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YOURMAN v. DINKINS

October 6, 1994

HAROLD YOURMAN, ET AL., Plaintiff(s),
v.
DAVID N. DINKINS, ET AL., Defendant(s).



The opinion of the court was delivered by: LORETTA A. PRESKA

 LORETTA A. PRESKA, District Judge:

 Plaintiffs are employees of the City of New York (the "City"), the New York City Health and Hospitals Corporation (the "HHC"), and the Board of Education of the City School District of the City of New York (the "BOE") who have been designated as managerial employees by their respective employers. They bring this action pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-2219, seeking unpaid overtime compensation at time-and-one-half their regular rate of pay for all hours worked in excess of forty hours each week. See 29 U.S.C. § 216(b). *fn1"

 In a previous opinion, I granted plaintiffs' motion for summary judgment against defendants holding them liable under FLSA for failing to pay overtime compensation as required by the statute. 826 F. Supp. 736 (1993). In that opinion, I also directed the parties to address issues related to calculating the proper amount of damages, and it is those matters which are discussed herein. Specifically, I now consider the parties' cross-motions for summary judgment on the issues of (a) whether plaintiffs' back overtime claims should be retroactive to a date three years prior to the filing of their individual consents pursuant to the Portal-to-Portal Act, 29 U.S.C. § 255(a); (b) whether plaintiffs are entitled to liquidated damages pursuant to 29 U.S.C. § 216(b); (c) whether plaintiffs are entitled to have their back overtime compensation calculated pursuant to 29 C.F.R. § 778.113 or 29 C.F.R. § 778.114; and (d) whether plaintiffs are entitled to additional straight time pay for non-overtime hours worked in weeks during which they worked in excess of 40 hours.

 Background

 The reader is referred to my previous opinion for a detailed recitation of the facts. See 826 F. Supp. at 737-740. For present purposes, it will suffice to recall that defendants' main contention in opposition to liability under FLSA was that plaintiffs are "employed in a bona fide executive, administrative, or professional" capacity and therefore excluded from the statute's overtime requirements. See 29 U.S.C. § 213(a)(1). Plaintiffs argued that they did not fall within the exclusion because they were not compensated on a salary basis, as required by the applicable regulation. See 29 C.F.R. §§ 541.1-.3. After reviewing the time and leave policies maintained by defendants' for their employees, 826 F. Supp. at 739, I agreed with plaintiffs that they could not be considered salaried employees and were thus not excluded from FLSA coverage. Id. at 744.

 As defined by Department of Labor regulations, a salaried employee is one whose compensation is "not subject to reduction because of variations in the quality or quantity of the work performed," except as provided in the regulations. 29 C.F.R. 541.118(a). Several aspects of defendants' time and leave policies led me to conclude that plaintiffs did not work under such conditions:

 
. Plaintiffs were subject to disciplinary penalties, including suspensions without pay of one to four days or deductions from accrued leave time, for infractions of safety rules of less than major significance. See 29 C.F.R. 541.118(a)(5);
 
. plaintiffs were subject to deductions from compensation for absence from work to appear at court proceedings in which they, or one of their relatives, had a personal interest. See 29 C.F.R. 541.118(a) (4); and
 
. plaintiffs were subject to deductions from compensation for absence from work due to military service. See Id.

 In addition, I noted that the fact that plaintiffs were subject to "part-day docking" for personal absences of less than one day's duration was inconsistent with salaried status under FLSA, although I did not rely on this factor in holding defendants liable. *fn2"

 Discussion

 I. The Applicability of a Three-Year Statute of Limitations to Plaintiffs' Claims

 In McLaughlin v. Richland Shoe Co., 486 U.S. 128, 100 L. Ed. 2d 115, 108 S. Ct. 1677 (1988), the Supreme Court considered the meaning of "willful," as that term is used in § 255(a). Justice Stevens, writing for the majority, initially observed that Congress' decision to adopt a two-tiered statute of limitations for FLSA actions signified an intent "to draw a significant distinction between ordinary and willful violations." Id. at 132. The Court then rejected the petitioner's argument that this congressional mandate could be satisfied by construing "willful" broadly to include violations by those who act knowing only that their conduct is governed generally by FLSA. Noting that the ordinary usage of "willful" excludes merely negligent conduct, the majority instead defined the term to require either knowledge that one's conduct violates FLSA or reckless disregard of the question. Id. at 133. The majority further refined this standard by observing that, while reasonable conduct could never be deemed willful, unreasonable conduct was not willful per se.3 Id. at 135 n.13. Finally, the Court made clear that it is the plaintiff's burden in a FLSA action to prove willfulness on the part of the employer. *fn4" Id. at 135.

 Applying the McLaughlin standard to the facts at hand, plaintiffs correctly observe that Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 83 L. Ed. 2d 1016, 105 S. Ct. 1005 (1985), put defendants on notice that FLSA's overtime requirements applied to employees of state and local governments. Defendants have acknowledged their contemporaneous awareness of this decision. Thus, as early as 1985, defendants must be considered to have known that their employees had to be paid overtime wages for hours worked in excess of forty each week, unless the employees fit within FLSA's "executive, administrative, or professional" exemption. The only way this exemption could have applied is if the plaintiffs were salaried employees under 29 C.F.R. § 541.118. ...


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