d at 544.
18
Id.
19
Id. at 545.
20
Boeing, 411 F.2d at 375.
21
Id. at 374-5.
7
benefit of the employer.
IV.
IBP also argues that the district court erred in instruct ing the jury regarding the
compensability of meal breaks. When reviewing a district court’s charge to the jury, we consider the
instructions on the “whole, in view of the allegations of the complaint, the evidence presented and
the arguments of counsel to determine whether the jury was misled and whether it understood the
issues presented.”22 “If the charge leaves the reviewing court with ‘substantial and ineradicable doubt
as to whether the jury has been properly guided in its deliberations’ it cannot stand.”23 Nevertheless,
“‘[t]he test is not whether the charge was faultless in every particular but whether the jury was misled
in any way and whether it had understanding of the issues and its duty to determine those issues.’”24
The jury instructions submitted by the district court state:
Under the Fair Labor Standards Act, employees must be paid for time spent predominantly
for the benefit of the employer. On the other hand, if the time is spent predominantly for the
employee’s benefit, then it is not compensable. Whether the time was spent predominantly
for the employer’s or employee’s benefit depends on all the facts and circumstances of each
case. The crit ical issue is whether the employee can use the time effectively for his or her
own purposes. Among the factors that you may consider are whether the employees are
subject to real limitations on their personal freedom which inure to the benefit of the
employer; whether restrictions are placed on the employee’s activities during those times,
such as whether or not the employee may leave the work site if he chooses; whether the
employee remains responsible for substantial work-related duties; and how frequently the time
is actually interrupted by work-related duties.
IBP complains that these instructions incorrectly advise the jury of factors other than whether
22
Coughlin v. Capitol Cement Co., 571 F.2d 290, 300 (5th Cir. 1978).
23
Mart. v. City of New Orleans, 678 F.2d 1321, 1325 (5th Cir. 1982) (quoting
Dwoskin v. Rollins, Inc., 634 F.2d 285, 293 (5th Cir. 1981)), cert. denied, 459 U.S. 1203 (1983).
24
Houston v. Herring, 562 F.2d 347, 349 (5th Cir. 1977) (quoting Borel v.
Fibreboard Paper Products Corp., 493 F.2d 1076, 1100 (5th Cir. 1973)).
8
the meal break is “predominantly for the benefit of the employer”. Specifically, IBP maintains that
the district court erred by including a statement that “[t]he critical issue is whether the employer can
use the time effectively for his or her own purposes”. IBP also argues that the district court’s
instruction was improper because it called for “an all-or-nothing answer”. The jury could award
compensation for all meal periods or it could order compensation for none; there were no alternative
options for the jury to consider. We find that the district court did not err.
The language used by the district court accurately reflects the standard and factors employed
by the courts when applying the predominant benefit test. The statement that “the critical issue is
whether the employee can use the time effectively for his or her own purposes” is taken directly from
the Eighth Circuit’s decision in Henson v. Pulaski County Sheriff Dept.25 When applying this test,
the courts have focused upon the limitations and restrictions placed upon the employees, the extent
to which those restrictions benefit the employer, the duties for which the employee is held responsible
during the meal period, and the frequency in which meal periods are interrupted.26 These are
appropriate factors to be considered.
The district court’s “all-or-nothing” instruction was also proper. IBP stipulated to the
calculation of the number of meal periods and the amount of actual damages to be awarded in the
event that liability was found. This stipulation is signed by both parties. IBP’s argument that the
stipulation was of “no moment” is not supported by the record.27 Furthermore, the issue presented
25
6 F.3d at 534 (citing Bright v. Houston N.W. Med. Ctr. Survivor, Inc., 934 F.2d
671, 677 (5th Cir. 1991)).
26
See Roy, 141 F.3d at 545-6; Reich, 121 F.3d at 65; Lamon, 972 F.2d at 1157-8.
27
During a conference in chambers before trial, plaintiffs attorney noted that “one
dispute that has prevented us from reaching agreement [on a stipulation to damages] is I think the
9
in this case is whether the plaintiffs were entitled to compensation for their meal breaks under the
FLSA when they were required to remain on-call and ready to handle maintenance problems during
those breaks. The maintenance workers were performing services for IBP even when their meal
breaks were not interrupted; they were available to handle any conditions that might arise. Given the
parties’ stipulation, it was not necessary for the district court to submit to the jury the question of
how many meal breaks were for the benefit of IBP.
V.
IBP argues that the dist rict court erred in sustaining the plaintiffs’ objection to defense
counsel’s closing arguments. Defense counsel at tempted to argue that the plaintiffs were seeking
compensation for all of their meal breaks even though many of those breaks were not interrupted.
We review the district court’s decision to sustain an objection during closing arguments for
abuse of discretion.28 We find that the district court did not abuse its discretion. The number of days
for which the plaintiffs should be compensated was part of the damages calculation that was
submitted to the district court on the parties’ stipulation. The jury was not asked to resolve thi s
question. It was not appropriate, then, for defense counsel to argue this point to the jury.
defendants take the position that even if the employees are on call and even if that time is
compensable, that they should only be compensated for the days they were specifically called to
go perform repairs on the machinery”. After this statement, the parties’ attorneys discussed a
damage stipulation with the court. Defense counsel agreed to stipulate to the damages and signed
that stipulation without objecting to the manner in which the damages were calculated. A
reasonable interpretation of this stipulation, then, is that the parties resolved their differences.
Defense counsel’s attempt to re-characterize the stipulation in IBP’s favor when arguing over the
jury instructions at the close of trial is unpersuasive.
28
See United States v. Taylor, 680 F.2d 378, 380 (5th Cir. 1982); Commercial
Credit Equip. Corp. v. L & A Contracting Co., 549 F.2d 979, 981 (5th Cir. 1977). See also
United States v. Santiago, 46 F.3d 885, 892 (9th Cir. 1995). Vanskike v. Union Pac. R.R. Co.,
725 F.2d 1146, 1149 (8th Cir. 1984).
10
VI.
Finally, IBP argues that the district court erred in awarding liquidated damages to the
plaintiffs. An employer who violates the FLSA is liable for the unpaid wages and “an additional equal
amount as liquidated damages”.29 Section 260 of Title 29 qualifies this automatic award of liquidated
damages, however:
[I]f the employer shows to the satisfaction of the court that the act or omission giving rise to
such action was in good faith and that he had reasonable grounds for believing that his act or
omission was not a violation of the [FLSA], the court may, in its sound discretion, award no
liquidated damages or award any amount thereof not to exceed the amount specified in § 16
of this title.30
“The purpose of [§ 260] was to mitigate the harshness of the then- strict liability offense of violating
Section 216, with its attendant double-damage assessment.”31 Nevertheless, the employer faces a
“substantial burden” of demonstrating good faith and a reasonable belief that its actions did not
violate the FLSA.32 And, the award of liquidated damages remains within the discretion of the trial
court; “even if the district court determines that the employer’s actions were in good faith and based
on reasonable grounds, the court has discretion to award liquidated damages.”33
IBP sets forth several factors to show that its actions were in good faith and based on a
reasonable belief that it did not violate the FLSA. IBP insists that liquidated damages are not
warranted because (1) the legal precedents did not advise IBP that its employment practices were
29
29 U.S.C. § 216.
30
29 U.S.C. § 260.
31
LeCompte v. Chrysler Credit Corp., 780 F.2d 1260, 1263 (5th Cir. 1986).
32
Mireless v. Frio Foods, Inc., 899 F.2d 1407, 1415 (5th Cir. 1990).
33
Lee v. Coahoma County, 937 F.2d 220, 226 (5th Cir. 1990).
11
unlawful,34 (2) its employment practices were not concealed,35 (3) none of the plaintiffs ever
complained or filed grievances about the meal break policies before this suit, (4) several maintenance
workers testified that they engaged in activities during their meal breaks that were solely for their
benefit, and (5) the jury found that IBP’s violations were not wilful.
Even if IBP acted in good faith based upon a reaso nable belief that it did not violate the
FLSA, the district court still had discretion to award liquidated damages.36 Given IBP’s violation of
the FLSA, we conclude that the district court did not err in exercising its discretion to award
liquidated damages.
VII.
For the foregoing reasons, the judgment of the district court is AFFIRMED.
34
A reasonable belief may be found where the employer purposefully “engaged in the
acts proven to be violations [ of the FLSA] but did so under a mistaken, although reasonable
belief, that its acts were in conformity with the law”. See Martinez v. Food City, Inc., 658 F.2d
369, 376 (5th Cir. 1981).
35
A decision made “above board and justified in public” may satisfy the good faith
and reasonableness test. Walton v. United Consumers Club, Inc., 786 F.2d 303, 312 (7th Cir.
1986).
36
29 U.S.C. § 260.
12