Petition for Writ of Certiorari — Bouchard v. Regional Governing Board of Region V Mental Retardation Services
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Supreme Court, U.S,
§1- 1402) ‘TTLep
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-EB-2 8 1992
IN THE SUPREME COURT OF THE UNITED STATES
OFFICE OF THE Clenf
OCTOBER TERM,1991
BONNIE BOUCHARD; RODNEY WACKER, VICKI
DANOWICZ; GARY SEXTON; JACK D. YATES, JR.;
LAWRENCE E. YATES; ILA FETT; ROSEMARIE STEEL;
DANIEL J. ROSEY; PHYLLIS HENSLEY; KEVIN CARLSON;
JEAN PETERS; TAMMY SUE EMPFIELD; LEO F. PROKOP,
JR.; DORIS JEAN MEYER;AND PATRICK K. BOUCHARD,
PETITIONERS,
V.
THE REGIONAL GOVERNING BOARD OF REGION V
MENTAL RETARDATION SERVICES AND REGION V
MENTAL RETARDATION SERVICES,
RESPONDENTS.
KEVIN HUSS; CHRIS AMUNDSON; AND JERRY JUNKER,
PETITIONERS,
¥.
THE REGIONAL GOVERNING BOARD OF REGION V
MENTAL RETARDATION SERVICES AND REGION V
MENTAL RETARDATION SERVICES,
RESPONDENTS.
ON PETITION FOR A WRIT OF CERTIORARI TO |
THE UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
Mary C. Wickenkamp
Attorney for Petitioners
Wickenkamp Law Office
4831S. 58th St.
Lincoln, Nebraska 68516
(402)488-1381
ISSUES PRESENTED
THE COURT OF APPEALS IMPROPERLY
DISREGARDED THE FACTUAL FINDINGS UPON
WHICH THE DISTRICT COURT BASED _ ITS
CONCLUSION THAT THE DEFENDANT
APPELLANT VIOLATED THE FLSA AND FAILED
TO PROVE GOOD FAITH AS REQUIRED BY 29
U.S.C. SECTION 259 WITHOUT FIRST
DETERMINING THAT SUCH FACTUAL
FINDINGS WERE CLEARLY ERRONEOUS OR
THAT FED. R. CIV. PRO. 52(A) WAS OTHERWISE
INAPPLICABLE.
THE COURT OF APPEALS ERRED IN MAKING
FINDINGS OF FACT WHICH IGNORED A JOINT
STIPULATION OF THE PARTIES THAT, IN
ORDER TO AVOID CUMULATIVE TESTIMONY,
THAT THE TESTIMONY OF ALL PLAINTIFFS
TESTIFYING AT TRIAL WOULD BE TAKEN TO
REPRESENT THE WORKING CONDITIONS OF
ALL PLAINTIFFS EMPLOYED BY THE
DEFENDANT.
THE COURT OF APPEALS ERRED IN FINDING
THAT REASONABLE CONFORMITY WITH
WAGE AND HOUR OPINION LETTERS
SATISFIES THE REQUIREMENTS OF 29 U.S.C.
$259 AND SUCH DECISION CONFLICTS WITH
THE ACTUAL CONFORMITY STANDARD
ADHERED TO BY OTHER CIRCUITS
THE FINDINGS OF THE APPELLATE COURT
ARE NOT SUPPORTED BY SUBSTANTIAL
EVIDENCE ON THE RECORD
OPINIONS BELOW
The opinion of the United States District Court for the District
of Nebraska is set forth in the Appendix.
The opinion of the United States Court of Appeals for the
Eighth Circuit is set forth in the Appendix as is the Court’s order of
October 16, 1991 denying Rehearing and Rehearing En Banc.
TABLE OF CONTENTS
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COURT OF APPEALS OPINION ne ss 69
Cases Cited
TABLE OF AUTHORITIES
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Anderson v. City of Bessemer City, N.C ...................00.00..2.0.esseee0e. 19
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Garcia v. Sen Antonio Metro Transit Aut, ...................ccccccccoccssesoses 1]
Hultgren v. County of Lancaster, Nebraska ..0.00..........00ccc0000.. S, 43, 22
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Olson v. Superior Pontiac-GMC Inc. ..................cccccccccsscccsecccecceeees 22
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6
JURISDICTIONAL STATEMENT
The judgment of the United States Court of Appeals for the
Eighth Circuit was entered on July 25, 1991. An order denying a
rehearing en banc was entered on October 16, 1991. On January 4,
1992 the Supreme Court of the United States entered an order with
regard to Application No.91-A476 granting Petitioners until February
28,1992 to file a Petition for Writ of Certiorari. Petitioners believe
this court has jurisdiction pursuant to 28 U.S.C. §1254 and Rule 10 of
the Rules of the Supreme Court of the United States.
STATUTES AND REGULATIONS
29 U.S.C. Section §259(a)
In any action or proceeding based on any act or
omission on or after May 14, 1947, no employer shall
be subject to any liability or punishment for or on
account of the failure of the employer to pay
minimum wages or overtime compensation under the
Fair Labor Standards Act of 1938,. . .if he pleads and
proves that the act or omission complained of was in
good faith in conformity with and in reliance on any
written administrative regulation, order, ruling,
approval, or interpretation, of the agency of the United
States specified in subsection (b) of this section, or
any administrative practice or enforcement policy of
such agency with respect to the class of employers to
which he belonged. Such a defense, if established,
shall be a bar to the action or proceeding,
notwithstanding that after such act or omission, such
administrative regulation, order, ruling, approval,
interpretation, or practice, or enforcement policy is
modified or rescinded or is determined by judicial
authority to be invalid or of no legal effect.
29 C.F.R.§785.14
Whether waiting time is time worked under the Act
depends upon _ particular circumstances. The
determination involves "scrutiny and construction of
the agreements between particular parties, appraisal of
their practical construction of the working agreement
by conduct, consideration of the nature of the service,
and its relation to the waiting time, and all of the
circumstances. Facts may show that the employee was
engaged to wait or they may show that he waited to
be engaged."(Skidmore v. Swift, 323 U.S. 134 (1944))
Such questions "must be determined in accordance
with common sense and the general concept of work
or employment." (Central Mo. Tel. Co. v. Conwell,
170 F.2d 641 (C.A. 8, 1948)
29 C.F.R. Section 785.20
Under certain conditions an employee is considered to
be working even though some of his time is spent in
sleeping or in certain other activities.
29 C.F.R.Section 785.21 Less than 24 hour duty.
An employee who is required to be on duty for less
than 24 hours is working even though he is permitted
to sleep or engage in other personal activities when
not busy. A telephone operator, for example, who is
required to be on duty for specified hours is working
even though she is permitted to sleep when not busy
answering calls. It makes no difference that she 1s
furnished facilities for sleeping. Her time is given to
her employer. “She is required to be on duty and the
time is worktime.
29 C.F.R. Section 785.22
(a) General. Where an employee is required to be on
duty for 24 hours or more, the employer and the
employee may agree to exclude bona fide meal
periods and a bona fide regularly scheduled sleeping
period of not more than 8 hours from hours worked,
9
provided adequate sleeping facilities are furnished by
the employer and the employee can usually enjoy an
uninterrupted night;st sleep. If sleeping period is of
more than 8 hours, only 8 hours will be credited.
Where no expressed or implied agreement to the
contrary is present, the 8 hours of sleeping time and
lunch periods constitute hours worked. (Citations
omitted. )
29 C.F.R. Section 785.23 Employees residing on employer’s
premises or working at home.
An employee who resides on his employer’s premises
on a permanent basis or for extended periods of time
is not considered as working all the time he is on the
premises. Ordinarily, he may engage in normal private
pursuits and thus have enough time for eating,
sleeping, entertaining, and other periods of complete
freedom from all duties when he may leave the
premises for purposes of his own. It is, of course,
difficult to determine the exact hours worked under
these circumstances and any reasonable agreement of
the partics which takes into consideration all of the
pertinent facts will be accepted. This rule would apply,
for example, to the pumper of a stripper well who
resides on the premises of his employer and also to a
telephone operator who has the switchboard in her
own home. (Citations omitted.)
10
STATEMENT OF THE CASE
Respondent Regional Governing Board of Region V
Mental Retardation Services and Region V Mental Retardation Services
(hereinafter known as Region V) is a political subdivision of the State
of Nebraska established under Neb. Rev. Stat. Section 83-141, et. seq.
(Reissue 1987). Region V_ operates group homes for mentally
retarded individuals in a sixteen county area in southeastern Nebraska.
Region V provides vocational services (teaching of vocational skills)
and residential services. The residential services consist of providing
group homes for mentally retarded clients which are supervised by
employees of Region V. Petitioners/Plaintiffs are twenty individuals
who were employed by Region V to supervise mentally retarded
clients in group homes in Fairbury, Nebraska. Their job title was Life
Skills Trainer. The Plaintiffs fall into three general categories of Life
Skills Trainers: weekday, weekend and substitute.
Prior to Garcia v. Metro Transit Authority, 469 U.S. 528
(1985) these community residences had been staffed by people paid on
a salary basis. Hours worked were not recorded.
Plaintiffs brought this action under the FLSA alleging that they
were entitled to be compensated for all "sleep time" spent on the
premises of Region V from April 15, 1986 to November 17,1989.
Weckday LSTs were paid for cight hours in a workday and
were actually on the Region V premises, for Region V's benefit, for
a total of sixteen to seventeen hours. Weekend LSTs typically were
on Region V premises from Friday afternoon to Monday morning.
Weekday LSTs typically spent four nights a weck on Region V
premises, Weekend LSTs spent three. Weekend and Weekday LSTs
were treated similarly in that they were allotted a specific amount of
time each night for sleeping purposes during which they were required
to remain on the employer’s premises and for which they were not
paid. During those sleeptime hours all LSTs were required to remain
alert in order to be aware of and respond to the needs of the mentally
retarded clients. Many of the mentally retarded clients were severely
1]
or profoundly retarded, some suffered from medical problems and
many exhibited behavioral problems. Plaintiffs sought back straight
time and overtime for the overnight hours worked on the basis that the
sleep time was in reality work time and should be paid.
Region V claimed to have relied in good faith on opinion
letters issued by the Wage and Hour Division of the Department of
Labor in accordance with 29 U.S.C. §259.
After a trial to the court, the District Court entered judgment
on behalf of the Petitioners/Plaintiffs. In doing so, The District Court
specifically found that the Petitioners were always on Region V's
premises for the benefit of their employer. The District Court also
found that the LSTs were "rarely, if ever,able to obtain an
uninterrupted night’s sleep."
The Court of Appeals for the Eighth Circuit reversed in part,
and finding Region V liable for backpay to only one Plaintiff, Gary
Sexton.
ARGUMENT
I. THE COURT OF APPEALS IMPROPERLY DISREGARDED THE
FACTUAL FINDINGS UPON WHICH THE DISTRICT COURT
BASED ITS CONCLUSION THAT THE DEFENDANT
APPELLANT VIOLATED THE FLSA AND FAILED TO PROVE
GOOD FAITH AS REQUIRED BY 29 U.S.C. SECTION 259
WITHOUT FIRST DETERMINING THAT SUCH FACTUAL
FINDINGS WERE CLEARLY ERRONEOUS OR THAT FED. R.
CIV. PRO. 52(A) WAS OTHERWISE INAPPLICABLE.
Petitioners contend that the Court of Appeals failed to follow
the proper standard of review.
The Court of Appeals ruled that the District Court had
incorrectly rejected Respondent's claim of reliance upon two opinion
letters of the Wage and Hour Division of the Department of Labor in
support of Respondents’ asserted good faith defense under 29 U.S.C.
Section 259. The Court of Appeals reversed the determination of
liability under the FLSA as to nineteen of the twenty plaintiffs, stating
that the District Court had "applied a legal standard subsequently
rejected by this court."
The Court of Appeals for the Eighth Circuit previously
addressed the identical issue and the identical opinion letters in
Hultgren v. County of Lancaster, Nebraska, 913 F.2d 498 (8th Cir.
1990). Petitioners note that the opinion letters, of the Wage and Hour
nN same Wage and Hour
Division which were at issue in Hultgren are t
opinion letters at issue here.
In Hultgren the Court held that opinion letters of the Wage and
Hour Division of the Department of Labor written by Deputy
Administrators did constitute the "position of the agency" as required
by 29 U.S.C. Section 259 and that the employer was entitled to rely on
them. However,in Hultgren the Court determined that the underlying .
facts, as determined by the District Court, demonstrated a lack of
conformity with such opinion letters. The Hultgren
13
court found the factual findings of the District Court to be not clearly
erroneous and affirmed the District Court’s holding that the Defendant
employer had violated the FLSA and had not acted in "good faith in
conformity with" the Wage and Hour Division opinion letters.
In this case the reversal of the District Court by the Court of
Appeals derives from the latter’s application of the "de novo" standard
of review to the record in this case. The Court of Appeals here makes
reference to Hultgren| and appears to premise its reversal on the
District Court’s incorrect application of the law relating to
Defendant/Appellant’s reliance on administrative rulings under Section
259. The majority goes on to reject all factual findings of the District
Court and to make its own factual determinations. Petitioners submit
that the Court of Appeals was incorrect in doing so.
The District Court made a number of factual findings
which impact significantly on the determination of good faith under
§259. Those findings are as follows:
1) ". . .Region V does receive a benefit
from having the LST’s on_ the
premises during sleep-time hours.
This is supported by the ample
testimony of the LST’s concerning the
activity of the clients during sleep-
time hours and the general inability of
the LST’s to gain a restful night's 2
sleep." Dist.Ct.Op. at 3.
2) "Among the interruptions which
LST’s dealt with during sleeptime
hours were (1)a client who hit herself
and the wall during the night, (2) a
client who urinated and defecated on
the floor of her bedroom, (3) clients
who were incontinent and soiled their
beds during the night for which an
LST would clean up the client and
14
change the sheets, (4) clients who
woke up during the night and
wandered about the residence, (5)
clients who needed assistance in using
the toilet, including the removal of
clothing, wiping and flushing, (6) a
client who had tried to leave the
residence in the past, (7) clients who
woke up during the night, dressed
themselves and thought it was time to
to work, (8) a client who liked to get
out of bed and rearrange things, (9)
clients who awoke and became afraid
of the sound of wind, thunder, and
sirens, (10) a client who spent some
nights awake and yelling, (11) a client
who had a tendency to steal from
other clients at night and damage
property, (12)a client who had on
occasion had a bowel movement in
bed and then smeared it on the wall,
(13) clients who came into the room
where the LST was sleeping to make
sure the LAST was still there, (14)
clients who became _ physically
aggressive, (15) a client with diarrhea
and a prolapsed bowel, which meant
the LST had to check her alter each
rest room visit to make sure her
bowels had not fallen outside her
body, and (16) a client prone to
epileptic seizures.
Dist.Ct.Op. at 3.
That weekday LSTs worked a serics
of 17-hour shifts because, despite the
Defendant’s assertions that these
employees were "on-call" within the
meaning of 29 C.F.R. §785.17, that
the employees were never told that
they were on call, never required to
carry a beeper,were never required to
leave a phone number where they
could be reached and were never
called in and that the Defendant
maintained substitutes available to
come in during the daytime hours if
necessary. Dist. Ct. Op. at 6.
That weekday LST’s did not fall
within the scope of 29 C.F.R.§785.23
because "Section 785.23 is not
applicable to the working conditions
of the LST’s. Section 785.23
contemplates a situation where an
employee would at times be on his or
her employer's premises for his or her
own benefit. It is clear from the
testimony that the LST’s were at all
times on the group home premises for
Region V's benefit, including the
period of their sleep time. Section
785.23 speaks of sleep time as one of
the ‘periods of complete freedom
from all duties." The LST’s did not
have complete freedom from their
duties while they slept. They were
required by Region V to remain on
the premises to care for and protect
the clients after clocking out at night.
16
WN
Dist. Ct. Op. at 7.
"_. that weekend LST’s did work for
24 hours or more..Dist. Ct. Op. at 9.
"The greater weight of testimony
showed that LST’s were rarely, if
ever, able to enjoy an uninterrupted
night’s sleep. In fact, few LST’s ever
had a night where they received at
least five hours of uninterrupted sleep.
The demands of their job simply did
not allow for such luxury. Dist. Ct.
Op.at 9.
"testimony by the LST’s was that
they sometimes, but not consistently,
documented sleep-time interruptions
on their time sheets.However, this
was due in large part to the fact that
the LST’s were not allowed to
document any interruptions which did
not last at least 5-7 minutes and could
not document interruptions for which
they did not have to physically be out
of bed. Both Merrill and (sic)
Klausterer knew that these were the
policies of Region V." Dist. Ct. Op.
at 13.
"The LSTs employed by Region V
were staying at the residences during
the nighttime hours for the benefit of
Region V, not for their own benefit.
The testimony of David Merrill
17
acknowledges that LST’s were
responsible for the clients’ safety and
well-being and were in fact
responsible for the clients’ lives. He
believes that it is the responsibility of
an LST to respond to a client during
the nighttime hours if the LST has
reason to believe a client could cause
harm to himself or others,or could
cause damage to property. The
testimony of the LSTs shows that
they believe themselves to function in
a parent-like role and that they
remained repsonsible for the clients’
safety at any time they were on duty,
including those hours during which
they were allowed to sleep".Dist. Ct.
Op. at 9.
"I find from the evidence as a whole
that Region V knew or should have
known that the LST’s sleep-time
interruptions did occur, and that they
were a normal part of the job."Dist.
Ct. Op. at 14
The factual findings of the District Court impact on two issues:
|) whether the Respondent's practices violated the FLSA; and 2)
whether the Respondent met its burden under 29 U.S.C.§259 in
showing good faith reliance on rulings or interpretations of an
administrative agency.
In Skidmore v. Swift & Co.,323 U.S. 134 (1944) the Court
held that the issue of whether time spent on an employer's premises
was working time under the FLSA is a question of fact to be resolved
by the trial court. Skidmore at 136. The Eighth Circuit has, in previous
cases, adhered to the same standard. Hultgren v. County of Lancaster,
18
913 F.2d.498 (8th Cir. 1990); Central Mo. Tel. Co. v. Conwell, 170
F.2d 641 (8th Cir. 1948).
The question of whether or not the Respondent met its burden
of proving good faith under 29 U.S.C. Section 259 is a question of
law, which is subject to a de novo review. Cole v. Farm Fresh Poultry,
Inc., 824 F.2d 923,926, (11th Cir. 1987).
Good faith under 29 U.S.C.Section 259 requires a showing that
the act or omission was (a) taking in good faith and was (2) in
conformity with and (3) in reliance on a written administration
interpretation by a designated agency." Such a determination is
inextricably tied to factual issues. Hultgren v. County of Lancaster,
Nebraska, 913 F.2d 498 (8th Cir. 1990). Factual findings of the trier
of fact cannot be set aside unless they are shown to be clearly
erroneous. Amadeo v. Zant, 486 U.S. 214 (1988); Anderson v. City of
Bessemer City, N. C., 470 U.S. 564 (1985).
Of particular significance is the District Court's specific
finding that LSTs rarely, if ever, got an uninterrupted night's sleep.
This determination by the District Court totally precludes the
Respondent from showing actual conformity with the Wage and Hour
Division’s opinion letters. If the Respondent cannot meet the
conformity requirement, there is no way in which it can avail itself of
the good faith defense under 29 U.S.C. Section 259. The conformity
requirement is precisely linked to the requirement of objective good
faith. Hultgren v. County of Lancaster, 913 F.2d 498, (8th Cir. 990);
Cole v. Farm Fresh Poultry, 824 F.2d 923,926 (11th Cir.1987).
The Court of Appeals rejected the factual findings upon which
the conclusion of the District Court is based and made its’ owns
factual determinations. If the District Court's account of the evidence
is plausible in light of the record viewed in its entirety, the court of
appeals may not reverse it even though convinced that had it been
sitting as the trier of fact, it would have weighed the evidence
differently. Anderson _v. City of Bessemer City, N.C., 470 U.S.
564,573 (1984). "In applying the clearly erroneous standard to the
findings of a district court sitting without a jury, appellate courts must
constantly have in mind that their function ts not to decide factual
19
issues de novo." Id. at 573. "{W}hen a trial judge’s finding is based
on his decision to credit the testimony of one of two or more
witnesses, each of whom has told a coherent and facially plausible
story that is not contradicted by the extrinsic evidence, that finding, if
not internally inconsistent, can virtually never be clear error. Id. at 575.
If the Court of Appeals believed that the clearly erroneous rule was
inapplicable here it should be required to state the reasons for that
view.
Petitioners submit that the finding by the District Court that
LSTs " rarely, if ever," enjoyed an uninterrupted night's sleep is
sufficient to rebut actual conformity and = deprive _ the
Defendant/Appellant of its good faith defense.
Petitioners submit that in doing so the Court of Appeals failed
to adhere to the proper standard of review.
The Court of Appeals, had it followed the proper standard of review
and given due deference to the District Court’s factual findings, would
have been compelled to affirm the decision of the District Court tn its
entirety.
I THE COURT OF APPEALS ERRED IN MAKING
FINDINGS OF FACT WHICH IGNORED A JOINT
STIPULATION OF THE PARTIES THAT, IN
ORDER TO AVOID CUMULATIVE TESTIMONY
THE TESTIMONY OF ALL PLAINTIFFS
TESTIFYING AT TRIAL WOULD BE TAKEN TO
20
REPRESENT THE WORKING CONDITIONS OF
ALL PLAINTIFFS EMPLOYED BY THE
DEFENDANT.
In order to avoid cumulative and repetitive testimony and to
make expeditious use of trial time, the parties, prior to trial, reached
a stipulation that would allow them to avoid the necessity of having all
twenty plaintiffs testify in detail as to working conditions they
encountered at Region V. They stipulated as follows:
"To avoid cumulative and repetitive testimony the
parties stipulated that the testimony of all plaintiffs
who did testify shall be considered to accurately
reflect the working conditions for all LSTs who are
plaintiffs herein and who were employed by Region V
Fairbury for the time period from April 15, 1986, until
the present."
Dist. Ct. Op. at 3.( See Bouchard, Filing 48, Huss, Filing 4.
The District Court accepted the stipulation and the partics
relied upon them at trial. As a result, only ten of the twenty Plaintiffs
testified at trial.
The decision of the Court of Appeals reversed the judgment of
the District Court as to nineteen of the twenty plaintiffs, awarding only
Gary Sexton backpay and interest. The Court of Appeals based its
decision on its determination that the "private quarters" that the Wage
and Hour opinion letters required be provided to employces sleeping
overnight equated to a bedroom separate from those occupied by
Region V's mentally retarded clients. The award of backpay as to Gary
Sexton was affirmed by the Court of Appeals solely for the reason that
Sexton testified that he had never had a separate bedroom in which to
sleep during his entire tenure with Region V.
The District Court accepted the stipulation and incorporated tt
into its findings. As part of the findings of the District’ Court.
stipulations are governed by Fed. R. Civ. Pro. 52(a). Texas co., V.R.
21
—
O’Brien & Co., 242 F.2d 526 (Ist Cir. 1957). The Court of Appeals
disregarded the stipulation without comment and without first finding
it to be clearly erroneous. The testimony relating to working conditions
and sleeptime interruptions introduced at trial was consistent and
supported the Trial Court’s application of that testimony to all
plaintiffs. The Court of Appeals’ failure to give deference to the
stipulation is incorrect and constitutes reversible error.
Il. THE COURT OF APPEALS ERRED IN FINDING
THAT REASONABLE CONFORMITY WITH
WAGE AND HOUR OPINION’ LETTERS
SATISFIES THE REQUIREMENTS OF 29 U.S.C.
§259 AND SUCH DECISION CONFLICTS WITH
THE ACTUAL CONFORMITY STANDARD
ADHERED TO BY OTHER CIRCUITS
Petitioners submit that the Court of Appeals erred in applying
a "reasonable conformity" standard to the conformity requirement
embodied in 29 U.S.C. §259. The good faith defense set forth in
Section 259 is essentially an estoppel defense intended to protect
employers from an agency’s mistakes in statutory interpretation.
Hultgren at 507. To avoid liability under Section 259 an employer
must show "that the act or omission complained of was in good faith
in conformity with and in reliance on any written administrative
regulation, order, ruling, approval, or interpretation, of the agency." 29
U.S.C. Section 259.
The Eighth Circuit Court of Appeals held in Hultgren that
v. County of Lancaster, 913 F.2d. 498,508 (8th Cir. 1990) that the
employer must show actual conformity with the interpretation sought
to be relied upon. This rule is also adhered to by the Eleventh and
Second Circuits. Cole v. Farm Fresh Poultry, Inc., 824 F.2d 923,
26(1 1th Cir. 1987); Olson v. Superior Pontiac-GMC, Inc., 765 F.2d
1570,1579-80 (11th Cir. 1985); EEOC v. Home Insurance Co., 672
F.2d 252, 263 (2nd Cir. 1982).
The Court of Appeals applied a different, lesser standard in
determining whether there exists conformity with the administrative
interpretation the employer seeks to rely upon in this case: that of
reasonable conformity.
The Court of Appeals states:
We consider this aspect of the Department's
Enforcement Policy an unreasonable attempt to dictate
the precise nature of relationships that Skidmore and
the regulation acknowledge will vary. But in any
event, Region V’s prior schedule was in reasonable
conformity with the regulation and with the February
3, 1981 letter ruling.
Majority Op. at 10,n.3. (Emphasis Supplied).
The Second Circuit , EEOC v. Home Ins. Co, 672 F.2d 252,
265(1 1th Cir. 1985) stated:
Section 259’s language "in good faith in conformity
with,” precisely links the question of good faith to an
act in conformity, and if there is not conformity,
general good faith in other respects cannot save the
day.
Petitioners submit that the Court of Appeals has applied a
lesser standard that conflicts not only with its own, carlier precedent,
but with the rule adhered to by the Second and Elevonth Circutts.
Petitioners submit that the correct standard is that of "actual
conformity" and that the Court of Appeals erred in its application of
the law.
IV. THE FINDINGS OF THE COURT OF APPEALS
ARE NOT SUPPORTED BY SUBSTANTIAL
EVIDENCE ON THE RECORD
Petitioners submit that the Court of Appeals made numerous
23
FO
factual findings de novo. Petitioners believe that virtually all such
findings contradict the actual record in this case. To set forth all such
factual findings and the transcript references which refute them would
contradict Rule 14(g) and 14(j) of this Court which requires a concise
statement of the reasons the Writ is sought. Petitioners submit that the
substantial conflicts between the Majority’s opinon and the record as
well as the transcriptual references there to are set forth accurately in
the Dissent by Chief Judge Lay. Slip. Op. at 26.
CONCLUSION
Petitioners submit that this Writ of Certiorari brings before the
Court substantial and important questions for review. Petitioners pray
that the Court grant the Writ of Certiorari so that consideration of such
issues may be had.
Dated: Lincoln, Nebraska
February 26, 1992
Respectfully submitted,
Mary C. Wickenkamp
Neb. State Bar. No. 16396
Attorney for Petitioners
P.O.67067
4831S. 58th ST.
Lincoln,Nebraska 68516
(402)488-138]
FOR THE EIGHTH CIRCUIT
Nos.90-2015 and 90-2016
Bonnie Bouchard; Rodney Wacker,
Vicki Danowicz; Gary Sexton, Jack
D. Yates, Jr.; Lawrence E. Yates;
Ila Fett; Rosemarie Steel; Daniel
J. Rosey; Phyllis Hensley; Kevin
Carlson; Jean Peters; Tammy Sue
Empfield; Leo F. Prokop, Jr.;
Doris Jean Meyer; and Patrick
Bouchard,
Appellees,
The Regional Governing Board
of Region V Mental Retardation
Services and Region V Mental
Retardation Services,
Appellants.
Kevin Huss: Chris Amundson: and
Jerry Junker,
Appellees,
The Regional Governing Board of
Region V Mental Retardation
Services, in the official
capacity, and Region V Mental
Retardation Services,
Nem ee”
Appellants.
Appeal From the United States
District Court For the
District of Nebraska
Submitted: January 9,199]
Filed: July 25, 199]
Betore Lay, Chicf Judge, Magill and Loken, Circuit Judges.
LOKEN, Circuit Judge.
In this Fair Labor Standards Act ("FLSA") case, defendant
Region V Mental Retardation Services ("Region V"), a political
subdivision of Nebraska, appeals from a judgment awarding over
$300,000 in unpaid overtime compensation and attorneys fees to
twenty present and former Life Skill Trainers ("LSTs") employed at
28
residential facilities for the mentally retarded in Fairbury, Nebraska.
Plaintiffs cross appeal from the district court’s refusal to ward
liquidated damages equal to the amount of the unpaid compensation.
In rejecting Region V’s defense that it relied in
good faith upon written interpretations of the FLSA by the Wage
and Hour Division of the U.S. Department of Labor (the
"Department"), see 29 U.S.C. Section 259, the district court applied
a legal standard subsequently rejected by this court in Hultgren _v.
County of Lancaster, 913 F.ed. 498 (8th Cir. 1990). Accordingly, we
reverse the judgment in favor of all plaintiffs except Gary Sexton.
Plaintiffs brought this action under the private remedies
section of the FLSA, 29 U.S.C. Section 216(b), alleging they were
entitled to be compensated for all "sleep time" spent on the premises
of Region V facilities from April 15, 1986, when the FLSA became
applicable to public agencies, see Pub. L. 99-150, 99 Stat. 787
(1985), until November 1989, when Region V adopted a new
compensation schedule that climinated this issue. The district court
held that all disputed sleep time was compensable under the
Department’s applicable regulations, an issue that, for the most part,
we need not reach on appeal given our disposition of the Section
259 defense.
The district court further rejected Region V's defense under
Section 259, concluding that the defense may not be based upon
letter rulings issued by "lesser officials" of the Department. for the
reasons explained below, we disagree and hold that, except as to
Gary Sexton, the Section 259 defense was proved. Finally, the
district court held that plaintiffs were not entitled to liquidated
damages because Region V had proved the good faith defense to
such damages under 29 U.S.C. Section 260. Our resolution of the
Section 259 issue makes it unnecessary to address separately the
Section 260 defense.
During the relevant period, Region V’s residential facilities
each housed from two to four mentally retarded adults in private
homes or apartments in the Fairbury community. One or two LSTs
resided in each group home when the mentally retarded clients were
present. LSTs instructed the clients in social skills necessary for
independent living; they also prepared meals, administered
medication, reported on each client’s needs and progress, and were
generally responsible for the clients’ safety and well-being at the
group home.
The plaintiff LSTs fell into three categories. Weekday LSTs
worked at the group homes from Monday afternoon until Friday
morning or, later in the damage period, early Friday afternoon. They
left the premises only when the clients attended workshops
elsewhere. Weekend LSTs were at the group homes with their
clients continuously from Friday afternoon until Monday morning.
Substitute LSTs replaced either weekday or weekend LSTs and
worked the same schedule as the LSTs being replaced. Because of
the intricacies of the FLSA sleep time issue, each category of
plaintiffs was separately analyzed by the district court and by the
parties on appeal.
Prior to 1985, Region V LSTs were paid on a salary basis.
In February 1985, the Supreme Court held that the FLSA ts
generally applicable to state and local governmental units such as
Region V. Garcia v. San Antonio Metro. Transit Auth., 469 U.S.
528. Following Garcia, Region V concluded that is LSTs must be
converted to hourly employees subject to the minimum wage and
maximum hour (overtime) requirements of the FLSA, 29 U.S.C.
206,207.
Accordingly, Region V administrators obtained wage and
hour pubiications from the Department and received other
interpretive materials from the National Association of Private
Residential Resources ("NAPRR"), an association of agencies that
provide community-based residential support: services to some
30
40,000 mentally retarded and developmentally disabled persons.’
After reviewing these materials, Region V developed a compensation
schedule for the LSTs and prepared a standard Employment
Agreement adapted from a form of agreement obtained from
NAPRR. Region V counsel approved this form of agreement, and in
mid-1985 a copy of the agreement was presented to and signed by
each Region V LST. In October 1988, responding to an Enforcement
Policy issued by the Department, Region V prepared, with counsel’s
approval, a revised Employment Agreement containing somewhat
modified LST work schedules. The revised agreement was again
presented to and signed by each LST. In this lawsuit, plaintiffs claim
that Region V violated FLSA because the work schedules in the
Employment Agreements provided (with exceptions explained
below) that LSTs must spend eight hours of uncompensated sleep
time on the premises of the group home each night.
I].
The FLSA requires that covered employees be paid at least
the prescribed minimum hourly wage and receive at least | 1/2
times their regular hourly wage for overtime hours. 29 U.S.C.Section
206, 107. The amount of money an employee must be paid under
FLSA cannot be determined without knowing the number of hours
worked. In two of its early landmark FLSA decisions, the Supreme
Court considered when an employer must compensate for sleep time
and other on-premises waiting time that the employer would prefer
to designate as "off duty". In Armour & Co. v. Wantock, 323 U.S.
125 (1944), the Supreme Court held that on-premises "time spent in
playing cards and other amusements, or in idleness: must be
NAPRR has been the primary organization with which the
Department has communicated since the carly 1970°s on FLSA
issues concerning employees of community-based — residential
facilities. NAPRR_- filed an amicus curiae bricf supporting Region
V's Section 259 defense in this case.
3]
compensated because the employer’s fire guards had been hired "to
do nothing but wait for something to happen," 323 U.S. at 132, 133.
However, the district court’s decision to exclude the employees’ on-
premises time "for sleep and for eating: from the FLSA computation
was not at issue, 323 U.S. at 129.
In Skidmore v. Swift & Co., 323 U.S. 134 (1944), decided
the same day as Armour, sleep time was included in the waiting
time at issue. In reversing a decision that no waiting time was
compensable, the Supreme Court held that whether waiting time and
sleep time must be compensated in a particular case is a question of
fact which:
involves scrutiny and construction
of the agreements between the
particular parties, appraisal of their
practical construction of _ the
working agreement by conduct,
consideration of the nature of the
service, and its relation to the
waiting time, and all of the
surrounding circumstances. . . .The
law docs not impose an
arrangement upon the parties. It
imposes upon the courts the task of
finding what the arrangement was.
323 U.S. at 137. The Court noted that the Department had filed an
amicus brief urging the "the exclusion of sleeping and cating time.
and the inclusion of all other on-call time,"323 U.S. at 139
Without accepting or rejecting this conclusion, the Court stated, "We
consider that the rulings, interpretations and opinions of the
Administrator under this Act, while not controlling upon the courts
by reason of their authority, do constitute a body of experience and
32
informed judgment to which courts and litigants may properly resort
for guidance." 323 U.S. at 140.
An employer charged with violating the minimum wage or
maximum hour provisions of FLSA is given an affirmative defense
in Section 259, which provides that,
no employer shall be subject to any
liability. . .for .. .failure. . .to pay
minimum wages or overtime
compensation. . .if he pleads and
proves that the act or omission
complained of was in good faith in
conformity with and in reliance on
any written administrative
regulation, order, ruling, approval,
or interpretation, of {the
Department}. . .or any
administrative practice or
enforcement policy... . .
Section 259 was enacted in 1947 in response to Congress; perception
that the FLSA “has been interpreted judicially in disregard of long-
established customs, practices, and contracts between employers and
employees, thereby creating wholly unexpected liabilities, immense
in amount and retroactive in operation.” 29 U.S.C.Section 251(a).
Thus, the deference to employment agreements mandated by the
Supreme Court in Skidmore ts particularly appropriate in the context
of the Section 259 good faith defense.
In 1961, the Department issued an interpretive bulletin that
is now Part 785 of the Wage and Hour Division Regulations, 29
C.F.R. Part 785, discussing what constitutes compensable work time
for FLSA purposes. Several provisions deal with sleep time issues.
29 C.F.R. Section 785.20-23. Beginning in 1980, in response to
inquiries from trade associations such as NAPRR, the Department
issued a serics of letter rulings applying its regulations to the sleep
33
time of "houseparents" at "community residences for the mentally
retarded." In January 1988, the Department suspended its’ numerous
compliance investigations of group homes around the country °* to
develop a consistent enforcement policy. On June 30, 1988, the
Department promulgated an Enforcement policy. On June 30, 1988,
the Department promulgated an Enforcement Policy "refining and
restating" the interpretations set forth in its earlier letter rulings. this
Enforcement Policy expressly stated that the Department : "will not
initiate any new investigations of residential care facilities which
involve only an assertion that improper sleep time deductions are
being made by a group home employer until 90 days from the date
of this enforcement policy statement."
Under the FLSA, this moratorium on public enforcement did
not preclude Section 216(b) private actions such as this. However,
it reflected the agencies judgment that the difficult compliance
questions facing this industry should be resolved by prospective
enforcement. Therefore, the district court’s decision to award
substantial retroactive overtime liability against this public agency
defendant must be "justified by very good reasons," Skidmore, 323
U.S. at 140.
In 1985, when Region V obtained interpretive materials from
the NAPRR, developed the hours-worked schedules for LSTs and
prepared the standard Employment Agreement signed by cach LST,
it relied upon three letter rulings issued by the Department that dealt
with this industry. In rejecting the Section 259 defense, the district
court held that Region V was not entitled to rely upon these rulings
* Unlike the defendant in Hultgren, Region V had not been the
subject of any investigation or enforcement litigation by the
Department.
34
ae
because they were signed by a Deputy and an Assistant
Administrator who were "lesser officials within the agency." The
district court then concluded that Region V had not acted "in good
faith in conformity with" the regulations, based upon the court's own
interpretation of the regulations rather than the Department’s
interpretation as reflected in the letter rulings.
This Court’s subsequently decision in Hultgren held that the
Deputy and Assistant Administrator’s letter rulings, including two of
the same letters at issue here, "may properly be characterized as the
position of the agency for purposes of section 259," 913 F.2d at 507.
Thus, the district court erred in limiting its Section 259 inquiry to
the regulations alone. We must consider whether Region V met the
good faith reliance standards under Section 259, taking into account
both the Department's regulations and the agencies letter rulings.
The good faith test under Section 259 is an objective one. Hultgren,
supra, 913 F.2d at 507. We conclude that Region V proved the
Section 259 defense with respect to cach of the three categories of
LSTs.
Weekday LSTs. These full-time employees remained at
Region V premises from Monday afternoon until Friday. Pursuant
to the compensation schedule in the Employment Agreement, they
were paid for approximately 40 Duty Hours. Unpaid time included
(a) "Off Duty," from 8:00 a.m. to 3:30 p.m. each day, when the
clients were away from the group homes, and "Evening Hours, "
defined as the period form 10:00 p.m. to 6:00 a.m. when the LSTS
were expected to sleep in private quarters at the group home.
Sleep time was not compensated except in two situations:
first, if a client needed attention for at least 5-8 minutes during sleep
time, the LST would be compensated for the time actually spent on
duty; second, on any night when client interruptions totaled three
hours or more, the LST would be paid for the entire eight hour sleep
time period. LSTs were required to record all such compensable
sleep time interruptions on their time cards. They were paid 1/1/2
35
times their hourly rates for hours worked over 40 per week,
including compensable sleep time.
Section 785.22 of the Department’s sleep time regulations
provides that, if an employee is required to be on duty for 24 hours
or more, the employer and the employee may agree to exclude "a
bona fide regularly scheduled sleeping period of not more than 87
hours" from hours worked. The employer must furnish "adequate
sleeping facilities, " and sleep time conditions must be such that the
employee "can usually enjoy an uninterrupted night’s sleep." Sleep
time interruptions must be compensated "if the employee cannot get
at least 5 hours’ sleep during the scheduled period.” This regulation
is based upon decisions such as Skidmore and Rokey v. Day &
Zimmerman, Inc., 157 F.2d 734 (8th Cir. 1946), cert.denied, 330
U.S. 842 (1947).
Section 785.23 of the regulations broadens the sleep time
exception for an employee who resides on the employer's premises
for "extended periods of time." Consistent with the Supreme Court's
admonition in Skidmore, this regulation states, "It is, of course,
difficult to determine the exact hours worked under these
circumstances and any reasonable agreement of the parties which
takes into consideration all of the pertinent facts will be accepted.”
This general guideline was clarified with respect to "houseparents
sleeping at community residences for the mentally retarded" in a
letter ruling of the Deputy Administrator dated February 3, 198]:
In general, we take the position that
employees who reside on_ their
employer's premises five days a
week are considered to reside there
"for extended periods of time."
Where the facilities offered by the
employer provide a home-like
environment with private quarters
separate from the residents of the
36
group home, we would regard such
employees as residing there, even
though they may have another
residence which they may regard as
their principal residence.
{W}here employees are on duty for
less than 120 hours in a week, they
can be considered as residing on
the employer’s premises, provided
that they spend five consecutive
days or five consecutive nights on
the premises.
Region V argues that it was not required to compensate
Weekday LSTs for their sleep time (except when interrupted)
because these employees resided on the employer’s premises for
extended periods of time within the meaning of Section 785.23, as
interpreted in the February 3, 1981 Ictter ruling, and because they
were properly compensated for sleep time interruptions in
accordance with Section 785.22.
It is apparent that the work schedules for Weekday LSTs
reflected in Region V’s Employment Agreements were based upon
and were in concept consistent with the Department's regulations, as
clarified by the Deputy Administrator’s letter ruling. Weekday LSTs
resided at the Region V group homes for consecutive five day and
four night periods.’ They were provided private sleeping rooms, and
‘The Department's June 1988 Enforcement Policy provided that,
to reside on the employer's premises for an extended period of time
under Section 785.23, an employee must be compensated "for at
least crght hours in cach of five consecutive 24-hour periods.” As a
result of this change--described by the Department as a refinement--
(continued...)
the group homes were intended to provide a "home-like
environment." The LSTs were compensated for recorded sleep time
interruptions and were paid for any eight hour sleep period in which
client interruptions totaled three hours or more.
The district court nonetheless concluded that Section 785.23
was not applicable to the Weekday LSTs because they were on the
premise at night to protect the clients, to the employer’s benefit, and
thus were "engaged to wait" within the meaning of Skidmore. The
district court further reasoned that Region V knew that LSTs sleep
was frequently interrupted by client needs and therefor that the LSTs
were engaged to wait within the meaning of Section 785.14 of the
regulations, thereby precluding a Section 259 good faith defense. We
disagree.
Region V_ relied upon written agency interpretations
specifically addressing working conditions in the group home
industry. After considerable study of the industry, the Department
issued letter rulings that houseparents who work five day-four night
schedules comparable to those of the Weekday LSTs do reside on
the employer’s premises for extended periods of time within the
meaning of Section 785.23 and therefor may be afforded, pursuant
to a written employment agreement, up to cight hours of unpaid
‘(...continued)
Region V revised its work schedule for Weekday LSTs to provide
for cight compensated hours cach day, Monday through Friday, and
reflected this new schedule in the October !98& Employment
Agreement. We consider this aspect of the Department's
Enforcement Policy an unreasonable attempt to dictate the precise
nature of relationships that Skidmore and the regulation acknowledge
will vary. But in any event, Region V's prior schedule was in
reasonable conformity with the regulation and with the February 3,
1981 letter ruling.
38
sleep time per day in private quarters on the employer's premises.
The Department’s interpretation of its own regulation is reasonable
on its face and is entitled to deference by the courts and contracting
parties. Region V could reasonably assume that the Department was
familiar with the nighttime duties of houseparents for the mentally
retarded; thus, Region V’s reliance upon the February 3, 1981 letter
ruling in developing the work schedules contained in_ its
Employment Agreements with the Weekday LSTs was plainly
reasonable.
The district court’s reliance upon Section 785.14 of the
regulations was misplaced. Section 784.14 deals generally with
"Waiting Time." As the Supreme Court decisions in Armour and
Skidmore and the position of the Department in those cases make
clear, sleep time raises different compensation questions under the
FLSA than do other types of waiting time. See also Halferty v. Pulse
Drug Co., 864 F.2d 1185, 1189-1191 (Sth Cir. 1989). Section
785.23 of the regulations specifically addressed the question of sleep
time, and the Department's letter ruling clarified the application of
the regulation to this industry. None of these Ictter rulings, including
the June 1988 Enforcement Policy, even referred to Section 785.14
Accord, Beaston v. Scotland School for Veteran's Children, 693
F.Supp. 234 (M.D. Pa. 1988), aff'd 869 F.2d S587 (3d Cir. 1989)
Given Congress” statement of purpose in enacting Section 259. "in
close cases we should consider the expectations of the contracting
parties and the reasonableness of the employer's actions in light of
the administrative interpretation in question.” Marshall v_ Baptist
Hosp., 668 F.2d 234, 238 (6th Cir. 1981) (where the administrative
interpretation was ambiguous, employer that reasonably relied on the
Department's specific rule, rather than its indefinite standard, was
entitled to the Section 259 defense. )
Appellees argue that the Weekday ESTs never resided on
Region V's premises for an extended period of time because they
"worked a series of sixteen or seventeen hour shifts.” However,
the fact that LSTs left the premises during their off duty daytime
hours, when the clients were off the premises, did not render Section
785.23 of the regulations inapplicable. Region V had to allow the
LSTs to use this time effectively for their own purposes, or it would
have been compensable hours worked. See 29 C.F.R. Section
785.23 expressly states that an employee who resides on the
employer’s premiss for an extended period of time may have
"periods of complete freedom from all duties when he may leave the
premises for purposes of his own." Therefore, the fact that Region
V's Employment Agreement expressly granted Weekday LSTs such
periods of off-duty time is consistent with Section 785.23 and does
not undermine the Section 259 good faith defense.
Appellees and the dissent further contend that Region V
must be denied the good faith defense because it unilaterally drafted
the Employment Agreement and "forced it on" the LSTs. We
disagree. The 1985 Employment Agreement essenually codified the
parties’ prior employment relationship under work schedules adapted
to comply with FLSA. It did not obligate LSTs to accept either
reduced total compensation, longer hours, or increased
responsibilities than they had agreed to work prior to the Garcia
decision. The Employment Agreement served the purpose of
advising the LSTs in advance of the circumstances under which thetr
sleep time would be compensated. Sce Aricnds v. Olin Mathieson
Chem. Corp., 382 F.2d 192, 197 (6th Cir. 1967). Region V
permitted minor schedule variations for the convenience of
individual LSTs, and it obtained the views of LSTs_ betore
implementing the revised work schedules contained in the 1988
Employment Agreement.
The LSTs had no collective bargaining representative.
Region V circulated its proposed Employment Agreements to cach
LST, and there is no evidence that any LST refused to sign either
agreement. In the context of the Section 259 defense, we conclude
that the Employment Agreements in this case satisfy the standard,
40
under Skidmore, that " ‘any reasonable agreement of the parties
which takes into consideration all of the pertinent facts will be
accepted.’" Halferty v. Pulse Drug Co., 821 F.2d 261, 269 (Sth Cir.
1987) (quoting Skidmore, 323 U.S. at 137), appeal after remand, 864
F.2d 1185 (Sth Cir. 1989). Accord, General Elec.Co. v. Porter, 208
F.2d 805. 814 (9th Cir.),cert. denied, 347 U.S. 951 (1954). any
other decision would violate Congress’ stated purpose not to award
employees "windfall payments. . . of sums for activities performed
by them without any expectation of reward beyond that included in
their agreed rates of pay." 29 U.S.C. Section 251(a)(4).
Finally, the dissent argues that Region V must be denied the
Section 259 defense because it did not provide the LSTs a "home-
like environment." The dissent bases its definition of home-like
environment on the Department's June 30,1988 Enforcement Policy.
However, Region V had to comply with FLSA after Garcia in 1985.
Thus, the Department’s February 1981 letter ruling, upon which
Region V's compliance program was based, is far more relevant to
the Section 259 defense. On the home-like environment question,
the February 1981 letter ruling stated:
The houseparents and relict staff
sleep in private quarters separate
from the mentally retarded residents
of the group home. The actual facts
differ somewhat from facility to
facility, but the above description
sets forth the typical situation as tt
has been explained to us.
*x* * * *
Where the facilities offered by the
employer provide a home-like
environment with private quarters
separate from the residents of the
group home, we would regard such
4]
employees as residing there, even
though they may have another
residence which they may regard as
their principal residence. In light of
the amount of time they spend at
the group home, it is in effect a
second residence.
* * * *
We have reached this conclusion
{regarding relief employees}, which
represents a departure from the
general rule under 29 C.F.R.
785.21, because of the home-like
environment afforded to those
employees in community
residences, with private quarters
and other amenities and where
employees do in fact get a
reasonable nights sleep
It is apparent that the Department's rulings on this subject
changed over the 1981-1988 period, from a gencral pronouncement
in 1981 that the home-like environment inherently available in these
group homes must include private quarters where LSTs could geta
reasonable nights’s sleep, to detailed specifications in 1988 as to the
furniture and the cooking, cating, and bath facilities that had to be
provided separately to these employees.
The issue here is whether sleep time must be compensated.
Where an employee is furnished reasonable sleeping facilitics under
conditions that satisfy Skidmore and the regulations, the Department
may not deny the exclusion of sleep time because the employer did
42
a it
not provide employees with other "amenities" unrelated to their sleep
time. See Van Dyke v. Bluefield Gas. Go., 210 F.2d 620 (4th Cir.
1954). Thus, it is clear to us that Region V acted in good faith
conformity with the regulations and the Department’s February 1981
letter ruling so long as it provided LSTs with a separate sleeping
room and the LSTs got at least five hours sleep per night, which
Section 785.22(b) of the regulations defines as "an uninterrupted
night’s sleep."
Weekend LSTs. These full-time employees were on Region
V premises continuously from Friday afternoon to Monday morning.
The Employment Agreements provided that all hours between 3:30
p.m. Friday and 8:00 a.m. Monday would be compensated except for
sleep time from 10:00 p.m. to 6:00 a.m. each night. Interrupted sleep
time was compensable under the same circumstances as for Weekday
LSTs.
Region V contends that the Weekend LSTs’ work schedules
were intended to and did in fact meet the Section 785.22 standards
for unpaid sleep time for employees "required to be on duty for 24
hours or more," as construed in the February 3, 1981 letter ruling.
Appellees and the district court concede that Region V's work
schedule for the Weekend LSTs was, in concept, consistent with
Section 785.22 as clarified by this letter ruling. Nevertheless, the
district court held that weekend LSTs did not fall within this
exception because they rarely had a night where they received "at
lcast five hours of uninterrupted sleep." However, this ts not a basis
for rejecting Region V's Section 259 defense because it misconstrues
the regulation.
Section 785.22 allows unpaid sleep time for employees who
"can usually enjoy an uninterrupted night's sleep. The regulation
defines "uninterrupted" as meaning, " that if the employee cannot get
at least 5 hours’ sleep during the scheduled period the entire time ts
working time." Here, the LSTs testified that their sleep time was
frequently interrupted for short periods (which they usually did not
43
record on their time cards); their time cards reflected that they
typically did get at least five hours sleep in total each night. The
regulation plainly states that the required five hours’ sleep need not
be consecutive hours. This was confirmed by the Department's letter
ruling of August 20,1985, which stated:
{I}f an employee’s sleeping time is
interrupted to such an extent that
the employee cannot get at least
five hours’ sleep during the
scheduled period, then all hours of
the sleeping period are compensable
hours of work.
The Department’s view on this was even more clearly stated
in is May 1985 WH Publication 1459, entitled "State and Local
Government Employees Under the Fair Labor Standards Act."
The 5 hours of sleep need not be 5
continuous uninterrupted hours of
sleep. However, if interruptions
during the sleep period are so
focused as to prevent reasonable
periods of sleep totaling at least 5
hours, the entire period would be
considered hours worked.
In sum, Region V and the LSTs entered into Employment
Agreements providing for sleep time compensation consistent with
Section 785.22, and requiring the LSTs to record compensable sleep
time on their time cards. Region V paid the LSTs for all recorded
compensable sleep time. Under these circumstances, Region V's
Section 259 defense may not be defeated by the LSTs’ general
testimony that their sleep time was frequently interrupted for
uncertain lengths of time which they chose not to reflect on their
44
time cards. See, Davis v. Food Lion, 792 F.2d 1274, 1276-1277 (4th
Cir. 1986).
We note that this factor distinguishes this case from
Hultgren which did not involve full-time employees such as the
Weekday LSTs and the Weekend LSTs, this court rejected the
employer’s good faith claims, despite holding that it was entitled to
rely upon the Department’s letter Rulings, because the district court
had specifically found that " relief employees averaged from zero to
four hours of sleep during the nighttime hours," 913 F.2d at 508.
this essential fact made the employer’s sleep time conditions
obviously inconsistent with the Department’s regulations and its
letter rulings, and thus compelled the conclusion that the employer's
Section 259 good faith defense must be rejected.
Substitute LSTs. These employees replaced both Weekday
LSTs and Weekend LSTs when needed. Each worked the same
schedule as the LST being replaced. The Employment Agreements
defined the paid work day for substitute LSTs as 3:30 p.m. to 10:00
p.m. and 6:00 a.m. to 8:00 a.m. during each shift worked, with the
Evening Hours again being unpaid.
The issue of when sleep time must be paid to substitute or
rclicf houseparents in community homes was specifically addressed
in two of the Deputy Administrator's letter rulings. The February 3.
1981 letter stated:
Your third and final question
related to employees who do not
reside at the community residences
but who, as_ relicf employees,
remained there for at least 24 hours,
and often as long as two or three
days. . (Although) such employees.
. .are arguably on duty for less
than 24 hours. . .we believe that
such sleep time can be deducted
45
20
from hours worked, provided that
the employer and employees agree
in advance to do so, and that no
more than 8 hours per night (or
actual, uninterrupted sleeptime, if
that is less than 8 hours) is
deducted.
By letter dated August 20, 1985, the Deputy Administrator
responded to a request for further clarification of the Department's
position regarding houseparent sleep time:
We have review all available
information, including — that
furnished by you and that obtained
from a review of a large number of
case files involving investigations
of community residences under
FLSA. As a_ result of this
comprehensive review, we have
concluded that, because of the
special circumstances that prevail in
community residences, and because
relief employees perform essentially
the same duties as regular full-time
employees, the same “hours
worked" principles should be
applied to both categorics of
employees. . .Therefore, it is our
opinion that, in situations where a
community residence employs one
or more full-time employees who
reside on the employcr:s premises
for extended periods of time, the
46
employer and a relief employee
who performs essentially the same
duties as such full-time employees
may agree, in advance of the
performance of any work, that
sleeping time of up to eight hours
can be excluded from compensable
hours of work, regardless of the
length of the tour of duty involved.
In Hultgren, the issue was whether FLSA required the
employer to compensate the sleep time of relief assistants who
replaced resident managers one or two days a week at residential
facilities for the mentally retarded in another county of Nebraska.
However, because the resident managers were exempt, the relief
employees in Hultgren were not entitled to the "departure" from the
regulations explained in the above letter rulings. Here, on the other
hand, Region V’s full-time employees--the Weekday LSTs and the
Weekend LSTs- were allowed uncompensated sleep time, and thus
Region V acted consistently with the letter rulings in providing
uncompensated sleep time for the Substitute LSTs on the same basis.
Accordingly, Region V has established its 259 good faith defense
with respect to this category of employces as well.
Gary Sexton. This former Weekend LST testified that he
was never afforded a private sleeping room at the group home at
which he worked, which Region V stopped using in early 1989.
Although the record included photographs of the private sleeping
rooms that Region V provided at cach of the group homes operating
at the time of trial, Region V did not rebut Sexton’s testimony that
he was never afforded a private room during his employment as a
Weekend LST. Region V’s Section 259 good faith defense was
based upon Department letter rulings that uniformly required that
LSTs be furnished private slecping quarters. Region V knew of this
47
requirement and failed to comply with it at the group home where
Sexton worked. Therefore, as to Sexton, we affirm the district
court’s decision that all sleep time was compensable under FLSA,
that Region V failed to prove the Section 259 defense, but that
liquidated damages should not be awarded.
IV.
The Section 259 defense is "jurisdictional in nature."
Marshall v. Baptist Hosp., supra, 668 F.2d ‘at 239. Thus, our
conclusion that Region V established the defense as to each category
of LSTs ends our inquiry. Accordingly, the judgment of the district
court is reversed as to all plaintiffs except Gary Sexton, as to whom
it is affirmed. The award of attorneys’ fees is vacated and remanded
to the district court for further proceedings consistent with this
decision.
LAY, Chief Judge, dissenting.
I respectfully dissent.
The reversal of the judgment of the district court constitutes
a gross injustice to a dedicated working class of people. The
majority opinion fails (1) to give due deference to the district court's
factual findings; (2) to adhere to a controlling precedent of this
circuit, Hultgren v. County of Lancaster, Neb., 913 F.2d 498 (8th
Cir. 1990);’ and (3) to give proper weight to a record that is
virtually undisputed.
‘ The Hultgren case is identical in fact and law to the present
case. It is indistinguishable. | respectfully submit our failure to apply
the controlling principles of our own precedent can only result in
contusion to the Department of Labor, litigants, and the bar.
4&
DISCUSSION
The fundamental issue, as posed by the majority opinion, is
whether Region V is entitled to a good faith defense, under 29
U.S.C. Section 259 (1988), ° for violating the Fair Labor Standards
Act ("FLSA"), 29 U.S.C. Section 201 (1988). The district court's
findings that Region V failed to properly provide compensation for
"sleep time" for all three classes of Life Skills Trainers ("LSTs") is
unassailable. Under the clearly erroneous rule, these findings cannot
be set aside. Anderson v. City of Bessemer City, N.C., 470 U.S.
564, 573-74 (1985).
The majority side-steps Region V’s gross violations of the
FLSA by holding that Region V’s acts or omissions were
* Section 259(a) provides:
In any action or proceeding based on any act or omission on
or after May 14, 1947, no employer shall be subject to any liability
or punishment for or on account of the failure of the employer to
pay minimum wages or overtime compensation under the Fair Labor
Standards Act of 1938, . . .if he pleads and proves that the act or
omission complained of was in good faith in conformity with and in
reliance on any written administrative regulation, order, ruling
approval, or interpretation, of the agency of the United States
specified in subsection (b) of this section, or any administrative
practice or enforcement policy of such agengy with respect to the
class of employers to which he belonged. Such a defense, if
established, shall be a bar to the action or proceeding,
notwithstanding that after such act or omission, such administrative
regulation, order, ruling approval, modified or rescinded or is
determined by judicial authority to be invalid or of no legal effect.
29 U.S.C. Section 259(a) (1988).
49
nevertheless taken in good faith because of their attempted
conformity with and reliance on written administrative interpretations
by a designated agency.® The good faith defense to liability for
FLSA violations requires that Region V prove that the act or
omission was "(1) taken in good faith and was (2) in conformity
with and (3) in reliance on a written administrative interpretation by
a designated agency."_Cole v. Farm Fresh Poultry, Inc., 824 F.2d
923, 926 (llth Cir. 1987); see_also 29 U.S.C. Section 259, (a)
(1988). Whether Region V is entitled to the good faith defense
embodied in section 259 is a question of law that is reviewed de
novo. Cole, 824 F.2d at 926. The record here clearly establishes that
Region V’s actions did not adhere or even attempt to conform to the
Department of Labor’s ("Department") regulations and opinion
letters in good faith."’The "good faith" defense is not available to an
employer unless the acts or omission complained of "were in
conformity with" the regulation. . . . This is true even though the
employer erroneously believes he conformed with it and in good
faith relied upon it; actual conformity is necessary." Olson_v.
Superior Pontiac-GMC, Inc. 765 F. 2d 1570, 1580 (11th Cir. 1985)
(quoting 29 C.F.R. Section 790.14(a). Region V has the burden to
‘The majority initially premises its reversal on the district court's
mistaken view that because some of the administrative letters were
written by lesser officials within the agency Region V was not
entitled to rely on them. This interpretation was deemed crroncous
by this court in Hultgren but we nevertheless affirmed the same
district court’s holding that FLSA was violated and that there was
no good faith conformity with the letters. This issue is not
determinative here any more than it was in Hultgren. The district
court analyzed all the regulations and the key administrative letters.
The majority relics on all the letters in holding good faith
conformity. Therefore, the basic principle upon which the majority
premises its reversal--"the district court applicd a legal standard
subsequently rejected by this court"--is irrelevant.
50
establish that it conformed with the letters in good faith. "this is not
a requirement of a showing of general good faith; the Portal Act
language, “in good faith in conformity with,’ precisely links the
question of good faith to an act in conformity, and if there is no
conformity, general good faith in other respects cannot save the
day." EEOC v. Home Ins. Co., 672 F.2d 252, 265 (2nd Cir. 1982).
The fundamental issue in determining if Region V violated
FLSA, and identical to the issue in Hultgren, is whether "sleep time
is work time." As we stated in Hultgren, this issue is a question of
fact "which must be determined, *in accordance with common sense
and the general concept of work or employment.’"Hultgren, 9132
F.2d at 504 (quoting Central Mo.Tel.Co. v. Conwell, 170 F.F2d 641,
646 (8th Cir. 1948);. Our court stated that the "issue, at bottom, 1s
whether the employee’s time is spent predominantly for the benefit
of the employer or the employee."Hultgren, 913 F.2d at 504 (citing
Armour & Co. v. Wantock, 323 U.S. 126, 133 (1944). In bypassing
the district court’s findings that Region V violated FLSA, the
majority obviates much of the harshness and unfairness created by
Region V to the employee involved. These findings, I beiieve, are
directly relevant to the good faith conformity which the majority
chooses to discuss in its single issue analysis. The district court
specifically found that the "LST’s employed by Region V were
staying at the residences during the nighttime hours for the benefit
of Region V, not for their own benefit." Mem. Op. at 9. this finding
is not clearly erroncous.
In the present case, the district court found, "from the
evidence as a whole that Region V knew or should have known that
the LST’s sleep-time interruptions did occur, and that they were a
normal part of the job." Id. at 14. According to the district court
‘Even Region V's employment agreement states that the
employees are sleeping at the residences for Region V's benefit.
Jt.App. at 47.
S|
{t}estimony was received regarding
interruptions incurred by plaintiffs
working all three different shifts.
To avoid cumulative and repetitive
testimony the parties stipulated that
the testimony of all plaintiffs who
did testify shall be considered to
accurately reflect the working
conditions for all LSTs who are
plaintiffs herein and who were
employed by Region V Fairbury for
the time period from April 15,
1986, until the present.
Id. at 3 (Citations omitted) (Emphasis added).
If substantial evidence on the record exists, as in this case,
this court must show great deference to the district court’s findings
of fact. The majority asserts that "Region V’s Section 259 defense
may not be defeated by the LSTs general testimony that their sleep
time was frequently interrupted for uncertain lengths of time which
they chose not to reflect on their time cards." Maj. Op. at 16-17. The
district court found,however, that the sleep time interruptions were
not documented on the employees’ time cards because "the LST’s
were not allowed to document any interruptions which did not last
at least 5-7 minutes and could not document interruptions for which
they did not have to physically be out of bed." Mem.Op at 13, sec
-also Tr. at 131-32, 136-37, 142, 196-97. 212-14, 278, 298, 405-07,
412-14. These facts parallel Hultgren. See Hultgren, 913 F.2d at S06.
The majority distinguishes Hultgren,on the ground that the district
court in Hultgren expressly found that the employces had less than
five hours sleep. Maj. Op. at 17. The majority overlooks the district
court’s identical finding here. The district court in this case found
that "few LST’s ever had a night where they received at least five
52
hours of uninterrupted sleep. The demands of their job simply did
not allow for such luxury." Mem. Op. at 9. Region V’s employees
were also discouraged from documenting overtime hours because of
budget problems. Tr. at 345. Region V knew about sleep time
interruptions because of the frequent complaints from employees. Tr.
at 179, 387-88, 503-05, 675,963. "{Gtood faith requires the
employer io have honesty of intention and to be without knowledge
of circumstances which ought to put him upon inquiry." Olson, 765
F.2d at 1580 (Citing 29 C.F.R. Section 790.15 (1984)). The trial
transcript is replete with testimony regarding the numerous and
diverse nighttime interruptions the LSTs experienced. The district
court found that
{a}mong the interruptions which
LST;s dealt with during sleep-time
hours were (1) a client who hit
herself and the wall during the
night, (2) a client who urinated and
defecated on the floor of her
bedroom, (3) clients who were
incontinent and soiled their beds
during the night for which an LST
would clean up the client and
change the sheets, (4) clients who
woke up during the night and
wandered about the residence, (5)
clients who needed assistance in
using the toilet, including the
removal of clothing, wiping and
flushing, (6)a client who had tried
to leave the residence in the past,
(7) clients who woke up during the
night, dressed themselves and
thought it was time to go to work,
53
(8) a client who liked to get out of
bed and rearrange things, (9) clients
who awoke and became afraid of
the sound of wind, thunder, and
sirens, (10)a client who spend some
nights awake and yelling, (11)a
client who had a tendency to steal
from other clients at night and
damage property, (12) a client who
on occasion had a bowel movement
in bed and then smeared it on the
wall, (123) clients who came into
the room where the LST was
sleeping to make sure that the LST
was still there, (14) clients who
became physically aggressive, (15)
a client with diarrhea and a
prolapsed bowel, which meant the
LST had to check her after each
restroom visit to make sure her
bowels had not fallen outside her
body, and (16) a client prone to
epileptic seizures.
Mem. Op. at 3; see_also TR. at 23-26, 28-29, 31-33, 35-37,151-
62,168-69,266-71, 274-75, 341-=42, 351-58, 364-67, 396-99, 404-
06, 4376-53, 509-12, 534-4-. These sleep time conditions are as
“obviously inconsistent with the Department's regulations and its
letter rulings" in this case as they were in Hultgren. See Maj. Op. at
17 (emphasis omitted).
The record and the district) court's findings clearly
demonstrate that the alleged conformity to the Department's hours
requirements did not exist. However, assuming, arguendo, that there
$4
was compliance with the scheduled hours the Department's
directives required, the good faith defense still must fail because of
two basically undisputed deficiencies in Region V's attempted
conformity.
In Hultgren, we held that the employer did not conform in
good faith to the agency directives because (1) the employer failed
to provide the required "home-like environment" consisting of
private quarters, and (2) only a unilateral agreement enforced by the
employer existed.” Hultgren, 913 F.2d at 506.
‘The court in Hultgren observed:
Even assuming section 785.22 of the
regulations applies, both this regulation and the
opinion letters from the Wage & Hour Deputy
Administrator are premised on the notion that
employees are able to get a full night’s sleep and
are provided with adequate sleeping facilities or
home-like environment in a group home setting. The
sleeping accommodations for plaintiffs in this case.
who were generally in a different group home each
night they worked and who often slept on a sofa or
a hide-a-bed in the living room, are simply not the
same as the environment envisioned by the opinion
letters. Moreover, plaintiffs did not usually enjoy an
uninterrupted night’s sleep, both because of [the!
nature of their sleeping accommodations and
because, as a general rule, the clients who resided in
ithe employer's} facilities were "prone to being up
at night, often frequently, and on a consistent basis
over time." Thus, the very nature of plaintiffs jobs
required that they be ready for frequent nighttime
interruptions."
(continued... )
aA
‘A
The record in this case overwhelmingly establishes that
Region V failed to provide its employees with private quarters in a
homelike environment and that it required the employees to sign a
unilateral non-negotiable agreement.
I. Absence of Home-like Environment
The June 30,1988, letter from the Department defines
"private quarters" to be furnished living quarters that are separate
from the clients and from any other staff members, have as a
minimum the same furnishings available to the clients and enable the
employees to leave his or her belongings there during on and off
duty periods. Appellant's App. at 31. A "home-like environment" is
defined as facilities including private quarters and also including on
the same premises facilities for cooking and eating, for bathing in
private, and for recreation. The amenities and quarters must be
‘(...continued)
Nor did plaintiffs agree that their "sleep
time" could be uncompensated. The Deputy
Administrator’s 1985 opinion letter stresses that
only “mutually agreed-upon sleep time may be
excluded: the exclusion of sleep time may not be
the “unilateral decision of the employer." The
magistrate in this case found {the employer's post
Garcia_v. San Antonio Metropolitan Transit
Authority,469 U.S.528 (1985)}contracts "were
drafted exclusively by the defendant with no input
or negotiation from the plaintiffs or even any
bargaining agent for them. . . .The evidence ts
uncontradicted that the contracts at issue in this case
were most certainly presented on a take-it or leave-it
basis without any possibility for negotiation by the
plaintiffs.”
Hultgren, 913 F.2d at 506.
56
suitable for long-term residence by individuals and be similar to
those found in a typical private residence or apartment, rather than
those found in institutional facilities such as barracks, dormitories.
and short-term facilities for travelers. Id. at 32.
It is virtually undisputed that Region V did not provide
private quarters and a home-like environment for the employces. The
district court relied upon a stipulation that the testimony of all of the
employees who did testify "shall be considered to accurately reflect
the working conditions for all LST’s who are plaintiffs.” Mem.Op.
at 3. The majority holds that Gary Sexton’s sleep time should be
compensated because he was never given a private bedroom. Patrick
Bouchard also testified that he never had a private bedroom. He
testified that he had to sleep on a couch in the living room because
of the condition of the staff bedroom in this group home. He
testified that the bed was stained and smelled of urine. body odor,
and leakage from a staff person who had a tracheotomy. Tr. at 337-
40; see also Tr. at 369-70. The stipulation makes the testimony of
Sexton and Bouchard binding as to all the employees. All the agency
letters assumed that the employees had a “home-like environment”
with a private bedroom. The record presents a vivid and Startling
contrast. There was testimony that in some cases the employees
slept on couches in the living rooms, on roll away beds in the
kitchen, or on the floor either because there was no private bedroom
or the bed was not in a sanitary condition. Tr. at 51-52, 74, 145-|48.
191-93, 261-63, 336-40,43 1-33, 541-43. There is little evidence that
any of the employees had private quarters where they could leave
their belongings during on and off duty periods. Tr. at 44, 147-48.
261-63, 339, 432, 542. Most of the employees testified that they
could not leave any of their personal belongings in the homes while
they were off duty because the clients would get into them. Id.
il. The Unilateral Agreement
Region V did not negotiate with its employees on the issue
57
of sleep time compensation. It created its own employment
agreement from a sample agreement obtained from the National
Association of Private Residential Resources ("NAPRR"). The
NAPRR had advised Region V that the agreement had been
approved by the Department. Region V deleted portions of the
sample agreement discussing the value of room and board provided
to the employee by the employer. Region V’;s agreement stated that
"since both the meals and quarters made available to EMPLOYEE
are for REGION V’s convenience, no value is assigned to room and
board for pay purposes, and no charge is made to EMPLOYEE fer
them." J. App. at 47. Region V also did not include the
"Employment Agreement Pay Schedule Breakdown" that was
attached to the sample agreement as part of the contract. The pay
schedule breakdown applies a fixed dollar value to the employee's
use of the premises and it specified the number of hours excluded
pursuant to the terms of the agreement. Region V did not distinguish
between the employer's premises and the employee's living quarters
as did the sample agreement. It also added a clause stating that all
overtime had to be documented with incident reports. Region V
never asked legal counsel to review the agreement regarding the
sleep time exclusion. Tr. at 765-768. It only asked counsel to review
the agreement for "legal problems." Tr. at 768; Jt. App. at 89-90.
Any agreement to exclude sleep time must be "mutua!ly
agreed upon."” Region V did not attempt to reach a "mutually
agreed-upon" decision that sleep time would be uncompensated. The
1985 opinion letter stated that the employer could not unilaterally
decide to exclude sleep time from compensation. Appellant's App.
at 27. Region V’s employees had no input into the terms of the
“The facts here are nearly identical to Hultgren, reflecting that
it is not so easily distinguishable. As in Hultgren, the agreement here
was “the unilateral decision of the employer." Hultgren, 913 F.2d at
S06.
58
agreement. Tr. at 599, 772. Region V required its employees to
individually sign the employment agreement to receive their
paychecks. Tr. at 55-58, 135, 176-77, 418, 454-57, 543-44, 963. The
majority contends there was no evidence that the employees refused
to sign the agreement but it is difficult to refuse to sign under the
duress of a withheld paycheck.
II} Nonconformity with Agency Regulations and Directives
In addition to nonconformity with the Department's
directives regarding home-like environment and a negotiated
agreement, Region V also was not in actual conformity with the
regulations and directives concerning the number of hours worked
before an employer can exclude sleep time.
A. Weekday LSTs
An employer must pay an employee for sleep time unless
the employees’ work schedule falls under one of the exceptions
contained in the regulations. Region V argues that it excluded sleep
time in the good faith belief that its employees fell under the
exceptions. The weekday LSTs* schedule did not comply with any
of the exceptions. ‘They did not qualify for the exception under 29
C.F.R. Section 785.22 (1987), because they were not on duty
twentyfour hours or more.'' The weekday LSTs were off duty for
Weekday LSTs worked Monday 3:30 p.m. to 10:00 p.m.. (slept
from 10:00 p.m. to 6:00 a.m. Monday through Thursday), Tuesday
to Thursday 6:00 to 8:00 a.m., 3:30-10:00 p.m. (off-duty free time
from 8:00 a.m. to 3:30 p.m. Monday through Thursday), and Friday
6:00 to 8:00 a.m.
‘Section 785.22 provides that:
(continued...)
several hours everyday and according to the Department’s
interpretations of the regulations this interruption kept the employees
from qualifying for this exception. Appellant’s App. at 34 (June 30,
1988 letter). The weekday LSTs also did not qualify for the
"residing for extended periods of time exception," under 29 C.F.R.
Section 785.23 (1987) because they did not work eight hours in five
''(. continued)
(a) General. Where an employee is required
to be on duty for 24 hours or more, the employer
and the employee may agree to exclude bona fide
meal periods and a bona fide regularly schedule
sleeping period of not more than 8 hours from hours
worked, provided adequate sleeping facilities are
furnished by the employer and the employee can
usually enjoy an uninterrupted night’s sleep. If
sleeping period is of more than 8 hours, only &
hours will be credited. Where no expressed or
implied agreement to the contrary is present, the 8
hours of sleeping time and lunch periods constitute
hours worked.
(b) Interruptions of slecp. If the sleeping
period is interrupted by a call to duty, the
interruption must be counted as hours worked. if the
period is interrupted to such an extent that the
employee cannot get a reasonable night's slecp, the
entire period must be counted. For enforcement
purposes, the Divisions have adopted the rule that if
the employee cannot get at least 5 hours’ sleep
during the scheduled period the entire time ts
working time.
29 C.F.R. Section 785.22 (1987) (citations omitted).
60
consecutive twenty-four hour periods.'* Jt. App. at 73 (July 27,
1987), which requires the employer to compensate them for sleep
time.’ To qualify for these exceptions not only does the
Region V places the most reliance on section 785.23. This
regulation states:
An employee who resides on his employer’s
premises on a permanent basis or for extended
periods of time is not considered as working all the
time he is on the premises. Ordinarily, he may
engage in normal private pursuits and thus have
enough time for eating, sleeping, entertaining, and
other periods of complete freedom from all duties
when he may leave the premises for purposes of his
own. It is, of course, difficult to determine the exact
hours worked under these circumstances and any
reasonable agreement of the parties which takes into
consideration all of the pertinent facts will be
accepted.
29 C.F.R.Section 785.23(1987) (citations omitted).
Section 785.21 discusses employces on duty iess than twenty-
four hours. It states that:
An employee who is required to be on duty
for less than 24 hours is working even though he is
permitted to sleep or engage in other personal
activitics when not busy. A telephone operator, for
example, who is required to be on duty for specified
hours is working even though she is permitted to
sleep when not busy answering calls. It makes no
difference that she is furnished facilities for
sleeping. Her time is given to her empleyer. She is
(continucd...)
61
employee’s work schedule have to fit within the guidelines, outlined
by the regulations and the Department’s letters, but also the
employer has to provide a home-like environment and the parties
must mutually agree to exclude sleep time from compensation. As
we discussed above, Region V did not provide a home-like
environment for its employees and it did not mutually agree with its
employees to exclude sleep time.
Region V argues that it complied with the regulations after
it changed the weekday LSTs’ schedule on October 1, 1988. After
the change, the weekday LSTs worked eight hour shifts during five
consecutive twenty-four hour periods. This change allowed the LSTs
to qualify for the exception under 785.23. However, Region V still
did not comply with FLSA even after the schedule change because
Region V did not provide the LSTs with a home-like environment
containing private quarters, the parties did not mutually agree to
exclude sleep time, and the LSTs could not obtain a reasonable
night's sleep. The district court found that Region V did not qualify
for the section 785.23 exception because the LSTs were on Region
V's premises for Region V’s benefit at all times. The court found
that section 785.23:
speaks of sleep time as_ one of the "periods of
complete freedom from all duties." The LST’s did
not have complete freedom from their dutics while
they slept. They were required by Region V to
remain on the premises to care for and protect the
clients after clocking out at night.
Mem.Op. at 7. The court also concluded that section 785.23 had
to be read in conjunction with 29 C.F.R. Section 785.14 (1987),
z °
'*(...continued)
required to be on duty and the time ts work time.
29 C.F.R. Section 785.21(1987) (citations omitted).
62
defining whether waiting time is time worked under FLSA." The
court found that a reasonable person would have looked to section
785.14 to decide whether the LSTs sleep time should be
compensated. The court found that because the LSTs were engaged
to wait within the meaning of section 785.14 and Region V knew or
should have known about the Sleep interruptions, Region V was
precluded from using the good faith defense. Mem.Op. at 13-14. The
majority argues that the district court’s reliance on section 785.14
was misplaced because none of the Department’s letters referred to
section 785.14. However, the Department’s May 1985 pamphlet
discussed waiting time and stated that waiting time could be
included in hours worked depending on the circumstances. Jt. App.
at 79. The pamphlet further stated that an employee required to be
on duty for less than twenty-four hours is working even though he
or she is allowed to sleep or engage in other personal activities when
not busy. Id. at 81. "The employee is engaged to wait during slack
time that may occur during the duty period." Id. The pamphlet stated
that an employee who resides on the premises for an extended
“Section 785.14 provides:
Whether waiting time is time worked under
the Act depends upon particular circumstances. The
determination involves "scrutiny and construction of
the agreements between particular parties, appraisal
of their practical construction of the working
agreement by conduct, consideration of the nature of
the service, and its relation to the waiting time, and
all of the circumstances. Facts may show that the
employee was engaged to wait or they may show
that he waited to be engaged." Such questions "must
be determined in accordance with common sense
and the general concept of work or employment."
29 C.F.R. Section 784.14 (1987) (citations omitted).
63
period of time:
is not considered to be working all of the time while
on the employer;s premises. Ordinarily an employee
who resides on the employer’s premises may engage
in private pursuits; has enough time for eating.
sleeping, and entertaining; and has other periods of
complete freedom from duties when he or she may
leave the premises for personal reasons. It is, of
course, difficult to determine the exact hours of
work under these circumstances. Therefore, any
reasonable agreement by the parties which takes into
consideration all of the pertinent facts will be
accepted.
Id.at 82. Even while sleeping, Region V’s employees did not have
complete freedom from their duties because they were required to be
on the premises and available in case the clients needed them. The
LSTs were engaged to wait during the night.'° The district court’s
finding that Region V should look to section 785.14 is not clearly
' The pamphlet stated that employees"on call" who were not
required to remain on the employer's premises and who were free
to engage in personal pursuits were not working while on call.
However,
{wyhen an employee is called out on a_ job
assignment, only the time actually spent in making
the call need be counted as hours worked. Of
course, if calls are so frequent or the readiness
conditions are so restrictive that the employee ts not
really free to use the intervening periods effectively
for his or her own benefit, the employee may be
considered as "engaged to wait" rather than "waiting
to be engaged."
Jt. App. at 80.
64
erroneous under these circumstances. '°
B.Weekend LSTs
Weekend LSTs qualify for the twenty-four hour duty
exception under section 785.22'’. According to the regulations,
these employees should be considered relief employees, not full-time
employees. The majority makes its own factual findings regarding
the weekend LSTs’ ability to get at least five hours of sleep.
although these employees fall within section 785.22. sleep time can
only be deducted if the employee can get at least five hours of sleep
during the scheduled period. The district court specifically found that
the weekend LSTs rarely received five hours of sleep. Mem. Op. at
9. The majority, however, overlooks this finding and uses the time
cards to find that the employees typically received at least five hours
of sleep a night. The majority did not state that the district court’s
The majority states that Region V could reasonably rely on the
Department's February 3, 1981, leiter discussing the sleep time issue
as it applicd to house parents in a group home. The majority argues
that the house parents’ schedule in that letter was similar to the
weekday LSTs’” schedule in this case. The schedule referred to in the
letter indicated that employees on duty from 9:00 a.m. Monday to
5:00 p.m. Friday are considered to reside on the premises for
extended periods of time within Section 785.23 because they are on
duty five consecutive days but did not work full days. The LSTs
only worked two hours on Friday. This is far removed from
conformity with the Department's letter. That letter also provided
that the parties had to have a reasonable agreement regarding sleep
time deductions and that the employer had to provide a home-like
environment with private quarters for the employees.
’ Weekend LSTs worked Friday from 3:30-10:00 p.m. (slept
10:00 p.m. to 6:00 a.m. Friday through Sunday), Saturday and
Sunday 6:00 a.m. to 10:00 p.m., and Monday 6:00 to 8:00 a.m.
65
finding was clearly erroneous. The majority also does not address
the fact that the district court found the LSTs were not allowed to
document many of their sleep time interruptions. The majority
distinguishes Hultgren on this point, arguing that Hultgren did not
involve full-time employees. In this case, the only employees
considered full-time by the regulations are the weekday LSTs. The
weekend and substitute LSTs are considered relief employees. In any
event, the letters also state that relief and full-time employees should
be treated the same regarding sleep time deductions. See Appellant's
App. at 27-28 (Aug. 20, 1985 letter). The majority attempts to
distinguish Hultgren on the basis that the Hultgren district court
found the employees averaged from zero to four hours of sleep a
night. The majority finds that this was obviously inconsistent with
the regulations. The district court in this case found that Region V's
employees did not receive five hours of sleep a night. Thus, Region
V’s treatment of its employees also was obviously inconsistent with
he regulations. In this regard the majority's analysis remains
inexplicable.
Cc. Substitute LSTs
Substitute LSTs worked the same shift as the person they
replaced. Thus, they should also be considered relicf employces.
To show compliance with the Department’s requirements,
Region V asserted that its employees were on call from 6:00 a.m.
until 2:00 p.m. Tr. at 667-70. The employees, however, were never
called in nor did they have to provide a telephone number where
they could be reached. Even if an "on-call" employee was needed to
work for some reason, Region V would call a substitute instead of
a full-time employee. Tr. 566-70. This was an obvious attempt to
circumvent the regulations. These violations cannot be ignored when
weighing the alleged good faith reliance on the agency letters upon
which the majority opinion focuses.
66
CONCLUSION
Each directive relied on by Region V to support its good
faith defense was conditioned upon (1) the employer and the
employees agreeing in advance to exclude sleep time, and (2) the
employer providing a home-like environment for the employees
Region V did not meet these conditions
I respectfully submit that this court should be bound by the
record and our own precedent. | therefore dissent
67
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
BONNIE BOUCHARD, et al., ) CV88-L-21
) CV89-L-386
Plaintiff, )
)
VS. )
)
THE REGIONAL GOVERNING )
BOARD OF REGION V MENTAL _ )
RETARDATION SERVICES and )
REGION V MENTAL RETARDATION
SERVICES, ) MEMORANDUM OF
) DECISION
Defendants. )
KEVIN HUSS, CHRIS AMUNDSON,
and JERRY JUNKERS,
Plaintiffs,
VS.
THE REGIONAL GOVERNING
BOARD OF REGION V MENTAL
RETARDATION SERVICES, in
the official capacity, and
REGION V. MENTAL
RETARDATION SERVICES,
Defendants.
69
This action is brought pursuant to the Fair Labor Standars Act, 29
U.S.C §§ 201, et.seq. (FLSA). By stipulation of the parties the
cases of Bonnie Bouchard, et. al. and Kevin Huss, et. al. have been
consolidated. The twenty plaintiffs in these actions are past and
present employees of Region V Mental Retardation Services
(Region V). They seek unpaid straight and overtime compensation
for sleep time that occurred during the course of their employment
at Region V in Fairbury, Nebraska. In addition they seek liquidated
damages, costs and attorney's fees.
FACTS
Region V operates group homes for clients with mental
retardation in a sixteen-county area in Nebraska. It is governed by
a Board of Directors consisting of one county commissioner for
each sixteen counties. The Region provides both vocational and
residential services to its mentally retarded clients. All the plaintiffs
are past or present Life Skills Trainers (LST’s) assigned to work
one of three different shifts.
WEEKDAY SHIFTS:
Weekday LST’s began their shifts on Monday at 3:30 p.m.
when they arrived at the residential facility and clocked in. The
LST’s clocked out at approximately 10:00 p.m. The LST’s
remained on the premises until 6:00 a.m. on Tuesday morning,
when they again clocked in. They remained on the premises and
clocked out at approximately 8:00 a.m. on Tuesday morning. After
8:00 a.m. the LST’s left the residential facility and returned at 3:30
p.m. on Tuesday. This schedule continued until Friday morning at
8:00 a.m., at which point they left the residential facility and did not
return until the following Monday.
For the above-mentioned time period from 10:00 p.m. until
6:00 a.m. the following morning, the LST’s were required to remain
70
on the premises and were not allowed to leave the premises at any
time. They were allowed to sleep but were required to be available
to care for clients’ needs during the sleep time at all times in the
event of an emergency. In the event an LST was called to duty
during sleep-time hours, he or she would be compensated for the
time actually spent up with a client. This time was to be rounded
to the nearest quarter hour, with time spent up of less than 5-8
minutes (testimony varied) uncompensable.
WEEKEND SHIFTS:
Weekend LST’s began their shifts on Friday at 3:30 p.m.
and remained clocked in until 10:00 that night. The LST’s
remained on the premises until 6:00 Saturday morning when they
clocked in again. They remained clocked in until 10:00 Saturday
evening. They remained on the premises until 6:00 a.m. Sunday at
which time they clocked back in and remained on the clock unti!
10:00 Sunday night. They remained on the premises until Monday
morning, when the clocked in from 6:00 a.m. to 8:00 a.m. They
then left the residence until the following Friday. Weekend LST’s
were not allowed to leave the premises a night on the weekends.
Again, as with weekday staff, they were allowed to sleep at night,
and were paid for interruptions rounded to the nearest quarter hour.
SUBSTITUTE SHIFTS:
Substitute LST’s were required to fill in for one of the
above shifts when needed. Their schedule mirrors the above
schedules. They too were required to remain on the premises, were
allowed to sleep, and were paid for interruptions rounded to the
nearest quarter hour.
Generally, the duties of the LST’s involved the responsibilty
for utilizing individual program plans to instruct mentally retarded
71
clients in social skills, toilet training, feeding, dressing, motor
coordination, management of personal finances, cooking, shopping,
telling time and other social skills necessary to independent living.
Their duties also included preparation of meals, maintaining sanitary
living conditions, administering medication, recording daily
activities of clients, and providing input to superiors concerning
physical and emotional needs and progress of clients.
During the time period from approximately 10:00 p.m. until
8:00 a.m. the LST’s were required to remain on the premises.
Some residences provided the LST with a staff bedroom; in other
residences the LST slept on a cot or couch in the general living
area.
David Merrill, the Executive Director of Region V, testified
that Region V represents itself as providing 24-hour care and that
Region V does receive a benefit from having the LST’s on the
premises during sleep-time hours. This is supported by the ample
testimony of the LST’s concerning the activity of the clients during
sleep-time hours and the general inability of the LST’s to gain a
restful night’s sleep. Testimony was received regarding
interruptions incurred by plaintiffs working all three different shifts.
To avoid cumulative and repetitive testimony the parties stipulated
that the testimony of all plaintiffs who did testify shall be
considered to accurately reflect the working conditions for all LST’s
who are plaintiffs herein and who were employed by Region V
Fairbury for the time period from April 15, 1986, until the present.
Bouchard, Filing 48, Huss, Filing 4.
Among the interruptions which LST’s dealt with during
sleep-time hurs were (1) a client who hit herself and the wall during
the night, (2) a client who urinated and defecated on the floor of her
bathroom, (3) clients who were incontinent and soiled their beds
during the night for which an LST would clean up the client and
72
Oe
change the sheets, (4) clients who woke up during the night and
wandered about the residence, (5) clients who needed assistance in
using the toliet, including the removal of clothing, wiping and
flushing, (6) a client who had tried to leave the residence in the
past. (7) clients who woke up during the night, dressed themselves
and thought it was time to go to work, (8) a client who liked to get
out of bed and rearrange things, (9) clients who awoke and become
afraid of the sound of wind, thunder, and sirens, (10) a client who
spent some nights awake and yelling, (11) a client who had a
tendency to steal from other clients at night and damage property,
(12) a client who had on occasion had a bowel movement in bed
and then smeared it on the wall, (13) clients who came into the
room where the LST was sleeping to make sure the LST was still
there, (14) clients who became physically agressive, (15) a client
with diarrhea and a prolapsed bowel, which ment the LST had to
check her after each restroom visit to make sure her bowels had not
fallen outside her body, and (16) a client prone to epileptic seizures.
It is undisputed that the LST’s could (and sometimes did)
write down these nighttime interruptions and that they would be
paid for the time they were up and attending to a client.
Interruptins for which the LST was up less than 5-8 minutes was
not compensted and no compensation was allowed except for time
the LST was out of bed. Time spent listening, wondering, worrying
or waiting in bed, however alertly , was not compensated.
LEGAL ANALYSIS
Since 1985 the provisions of the FLSA have been held
applicable to state and local governments. Garcia v. San Antonio
Metro. Transit Auth., 469 U.S. 528 (1985). After the Garcia
decisions, Congress provided that state and local governments would
be sebject to the wage and hour provisions of the FLSA beginning
on April 15, 1986. See Pub. L. No. 99-150. 99th Congress.
73
At issue here is whether the plaintiffs’ sleep time constitutes
work time within the FLSA. The question of whether sleep time
constitutes work time is a question of fact for the trial court.
Skidmore v. Swift, 323 U.S. 123 (1944). "This involves scrutiny
and construction of the agreements between the particular parties,
appraisal of their practical construction of the working agreement by
conduct, consideration of the nature of the service, and its relation
to the waiting time and all of the surrounding circumstances."
Skidmore, supra at 137.
It is well settled that sleep time constitutes work time under
appropriate circumstances. Beaston v. Scotland School for Veterans
Children, 693 F. Supp. 234 (M.D. Pa. 1988), aff'd 869 f.2d 587
(3rd cir. 1989).
Courts are assisted by interpretive bulletins issued by the
Administrator of the Wage and Hour Division of the United States
Department of Labor. Although these interpretive bulletins are not
binding on the courts, they do offer guidance. Beaston, supra at
237. The policy concerning sleep time is in Interpretive Bulletin
Part 785, in Title 29 of the Code of Federal Regulations (Ex. 102),
as follows:
Section 785.20-GENERAL
Under certain conditions an employee is
considered to be working even though some of his
time is spent in sleeping or in certain other activities.
Section 785.21 LESS THAN 24-HOUR DUTY.
An employee who is required to be on duty for less
than 24 hours is working even though he ts permitted
to sleep or engage in other personal activitics when
not busy. A telephone operator, for example, who ts
required to be on duty for specified hours 1s working
74
even though she is permitted to sleep when not busy
answering calls. It makes no difference that she is
furnished facilities for sleeping. Her time is given
to her employer. She is required to be on duty and
the time is worktime. (Citations omitted)
Section 785.22 DUTY OF 24 HOURS OR MORE
(a) General. Where an employee is required to be
on duty for 24 hours or more, the employer and the
employee may agree to exclude bona fide meal periods
and a bona fide regularly scheduled sleeping period
of not more than 8 hours from hours worked. provided
adequate sleeping facilities are furnished by the
employer and the employee can usually enjoy an
uninterrupted night's sleep. If sleeping period of
more than 8 hours, only 8 hours will be credited. Where
no expressed or implied agreement to the contrary is
present, the 8 hours of sleeping time and lunch periods
constitute hours worked. (citations ommited)
(b) Interruptions of sleep. If the sleeping period is
interrupted by a call to duty, the interruption must
be counted as hours worked. If the period is interrupted
to such an extent that the employee cannot get a reasonable
night's sleep, the entire must be counted. For enforcement
purposes, the Divisions have adopted the rule that if the
employee cannot get a least 5 hours’ sleep during the
scheduled period the entire time is working time.
(citation omitted)
Section 785.23-EMPLOYEES RESIDING ON
EMPLOYER’S PREMISES OR WORKING AT HOME.
An employee who resides on his employer's
premises on a permanent basis or for extended
periods of time is not considered as working all the
time he is on the premises. Ordinarily, he may engage
in normal private pursuits and thus have enough time
for eating, sleeping, entertaining, and other periods
of complete freedom from all duties when he may leave
the premises for purposes of his own. It is of course
difficult to determine the exact hours worked under these
circumstances and any reasonable agreement of the parties
which takes into consideration all of the pertinent
facts will be accepted. This rule would apply, for
example, to the pumper of a stripper well who resides
on the premises of his employer and also to a telephone
operator who has the switchboard in her own home.
(citations omitted)
Thus, sleep time is compensable unless an employee is on
duty for 24 hours or more and a qualified agreement for
nonpayment is reached (§§ 785.22), or where an employee resides
on his employer’s premises on a permanent basis or for an extended
period of time (§§ 785.23).
WEEKDAY LIST’S
I believe that neither the §§ 785.22 exception nor the
§§ 785.23 exception applies to weckday LST’s, and thus they are
entitled to compensation for sleep time. Richard Packwood,
Director of Fiscal Management for Region V until March 1988,
testified that weekday LST’s "definitely" did not work a series of
17-hour shifts, but rather were on duty for 24 hours or more, even
though the LST’s left the residence at approximately 8:00 a.ni. and
did not return until 3:30 p.m. Both Merrill and Packwood testified
that during these hours the LST’s were "on-call". Section 785.17
76
of the Interpretive Bulletin defines on-call time as follows:
An employee who is required to remain on call on
the employer’s premises or so close thereto that
he cannot use the time effectively for his own
purposes is working while "on call." An employee
who is not required to remain on the employer's
premises but is merely required to leave word at
his home with company officials where he may be
reached is not working while on call. (citations
omitted)
Plaintiff Ila Fett testified that she was not required to leave
a number where she could be reached after clocking out at 8:00 a.m.
She was not required to carry a beeper. Plaintiff Vickie Dannewitz
tessified that she was never told that she was on-call during that
time and in fact was never called in. She stated that the policy of
Region V was to call in a substitute LST if a client became ill or
for some reason an LST was needed to care for a client during
daytime hours. Plaintiff Gary Sexton testified that he never
understood he was to be on-call during the day and that he took
college classes outside of Fairbury when he was not working.
Kevin Huss was aware that he was considered to be on-call after
8:00 a.m. but that he was not required to carry a beeper, was never
called in, that he considered himself free until 4:00 p.m., and that
if'a client became ill during the day a substitute LST was called in.
David Merrill testified that LST’s were not required to leave a
phone number where they could be reached and that they were not
required to carry beepers, but that he wanted LST’s to be available
for mectings. He did not recall if he ever told LST’s that they
would not be called in after 8:00 a.m. and before 3-00 p.m., but that
he may have told them that Region V would try not to call them in
and instead would first try to find a substitute. It is clear from the
testimony that the LST’s were not on-call during their hours away
77
purse
from the residence, but were instead off-duty. Therefore, the LST’s
do not fall within the excetion contained in §§785.22.
The defendant contends that the LST’s fall within the
second exception contained in §§ 785.23, that being that sleep time
need not be compensated when an employee resides on an
employer's premises for an extended period of time. I disagree.
Section 785.23 is not applicable to the working conditions of the
LST’s. Section 785.23 contemplates a situation where an employee
would at times be on his or her employer’s premises for his or her
own benefit. It is clear from the testimony that the LST’s were at
all times on the group home premises for Region V’s benefit,
including the period of their sleep time. Section 785.23 speaks of
sleep time as one of the "periods of complete freedom from all
duties". The LST’s did not have complete freedom from their
duties while they slept. They were required by Region V to remain
on the premises to care for and protect the clients after clocking out
at night.
More importantly, the provisions of §§ 785.23 must be read
in conjunction with §§ 785.14, which states:
Whether waiting time is time worked under the act
depends upon particular circumstances. The
determination involves "scrutiny and construction of
the agreements between particular parties, appraisal
of their practical construction of the working
agreement by conduct, consideration of the nature
of the service, and its relation to the waiting time,
and all of the circumstances. Facts may show that
the employee was engaged to wait, or they may
show that he waited to be engaged." (Skidmore v.
Swift, 323 U.S. 134 (1944) ) Such questions "must
be determined in accordance with common sense
78
and the general concept of work or employment."
(Central Mo. Tel. Co. v. Conwell, 170 F.2d 641
(C.A. 8, 1948) )
The following cases demonstrate that the LST’s were
engaged to be waiting and are entitled to compensation for sleep
time.
In Armour & Co. v. Wantock, 323 U.S. 126 (1944) the
Court addressed the issue of whether firefighters who were required
to remain on the company’s premises from 5:00 p.m. when they
clocked out until 8:00 a.m. the next morning were entitled to
compensation for that time. During their nighttime duty the
firefighters were required to remain on the premises, respond to any
alarms, make temorary repairs of fire apparatus and take care of any
defective sprinkler systems. These tasks consumed on the average
less than one-half hour per week. Armour did not deny that the
time actually spent working in the nighttime hours should be
compensated In affirming the 7th Circuit’s finding that such
nighttime hours should be compensated, the Court held:
Readiness to serve may be hired, quite as much as
service itself, and time spent lying in wait for
threats to safety of the employer’s property may be
treated by parties as a benefit to the employer.
Whether time is spent predomnantly for the
employer's benefit or for the employee's is a
question dependant upon all the circumstances of the
case. 323 US. at 133.
In the companion case of Skidmore v. Swift & Co., 323 U.S. 134
(1944) the question of to whose benefit nighttime hours were spent
was again raised. The answer depends on whether the employee
was "engaged to wait" or "waiting to be engaged". Skidmore, supra
79
at 137.
In general, the answer depends "upon the degree to which
the employee is free to engage in personal activities
during periods of idleness when he is subject to call
and the number of consecutive hours that the employee is
subject to call without being required to perform active
work." "Hours worked are not limited to the time spent in
active labor but include time given by the employee to the
employer..." Skidmore, supra at 138.
Four years later the 8th Circuit applied the principles of
Armour and Skidmore in Central Missouri Tel. Co. v. Conwell, 170
F.2d 641 (8th Cir. 1948). The plaintiffs, two nighttime telephone
operators, brought an action to recover compensation for overtime
hours worked during their eleven-hours-a-day, six-days-a-week shift,
which started at 9:00 p.m. and ended at 8:00 o'clock the next
morning. The plaintiffs were paid only for eight hours of work
because they were allowed to rest or sleep during times when the
switchboard did not need attending. The evidence showed that on
some nights the plaintiffs received several hours sleep while on
other nights they received very little sleep due to frequent
interruptions. The court held that the entire cleven-hour shift must
be compensated, because it was clear that they were required to be
on the premises ready to serve and "were not there for the purpose
of sleep nor for any purpose of their own, but for their employer's
benefit." Central Missouri Tcl. Co., supra at 646.
The court distinguished a previous case by the 8th Circet
in which sleep time was held not compensable and upon which
Region V relics in the present case. In Rokey_v. Day &
Zimmerman, 157 F.2d 734 (8th Cir. 1946) the plaintiffs were
employed as firemen who were required to be on duty for 24 hours
SO
a day on alternate days. They were paid for sixteen of those hours,
with the remaining eight hours uncompensated a sleep time. This
arrangement was upheld on the basis that interruptions were rare
and the plaintiffs slept an average of eight or nine hours a night.
The Central Missouri court held that Rokey was _ readily
distinguishable in its facts for the reason that the firemen were
rarely interrupted.
A more recent case that has explained the waiting to be
engaged doctrine is Halferty v. Pulse Drug Co., Inc., 821 F.2d 261
(Sth Cir. 1987), modified 864 f.2d 1185 (Sth Cir. 1989).
{W]hen idle time is spent predominantly for the
benefit of the employer, not the employee, the
employee is engaged to be waiting, not waiting
to be engaged and is entitled to compensation.
Conversely, if the time primarily benefits the
employee, the employee can be considered to be
waiting to be engaged, and should receive
compensation for actual work time. Halferty, sura
at 269.
The LST’s employed by Region V were staying at the
residences during the nighttime hours for the benefit of Region V,
not for their own benefit. The testimony of David Merrill
acknowledges that LST’s were responsible for the clients’ safety and
well-being and were in fact responsible for the clients’ lives. He
believes that it is the responsibility of an LST to respond to a client
during the nighttime hours if the LST has reason to believe a client
could cause harm to himself or others, or could cause damage to
property. The testimony of the LST’s shows that they believe
themselves to function in a parent-like role and that they remained
responsible for the clients’ safety at any time they were on duty,
including those hours during which they were allowed to sleep.
8]
WEEKEND LST’S
I find that weekend LST’s did work for 24 hours or more.
At issue is whether weekend LST’s fall within the 785.22 exception,
which states that "where an employee is required to be on duty for
24 hours or more, the employer and employee may agree to exclude
a bona fide regularly scheduled sleeping period... provided
adequate sleeping facilities are furnished by the employer and _the
employee can usually enjoy _an_uninterrupted_night’s_ sleep.”
(Emphasis supplied)
The greater weight of testimony showed that LST’s were
rarely, if ever, able to enjoy an uninterrupted night's sleep. In fact,
few LST’s ever had a night where they received at least five hours
of uninterrupted sleep. The demands of their job simply did not
allow for such luxury
SUBSTITUTE LST’S
As mentioned previously, substitute LST’s filled in for both
weekday and weekend staff on an as-need basis. In analyzing the
question of sleep-time compensation for substitute LST’s it is
necessary only to determine whether they were filling in for a
weekday person or a weekend person. If they were filling in for a
weekday person the analysis previously discussed for weekday
LST’s should be equally applied to their substitutes. If they were
filling in for weekend LST’s then the analysis previously discussed
for weekend LST’s should be applied.
GOOD FAITH DEFENSE
Region V asserts that even if | find that it violated the
provisions of the FLSA, it is entitled to a good faith defense under
the Portal to Portal Act, 29 U.S.C. $$ 259 (PTPA). The act states
in pertinent part as follows:
ee
(a) In any action or proceeding based on any act or
omissions on or after May 14, 1947, no employer shall be
subject to any liability or punishment for or on account
of the failure of the employer to pay minimum wages or
overtime compensation under the [FLSA] ... if he pleads
and proves that the act or omission complained of was in
good faith in conformity with and in reliance on any
written administrative regulation, order, ruling, approval,
or interpretation, of the agency of the United States
specified in subsection (b) of this section, or any
administrative practice or enforcement policy of such agency
with respect to the class of employers to which he belonged.
Such a defense, if established, shall be a bar to the
action or proceeding, notwithstanding that after such
act Or Omission, such administrative regulation, order,
ruling, approval, interpretation, practice, or enforcement
policy is modified or rescinded or is determined by judicial
authority to be invalid or of no legal effect.
(b) The agency referred to in subsection (a) of this
section shall be -- (1) in the case of the Fair Labor
Standards of 1938, as amended...the Administrator of
the Wage and Hour Division of the Department of Labor.
Good faith is determined by using an objective test for
which the evidence must show that the defendant’s acts were
consistent with those of a reasonably prudent person under similar
circumstances. Good faith requires that the employer have honesty
of intention and no knowledge of circumstances that ought to put
him or her on inguiry. 29 C.F.R. §§ 790.15(a). Region V relied on
several documenis received from the National Association of Private
Residential Facilities for the Mentally Retarded (NAPRFMR) who
X3
had in turn received these documents from a deputy administrator
(Ex. 104) and as assistant administrator (Ex. 105) in the Wage and
Hour Division. In Hultgren et. al. v. County of Lancaster, No.
CV88-L-93 (D. Neb., May 10, 1989) the defendant asserted a good-
faith defense under 29 U.S.C. 259. The defendant, in part, based its
defense on two opinion letters from the deputy administrator of the
Wage and Hour Division. The court concluded that the opinion
letters were insufficient to support a finding that the defendant acted
in good faith because the documents were not issued by the
Administrator of the-Wage and Hour Division as required in §§
259(b). The opinion letters came from lesser officials or employees
and were therefore insufficient to support the good-faith defense of
§§ 259. See also, National Automatic Laundry and Cleaning
Council v. Schultz, 443 F.2d 689 (D.C. Cir. 1971).
While I realize that §§ 29 U.S.C. 259(a) states that one is
entitled to rely on a written administrative regulaiton, order, etc., of
the agency specified (that agency being the Administrator of the
Wage and Hour Division), this is not broad enough to cover lesser
officials within the agency, including deputy and assistant
administrators. I base this conclusion on the fact that "agency" Is
defined in 29 C.F.R. 790.19 as being expressly limited to the
official or officials actually vested with final authority under the
statutes involved. It goes on to explain that the definition of
"agency" in other federal statutes indicates that the term has
customarily been restricted in its usage by Congress "to the persons
vested under the statutes with the real power to act for the
Government--those who actually have the power to act as (rather
than merely for) the highest administrative authority of the
Government establishment*". (* footnote omitted)
For this reason | will not consider any documents which
Region V received from anyone other than the Administrator in
determining whether a good faith defense applics.
&4
Three documents, authored by the Administrator of the
Wage and Hour Division, were received by Region V. It appears
that these documents were not received by Region V directly from
the Administrator but rather through NAPRFMR. The first
document is a memorandum dated December 2, 1987, upon which
both Merrill and Packwood relied. (Ex 108) It said that time spent
sleeping by employees of group homes who failed to meet the
definition of full-time or relief employees, as discussed in FOH
31d01, could not be excluded in computing cempensable hours of
work. In order to exclude sleep time for such employees they must
be on duty for 24 hours or more, as discussed in 785.22. No
evidence has been furnished to guide me in determining the
definition contained in FOH 31d01 but I find nothing in the
memorandum of December 2, 1987, that would give Region V an
objectively valid reason for believing in good faith that the LST’s
should not be compensated for their sleep time.
In the second memorandum (Ex. 109) dated January 4,
1988, the Administrator stated that the National Office would be
reviewing group home compliance involving issues of hours worked
and would in the near future provide specific guidance on how
hours worked should be teeated in investigations of group homes.
All investigations of group homes involving issucs of work hours
then in progress were suspended. Nothing in this memorandum
gives Region V an objective reason for believing in good faith that
the LST’s were not entitled to compensation for their sleep time.
Finally, David Merrill received a memorandum authored by
the Administrator dated June 30, 1988. (Ex. 160) Merrill reviewed
this document and sent a copy to his legal counsel requesting an
opinion. The document states that the review of group home
investigations had been completed and tt was determined that further
guidance on hours worked issues was necessary. An enforcement
policy is attached to the memorandum for guidance as to the
conditions under which the Wage and Hour Division, in its
enforcement of FLSA, will not require compensation for sieep time.
It starts out by reviewing its previous position on the definition of
"residing on the premises permanently" or for "extended periods of
time" and says that in 1981 it took the position that residing on the
employer's premises for 120 hours a week or 5 consecutive days or
nights would qualify an employee as residing on the premises for
an extended period of time. It goes on to say that it is refining and
restating the minimum conditions required to be deemed as residing
on the premises for an extended period of time. The new conditions
were that: (1) the employee be on duty at the group home and be
compensated for at least eight hours in each of five consecutive 24-
hour periods; and (2) the employee must sleep on the premises for
all sleep periods between the beginning and end of the 24-hour
period. The following example is given:
Any 24-hour period can be utilized, and the eight
compensated hours per 24-hour period need not be
consecutive. Thus, an employee who is on duty and
compensated for the period 5:00 p.m. to 10:00 p.m.
Monday, 6:00 a.m. to 9:00 a.m. and 3:00 p.m. to —
10:00 p.m. Tuesday through Friday, and 6:00 a.m.to
9:00 a.m. Saturday, and who sleeps on the premises
(10:00 p.m. to 6:00 a.m.) for all sleep periods from
Monday night through Friday night, has been compensated
for at least cight hours in five consecutive 24-hours
periods between 5:00 p.m. Monday and 5:00 p.m. Saturday.
The employee would also have slept five consecutive nights
on the premises. Provided the other conditions were met,
this would be considered to be residing on the premises
for an extended period of time.
Weekday LST’s did not meet this criteria because they did
86
i]
not work eight hours in five consecutive 24-hour periods. David
Merrill testified that after receiving this document Region V made
a schedule change in October 1988, so that weekday LTS’s worked
eight-hour shifts during five different 24-hour periods. The issue is
whether this is sufficient to support a finding that Region V had an
objective reason for good faith reliance in believing, at least at this
point when they changed their schedule, that they were in
compliance with wage and hour laws and that they did not need to
compensate for sleep time.
Section 785.23 must be read in light of §§ 785.14. The
memorandum did not address a situation where an employee is
engaged to be waiting during the time the employee is allowed to
sleep. Under a reasonable person (objective) standard, Region V
had to read the memorandum in light of the conditions and
requirements of the entire Interpretive Bulletin as they knew them
or should have known them. I believe a reasonable person should
have read the memorandum in light of the waiting to be engaged
doctrine embodied in §§ 785.14. Section 785.14 is contained in the
same Interpretive Bulletin that contains §§ 785.22 and §§ 785.23
This Bulletin was received by Region V on or about February 27
1985, so there is no question but that Region V had the provisions
of §§ 785.14 within its possession.
The next question to be answered is whether a reasonable
person in the position of Region V would know or should have
known that the LST’s were performing services for Region V during
sleep-time hours; that is, that the LST’s were on the premises for
Region V's benefit, David Merrill testified that he relied on the
LST’s time cards to determine how many interruptions occurred
during sleep time. Kal Lausterer, area director of Region V in
Fairbury also believed that interruptions incurred by LST’s were
written down on time sheets. The general consensus of testimony
by the LST’s was that they sometimes, but not consistently,
documented sleep-time interruptions on their time sheets. However,
this was due in large part to the fact that the LST’s were not
allowed to document any interruptions which did not last at least 5-
7 minutes and could not document interruptions for which they did
not have to physically be out of bed. Both Merrill and Klausterer
knew that the these were the policies of Region V.
In addition, Region V was informed by various LST’s that
they had problems with nighttime interruptions. Ila Fett voiced
concerns to Lausterer about her problems sleeping. She also told
Clarice Wienke, residential coordinator for Region V in Fairbury,
about her sleep-time problems. Wienke’s response was that it was
sad, but nothing could be done. Vickie Dannewitz testified that
Lausterer and Wienke were aware that she regularly got out of bed
at 5-00 a.m. to take two of her clients to the restroom, and that she
had discussed sleep time problems with Wienke. Gary Sexton
stated that his supervisors were aware that he got up every 1 1/2
hours to take a client to the bathroom and that he was instructed to
do this when he started his job. Between July 1986 and August
1987 Patrick Bouchard had conversations with Lausterer regarding
payment for sleep time. Bouchard described this as a "constant
topic". Dan Rosey testified that he complained to Lausterer and
Wienke more than once about nighttime interruptions.
| find from the evidence as a whole that Region V knew or
shoud have known that the LST’s sleep-time interruptions did occur,
and that they were a normal part of the job. This, combined with
the fact that Region V knew about or should have been aware of
S$ 785.14, eliminates any good faith defense. I cannot find that
their acts were consistent with those of a reasonably prudent person,
nor can I find that they had no knowledge of circumstance that
ought to have put them on inquiry.
The memorandum goes on to explain that where one or
SS
more employees meet the full-time employee/residing on the
premises test described above, Wage and Hour will likewise apply
the provisions of 785.23 to one or more "relief" employees who
reside on the premises for one to three nights. It is clear that they
are referring to employees who temporarily take the place of a full-
time employee, such as a substitute LST filling in for a weekday
LST not a weekend LST. Nothing is this memorandum gives
Region V an objective reason for believing in good faith that
weekend LST’s were not entitled to compensation for their sleep
time.
LIQUIDATED DAMAGES
Plaintiffs seek, in addition to unpaid compensation, an
additional equal amount as liquidated damages pursuant to 29
U.S.C. 216 (b) which directs than an employer who violates the
minimum wage or overtime provisions "shall be lable ... in the
amount of ... their unpaid overtime compensation, and in an
additional equal amount as liquidated damages." However, 29
U.S.C. 260 permits an employer to assert a good faith defense to
payment if the employer can show "that the act or omission giving
rise to [the] 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]."
Whether the good faith defense applies depends on a two-
part test. In order to invoke the defense the employer has the
burden of showing that he acted in good faith and that he had
reasonable grounds for belicving that he did not violate the FLSA
Sinclair v. Automobile Club of Oklahoma, Inc., 733 F.2d 726 (10th
Cir. 1984). this ts in contrast to the objective good faith test used
in $$ 259. Here, the test for awarding liquidated damages
incorporates both a subjective and an objective standard. In order
to satisfy the subjective good faith component under $$ 260 the
employer is obligated to prove that he had an honest intention to
ascertain the requirements of the FLSA and to act in accordance
with it. E.E.O.C. v. First Citizens Bank of Billings, 758 F.2d 397,
cert. denied, 474 U.S. 902 (1985).
Acts or omissions occurring on advice of counsel or other
professionals warrant a finding, under a subjective test, that an
employer acted in good faith and, objectively, will support a finding
that the employer had reasonable grounds upon which he could base
a belief that he was acting in accordance with FLSA requirements.
Hultgren et. al. v. County of Lancaster, supra. In Lane v. M’s Pub,
Inc., 435 F. Supp. 917 (D. Neb. 1977) the court denied the
plaintiff's request for liquidated damages primarily on the basis that
his employer had consulted with her accountant who had informed
her (wrongly) that the provisions of the FLSA were inapplicable in
her business. The court found that even though the accountant was
mistaken the employer had reasonably and in good faith relied on
his advice, and declined to award liquidated damages.
Similarly, the evidence in this case shows that Region V
had reasonable grounds for believing they were not in violation of
FLSA provisions. Region V sought out information both from
NAPRFMR and from counsel. For that reason liquidated damages
are not appropriate in this case.
Counsel have stipulated to the amounts of straight and
overtime compensation the plaintiffs are entitled to if the plaintiffs
are found to prevail. Judgment will be entered in those amounts, as
follows:
Tammy Empficld $ 2,432.43
Larry Yates 5,460.61
Ila Fett 32,394.00
Debra Junker 30,024.96
90)
aa
Dan Rosey 9,872.83
Rodney Wacker 7,292.91
Kevin Huss 25,682.11
Phyllis Hensley 14,754.26
Leo Prokop 17,059.10
Jean Peters 26,076.27
Vickie Dannewitz 23,641.61
Gary Sexton 18,074.51
Bonnie Bouchard 9,033.14
Jerry Junker 11,114.36
Kevin Carlson 15,608.94
Jack Yates 2,772.33
Chris Amundson 7,134.27
Rose Marie Steel 6,283.30
Doris Meyer 6,777.21
Pat Bouchard 10,926.40
Under 29 U.S.C. §216 the plaintiffs are entitled to a
reasonable attorney’s fee. Judgment will be withheld until the
amount of fees to be allowed is resolved. Counsel are invited to
proceed in accordance with Local Rule 34 and the Fee Application
Guidelines referred to in that rule.
IT IS ORDERED that plaintiffs’ counsel shall have until
February 2, 1990, to submit a showing regarding attorney's fees and
the defendants may respond by February 16, 1990.
Dated January 22, 1990.
BY THE COURT
Warren K. Urbom
United States District Judge
9|
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.