ConAgra is not required to compensate employees for the time spent donning and doffing their protective equipment under either the FLSA or the Arkansas Minimum Wage Act (AWMA), the Eighth Circuit ruled, affirming the grant of summary judgment in favor of the packaged foods company. Nor is it required to compensate employees for the time spent checking-out and checking-in tools necessary for their work, said the court, finding the time de minimis in light of the short duration of the process and the additional administrative burden necessary to compensate them for that time (Lyons v. Conagra Foods Packaged Foods LLC dba ConAgra Foods, August 9, 2018, Wollman, R.).
Because employees at ConAgra’s Russellville, Arkansas, plant donned and doffed company-provided personal protective equipment outside the plant’s production areas, and the timeclocks were located within production areas, they were not compensated for their time donning and doffing the equipment or walking to and from the timeclocks. When the union and ConAgra entered into negotiations to revise the collective bargaining agreement in March 2012, the union proposed a 10-minute paid dress-out period for employees.
CBA silence. Although the parties disputed what happened during contract negotiations, the employees presented evidence that ConAgra agreed to move its timeclocks from production areas to changing areas so they could be compensated for their donning and doffing time. In return, the union apparently agreed to withdraw its proposal. The CBA ultimately agreed to by the parties, however, did not state that employees would be compensated for donning and doffing time or address whether the timeclocks would be moved.
Lower court proceedings. Afterward, ConAgra made no changes to its donning and doffing compensation practices. Nor did it move its timeclocks. And the union did not file a grievance. The employees subsequently sued under the FLSA and state law. In October 2013, the district court held that FLSA Section 203(o), the exception to donning and doffing rules for unionized employees, would apply to claims under the AMWA and in September 2015, it granted summary judgment on the employees’ federal and state-law donning and doffing claims.
In 2016, the Arkansas Supreme Court’ held in Gerber Prods. Co. v. Hewitt that FLSA Section 203(o)’s donning and doffing exception did not apply to AMWA claims. Therefore, the district court in 2016 set aside that portion of its October 2013 order finding that FLSA Section 203(o) would apply to claims under the AMWA. After the 2017 Arkansas General Assembly legislatively overruled Gerber, the district court, in August 2017, granted summary judgment against the employees’ state-law claims.
FLSA claims. Turning first to the employees’ FLSA claims, the Eighth Circuit observed that the issue was whether it was the “custom or practice” under the 2012 CBA for employees not to be compensated for donning and doffing their protective equipment. Although the employees argued that ConAgra could not unilaterally create a custom or practice by refusing to compensate them for time spent donning and doffing, the court pointed out that prior to the 2012 CBA, the parties had a longstanding practice of nonpayment for donning and doffing for most employees at the Russellville plant, which continued after the 2012 CBA took effect and to which the union and its employees never objected. Thus, the court found ConAgra did not unilaterally impose a custom or practice, but rather continued a custom or practice that was already in effect under the prior CBA.
AMWA claims. As to the employees’ AMWA claims, the appeals court first noted that in Gerber, the Arkansas Supreme Court held that the AMWA required employers to pay employees for time spent donning and doffing protective equipment, regardless of the “custom and practice under the collective bargaining agreement.” A year later, however, the Arkansas legislature passed Act 914, which amended Arkansas Code § 11-4-205 and provided that “Nothing in this subchapter, including the provisions of § 11-4-218(b), shall be deemed to interfere with, impede, or in any way diminish the right of employers and employees to bargain collectively through representatives of their own choosing in order to establish wages or other conditions of work.”
The amendment, said the Eighth Circuit, attempted to clarify that the parties’ agreement controlled employee compensation, regardless of Arkansas Code § 11-4-218(b)’s directive that “[a]ny agreement between the employee and employer to work for less than minimum wages shall be no defense to the action.” At issue in this appeal, the court explained, was whether the lower court was entitled to consider Act 914 when predicting how the Arkansas Supreme Court would construe Arkansas law.
Bound by Gerber? The lower court was bound by Gerber, the employees argued, because the Arkansas Supreme Court had never questioned its legal underpinnings. But, said the Eighth Circuit, the U.S. Supreme Court has explained that “[w]henever [the] law is authoritatively declared by a State, whether its voice be the legislature or its highest court, such law ought to govern in litigation founded on that law, whether the forum of application is a State or a federal court[.]”
The employees cited to the Eighth Circuit’s opinion in J-McDaniel Construction Co., Inc. v. Mid-Continent Casualty Co., in which the appeals court stated that “we are not at liberty to disregard the binding law of the state, nor may we substitute our judgment for that of the Arkansas Supreme Court.” However, the appeals court found J-McDaniel distinguishable. The plaintiff in that case, observed the court, sought retroactive application of a statute that created a new substantive right. Act 914, however, did not create a new substantive right under Section 11-4-205, but merely clarified the statute’s meaning that “[n]othing in this subchapter” applied to Section 11-4-218(b), a different statute within the subchapter. “Such a change in text cannot be considered the creation of a substantive right,” said the court.
After rejecting the employees’ assertion that Act 914 could be applied only prospectively, the appeals court predicted that if this issue were before the Arkansas Supreme Court today, it would not follow Gerber but would instead apply the terms of the parties’ 2012 CBA.
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