18th Annual Workplace Class Action Report - 2022 Edition

274 Annual Workplace Class Action Litigation Report: 2022 Edition discount fell under the "other similar payments" exemption. The Court held that Defendant treated employees who live on its properties like all other tenants except for the fact that it offered employees a discount. Further, employees who decided not to take advantage of the rent discount received no additional compensation, which demonstrated that the rent discount was not a substitute for employees’ regular rate of pay. Therefore, the Court reasoned that the discount on rent was offered not as part of regular compensation but as a benefit that employees could take or leave. The Court reasoned that the facts did not support the proposition that either party intended the rent discount to be compensation. The Court concluded that discounts offered by employers on employer-provided goods or services were excluded from an employee’s regular rate of pay as an "other similar payment," and the discount was thereby properly excluded from Plaintiff’s regular rate for the purpose of calculating overtime compensation. The Court therefore granted Defendant’s motion for summary judgment. Makaneole, et al. v. Solarworld Industries America, Inc., Case No. 14-CV-1528 (D. Ore. Oct. 21, 2021). Plaintiff filed a class action alleging that Defendants failed to pay wages for all time worked in violation of Oregon state wage & hour laws. The Court previously had granted Plaintiff’s motion for class certification. Subsequently, Plaintiff moved for partial summary judgment on the issue of liability and damages. The Court granted in part and denied in part the motion. Defendants maintained a time and attendance system in which employees were instructed to punch-in to an electronic timekeeping system at the beginning of their shifts, punch-out during meal breaks, punch-back-in at the conclusion of their meal breaks, and punch-out again at the end of their shifts. The system also was programmed to adjust punch times that were five minutes before or after the scheduled work shift. Plaintiff asserted that the five-minute rule failed to account to all work time because if an employee clocked-in five minutes early and began working immediately, it would not account for this time. The Court noted that the undisputed evidence showed that Defendants had a policy and practice of authorizing employee attendance of up to five minutes before and after shifts. The Court rejected Defendants’ argument that employees were not required to work during those five minutes, since they were also not forbidden to work. The Court thus found that Plaintiff’s motion for summary judgment should be granted as to the five-minute rule claims. However, the Court found that Plaintiff failed to establish that Defendants’ practice of requesting employees to take 30-minute meal breaks was in violation of any labor laws. The Court therefor granted in part and denied in part Plaintiff’s motion for summary judgment. McPhee, et al. v. Lowe ’ s Home Centers, 2021 U.S. App. LEXIS 18076 (4th Cir. June 17, 2021). Plaintiffs, a group of non-exempt, hourly employees, filed a collective action alleging that Defendant failed to include tax reform bonus payments and payments for hours volunteered for third-party non-profits from their "regular rate" for purposes of calculating overtime compensation in violation of the FLSA. The District Court granted Defendant’s motion to dismiss. On appeal, the Fourth Circuit affirmed the District Court’s ruling. Defendant announced that it would pay a one-time bonus of up to $1,000 to over 260,000 full- and part-time hourly employees in response to recent federal tax-reform legislation. The amount of the bonus was determined based on employees’ part-time or full-time status and length of service. Plaintiffs contended that the bonus should be counted as part of their regular pay for calculating overtime. In 2016, Defendant implemented a Give Back Time policy allowing employees to use time during their workweeks to volunteer with "any 501(c)(3) non-profit organization" they wished. Id . at *2-3. Employees could use approved Give Back Time at 100% of their hourly base rate of pay, but the policy expressly provided that Give Back Time was not used in calculating overtime hours. Employees were not required to volunteer, and if they chose to volunteer could do so for any charitable organization. Plaintiffs asserted that the District Court improperly held that the payments to them for hours worked pursuant to the Give Back Time program were excludable from the calculation of overtime purposes. The Fourth Circuit explained that under the FLSA, in order to be excluded, "the employer must retain discretion both as to the fact of payment and as to the amount until a time quite close to the end of the period for which the bonus is paid." Id . at *5. Further, "if the employer promises in advance to pay a bonus, he has abandoned his discretion with regard to it." Id . The Fourth Circuit ruled that the plain language of the regulation supported the conclusion that the payments at issue were excludable as either gifts or discretionary bonuses, as they were given as part of a special offer, not based on wages or hours, and not made under any agreement or contract. Id . at *5-6. The Fourth Circuit reasoned that Plaintiffs failed to plead any facts demonstrating that their volunteer work for third-party non-profits was for the primary benefit of Defendant, or that Defendant required participation. The Fourth Circuit thus concluded that Plaintiffs’ bare contentions that their service was "work" was insufficient