Court Opinion

ID: 6927492
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:32:04.706793+00
Date Added: 2024-06-11T16:06:59.009338
License: Public Domain

TROTT, Circuit Judge,
dissenting and concurring:
As I write this opinion, major cities and towns in four Midwestern states are under water. From Montevideo, Minnesota through Minneapolis and St. Paul, from Du-buque, Des Moines, and Davenport, Iowa through Hannibal and St. Louis, Missouri, the waters of the Mississippi River and its tributaries have disrupted the lives of almost everyone living and working in the area. According to.the Associated Press, 250,000 people in Des Moines are without drinking water, and 30,000 people have been flooded out of their homes in Iowa, Illinois, and Missouri. Businesses everywhere are closed. The interruption to everyday life caused by this natural disaster is similar in many respects to recent hurricanes in Florida, earthquakes in California, and drought in South Carolina: virtually everything stops except heroic efforts to survive and recover. I use this to illustrate the fact that unpredictable forces beyond anyone’s control frequently invade our lives and disrupt the orderly course of everything, including the normal operation of business and commerce. These forces do not respect the calendar, payday, or the Fair Labor Standards Act. On a lesser scale, people get sick, customers declare bankruptcy, computers crash, the mail is sometimes late, and yes, states required to live by rules designed to ensure fiscal responsibility prohibit by law the release of paychecks until a budget is passed. Even federal employees are not always paid on payday. Meeting a payroll on time is not always easy or possible.
The real world notwithstanding, we now impose from the cocoon of a federal appeals court a new peril on people struggling to provide jobs for others: pay your employees before the clock strikes midnight, or you just bought yourself a lawsuit in federal court. Floods and the like provide the rock, we now provide the hard place.
Congress has not spoken on this precise issue. All the law says is that employers shall pay their employees the minimum wage, period. Congress has not uttered a word about when this payment must be made. Yet, driven by a search for a “bright line,” we read into the law an impractical requirement that creates a cause of action against an employer at midnight plus one second after the expiration of payday. The majority’s holding says to employers, we don’t care why you were late, we don’t care what your reason was, the only issue now is whether liquidated damages shall be awarded. Judge Rymer says this rule does not unfairly penalize employers “who happen to be late in paying their employees.” I thoroughly disagree. So will many employers. I do not dispute the idea that payment must be made in a reasonable time given the circumstances, but I do disagree with the notion *1545that payment must be made on payday, no excuses accepted. Surely most employees of flood-ravaged employers would not take them to court to take advantage of their instant cause of action. Why? Because they too would recognize the unfairness of requiring someone to pay on time when they reasonably cannot. But it makes no sense to leave all employees at the mercy of the good will of their employers. The instant case demonstrates what can happen. Labor unrest is not uncommon.
In this respect, I believe the district court fashioned a workable rule for determining when a violation of the FLSA occurs, a rule I would adopt for this Circuit:
The requirement of prompt payment should not be construed to impose strict liability on an employer for every delay in payment, however slight or for whatever reason. Indeed, such a result would threaten to bring about the financial ruin of many employers, seriously impair the capital resources of many others, provide a windfall to employees, and burden the court with excessive and needless litigation, all in direct contravention to the expressed intent of Congress. See 29 U.S.C. § 251(a)(1), (4) and (7). Instead, it must be interpreted to require payment which is reasonably prompt under the totality of the circumstances in the individual case. This interpretation is consistent with the long-established customs, practices, and contracts between employees and employers which Congress sought to revive in enacting the amendment to the statute. See Id. at § 251(a). For it has long been recognized that in the absence of a provision indicating that time is of the essence, a party is entitled reasonable time to perform. John D. Calamari & Joseph M. Perillo, Contracts § 11-22 at 410. (2nd ed. 1977).
Judge Rymer relies on “logic,” but logic used in this sense means judgment, and judgment means reason and choice. I respectfully believe she has made the wrong choice. We don’t need bright lines for everything. Sometimes they work mischief. It is ironic that we impose this bright line on employers at a time when most federal judges are publicly railing against the rigidity of federal sentencing guidelines. There is a place for bright lines, but this is not it. This is essentially a policy choice. Because Congress has left it to us, I would choose a more comprehensive approach that recognizes the problems of the real world.
Those of us who live surrounded by lawsuits may not be scared of them, but well-meaning and conscientious employers — including sovereign states and their political subdivisions — are not so sanguine about mandatory costs and attorneys’ fees, See 29 U.S.C. § 216(b), and the hassle of being hauled into court. For everyone, being a defendant in federal court is a disaster of its own kind. To the detriment of all of us, the litigation explosion continues.
The parade of litigation horribles conjured up by the majority to discredit reasonable flexibility is simply false. Trial courts and judges are well equipped to deal with yielding rules. We do it all the time. For example, the statute of limitations clock does not start to tick against an injured employee eligible for a disability award under the Longshoremen’s and Harbor Workers Compensation Act, 33 U.S.C. § 901 et seq., until the employee becomes “aware of the full character, extent and impact of the harm done to him.” Todd Shipyards v. Allan, 666 F.2d 399, 401 (9th Cir.) (emphasis omitted), cert. denied, 459 U.S. 1034, 103 S.Ct. 444, 74 L.Ed.2d 600 (1982). No bright line here. This is just a matter of fairness and common sense. See also Abel v. Director, OWCP, 932 F.2d 819 (9th Cir.1991). Ironically, one of the cases cited by the majority cuts against its reasoning. In Aronsen v. Crown Zellerbach, 662 F.2d 584 (9th Cir.1981), we rejected the use of a bright-line statute of limitations formula in favor of a test based on when an employee “knows or should know that an unlawful employment practice has been committed.” Id. at 593. We said, “Judicial review in each case cannot be facilitated by bright-line approaches because, as the court has indicated, such formulae tend to obscure and even distort congressional intent.” Id. The only congressional intent I can readily discern from the FLSA is the intent to insure the payment of minimum wages, not *1546that payment be made on payday come hell or high water, or else. I quote the Supreme Court:
The legislative history of the Fair Labor Standards Act shows an intent on the part of Congress to protect certain groups of the population from substandard wages and excessive hours which endangered the national health and well-being and the free flow of goods in interstate commerce. The statute was a recognition of the fact that due to the unequal bargaining power as between employer and employee, certain segments of the population required Federal compulsory legislation to prevent private contracts on their part which endangered national health and efficiency and as a result the free movement of goods in interstate commerce.
Brooklyn Savings Bank v. O’Neil, 324 U.S. 697, 706-07, 65 S.Ct. 895, 902, 89 L.Ed. 1296 (1945) (footnotes omitted).
I disagree with the majority that the district court’s test would require us to “guess” when late payment becomes nonpayment and when the statute of limitations starts to run. Trial courts would no more “guess” at this than anything else they decide. I have no doubt that we easily could apply the district court’s test in FLSA cases without damaging the purpose of Congress in enacting this law.
The majority’s holding also undercuts 29 U.S.C. § 260, which allows an employer to escape the clutches of liquidated damages “if the employer shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the [FLSA]. Id. (emphasis added). If payment must be made on payday, period, no excuses allowed, how could a flooded-out employer ever show he had reasonable grounds to believe his failure to pay on payday “was not a violation” of the Act? The majority’s failure to appreciate the ramifications of its bright-line rule on this issue and likewise to provide guidance to district courts is lamentable.
So, to employers in the Ninth Circuit, beware. No matter what your excuse, good or not, the next earthquake, fire, drought, death or illness, bankruptcy, flood, computer failure, or fiscal crisis may land you without a defense in federal court, especially if you are not on friendly terms with your employees.
Nevertheless, I concur in the outcome in this case because California understandably passed up its opportunity to demonstrate to the district court that its delay in payment was reasonable, preferring instead to argue that the statute only prohibits nonpayment, not late payment. I characterize California’s litigation position as “understandable” because it is true that the statute we construe says absolutely nothing about the timing of payments. Thus, although I disagree with the majority’s draconian rule, I concur in the result of this appeal.