Thomas More Marrone Wins Appeal Ruling That DuPont is Liable for Overtime Compensation in Wage and Hour Collective/Class Action Lawsuit

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In a decision that defines enforcement under the Fair Labor Standards Act (FLSA), the Third Circuit Court of Appeals reversed a District Court’s decision that would have let DuPont off the hook for wages in a collective/class action made up of workers who had been denied their overtime pay for "donning and doffing" uniforms and safety equipment, and for performing pre-shift and post-shift work.

The Department of Labor agreed with Marrone's arguments, and provided the Court the Department of Labor’s perspective and augments regarding the FLSA in its regulations, which were integral to the reversal decision.

In the case Smiley v. DuPont, the Third Circuit Court of Appeals reversed the prior District Court decision, thereby placing DuPont liable for wages in a collective/class action made up of workers who had been denied their overtime pay for "donning and doffing" uniforms and safety equipment, and for performing pre-shift and post-shift work.

The decision defines enforcement under the Fair Labor Standards Act (FLSA). Thomas More Marrone, who argued on behalf of the class of workers, said the ruling went a long way in clarifying that employers cannot avoid paying wages due under the FLSA by taking a “credit” for break time pay the employer had already paid, and using it to offset the employer’s overtime obligations under the FLSA for off the clock work. "The unanimous decision is painstakingly detailed, and it unequivocally resolves the question whether under the FLSA an employer is entitled to take a credit," Marrone said. “The employer can’t take the credit because there’s nothing in the FLSA that says it can. Plain and simple.”

According to court documents, a unanimous panel of the Third Circuit Court of Appeals held that DuPont may not avoid paying its hourly workers for overtime payments for “donning and doffing” uniforms and safety equipment before and after their work shifts, and performing other off-the-clock work. The U.S. Court of Appeals for the Third Circuit held in Smiley v. DuPont that the District Court incorrectly concluded that the Fair Labor Standards Act allowed DuPont to avoid paying overtime by taking a “credit” for break time pay the employer had already paid, and using it to offset the employer’s overtime obligations under the FLSA for off-the-clock work.

In its Opinion, the Third Circuit, agreeing with Marrone’s argument, explained:

Here, permitting DuPont to use pay given for straight time—and included in the regular rate of pay—as an offset against overtime pay is precisely the type of "creative bookkeeping"...the FLSA sought to eradicate.

The case involved 12-hour shift workers at DuPont's Towanda Pennsylvania plant. Thomas More Marrone of MOREMARRONE LLC in Philadelphia, along with co-counsel, filed claims against DuPont in the United States District Court for the Middle District of Pennsylvania, under the FLSA and Pennsylvania's Wage Payment and Collection. Marrone argued that DuPont failed to pay its workers for the time DuPont’s employees spent off-the-clock, before and after their shifts, donning and doffing vital protective gear and performing other work activities DuPont required them to perform.

Confronted with liability for this overtime work, DuPont argued in the Middle District that it was entitled to take a "credit" for all of the break-time payments it had made to the workers over the past several years, and use that money to satisfy its overtime wage obligations alleged in the lawsuit. Marrone argued that the credit was not permitted under the FLSA and, additionally, that in any event DuPont had agreed to pay the wages and had actually done so for several years without ever once taking a credit or informing the workers that they ever intended to.

DuPont had argued that compensation for the employees' breaks -- three half-hour periods over a 12-hour shift -- made up for the compensation DuPont owed the workers for their off-the-clock uniform changing and shift prep time. The Third Circuit disagreed on the basis that break pay was already a part of the employees' compensation, had been included in the workers’ regular rate, and that the FLSA did not anywhere permit a “credit” under these circumstances.

"Nothing in the FLSA authorizes the type of offsetting DuPont advances here, where an employer seeks to credit compensation that it included in calculating an employee's regular rate of pay against its overtime liability," Senior Judge Marjorie Rendell wrote for the Court.

The Third Circuit deemed this appeal on behalf of the workers, led by Marrone, as so important that it invited the Department of Labor to file an amicus brief. The Department of Labor agreed with Marrone's arguments, and provided the Court the Department of Labor’s perspective and augments regarding the FLSA in its regulations, which were integral to the reversal decision. “Rachel Goldberg of the US Department of Labor, Division of Fair Labor Standards deserves a lot of credit. Her brief was flawless and her portion of the oral argument was one of the best I have ever witnessed.”

In formulating its ruling, the Third Circuit agreed with Marrone’s citation to the Court’s 2005 decision in Wheeler v. Hampton Township. In that case, the Court ruled that it was improper for Hampton Township to voluntarily include non-work pay in its standard rate calculation. "It sought to offset compensation it was required to include in the regular rate, but did not, with compensation it voluntarily chose to include in the regular rate," Rendell said.

DuPont argued that the FLSA's failure to explicitly prohibit offsetting meant that it is permitted.

"While it is true that the statute does not explicitly set forth this prohibition, the policy rationales underlying the FLSA do not permit crediting compensation used in calculating an employee's regular rate of pay because it would allow employers to double-count the compensation," Rendell said.

The case is Smiley v. DuPont, Case: 14-4583, UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT (District Court No.: 3-12-cv-02380)

About Thomas More Marrone and MOREMARRONE LLC

MOREMARRONE LLC has handled cases producing some of the largest verdicts and settlements in Pennsylvania and New Jersey. The firm represents plaintiffs in significant personal injury, class action, and other complex civil litigation. After a recent 11-month stretch that included two class action jury trials resulting in a settlement and verdict amounting to well over $15 million in addition to several substantial personal injury recoveries, successful business and employment negotiations, and hundreds of satisfied clients, Tom Marrone established his multifaceted firm, MOREMARRONE LLC.

Licensed to practice in the State and Federal courts of Pennsylvania, New Jersey, and New York, Tom Marrone has extensive experience and proven success handling difficult, complex cases, especially class actions and collective actions, cases involving personal injury, employment, wage and hour claims, insurance matters, product liability, consumer protection, consumer fraud, deceptive practices, legal malpractice, and wrongful use of civil proceedings.

Individual and corporate clients also engage MOREMARRONE LLC for advisory services, including legal matters, crisis prevention and crisis management. A veteran class action trial lawyer, Tom Marrone also offers consultations with other attorneys and law firms related to class action and complex litigation theory development, implementation, and trial strategy.

Contact:

Tom Marrone
MOREMARRONE LLC
1601 Market Street, Suite 2500
Philadelphia, PA 19103
215-966-4142
http://www.moremarrone.com

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