United States District Court, D. Connecticut
JOSEPH STRAUCH and TIMOTHY COLBY, individually and on behalf of all others similarly situated, Plaintiffs,
COMPUTER SCIENCES CORPORATION, Defendant.
RULING ON REMEDIES
Bond Arterton, U.S.D.J.
action, the jury found Defendant Computer Sciences
Corporation ("CSC") liable for overtime exemption
misclassification of Plaintiffs, who are current and former
Associate Professional and Professional System Administrators
(collectively, "SAs") employed by Defendant. Both
parties have briefed a number of legal disputes on the legal
and equitable remedies to which Plaintiffs are entitled,
which the Court now addresses.
Court assumes the parties' familiarity with the
procedural history of this action, most recently summarized
in the Court's September 21, 2018 ruling denying
Defendant's Motion for Judgment as a Matter of Law and
Motion to Decertify the Rule 23 California and Connecticut
classes and Fair Labor Standards Act collective. ([Doc. #
476].) On October 22, 2018, Defendant appealed from the
September 21 ruling together with "all [previous]
adverse rulings subsumed therein," also
"reserv[ing] the right to supplement this notice of
appeal in light of future orders from this Court on
Remedies[.]" (Not. of Appeal [Doc. # 477] at 1-2.)
Flexible Work Week Methodology
contends that "as a matter of law and consistent with
the majority position on the issue-and with the direction the
Second Circuit clearly signaled in the 2016 Banford
decision-the Court should apply the fluctuating workweek
("FWW") method of calculating overtime."
(Def.'s Br. on Damages [Doc. # 448] at 1.) Particularly
in light of the jury's finding that CSC proved that it
and Plaintiffs "had a clear, mutual understanding that
their fixed salaries were intended as compensation (apart
from overtime premiums) for the hours worked each workweek[,
]" (Supp. Verdict Form [Doc. # 442-1]), Defendant argues
that "there is no proper basis to abandon the widely
accepted FWW method to calculate overtime damages for the
FLSA collective and Connecticut class on a
'half-time' premium basis." Moreover, Defendant
contends that "[b]ecause this question was put to the
jury at Plaintiffs' insistence, Plaintiffs waive any
argument that the FWW method should not apply."
(Def.'s Br. on Damages at 1.)
initial matter, Defendant's argument that Plaintiffs
"insiste[d]" that the FWW question be put to the
jury lacks basis in the record. Rather, Plaintiffs
consistently took the position that because the applicability
of the FWW method "is a matter of statutory
interpretation, it is a legal question for the Court."
(Pis.' Resp. to Def.'s Pretrial Mem. [Doc. # 369] at
5.) Notwithstanding that position, during trial Plaintiffs
agreed with Defendant and the Court that in the event of a
Plaintiffs' verdict on liability, and in light of the
absence of any binding authority making clear whether this
question was one of law or of fact, the question should be
put to the jury to avoid the inefficiency that would result
if, after trial, the question was later determined by the
Second Circuit or the Supreme Court to be one of fact that
should have been put to the jury. (See Ex P. (Trial
Tr.) to Sagafi Decl. at 1033:25-1037:4 [Doc. # 457-16].) Thus
the Defendant's waiver argument lacks merit, and the
Court will address this legal dispute between the parties.
2016 Banford summary order referenced by Defendant,
the Second Circuit noted that the other circuits that had
taken up the question had "found that FWW may be used to
calculate damages where, as here, employees were
misclassified as exempt from the FLSA," while noting a
split between "district courts within this circuit... on
whether FWW may be applied retroactively at all."
Banford v. Entergy Nuclear Operations, Inc., 649
Fed.Appx. 89, 91 (2d Cir. 2016) (citations omitted). In
Banford, the Second Circuit expressly declined to
resolve this question because "the record evidence
support[ed] the jury's verdict that no plaintiff agreed
to a fixed weekly salary covering unlimited hours[.]"
by contrast, the jury found that Plaintiffs did
agree "that their fixed salaries were intended as
compensation (apart from overtime premiums) for the hours
worked each workweek[, ]" (Supp. Verdict Form), so the
Court must determine whether, in light of that factual
finding, the FWW may be applied in this case as a matter of
Second Circuit noted in Banford, "[u]nder the
FWW methodology for calculating overtime due under the FLSA
to employees who have agreed to work at a fixed weekly salary
but whose hours vary, an employee is assumed to have been
paid for all hours worked at their regular rate of pay, with
excess overtime due for hours worked over forty at one-half
the regular rate of pay." 649 Fed.Appx. at 90. Under
this methodology, "[t]he regular pay rate is calculated
by dividing the weekly pay by total hours worked that
week." Id. The FWW was first sanctioned as a
method for calculating overtime in Overnight Motor
Transportation Co. v. Missel, 316 U.S. 572 (1942).
"Following Missel, the Department of Labor
issued an interpretive rule, allowing payment under the FWW
method where (i) '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'; (ii) the employee
receives sufficient salary so that his regular rate never
falls below the statutory minimum wage; and (iii) the
employee '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.'"
Banford, 649 Fed.Appx. at 91 (quoting 29 C.F.R.
years immediately before and after Banford, several
district courts within the Second Circuit considered the
question of whether the FWW methodology can ever be applied
in FLSA actions for unpaid overtime where, by definition,
plaintiff employees allege that they have not been
contemporaneously paid overtime, as required by the
Department of Labor's interpretive rule. See 29
C.F.R. § 778.114(a) ("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 ... such a salary arrangement is
permitted by the Act... if [the employee] 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")
most recent case within this circuit to address this question
observed that this "question of law... remains unsettled
in this circuit." Nelson v. Sabre Companies
LLC, No. 115CV00314BKSTWD, 2018 WL 3543523, at *12-14
(N.D.N.Y. July 23, 2018). The Nelson court found the
dispute over the number of hours the annual salary was
intended to cover created a triable issue for a jury
determination and declined to address whether the FWW
methodology could be used in misclassification cases where
overtime was never paid, "[i]n light of the split among
district courts in this circuit and the absence of Second
Circuit authority[.]" Id. at 14.
there is no question that Plaintiffs were not
contemporaneously paid any such "extra
compensation" for overtime, so the FWW method cannot be
applied under the DOL's interpretive rule codifying the
method, which expressly requires the contemporaneous payment
of overtime in order to establish the method's
applicability. See 29 C.F.R. § 778.114(a). For
this reason, another court in this district held that
"the proper damages calculation method is the
'time-and-a-half method and not the 'half-time'
method for all hours worked over 40." Costello v.
Home Depot USA, Inc., 944 F.Supp.2d 199, 208 (D. Conn.
2013). In Costello, the court rejected the
employer's argument that Missel did not
explicitly require the contemporaneous payment of overtime
premiums. Id. at 207. This conclusion that
Missel itself requires the contemporaneous payment
of overtime in order for FWW to apply rested on three
conclusions: first, that holding otherwise would mean that an
employee could "waiv[e] his entitlement to overtime
payment, which is, simply, illegal[, ]" id.
(citations omitted); second, that Missel in fact
"does mention failure to include a provision regarding
contemplation of payment of overtime as a reason for
rejecting the contract at issue in that case[, ]"
id. (citing Hasan v. GPM Investments, LLC,
896 F.Supp.2d 145, 150 (D. Conn. 2012); and third, that the
employer's "reading of Missel and the FLSA
plainly run counter to the policy implications of that case
and the statute itself [, ]" id. at 208.
Hasan, the district court noted that Missel
had "reasoned that the contract at issue did not comply
with the FLSA because 'it [did not include a] provision
for additional pay in the event the hours worked required
minimum compensation greater than the fixed wage.'"
896 F.Supp.2d at 150 (quoting Missel, 316 U.S. at
581). Relying on Hasan, Costello concluded that
"[t]his lends further support to the argument that
section 778.114 accurately reflects the holding of
Missel" and "that an employee cannot achieve a
clear, mutual understanding as to whether a fixed salary is
intended to cover all hours worked unless that understanding
includes some provision for the payment of overtime; without
it, there is no understanding as to an 'agreed wage'
under Missel." Costello, 944 F.Supp.2d at 207
(quoting Missel, 316 U.S. at 581).
contrast, another district court within the Second Circuit
read Missel as not imposing any requirement of
contemporaneous payment of overtime premiums and concluded
that "when an employee has been misclassified as exempt
from overtime protections and the parties have
mutually agreed that a flat weekly wage would compensate the
employee for all his hours, no matter their number,
Missel provides the correct method to calculate
overtime damages: the effective wage should be calculated by
dividing the flat wage by the total hours worked."
Klein v. Torrey Point Grp., LLC, 979 F.Supp.2d 417,
438 (S.D.N.Y. 2013). The Klein court agreed with
other courts within this circuit that "the DOL
regulation, on its own terms, may not be used to calculate
overtime payments in the context of a misclassified
employee" because "a misclassified employee did
not, by definition, receive overtime premiums during his
employment[, ]" as required by the regulation, but
nonetheless held that overtime payments in this context
could be calculated using FWW under Missel.
Id. at 436-38.
argue, in line with Costello's reading of
Missel, that "[a] FWW contract cannot exist
here for the same reason that the contract in Missel
was found to be unlawful: CSC, like the employer in
Missel, never paid an overtime premium, which is a
requirement of a FWW contract." (Pis.' Br. on
Remedies [Doc. # 449] at 5-6.) The Court finds
Plaintiffs' reading of Missel to be more
persuasive, in light of the Supreme Court's
characterization of its holding in Missel in a
different decision issued on the same day.
ruling against the employer in Missel, the Court
It is true that the wage paid was sufficiently large to cover
both base pay and fifty per cent additional for the hours
actually worked over the statutory maximum without violating
section six. But there was no contractual limit upon the
hours which petitioner could have required respondent to work
for the agreed wage, had he seen fit to do so, and no
provision for additional pay in the event the hours worked
required minimum compensation greater than the fixed wage.
Implication cannot mend a contract so deficient in complying
with the law. This contract differs from the one in
Walling v. A. H. Belo Corp.,316 U.S. 624, 62 S.Ct.
1223, 86 L.Ed. 1716, decided today, where the contract
specified an hourly rate and not less than time and a half