In a long-running dispute involving donning and doffing issues at an employer’s foundries, a federal district court in Wisconsin denied the employer’s motion to dismiss the employees’ amended complaint based on the Supreme Court’s ruling in Integrity Staffing Solutions, Inc. v. Busk. At this stage of the litigation, the court declined to reject the employees’ allegations that time spent showering after their shifts was necessary and indispensable to their work to avoid presenting a health hazard to themselves and their families. A similar result was reached as to donning and doffing claims of foundry workers at the employer’s Indiana facility. Deciding both cases under agreement with the federal court in Indiana, the chief judge in the Eastern District of Wisconsin further ruled that the Indiana employees could pursue a common-law claim for unjust enrichment. However, the Indiana employees failed to assert a fraud claim with sufficient particularity, so that cause of action was dismissed (DeKeyser v. Thyssenkrupp Waupaca Inc. dba Waupaca Foundry Inc. and Adams v. Waupaca Foundry, December 19, 2017, Griesbach, W.).
Background. Employees of a Wisconsin foundry brought suit seeking compensation for time spent changing into and out of work clothes and protective gear, as well as time spent showering after shifts at the employer’s Wisconsin, Indiana, and Tennessee facilities. In December 2008, the case was conditionally certified, but in July 2012, the district court granted the employer’s motion for summary judgment, finding that the employees’ time spent engaged in on-site decontamination activities was not compensable work. However, in October 2013, the Seventh Circuit reversed that decision.
In 2016, the court granted the employees’ motion to certify Wisconsin law claims as a class action. The court divided the FLSA class action into three subclasses—Wisconsin workers, Indiana workers, and Tennessee workers—and transferred the non-Wisconsin cases to the appropriate districts. The employer appealed the certification decision to the Seventh Circuit, which affirmed in DeKeyser v. ThyssenKrupp Waupaca, Inc. dba Waupaca Foundry, Inc., finding that the employees had produced common evidence tending to prove their common assertion. Thereafter, the employees filed an amended complaint on behalf of the Wisconsin employees, and separate complaints in Indiana and Tennessee on behalf of the employees at those facilities. This action is now before the court on the employer’s motion to dismiss the Wisconsin complaint.
Law of the case doctrine. The employer argued that the employees’ claims failed as a matter of law under Integrity Staffing Solutions, Inc. v. Busk, and that their state law claims were preempted by the FLSA, or alternatively, the state law claims failed to state cognizable claims. In response, the plaintiffs asserted that the law of the case doctrine prevented the employer from asserting its Integrity Staffing argument and that the court should not reconsider these issues.
The court held the law of the case doctrine did not apply, noting that the Seventh Circuit’s decision regarding certification did not discuss or mention Integrity Staffing. Moreover, the court was not prevented from reconsidering its prior rulings. That said, the court noted that it had already addressed these arguments previously in deciding the motion to dismiss the original complaint, and so applied the standard used to decide motions for reconsideration to this case.
Decontamination activities. The employer contended that the court misread Integrity Staffing and that multiple courts have relied on the Supreme Court’s decision to reject FLSA claims for off-the-clock activities. The employees’ donning and doffing and post-shift showering were noncompensable because they were not the principal activity the workers were employed to perform, according to the employer. But the mere fact that donning, doffing, and showering are not the principal activity the workers were employed to perform did not mean they were not compensable, the court said. Changing and showering are principal activities when the nature of the work creates significant risk to workers’ health and participating in those decontamination activities reduces that risk.
The employees’ amended complaint alleged that time spent showering after their shifts was necessary and indispensable to their work because they worked with toxic or corrosive chemicals, presenting a health hazard to themselves and their family members. At this stage, the court could not reject the employees’ allegations simply because the employer rejected them, nor was the court inclined to limit the employees’ claims by holding that only end-of-shift activities are compensable. Rather, the court determined that the employees stated a claim under the FLSA, and that was enough to deny the employer’s motion.
State law claims. The employer asserted that the employees’ state law claims failed as a matter of law because the FLSA preempted them or, alternatively, that the claims were not cognizable. Again, the court noted that the employer had raised these arguments in its motion to dismiss the original complaint. It previously denied the employer’s preemption arguments, and the employer conceded that the Seventh Circuit has not addressed the extent to which the FLSA preempts state law claims. Thus, there was no basis for finding that the employees’ state law claims were preempted.
Indiana employees. In a separate action, employees at the Indiana facility asserted violations of the FLSA, the Indiana Wage Payment Statute, common-law fraud, and common-law unjust enrichment. The employer filed a motion to dismiss the subclass of Indiana employees, and the court granted the motion in part and denied it in part. As in the Wisconsin case, here the judge concluded that the law of the case doctrine did not prevent the employer from asserting its Integrity Staffing argument. However, it also ruled that the employees’ FLSA claims survived its Integrity Staffing challenge.
Preemption of common-law claims. Next, the court examined whether the Indiana employees’ common-law claims for fraud and unjust enrichment were preempted by the FLSA. Again it was noted that the Seventh Circuit has not addressed the extent to which the FLSA preempts state law claims. However, the court observed that the FLSA’s savings clause expressly permits states to provide workers with more beneficial minimum wages and maximum workweeks than those mandated by the FLSA itself. Thus, it was clear that the FLSA would preempt only those state laws that mandated lower minimum wages or longer maximum workweeks.
Here, Indiana law was not less generous than the FLSA and the federal statute did not displace state law, but allowed states to offer an alternative legal basis for equal or more generous relief for the same alleged wrongs. If the employer’s policies violate the FLSA as well as Indiana wage and hour laws and constitute unjust enrichment and fraud, nothing in the language or purpose of the FLSA precludes the employees from proceeding on those claims in this action.
The employer’s contention that the Indiana Wage Payment Statute preempted the employees’ unjust enrichment claim with respect to donning, doffing, and showering likewise failed. The employees merely pleaded alternative theories, the court reasoned.
Fraud claim. On the other hand, the employees failed to allege fraudulent conduct on the employer’s part with sufficient particularity. According to the employees, during the pendency of this litigation, foremen in the employer’s Indiana facility periodically altered time records and unilaterally clocked out workers early while continuing to make them work. They alleged that these time-shaving activities broke the employer’s promise to compensate the employees at specified hourly base rates. However, the complaint failed to allege whose time cards were altered, which foremen performed the fraudulent conduct, and when it occurred. Because the employees had not adequately pled their fraud claim, it was dismissed.
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