Ralph Smith v. Allegheny Technologies Inc

• Court: Court of Appeals for the Third Circuit
• Decided: December 10, 2018
• Docket: 18-1707
• Status: Unpublished

Opinion

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ________________

No. 18-1707 ________________

RALPH SMITH; IGNATIUS HARRIS, individually and on behalf of all others similarly situated,

Appellants

v.

ALLEGHENY TECHNOLOGIES, INC.; STROM ENGINEERING CORPORATION

________________

Appeal from the United States District Court for the Western District of Pennsylvania (D.C. Civil Action No. 2-17-cv-00911) District Judge: Honorable Mark R. Hornak ________________

Submitted Under Third Circuit L.A.R. 34.1(a) November 5, 2018

Before: AMBRO, SCIRICA, and RENDELL, Circuit Judges

(Opinion filed: December 10, 2018) ________________

OPINION* ________________

AMBRO, Circuit Judge

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. When is commuting across a picket line compensable? Ralph Smith and Ignatius

Harris appeal the District Court’s decision to dismiss their claims under the Fair Labor

and Standards Act (the “FLSA”), 29 U.S.C. § 201 et seq., the Oregon minimum wage

statute (the “OMWS”), and the Pennsylvania Minimum Wage Act (the “PMWA”), 43

P.S. § 333.103 et seq. They challenge the District Court’s ruling that they failed to state a

claim that crossing picket lines and travelling to work in an employer’s van was

compensable. For the reasons stated below, we affirm in part and vacate in part the

District Court’s decision to dismiss their complaint.

In August 2015, Allegheny Technologies, Inc. (“ATI”) began a lockout of its

union workers in Pennsylvania and Oregon. The employees responded by creating a

picket line. During the lockout, ATI contracted with Strom Engineering Corp. to provide

a temporary workforce to operate the facility. Smith and Harris were members of this

temporary workforce and made steel at the ATI facilities in 12-hour shifts. To enter and

leave the facilities, they rode through the picket line in Strom vans driven by temporary

workers. The vans picked them up and dropped them off at the hotels where they were

housed. The workers’ commute took roughly 45 minutes each way.

Smith and Harris filed a class and collective action complaint in July 2017,

alleging that ATI and Strom violated the FLSA, OMWS, and PMWA, as well as unjustly

enriched themselves under Pennsylvania law, by failing to compensate them for travel

between the hotels and the ATI facilities before and after their shifts. They also sought to

certify a class conditionally. Strom moved to strike their complaint, and ATI moved to

dismiss it.

2 A Magistrate Judge recommended that ATI and Strom’s motions be denied and

Smith and Harris’ motion for conditional certification be granted. The District Court

rejected these recommendations, granted ATI’s motion to dismiss, and denied all other

motions as moot. Smith and Harris appeal.

The District Court had jurisdiction over Smith and Harris’ FLSA claims under 28

U.S.C. § 1331. It properly exercised supplemental jurisdiction over their state law claims

under 28 U.S.C. § 1367(a). We have appellate jurisdiction under 28 U.S.C. § 1291. We

review de novo a District Court’s decision to grant a motion to dismiss. See Fowler v.

UMPC Shadyside, 578 F.3d 203, 206 (3d Cir. 2009). In doing so, “we accept all factual

allegations as true [and] construe the complaint in the light most favorable to the

plaintiff.” Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77, 84 (3d Cir. 2011).

A. FLSA

The FLSA requires employers to pay overtime to employees who work more than

40 hours in a workweek. The Portal-to-Portal Act, however, relieves employers from

compensating employees for:

(1) walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform, and

(2) activities which are preliminary to or postliminary to said principal activity or activities,

which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities.

29 U.S.C. § 254(a). The Supreme Court “has consistently interpreted the term ‘principal

activity or activities’ [to] embrac[e] all activities which are an ‘integral and indispensable 3 part of the principal activities.’” Integrity Staffing Solutions, Inc. v. Busk, 135 S. Ct. 513,

517 (2014) (“ISS”) (quoting IBP, Inc. v. Alvarez, 546 U.S. 21, 29–30 (2005)) (quotation

marks omitted). Thus employees will receive overtime pay for commuting when the

commute is (1) a principal activity or (2) integral and indispensable to a principal

activity. See id.; see also Llorca v. Sheriff, Collier Cty., Fla., 893 F.3d 1319, 1324 (11th

Cir. 2018).

1. Principal Activity

A principal activity is an activity that the employee is “employed to perform.” 29

C.F.R. § 790.8 (1970). According to the Department of Labor, “Congress intended the

words ‘principal activities’ to be construed liberally in the light of the foregoing

principles to include any work of consequence performed for an employer, no matter

when the work is performed.” Id. Smith and Harris acknowledge they were hired to

make steel, but they also allege that ATI hired Strom to “employ[] a non-unionized

temporary workforce . . . to cross picket lines and keep the affected plants in operation”

in an effort to pressure the union to negotiate more quickly its contract with ATI. J.A. at

51 ¶ 49. This conclusion is not supported by well-pled facts.

Smith and Harris allege that they were instructed to ride in Strom vans to cross the

picket line and that following these instructions was “a term and condition of their

employment.” J.A. at 57 ¶ 89. Accepted as true, these facts do not permit the reasonable

inference that a principal aspect of their employment was to take the vans to cross the

picket line. That an employer mandates certain travel procedures does not make the

travel a principal activity. For example, in Rutti v. Lojack Corp., the Tenth Circuit

4 concluded that requiring an employee to drive the employer’s vehicle to and from work

and not pick up passengers did not make the employee’s travel compensable under the

FLSA. 596 F.3d 1046, 1054 (10th Cir. 2010); see also Integrity Staffing Sols., Inc. v.

Busk, 135 S. Ct. 513, 519 (2014) (“ISS”) (“If the [integral and indispensable] test could

be satisfied merely by the fact that an employer required an activity, it would sweep into

‘principal activities’ the very activities that the Portal–to–Portal Act was designed to

address.”). Likewise here, the requirements that Smith and Harris observe procedures

while riding the Strom vans and while crossing the picket line do not establish a principal

activity.

To be sure, an employer could hire a temporary workforce for the principal goal of

crossing the picket line. For example, a temporary workforce’s commute would be a

principal activity if members of that workforce were simply hired to cross the picket line

in the morning, enter its factory, and then re-cross the picket line at night. Similarly, a

complaint could allege facts that demonstrated the employee’s crossing the picket line

was as important as the work the employee subsequently performed. But no such facts

were alleged here. Smith and Harris’ FLSA claim was properly dismissed because they

only alleged facts that support the inference they were employed to make steel.

2. Integral and Indispensable

Smith and Harris’ travel time might be compensable if it is “integral and

indispensable” to their principal activity of making steel. This occurs when the employee

performs tasks that are necessary and directly tied to the principal activity. Put another

way, riding in the Strom vans to work is compensable if it was so important to making

5 steel that it must be compensable. See ISS, 135 S. Ct. at 517. ISS cites to two prior

Supreme Court cases to clarify the requisite connection between an activity and the

employee’s principal purpose. In Mitchell v. King Packing Co., the Court held

compensable the time meatpacking employees spent sharpening their knives because “a

dull knife would slow down production which is conducted on an assembly line basis,

affect the appearance of the meat as well as the quality of the hides, cause waste and

make for accidents . . . .” 350 U.S. 260, 262 (1956). In contrast, the Court in IBP, Inc. v.

Alvarez held that the time meatpacking employees spend putting on protective gear

before a shift is “two steps removed from the productive activity on the assembly line.”

546 U.S. 21, 42 (2005). In both cases the activities were required, but only when they

affected the quality of the principal activity was it compensable.

Here, riding the Strom van to work is at least two steps removed from making

steel. Smith and Harris’ complaint does not sufficiently plead why the Strom vans were

indispensable to that production. Further, the presence of a picket line does not elevate

this situation beyond that of a normal commute, which courts have routinely held is non-

compensable under the FLSA. See, e.g., Singh v. City of New York, 524 F.3d 361, 367

(2d Cir. 2008); Smith v. Aztec Well Servicing Co., 462 F.3d 1274, 1290 (10th Cir. 2006).

In this context, Smith and Harris’ FLSA claims fail.

B. OMWS

As Smith and Harris concede in their briefing, the OMWS claim they make is

governed by the same analysis as their FLSA claim and so fails for the reasons noted

above.

6 C. PMWA

The PWMA requires that “[e]very employer shall pay . . . each of his or her

employe[es] wages for all hours worked.” 43 Pa. Cons. Stat. § 333.104(a). For travel

time to be compensable, it must be “time spent in traveling as part of the duties of the

employee during normal working hours and time during which an employee is employed

or permitted to work.” 34 Pa. Code § 231.1 (1994). This requires a two-part inquiry

determining whether the travel time was (1) part of the employee’s duties and (2) during

normal working hours.1 The District Court dismissed Smith and Harris’ PMWA claim

because their commute was not part of their duties of employment.

There is a dearth of precedent interpreting when travel time is an employee’s duty

under the PMWA. The District Court relied on our non-precedential opinion in Espinoza

v. Altas Railroad Construction, LLC, 657 F. App’x 101, 106 (2016), which held that, for

travel to be compensable, the employee must “perform[] work-related tasks, aside from

travel, during their travel time.” The District Court concluded that Smith and Harris’

claim under the PMWA failed for “the same reasons that the Court concluded that [they]

cannot establish that commuting across the picket line in Strom’s vans was either a

principal activity or integral and indispensable to a principal activity of their

employment.” J.A. at 26. But Pennsylvania has not enacted the Portal-to-Portal Act, and

Pennsylvania law requires compensation for a broader range of activities, including travel

1 Because ATI does not dispute on appeal Smith and Harris’ contention that they adequately alleged the travel was during normal working hours, we may consider that issue waived. See John Wyeth & Bro. Ltd. v. CIGNA Int’l Corp., 119 F.3d 1070, 1076 n.6 (3d Cir. 1997).

7 time, than the FLSA. See De Asencio v. Tyson Foods, Inc., 342 F.3d 301, 307 (3d Cir.

2003), as amended (Nov. 14, 2003); In re Cargill Meat Sols. Wage & Hour Litig., 632 F.

Supp. 2d 368, 394, 397–98 (M.D. Pa. 2008). Neither the principal activity nor the

integral or indispensable test applies here.

As a non-precedential opinion (written by a divided panel), Espinoza has no

persuasive authority under the rules of our Court. See I.O.P. 5.7. Instead, we think our

precedential opinion in Pennsylvania Fed’n of Bhd. of Maint. of Way Employees by Dodd

v. Nat’l R.R. Passenger Corp. (Amtrak), 989 F.2d 112, 116 (3d Cir. 1993), is instructive.

Appellants in Amtrak sought compensation under the regulation at issue here, 34 Pa.

Code § 231.1, for travel in Amtrak vehicles after their shift was complete that, they

alleged, was required under their collective bargaining agreement. We held that the

Pennsylvania travel regulation requires courts to inquire into the underlying employment

agreement. Reviewing it provided the “the only way” to determine if the employees “are

required to travel on the AMTRAK vehicle after their work shifts are done.” Id. at 115

(emphasis in original).

That courts must determine whether the uncompensated activity is required under

the contract is consistent with a plain text reading of “duties of the employee” under the

regulation. Black’s Law Dictionary defines a “duty” as “[a] legal obligation that is owed

or due to another and that needs to be satisfied.” Black’s Law Dictionary 580 (9th ed.

2009). An obligation “may refer to anything that a person is bound to do or forbear from

doing.” Id. at 1179 (emphasis added).

8 Smith and Harris’ employment agreements are not in the record. They allege that

“Plaintiffs’ and Class Members’ employment with ATI and Strom required that they

cross active picket lines in the vans owned, leased, or rented by Strom.” J.A. at 56 ¶ 85.

They also allege that they had to follow specific instructions regarding crossing the picket

lines “as a term and condition of their employment.” Id. at 57 ¶ 89. For a motion to

dismiss, we are required to accept as true the factual allegations of the complaint. Thus

Smith and Harris have adequately pled that riding in Strom vans was a duty of the

employees and thus compensable under the PMWA.

We conclude that the District Court erred in granting ATI’s motion to dismiss, and

thus we vacate in relevant part.

D. Claims against Strom

Smith and Harris argue that the District Court improperly dismissed their

complaint against Strom because it did not join ATI’s motion to dismiss. The District

Court was similarly “puzzled by this somewhat piecemeal litigation approach on Strom’s

part.” J.A. at 18 n.1. However, the Court dismissed their complaint against Strom

because “the grounds in favor of dismissal raised in ATI’s Motion are common to both

Defendants, and Plaintiff’s fully responded to these arguments in its briefings.” Id. We

agree with the Court that Smith and Harris’ complaint also fails to state a cause of action

against Strom and so affirm the sua sponte dismissal of their FLSA and OMWS claims.

* * * * *

Smith and Harris failed to state a claim under the FLSA and OMWS, and thus we

affirm the District Court’s dismissal of those claims. We conclude, however, that Smith

9 and Harris adequately pled a cause of action under the PMWA. Therefore, we vacate the

dismissal of their claims under that statute and remand. The District Court in its

discretion may choose to refer the case to state court for resolution of the remaining state

law claims.