concluded that the reductions were infrequent and MP's actual policy was not to dock employees for partial absences. Id. at 908.
The Second Circuit, viewing the same undisputed underlying facts, reached contrary conclusions. Defendant argues that "the Second Circuit in its opinion appears to have assumed . . . that Malcolm Pirnie had a policy of docking the pay of its exempt employees." Def.'s Brief at 4. Defendant then goes on to argue that the facts which the Second Circuit found undisputed, were in fact disputed by the record as a whole. Defendant also stresses that the Circuit Court's factual assessment was very different from this court's original factual findings.
These arguments are unavailing. Both this court and the Second Circuit viewed the material underlying facts as undisputed. The only difference between this court's initial holding and the Second Circuit's decision was the different conclusions drawn from these facts. Reviewing the record de novo the Second Circuit concluded that a policy of docking pay existed both because the company's Policy Guide allowed it, and on occasions reductions occurred. The legal conclusions it drew from the factual record stand as the law of this case.
We are in no position to challenge its conclusions. Defendant is barred by the law of the case doctrine from relitigating the issue of whether a policy of docking pay for partial absences existed, or whether the window of correction exception is available to it. The Second Circuit's decision rested on its assessment of the evidentiary record, in particular MP's Policy Guide and Handbook of Information for Staff. The court also took account of the statement given by MP's Director of Human Resources who conceded that overtime was paid in essentially the same manner for employees in grades 1-5 and 6-9. Based on such evidence, the court expressly found that MP's policy "clearly allowed proportional salary deductions for all employees -- including those paid at grade levels 6 through 9." Id. at 616.
Defendant maintains that MP's policy for grade 6-9 employees is still in dispute. It is not. The Second Circuit spoke clearly and decisively on the issue after conducting its own examination of the factual record. It concluded by stating that "MP impermissibly withheld overtime payments that were due and owing." Id. at 617.
Defendant spends much time arguing that the Second Circuit's ruling on the salary basis was new law in the field and should therefore not be applied retroactively on defendant. Defendant submits affidavits from labor lawyers to support its point. In response, we highlight two aspects of the Second Circuit's opinion. First, the court stated that it "had previously held that an employee who can be docked pay for missing a fraction of a workday must be considered an hourly, rather than a salaried, employee." Id. at 615 (citing cases). Second, as we have already noted, the court concluded its opinion by saying that "MP impermissibly withheld overtime payments that were due and owing." Id. at 617. We can reach only one conclusion based upon these statements. The Second Circuit did not consider its holding on salary basis novel and it did find that defendant owes its grade 6-9 employees overtime under the FLSA as hourly employees, meaning it owes them time-and-a-half.
The law of the case doctrine concerns the practice of courts generally not to reopen what has already been decided. Riley v. Meba Pension Trust, 586 F.2d 968, 970 (2d Cir. 1978). The law of the case applies to every issue that has been decided either expressly or by necessary implication. As we have discussed, the Second Circuit decided the critical issues regarding MP's policy of docking employees for partial absences and the inadvertence of its reductions.
Pursuant to the Second Circuit's ruling, defendant's failure to pay the backwages was not in conformity with the FLSA's regulations. The Second Circuit held that the law contains no ambiguity. An employer with a policy of reducing employee compensation for fractions of days missed may not invoke the salary basis exception for not paying overtime to them.
Since the court found the window of correction exception inapplicable, it follows that defendant's Portal-to-Portal Act defense falls. If defendant's actions are found in violation of the Act or its regulations, good faith is not a defense. The Second Circuit found a policy in place by which deductions were (or could have been) made for partial absences. Deductions were expressly permitted under the Handbook and Policy Guide and, under the circumstances, MP was not entitled to invoke the window of correction. Given this, we cannot find that defendants' actions represented an unintentional failure to adhere to the FLSA's overtime requirements. The Second Circuit's holding that a policy of deductions for partial absences was in place belies any notion that such deductions were inadvertent or accidental. Where actions do not conform with regulations, good faith cannot save the day. E.E.O.C. v. Home Ins. Co., 672 F.2d 252, 265 (2d Cir. 1982).
Consistent with the Second Circuit's decision, we grant plaintiff's motion for summary judgment. Defendant's retention of sums owed to grade 6-9 employees represents an affront to the Act's stated policy of ensuring that overtime due to eligible employees is paid. Defendant's continued resistance to repaying the improperly withheld backwages is unjustified. Pursuant to 29 U.S.C. § 217 and clear public policy, defendant is enjoined from continuing to withhold any unpaid backwages. Defendant must also pay pre-judgment interest on the overtime compensation due.
At this point, we decline to enjoin MP from any future violations of the FLSA. The Policy Guide has already been changed. The affected employees are no longer subject to deductions for missing a part day of work, and, consequently, are no longer entitled to overtime. We presume and expect that defendant will fully comply not only with this court's decision but also with the FLSA to avoid further violations.
The total amount of backwages due is $ 515,455.50. Added to this is a sum representing prejudgment interest. Because an accounting of the prejudgment interest due is a complex calculation involving many different grade 6-9 employees and changing interest rates pursuant to 26 U.S.C. § 6621, we direct plaintiff, with copies to defendant, to submit within 30 days an accounting of the prejudgment interest due. Besides the total amount due, the submission should include, if reasonably possible, the dates covered and the applicable rates.
Dated: White Plains, New York.
May 21, 1993.
GERARD L. GOETTEL
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