Tymeco Jones v. SCO Silver Care Operations LLC
Opinion of the Court
OPINION OF THE COURT
Plaintiffs, Tymeco Jones, Iesha Bullock, and Teairra Pizarro, are certified nursing assistants who bring this action against their employer, SCO Silver Care Operations (“Silver Care”) for violations of the Fair Labor Standards Act (“FLSA”) and related New Jersey state wage and hour laws. The plaintiffs claim that Silver Care underpaid them for overtime in two ways. First, Silver Care failed to include certain hourly wage differentials in the calculation of the plaintiffs’ regular rate of pay, resulting in illegally low overtime rates. Second, Silver Care deducted plaintiffs’ half-hour meal breaks from their total hours worked, even though they often worked through those breaks. A year after the plaintiffs filed their lawsuit, but before any discovery took place, Silver Care moved to dismiss or to stay the proceedings pending arbitration, citing the arbitration clause in the governing collective bargaining agreement (“CBA”). The District Court denied the motion to dismiss or to stay pending arbitration. Defendant Silver Care appeals, contending that both overtime claims must first be submitted to arbitration to resolve disputed interpretation of the CBA, including the definition of the wage differentials and policies concerning the meal breaks. For the reasons set out below, we will affirm the decision of the District Court.
I. Background
The plaintiffs are employed, at an assisted living facility, which was bought by Silver Care in 2007. The terms of their employment are governed by a CBA, negotiated by the nurses’ union at the time of the purchase in 2007. This agreement lays out, among other things, wages, raises, breaks, and a grievance procedure that directs all disputes and complaints arising under the CBA to arbitration. Together, the three plaintiffs bring underpayment of overtime claims on their own behalf and on behalf of a class of nursing assistants who have worked at the nursing home at any time between December 31, 2010 and December 31, 2013. Their allegations are twofold: First, though plaintiffs are paid wage differentials, an additional $1.25 an hour to $3.00 an hour to account for shift premiums and raises, these differentials are not included in their regular rate of pay when overtime pay is calculated. Second, plaintiffs’ 30-minute meal breaks are automatically deducted from total time worked even though they often need to work through those breaks during night shifts. Briefly summarized below are the facts relevant to each of these two claims, followed by the procedural history.
A. Exclusion of Wage Differentials in Overtime Calculation
Nursing assistants are paid a base rate of $10 to $14 an hour. In addition to these base rates, they may also be paid some or all three types of differentials: (1) “shift
B. Uncompensated 30-Minute Meal Breaks
Under the CBA, nursing assistants who are scheduled for eight-hour shifts are entitled to two paid 15-minute breaks and one unpaid 30-minute meal break per shift. The plaintiffs allege that nursing assistants who work during the night shifts “rarely, if ever” took an uninterrupted meal break because those shifts are chronically understaffed.
C. Procedural History
The plaintiffs filed suit in December 2013. Silver Care moved to dismiss the complaint, which motion was denied when the plaintiffs filed an amended complaint. Silver Care subsequently moved to dismiss the amended complaint, which was granted as to the plaintiffs’ claims seeking injunc-tive relief, but denied as to the claims seeking monetary damages. Thereafter, the plaintiffs moved to conditionally certify their suit as a collective action. Silver Care opposed the motion for conditional certification and moved to dismiss or to stay the proceedings pending arbitration. The District Court granted conditional certification and denied Silver Care’s motion to dismiss or stay proceedings pending arbitration, holding that the plaintiffs’ FLSA claims do not arise out of or implicate the CBA. Silver Care subsequently moved for reconsideration, which was also denied. Silver Care appealed.
The main issue on appeal is the applicability of the arbitration clause in the CBA to each of the plaintiffs’ FLSA overtime claims. We begin by examining the relevant legal framework before turning to the plaintiffs’ two claims.
A. Legal Framework
Whether and when a plaintiff’s FLSA claims can be covered by an arbitration clause in a CBA is subject to a two-prong test. A court may compel arbitration of a plaintiffs federal statutory claim when (1) the arbitration provision clearly and unmistakably waives the employee’s'ability to vindicate his or her federal statutory right in court; and (2) the federal statute does not exclude arbitration as an appropriate forum.
In Vadino, the plaintiff-employee brought two claims.
By contrast, we held more recently in Bell v. Southeastern Pennsylvania Transportation Authority that the plaintiffs were not required to resolve any contractual disputes through arbitration before bringing their FLSA claim in federal court because their FLSA claim was completely independent of any interpretation of the CBA.
In summary, to the extent that an employee may be compelled to arbitrate his or her FLSA claims at all, the arbitration clause in the CBA must clearly and unmistakably state so. However, even where an arbitration clause does not contain a clear and unmistakable waiver of a plaintiffs right to a judicial forum, a plaintiff may nonetheless be compelled to arbitrate disputes over interpretations of the CBA, if the FLSA claims depend on such contractual disputes.
Here, Silver Care does not dispute that the arbitration provision lacks a clear and unmistakable waiver of the employees’ right to vindicate their FLSA claims in federal court.
B. Miscalculation of Overtime Rate Claim
Silver Care argues that the plaintiffs’ FLSA claim alleging miscalculation of the overtime rate rests upon a dispute over an implicit term of the CBA regarding whether the differentials already include a payment for overtime. Silver Care claims that during the collective bargaining process, when it negotiated to grandfather in some of the differentials, it also came to an agreement with the nurses’ union that the additional differential amounts would already include overtime.
Silver Care’s argument fails because the plaintiffs’ overtime claim is gov
The FLSA requires qualifying employers to pay “at a rate not less than one and one-half times the regular rate” to employees for hours worked in excess of forty hours a week.
In other words, whether the wage differentials should be included in the regular rate of pay depends not on any labels assigned to them by the CBA, but on whether they fit into one of the statutory exclusions. An employee’s “regular rate is a readily definable mathematical caleulation that is explicitly controlled by the FLSA.”
In conclusion, the plaintiffs’ miscalculation of overtime rate claim does not depend on any disputed term of the CBA, and, therefore, need not be sent to arbitration.
C. Lack of Mealtime Compensation Claim
Silver Care argues that the plaintiffs’ second FLSA claim—that their meal breaks should be credited towards hours
The FLSA itself does not define what are compensable work hours. Instead, the Wage and the Hour Division of the Department of Labor issued a number of regulations providing employers and employees alike guidance on how it would implement and enforce the law. One such regulation provides that employers need not compensate employees for bona fide meal periods because those are not considered to be compensable worktime.
As the dissent alludes, this regulation does not have the force of law, however, and merely “constitute[s] a body of experience and informed judgment to which courts and litigants may properly resort for guidance.”
Silver Care does not argue that the plaintiffs’ mealtime compensation claim is a contractual dispute, as the dissent posits. It recognizes that the plaintiffs’ mealtime compensation claim is based on the FLSA and how compensable work time is defined under that statute. Instead, it relies on our consideration of the characterization of the meal break in the CBA in Babcock to support its contention that “[i]n order to determine ... to whom the benefit of the meal break inures, there must be an inter
All of these so-called disputed “interpretations” of the CBA, however, are factual questions—length of meal breaks, types of interruptions, how they were handled, and whether the plaintiffs ever received compensation due to these interruptions.
In Babcock, we determined that the meal period át issue there inured primarily to the benefit of the employees by looking at both the facts and the CBA.
Notably, our consideration of the CBA was limited to reading the text. We did not collapse the factual inquiry and the consideration of the CBA into one. Nor could we. To characterize an essentially factual inquiry as a dispute of practices or custom under the CBA such that arbitration is necessary would be to circumvent Supreme Court precedent that a plaintiff cannot be compelled to arbitrate his or her federal statutory claims without a clear
Here, Silver Care has not pointed to any disputes over the text of the CBA, which provides that “meal periods and breaks shall be free and uninterrupted, and employees shall not be on call. However, in emergencies, employees are expected to respond.”
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In sum, neither of the plaintiffs’ FLSA claims depend on disputed interpretations of CBA provisions such that arbitration is necessary.
III. Conclusion
For the foregoing reasons, we will affirm the District Court’s denial of Silver Care’s motion to dismiss or to stay the proceedings pending arbitration.
. A 116.
. The District Court had jurisdiction under 28 U.S.C. § 1331 to adjudicate the FLSA claims and under 28 U.S.C. § 1367 to consider the associated state law claims. The District Court’s order denying Silver Care’s motion to dismiss or to stay pending arbitration under 9 U.S.C. § 3 is immediately appealable under 9 U.S.C. § 16(a)(1). Arthur Andersen LLP v. Car-lisle, 556 U.S. 624, 628, 129 S.Ct. 1896, 173 L.Ed.2d 832 (2009). Our review of the arbitra-bility of the plaintiffs’ claims is plenary. See Edwards v. HOVENSA, LLC, 497 F.3d 355, 362-63 (3d Cir. 2007) (citing Harris v. Green Tree Fin. Corp., 183 F.3d 173, 176 (3d Cir. 1999)). We review the District Court's denial of the motion for reconsideration for abuse of discretion. Chesapeake Appalachia, LLC v.
. 14 Penn Plaza v. Pyett, 556 U.S. 247, 260, 129 S.Ct. 1456, 173 L.Ed.2d 398 (2009).
. Bell v. Se. Pa. Transp. Auth., 733 F.3d 490, 494 (3d Cir. 2013).
. 903 F.2d 253 (3d Cir. 1990).
. Id. at 255.
. Id. at 257.
. Id.
. Bell, 733 F.3d at 494 (describing Vadino).
. Vadino, 903 F.2d at 266.
. Id.
. Bell, 733 F.3dat491.
. Id.
. Id. at 495 (internal quotation marks omitted).
. Id.
. Id.
. In fact, the arbitration clause defines a grievance "as a dispute or complaint arising between the Union and the Employer under this CBA or the interpretation, application, performance or any alleged breach thereof.” A 189. It does explicitly provide that "[a]ll claims that an employee has been discriminated against ... in violation of applicable federal, state or local law shall be subject to the grievance and arbitration procedure as the sole and exclusive remedy for violations.” A 191. But there is no similar provision for FLSA disputes.
. Appellant’s Br. at 44.
. Id. at 41.
. Id. at 41-42.
. 29 U.S.C. § 207(a)(1).
. 29 U.S.C. § 207(e).
. Smiley v. E.I. Dupont De Nemours & Co., 839 F.3d 325, 330 (3d Cir. 2016) (quoting 29 C.F.R. § 778.200(c)).
. Id. (quoting Minizza v. Stone Container Corp. Corrugated Container Div. E. Plant, 842 F.2d 1456, 1459 (3d Cir. 1988) (internal citations omitted)).
. Id. (citing Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419, 424-45, 65 S.Ct. 1242, 89 L.Ed. 1705 (1945)).
. Walling, 325 U.S. at 424, 65 S.Ct. 1242 (emphasis added).
. Id. at 425, 65 S.Ct. 1242.
. 29 C.F.R. § 778.109. '
.Contrary to the dissent’s characterization, the plaintiffs clearly state that their "claim for overtime wages due to unlawful meal break deductions is based only on their statutory rights under the FLSA.” Appellees’ Br. at 17. They emphasized that they "do not claim that [Silver Care] breached a contractual right provided by the CBA but instead violated the FLSA and DOL regulations, which require employers to pay employees 1.5 times their regular rates for all hours worked in excess of 40 hours including meal breaks that are not bona fide." Id. (citing 29 U.S.C. § 207; 29 C.F.R. § 785.18) (emphasis in original).
. 29 C.F.R. § 785.19(a).
. Id.
. Babcock v. Butler Cty., 806 F.3d 153, 157 n.7 (3d Cir. 2015) (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944)).
. Id. at 156.
. Id. at 157.
. Id. at 158.
. Appellant's Br. at 48.
. Id.
. Id. at 49
. Id.
. Id. at 50.
. Silver Care's attempt to distinguish these inquiries from factual disputes is unpersuasive. In its reply brief, Silver Care states that "making simple factual determinations of whether the meal break was interrupted and whether the employee worked during the meal break” is not sufficient, because "there first has to be a determination made, whether, if there is an interruption, the interruption is considered part of the paid portion of the break or the unpaid portion of the meal break.” Appellant's Reply Brief at 11. Silver Care never makes clear why it matters to an FLSA claim how the CBA would categorize the meal time interruptions. Either the plaintiffs received compensation for interruptions during their meal time, or they did not. The plaintiffs’ claim is based on the FLSA rather than the CBA.
. Babcock, 806 F.3d at 158.
. Id. at 157.
. Id.
. Pyett, 556 U.S. at 260, 129 S.Ct. 1456.
. A 171.
. The plaintiffs also raised some threshold questions regarding whether the arbitration clause in the CBA is enforceable at all. We need not address these questions because, even assuming the arbitration clause is enforceable, arbitration is inappropriate in this case where the plaintiffs' FLSA claims do not depend upon any disputed interpretation of the CBA.
Dissenting Opinion
dissenting
As I read the Majority’s opinion, it considers plaintiffs’ two claims brought under the Fair Labor Standards Act (“FLSA”) (a pay-differentials claim and a meal-break claim) as independent from the applicable collective bargaining agreement (“CBA”). Because I believe both of those claims rest on terms covered by the CBA, and because I believe our holding in Vadino v. A Valey Engineers, 903 F.2d 258 (3d Cir. 1990), controls, they should first be arbitrated as the parties had agreed.
Vadino involved a union member challenging his pay rate and overtime compensation under the FLSA. The relevant CBA between the union and Vadino’s employer set out various pay grades given the worker’s title and job qualifications. Using that pay scale, Vadino argued that he was entitled to receive a higher wage and thus should have received overtime commensurate with it. The CBA also provided for a grievance process that culminated in arbitration.
Although Vadino’s claim for overtime implicated the FLSA, we held that when a dispute arises “as ,to the correct wage rate under a [CBA] ” that also involves a “claim under the overtime provision of the FLSA, the procedure we envision is to decide the contract interpretation issue through the grievance procedure to arbitration.” Id. at 266. “Concurrent with that, the employee may bring a FLSA claim, but the FLSA overtime claim would be dependent upon the resolution ... of the contract interpretation issue.” Id. That holding applies to the case before us.
First, a central dispute between the parties involves the “correct wage rate” under the CBA: the pay differentials. Plaintiffs assert that the periodic increase in their weekly wages from the pay differentials was not reflected in their regular rate of pay for the purposes of calculating overtime. Silver Care, however, contends that overtime for those pay differentials was reflected in the pay differentials themselves (for example, under the implied terms of the CBA plaintiffs were not given the $3 per hour increase they received but
Second, plaintiffs’ claim that they should be compensated for work performed during unpaid meal breaks also falls within the CBA. The FLSA makes no mention of meal breaks. Instead, the right to uninterrupted meal breaks is created by the CBA, providing that “meal periods and breaks shall be free and uninterrupted, and employees shall not be on call. However, in emergencies,, employees are expected to respond.” Plaintiffs argue that the unpaid, uninterrupted breaks to which they were entitled in the CBA were in fact interrupted and they should be compensated for the work performed during that time. But their FLSA claim for compensation depends entirely on a breach-of-contract claim. If Silver Care did not violate the terms of the CBA by interrupting their guaranteed unpaid breaks, there would be no cause of action for relief. Thus the alleged breach of the CBA is a claim the parties agreed to arbitrate.
Furthermore, the text of the CBA is unclear as to what constitutes an interruption. Would being understaffed, as plaintiffs allege, be an emergency under the CBA? And if interrupted, could plaintiffs count that as one of their two interrupted breaks and take an uninterrupted break later? These questions go to the heart of what the parties intended when entering into the CBA. Because this FLSA claim is predicated on a breach-of-contract claim that also warrants interpretation of the CBA, the parties’ arbitration agreement should be honored and the issue resolved by an arbitrator.
As the claims before us require in my view an interpretation of the CBA before proceeding to the alleged FLSA violations, and CBA interpretations require arbitration here, I respectfully dissent.
Reference
- Full Case Name
- Tymeco JONES, Iesha Bullock, and Teairra Pizarro, on Behalf of Themselves and Those Similarly Situated v. John DOES 1-10; SCO Silver Care Operations LLC D/B/A Alaris Health at Cherry Hill, Appellant
- Cited By
- 14 cases
- Status
- Published