Court Opinion

ID: 1015154
Source: CourtListenerOpinion
Date Created: 2013-07-04 21:28:30.129028+00
Date Added: 2024-06-11T15:13:08.175386
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                             No. 03-2223

RICHARD L. FULMER; JAMES M. BEANE; BRENT A.
CLEVINGER; DAVID L. FULKS; BRIAN N. SHARP;
JAMES A. HILL; SCOTT D. DAVIDSON; JOHN O.
PHILPOTT; DANIEL J. TAAFFE; BOYD R. POFF, III;
DWIGHT PETTRY; KENNY R. ROMINE; JEREMY
RONCAGLIONE; REX EGGLETON; BOYD R. POFF, II;
ERIC MITCHELL; LANCE W. CARNEY; CHARLES E.
SMITH, and other employees similarly situated,

                                            Plaintiffs - Appellants,

           and

JERRY D. BOSTIC,

                                                           Plaintiff,

           versus

THE CITY OF ST. ALBANS, WEST VIRGINIA, a West
Virginia Municipal Corporation,

                                               Defendant - Appellee.

Appeal from the United States District Court for the Southern
District of West Virginia, at Charleston. Joseph Robert Goodwin,
District Judge. (CA-02-1053-2)

Argued:   October 27, 2004                 Decided:   January 7, 2005

Before WILKINS, Chief Judge, NIEMEYER, Circuit Judge, and Glen E.
CONRAD, United States District Judge for the Western District of
Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion. Chief Judge Wilkins
wrote an opinion concurring in part and dissenting in part.

ARGUED: Scott Allen Damron, Huntington, West Virginia, for
Appellants. Bryan Rex Cokeley, STEPTOE & JOHNSON, Charleston, West
Virginia, for Appellee. ON BRIEF: Robert L. Bailey, II, STEPTOE &
JOHNSON, Charleston, West Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).

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PER CURIAM:

       This    appeal     arises    out    of   a   claim   for   unpaid     overtime

compensation brought by nineteen professional firefighters employed

by   the     City   of   St.     Albans,   West     Virginia    (the     City).       The

firefighters allege that the City's method of calculating their

regular rate of pay violates the Fair Labor Standards Act (FLSA),

29 U.S.C.A. §§ 201-219 (1998). The district court, concluding that

the City's method of compensation complies with the FLSA, entered

an order granting summary judgment to the City.                        We affirm the

judgment of the district court.

                                           I.

       The    parties'     stipulated      facts     indicate     that    the     City's

firefighters are scheduled to work one twenty-four hour shift

followed by forty-eight hours off. During a three week cycle, each

firefighter works two forty-eight hour weeks and one seventy-two

hour week.      The firefighters are scheduled to work an average of

2,912 hours per year. This total includes 2,080 scheduled straight

time   hours,       or   hours    within   a    forty   hour    workweek,       and   832

scheduled overtime hours.

       The City pays the firefighters a regular hourly rate for all

hours worked up to and including forty hours per week.                                The

firefighters are paid an overtime rate of one and one-half times

their regular hourly rate for all hours worked in excess of forty

                                           3
per week.     The City's wage classification plan expresses the

firefighters’ base pay as a total annual salary.            In order to

calculate the firefighters' regular hourly rate, the City divides

the firefighters' annual salary by 3,328 hours.             This divisor

equals the number of hours for which the firefighters are scheduled

to be paid.    Since the firefighters are scheduled to work 832

overtime hours, and since they are compensated at a rate of one and

one-half times their regular rate for these hours, the City adds

1,248 hours (832 hours multiplied by 1.5) to the firefighters'

2,080 scheduled straight time hours to arrive at 3,328 hours.

     The City's method of calculating the firefighters' regular

hourly rate has been in practice since 1989.            When the City

interviews individuals for the firefighter positions, the City

explains that the firefighters work rotating shifts, consisting of

one twenty-four hour shift followed by forty-eight hours off.         The

City also explains the firefighters' total annual pay.

     In July 2002, the firefighters filed a complaint against the

City in West Virginia state court, alleging violations of the FLSA.

The case was timely removed to the United States District Court for

the Southern District of West Virginia.      The firefighters’ second

amended   complaint   alleges   that   the   City   fails   to   properly

compensate the firefighters for overtime work.        The firefighters

claim that the regular hourly rate, on which their overtime rate is

based, is incorrectly calculated by the City.       The district court

                                   4
granted summary judgment in favor of the City.             The district court

concluded that the firefighters' annual pay includes an overtime

premium, and that the City properly deducts the overtime premium

when calculating the firefighters' regular hourly rate.                    The

firefighters appeal the district court's decision.

     We review a grant of summary judgment de novo, viewing all

facts and inferences in the light most favorable to the nonmoving

party.   Love-Lane v. Martin, 355 F.3d 766, 775 (4th Cir. 2004).

Summary judgment is appropriate if "there is no genuine issue as to

any material fact and ... the moving party is entitled to judgment

as a matter of law."     Fed. R. Civ. P. 56(c).

                                   II.

     The overtime provision of the FLSA requires employers to pay

nonexempt employees at least one and one-half times their "regular

rate" for all hours worked in excess of forty per week.                     29

U.S.C.A. § 207(a)(1) (1998).       The "regular rate" refers to the

hourly   rate   an   employer   pays       an   employee   "for   the   normal,

non-overtime workweek for which he is employed."                   Walling v.

Youngerman-Reynolds Hardwood Co., 325 U.S. 419, 424 (1945).                 In

this case, it is undisputed that the City pays the firefighters

overtime wages when the firefighters work more than forty hours in

one week. The firefighters argue, however, that the City's formula

for determining their regular hourly rate fails to comply with the

                                       5
FLSA regulations.    The firefighters contend that when calculating

their regular hourly rate, the City must reduce their annual salary

to its workweek equivalent and divide the workweek equivalent by

the actual number of hours worked.    See 29 C.F.R. §§ 778.109 and

778.113(b).

     Although the regulations cited by the firefighters give some

direction for calculating the regular hourly rate for an employee

who is paid an annual salary, the regulations do not address the

situation of an employee whose salary already includes a premium

for overtime work.    When an employee is hired on a salary basis,

"the regular rate depends in part on the agreement of the parties

as to what the salary is intended to compensate."    29 C.F.R.

§ 778.323.    "[I]f the annual salary was properly intended by the

parties to account for both a regular rate and an overtime rate,

the contemplated arrangement is in compliance with the FLSA."

Adams v. Dept. of Juvenile Justice, 143 F.3d 61, 68 (2nd Cir.

1998).

     We agree with the district court that the parties agreed to

include an overtime premium in the firefighters' annual pay. It is

undisputed that the City explains the total annual pay to the

firefighters when they are first interviewed.       The City also

explains the firefighters' rotating shifts.   The City's method of

calculating the firefighters' regular hourly rate has been in

practice since 1989, and the firefighters did not formally petition

                                  6
the City to change its method prior to filing this lawsuit.                       There

is simply no evidence to support the firefighters' contention that

they did not agree for their annual pay to include an overtime

premium.     The firefighters place great emphasis on the deposition

testimony of a City Council member, who testified that firefighters

complained in the past about their overtime pay.                          While this

testimony may suggest that the firefighters became unsatisfied with

their   wages,    it    does   not   contradict       the    conclusion     that    the

firefighters' agreed to their annual pay, and the included overtime

premium, at the time they were hired.

     We also agree with the district court that the City's method

of calculating the firefighters' regular hourly rate complies with

the FLSA.    Since the firefighters' annual pay includes an overtime

premium, the City properly deducts the overtime premium when

calculating the firefighters' regular hourly rate.                      As previously

stated, an employee's regular hourly rate is the rate an employer

pays for the normal, non-overtime work period.                    Walling, 325 U.S.

at 424 (emphasis added).             See also 29 U.S.C. § 207(e) (1998)

(providing    for      the   exclusion    of    any    overtime         premium    when

calculating the regular rate); Bay Ridge Operating Co. v. Aaron,

334 U.S. 446, 464 (1948) (noting that Congress clearly "intended to

exclude overtime premium payments from the computation of the

regular    rate   of    pay.").      If   the   City        did   not    convert   the

firefighters' scheduled overtime hours into straight-time hours

                                          7
before calculating their regular rate, the firefighters' regular

rate would be inflated.   "To permit overtime premium to enter into

the computation of the regular rate would be to allow overtime

premium on overtime premium –- a pyramiding that Congress could not

have intended."   Bay Ridge Operating Co., 334 U.S. at 464.

                                III.

     Because the undisputed facts with regard to the firefighters'

claims for unpaid overtime compensation demonstrate that the City

is entitled to judgment as a matter of law, the district court's

entry of summary judgment in favor of the City is

                                                         AFFIRMED.

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WILKINS, Chief Judge, concurring in part and dissenting in part:

       The majority opinion affirms the grant of summary judgment

against each of the Appellants.         Although I concur in that result

with regard to all but two of the Appellants, I respectfully

dissent from the holding that the City was entitled to summary

judgment against Lance W. Carney and Charles E. Smith.

       We review the grant of summary judgment de novo, viewing the

disputed facts in the light most favorable to Appellants.                 See

Figgie Int’l, Inc. v. Destileria Serralles, Inc., 190 F.3d 252, 255

(4th       Cir.   1999).   Summary    judgment   is   appropriate   “if   the

pleadings, depositions, answers to interrogatories, and admissions

on file, together with the affidavits, if any, show that there is

no genuine issue as to any material fact and that the moving party

is entitled to a judgment as a matter of law.”             Fed. R. Civ. P.

56(c).

       When employees are hired at a particular salary for hours that

the parties contemplate will exceed 40 per week, the FLSA entitles

the employees to a statutory overtime premium for each hour that

they work in excess of 40 in a given week, in addition to the

salary to which they agreed.         See 29 C.F.R. § 778.325 (2004).1     The

majority holds, however, that the City properly paid Appellants

       1
      Section 778.325 explains, for example, that when an employee
whose maximum hours standard is 40 (such as Appellants) is hired at
a salary of $275 per week for 55 hours, he is entitled to receive
the $275 for a 55-hour workweek plus a statutory overtime premium
for each of the 15 hours he worked in excess of 40.

                                       9
only their agreed-upon salary because, as a matter of law, the

parties agreed when Appellants were hired that the salary already

included the statutory overtime premiums.              See ante, at 6-7;

29 U.S.C.A. § 207(e)(5) (West 1998 & Supp. 2004) (providing that an

employee’s regular rate shall not include compensation provided at

a premium rate for overtime hours).

       This holding is not supported by the record.           The parties

stipulated that “[t]he City’s Wage Classification Plan specifies a

firefighter’s base pay as a total annual, rather than hourly, pay

based on the firefighter’s rank.”        J.A. 93.     They also stipulated

that “[w]hen the City first interviews a firefighter before hiring,

the City explains to that firefighter the nature of the rotating

24-hour-on / 48-hour-off shifts” and that “[w]hen the City first

hires a firefighter, the City explains to that firefighter his or

her total annual pay.”       Id. at 94.        No other stipulations or

evidence forecasted in the record indicates what Appellants and

City representatives discussed when Appellants were hired.

       The majority apparently interprets the stipulation that the

City explained to the firefighters their “total annual pay” to mean

that   the   City   specifically   explained   that    Appellants’   salary

represented the total amount of compensation--including statutory

overtime premiums--that they would receive for working the agreed-

upon hours.    But that is an erroneous interpretation, in my view.

In the parties’ stipulations, the term “total annual [pay]” is

                                    10
contrasted with “hourly [pay]” simply to explain that the City’s

Wage Classification Plan sets forth Appellants’ salaries in annual

rather than hourly terms.   Id. at 93.   Thus, the stipulation that

the City explains a firefighter’s “total annual pay” to him at the

time of his hiring cannot establish as a matter of law anything

more than that the City explains a firefighter’s base annual salary

to him.   See Rice v. Paladin Enters., 128 F.3d 233, 253 (4th Cir.

1997) (holding that, on review of grant of summary judgment to

defendant, stipulation must be interpreted in the light most

favorable to plaintiff).    The stipulation states nothing about

whether the City informed Appellants that their base salary already

included statutory overtime premiums.2

     The City contends that even if Appellants did not agree at the

time they were hired that their annual salary already included

statutory overtime premiums, it established as a matter of law that

Appellants subsequently agreed to that arrangement.       The City

argues that the paychecks of each Appellant clearly explained that

     2
      It also appears that the majority may place the burden on
Appellants to prove the nonexistence of such agreements. See ante,
at 6-7 (“There is simply no evidence to support the firefighters’
contention that they did not agree for their annual pay to include
an overtime premium.”). But, in fact, the City bears the burden of
proving the existence of the agreements because the City is
attempting to use the agreements to justify its exclusion of a
portion of Appellants’ wages in determining Appellants’ regular
rates. See 29 U.S.C.A. § 207(e)(5); cf. Clark v. J.M. Benson Co.,
789 F.2d 282, 286 (4th Cir. 1986) (holding that employer bears the
burden of proving applicability of FLSA exemptions).      The City
correctly conceded as much at oral argument.

                                11
his   agreed-upon   salary    already     included   a    statutory    overtime

premium and thus, by continuing to work without filing a formal

complaint,     Appellants     implicitly        agreed    with   the     City’s

determination of their regular rate.

      I agree with the City with regard to most of the Appellants.

See Bodie v. City of Columbia, 934 F.2d 561, 564 (4th Cir. 1991)

(en banc) (quoting with approval statement in Shepler v. Crucible

Fuel Co., 140 F.2d 371, 374 (3d Cir. 1944), that “continuance in an

employment under a new method of computing pay creates a new

contract and that the employee’s consent to the new arrangement may

be found from the continuance” (internal quotation marks omitted));

id. at 566 (citing with approval General Electric Co. v. Porter,

208 F.2d 805, 813 (9th Cir. 1953), which held that employees, by

continuing to work, implicitly agreed to employer’s unilateral

change in method of payment that resulted in employees no longer

receiving overtime). But see Mumbower v. Callicott, 526 F.2d 1183,

1187 (8th Cir. 1975) (holding that an agreed-upon salary for

agreed-upon hours does not include a statutory overtime premium

unless the employer proves that the parties explicitly agreed that

it would); Brennan v. Elmer’s Disposal Serv., 510 F.2d 84, 86 n.1,

88 (9th Cir. 1975) (same).      The record here demonstrates that most

of the Appellants claim that their FLSA rights had been violated

for at least three years, see Rule 26(a)(1) Disclosures of Pls.,

Richard   L.   Fulmer,   et   al.,   at   2-6    (filed   Dec.   2,   2002),   a

                                     12
sufficient time to establish as a matter of law their awareness of

the City’s regular rate computation and their implied consent to

that calculation.

     Appellants argue, however, that there is no basis to impute

knowledge of, and agreement to, the City’s payment methods to all

Appellants. Indeed, I can find no evidence in the record regarding

how long Carney and Smith worked for the City prior to joining this

lawsuit.   As far as the record reflects, these employees may have

promptly joined in this suit shortly after beginning work with the

City. Considering that each of the Appellants bargained separately

with the City and was not part of a collective bargaining unit, I

would hold that the City failed to prove as a matter of law that

Carney and Smith agreed--implicitly or otherwise--that their base

salary already included statutory overtime premiums.   I therefore

respectfully dissent from the majority opinion to the extent that

it holds to the contrary.

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