holding that an employer failed to prove it conformed to a DOL opinion letter where hypothetical facts contained in the Letter are not “closely analogous to the situation of the employees”
How later courts described this case
- holding that an employer failed to prove it conformed to a DOL opinion letter where hypothetical facts contained in the Letter are not “closely analogous to the situation of the employees”
- employees entitled to compensation for time spent waiting during day due to assembly line shut-down
- "the administrative interpretation relied upon must provide a clear answer to the particular situation in order for an employer to rely on it"
- ‘While the attempts of employers to make correct decisions on the basis of general guidelines is prudent and commendable the attempt alone does not raise the statutory bar of § 259. The administrative interpretation relied upon must provide a clear answer to the particular situation in order for the employer to rely on it.”
Written by the judges who cited it.
The opinion
RONEY, Chief Judge,
dissenting:
I respectfully dissent because in the circumstances of this FLSA case the district court’s determination that the employer established the Portal-to-Portal Act good faith defense, 29 U.S.C.A. § 259 , is due to be affirmed.
In order to qualify for the Portal Act’s good faith defense the employer must show that the act complained of was in good faith, and in conformity with and reliance on any written administrative regulation, order, ruling, approval, or interpretation of an agency of the United States. See Olson v. Superior Pontiac-GMC, Inc., 765 F.2d 1570, 1579 (11th Cir.1985); 29 U.S.C.A. § 259 ; 29 C.F.R. § 790.13 (a). All of these elements are at issue in this case.
The employer satisfies the threshold good faith element by acting as a reasonably prudent employer would have acted under similar circumstances. Olson, 765 F.2d at 1580 ; 29 C.F.R. § 790.15 (a). The *931 regulations at issue in this case permit the employer to fashion a policy of non-com-pensable waiting time or downtime based on a durational period that is long enough to enable the employees to use the time effectively for their own purposes and on the “facts and circumstances” of the employment situation. See 29 C.F.R. §§ 785 .-14-785.16.
The Administrator’s regulations do not contain a specific thirty-minute rule. The compliance officer’s verbal advice certainly constitutes part of the “facts and circumstances” upon which the employer could rely in fashioning its waiting time policy. At the very least, when the employer develops a durational period for non-compensa-ble downtime in good faith in reliance on the agency’s written regulations, it should not be penalized for receiving a compliance officer’s advice as to the appropriateness of that action.
The Portal Act’s good faith defense requires that the employer act in actual conformity with the regulation upon which it relied. 29 C.F.R. § 790.14 (a); Olson, 765 F.2d at 1579-80 . Although the elements of good faith and conformity are not synonymous, Olson, 765 F.2d at 1580 , where the agency sets forth a “facts and circumstances” standard, the employer is in conformity with the regulation if its action is reasonable. This is the most that the law can expect of the employer. Indeed, this is what the district court held in concluding that “[b]ecause defendant’s implementation of the thirty minute rule was a reasonable interpretation of 29 C.F.R. §§ 785.14-785 .-16, particularly in light of Mr. Rushing’s advice ... Farm Fresh has acted ... ‘in conformity with’ ” the waiting time regulations.
The court holds that Farm Fresh’s thirty-minute policy failed section 259’s conformity requirement because the district court also found that the production employees “need at least a one hour break period in order to use the time effectively for their own purposes, and, therefore, that any break period less than one hour in duration is compensable time under the Act.” Assuming that the district court's one-hour rule is correct, that finding does not negate the district court’s conclusion that the thirty-minute policy was reasonably in conformity with the agency’s waiting time regulations for the purpose of the Portal Act’s good faith defense.
Confronted with an ambiguous administrative interpretation, the Sixth Circuit observed:
The language and legislative history of this Act indicate that courts should be hesitant to impose retroactive minimum wage liability on employers in the face of an administrative interpretation which the employer could plausibly interpret as insulating him from liability. See H.R. No. 71, 80th Cong., 1st Sess. [1947] U.S. Code Cong. & Ad. News 1029, 1036.
Marshall v. Baptist Hospital, Inc., 668 F.2d 234, 238 (6th Cir.1981). In this case, the employer has established all the elements of the good faith reliance defense and section 259 of the Portal-to-Portal Act, therefore, bars the imposition of any back wage liability.