Allemani v. Pratt Industries (U.S.A.), Inc.

Filing 95

ORDER: The Court instructs the fact finder to calculate Plaintiffs' damages based on the Eleventh Circuit and Department of Labor guidance method described in detail above. Having substantially narrowed the remaining issues in this matter, the Court ORDERS the Parties to mediation. The Parties may agree on a mediator and inform the Court of their choice within fourteen days of entry of this Order. If the Parties do not identify a mediator within that time, the Court will refer the matter to Chief Magistrate Judge King for assignment to the next available magistrate judge. Signed by Judge Richard W. Story on 8/18/2014. (cem)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
DENNIS ALLEMANI and
NATHANIEL BARLOW, JR.,
Plaintiffs,
v.
PRATT (CORRUGATED
LOGISTICS), LLC,
Defendant.

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CIVIL ACTION NO.
1:12-CV-0100-RWS

ORDER
In its Order dated June 6, 2014 [87], the Court reserved ruling on the
proper method for calculating Plaintiffs’ damages, pending further briefing by
the Parties. The issue is now fully briefed. After reviewing the record and the
Parties’ submissions, the Court enters the following Order.
Discussion1
Under the Fair Labor Standards Act (“FLSA”), employers must
compensate their employees for overtime hours “at a rate not less than one and

1

A complete discussion of the factual background is included in the Court’s
previous Order [87].

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one-half times the regular rate at which [the employees are] employed.” 29
U.S.C. § 207(a)(1). The FLSA does not define “regular rate” and the Parties
cite numerous cases on this point. However, Eleventh Circuit precedent is clear
that when an employee is employed “solely on a weekly salary basis, his regular
hourly rate of pay, on which time and a half must be paid, is computed by
dividing the salary by the number of hours which the salary is intended to
compensate.” Rodriguez v. Farm Stores Grocery, Inc., 518 F.3d 1259, 1268-69
(11th Cir. 2008) (citing 29 C.F.R. § 778.113(a)) (emphasis added); see also
Lamonica v. Safe Hurricane Shutters, Inc., 711 F.3d 1299, 1311 (11th Cir.
2013) (“The district court properly instructed the jury to calculate Appellees’
regular rates of pay using the number of hours their salaries were intended to
compensate.”). The number of hours an employee’s salary is intended to
compensate is a factual issue. Rodriguez, 518 F.3d at 1269.
The Parties do not dispute that Plaintiffs were compensated with a fixed
salary every two weeks. The Department of Labor’s (“DOL”) interpretive
bulletin on calculating the regular rate of pay for salaried employees states that
where the salary covers a period longer than a workweek, the salary “must be

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reduced to its work-week equivalent.” 29 C.F.R. § 778.113(b)2. Once the
weekly wage is determined, the regular hourly rate of pay, on which time and a
half must be paid, is calculated as follows: “by dividing the [weekly] salary by
the number of hours which the salary is intended to compensate.” 29 C.F.R. §
778.113(a).
The Parties focus their briefing on the “flexible work week” (“FWW”)
method of determining an employee’s regular rate of pay and corresponding
overtime premium. As the Eleventh Circuit has noted, the FWW method “is
conceptually subsumed within the broader rule” laid out in 29 C.F.R. §
778.113(a). Lamonica, 711 F.3d at 1311. The DOL guidance on the FWW
method reads:
An employee employed on a salary basis may have
hours of work which fluctuate from week to week and
a salary may be paid him pursuant to an understanding
with his employer that he will receive such fixed
amount as straight time pay for whatever hours he is
called upon to work in a workweek, whether few or
many. Where there is a clear mutual understanding
of the parties that the fixed salary is compensation
(apart from overtime premiums) for the hours worked

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To arrive at the weekly wage, “[a] semimonthly salary is translated into its
equivalent weekly wage by multiplying by 24 and dividing by 52.” 29 C.F.R. §
778.113(b).
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each workweek, whatever their number, rather than
for working 40 hours or some other fixed weekly
work period, such a salary arrangement is permitted
by the Act if the amount of the salary is sufficient to
provide compensation to the employee at a rate not
less than the applicable minimum wage for every hour
worked in those workweeks in which the number of
hours he works is greatest, and if he receive extra
compensation, in addition to such salary, for all
overtime hours worked at a rate not less than one-half
his regular rate of pay.
29 C.F.R. § 778.114(a).
Under the FWW method, “[p]ayment for overtime hours at one-half [the
regular] rate in addition to the salary satisfies the overtime pay requirement
because such hours have already been compensated at the straight time regular
rate, under the salary arrangement.” 29 C.F.R. § 778.114(a). The DOL
guidance states, however, that the [FWW] method may not be used unless “the
employee clearly understands that the salary covers whatever hours the job may
demand in a particular workweek and the employer pays the salary even though
the workweek is one in which a full schedule of hours is not worked.” Again,
therefore, the analysis depends on the intent and understanding of the Parties
with respect to the hours Plaintiffs’ salaries were intended to compensate – an
inquiry for the fact finder.
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DOL guidance, which is followed by the Eleventh Circuit, provides
examples of the proper method for calculating FLSA overtime damages for a
salaried employee. For instance, under the general rule for salaried employees,
if an employee receives a weekly salary of $350 and the salary is intended to
compensate the employee for 35 hours, the regular rate of pay is $10 per hour.
When the employee works overtime, the employee is entitled to $10 per hour
for the first 40 hours and $15 (one and one-half times the regular rate) for each
hour worked over 40 hours during a single week. 29 C.F.R. § 778.113(a).
If, on the other hand, the fact finder determines that Plaintiffs’ fixed
salary was intended to compensate whatever hours Plaintiffs worked in a
workweek (i.e., not for a fixed number of hours each week), the DOL guidance
provides an example for that scenario. If the employee’s weekly salary is $600
and during the course of four weeks the employee works 40 hours, 37.5 hours,
50 hours, and then 48 hours, the regular rate of pay is calculated separately for
each week. The regular rate for each week is $15, $16, $12, and $12.50,
respectively. Since, under the salary arrangement, the employee has received
straight time compensation for all hours worked, only the half-time premium is
due for overtime hours. Thus, the employee is entitled to $600 for the first two
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weeks (because no overtime hours were worked), $660 for the third week ($600
plus a $6 premium – half of that week’s regular rate of $12 – for the 10 hours
worked over 40), and $650 for the fourth week ($600 plus 8 hours at a $6.25
half-time premium). 29 C.F.R. § 778.114(b).
Because Defendant did not maintain records of Plaintiffs’ hours each
week, the fact finder will be required to evaluate the evidence presented at trial
to determine Plaintiffs’ overtime hours. Rodriguez, 518 F.3d at 1267.
Normally, “[t]he FLSA places upon the employee-plaintiff the burden of
proving that he performed work for which he was not properly compensated.”
Lamonica, 711 F.3d at 1315. “However, if the employer failed to keep time
records, . . . that burden is relaxed.” Id. Here, Plaintiffs can satisfy their burden
by producing sufficient evidence “to show the amount and extent of the
[improperly compensated] work as a matter of just and reasonable inference.”
Id. Then the burden will shift to Defendant to provide evidence “of the precise
amount of work performed or with evidence to negative the reasonableness of
the inference to be drawn from [Plaintiffs’] evidence.” Id.
In sum, to perform the calculations described above, the following factual
issues must first be resolved by the fact finder: (1) the number of hours intended
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to be compensated by Plaintiffs’ salary (to establish the regular rate of pay); and
(2) the number of hours actually worked by Plaintiffs each week during the
relevant time period (to determine the total amount of overtime compensation
owed). In addition to reserving ruling on the method for calculating Plaintiffs’
unpaid overtime damages, the Court denied summary judgment on Plaintiffs’
claim for liquidated damages because the Court could not determine as a matter
of law that Defendant acted in good faith when it misclassified Plaintiffs as
exempt employees. (Order, [87] at 41 of 42.) Therefore, whether Defendant
made the erroneous classification in good faith is another factual issue to be
addressed by the fact finder.
Conclusion
Based on the foregoing, the Court will instruct the fact finder to calculate
Plaintiffs’ damages based on the Eleventh Circuit and DOL guidance method
described in detail above. Having substantially narrowed the remaining issues
in this matter, the Court ORDERS the Parties to mediation. The Parties may
agree on a mediator and inform the Court of their choice within fourteen days of
entry of this Order. If the Parties do not identify a mediator within that time,

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the Court will refer the matter to Chief Magistrate Judge King for assignment to
the next available magistrate judge.
SO ORDERED, this 18th day of August, 2014.

________________________________
RICHARD W. STORY
United States District Judge

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