good morning your honour's my name is daniel johnson i represent along with my co counsel mark cody and toby marshall we represent the plaintiff appellant christy douglas and she can richard and about thirty three hundred others who have opted into this if of f l s a class action the fair labor standards act is probably the most basic protection that federal law offers to workers in this country and one of its principle bedrock purposes is to ensure that workers are paid for all hours worked just as you do this you can see that there is no circuit authority in the country for your position that is correct i think the best that all the circuit decisions are against you well that at most there are two circuit decisions that address the question presented ok you can see there's at least two yes we do and they're old and at least the businesses in those circuits relied on i can't answer that for sure but there is a there is a record of authority against high  there is some compunction not to create a circuit split where none exists it seems to me that's more important the older the circuit cases are that are against you why is that not a legitimate consideration for us in this case and that is we well enough alone do not create circuits what the move labor is not gone after the issue and why is it not a legitimate approach to this case it certainly is a legitimate consideration and appreciate that that is one of the challenges that we are the courts facing in deciding this case but it is not enough is what our position is and the reason it's not enough is because it's wrong and the reason it's wrong is because the federal the fairly or standards act it actually says that employers must pay employees not less than seven twenty five an hour and when the courts look they said yeah yeah it doesn't tell you how you whether you average that by the day or the week i mean why even do it by the day why not every single minute you know i'm saying as well right all it tells you is you need to get seven twenty five for hour but the statute doesn't answer your question well we think it certainly it certainly does at least partially because it uses an hourly measure but accepting the court's skepticism that turning to it wouldn't make house sense for it to use otherwise because different circumstances require different amount of hours so it wouldn't say you're entitled to you know two hundred eighty dollars a month because of course some people work twenty hours and some people are forty and some people work overtime it just again i can't quite see how the statute as written does any lifting for you well it may be that we need the interpret approach the interpretive rules to get there and we certainly have those on our side this is an extraordinarily liberal the liberal construction mandate in the statute is extraordinarily strong as a liberal construction applies to it's a good ability not as to its operation no no the liberal construction is that any time the courts interpret the meaning of any terms in the statute it should choose if there are more than there is one that more than one interpretation available it should choose the term the interpretation that favors the employees or does it say that playing off or just murphy's question when the question is whether it's applicable or not we have a lot of cases a that you tip to the employee and you look to a broad interpretation right well you just made a statement that is about as broad as a kitchen sink so where's the case i go to that says exactly that that we wouldn't vote well biggs versus wilson is a case from this court that decided our briefs about the work week the mention of work we can another provision and in that case judge reimer quoted from i believe supreme court cases saying that the statute should be liberally must be liberally construed to the furthest reaches consistent with can congress's intent to protect employees and that case was about whether these verses was and was about tend to look to the agency that has some expertise for guidance where of course there is no regulations but deal well hass it seems fairly consistently taken the position hourly measurement instead of weekly i don't think we have explicit authority from the partner of labor we certainly have as you mentioned klinghoffer the the department of labor has taken that position aren't sixty you're not aware of any other instance where deals deviated from its measurement well i wouldn't but i would say that there are a lot of regulations that the department of labor has promulgated that five addresses hours worked and you know it goes to great lengths to talk about when travel time must be compensable when waiting time must be compensable when pre and post shift work must be comp and all of those suggest that small increments of time must be compensable granted that often raises over time questions because when workers are already working forty hours then it's overtime but not always and that's why that's why we're here today i mean employees who don't work an overtime week but are working giving free labor to the employer ought to have a remedy under this very worker protective statute so it is an unusual set up admittedly that is a little bit difficult to understand the rationale for the application of it so one question i have is just for talking purposes even if you were not correct about the hourly calculation is to post to the weekly would there still be some kind of contract or implied contract claim that the employees would have as to the nature of their compensation or whether they're entitled overtime well there might be a contract claim that we haven't pursued vigorously because frankly the contract is you know it's a take it or leave a document that is written by the employer and to favor the  employer will or not also already have a problem with your class if you focus on the contract well i mean you know a docking like this really ought to be read the same for all employees it shouldn't be every employee has to say what you know what they thought at the time but that's a concern think it arguably is but it's not the point not a contract like that funk i mean troublesome and you know i read this thing and i'm trying to i can well imagine you know if three federal judges and all these lawyers are trying to figure out how these people are being paid why isn't there some potential contract well because it's the contract was written by the employer to favor the employer and i think one may argue that it's ambiguous as to whether this these rates these complicated rates that are you know varying each week according to this or that fit factor for each employee whether those rates should arced whether the contract is saying those rates apply to all of the time that you're on the clock or not they certainly say it does not it says clearly says it does not we say look that shouldn't matter under the fair labor standards act so it but the bottom line is if you get to the end of the week and you add up the number of hours and true up after i think it's every pay period so make they could be making more but they're making at least seventy seven dollars and twenty five cents yeah based on the actual hours that they put in right and what's undisputed is that the earning s that are being that are you being used in that calculation are earned in some hours and zero is earned in some other hours and so they have to average it they have to take pay for earned in this at the end of the day for all the hours of work they got seven dollars twenty so yes you're warm and that's why you know if the work week averaging rule applies even to hourly workers then they have no remedy under the fair labor standards act for not being paid for some hours or anything you say wait a second what does that mean if they're not being paid for some hours because i thought you said that they are getting seven twenty five hour well i thought your question was at the end of the week if you redo the math and average it over all the hour yes yes that's right but what i'm saying is the worker is there working and watching her time and doing her tasks and she is earning money when she picks up the phone and talks to this customer and she stops earning money when she puts it down so what they're doing by doing this averaging because this is an hourly employee an employee that earns money by the time she works they're taking that money she earned while she was on the phone and saying we're going to have it over the time that you're not not earning money to make and make sure that it averages at  least seven twenty five and then we're good it's a call good approach and you can't do that under a statute that is designed to protect workers and to protect their right to the minimum wage are you suggesting that the way you measure this is that  for every hour throughout a week where there's any unproductive time that you total up all that productive time unproductive time for the week problem is that by you're doing it in that way you're committing the very sin that you're saying the defendant is in that is you're not looking at it hour by hour by hour are you going to the end of the week in and bundling everything well you know no i don't believe so and i think that it's using this idea of per hour taking it a little bit further than than we intended i mean certainly a worker is entitle be paid for less than an hour of work under the minimum wage act if he works forty five minutes he's entitled to be paid for that under the minimum wage at one standard but if i look at an eight hour day and i see in the first hour that the affectively were paid nine dollars an hour even with the unproductive time then for that hour they're fully paid then i go to the second hour of that day but i guess the answer to that is they don't do that they forty hours they've worked twenty hours how does that get calculated you're asking how they calculate to you and how does that fit into your argument well you know what happens what are you mean is that in any given work day the employee has to do noncompetitive and compensable work they have to get to their you know get their computer started and they've got to read announcements and they've got to wait for a call then they take a call and they start making money then they put down the phone and they got to do some after call work some paperwork for that call and say stop making money and then they got to pick up another call and they start making money every single one of those activities is tracked by the second xerox so if it was a twenty hour week i think it would work exactly the same way as a forty or fifty hour week they look back at the pay that they would get seven twenty five an hour at least them they would add what they call subsidy pay if necessary to bring it up to an average of seven twenty five an hour yeah i mean it was so let me just asking you know what sort of win the battle lose the war of let's just say you're right so then they just change their home and i mean i'm just saying what it what does all this mean up because if i was there x or some other business and you say well we're not going to count that way then i just simply revise how i lay it out i mean doesn't come out the same in the wash so to speak well i don't know you know i think they're probably sophisticated enough to figure out a way to make it come out the washing away that's not illegal yes but this is the point they're telling these agents who are very low status workers they are in a take it or leave it situation for jobs and they're telling these workers we're going to pay you a variable rate per minute for your productive work here they're going to we're going to pay you between one thousand and twenty three cents a minute for this work and so they were in these workers these employees are trying to make as much as they can honestly so they're trying to do this for their cause as fast as they can get and stay on the phone as much as calculate so that's why i asked the contract question because when you read all these complicated things that get paid for this and how many cents a minute and all that you're kind of left with your head spinning well that's right and you your i mean it may be that that's a claim that we should pursue for these of these people but if the fair labor standards act is read is interpreted in favor of employees let me ask you this so if you end up not prevailing on the minimum wage provision claim how does that affect your overtime playing you know you know we have some arguments about how it's really a contract questions a contract claim and i don't think under the minimum the fair labor standards act you know i think our overtime affirmed i wanted to note a couple of things in relation to your questions and judge murphy you focused on the idea that they're trying to jumble all of this together at the end of the work and committing the same sin that they're arguing the xerox isn't it's exactly right the key thing in this case is that if you argue that if you yes you're wrong we argued minutes past five in our brief that they failed to show a single discrete hour where they ever showed that lesson seven twenty five was paid if you added up the production minutes in any discrete hour and so even if you accepted an hourly concept that they argue from door side hour by hour approach and ironically later in the case the class was decertified because the court realised that if you had to look at every hour in dissect every hour to figure out whether or not you met minimum wage you certainly couldn't do that on a class basis and so there is really no with warty that to suggest that this should be pursued on a broad basis and just murphy that goes to your other question about the courts of appeals and there are actually five courts of appeals point that seems to be a reason to affirm but if the decision below and use wrong it doesn't matter how many circuits if you look at it in here's the problem i'm having  addressed why not it seems to me that that's a more natural reading of the minimum wage provision when you couple that with the overtime provision because the minimum wage provision so clearly talks about hourly as the unit of measurement and the overtime provision talks about a weekly rate so when you look at the two together it seems to me if congress wanted the weekly rate to be the measuring stick for the minimum wage provision they could have stuck it in supreme court cases and the u s department of labor in one thousand nine hundred forty the u s department of labor looked at this in the key thing in the statute when it was adopted as it didn't say per hour it says that a rate of x amount per hour rate as a measuring criteria rate is not a statement that you have to pay for a specific hour but it has to be at a rate in the us department of labor looked at this in a nine shoot guidance stating that they believed it could be interpreted multiple ways but the statute was designed to guarantee a minimum amount of compensation in other words a base amount of earnings not designed to look at each hour in the department said well people normally are paid by the week and it's reasonable to look at this in terms of are you assuring sufficient base compensation a day's pay for a fair day's work is the other underlying going i'm i'm looking at this a b c plan payment and it's so complicated every time i think i've got it i've got it now i understand it then the next day and i have to look at it over again just to figure out like what what it's designed to do here but is it fair to say that at bottom the a b c plan is really an hourly compensation system and the minute it's really just fractions of an feels like i'm going to be paid per hour even though it's broken up into fractions of the hour by the minute or how is that wrong or your honor i think that there are a number of reasons why that's not accurate i would also kno even if it it was an hourly system the us department of labor's interpreted the minimum wage provisions in in the terp of handbook in thirty b o two states that you still apply a work week standard to an hourly approach and so their departments longstanding position is you apply work week even to an hourly system but is not hourly for a number of reasons and to start with i'd simply note there isn't an hourly rate based on the amount of productivity as well as quality as well as sufficiency and if we did this in terms of the number of sales or the number of calls or something else or the number of apples picked we wouldn't have these created a production minute and detailed in a rack or a production minute isn't something that xerox created is something recognized in the call center industry is a standard of production  a measuring stick instead of weekly because the bottom line is going with the weekly approach pays the employee less than going with the hourly approach right going with that weekly protests council explain i'm not going to get it right because it's so complicated but there are some hours that you get zero for and then other hours can make up for that no your honor there aren't even result is that the dollar amount is less if you go with that weekly rate their argument is that their hours where somebody gets nothing but there's no evidence of that what there are incremental periods of time during an hour when someone isn't in  status which is on an incoming call or on hold or doing thirty seconds of follow up on that call and those times are that amount of time does not produce or generate any income at the same time there is no evidence of any particular hour that wasn't paid at least seven twenty five an hour and in fact the design of the plan in part of what you the court should look at i the fallback of someone shows up and doesn't work for an entire week their paid subsidy paid for the week of the plan that i would watch and what happens if you only work half a week and then you quit or you quit after two and a half weeks there they're paid nine o four per hour entice sheaffer richard to plan for every hour that they work and so the idea that somehow they're underpaid something more didn't make the minimum wage workers a made gave them an opportunity to earn something more based on their productivity based on the quality of their work in fact these two individuals always what earned more that hears the question because it is a bit of a model and this program is is there any evidence in the record if you had looked at this on an hourly basis that there would be an employee who was not paid the minimum wage or that would have made more than the employee actually made going to do question well your honor if they were paid on an hourly wage the question is what would the hourly wage be they were guaranteed under the plan for tie she could richard two thousand and twelve for instance she was guaranteed of getting at least nine zero four for every hour end of the day do they all make seven twenty five or more and the answer is yes when you do it by the week is there a situation if you don't do it by the week you do it under your calculation that they would not alternately be paid seven twenty five an hour for that hour or that they would actually make  where does this matter what will your honor i would say on summary judgment they have the burden of proof to establish a wage claim we've demonstrated put in evidence that people were paid above the minimum wage they have not in even without any evidence they have the obligation to come in with at least one hour where someone wasn't paid at least seven twenty five and there's no evidence in the record of anyone who was not paid seventy of these two individuals ever being having a discreet hour so this isn't part of an hour where they were cooling their heels so to speak waiting for a call and off a call where they're not compensated and therefore for that hour even though normally they would make nine minutes at nine o four an hour that they wouldn't make seven twenty five for that hour if you were to analyze minute by minute or hour right for any particular hour yes that could happen but there's no evidence of that well wait a minute if if if you're sitting at your desk seven hours among the phone continuously the last  spinning cleaning up my gas you know it's all non productive time as long as the end of the week i got paid seven twenty five of for all average hours that last hour if you look at it by the hour i was paid nothing but it's ok because at the end of the week i got seven in a quarter of them isn't that well if there was evidence of that our yes it is complicated plan isn't that a way it could have worked if if if there was evidence of that out where there's no evidence that they sat for an hour and did nothing well no we're talking about a complicated plan that could have all kinds of different hypotheticals of what happens in what i want to know is the hypothetical i said out even though may not in the record that could happen if if this was under six hundred hypothetically that could happen but this is on summary judgment is saying they're off and they haven't shown us any hours or minutes where that ends up being the case they have not shown an hour where there were so many unpaid minutes that the hour would fall below seven twenty clear any way you calculate it were at the end of a week if there were at least seven twenty five xerox wins based on the holdings of five cour of appeals based on the court if you want to look at it hourly or weekly is long as they get the seven twenty five at the end of the day it doesn't matter production minute is a piece a unit of work that's what xerox was paid for by of arisan rise and paid for the number of production minutes that were produced and so it's more and seventy seven seventy eight three eighteen then is applicable one year so that three section three eighteen talks about other compensation the first part of that provision isn't limited to piece rate on the example below  piece rate plan but i believe section three eight hundred see applies regardless of the form of compensation would also note mr johnson noted that there are other people involved in this case the other people in this case we put in the other plans it's production minute for these particular individuals that's why they picked them i think but there are other plans that cover calls and documents and faxes in hearings and all sorts of other things that aren't measured by time that all plug into the same plan are they part of the class yes ok but not these individual but not these two individuals i mean and so the design of the plan is to be an incentive piece rate pla although there is a distance it too to keep people on the phone longer the longer run keep them on the phone the more you going to make correct which means you want them to produce more understood their three components their day quality component that's are the people happy in their surveyed for that the second component see efficiency component and they had a targeted amount of time that they were to post to be on calls if they were under four hundred eighty five seconds that got them a higher rate than if they went over four hundred eighty five seconds because they didn't want them on a phone call for thirty minutes or an hour because customers then are unhappy so in this is specified in the rise in contract again varieties unspecified how long they want so the ideal call is about eight minutes and if they go beyond that then their rate drops and so there are three there are different centers here you want to make customers happy you want to make sure that you don't make the calls too long and you want to be honest many incoming calls as possible again you'd say this is not copy so what you're telling me now something and then is that even on a single telephone call while you have them on the line there's a different hourly rate retroactively what you do is you look at how many the average handle time is how the average number amount of time you spend on cause and if it stays below four hundred eighty five seconds in one period then you will get paid a certain rate that may be different than if it goes above and it's done by work weeks rather then by hour or by call but it's a multi faceted calculation of what they earn and it looks a quality in that's the efficiency component and then the productivity is are you on taking incoming calls plaintiffs have shown no situation where even if you do it the way you'd like to do it they were underpaid so i mean maybe you can show us where in the record we would look sure there support your view or his well yeah in our opening  we outlined exactly how the two plaintiffs pay during a given work week did ended up having unpaid that and those are actual hours and times that they worked as a hypothetical well these are actors substituted the more well we took the complicated represent they have behind the scenes which show you exactly how minutes ninety minutes were deemed productive and compensated at what rate and how many minutes were were on the clock and not paid so it's all right there and you know this idea that i mean no court has ever said that an employee has to prove a discreet hour that occurred between eight fifteen and nine fifteen in order to make a case for a minimum wage claim that's the no court's ever said that we have shown right here time unpaid time i mean the tennessee coal case where i think was all that honest down it's all comes down to when in what increment you aggregate that well yeah but there's no question in the law that you know being a contract potential contract violation yeah but again we're still looking at this document that you whole hadria is completely a mess i mean it's got all these varying rates and all these you know unclear ways that they're going to apply the rates to what time i mean it says these rates are going to apply to all of your work time and yet they don't they don't apply to all work time and we claim before your honor's is definitely only this minimum wage claim and that the basis for it is that it is an hourly plan and they don't pay for all hours worked why does it have to be the said you may route one way or another but the point is we're not advocating a single monolithic measure iraj we're saying hourly workers earn the right to minimum wage on an hourly basis in adair you have people paid by weekly salary we don't contend that adair was decided wrong most people can't have minimum wage decided on an hourly basis they're paid by the week the same with piece rate workers how you know if if you're paid soley by the piece work and you're not and you're you're engaged in piece work you can't measure that that that work by the on an hourly basis but when you're an hourly employee you certainly should under this statute measure the right woman a day they claim it's not really an hourly based and right so then you're back to something that's even less complicated than the statute and that is what is this plan pending before another panel here he did say this is an hourly pay plan it's the same plan the same employer all right thank you thank you well certainly presented us with a puzzle from both sides we appreciate the