18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 271 allegedly provided to reimburse traveling clinicians for costs incurred while completing shifts more than 50 miles away from their homes. Id. at *5. Defendant treated these payments as non-taxable income (thus excluding them from Plaintiffs’ normal pay rates), but according to Plaintiffs, Defendant violated federal and state wage laws by failing to account for the per diem payments with respect to overtime rate calculations. Defendant filed a motion for summary judgment on the basis that per diem payments should not be considered part of Plaintiffs’ regular rate of pay, and the District Court granted the motion. On appeal, the Ninth Circuit reversed the District Court’s order. The Ninth Circuit noted that the key issue on appeal, i.e. , whether per diem payments are excludable from the FLSA’s regular rate of pay, should be analyzed by determining the payment’s function under the circumstances. Id. at *11-12. In reviewing relevant case law on this issue, the Ninth Circuit pointed out that several other circuits had reasoned that per diem payments that depend on the amount of time worked are included in the regular pay rate. However, even without adopting this per se rule, the Ninth Circuit held that Defendant’s per diem payments in this case functioned as compensation for hours worked rather than reimbursement for expenses. To that end, the Ninth Circuit determined that Defendant’s pro rata deductions from its per diem payments were based on Plaintiffs’ hours worked rather than the amount of expenses incurred. The Ninth Circuit also found that Defendant provided local clinicians with the same per diem payments as traveling clinicians, which supported Plaintiffs’ assertion that these payments were “expected as part of a clinician’s pay package and so function as supplemental wages.” Id . Consequently, the Ninth Circuit reversed the District Court’s order and remanded for the District Court to enter partial summary judgment in Plaintiffs’ favor and conduct further proceedings. Dean, et al. v. Akal Security Inc ., 2020 U.S. App. LEXIS 18621 (5th Cir. June 22, 2021). Plaintiffs, a group of aviation security officers (“ASOs”), filed a collective action alleging that Defendant failed pay for all hours worked in violation of the FLSA. Defendant filed a motion for summary judgment, which the District Court granted. ASOs were hired to supervise non-citizen detainees subject to deportation on flights. Defendant had a policy of deducting one hour’s pay from all ASO timesheet totals for "empty return leg flights,” or flights on which detainees were no longer present for 90 or more minutes until landing at the ASO’s home station in Phoenix, Arizona. Id. at *7. Plaintiffs alleged they were not afforded a qualifying meal break under the FLSA. Defendant argued that the unpaid meal period policies were lawful under the FLSA. Further, Defendant contended that Plaintiffs were aware of the meal deduction policy because it was issued pursuant to a collective bargaining agreement and explained in the offer letters signed by all employees at their time of hire. The Court observed that the FLSA exempts bona fide meal periods from compensable hours worked, which is defined as lasting [o]rdinarily 30 minutes or more . . ." and relieving the employee of his duties and obligations to be at his "desk" or "machine" while eating. Id . at *7. An employee otherwise relieved of duties during his meal break need not be permitted to leave work premises during such a break. The District Court applied the "predominant benefit test" to the FLSA claim for uncompensated meal breaks, which focused on whether the employer or the employee received the primary benefit from the period at issue. It concluded that ASOs received the predominant benefit here. Defendant contended that the empty return leg flights at issue, each lasting at least 90 minutes, consisted almost entirely of free time that ASOs used at their own discretion, within limits imposed by being onboard an aircraft, and for their own purposes. Defendant offered testimony from 10 current and former employees illustrating various typical leisurely pursuits engaged in by ASOs during these flights, such as sleeping, reading, eating, socializing, and moving about the aircraft cabin. Id . The Fifth Circuit agreed with the District Court that the ASOs almost always had at least one hour on the return flights when they had no work-related duties. Id. at *16. The Fifth Circuit opined that Defendant received no benefit arising from the inevitable restrictions on mobility or the prohibitions on the use of technological devices when confined to the airplane. Further, the Fifth Circuit determined that as to the application of the policy, the ASOs failed to present any evidence that they did not regularly receive the one hour of personal time on every return flight, free from work-related duties. For the reasons, the Fifth Circuit affirmed the District Court’s ruling granting Defendant’s motion for summary judgment. Figueroa, et al. v. Butterball, 2021 U.S. Dist. LEXIS 175243 (E.D.N.C. Sept. 15, 2021) . Plaintiff, a poultry loader/catcher, filed a class and collective action alleging that Defendant failed to pay overtime compensation in violation of the FLSA and the North Carolina Wage & Hour Act. Defendant filed a motion to dismiss, which the Court granted. Plaintiff was paid on a piece-rate basis. While Defendant did not contest that it paid Plaintiff on a piece-rate system, it contended that it properly compensated Plaintiff and paid him overtime. Defendant further argued that Plaintiff could not plausibly allege that Defendant improperly calculated the piece-rate compensation