McCormick v. Cable Communications, Incorporated
Filing
56
OPINION AND ORDER: For the foregoing reasons, Mr. Brunozzis Motion for Partial Summary Judgment 41 is DENIED and CCIs Motion for Summary Judgment 32 is GRANTED. All of Mr. Brunozzis claims are DISMISSED. Signed on 7/9/15 by Judge Michael W. Mosman. Associated Cases: 3:14-cv-01128-MO, 3:14-cv-01131-MO (dls)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION
MATTEO BRUNOZZI,
an individual,
Plaintiff,
v.
Lead Case No. 3:14-cv-01128-MO
No. 3:14-cv-01131-MO
OPINION AND ORDER
CABLE COMMUNICATIONS, INC.,
a foreign corporation,
Defendant.
MOSMAN, J.,
Plaintiff Matteo Brunozzi and Defendant Cable Communications, Inc. (“CCI”) have filed
competing motions for summary judgment. Mr. Brunozzi’s Motion for Partial Summary
Judgment [41] seeks summary judgment regarding his Fair Labor Standards Act (“FLSA”) claim
and his ORS 652.140 claim for failure to pay all wages at the end of employment. CCI’s Motion
for Summary Judgment [32] seeks summary judgment regarding all of Mr. Brunozzi’s claims.
For the reasons set forth below, Mr. Brunozzi’s Motion for Partial Summary Judgment [41] is
DENIED and CCI’s Motion for Summary Judgment [32] is GRANTED.
1 – OPINION AND ORDER
BACKGROUND
CCI is a cable installation company. It employs technicians to install cable television and
internet services for Comcast. Mr. Brunozzi applied for a position with CCI on or about October
25, 2013. Deposition of Matteo Brunozzi (“Brunozzi Depo.”), 12:12–22. CCI hired Plaintiff on
or about November 1, 2013, and Plaintiff began working for CCI on or about November 19,
2013. VanNorstrand Decl., ¶ 2.
At the start of his employment, Mr. Brunozzi was provided with a document that
specifically explained how technicians were paid after they completed their hourly paid training
program. This document explains that for each task the technician performs during the week
there is a dollar value assigned to it. At the end of the week all the task values are added up to get
to a total dollar amount – the “Piece Rate Total.” Then it is determined whether the employee
performed any work in excess of 40 hours during the pay period. If so, the total amount of hours
worked is divided into the Piece Rate Total to determine the average hourly rate. The technician
is then paid a “Piece Rate OT Premium” on that rate for all hours over 40. The Piece Rate Total
is then divided by 60 and multiplied by 70 and then the Piece Rate Total is subtracted back out of
this number to come up with a total amount available for the “Production Bonus.” If an
employee was paid overtime for that week, that amount is also subtracted from the preliminary
Production Bonus calculation. At that point, a Production Bonus is finalized and paid to the
employee. If the employee worked overtime that week, then they are also paid an Overtime
Premium component on the Production Bonus. This is all explained in the Technician Pay Rate
Program given to Plaintiff, which he signed stating that he read it, had a chance to ask questions
to his satisfaction, and understood how it worked.
After the hourly paid training program, technicians, such as Mr. Brunozzi, fill out daily
work sheets (“Daily Sheets”) to indicate how many hours they worked and which tasks they
2 – OPINION AND ORDER
performed. Each day Mr. Brunozzi filled out one of these sheets and signed it stating “I hereby
certify that the tasks completed, mileage driven, and hours worked as indicated are true and
complete. I have received all rest breaks and meal periods to which I was entitled.” Mr. Brunozzi
specifically testified at his deposition that he filled out these Daily Sheets truthfully every day
and that he believed it was fair for CCI to rely on his representations as to the information he
provided. At the end of each week, Mr. Brunozzi would be given a “Weekly Payroll Report”
showing the hours he worked and the amounts, including overtime that CCI calculated was due
to him based on the work he performed. It was from these sheets that CCI would cut the checks
to employees.
Mr. Brunozzi was scheduled to work on Saturday, April 5, 2014. VanNorstrand Decl., ¶
3. Mr. Brunozzi failed to show for work that day. Id. Just two days prior, Mr. VanNorstrand held
a meeting with all Portland CCI employees and made it clear that failure to show up for work
could result in termination. Id. at ¶ 5; see also Brunozzi Depo., 70:3-17. When Mr. Brunozzi
returned to work on April 7, after missing his April 5 shift, Mr. VanNorstrand terminated Mr.
Brunozzi’s employment. VanNorstrand Decl., at ¶ 6. Mr. Brunozzi alleges that he made multiple
complaints to his supervisors in the weeks before he was fired concerning CCI’s failure to pay
overtime, and that he specifically objected to working on April 5 unless he was properly paid all
his overtime amounts for his overtime hours worked.
LEGAL STANDARD
Summary judgment is appropriate if the pleadings, depositions, and other documents on
file show that there is no genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The court views the record in the
light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
3 – OPINION AND ORDER
(1986). If the movant shows that no genuine issue exists for trial, the non-movant cannot then
rest on the pleadings but must respond by “citing to particular parts of materials in the record,
including deposition, documents, electronically stored information, affidavits or declarations,
stipulations (including those made for purposes of the motion only), admissions, interrogatory
answers, or other materials. Fed. R. Civ. P. 56(c)(1). When the record taken as a whole could not
lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
On a motion for summary judgment, all reasonable doubt as to the existence of a genuine
issue of fact should be resolved against the moving party. Hector v. Wiens, 533 F.2d 429, 432
(9th Cir. 1976). The inferences drawn from the underlying facts must be viewed in the light most
favorable to the party opposing the motion. Valandingham v. Bojorquez, 866 F.2d 1135, 1137
(9th Cir. 1989).
DISCUSSION
I.
Wage and Overtime Claims
The parties each seek summary judgment in their favor regarding Mr. Brunozzi’s wage
and overtime claims. Mr. Brunozzi argues that CCI’s wage scheme violates the Oregon state law
overtime regulations and the FLSA through a bonus structure calculated by subtracting overtime
wages. Mr. Brunozzi further argues that these overtime violations resulted in a violation of ORS
652.140 because he was not paid all the wages he was due at the time of his termination. CCI
argues that it fully complied with the requirements of Oregon law and the FLSA, and that what
Mr. Brunozzi calls deficiencies in the bonus scheme are unregulated contractual agreements to
which Mr. Brunozzi freely bound himself.
4 – OPINION AND ORDER
A.
Oregon Overtime Regulation
OAR 839-020-0030(1) commands that “all work performed in excess of forty (40) hours
per week must be paid for at the rate of not less than one and one-half times the regular rate of
pay when computed without benefits of commissions, overrides, spiffs, bonuses, tips or similar
benefits.” OAR 839-020-0030(3)(b)(A) provides the method for calculating the regular rate
when an employee is paid based on a piece rate agreement: “[w]here an employee is employed
on a piece-rate basis, the regular hourly rate of pay is determined by adding together the total
earnings, (excluding commissions, spiffs, bonuses, tips or similar benefits) for the work week
and dividing this sum by the number of hours worked in the week for which such compensation
is to be paid.” OAR 839-020-0030(3)(b)(B) makes it clear that, upon calculating the regular rate
of pay, an employee paid based on a piece-rate agreement is entitled to receive an additional
50% of the regular rate for each hour worked over 40 in a week: “[f]or example, an employee
who has earned $500 during a 50 hour work week must be paid an additional sum of $50 for the
ten overtime hours, for a total of $550 (50 hours at $10 per hour and the ten overtime hours at
$5.00 per hour).”
It is undisputed that CCI paid Mr. Brunozzi the required overtime pay for all the overtime
hours he worked. All of Mr. Brunozzi’s overtime pay related arguments have to do with his
belief that his Piece Rate OT Premium should not have been deducted from his bonus; that doing
so had the practical impact of diluting the value of his overtime pay. But Oregon law does not
require that bonuses be included in overtime pay calculations. And Oregon law leaves
unregulated—that is it allows the parties freedom to contract with each other as they see fit—the
payment of bonuses. Because Mr. Brunozzi has failed to make any legally significant arguments
5 – OPINION AND ORDER
regarding the Oregon overtime pay regulations, CCI’s Motion for Summary Judgment [32]
regarding Mr. Brunozzi’s First Claim is granted.
B.
FLSA Overtime Provision
Similar to the Oregon regulations, the FLSA provides that a piece-rate employee must be
paid an additional 50% of his or her “regular rate” for each hour worked in excess of 40 hours in
a single week. The “regular rate” is computed by “adding together total earnings for the
workweek” and dividing that sum “by the number of hours worked in the week.” 29 C.F.R. §
778.111. The only material difference between the Oregon and federal regulations is that the
federal regulations require that all non-discretionary bonuses be included in earnings for the
week, whereas the Oregon regulation does not. 29 U.S.C. § 207(e)(3). Expressed in a formula,
overtime under the federal regulations is calculated as follows:
Regular Rate = (Piece Rate Total + Bonus)/Total Hours Worked
Overtime Pay = 0.5*Regular Rate*(Total Hours Worked – 40)
An important omission from the FLSA overtime provision is anything that attempts to
regulate how bonuses should be calculated. 29 C.F.R. § 778.111. CCI calculates its employees’
bonuses according to the following formula:
Bonus = 70*(Piece Rate Total/60) – (Piece Rate Total + Piece Rate Premium for Overtime) 1
Mr. Brunozzi contends that this bonus scheme violates the FLSA. Mr. Brunozzi argues that by
subtracting the Piece Rate Premium for Overtime from the Bonus before calculating the Regular
Rate, CCI is illegally deflating the Regular Rate, the key input in the Overtime Pay formula,
resulting in illegally depressed Overtime Pay amounts.
1
The Piece Rate Premium for Overtime is calculated according to the following formula:
Piece Rate Premium for Overtime = 0.5* (Piece Rate Total/Total Hours Worked)* Overtime Hours Worked
6 – OPINION AND ORDER
Mr. Brunozzi’s briefing includes a mathematical example that shows that under CCI’s
bonus scheme the difference in pay between an employee who works 5 hours of overtime and an
employee who works 10 hours of overtime is only $0.45. Pl.’s Motion for Partial Summary
Judgment [41] at 5–8. What Mr. Brunozzi fails to appreciate is that what he believes is an illegal
failure to pay sufficient overtime wages is in fact a perfectly legal result of an agreed upon bonus
scheme.
CCI does not dispute the fact that each hour of overtime worked decreases the bonus due,
which has the effect of decreasing the Regular Rate, thereby decreasing the ultimate overtime
payment that an employee receives. However, CCI correctly argues that the FLSA does not
prevent employers and employees from contracting into whatever bonus scheme they desire. The
only requirement imposed by the FLSA is that if CCI chooses to pay a bonus, it must include
that bonus in its calculation of the Regular Rate. 29 C.F.R. § 778.111. Employers could contract
into giving bonuses for showing up to work early and reducing bonuses for leaving early.
Employers could contract into giving bonuses for good workplace behavior and reducing
bonuses for bad workplace behavior, such as profane or abusive language. An employer could
offer no bonus and not violate the FLSA. Employers who ask their employees to agree to
substandard bonus structures will be punished by the market for laborers when their employees
are snatched up by their competitors who offer superior bonus schemes. The FLSA only requires
that whatever bonus results from the agreed upon scheme, whether it be $1,000,000 or $0, be
added to the employee’s total compensation for calculation of the regular rate. In Mr. Brunozzi’s
illustration, each employee’s overtime pay was calculated in exactly the manner mandated by the
FLSA. Both employees received the wages they were owed and they received the requisite
overtime pay based on those wages. The fact that the employee who worked 5 additional hours
7 – OPINION AND ORDER
only received an additional $0.45 was not a result of a failure to pay overtime, but rather the
result of receiving a lower bonus than the other employee who worked fewer hours.
It is undisputed that CCI complied with the FLSA requirement regarding bonuses.
Mr. Brunozzi never alleges that CCI failed to include his bonus in the calculation of his overtime
wages; he only argues that the bonus was illegally calculated. As stated above, the FLSA is not
concerned with bonus payments beyond the fact that whatever bonus is paid must be included in
calculating overtime payments. CCI did just that. I am neither a labor czar nor a majority of
Congress and therefore lack the capacity to amend the FLSA to regulate employee bonuses to
repair the holes Mr. Brunozzi argues exist in its overtime pay regulations. CCI’s Motion for
Summary Judgment [32] regarding Mr. Brunozzi’s Second Claim is granted.
C.
Late Payment of Wages
Given my findings that Mr. Brunozzi was fully paid all overtime due under Oregon law
and the FLSA, Mr. Brunozzi’s claims that he was owed additional overtime payments at the time
of his termination fall away. I find that Mr. Brunozzi was fully compensated upon his
termination by CCI as required by ORS 652.140. CCI’s Motion for Summary Judgment [32]
regarding Mr. Brunozzi’s Fourth Claim is granted.
II.
Wage Retaliation Claim
CCI’s Motion for Summary Judgment [32] also seeks to dispose of Mr. Brunozzi’s wage
retaliation claim. This claim arises from Mr. Brunozzi’s failure to work on April 5, 2014. As a
result of not showing up to work on April 5, Mr. Brunozzi was fired. Mr. Brunozzi’s complaint
alleges that CCI firing him for not attending work on April 5 is merely a pretextual reason for his
termination. Mr. Brunozzi argues that he was actually terminated as a result of wage claims he
made regarding his overtime pay. Mr. Brunozzi’s complaint contains two statutory theories, ORS
8 – OPINION AND ORDER
652.355 and ORS 659A.199, for his wage retaliation claim. For the reasons set forth below,
CCI’s Motion for Summary Judgment [32] is granted as to Mr. Brunozzi’s wage retaliation
claim.
1.
ORS 652.355
ORS 652.355 states in relevant part, “[a]n employer may not discharge or in any other
manner discriminate against an employee because . . . [t]he employee has made a wage claim or
discussed, inquired about or consulted an attorney or agency about a wage claim.” Therefore, in
order to prevail on this claim, Mr. Brunozzi must prove that: (1) he made, discussed, inquired
about, or consulted with an attorney or agency about a wage claim; and (2) that action led to his
termination.
Viewing the facts in the light most favorable to Mr. Brunozzi, it appears as though he
may have in fact discussed or inquired about a wage claim. In his deposition, Mr. Brunozzi states
that he complained about three times to Travis and Reese that he did not believe he was properly
being paid overtime. Brunozzi Depo., 80:3–23; 81:12–14. Absent controlling Oregon state case
law to the contrary, I would find this evidence sufficient to support a triable issue of fact
regarding whether Mr. Brunozzi made the type of wage claim protected by ORS 652.355.
However, there is controlling Oregon case law that says these types of complaints are not
sufficient to constitute a wage claim.
In De Bay v. Wild Oats Market, Inc., the plaintiff brought a wrongful termination claim
under ORS 652.355. 244 Or. App. 443 (2011). Plaintiff wrote a negative report regarding
potentially illegal actions taken by his employer’s executive management team. Id. at 447. As a
result of the report, the executive management team cut plaintiff’s bonus in half. Id. Plaintiff
threatened to complain to the board of directors regarding his bonus being improperly reduced.
9 – OPINION AND ORDER
Id at 447–448. The executive management team terminated plaintiff’s employment to prevent
him from informing the board. Id. The Oregon Court of Appeals held that this was not sufficient
to state a claim under ORS 652.355. Id. at 449. The court held that these facts established merely
that plaintiff had complained about his wages being cut, not that he had made or discussed a
wage claim. Id.
Applying this to our case, while Mr. Brunozzi certainly complained about his overtime
wages, like the plaintiff in De Bay, he did nothing more that could be interpreted as making,
discussing, or inquiring about a wage claim. Although Mr. Brunozzi cites a string of cases to
rebut the rule in De Bay, all of the cases he cites are either non-controlling federal court
interpretations of ORS 652.355, or they are Oregon cases that pre-date De Bay and are therefore
overruled or displaced by De Bay. Due to the controlling Oregon case law, I have no option other
than to grant CCI’s Motion for Summary Judgment [32] with regards to Mr. Brunozzi’s ORS
652.355 claim.
2.
ORS 659A.199
Mr. Brunozzi’s second wage retaliation theory is contained in ORS 659A.199. ORS
659A.199 states in relevant part that:
It is an unlawful employment practice for an employer to discharge, demote,
suspend or in any manner discriminate or retaliate against an employee with
regard to promotion, compensation or other terms, conditions or privileges of
employment for the reason that the employee has in good faith reported
information that the employee believes is evidence of a violation of a state or
federal law, rule or regulation.
CCI argues that Mr. Brunozzi cannot prove, under controlling Oregon case law, that he
properly reported anything to anyone.
In Lamson v. Crater Lake Motors, Inc., the Oregon Supreme Court held that to
“report” wrongdoing within the meaning of that term as used in ORS 659A.230 (which,
10 – OPINION AND ORDER
like ORS 659A.199, makes it an unlawful employment practice to take adverse actions
against an employee that “reported” violations of law), the “report” must be made to an
“entity with authority to take action to enforce” the law or rules alleged to have been
violated. 346 Or. 628, 639–40 (2009). Since Lamson, other Oregon courts have held that
to constitute a “report” for the purpose of whistleblower statutes, the employee must
actually communicate some information to an outside entity with authority to enforce the
law. In Roberts v. Oregon Mutual Insurance Company, the court of appeals cited Lamson
for the proposition that a “report” requires informing an entity or person with authority to
take action on the complaint. 242 Or. App. 474 (2011). The court relied in part on the
plain meaning of the term “report.” Roberts, 242 Or. App. at 482 (holding that the term
“report” as used in Oregon’s whistleblower statutes means “to make a charge of
misconduct against another,” or “to make known to the proper authorities: give
notification of” (quoting Webster’s Third New Int’l Dictionary 645 (unabridged Ed.
2002)); see also De Bay, 244 Or. App. at 449 (holding that “[i]nternal complaints,
without more, are normally insufficient under Oregon law” to constitute a “report”).
Mr. Brunozzi does not allege that he “reported” anything to anyone or threatened
to report anything to anyone. Mr. Brunozzi did not inform any entity with authority to
enforce Oregon or federal wage laws that he believed CCI was not properly paying him
overtime. Instead, he merely alleges that he complained to his direct supervisors Travis
and Reese that he did not believe he was properly being paid overtime. Brunozzi Depo.,
80:3–23; 81:12–14. These types of internal complaints are not sufficient to constitute the
type of report required for a claim under ORS 659A.199. I therefore grant CCI’s Motion
11 – OPINION AND ORDER
for Summary Judgment [32] with regards to Mr. Brunozzi’s ORS 659A.199 theory of
wage retaliation.
CONCLUSION
For the foregoing reasons, Mr. Brunozzi’s Motion for Partial Summary Judgment [41] is
DENIED and CCI’s Motion for Summary Judgment [32] is GRANTED. All of Mr. Brunozzi’s
claims are DISMISSED.
IT IS SO ORDERED.
DATED this
9th
day of July, 2015.
/s/ Michael W. Mosman ___
MICHAEL W. MOSMAN
United States District Judge
12 – OPINION AND ORDER
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