Amicus Curiae Brief — Auer v. Robbins

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OCTOBER TERM, 1995

FRANCIS BERNARD AUER, et al.,

Petitioners,

Vv.

DAVID A. ROBBINS, et ai.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Eighth Circuit

BRIEF OF NATIONAL EMPLOYMENT

LAW PROJECT, INC. AS AMICUS CURIAE

IN SUPPORT OF PETITIONERS

KENNETH E. LABOWITZ

Counsel of Record

YOUNG, GOLDMAN & VANBEEK

510 King Street, Suite 416

Alexandria, Virginia 22314

(703) 684-3260

SARA E. RIOs,

Executive Director

CATHERINE K. RUCKELSHAUS,

Counsel

NATIONAL EMPLOYMENT

LAW PROJECT, INC.

36 West 44th Street, Suite 1415

New York, New York 10036

(212) 764-2204

PRESS OF BYRON S. ADAMS ¢ WASHINGTON, D.C. ¢ 1-800-347-8208

ee.

The Fair Labor Standards Act’s 29 U.S.C. §201 et -

seq., ("FLSA") hours of work standard protects the health

and safety of and generates jobs for working people. This

case presents an issue relating to the breadth of coverage

of the FLSA, specifically --

Should the FLSA salary basis “subject to"

pay docking, 29 C.F.R. § 541.118(a), and

“window of correction,” 29 C.F.R. §541.118(a)(6),

rules be construed narrowly to limit employer

access to exemptions from the national hours of

work standard codified in the Act;

Or, should exemptions be allowed for an

employer who purposely adopts rules or codes of

conduct which expressly state that employees are

“subject to” impermissible deductions, makes post-

litigation promises to reimburse any impermissible

deductions conditioned upon an order from a court

and revokes only a portion of the offending rule or

disciplinary code?

TABLE OF CONTENTS

QUESTIONS PRESENTED .......... YELYOT i

TABLE OF AUTHORITIES ..........+505:5 . iv

THE AMICUS CURIAE NATIONAL EMPLOYMENT

LAW PROJECT AND THEIR INTEREST ........ 1

STATEMENT OF THE CASE .........2200-. 2

ARGUMENT:

I, PERMITTING EVER-EXPANDING

EXEMPTIONS FLOUTS THE FLSA HOURS-

OF-WORK STANDARD AND HURTS LOW-

WAGE WORKERS AND OTHER GROWING

SEGMENTS OF THE WORKFORCE, ..... 3

A. FLSA Exemptions must be read

oo PP re re. 5

B. Employer abuse of the FLSA exemptions

disproportionately penalizes

low-wage workers. ..........e0e00% 6

C. Mandatory overtime and an increasing

workday are contrary to FLSA worker

protection and job creation goals........ 11

fl. A NEW LOOK AT THE "BRANDEIS BRIEF"

JUSTIFIES STRICT HOURS OF WORK

RULES. eft eeeeseeeee#ee#eee#eee##*#e*##*#e#e#e#e > 14

Il, EXEMPTIONS CAN SWALLOW THE RULE. 18

IV. THE DECISION OF THE EIGHTH CIRCUIT

SHOULD BE OVERTURNED. ......... 20

A. The “Subject To” Rule:

ee ks 20

B. The “Window of Correction":

re 21

ee 22

APPENDIX A: Chronology of the FLSA and the

ee as SS a ald is pe ee be la

iii

TABLE OF AUTHORITIES

CASE CITES:

_—aae PSPS Neos 5

EIT Cir. 1995) .......... 2, 3, 20, 21

PUR Ce nc nrre an .n ences ‘

ee wena ai tubs pak 5

ae od cnt cd Cir. 1991), cart. denied,

5D, GL OGD v cascnosesuwacsaws 21

aa ego 5

ee stn ase Fe io ea De aE 14

Tre): Bape ‘

re TT ee be 5

Wisconsin v. Muller,

54 F.3d 438 (7th Cir. 1995), cert. pending,

(Case. No. 95-0586, January 10, 1996) ....:.... 21

United States v. Darby,

312 U.S. 100, 109 (1941) ... 2... ee ee eee eee 4

STATUTES AND OTHER AUTHORITIES:

DEBE. Ge ic vie Sk. 8 ieee w oe Meedoeves i

aE Gs CS se We cd CKSOeSed odes oe 4

2D CPR. § S41. LUBED . ww ccc cc ccccees 21

29 C.F.R. §541.118(a)(1), (2) and (3)... ....... 20

GIR, TSS. wcscccsveccccccsccses 21

29 C.F.R. §541.118(a(S) .........--0--e 20, 21

"Symposium on the Regulatory Future of Contingent

Employment, ° .

Boris and Daniel, Homemade, (1989) .......... 16

Bureau of Labor Statistics, U.S. Department of Labor,

41 Employment & Earnings 108 (1994) ......... 15

Curent Population Survey.” at 4 able 13 (Oct, 1990) 16

Commission on the Future of Worker-Management

Relations, U.S. Department of Labor, NEE

FS SS rrr r ys ye PS: 8,

Wage Study Comm'n, F Report of the Minimum Wage |

Study Commission, 245-248 (1981) ............ Y

Hiatt, “Policy Issues Concerning the Contingent

Workforce.” Wash. & Lee L. Rev. 783 (1995) .... 11

International Labor Office, World Labor Report

PG nS « 14S Se bows Gh bw hess en 15

Lette-Guy and Schor, “Assessing the Time Squeeze

Hypothesis: Hours Worked in U.S. 1969-1989,"

> 6S eee ee eee 1]

Linder, “Closing the Gap Between Reich and Poor:

Which Side is the Department of Labor On?", 21 New

Linder, “Between Reich and the Poor", at 22 (citing U.S.

Bureau of Labor Statistics, Bullet No. 2370,

“Employment, Hours and Earnings," at 802-04 (1991) .

Linder, “Labor Department is Subverting Wage Law,” in

The National Law Journal, January 17, 1994 ....... 8

Ree | Gave My Eeployer 2 Chichen That Hind No

Bone: irm-State Responsibility for Line-Speed-

Related Occupational Injuries," 46 Case Western Reserve

L. Rev.

a a ie oe 13

a Qe 0 re EN 6 b-0's BEES wis o wee bc bk 1]

Report of the New York Bureau of Labor Statistics at 69

nes SaenaG hb ow kw ddd oe deknkees 16

5 SP Sonne 17

Robinson, "Who's Doing the Housework?” American

Demographics, 10, 12 (Dec. 1988)............ 16

vii

Schor, “The Piper Lecture: Worktime In Contemporary

Context: Amending The Fair Labor Standards Act,”

70 Chi.-Kent L. Rev. 157, 161 (1994) ......... 15

Schor’s The Overworked American: The Unexpected

Decline of Leisure (Basic Books 1991) ......... 12

Stein Report (October 10, 1940) .........4.. 6, 10

The Working Hours of Female Factory Hands, 111 (Berlin

Pee ee 16

U.S. Bureau of Labor Statistics, Current Population

Survey, 1995 Annual Averages (Unpublished Data)... 9

U.S. Bureau of Labor Statistics, “The Earnings Ladder:

Who’s at the Bottom? Who’s at the Top?" Statistical Brief

94-3

Fee oer re re a 9

Uchitele, "Fewer Jobs Filled as Factories Rely on

Overtime Pay," in The New York Times,

Bay 19, 1993 on. cccccccccccccescsees 11

Overtime, Employees Complain," pty mete ey

viii

THE AMICUS CURIAE NATIONAL EMPLOYMENT

LAW PROJECT AND THEIR INTEREST

The amicus National Employment Law Project

("NELP”") is a non-profit advocate for the employment

rights of the working poor and the unemployed. The

amicus has obtained consent from both parties to file this

brief. It supports the Petitioners.

For over 25 years, NELP has worked with state and

local advocates around the country, including legal

services offices, community groups, and labor

organizations to achieve strong workplace protections and

access to government systems of support for low-wage

workers and the unemployed. In addition, NELP has a

long history of litigation and policy advocacy on a broad

range of issues, including job training, employment

discrimination, unemployment compensation, the

employment rights of workfare participants, the Family

and Medical Leave Act, and the FLSA.

In 1993, NELP formed the Employment Task Force, a

nationwide network of advocates representing low wage

workers and the unemployed.

NELP and its constituents have a direct and sustained

interest in continued strict enforcement of a national hours-

of-work standard and the narrow application of FLSA

exemptions which is essential to coverage of low-wage

workers who comprise a disproportionate and growing

share of the workforce.

If exemptions are easy to obtain, a large middle

segment of the work force will be exempted. Employers

will give this exempted portion of the workforce extra

work, since they are essentially "free labor.” And

employers will be discouraged from both hiring more

entry level employees to do the extra work and from

paying lower paid employees at the time and one-half rate,

thereby undermining the very purposes of the hours-of-

work standard and harming the classes of persons who

need protection the most, the low-wage employee and

unemployed worker.

STATEMENT OF THE CASE

The Petitioners in this case are 289 police Sergeants

and one Lieutenant of the St. Louis Police Department.

The Department treats the Petitioners as FLSA exempt

employees.

The Department’s Police Manual expressly provides

that all Petitioners are “subject to” disciplinary suspension

of less than a full work period for infractions of over 40

non-safety related rules. See Pet. App. G, 102a. In fact,

Sergeants in the Department are suspended for periods of

less than one week for disciplinary reasons. J.A. 48-57,

60-62, 85-87.

The Petitioners brought this suit in the United States

District Court for the Eastern District of Missouri on

October 25, 1988. Pet. App. 68a-102a. On August 26,

1994, the District Court found that all of the Sergeant’s

positions except two were exempt. Pet. App. 67a-68a.

On September 8, 1995, the Eighth Circuit, decided that

even though all Petitioners in fact were “subject to"

disciplinary deductions of less than a full pay period for

any of the more than 40 violations of non-safety rules,

"[t]he mere possibility of an improper deduction in pay

does not defeat an employee’s salaried status." Pet. App.

at 8a. The court acknowledged, however, that an

employee is conside.. | hourly and entitled to overtime

compensation if the employee’s pay is subject to

deductions for a violation of any other non-safety rule.

Pet. App. at 9a.

The Eighth Circuit also ruled that one employee had, in

fact, been subjected to a post-litigation, intentional non-

safety disciplinary deduction of less than a full pay period,

which would require him to be treated as a nonsalaried

employee. Pet. App. at 9a. However, the Court

concluded that even though "[a]rguably, the department’s

two-day pay deduction from [the employee] would require

him to be treated as a nonsalaried employee," the

Department could avail itself of the "window of

correction." Pet. App. at 9a. The Department corrected

the improper deductions by issuing a subsequent, post-

litigation amendment to the Police Manual, even though

this revision only changed the one specific disciplinary

rule which had been violated. Pet. App. at 10a.

ARGUMENT

I. PERMITTING EVER-EXPANDING EXEMPTIONS

FLOUTS THE FLSA HOURS-OF-WORK

STANDARD AND HURTS LOW-WAGE

WORKERS AND OTHER GROWING SEGMENTS

OF THE WORKFORCE.

The FLSA’s hours-of-work standard establishes the

forty hour work week. The FLSA was enacted with a

dual purpose. The 1938 Act was explicit that the first

congressional purpose was to protect workers from

substandard wages and oppressive working hours, "labor

conditions [that are] detrimental to the maintenance of the

minimum standard of living necessary for health,

efficiency, and general well-being of workers." 29

U.S.C. §202(a).' The second purpose of the Act, the job

creation goal, was highlighted by Justice Reed’s 194]

opinion in Overnight Motor Transport v. Missel, 316 U.S.

572, 576 (1941).

[The Court of Appeals] felt that one of the

fundamental purposes of the Act was to induce

work-sharing and relieve unemployment by reducing

hours. We agree that the purpose of the Act was

not limited to a scheme to raise substandard wages

first by a minimum wage and then by increased pay

for overtime work. Of course, this was one effect

of the time and one half provision, but another and

an intended effect was to require extra pay for

overtime work by those covered by the act even

though the hourly wages exceeded the statutory

minimum. The provision of § 7(a) requiring this

extra pay for overtime is clear and unambiguous. It

calls for 150% of the regular, not the minimum

wage. By this requirement although overtime was

not flatly prohibited, financial pressure was applied

to spread employment to avoid the extra wage and

workers were assured additional pay to compensate

them for the burden of a workweek beyond the

hours of the act. In a period of widespread

inherent in avoiding extra pay was expected to have

iable effect in the distribution of availabl

work. Reduction of hours was part of the plan

1 See also, United States v. Darby, 312 U.S. 100, 109 (1941),

Barrantine v. Arkansas Freight System, 450 U.S. 728, 739 (1981).

from the beginning. .. . The message of

November 15, 1937 calling for the enactment of this

type of legislation referred again to protection from

excessive hours. May 24, 1937, 81 Cong. Rec.

4983, 75th Cong. Ist Sess. Sen. Rep. No. 884 on

S. 24754 (July 6, 1937), at 4. The Senate Report

No, 884, the companions House Report, 82 House

Rep. 1452, 75th Cong. Ist Sess., at 14 and 15

(1937), and the Conference Report, 83 Cong. Rec.

9246, 9254 (1937), all spoke of maximum hours as

a separate desirable object. Indeed the Acct itself in

setting up two sections of standards, § 6 for wages

and § 7 for hours, emphasizes the duality of the

Congressional purpose. 316 U.S. at 577-578.

(emphasis added).

A. FLSA Exemptions Must be Read Narrowly.

This Court has emphasized that the “breadth of

coverage” of the FLSA’s overtime work rules is “vital to

[its] mission" of establishing a national work week

standard and that statutory exemptions to the Act should

be narrowly construed.’ An employer claiming an

exemption must establish entitlement to it by clear,

convincing and affirmative evidence.’ The presumption

must be that all workers are covered.‘

2 Powell v. United States Cartridge Co., 399 U.S. 497, 516 (1950);

Mitchell v. Kentucky Finance Co., 359 U.S. 290, 295 (1959).

3 Coming Glass Works v. Brennan, 417 U.S. 188, 196-97 (1974).

4 Powell v. United States Cartridge Co., supra, 399 U.S. at 516;

Amold v. Ben Kanosky, Inc., 361 U.S. 388, 392 (1960).

The Eighth Circuit’s ruling makes employer access to

exemptions a virtual cakewalk; it could make evasion of

the forty hour week commonplace.

B. Employer Abuse of the FLSA Exemptions

Di ty Penslizes Low-Waee Worl

In the 1940’s business groups argued that all "white

collar" workers should be exempt from the Act. The

Department of Labor’s Report and Recommendations of

Presiding Officer Stein on October 10, 1940, discussed

that idea --

All of the foregoing arguments have as an inarticulate

major premise the assumption that all salaried white

collar workers enjoy satisfactory working conditions --

that they need no protection against oppressively long

hours. The record shows the incorrectness of this

assumption. There is evidence, some of it introduced

by the proponents of the blanket exemption, that, prior

to the effective date of the act, a workweek of 48 or 54

hours or even longer was common.

Today’s employers remain driven toward treating all

white collar workers as exempt in order to avoid paying

employees overtime for working over forty hours in a

week, and to avoid hiring more employees to do the extra

work.

Recent real life examples of employer manipulation of

the exemptions illustrate the point that low-wage workers

are significantly impacted by this case.°

Example #1:

Maria is an assistant manager at a fast food restaurant,

She works 72 hours a week for $300 salary. Her

hourly rate is $4.16 an hour -- less than the minimum

wage. Her employer classified her as a low-level

supervisor and did not pay her overtime under the

“executive employee" exemption.

Example #2:

Ralph, a convenience store clerk in Weslaco, Texas,

was often the only employee on the premises in the

evenings and on weekends. He fulfilled all duties in

the store, from ringing up customers, stocking shelves,

and closing up the store, often after midnight. As a

“manager,” he was classified by his employer as an

“executive employee," and did not receive overtime

payments.

Example #3:

Lucia is a garment worker who sews shirts for a

sewing contractor. She supervises three other workers

who also sew shirts alongside her. When her boss gets

a big job, instead of hiring another three workers to get

it done, she has to stay overnight three nights in a row

and over a weekend to finish by the deadline. Her

employer, who calls her a supervisor, misclassifies her

5 These examples are from cases filed by legal advocates which

resulted in settlements requiring that the parties’ names and the

litigation results remain confidential.

as an “executive” employee, and she receives no

overtime pay.

The duties test applied to these cases contains a number

of subjective elements, demands a comparative analysis of

time spent on various activities, necessitates an evaluation

of the degrees to which an employee has discretion, and

requires subtle differences between management and

working supervision. These elements of the test are

difficult for judges, let alone low level, comparatively

powerless, workers, to apply. The simpler salary basis

test is a more accurate criteria of exempt status.

Low wage workers comprise a disproportionate share

of the workforce. From 1979 to 1992, the low wage

sector of the workforce grew an astounding 50%, now

representing one in five workers.° Increasingly, workers

classified as managers and administrators in growing

industries such as retail and sales, are also finding

themselves in low paying jobs. For example, the National

Restaurant Association conducted a survey in 1994 which

found that one-quarter of fast-food assistant managers

earned less than $15,000’ and from 1964 to 1992,

supervisory employees in eating and drinking

6 U.S. Department of Labor and U.S. Department of Commerce’s

Commission on the Future of Worker Management Relations, Fact

Finding Report (May 1994). (Hereafter "Dunlop Commission

Report").

7 Marc Linder, “Labor Department is Subverting Wage Law,” in The

National Law Journal, January 17, 1994.

establishments more than quadrupled, from 126,000 to

634,000.*

Low wage workers are also disproportionately women

and members of racial and ethnic minority groups.’ By

the year 2005, women and racial minorities will be two-

thirds of all new entrants to the workforce.’ According to

recent data from the U.S. Bureau of Labor Statistics,

while women represent 48 percent of all managerial and

professional workers, they are disproportionately working

in lower paying jobs averaging 73 percent of the pay of

men in managerial and professional jobs.'' The pay

differential is partially due to women tending to be

concentrated in low-paying industries such as sales and

retail jobs."

8 Marc Linder, “Closing the Gap Between Reich and Poor: Which

Side is the Department of Labor On?", 21 New York University

Review of Law and Social Change |, 22 (1993-94). U.S. Bureau of

Labor Statistics, Bullet No. 2370, “Employment, Hours and

Earnings,” at 802-04 (1991).

9 U.S. Bureau of Labor Statistics, “The Earnings Ladder: Who's at

the Bottom? Who's at the Top?” Statistical Brief 94-3(March 1994),

10 The “Dunlop Commission report” at 12.

11 U.S. Bureau of Labor Statistics, Current Population Survey, 1995

Annual Averages (Unpublished Data).

12 Conrad F. Fritsch & Kathy Vandell, Exemptions from the Fair

Labor Standards Act: Outside Sal 1E .

Admunistrative, and Professional Employees in Minimum Wage Study

Comm'n, Report of the Minimum Wage Study Commission, 245-248

(1981); Mare Linder, [bid at 21.

The Eighth Circuit’s ruling significantly impacts these

low-wage workers in industries such as retail, food

even when they spend a good part of their time performing

the same work as the people they supervise, permits the

employer to avoid paying overtime, and indeed, avoid

paying wages at all for the extra hours worked." This

dynamic flouts the purpose of the narrow executive

exemption which recognized that the highest paid

executives of a company had enough power (and wages) to

dictate their own hours and working conditions."* The

notion that assistant managers at fast-food restaurants and

convenience store clerks have the requisite power to

qualify them for the executive exemption as it was

intended is absurd.'* Again, the superior test of true

exempt power, discretion and control is the salary basis

test.

13 The U.S. Department of Labor states in a 1940 report, “there is

little advantage in salaried employment if it merely serves as a cloak

for long hours and may well conceal excessively low hourly rates of

pay.” “The Stein Report” at 7 (1940).

14 Marc Linder, Ibid. at 17. (“executive connotations. *)

15 Petitioners urge use of the “as a practical matter” test to determine

the true nature of the employee's status. This use of the salary basis

test would necessarily take into account the relative bargaining power

of the employee and employer, and, in the case of the lower-level

employees, recognize that the employer dictates the terms and

conditions of work.

C. Mandatory Overtime and An Increasing Work Day

Hurts Workers Contrary to the FLSA Worker

p {Job Creation Goal

Workers are being required to work longer hours for

the same pay. Employers’ need to stretch budgets is

manifesting itself in a reconfiguration of the workforce,

including “contracting out" certain job functions and hiring

temporary workers in place of permanent employees"*, and

lengthening the work day for those workers who are not

the victims of mass layoffs and stay on as employees.”

Researchers have established that Americans are spending

more and more of their time working. '*

16 See, ¢.g., Richard S. Belows, “The Rise of the Contingent

Workforce: The Key Challenges and Opportunities," 52 Wash. & Lee

L. Rev. 863 (1995). See also, other articles in same volume,

"Symposium on the Regulatory Future of Contingent Employment,” 52

Wash. & Lee L. Rev. (1995). The rise of the “contingent” workforce

creates an ease with which employers are able to manipulate shifts, job

descnptions and job characterizations to minimize coverage of labor

and employment laws. See, Jonathan P. Hiatt, “Policy Issues

Concerning the Contingent Workforce,” at 739,; Mary E. O’Connell,

“Contingent Lives: The Economic Insecurity & Contingent Workers, *

at 889.

17 See ¢.g. Louis Uchitelle, “Fewer Jobs Filled as Factories Rely on

Overtime Pay,” in The New York Times, May 19, 1993; G. Paul

Zachar, “Shortchanged: Many Firms Refuse to Pay for Overtime,

Employees Complain,” Wall Street Journal, June 24, 1996; Joan

Rigdon, “Worn Out: Some Workers Gripe Bosses are Ordering Too

Much Overtime,” Wall Street Journal, September 29, 1994.

18 The Economic Policy Institute study by Case Western Reserve

Assistant Professor Laura Lette-Guy and Harvard Professor Juliet

Schor. Lette and Schor, “Assessing the Time Squeeze Hypothesis:

Hours Worked in U.S. 1969-1989," 33 Indus. Rel. L. J. 25 (1994);

Juliet Schor’s The Overworked American: The

Unexpected Decline of Leisure’ establishes the surprising

fact that in the last twenty years the average employed

American has seen his or her working hours increase by

the equivalent of one month a year. This dramatic spurt

has hit nearly everyone; men and women, professionals

and low paid service workers, across every industry and in

every occupation.

Total Annual Hours,

Labor Force Participants

Change

1969 1987 1969-1987

Market Hours

All participants 1786 1949 163

Men 2054 2152 98

Women 1406 1711 30S

Heuusehuld Hours

‘All participants 889 SS) -1

Men 621 089 63

Women 1268 1123 -145

Tutal Hours

All partucipants 2675 2837 162

Men 2675 2841 166

Women 2674 2834 160

This extra month’s work per year decreases efficiency,

increases stress on the worker, and leads to an unhealthy

workplace.

mnie. Martin Moore-Ede, M.D., Ph.D., The Tenaty-Fom Hone

1, 66-71 (1992) qagieiaing Get tunes Se cain

long or late hours accounts for many serious accidents, such as Three

Mile Island, Exxon Valdez, and transportation accidents).

19 Juliet Schor, “The Overworked American: The Unexpected

Decline of Leisure,“ Basic Books (1991), (hereafter Overworked).

Workers who are not in a position to bargain are

forced to take the job as they find it, even if that means

working long hours, with or without overtime pay. A

recent radio advertisement on Spanish-speaking radio

seeking 500 workers in West Texas for a job at a chicken

processing plant in a Northern State described the job as

“full time” and “permanent,” but required workers to

commit to working six days a week for twelve hours a

day, Sundays “optional.” If the worker were to take the

job, it is difficult to imagine that she would be there for

the long term; injuries and general burn out would likely

result in a frequent turnover. The chicken processing

company’s strategy of recruiting from an agricultural

worker community suggests that it expects a high

turnover.”°

The overtime provisions of the FLSA are designed to

excessive hours, both to protect those employees working

overtime, and to create jobs. The Eighth Circuit's

countenance of employer abuse of exemption and creative

misclassification of employees exploit the workers who are

“lucky” enough still to have a job, and provide employers

with an incentive not to hire additional workers. Low-

wage workers and the unemployed suffer because they, the

intended beneficiaries of the FLSA overtime provisions,

lose out on the entry-level jobs that would have been

created but for the FLSA violations.

20 See Marc Linder, “1 Gave My Employer a Chicken That Had No

Occupational Injuries," 46 Case Western Reserve L. Rev. 33 (Fall

1995).

Il. A NEW LOOK AT THE BRANDEIS BRIEF

JUSTIFIES STRICT HOURS OF WORK

RULES.

Louis Brandeis inaugurated the argument for an hours

of work standard, in the first case in which this Court

upheld a state statute limiting the hours of work.”! Muller

y. Oregon, 208 U.S. 412 (1908). The original “Brandeis

Brief” persuasively argued that protective hours of work

Statutes should be upheld for the public health, public

safety and general well-being of women and society as a

whole. Relying on over ninety national and international

medical studies and committee reports, Brandeis found that

long hours of labor cause bad effects on health, safety,

morals and the general welfare. He further discussed the

economic benefits of short hours. Although the 1908

Brandeis Brief and Muller decision are hopelessly outdated

with regard to their views that women are weaker and

inferior to men, Brandeis’ reasons for enforcing a strict

hours of work statute hold true, even after eighty-eight

years.

Health. In analyzing the harmful effects of long hours

on health, Brandeis found that fatigue from long hours of

work becomes chronic, resulting in the deterioration of

health, which in turn makes individuals more susceptible

to disease. Brief at 28.

The negative effect of long hours on health remains

prevalent in today’s society. Long working hours are

related to stress and injuries at the workplace. Juliet B.

21 Appendix A contains a full chronology of the FLSA and the Salary

Basis Doctrine.

Schor, The Piper Lecture: Worktime In Contemporary

Context: Amending The Fair Labor Standards Act, 70

Chi. Kent L. Rev. 157, 161 (1994) (hereafter "Piper

Lecture"). According to the International Labor Office,

job stress, which costs the United States $200 billion a

year, is "’one of the most serious health issues of the

twentieth century.’" International Labor Office, World

Labor Report at 65-67 (1993), quoted in Piper Lecture at

161.

Safety. Brandeis also analyzed the bad effect of long

hours on safety, noting that workplace accidents most

frequently occur at the end of the day or at the end of a

long period of work due to long hours. Brief at 42.”

The negative effects of long hours on safety still exist

in all industries. For instance, between 1985-1991, United

States automobile factories, which have extremely high

overtime } hours, suffered a 460% rise in workplace

injuries.”

22 “[Ljess [work] is done in the tenth hour, by reason of weariness,

than in other hours; and the work of the last hour, like overtime work

at night, weakens a person for the next day. It is this weariness that

causes accidents to occur two or three times as frequently in the last

hour as in other hours. . ." G. L. Bohn, Getting a Living, at 407,

quoted in Brief at 44.

23 United Auto Workers New Directions Movement, Forced

Overtime: Killing the American Dream (1994), quoted in Piper

Lecture at 161 n. 34; see Bureau of Labor Statistics, U.S. Department

of Labor, 41 Employment & Earnings 108 (1994) (stating that motor

worked approximately 8.7 overtime hours per week).

Family Life. Brandeis emphasized that longer hours

encroach upon family life. Brief at 47.% Family life is

the core of society, and the weakening of the forty hour

workweek means a weakening of the most basic unit in

society, the family.

In 1905, the shortening of working hours was different

for women and men since free time for women was not

“resting time", as it was for men, but time to do the

housework and attend to family life. Brief at 58.”

Similarly, in 1991, approximately two-thirds of women

with children are employed.”* In 1987, women’s

household hours were 1123. Men spent 689 hours doing

household work.”” This leaves families with little non-

work time. The more hours spent at

24 A 1900 New York Bureau of Labor Statistics Report found that if

both working parents do not have the time to give their children

enough attention, their generation will suffer irreparable harm. Report

of the New York Bureau of Labor Statistics at 69 (1900), quoted in

Brief at 48-49.

25 Reports of the Factory Inspectors, The Working Hours of Female

Factory Hands, at 111, 113 (Berlin 1905); Boris, Home to Work,

(Cambridge University Press, 1994); Boris and Daniel and

Homemade, (University of Ill. Press, 1989).

26 Overworked at 1, 20; Bureau of Labor Statistics Memo,

"Marital and Family Characteristics of the Labor Force from the

March 1990 Current Population Survey,” at 4 table 15 (Oct. 1990)).

27 Id. at 35, table 2.3 and at 37 n. 40 (construing John P. Robinson,

“Who's Doing the Housework?” American Demographics, 10, 12

(Dec. 1988)).

work, the less with the family. American men and women

both need family time.

Economics. Brandeis argued that the economic aspects

of shorter hours outweigh any possible benefits derived

from longer hours. Brief at 65. Again relying on

numerous national and international reports, Brandeis

argued that output declines with long hours, and shorter

hours increase productivity and improve quality.”

Just as Brandeis warned against the dangers of

exempting specific trades from the hours of work

standards eighty-eight years ago, a warning sounds now

that any claimed exemptions from the national hours of

work standard must be narrowly read and strictly applied.

Brandeis concluded that exemptions of special trades from

the hours of work standard subjected employees to

injurious overwork and destroyed the intent of an hours of

work standard. Brief at 86.

Brandeis was right.

28 Id.; see, e.g., 1886 Commission du Travail, Report of the

Sessions of Inquiry into Industrial Labor, at 65” (Brussels 1887),

quoted in Brief at 68 (concluding that “everything which makes the

worker more strong, more healthy . . . more intelligent, etc. (and

these will be the results of greater leisure . . . ), make him also more

productive. . . [introducing reforms] indicates strongly that the final

rut willbe a very great increase of production witha shorter ime

and Workshops (1893), quoted in Brief at 75 (“[An} {a}rgument{)

against overtime . . . [is] [t}hat the work done during overtime is not

equal, in amount or quality, to that done during the regular time.”)

Il. EXEMPTIONS CAN SWALLOW THE RULE.

Interpreting exemptions broadly ignores Congresses’

intent and undermines the national hours of work standard.

The standard only works if nearly the entire society lives

by it. The Eighth Circuit’s exemption rules threaten to

swallow the hours standard. It portends an expansion of

the exempted class in relation to the covered class,

especially as compared to the relationship between all

employees and the small class of high paid executive, top

staff administration and true professionals anticipated in

1937.

A simple example best exemplifies that a liberal

exemption standard, which is difficult to enforce and easy

to abuse, creates a much larger exempt class in relation to

the size of the covered class, thereby jeopardizing the

FLSA’s goals of job creation and discouraging long hours

by requiring extra pay.

A Final Example:

Consider a 103 person catering business. Three

people are involved at the very top of the firm.

The boss does everything and leads every project.

She is clearly an executive. Her immediate

assistant is in charge of the books, personnel and all

administrative tasks. He is an administrative

assistant with internal management discretion. The

firm’s main draw is an ice sculpturist, an artist to

the core and a true professional. The three control

their own work and time. Under the rules in force,

the remaining 100 earn $6.00 per hour for 40 hours

a week but are paid time and one-half, or $9.00 per

hour, for overtime. The firm is fully employed, and

all employees work a full 40 hour week. When the

holiday season begins, extra work comes in beyond

that which the three top people can do on their own,

and the firm faces an important economic decision.

Management must sit down and decide whether to

pay current employees $9.00 per hour for the extra

work or hire new employees at the $6.00 rate.

Before the next holiday season, the

administrative assistant hears that the rules on

overtime are becoming more liberal. He learns that

a method exists which achieves broader exemptions.

The firm divides its work force up into 20 teams of

5 employees on each team. Each team has a

worker designated "sergeant" who works with and

leads the team. The 20 sergeants are now

designated exempt from the hours of work standard,

just like the top brass. A total of over 20 percent

of the workforce is now exempt. Again the team is

fully employed. Everyone is working full time.

Again the new work comes in. Now the firm has

23 employees who are available to do the work

without the overtime payment. The administrative

assistant explains that now the 23 exempt employees

can easily absorb the extra work, exclaiming now

“its free work." The firm faces no pressure to pay

overtime or hire more employees. The work force

gets no additional pay for their extra effort and no

new jobs are created.

IV. THE DECISION OF THE EIGHTH CIRCUIT

SHOULD BE OVERTURNED.

This case raises a technical issue concerning the

application of FLSA exemption rules and the "salary

basis" pay docking doctrine.

A. The “Subject To" Rule: §541.118(a)(5).

The Eighth Circuit appears to create a dilemma

between a “merely hypothetical rule” and an “only actual"

rule. It then appears to adopt the “only actual” rule.

However, the better test provides that salaried status is lost

only when the employees are "subject to” docking as a

practical matter. (See Solicitor General’s Amicus Curiae

in Opposition to Certiorari).”

If the Eighth Circuit’s reading of the “subject to"

provision were upheld, an employer could permanently

maintain a detailed attendance” or disciplinary” code

29 “[T]be Employer has the burden of proving that the employees

are paid on a salary basis, e.g., by showing that there have been only

isolated instances in which disciplinary suspensions have occurred, or

that suspensions have occurred only in unusual circumstances.” See

U.S. amici op. Cert. at 11. The employer did not carry this burden.

See Petitioners’ Brief.

30 In the private sector, the 29 C.F.R. § 541.118(a)(1), (2) and (3)

rules on pay docking for part day personal absences continue to apply.

The Eighth Circuit’s “subject to” interpretation, of course, applies to

that portion of the rule. This is significant because the result of the

decision will impact the entire American workforce.

which subjects all employees to pay docking. The

employer could then pay overtime wages only to those

employees who were actually docked. This would lead to

the obviously unintended result that employees who violate

the rules and are actually docked would be entitled to

overtime, while those who obey the rules would not

receive such overtime. See Solicitor General’s Brief in

Opposition to Certiorari in Wisconsin v. Mueller, 54 F.3d

438 (7th Cir. 1995), cert. pending, (Case. No. 95-0586,

January 10, 1996) at 2-4, and 6-7.

B. The “Window of Correction": 541.118(a)(6).

The Eighth Circuit’s view of the “window of

correction” would also lead to unintended results. An

employer who deliberately makes deductions that are

inconsistent with the salary basis test, and is then sued in

an FLSA suit, could escape liability easily. Such a rule

would rob the salary basis regulations of its teeth. See

Solicitor General’s Brief in Opposition to Certiorari in

Martin v. Malcolm Pirie, 949 F.2d 611 (2d Cir. 1991),

cert. denied, 113 S. Ct. 298 (1992) at 30-32.

No employer should be allowed access to the “window

of correction" unless the employer meets a burden of

establishing that any deductions made were "inadvertent,"

that all deductions made were reimbursed as soon as they

came to the employer’s attention, and that the employer

31 Both the part day docking and the disciplinary docking rule

contain the “subject to” language. In the public sector, at least for the

post-1991 period, disciplinary docking remains in force under 29

C.F.R. § 541.5d and § 541.118(a)(5).

has revised all of its rules, codes, policies, practices and

procedures which leave no doubt that as a practical matter

the affected employee will not be subject to such

deductions in the future.

IV. CONCLUSION,

For the foregoing reasons, this Court should reverse

the Eighth Circuit.

Respectfully Submitted,

KENNETH E. LABOWITZ

Counsel of Record

YOUNG, GOLDMAN & VANBEEK

510 King Street, Suite 416

Alexandria, Virginia 22314

(703) 684-3260

SARA E. RIOS,

Executive Director

CATHERINE K. RUCKELSHAUS,

Counsel

NATIONAL EMPLOYMENT LAW

PROJECT, INC.

36 West 44th Street, Suite 1415

New York, New York 10036

(212) 764-2204

a 5 OE A eS A en i te One tithe iat Sin ep a Py ee te

APPENDIX A

CHRONOLOGY ON FLSA AND THE "SALARY

1791.

Philadelphia Carpenters First American strike

for a ten hour day. (David R. Roediger and

Philip S. Foner, Our Own Time 7 (Greenwood

Press 1989)).

Average work week 75 to 90 hours for

laborers; journeymen push for 60 hour week.

(W.S. Woylinsky, “Hours of Labor” in

employees engaged in manual labor. Id. at 40.

Pressure to shorten work week for

safety and protective reasons increases. Moved

to 3150 hours per year. (Zeisel, "The American

Work Week, 1850-56," 81 Monthly Labor

Review 23-29 (1958)).

Eight hour day for federal contractor enacted.

(Roediger at 87).

U.S. v. Martin, 94 U.S. 400 (1876). Vitiates

1868 eight hour day law for federal contractors

by allowing individual agreements.

1890s.

1898.

1905.

1907.

1908.

1914,

1915.

1916.

1917.

Women’s action groups, led by Florence Kelly

and Grace Abbott, push to limit hours of work.

(Eileen Boris, Home to Work 81-122

(Cambridge Unive:.:*y Press 1994); and

Hunnicut, Work Without End, 20-23 (Temple

University Press 1988)).

Holden v. Hardy, 169 U.S. 366 (1898).

Upholds eight hour day law for mine safety.

Lochner v. New York, 198 U.S. 45 (1905).

Strikes down limits on hours of work on

freedom of contract grounds.

Federal Hours of Service Act caps hours for

railroads on safety rationale.

Muller v. Oregon, 208 U.S. 412 (1908).

Upholds hours of work regulation for women --

original “Brandeis Brief” filed.

Howley v. Walker, 232 U.S. 718 (1914).

Upholds women’s hours law.

F. Frankfurter and J. Goldmark, “Brief for the

Defendant in Error; The Case for Shorter Work

Day,” (U.S. Supreme Court, Oct. Term (1915)).

Federal Adams Act enacted eight hour day for

railroads.

Bunting v. Oregon, 243 U.S. 426 (1917).

Upholds 10 hour day and seems to question

Lochner; Wilson v. New York, 243 U.S. 332

1920's.

1923.

1935.

1936.

1937.

June 25,

1938.

1939.

(1917). Railway hours law is constitutional on

safety grounds.

The five day week movement. (Hunnicutt at 18;

and “Attitude of Certain Employers to the Five-

Day Week," Monthly Labor Review, 23

(December 1923)).

Adkins v. Childrens Hospital, 261 U.S. 525

(1923). Invalidates minimum wage for women;

questions worker protection laws.

Congress nearly enacts Black-Connery Bill

which would have outlawed employing anyone

over thirty hours per week. Postal Act of 1935

40 hour work week for postal employees.

(Jonathan Grossman, “Fair Labor Standards Act

of 1938," Monthly Labor Review 101, 25-26

(1978)).

Moorehead vy, New York, 298 U.S. 587 (1936)

Invalidates state and federz] wage and hour

laws.

West Coast Hotel v, Parrish, 300 U.S. 379

(1937). Upholds state minimum wage law.

FLSA, 29 U.S.C. §201 et seg. Enacted.