Court Opinion

ID: 3017732
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:17:59.049512+00
Date Added: 2024-06-11T08:53:05.506235
License: Public Domain

_________________________

                    Nos. 95-4183MN, 96-1010MN
                    _________________________

Michael J. Rudolph and          *
James A. Lindquist,             *
                                *
    Appellants/Cross-Appellees, *
                                *   On Appeal from the United
     v.                         *   States District Court
                                *   for the District of
                                *   Minnesota.
Metropolitan Airports           *
Commission,                     *
                                *
    Appellee/Cross-Appellant.   *

                           ___________

                  Submitted:   October 21, 1996

                      Filed: December 24, 1996
                           ___________

Before RICHARD S. ARNOLD, Chief Judge, McMILLIAN and BEAM, Circuit
     Judges.

                           ___________

RICHARD S. ARNOLD, Chief Judge.

     Plaintiffs filed this action under the Fair Labor Standards
Act (FLSA), 29 U.S.C. §§ 201-19 (1994), to recover back wages for
time spent providing home care of dogs in the Metropolitan Airports
Commission's (MAC) canine unit. A jury found that both plaintiffs
had worked compensable time caring for the dogs (although not the
full amount alleged) for which MAC had not paid them. The District
Court then calculated the back wages owed to plaintiffs and awarded
attorneys' fees and costs. We reverse the Court's award of back
wages, as well as the award of attorneys' fees, because the
plaintiffs had been paid fully under the terms of a reasonable
agreement they had with MAC regarding the hours they would work in
caring for the dogs. We hold that such an agreement is authorized
by a regulation issued by the Secretary of Labor.

                                I.

     The Airport Police Department, a division of the Metropolitan
Airports Commission (which oversees public airports in the
Minneapolis-St. Paul area), created a canine unit in 1989 to aid in
the detection of drugs. Michael Rudolph and James Lindquist, as
well as six other officers with the Airport Police, asked to be
considered for two canine-handler positions, which would require
taking the dogs home at night to feed, groom, exercise, and
otherwise care for them. Rudolph and Lindquist were selected for
the positions.

     Shortly after Rudolph and Lindquist began caring for the dogs,
MAC realized that it had an obligation under FLSA to compensate the
officers for the time they spent at home doing this work. MAC and
the officers met and formed an interim agreement, in June 1990,
that the officers would perform, and be compensated for, one-half
hour of dog care on their on-duty days, and one hour (at an
overtime-pay rate) on their off-duty days. The agreement (like all
the ones that followed) directed that the officers were not to
perform additional care unless they had received prior approval
from a supervisor.

     In September 1990, the officers wrote a memorandum to MAC
requesting that the agreement struck in June be signed and attached
to the Metropolitan Airports Police Federation (the union)
contract. At about the same time, MAC was concluding a survey of
local police departments' compensation policies with respect to
canine handlers. The report compiled from this survey indicated
that providing one-half hour of care time on off-duty days would

                               -2-
not be inconsistent with other local police departments' policies.
Consequently, MAC decided it wanted to reduce the off-duty-day time
to one-half hour, and it so informed Rudolph and Lindquist,
providing them with a copy of the survey report.       Rudolph and
Lindquist wrote to express their disagreement with this change,
stating that they spent more than one-half hour on off-duty days
caring for the dogs, and explaining that they needed this
additional time.

     In early October, Rudolph and Lindquist met with MAC to
discuss their objections to the reduction in off-duty-day time, at
which point they were asked to document the time they spent with
the dogs. Lindquist apparently did not submit any documentation in
the coming month, as requested, and Rudolph's documentation
indicated that he spent 21 minutes per on-duty day and 54 minutes
per off-duty day in dog care (including unrequested exercise and
grooming). From this, MAC concluded that one-half hour would be
reasonable for all days, and decided to institute this policy in
November, 1990.

     MAC continued to pay the officers for one hour of time on off-
duty days, because Lindquist and Rudolph were not satisfied and had
decided to refer the issue to the collective bargaining that would
take place in 1991 to renegotiate the union's soon-to-expire
contract with MAC. Both Rudolph and Lindquist were members of the
union, and Lindquist was a principal negotiator for it. In June
1991, the union and MAC met with a mediator to attempt to resolve
a number of contract issues, including the compensation that would
be paid to canine handlers.        MAC's labor-relations manager
submitted to the mediator a proposed resolution of the disputed
issues for the mediator to suggest to both parties. Included in
the proposal was a provision that would compensate canine handlers
one-half hour for dog care on all days and provide them with a
take-home vehicle. The union decided not to accept the mediator's
proposal, which it could reject or accept only in full.

                               -3-
     As a consequence of the union's rejection of the proposal, the
mediator asked both parties to submit their final positions on each
of the 44 issues for which they were at an impasse in preparation
for arbitration. The final position taken by the union regarding
canine care included a request for one-half hour of compensation
for work for both on- and off-duty days, $60.73 bi-weekly
specialist pay, and the use of a vehicle for the officers to
transport the dogs to and from their homes.

     The dispute then went to interest arbitration.          Before
arbitration commenced, Lindquist, writing as Vice President of the
union (and, after consulting him, on Rudolph's behalf), proposed
resolution of the canine compensation issue by offering to accept
the mediator's proposal (a vehicle and one-half hour per day) on
this issue. Appellee's App. 32. MAC responded with an acceptance
of Lindquist's proposal, specifically noting the terms - including
the absence of the specialty pay provision - and attaching a copy
of its proposed policy to its letter.       Id. at 66.    Lindquist
confirmed his agreement, noting that the MAC's policy had
"essentially the same" terms as those stated in the union's final
position - the absence of specialist pay being the only difference
- and asking that the policy be implemented as soon as possible.
Id. at 65.    MAC acknowledged receipt of this letter, writing
Lindquist and the union that it considered it a "final and complete
settlement" of this disputed issue, and indicated that it would
implement the new policy "as soon as is feasible." Id. at 27. MAC
then began to pay Rudolph and Lindquist for one-half hour of work
for both on- and off-duty days. The arbitration of the remaining
issues commenced shortly thereafter. The union negotiators never
raised the canine care issue, nor did MAC's negotiators, who
considered the issue to be settled. Tr. 778. As a consequence,
the policy did not appear in the contract signed by MAC and the
union in early 1992.

     Plaintiffs filed this action in July, 1994, pursuant to 29

                               -4-
U.S.C. § 216(b) (1994), to recover back pay and the liquidated
damages that may be awarded for violations of FLSA, and to obtain
a declaratory judgment that MAC willfully violated FLSA. At the
close of the evidence, the District Court asked the jury to decide
whether Rudolph and Lindquist had, both for on-duty and off-duty
days: (1) performed compensable work in excess of one-half hour;
and (2) come to a reasonable agreement with MAC about the amount of
work they were to perform. The Court also asked the jury to find
how much in excess of one-half hour (if at all) the plaintiffs had
worked on on- and off-duty days and whether MAC's failure to pay
overtime was a willful violation of FLSA.

     The jury found that plaintiffs had worked more than one-half
hour of compensable work on both on- and off-duty days.          It
concluded, however, that MAC and plaintiffs had come to a
reasonable agreement as to the amount of time the plaintiffs should
spend caring for the dogs on on-duty days and therefore (as
instructed) it did not find how much additional time plaintiffs had
worked on such days. The jury determined that plaintiffs and MAC
had not reached a reasonable agreement about off-duty days, and
that Rudolph and Lindquist had performed an additional half-hour of
compensable work (not including the half-hour for which they
already had been compensated) on their off-duty days for which they
had not been paid. The jury also found that MAC had not willfully
violated FLSA.

     Based on these findings, the District Court calculated the
amount of back pay owed to plaintiffs. It calculated the total
amount of back pay owed for the three-year period (from the date
MAC reduced plaintiffs' off-duty-day pay to the date of judgment),
and then deducted from that amount the total of all premium
overtime-pay and compensatory time off MAC had given to plaintiffs.
The result was an award to Rudolph of $1592.16 (doubled, pursuant
to 29 U.S.C. § 216(b)'s provision for liquidated damages, from
$796.08), and nothing to Lindquist, because his overtime credits

                               -5-
exceeded the amount MAC owed him in back pay.       The court also
awarded $31,644.31 to Rudolph and Lindquist for attorneys' fees and
costs, a reduction from their request of over $257,000.

     Rudolph and Lindquist appeal the District Court's method of
calculating damages, its submission to the jury of the question
whether the parties had made a reasonable agreement, and its
reduction of attorneys' fees from the requested amount. MAC cross-
appeals on several grounds. First, it argues that it was entitled
to judgment as a matter of law because no reasonable jury could
find either that the plaintiffs worked beyond the requested half-
hour or that the parties had not come to a reasonable agreement
regarding off-duty days. MAC also argues that the District Court
erred in finding that the violations were not in good faith, in
failing to calculate damages under FLSA's provision for public-
safety employees, and in awarding over $30,000 in attorneys' fees
and costs for a recovery of less than $2,000.

                               II.

     The FLSA and its accompanying regulations lay out exacting
standards concerning the maximum number of hours covered employees
may work per week without their employer's incurring an obligation
to pay overtime at a premium wage rate. Ordinarily, all time that
an employer "suffers or permits" its employees to work must be
compensated, any contract to the contrary notwithstanding.
Employers and employees may not, in general, make agreements to pay
and receive less pay than the statute provides for.            Such
agreements are against public policy and unenforceable.         See
Barrentine v. Arkansas-Best Freight Sys., 450 U.S. 728 (1981). The
regulations, however, do provide certain exceptions. Critical to
the case at hand is 29 C.F.R. § 785.23, which allows the use of a
"reasonable agreement" to determine the number of compensable hours
due an employee who works at home or who lives on the employer's
premises. The regulation reads as follows:

                               -6-
          § 785.23 Employees residing     on employer's
          premises or working at home.

               An employee who resides on his employer's
          premises on a permanent basis or for extended
          periods of time is not considered as working
          all the time he is on the premises.
          Ordinarily, he may engage in normal private
          pursuits and thus have enough time for eating,
          sleeping, entertaining, and other periods of
          complete freedom from all duties when he may
          leave the premises for purposes of his own.
          It is, of course, difficult to determine the
          exact hours worked under these circumstances
          and any reasonable agreement of the parties
          which takes into consideration all of the
          pertinent facts will be accepted. This rule
          would apply, for example, to the pumper of a
          stripper well who resides on the premises of
          his employer and also to a telephone operator
          who has the switchboard in her own home.

     Plaintiffs argue that § 785.23 does not apply to this dispute
because the dog care they provided was only a small part of their
total work as officers. The regulation, they contend, applies only
to employees who live and perform all of their work on their
employer's premises or who work entirely at home. MAC advances a
broader reading of the regulation, arguing that an employer can
compensate its employees for work at home pursuant to any
reasonable agreement that "takes into consideration all of the
pertinent facts." Bouchard v. Regional Governing Bd., 939 F.2d
1323, 1331 (8th Cir. 1991) (internal quotations and citations
omitted), cert. denied, 503 U.S. 1005 (1992).

     We believe that § 785.23 goes beyond plaintiffs' narrow
reading and applies to the situation at hand.      The regulations
explain that the provision is but a specific application of general
FLSA principles to a frequently occurring problem, 29 C.F.R.
§ 785.10, and that the courts are ultimately responsible for
interpretations of the Act, 29 C.F.R. § 785.2. The regulation's

                               -7-
caption, which we may properly use to construe it, expressly
mentions not only work performed by employees who live on the
employer's premises, but also work performed in employees' homes.
An example of this second category of work covered by the
regulation is the telephone dispatcher in Halferty v. Pulse Drug
Co., 864 F.2d 1185 (5th Cir. 1989), who did perform all of her work
at home. But the fact that the regulation covers such a case does
not mean that it does not cover employees only part of whose work
is performed at home.     Nothing in the words of the regulation
contains such a limitation.

     The reason for there being such a regulation in the first
place also covers this case. The employer cannot easily determine
how long the officers work at home caring for the dogs.        Dog
care - feeding, grooming, cleaning cages or pens, and exercising -
may take more time on one day than on others. It may be spread
out, sporadic in nature. An officer might feed a dog when they
first get home, give the dog water later, and perform other care
still later. The indeterminate nature of these tasks, we think,
makes them exactly the sort of work as to which it makes sense for
the parties to come to an agreement, to eliminate complicated,
repetitious, and hard-to-resolve disputes about exactly how much
time it took to take care of the dogs each day. So long as there
was an agreement in fact, and the agreement was reasonable, we
think § 785.23 applies to this case.       It was proper for the
District Court to put to the jury the question whether the parties
had made a reasonable agreement.

     We have carefully considered the authorities cited by
plaintiffs in support of their contention that § 785.23 does not
apply to this case.    Two cases are cited from our own Circuit,
Hultgren v. County of Lancaster, 913 F.2d 498 (8th Cir. 1990), and
Bouchard v. Regional Governing Bd., supra. Both of these cases
concerned "sleep time" of employees all of whose work was done on
the premises of the employer. Neither case addresses the precise

                               -8-
issue involved here:     whether the regulation applies to work
performed at home if the employees in question also do some work at
the employer's place of business. Neither case, even in dictum,
throws any light on this question.      Bouchard does discuss the
provision of the regulation specifying that it applies to employees
residing on an employer's premises only if the employee resides
there "on a permanent basis or for extended periods of time."
Plaintiffs argue that the work that they performed at home in the
present case did not cover "extended periods of time" within the
meaning of the regulation. The argument is beside the point. The
phrase "extended periods of time" appears only in that portion of
the regulation pertaining to employees residing on their employer's
premises. It has nothing to do with employees performing work at
their own homes.

     Plaintiffs also refer to a brief filed by the Department of
Labor as amicus curiae in Nelson v. Alabama Institute for Deaf and
Blind, 896 F. Supp. 1108 (N.D. Ala. 1995). They imply that the
position taken by the Department in this brief supports their
position in the present case. We have not been supplied with a
copy of the brief, and there is nothing in the reported opinion in
Nelson to support the position taken by plaintiffs here. Nelson,
like the cases from our own Court we have just discussed, was a
"sleep time" case. Among the questions presented was whether the
employees resided on their employer's premises for extended periods
of time, as required by the regulation. The Court held that they
did not, and mentions in a footnote, 896 F. Supp. at 1113 n.5, that
its holding is consistent with the position taken by the Department
of Labor in its amicus brief. Again, we see nothing here that is
relevant for present purposes. This case is a home-work case, and
the question is whether the regulation applies to employees who
work part of the time, but not all of the time, at home. For the
reasons we have given, we believe that the regulation does so

                               -9-
apply.1

     The jury found that the plaintiffs and MAC had come to a
reasonable agreement as to how much time Rudolph and Lindquist had
spent caring for the dogs on on-duty days.        This verdict is
supported by substantial evidence, and plaintiffs are not entitled
to any recovery for on-duty days.

     The jury, in contrast, found that the parties had not come to
a reasonable agreement concerning off-duty days.      The District
Court subsequently denied MAC judgment as a matter of law on this
issue.   While we review de novo the District Court's denial of
MAC's motion, we view the evidence presented at trial in the light
most favorable to Rudolph and Lindquist, the prevailing parties.
E.g., Larson ex rel. Larson v. Miller, 76 F.3d 1446, 1452 (8th Cir.
1996) (en banc). Thus, although we are loath to reverse a finding
of a jury, we will do so when there is only a "scintilla of
evidence" or no "proof beyond speculation to support the verdict."
Ibid. (internal quotations and citation omitted).

     As we have explained above, MAC, upon realizing its FLSA
obligations, sent Rudolph and Lindquist a memorandum proposing an
interim policy regarding compensation for dog care that would be in
place until a final policy was agreed to. Rudolph and Lindquist
accepted this proposal. When MAC concluded that one-half hour of

     1
      We find some implied support for this conclusion in Reich v.
New York City Transit Authority, 45 F.3d 646 (2d Cir. 1995). That
case arose out of a dispute between the New York City Transit
Authority and its Police Department's dog handlers. The plaintiffs
requested compensation for time spent taking care of the dogs at
their homes, and also for commuting time. The Department of Labor
filed suit seeking compensation for both types of work. Certain
claims were then settled. In accordance with the settlement, the
parties' collective-bargaining agreement was amended to include a
provision entitling the handlers to compensation for specified
periods of time for taking care of the dogs at home.         It is
apparent from the context that the handlers performed work both at
home and on the employer's premises. See 45 F.3d at 647 & n.1.

                               -10-
dog care on off-duty days was reasonable, and should be its policy,
the parties parted ways, and decided to resolve the issue in the
context of collective bargaining.

     After mediation of the union-MAC contract failed, and the
issues were set for interest arbitration, Lindquist sent a letter
to MAC offering to accept the mediator's proposal on the issue
involved in this case. The letter stated, in pertinent part, "You
assure me this is the offer: Take-home vehicles and one-half hour
compensation per day for care and maintenance of the dogs. After
hearing of the offer for the first time, Mike and I would be
willing to accept this policy." Appellee's App. 32. MAC responded
that it was happy to settle the issue on the terms presented by the
mediator - one-half hour of work on all days, a take-home vehicle,
and no specialist compensation - attached the mediator's proposal,
and asked for the union to provide a written statement
acknowledging acceptance of these terms. Id. at 66-67. Lindquist
answered MAC's acceptance letter with a letter of his own, the text
of which follows:

               The Airport Police K-9 handlers and the
          Federation agree to accept the K-9 policy as
          presented in the mediator's proposal of June
          10, 1991. As you have noted in your letter,
          the Federation['s final position on this
          issue] is essentially the same as your policy
          with   the  exception   of  some   additional
          financial compensation.

               Your willingness to implement this policy
          immediately is appreciated and is the reason
          for its acceptance.       The Federation has
          indicated a desire and willingness to settle
          the   entire  contract   short   of   interest
          arbitration and each item agreed upon is a
          step to that end.

Id. at 65.    MAC responded again, reconfirming the terms, and
indicating that it would implement the policy as soon as possible.
Id. at 27. The officers began soon to receive pay on these terms,

                               -11-
as well as the use of a vehicle.

     Lindquist testified that he did not feel that he had come to
an agreement with MAC,2 because MAC was not offering the specialty
pay that he thought the mediator's proposal contained.3 Tr. 458.
When later asked whether he agreed to the policy put in place in
1991, however, he stated that he and Rudolph "were accepting that
policy."   Tr. 818.   Even if we take Lindquist's testimony as a
whole as a claim that he based his offer of settlement on the wrong
document, the two letters he wrote (and the two he received)
explicitly state that the canine handlers were to receive one-half
hour of compensation per day, a take-home vehicle, and no
specialist pay. In his first letter, making the offer, Lindquist
makes no mention of specialist pay.        In his second letter,
Lindquist again refers to the mediator's proposal, and contrasts
MAC's policy (which it had submitted to the mediator) with the
union's final position, which demanded the specialist pay. The
documentary evidence, especially when it is as unambiguous as it is
here, cannot be refuted by Lindquist's inconsistent testimony about
his incorrect beliefs. Therefore, no reasonable jury could accept
Lindquist's statements instead of the documented proof of an
agreement and its terms.     A party who has made an unambiguous
written contract will not be heard to say that no agreement was
made.

     2
      Rudolph also answered "No" when asked whether he had "ever
voluntarily entered into an agreement where you considered one-half
hour a day to be adequate to provide for the care and maintenance
of the animal." Tr. 676-77. This statement could be literally
true: that is, Rudolph may have entertained the personal belief
that the agreement he had made was not adequate. This does not
mean there was no agreement.
      3
       Lindquist appeared at trial to have believed the document
captioned "Statement of Final Positions for Metropolitan Airports
Police Federation," and submitted to the arbitrator after mediation
failed, which included a request for specialist pay, to be the
mediator's proposal. See Tr. 446, 820.

                               -12-
     Perhaps the jury thought there was an agreement, but that it
was not reasonable.     Rudolph and Lindquist contend that they
actually worked more than provided for on off-duty days. But the
agreement explicitly dictates the amount of time they were to spend
on dog care, and specifies that they needed to obtain prior
approval for any additional time they thought necessary.4 Thus,
the additional work the jury found plaintiffs to have performed was
neither "suffered nor permitted" by MAC. 29 C.F.R. § 785.11; see
also Donovan v. Williams Chem. Co., 682 F.2d 185, 188 (8th Cir.
1982) (holding husband-wife teams instructed to split 80-hour-
weekly operation of gas stations could not collect overtime pay for
having worked in excess of 40 hours each). Plaintiffs persist,
however, with the contention that because MAC knew or had reason to
know additional work was being performed for its benefit, it is
liable for the attendant wages. See 29 C.F.R. § 785.11. We cannot
imagine what more MAC could reasonably have done. It was entitled
to rely on plaintiffs to follow the clear terms of the agreement.
(Sending someone to monitor the plaintiffs' activities at home, in
addition to being exceedingly intrusive, would simply waste
additional MAC money.)

     We do not know what amount of daily dog care is best. We
believe, however, that MAC has plenary authority to make that
determination about its own dogs, and direct its canine caretakers
accordingly. It is not enough for plaintiffs to show that they
worked more than agreed.     They must show that the agreement
provided an unreasonably short amount of time to perform the
assigned tasks. Cf. Lyle v. Food Lion, Inc., 954 F.2d 984 (4th
Cir. 1992). This they have failed to do. There is no evidence
that a reasonable employer would necessarily have known that half
an hour per off-duty day was too short a time to perform the tasks

      4
       The plaintiffs could recall no time during the period in
dispute that they sought such approval.

                               -13-
MAC told the officers to perform. Any time beyond the half-hour
plaintiffs spent with their canine charges we presume stemmed from
their personal devotion to the dogs, and was, therefore, not
"predominantly for the benefit of the employer," Henson v. Pulaski
County Sheriff Dep't, 6 F.3d 531, 534-35 (8th Cir. 1993), as it
must be in order to constitute "work" within the statute's meaning,
as explained in Tennessee Coal, Iron, & R.R. Co. v. Muscoda Local
No. 123, 321 U.S. 590, 598 (1944). We therefore hold that MAC was
entitled to judgment as a matter of law that a reasonable agreement
existed as to off-duty days, and that plaintiffs were therefore not
entitled to any back pay.

                               III.

     MAC and plaintiffs made a reasonable agreement as to the
amount of time Rudolph and Lindquist were to spend on dog care.
The portion of the judgment that held that plaintiffs are entitled
to no additional compensation for on-duty days is affirmed. The
portion of the judgment that held that plaintiffs are entitled to
additional compensation for off-duty days is reversed. The cause
is remanded with directions to enter judgment for defendants. We
need not address whether the District Court correctly calculated
the back wages owed.    Because the plaintiffs are obtaining no
success on the merits of their claim, we vacate the District
Court's award of attorneys' fees.

     It is so ordered.

     A true copy.

          Attest:

            CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

                               -14-