Court Opinion

ID: 4211656
Source: CourtListenerOpinion
Date Created: 2017-10-13 17:00:31.223026+00
Date Added: 2024-06-11T14:40:41.749983
License: Public Domain

PRECEDENTIAL

          UNITED STATES COURT OF APPEALS
               FOR THE THIRD CIRCUIT
                    _____________

                       No. 16-2685
                      _____________

    SECRETARY UNITED STATES DEPARTMENT OF
                   LABOR

                             v.

        AMERICAN FUTURE SYSTEMS, INC. d/b/a
      PROGRESSIVE BUSINESS PUBLICATIONS, a
     Corporation; EDWARD SATELL, Individually and as
        President of the above referenced Corporation,

                                Appellants
                      _____________

     APPEAL FROM THE UNITED STATES DISTRICT
                           COURT
    FOR THE EASTERN DISTRICT OF PENNSYLVANIA
                     (No. 2-12-cv-06171)
         District Judge: Honorable Mark A. Kearney1
                        _____________

                         Argued
                     February 9, 2017
                      ____________

1
  The District Court opinion was authored by Judge Restrepo
before he was appointed to this Court. The case was
thereafter transferred to Judge Kearney.
  Before: McKEE, RENDELL, FUENTES, Circuit Judges.

            (Opinion Filed: October 13, 2017)
                    ______________

Alfred W. Putnam, Jr., Esq. [ARGUED]
Dorothy A. Hickok, Esq.
Drinker Biddle & Reath
18th & Cherry Streets
One Logan Square, Suite 2000
Philadelphia, PA 19103

Sarah E. Bouchard, Esq.
Morgan, Lewis & Bockius
1701 Market Street
Philadelphia, PA 19103

Lincoln O. Bisbee, Esq.
Morgan, Lewis & Bockius
1111 Pennsylvania Avenue, N.W.
Suite 800 North
Washington, DC 20004

      Attorneys for Appellants

M. Patricia Smith, Esq.
Jennifer S. Brand, Esq.
Paul L. Frieden, Esq.
Rachel Goldberg, Esq. [ARGUED]
Office of the Solicitor
U.S. Department of Labor
200 Constitute Avenue, N.W.
Room N-2716
Washington, DC 20210

      Attorneys for Appellee

                               2
Jonathan S. Krause, Esq.
Klehr Harrison Harvey Branzburg
1835 Market Street
Suite 1400
Philadelphia, PA 19103

        Attorney for Amicus-Appellant

Margaret W. Williamson, Esq.
A Better Balance
80 Maiden Lane
Suite 606
New York, NY 10038

         Attorney for Amicus-Appellee

                     ______________

                OPINION OF THE COURT
                    ______________

McKEE, Circuit Judge.

                   I. INTRODUCTION

       We are asked to decide whether the Fair Labor
Standards Act requires employers to compensate employees
for breaks of 20 minutes or less during which they are logged
off of their computers and free of any work related duties.
For the reasons set forth below, we conclude that the Fair
Labor Standards Act does require employers to compensate
employees for all rest breaks of twenty minutes or less.
Accordingly, we will affirm the District Court’s decision.

       II. FACTS AND PROCEDURAL HISTORY

       American Future Systems, d/b/a Progressive Business
Publications, publishes and distributes business publications
and sells them through its sales representatives. Edward
Satell is the President, CEO, and owner of the company.

                             3
Sales representatives are paid an hourly wage and receive
bonuses based on the number of sales per hour while they are
logged onto the computer at their workstation. They also
receive extra compensation if they maintain a certain sales-
per-hour level over a given two-week period.

       Progressive previously had a policy that gave
employees two fifteen-minute paid breaks per day. In 2009,
Progressive changed its policy by eliminating paid breaks but
allowing employees to log off of their computers at any time.
However, employees are only paid for time they are logged
on. Progressive refers to this as “flexible time” or “flex time”
and explains that it “arises out of an employer’s policy that
maximizes its employees’ ability to take breaks from work at
any time, for any reason, and for any duration.”2

        Furthermore, under this policy, every two weeks, sales
representatives estimate the total number of hours that they
expect to work during the upcoming two-week pay period.
They are subject to discipline, including termination, for
failing to work the number of hours they commit to.3
Progressive also sends representatives home for the day if
their sales are not high enough4 and sets fixed work schedules
or daily requirements for representatives when that is deemed
necessary.5

        Apart from those requirements, representatives can
decide when they will work between the hours of 8:30 AM
and 5:00 PM from Monday to Friday, so long as they do not
work more than forty hours each week.6 As noted above,
during the work day, they can log off of their computers at
any time, for any reason, and for any length of time and may
leave the office when they are logged off. Employees choose
their start and end time and can take as many breaks as they
please. However, Progressive only pays sales representatives

2
  Appellant’s Br. at 4.
3
  JA-201-06, 401, 479, 516, 525-31, 939-43, 1059, 1082,
1252.
4
  JA-1064, 1083, 1093, 1220, 1250.
5
  JA-940-47.
6
  JA-523.

                               4
for time they are logged off of their computers if they are
logged off for less than ninety seconds. This includes time
they are logged off to use the bathroom or get coffee. The
policy also applies to any break an employee may decide to
take after a particularly difficult sales call to get ready for the
next call. On average, representatives are each paid for just
over five hours per day at the federal minimum wage of $7.25
per hour.7

       The Secretary filed suit against Progressive and Satell
alleging that they violated the FLSA by failing to pay the
federal minimum wage to employees subject to this policy,
and by failing to maintain mandatory time records.8 The
Secretary of Labor argued that this policy violated section 6
of the Fair Labor Standards Act9 “by failing to compensate . .
. sales representative employees for break[s] of twenty
minutes or less . . . .”10 The Secretary sought to recover
unpaid compensation owed to Progressive’s employees, an
equal amount in liquidated damages, and a permanent
injunction enjoining Progressive from committing future
violations.11

        Progressive moved for summary judgment, and the
Secretary moved for partial summary judgment on select
issues, including its minimum wage claim and claim for
liquidated damages. The District Court denied Progressive’s
motion and granted the Secretary’s motion in part.12 In doing
so, the court noted that the Department of Labor (“DOL”) has

7
  JA-847.
8
  29 U.S.C. §§ 206, 211(c).
9
  29 U.S.C. § 206.
10
   Appellee’s Br. at 2-3.
11
   29 U.S.C. §§ 216(c), 217.
12
   The Secretary moved for summary judgment on FLSA
minimum wage liability, FLSA recordkeeping liability, and
Satell’s role as an employer under the FLSA, liquidated
damages, and willfulness, but not on the actual damages
calculation. The District Court denied the Secretary’s motion
with respect to willfulness of the violations. Perez v. Am.
Future Sys., Inc., No. 12-6171, 2015 WL 8973055, at *1 n.1
(E.D. Pa. Dec. 16, 2015).

                                5
consistently applied the Wage and Hour Division’s
(“WHD”)13 interpretation of the FLSA under 29 C.F.R. §
785.18 to this kind of break. That regulation provides that:

        Rest periods of short duration, running from 5
        minutes to about 20 minutes, are common in
        industry. They promote the efficiency of the
        employee and are customarily paid for as
        working time. They must be counted as hours
        worked. Compensable time of rest periods may
        not be offset against other working time such as
        compensable waiting time or on-call time.14

The District Court afforded the Secretary’s interpretation of
section 785.18 substantial deference.15 It agreed that section
785.18 created a bright-line rule and concluded that
Progressive therefore violated the FLSA by failing to pay its
employees for rest breaks of twenty minutes or less. This
appeal followed.

     III. JURISDICTION AND STANDARD OF REVIEW

        The District Court had jurisdiction under 28 U.S.C. §
1331. We exercise jurisdiction pursuant to 28 U.S.C. § 1291.
We review a grant of summary judgment de novo.16
Summary judgment is appropriate where the moving party is
entitled to judgment as a matter of law, and there is no
genuine dispute as to any material fact.17 In reviewing a
motion for summary judgment, we view the evidence in the
light most favorable to the non-moving party.18 We refrain

13
   Congress delegated authority to WHD to administer the
FLSA. See 29 U.S.C. § 204(a) (“There is created in the
Department of Labor a Wage and Hour Division which shall
be under the direction of an Administrator, to be known as the
Administrator of the Wage and Hour Division . . . .”).
14
   29 C.F.R. § 785.18.
15
   See Skidmore v. Swift Co., 323 U.S. 134 (1944).
16
   Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 265 (3d
Cir. 2014).
17
   See, e.g., Hampton v. Borough of Tinton Falls Police
Dep’t, 98 F.3d 107, 112 (3d Cir. 1996).
18
   Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986).

                               6
from making credibility determinations or weighing the
evidence.19

        We review the District Court’s decision to deny or
limit liquidated damages for abuse of discretion.20 Although
we must apply the clearly erroneous standard of Federal Rule
of Civil Procedure 52(a) when reviewing the District Court’s
findings of fact “which underlie its ‘good faith’ and
‘reasonableness’ determinations . . . and the finding of
subjective good faith itself, we exercise plenary review of the
[D]istrict [C]ourt’s legal conclusion that [a party] had
‘reasonable grounds for believing’ that its violative conduct
was not a violation of the FLSA.”21

                     IV. DISCUSSION

        Progressive advances three arguments on appeal: (1)
that time spent logged off under its flexible break policy
categorically does not constitute work; (2) that the District
Court erred in finding that WHD’s interpretive regulation on
breaks less than twenty minutes long, 29 C.F.R § 785.18, is
entitled to substantial deference; and (3) that the District
Court erred in adopting the bright-line rule embodied in 29
C.F.R. § 785.18 rather than using a fact-specific analysis. We
do not find any of these arguments persuasive.

               A. Applicability of the FLSA

      Progressive first argues that under its policy, because
employees are basically free to do anything they choose and
can even leave the job site when logged off of their
computers, the time when employees are logged off of their
computers does not constitute “work,” and therefore, the
FLSA does not apply. We disagree.

19
   Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
20
Mart. v. Cooper Elec. Supply Co., 940 F.2d 896, 908 (3d
Cir. 1991).
21
   Id. (citation omitted).

                              7
       The FLSA governs compensation for “hours
worked.”22 But it does not define “work.”23 It is well
established that some breaks constitute “hours worked” under
the FLSA.24 Thus, hours worked is not limited to the time an
employee actually performs his or her job duties.25 The
FLSA does not require employers to provide their employees
with breaks. However, if an employer chooses to provide
short breaks of five to twenty minutes, the employer is
required to compensate employees for such breaks as hours
worked.26

       Progressive argues that it does not have a “break
policy” per se. Rather, it claims that the “flexible time”
policy described above, which allows employees to do
whatever they wish and be wherever they want for periods of
twenty minutes or less while logged off of their computers,
does not constitute “hours worked.”            According to
Progressive, since the FLSA does not require it to provide
breaks, it does not need to compensate its employees for these
periods.

       Although Progressive’s position may have some
superficial appeal, it cannot withstand scrutiny. According to
Progressive, if an employer has a policy allowing employees
to log off and leave their work stations at any time, for any
reason, it does not have to compensate employees if they take
a break. Progressive does not deny that it permits employees
to log off; it just refuses to call those time periods “breaks.”
This misses the point of the FLSA’s regulatory scheme. Its
protections      cannot     be     negated     by    employers’
characterizations that deprive employees of rights they are

22
   29 C.F.R. § 778.224 (“Under the Act an employee must be
compensated for all hours worked.”).
23
   IBP, Inc. v. Alvarez, 546 U.S. 21, 25 (2005).
24
   See Smiley v. E.I. Dupont De Nemours & Co., 839 F.3d
325, 331 (3d Cir. 2016).
25
   See Armour & Co. v. Wantock, 323 U.S. 126, 133-34
(1944).
26
   See 29 C.F.R. § 785.18.

                               8
entitled to under the FLSA.27 The “log off” times are clearly
“breaks” to which the FLSA applies.

       The policy that Progressive refers to as “flexible time”
forces employees to choose between such basic necessities as
going to the bathroom or getting paid unless the employee
can sprint from computer to bathroom, relieve him or herself
while there, and then sprint back to his or her computer in less
than ninety seconds. If the employee can somehow manage
to do that, he or she will be paid for the intervening period. If
the employee requires more than ninety seconds to get to the
bathroom and back, the employee will not be paid for the
period logged off of, and away from, the employee’s
computer. That result is absolutely contrary to the FLSA.28

27
   See Amicus Curiae A Better Balance and National
Employment Law Project, Inc. Br. at 4 (“The FLSA was
passed to ‘lessen, so far as seemed then practicable, the
distribution in commerce of goods produced under subnormal
labor conditions,’ Rutherford Food Corp. v. McComb, 331
U.S. 722, 727 (1947), by ‘insuring to all our able-bodied
working men and women a fair day’s pay for a fair day’s
work.’ See A.H. Phillips, Inc. v. Walling, 324 U.S. 490, 493
(1945) (quoting Message of the President to Congress, May
24, 1937)”).
28
   Indeed, unless he or she has access to something akin to a
Portkey, if an employee is sufficiently athletic to get from
workstation to bathroom, relieve himself or herself, wash his
or her hands, and return to the workstation in ninety seconds,
it is highly unlikely that the employee would be working at
Progressive for a minimum wage rather than playing for a
professional sports franchise or advertising a brand of athletic
footwear. Moreover, given the time restraints imposed by
certain biological necessities beyond the employee’s control,
we doubt an employee could manage this feat even if he or
she had access to a Portkey. See J.K. Rowling, Harry Potter
and the Goblet of Fire 70 (Scholastic Inc. 1st ed. 2000) (In the
Harry Potter series, Portkeys are “objects that are used to
transport wizards from one spot to another . . . .”).

                               9
The FLSA is a “humanitarian and remedial legislation” and
“has been liberally interpreted.”29

    Although employers need not have any break policy, we
refuse to hold that the FLSA allows employers to circumvent
its remedial mandates by disguising a break policy as
“flexible time,” as Progressive is seeking to do here.
Accordingly, we find that Progressive does have a break
policy, and thus, the FLSA applies. We therefore must
determine if this break policy is contrary to the FLSA.

                    B. Skidmore Deference

       The FLSA is silent as to the specific requirements
regarding “break” periods, but WHD’s interpretation is clear.
The parties agreed at the District Court level that Skidmore30
would determine the level of deference owed to WHD’s
interpretation in section 785.18. Progressive argues that the
District Court overstated this level of deference. It contends
that WHD’s interpretation “do[es] not have the force of
law.”31 Instead, the regulations are merely “positions [the
DOL] will take in the enforcement of the Act.”32 While it is
true that these interpretations are not technically “law,” the
regulations nevertheless “constitute a body of experience and

29
   Brock v. Richardson, 812 F.2d 121, 123 (3d Cir. 1987)
(citing Tennessee Coal, Iron & R. Co. v. Muscoda Local No.
123, 321 U.S. 590, 597 (1944)).
30
   323 U.S. 134. The parties agree that the level of deference
required under Chevron U.S.A., Inc. v. Nat. Res. Def. Council,
Inc., 467 U.S. 837 (1984), is not applicable.
31
   Babcock v. Butler County, 806 F.3d 153, 157 n.7 (3d Cir.
2015) (“In evaluating the effect of these regulations, it is
significant to keep in mind that the Supreme Court has
commented that interpretive regulations issued by the
Secretary of the Department of Labor under the FLSA do not
have the force of law; the regulations ‘constitute a body of
experience and informed judgment to which courts and
litigants may properly resort for guidance.’” (quoting
Skidmore, 323 U.S. at 140).
32
   29 C.F.R. § 785.2.

                             10
informed judgment to which courts and litigants may properly
resort for guidance.”33

       An agency’s interpretation of a statute “may merit
some deference whatever its form, given the specialized
experience and broader investigations and information
available to the agency . . ., and given the value of uniformity
in its administrative and judicial understandings of what a
national law requires.”34 The weight afforded the agency’s
interpretation “will depend upon the thoroughness evident in
its consideration, the validity of its reasoning, its consistency
with earlier and later pronouncements, and all those factors
which give it power to persuade, if lacking power to
control.”35

       We have “adopted Mead’s conceptualization of the
Skidmore framework as a ‘sliding-scale’ test in which the
level of weight afforded to an interpretation varies depending
on [the] analysis of the enumerated factors.”36 Those factors
include whether the interpretation was: (1) issued
contemporaneously with the statute; (2) consistent with other
agency pronouncements; (3) reasonable given the language
and purposes of the statute; (4) within the expertise of the
relevant agency; and (5) part of a longstanding and
unchanging policy.37

33
   Babcock, 806 F.3d at 157 n.7 (quoting Skidmore, 323 U.S.
at 140).
34
   De Leon-Ochoa v. Att’y Gen. U.S., 622 F.3d 341, 349 (3d
Cir. 2010) (quoting United States v. Mead Corp., 533 U.S.
218, 228 (2001), 533 U.S. at 234-35) (internal quotation
marks omitted).
35
   Mead, 533 U.S. at 228 (quoting Skidmore, 323 U.S. at
140).
36
   Hagans v. Comm’r of Social Sec., 694 F.3d 287, 304 (3d
Cir. 2012) (quoting Mead Corp., 533 U.S. at 228).
37
   Id. at 304-05; see also Cleary ex rel. Cleary v. Waldman,
167 F.3d 801, 808 (3d Cir. 1999) (if an agency has been
granted administrative authority by Congress, Skidmore
deference is warranted “as long as it is consistent with other

                               11
       Applying these factors, we conclude that WHD’s
interpretation, as set forth in section 785.18, should be
afforded the highest level of deference under Skidmore. First,
Congress ratified WHD’s interpretation, which had been in
place since 1940, by enacting former section 16(c) of the
FLSA in 1949.38 It states that:

       Any order, regulation, or interpretation of the
       Administrator of the Wage and Hour Division
       or of the Secretary of Labor . . . in effect under
       the provisions of the Fair Labor Standards Act
       of 1938, as amended, on the effective date of
       this Act, shall remain in effect as an order,
       regulation, interpretation, . . . except to the
       extent that any such order, regulation,
       interpretation . . . may be inconsistent with the
       provisions of the Act . . . .39

       Second, WHD’s interpretation of the regulations
controlling this dispute has been consistent throughout the
various opinion letters the DOL has issued to address this
matter.40 The Department of Labor

agency pronouncements and furthers the purposes of the
Act.”).
38
   Steiner v. Mitchell, 350 U.S. 247, 255 n.8 (1956).
39
   Id. (citing Fair Labor Standards Amendments of 1949, Pub.
L. No. 393, section 16(c), 63 Stat. 910, 920 (1949), 29 U.S.C.
§ 208 note).
40
   U.S. Dep’t of Labor, Wage & Hour Div., Opinion Letter
(Aug. 13, 1964) (JA 1351-52) (“[I]f [break] periods are given
and are of short duration (normally 20 minutes or less) they
must be counted as hours worked and the employees must
receive compensation for them. . . . The way in which the
employee utilizes his time during the rest periods described in
your letter, or the name attached to them, is irrelevant, and the
absence of such breaks in the past would not relieve an
employer from compensating his employees for them when
they occur.”); U.S. Dep’t of Labor, Wage & Hour Div.,
Opinion Letter (Oct. 13, 1964) (JA-1353) (“[R]est periods of
short duration, running from 5 minutes to about 20 minutes,

                               12
       has consistently held for over 46 years that such
       breaks are hours worked under the FLSA,
       without evaluating the relative merits of an
       employee’s activities. This position [is] found
       at 29 C.F.R. 785.18 . . . . The compensability of
       short breaks by workers has seldom, if ever,
       been questioned . . . . The FLSA does not
       require an employer to provide its employees
       with rest periods or breaks. If the employer
       decides to permit short breaks, however, the
       time is compensable hours worked.41

       Third, we have no difficulty concluding that WHD’s
interpretation is reasonable given the language and purpose of
the FLSA. In enacting the FLSA, Congress recognized the
effect of labor conditions that are “detrimental to the
maintenance of the minimum standard of living necessary for

must be counted as hours worked.”); U.S. Dep’t of Labor,
Wage & Hour Div., Opinion Letter (Jan. 25, 1995) (JA-1361-
62) (“[R]est periods . . . of short duration, running from 5 to
20 minutes are common in industry. . . . It is our long-
standing position that such breaks must be counted as hours
worked. The fact that certain employees may choose to
smoke during such breaks contrary to their employer’s policy
would not, in our opinion, affect the compensability of such
breaks. . . . While there may be valid health reasons for
prohibiting ‘smoking breaks,’ it does not follow that
employee efficiency is not enhanced by such breaks as is the
case with respect to ‘coffee breaks’. In other words, we think
it is immaterial with respect to compensability of such breaks
whether the employee drinks coffee, smokes, goes to the
restroom, etc. . . . Our views should not, however, be
construed to prevent an employer from adopting a policy that
prohibits smoking in the workplace, or devising appropriate
disciplinary procedures for violations of such policy. But an
employer may not arbitrarily fail to count time spent in breaks
during the workday because the employee was smoking at his
or her workplace or outside thereof.”).
41
   U.S. Dep’t of Labor, Wage & Hour Div., Opinion Letter
Fair Labor Standards Act (FLSA), 1996 WL 1005233, at *1
(Dec. 2, 1996).

                              13
health, efficiency, and general well-being of workers.”42 The
existence of such conditions:

      (1) causes commerce and the channels and
      instrumentalities of commerce to be used to
      spread and perpetuate such labor conditions
      among the workers of the several States; (2)
      burdens commerce and the free flow of goods in
      commerce; (3) constitutes an unfair method of
      competition in commerce; (4) leads to labor
      disputes burdening and obstructing commerce
      and the free flow of goods in commerce; and (5)
      interferes with the orderly and fair marketing of
      goods in commerce.43

Accordingly, the FLSA was designed “to correct and as
rapidly as practicable to eliminate the conditions above
referred to in such industries without substantially curtailing
employment or earning power.”44 As the District Court
explained, it is readily apparent that by safeguarding
employees from having their wages withheld when they take
breaks of twenty minutes or less “to visit the bathroom,
stretch their legs, get a cup of coffee, or simply clear their
head after a difficult stretch of work, the regulation
undoubtedly protects employee health and general well-being
by not dissuading employees from taking such breaks when
they are needed.”45

     This interpretation was well within WHD’s
expertise.46 Lastly, as the District Court correctly
pointed out, “[s]ection 785.18 is a rule that is both
longstanding and unchanging. The text of the rule
today is identical to the text of the rule when it was

42
   29 U.S.C. § 202(a).
43
   Id.
44
   Id. § 202(b).
45
   Am. Future Sys., Inc., 2015 WL 8973055, at *7.
46
   29 U.S.C. § 204(a) (“There is created in the Department of
Labor a Wage and Hour Division which shall be under the
direction of an Administrator, to be known as the
Administrator of the Wage and Hour Division . . . .”).

                              14
implemented in 1961.”47 Since all of these factors
favor WHD’s position, the District Court was correct
to apply substantial Skidmore deference to section
785.18.

 C.   Applicability of 29 C.F.R. § 785.16 versus 29
                    C.F.R. § 785.18

        At the District Court level, Progressive also argued
that because its employees used the time when they were
logged off solely for their own benefit, 29 C.F.R. § 785.16, as
opposed to 29 C.F.R. § 785.18, applies to its policy.48 Before
addressing the issue of applying section 785.18 as a bright-
line rule, we wish to elaborate on this and note that the
District Court correctly held that section 785.18 is applicable
to this case.

       Section 785.16 provides that:

       Periods during which an employee is
       completely relieved from duty and which are
       long enough to enable him to use the time
       effectively for his own purposes are not hours
       worked. He is not completely relieved from
       duty and cannot use the time effectively for his
       own purposes unless he is definitely told in
       advance that he may leave the job and that he
       will not have to commence work until a
       definitely specified hour has arrived. Whether
       the time is long enough to enable him to use the
       time effectively for his own purposes depends
       upon all of the facts and circumstances of the
       case.

Conversely, section 785.18 states that “[r]est periods of short
duration, running from 5 minutes to about 20 minutes, are

47
   Am. Future Sys., Inc., 2015 WL 8973055, at *7 (citing 26
Fed. Reg. 190 (Jan. 11, 1961)).
48
   Id. at *5.

                              15
common in industry . . . . They must be counted as hours
worked.”49

     Progressive argued that section 785.16 is applicable
here because the “breaks” at issue are unrestricted periods
that Progressive provides to its employees to use whenever
they want and however they want. Thus, section 785.16, as
opposed to section 785.18, applies.

      As the District Court held, Progressive’s argument fails
to recognize that, although section 785.16 provides general
guidance regarding the compensability of hours worked,
section 785.18 sets forth a separate and more specific
regulation carving out the compensability of breaks that are
twenty minutes or less.50 The Department of Labor has
therefore determined as a matter of labor policy and practical
consideration that breaks of twenty minutes or less are
insufficient to allow for anything other than the kind of
activity (or inactivity) that, by definition, primarily benefits
the employer. That is certainly true here where such short
work intervals better prepare the sales representative to deal
with the next call. Thus, as the District Court correctly
explained, in this case where breaks of twenty minutes or
less are in question, section 785.16 is inapplicable. We
therefore hold that section 785.18 applies to Progressive’s
“flexible time” policy.

      D. 29 C.F.R. § 785.18 as a bright-line rule

       Progressive also argues that section 785.18 should not
be enforced as a bright-line rule that would require employers
to compensate employees for any breaks that are twenty
minutes or less.51 Rather, Progressive insists that courts

49
   29 C.F.R. § 785.18 (emphasis added).
50
   See West v. Keve, 721 F.2d 91, 96 (3d Cir. 1983) (“It is a
fundamental principle of statutory construction that the
specific language controls over general language.”).
51
   By statute, short breaks to express breast milk need not be
compensated, 29 U.S.C. § 207(4), and unauthorized
extensions of authorized paid breaks need not be

                               16
should analyze whether a given break is intended to benefit
the employer or the employee. According to Progressive, if
the break benefits the employee, she need not be
compensated. In support of its argument, Progressive cites
Mitchell v. Greinetz,52 which section 785.18 incorporates in
interpreting the FLSA,53 and Armour & Co. v. Wantock.54
We remain unconvinced.

       Progressive claims that Greinetz mandates a fact-
intensive inquiry to determine when idle time is
compensable.55     However, Progressive ignores that the
Greinetz court deferred to WHD’s interpretation and that
several courts considering the issue have applied section
785.18 as a bright-line rule.56 Greinetz noted that facts must

compensated. Lillehagan v. Alorica, Inc., No. SACV 13-
0092-DOC, 2014 WL 6989230, at *10 (C.D. Cal. Dec. 10,
2014) (citing Chapter 31a01(c) of DOL Field Operations
Handbook, Dec. 15, 2000).
52
   235 F.2d 621 (10th Cir. 1956).
53
   See 29 C.F.R. § 785.18.
54
   323 U.S. 126, 133 (1944).
55
   Mitchell, 235 F.2d at 623 (“Whether idle time is
compensable or not is sometimes a difficult question to
answer. All the cases make it clear that under certain
conditions it is a part of employment time and must,
therefore, be compensated. While in the main the factors
which must be considered are well known, the difficulty as
always comes when we undertake to apply them to a given
state of facts, and because facts differ decided cases are not
controlling and are helpful only as they point the way. Some
of the factors to consider are whether idle time is spent
predominantly for the employer’s or employee’s benefit, and
whether the time is of sufficient duration and taken under
such conditions that it is available to employees for their own
use and purposes disassociated from their employment time.
The cases also make it clear that the answers to these
questions must be gleaned from all the facts and
circumstances of each case.” (emphases added)).
56
   See Lillehagen v. Alorica, No. 13-0092, 2014 WL 6989230,
at *10 (C.D. Cal. Dec. 10, 2014); Brown v. L & P Indus.,
LLC, No. 04-0379, 2005 WL 3503637, at *6 (E.D. Ark. Dec.

                              17
be considered in determining if breaks are compensable hours
worked. However, it also held that WHD’s interpretation
“adhered to since 1940 is entitled to great weight”57 and that
the court agreed with WHD “as to the correct interpretation of
the Act as it relates to the question of short break periods,
generally referred to as ‘coffee breaks.’”58 The court
explained that although such breaks “are beneficial to the
employees, they are equally beneficial to the employer in that
they promote more efficiency and result in a greater output,
and that this increased production is one of the primary
factors, if not the prime factor, which leads the employer to
institute such break periods.” 59 The court also noted that “a
number of states by statute or orders provide for short rest
periods and provide that such periods shall be compensated as
work time.”60       Accordingly, Progressive’s reliance on
Greinetz is misplaced, as section 785.18 likely referred to it
because it explicitly endorsed the interpretation.

        Progressive’s reliance on Armour & Co. is also not
persuasive. We realize that the Supreme Court did not apply
a bright-line rule in Armour & Co.61 However, Progressive
ignores the crucial fact that Armour & Co. did not involve the
compensability of breaks of twenty minutes or less. It
concerned the time between 5 PM to 8 AM during which
firefighters “were required to be on their employer’s
premises, to some extent amenable to the employer’s

21, 2005); Kasten v. Saint-Gobain Perform. Plastics Corp.,
556 F. Supp. 2d 941, 953 (W.D. Wisc. 2008); Martin v.
Waldbaum, Inc., No. CV 86-0861, 1992 WL 314898, at *1
(E.D.N.Y. Oct. 16, 1992).
57
   Greinetz, 235 F.2d at 625.
58
   Id.
59
   Id.
60
   Id.
61
   323 U.S. at 133 (“Readiness to serve may be hired, quite as
much as service itself, and time spent lying in wait for threats
to the safety of the employer’s property may be treated by the
parties as a benefit to the employer. Whether time is spent
predominantly for the employer’s benefit or for the
employee’s is a question dependent upon all the
circumstances of the case.”).

                               18
discipline, subject to call, but not engaged in any specific
work.”62 The Court used the predominant benefit test to
conclude that this time was compensable. The Secretary does
not argue that this test should not be used when dealing with
breaks of twenty-one minutes or more,63 and compensability
of breaks longer than twenty minutes is not before us.

       Progressive’s argument for determining the
compensability of break times is not only contrary to the
regulatory scheme and case law, it would also establish an
administrative regimen that would be burdensome and

62
   Id. at 128.
63
   DOL’s 1940 Press Release states:
Employees coming under the provisions of the [FLSA] must
be paid for short rest periods . . . . A “short” rest period
…will include periods up to and including 20 minutes. When
rest periods customarily taken by employees are longer, final
decision on whether or not the employee will be paid for it
will rest with the [WHD] Regional Director. The following
considerations will guide the Regional Director in making his
decision: the freedom of the employee to leave the premises
and go where he pleases during the intermission; the duration
of the intermission—whether sufficient to permit the
employee reasonable freedom of action and a real opportunity
for relaxation; whether the intermission is clearly not an
attempt to evade or circumvent the provisions of the [FLSA].
See Addendum A to Appellee’s Br. (WHD Press Release No.
R-837 (June 10, 1940)) (emphasis added); see also
Addendum C to Appellee’s Br. (Field Operations Handbook,
31a01 (Dec. 1955)) (“Rest periods of short duration, running
from 5 minutes to about 20 minutes, are common in industry.
They promote the efficiency of the employee and are
customarily paid for as working time. They must be counted
as hours worked. . . . Where a regular rest period of known
duration is longer than 20 minutes, the waiting time rules
apply. In other words, if the employees are free to go where
they please, and the rest period is long enough to permit the
employees to use it for their own purposes, and if bona fide
and not an attempt to evade or circumvent the Fair Labor
Standards Act (FLSA) or Walsh-Healey Public Contracts Act
(PCA), such periods are not hours worked.”).

                             19
unworkable. Employers would have to analyze each break
every employee takes to determine whether it primarily
benefitted the employee or employer. Such an approach
“would require a series of tests to evaluate the relative benefit
provided to employee and employer and the impact on
employee efficiency of each and every small work break ever
taken by any employee.”64 This would not only be “an
undesirable regulatory intrusion in the workplace with the
potential to seriously disrupt many employer-employee
relationships,” but it would also be difficult, if not impossible,
to implement in all workplace settings.65 “[T]he government
should not be in the business of determining what employees
do on short work breaks, much less attempting to evaluate
which short breaks merit or do not merit compensation. . . .
[E]mployers and employees are best served by the bright line
time test currently provided in Section 785.18.”66

       Nevertheless, Progressive argues that if a bright-line
rule is enforced, employees will be allowed to take any
number of breaks during their workday, and as long as they
are less than twenty minutes, employers will have to
compensate them. We recognize this is a theoretical
possibility given the bright line imposed by section 785.18.67
However, it is not a realistic one. “[W]here the employee is
taking multiple, unscheduled nineteen-minute breaks over and
above his or her scheduled breaks for example, the

64
   Lillehagen, 13-0092, 2014 WL 6989230, at *5.
65
   Id. at *5-6.
66
   Id.
67
   See U.S. Dep’t of Labor, Wage & Hour Div., Opinion
Letter Fair Labor Standards Act (FLSA), 1996 WL 1005233,
at *1 (employer requested that Department of Labor advise
whether short smoking breaks of 3 to 4 minutes were
compensable when taken in addition to other breaks allowed
to employees, and the DOL stated “[t]he FLSA does not
require an employer to provide its employees with rest
periods or breaks. If the employer decides to permit short
breaks, however, the time is compensable hours worked”).

                               20
employer’s recourse is to discipline or terminate the
employee—not to withhold compensation.”68

       Progressive notes that the sales representatives:

       may log-off of the computer system at any time
       of the day, for any reason, and for any length of
       time, at which point, if they so choose, they
       may leave the office. . . . Others may work non-
       stop from the time they arrive until they decide
       to leave for the day. In other words, [they]
       choose the time they start, the time they stop,
       and whether and how much time they take off
       in-between.69

In an argument that is no doubt well-intentioned, Amicus
Child Advocates argues that this “flex time” policy allows
parents to address child-related needs and that it is essential
for “all parents whose children are in out-of-home placement
in foster care, and can provide tremendous benefits to parents
. . . to deal with essential responsibilities such as scheduling
second jobs, attending child-related appointments and . . .
handling family-related issues . . ., and providing care for
their children.”70 Amicus Childs Advocates also alerts us to a
client it represented “who was placed in foster care because
her mother was drug addicted. . . . [W]ithin two years, her
mother had completed a drug and alcohol program, which
allowed her daughter to move back in with her.”71 We do
not doubt that such arguments by this Amicus result from a
sincere effort to encourage flexible work place policies that
are consistent with the organization’s efforts to advance the
welfare of at-risk children who have a particular need for
parental support. However, those arguments, and similar
arguments by Progressive, ignore the fact that the examples
of employees’ use of “break” time that Progressive presents

68
   Hawkins v. Alorica, Inc., 287 F.R.D. 431, 442 (S.D. Ind.
2012).
69
   Appellant’s Br. at 6.
70
   Amicus Curiae Support Center for Child Advocates’ Br. at
4
71
   Id. at 2.

                              21
involve activities that cannot generally be performed in
twenty minutes. Thus, such examples exaggerate the extent
to which the policy is intended to benefit the individual
employee as opposed to the employer. This is particularly
true if we factor in time getting to and from transportation to
get to one’s child (or to earn a degree or hold a second job).
Accordingly, the restrictions endemic in the limited duration
of twenty minutes or less illustrate the wisdom of concluding
that the Secretary intended a bright line rule under the
applicable regulations.

                  E. Liquidated Damages

        Progressive also argues that the District Court abused
its discretion in awarding liquidated damages.

       If an employer violates the minimum wage provisions
of the FLSA, it is liable for both the payment of unpaid wages
and an additional equal amount of mandatory liquidated
damages.72 Liquidated damages are compensatory. They
ease any hardship endured by employees who were deprived
of lawfully earned wages.73

       To avoid mandatory liability for liquidated damages,
an employer must show that it acted in good faith and that it
had reasonable grounds for believing that it was not violating
the Act.74 The good faith requirement is “a subjective one
that requires that the employer have an honest intention to

72
   29 U.S.C. § 216(c) (“The Secretary may bring an action in
any
court of competent jurisdiction to recover the amount of
unpaid minimum wages or overtime compensation and an
equal amount as liquidated damages.”); Cooper Elec. Supply
Co., 940 F.2d at 907.
73
Mart. v. Selker Bros., Inc., 949 F.2d 1286, 1299 (3d Cir.
1991) (“These liquidated damages are compensatory rather
than punitive in nature; they compensate employees for the
losses they may have suffered by reason of not receiving their
proper wages at the time they were due.”).
74
   29 U.S.C. § 260; Selker Bros., 949 F.2d at 1299.

                              22
ascertain and follow the dictates of the Act.”75 The
reasonableness requirement is an objective standard.76 An
employer bears a “plain and substantial” burden to prove it is
entitled to discretionary relief from liquidated damages.77

       Here, Progressive’s insufficient efforts to investigate
and comply with the FLSA neither satisfy that substantial
burden, nor undermine the propriety of the District Court’s
finding of bad faith.        Satell stated that he changed
Progressive’s policy in 2009 to “ensure that employees across
all call centers were being treated equally with respect to
breaks, and specifically rebuked the suggestion that the policy
change was motivated by the close-in-time increase in the
minimum wage.”78 He explains that in fashioning the policy,
he reviewed the DOL website, and “‘then tr[ied] to get as
much guidance as [he] could from the [Department of
Labor].’”79 Satell also obtained legal advice and read several
opinions from various courts on the matter.80 Additionally,
he held about a dozen meetings with Progressive’s Director of
Call Center Operations to discuss the new policy.81 However,
he admits that he was at least “vaguely aware” of 29 C.F.R. §
785.18.82

       In assessing liquidated damages, the District Court
noted that Satell sought advice of counsel, but he refused to
waive the attorney-client privilege and disclose this advice to
the court. Satell’s testimony placed the court in an untenable
position of having to assume that counsel’s advice was

75
   Cooper Elec. Supply, 940 F.2d at 907 (alterations, citations,
and internal quotation marks omitted).
76
   Id. at 907-08; Marshall v. Brunner, 668 F.2d 748, 753 (3d
Cir. 1982) (“an employer may not rely on ignorance alone in
meeting the objective test.”).
77
   Cooper Elec. Supply, 940 F.2d at 907 (quoting Williams v.
Tri-County Growers, Inc., 747 F.2d 121, 128-29 (3d Cir.
1984).
78
   Am. Future Sys., Inc., 2015 WL 8973055, at *13.
79
   Id. (alterations in original).
80
   Id.
81
   Id.
82
   Id.

                              23
consistent with the adopted policy while ignoring the fact that
Satell refused to tell the court what counsel advised. The
District Court concluded that, given the unwillingness to
share what it was told by counsel, “it is entirely possible that
Defendants implemented the new break policy in 2009,
despite being told by one or more of its lawyers that the
policy violated the FLSA. It would be an absurd result to
classify such conduct as ‘good faith’ . . . .”83

       Progressive argues that the District Court abused its
discretion in finding that it did not act in good faith when
setting its break policy simply because Progressive refused to
waive its attorney-client privilege. It claims that the District
Court’s decision punishes Progressive for seeking legal
advice that was not essential to a good-faith determination, as
employers are not required to seek legal advice to
demonstrate good faith. Thus, according to Progressive, the
District Court’s decision will discourage open and confident
relationships between clients and attorneys. That may be so,
but we, like Judge Restrepo, are incredulous that an employer
in this situation would decline to share the legal advice it
received when the issue of good faith is raised, and we will
not preclude a court from considering this in its thought
process.

       Further, the District Court’s unwillingness to find good
faith was not based solely upon Satell’s refusal to waive the
attorney-client privilege. Rather, it was the logical result of
the Court’s analysis of the entire record. Even if we ignore
the fact that Progressive sought legal advice and refused to
disclose the substance of that advice, we would still find that
Satell did not have reasonable grounds for believing that he
was comporting with the FLSA. Merely reviewing case law
and looking at the DOL website does not establish that he
acted reasonably because, as we have explained, that case law
and website would have informed him of the bright line rule
in section 785.18. The DOL has explicitly and repeatedly
stated that employees must be paid for breaks of twenty
minutes or less. Selective interpretation of its rulings may
establish wishful thinking or obstinacy, but it certainly does

83
     Am. Future Sys., Inc., 2015 WL 8973055, at *13.

                               24
not establish that the District Court abused its discretion in
declining to find good faith and awarding liquidated damages.

                    IV. CONCLUSION

        For the foregoing reasons, we affirm the District
Court’s order granting in part the Secretary’s partial motion
for summary judgment with respect to FLSA minimum wage
liability and liquidated damages.

                             25