Opinion
No. 4100689S.
November 15, 2006.
MEMORANDUM OF DECISION RE DEFENDANTS' MOTION TO SET ASIDE VERDICT AS TO DAMAGES ONLY AND FOR REMITTITUR.
In this vigorously contested matter, after a trial, the jury rendered a verdict for the plaintiff under both the Fair Labor Standards Act ("FLSA"), 29 U.S.C. Section 206, et seq. and Conn. Gen. Stat. Sections 31-68 and 31-72 awarding $85,257.90 and $56,026.62, respectively. The defendants now have moved to set aside the verdict as to damages only and for a remittitur. A hearing on the motion was held in this court at which all parties were represented by counsel, advanced argument, and subsequently filed proposals with respect to their respective claims.
The Defendants' motion is denied for the following reasons.
I. Background
The jury returned a verdict for the Plaintiff in the amount of $85,257.90 and $56,026.62, respectively, for violations of the FLSA and Connecticut overtime laws. Interrogatories were submitted to the jury by the court.
In response to Interrogatories #4 and #7 included under the FLSA claim, the jury found that all the Defendants had acted "willfully."
The jury also found, in response to Interrogatory #8, included under the FLSA claim, that the Defendants had subjected the Plaintiff's salary to reductions for weeks in which he missed work. With that answer, the jury was instructed to skip Interrogatory #9 asking whether "the defendants [have] proven by a preponderance of the evidence that they may use the fluctuating workweek method of calculating the plaintiff's overtime pay as that method is defined in the instructions."
In responding to Interrogatory #15, included under the Connecticut wage claims, the jury found that the Defendant Norwich Taxi, LLC had acted in bad faith, arbitrarily or unreasonably in not paying overtime.
Conclusion A. Fair Labor Standards Act ("FLSA"), 29 U.S.C. Section 206, et seq.
At trial, the Defendants, among other things, sought to calculate the overtime claimed by Mr. Stokes pursuant to the "fluctuating workweek method," an exception to the overtime requirements of the FLSA. All of the arguments advanced in the Defendants' motion to set aside the verdict concern this method.
In the Code of Federal Regulations, "fluctuating workweek method" is defined as follows:
Where there is a clear mutual understanding of the parties that the fixed salary is compensation (apart from overtime premiums) for the hours worked each workweek, whatever their number, rather than for working 40 hours or some other fixed weekly work period, such a salary arrangement is permitted by the Act if the amount of the salary is sufficient to provide compensation to the employee at a rate not less than the applicable minimum wage rate for every hour worked in those workweeks in which the number of hours he works is greatest, and if he receives extra compensation, in addition to such salary, for all overtime hours worked at a rate not less than one-half his regular rate of pay.
This method of compensation requires that an "employee must be guaranteed his or her entire weekly stipend even in workweeks in which a full schedule of hours is not worked." 29 C.F.R. Section 778.114(c). Where an employer does not guarantee that an employee would receive the same weekly salary even in workweeks where a full schedule of hours were not worked, it cannot rely upon the fluctuating workweek method. Rainey v. American Forest and Paper Ass'n, Inc., 26 F.Sup.2d 82 (D.D.C. 1998).
"A careful reading of [ 29 C.F.R. Section 778.114(c)] reveals that it imposes certain restrictions on the use of the fluctuating workweek, one of which is that the employee must be guaranteed his or her entire weekly stipend even in workweeks in which a full schedule of hours is not worked. Deductions for absences of less than [a] week, whether for illness, personal business, or other reasons, may not be made under this method of compensation." Yourman v. Dinkins, supra, 865 F.Sup. at 165 n. 20. (Internal quotations and citations omitted.)
With these principles in mind, each of the Defendants' arguments will be examined in turn.
1. First, the Defendants claim that the court erred in failing to instruct the jury that the fluctuating workweek method is merely an "alternative" method of calculating overtime, that the "clear mutual understanding" required under the method can be inferred from the facts of this case and that the fluctuations in hours need only be in the employee's overtime hours. At trial, however, the Defendants neither submitted any requests to charge as to any of these issues, nor took any exceptions to the court's charge on any those points. Because of that the defendants cannot be heard to complain after the verdict. Oakes v. New England Dairies, Inc., 219 Conn. 1, 12 (1991).
2. Second, the Defendants claim that the court improperly failed to instruct the jury that the Defendants were entitled to take disciplinary deductions from the Plaintiff's paychecks. Such an instruction was not required since the Defendants did not introduce evidence from which such a finding could have been made as to the relevant pay periods of August 26 and September 2, 2004. Defendants offered a disciplinary justification for its deduction with respect to the August 19, 2004 paycheck only, not for the reduced paychecks from August 26, 2004 and September 2, 2004. Considering the evidence as a whole, an instruction on disciplinary deductions would have been inappropriate, since this Court had "a duty to submit to the jury no issue upon which the evidence would not reasonably support a finding." Lin v. National Railroad Passenger Corp., 277 Conn. 1, 6 (2006).
In addition, the Defendants' admitted use of an inappropriate methodology to reduce the Plaintiff's pay makes irrelevant the lack of an instruction on disciplinary deductions. In all the relevant weeks, the evidence offered on the subject indicated that the Defendants divided the Plaintiff's salary by 40 hours, rather than all hours worked as required by the fluctuating workweek method, and took away 8 hours of pay. This action directly contradicts the Defendants' assertion that the parties had a "clear mutual understanding" that the salary paid to the Plaintiff covered all the hours he worked, rather, than merely his first 40. This action is also expressly prohibited by the Code of Federal Regulations which states that "[w]here deductions . . . are made for disciplinary reasons, the regular rate of an employee is computed before deductions are made." 29 C.F.R. Section 778.307. When compared to regular weeks, the Defendant's disciplinary calculation artificially increased the Plaintiff's regular rate and exaggerated the impact of the deduction. Thus, the jury could not properly have found from the evidence deductions consistent with the fluctuating workweek method regardless of the instruction it received.
3. Third, defendants also claim that the court erred in failing to provide to the jury a computational instruction on the use of the fluctuating workweek method. As noted above, however, this Court is not required to submit to the jury any issue upon which the evidence would not reasonably support a finding. Lin v. National Railroad Passenger Corp., supra, 277 Conn. at 6. The jury's unchallenged finding in Interrogatory #8 that the Defendants reduced the Plaintiff's salary when he missed work precludes, both legally and factually, the Defendants' reliance upon the fluctuating workweek method.
4. Fourth, the Defendants claim in their motion that the fluctuating workweek method does not require the contemporaneous payment of the overtime premium. However, the plain language of the regulation itself, as well as interpretive case law, requires an employee receive, each week, extra compensation, in addition to his salary, for all overtime hours worked. "This provision contains no suggestion that such compensation need only be paid as part of a judicially crafted remedy, but rather establishes that it is a necessary precondition to application of the fluctuating workweek method." Rainey v. American Forest and Paper Association, 26 F.Sup.2d at 101; Cowan v. Treetop Enterprises, 163 F.Sup.2d 930, 941-42 (M.D.Tenn. 2001).
5. Finally, the Defendants in their motion allege that they were improperly precluded from cross-examining the Plaintiff regarding fluctuations in his hours in the months predating the imposition of a salary in September 1999. First, cross-examination on that topic would have been irrelevant since the Defendants must show that the Plaintiff's hours fluctuated from October 2001 to September 7, 2004, the period of overtime at issue in the case and during which the employer seeks to take advantage of the fluctuating workweek method. The months preceding September 1999 are not relevant to that claim. 29 C.F.R. § 778.114; Rainey v. American Forest and Paper Ass'n, supra. In any case, the ruling had no ultimate impact upon the Defendant's ability to argue for the application of the fluctuating workweek method since the jury had before it the Plaintiff's payroll records dating back to January 1999 and heard the Defendants' claim in argument that the Plaintiff was paid a salary covering him for all his hours worked.
In considering all of Defendants' claims on this issue, this Court takes note of the fact that the jury made a specific, and now unchallenged, finding, that all of the Defendants acted willfully by not paying overtime to the Plaintiff. Under the FLSA, a violation is willful when "the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute." Herman v. RSR Security Services Ltd., 172 F.3d, 132, 141 (2d Cir. 1999) (quoting McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988)). "[T]he word `willful' is considered synonymous with such words as `voluntary,' `deliberate,' and `intentional.' " McLaughlin v. Richland Shoe Co., 108 S.Ct. at 1681.
In making such a finding, the jury is presumed to have "accepted the evidence which was consistent with [that conclusion]." See Andrea v. New York, N.H. H.R. Co., 144 Conn. 340, 348 (1957). The facts which the jury could have reasonably found, and which are required to be inferred by this Court in support of that finding of wilfulness, forecloses the Defendants' reliance upon the fluctuating workweek method.
B. Conn. Gen. Stat. Sections 31-68 and 31-72
The Defendants' claims regarding the fluctuating workweek method have no bearing on the jury's verdict under Connecticut law. Connecticut's statutory scheme, and the regulations promulgated thereunder contain no "fluctuating workweek method" exception to the requirement that overtime be paid to non-exempt employees on the basis of a 40-hour week.
Since Defendants have raised no independent challenge to the verdict rendered under state law, it must stand.
For the foregoing reasons, the Defendants' motion to set aside the verdict as to damages only and for remittitur is denied.