Foster v. Kraft Foods Global, Inc.

285 F.R.D. 343, 19 Wage & Hour Cas.2d (BNA) 1649, 2012 WL 3704992, 2012 U.S. Dist. LEXIS 121282
CourtDistrict Court, W.D. Pennsylvania
DecidedAugust 27, 2012
DocketCivil Action No. 09-453
StatusPublished
Cited by8 cases

This text of 285 F.R.D. 343 (Foster v. Kraft Foods Global, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Foster v. Kraft Foods Global, Inc., 285 F.R.D. 343, 19 Wage & Hour Cas.2d (BNA) 1649, 2012 WL 3704992, 2012 U.S. Dist. LEXIS 121282 (W.D. Pa. 2012).

Opinion

MEMORANDUM AND ORDER

CATHY BISSOON, District Judge.

I. MEMORANDUM

For the reasons that follow, Defendant’s Motion for Summary Judgment (Doc. 45) will be denied, and the Court holds that payment of overtime under the fluctuating workweek method, at one-half times an employee’s “regular” or “basic” rate, as opposed to one and one-half times (or more), is impermissible under 34 Pa.Code § 231.43(d)(3). The remainder of the parties’ Motions (see Does. 52, 54, 70, 71 & 73) will be resolved as described below.

A. Defendant’s Motion for Summary Judgment (Doc. 45)

1. The Fluctuating Workweek Under the Pennsylvania Minimum Wage Act

The parties’ disputes center around the fluctuating workweek method of overtime compensation. The origins of this method date back to a Supreme Court decision in 1942, and it subsequently has been reduced to federal regulation in 29 C.F.R. § 778.114. See generally Anthony J. Galdieri, Esq., The Fluctuating Workweek: How It Works, How It’s Treated, How It’s Perceived, 8 Pierce L.Rev. 157, 159 (Feb. 2010) (citing Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682 (1942)). As one commentator aptly summarized:

[The fluctuating workweek method] allows an employer to pay an employee a fixed, weekly salary, regardless of the number of hours worked. Each week, the employee’s fixed salary is divided by the number of hours worked during the week to determine the employee’s regular rate of pay. Because the fixed salary is designed to compensate the employee upfront for some overtime, an employee is paid one-half her regular rate for every hour she works over forty, instead of one and one-half times her regular rate. Thus, the more the employee works and the more overtime the employee logs, the less ... she is paid for each additional hour of overtime. This result is permissible because the employee’s salary compensates the employee for some overtime upfront, allowing the employer to drop her hourly rate with every additional hour worked and to pay the employee at one-half her regular rate ... for every hour worked over forty.

[345]*345Id. at 159-60 (citing 29 C.F.R. § 778.114) (internal citations and footnotes omitted).1

The question in this case is whether the fluctuating workweek method (hereinafter, “the FWW method”) is permissible under the Pennsylvania Minimum Wage Act (“PMWA”) and the regulations promulgated thereunder. Defendant maintains that the FWW method is permissible under 34 Pa.Code § 231.43(d)(3), which, in relevant part, states:

No employer may be deemed to have violated [the PMWA] by employing an employee for a workweek in excess of [40 hours] if, under an agreement or understanding arrived at between the employer and the employee before performance of the work, the amount paid to the employee for the number of hours worked by him in the workweek in excess of [40 hours] ... [i]s computed at a rate not less than 1 % times the rate established by the agreement or understanding as the basic rate to be used in computing overtime compensation thereunder____

Id.

Defendant does not claim that its compensation policy is permissible under the provisions in Section 231.43(b), regarding wages paid on a “per-day” or “per-job” basis:

If the employee is paid a flat sum for a day’s work or for doing a particular job without regard to the number of hours worked in the day or at the job ..., his regular rate is determined by totaling all the sums received at the day rates or job rates in the workweek and dividing by the total hours actually worked. He is then entitled to extra half-time pay at this rate for hours worked in excess of 40 ....

Id.; cf. Def.’s Br. (Doc. 46) at 6-11 (citing, in every instance, Section 231.43(d) as basis for permissibility of FWW method) and id. at 8 (stating that “it is irrelevant” whether Defendant’s policy complied with Section 231.43(b)).2

In deciding whether the FWW method complies with Pennsylvania law, the Court does not write on a blank slate. In Cerutti v. Frito Lay, Inc., 777 F.Supp.2d 920 (W.D.Pa. 2011), Judge Joy Flowers Conti rejected many of the same arguments presented here, made by one of the same law firms representing Defendant in this case. Judge Conti held that the defendant’s payment of overtime under the FWW method, at one-half times the regular rate, failed to satisfy Pennsylvania Code Section 231.43(d), because that Section expressly requires overtime payment at a rate of one and one-half times the regular rate. Id. at 945. The undersigned agrees.

As Judge Conti observed, a plain reading of Section 231.43(d) requires Defendant to pay its employees in question at a “rate not less than 1 ^ times the rate established by the [parties’] agreement or understanding as the basic rate.” Id. (emphasis added). Defendant admittedly paid the employees only one-half time for all hours worked in excess of forty, consistent with the FWW method under the FLSA. See Def.’s Br. (Doc. 46) at 19. Had the Pennsylvania regulatory body wished to authorize one-half-time payment under Section 231.43(d), it certainly knew how to do so. See 34 Pa.Code § 231.43(b) (for work compensated on per day or per-job basis, employee is “entitled to extra half-time pay ... for hours worked in excess of 40”) (emphasis added). The state regulators were well aware of the federal regulations, as evidenced by their verbatim adoption of 29 C.F.R. § 778.112, regarding “day rate[ ]” and “job rate[]” employees. Compare 34 Pa. Code § 231.43(b) and 29 C.F.R. § 778.112 (containing identical language). As the court in Friedrich stated:

[T]he overtime compensation scheme outlined in the federal regulations was [346]*346adopted at least as far back as 1950[, and t]he state regulations were adopted in 1977____The fact that § 231.43(b) is analytically identical to the two federal regulations!;, ie., Sections 778.112 and 778.114]— and exactly identical to one of them, § 778.112 — indicates that [Pennsylvania’s] Industrial Board of the Department of Labor and Industry knew about the federal regulations when drafting the state regulations. The Industrial Board adopted — verbatim — one of the regulations, but did not adopt the other. To hold that the Industrial Board intended to adopt both federal regulations, even though the language of only one appears in the state regulations, would be to ignore what the Industrial Board actually did. While it might be convenient for ... multi-state employers if federal law and Pennsylvania law were identical on the issue of overtime compensation, the fact is that they are not.

Id., 833 F.Supp.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

WOFFORD v. SEBA ABODE, INC.
W.D. Pennsylvania, 2023
Poe v. IESI MD Corporation
243 Md. App. 243 (Court of Special Appeals of Maryland, 2019)
Chevalier v. General Nutrition Centers, Inc.
177 A.3d 280 (Superior Court of Pennsylvania, 2017)
Rafael Espinoza v. Atlas Railroad Construction LL
657 F. App'x 101 (Third Circuit, 2016)
Chevalier v. General Nutrition Centers Inc.
42 Pa. D. & C.5th 1 (Alleghany County Court of Common Pleas, 2014)
Verderame v. Radioshack Corp.
31 F. Supp. 3d 702 (E.D. Pennsylvania, 2014)

Cite This Page — Counsel Stack

Bluebook (online)
285 F.R.D. 343, 19 Wage & Hour Cas.2d (BNA) 1649, 2012 WL 3704992, 2012 U.S. Dist. LEXIS 121282, Counsel Stack Legal Research, https://law.counselstack.com/opinion/foster-v-kraft-foods-global-inc-pawd-2012.