Lawtone-Bowles v. City of New York, New York

Background

The opinion addresses two related actions brought by nineteen current or former employees of the City of New York’s Department of Homeless Services. The plaintiffs worked as Motor Vehicle Operators, transporting employees, materials, clients, and belongings. Their scheduled shifts were 8.5 hours, including a 30-minute unpaid meal break.

The City used CityTime as its electronic timekeeping system. Time outside an employee’s regular schedule, when there was no approved overtime request, was labeled “noncompensable.” City policy required overtime to be authorized before it was worked, and employees had to electronically certify that their CityTime timesheets were accurate before being paid.

The plaintiffs asserted claims under the Fair Labor Standards Act, a federal wage law. They alleged that the City failed to pay for overtime worked before and after shifts and during meal periods, delayed overtime payments, and incorrectly calculated overtime rates. They also sought liquidated damages and a finding that the violations were willful, which would allow use of a three-year limitations period rather than the usual two-year period.

Unpaid overtime

To prove an unpaid-overtime claim, a plaintiff must show that the plaintiff performed work that was not properly paid and that the employer knew or should have known about the work. The court treated both issues as factual questions.

The plaintiffs argued that they could obtain summary judgment by showing only that some unpaid work occurred with the City’s knowledge. The court rejected that argument. It explained that the cases on which the plaintiffs relied described the showing needed to defeat an employer’s summary-judgment motion, not the showing needed for an employee to win summary judgment. The court therefore denied the plaintiffs’ motion on their unpaid-overtime claims.

The court also denied the City’s motion on those claims. The plaintiffs’ testimony and CityTime records could allow a factfinder to conclude that they worked unpaid overtime. The plaintiffs also presented testimony that supervisors assigned or observed work outside scheduled shifts, knew about missed meal breaks and unapproved overtime, reviewed time records, and sometimes discouraged reporting overtime that had not been pre-approved.

The City argued that the plaintiffs’ failure to report overtime and certification of their timesheets defeated the claims. The court rejected that argument at the summary-judgment stage. It stated that an employer’s duty to keep accurate records and pay overtime cannot be transferred to employees. The evidence could allow a factfinder to conclude that the City knew or should have known about the unpaid work and discouraged accurate reporting.

Delayed overtime payments

The Fair Labor Standards Act requires timely payment of wages, including overtime. The opinion states that payment within two pay periods is generally considered timely, but also explains that liability depends on whether earlier payment was practicable under objective standards.

The plaintiffs offered testimony and an expert declaration identifying overtime payments made more than two pay periods after the work. The City did not dispute that some payments were late, but argued that the late payments were a small portion of the total and that faster payment might have been impracticable because of employee errors or other reasons. The City also presented evidence that more than 96 percent of payments were timely.

The court found a genuine dispute of material fact about whether earlier payment would have been impracticable. It denied both parties’ summary-judgment motions on the delayed-payment claims.

Incorrect overtime-rate calculations

The plaintiffs alleged that the City failed to include night-shift differentials and meal-allowance payments in the base rate used to calculate overtime. They also alleged that the City paid only a straight rate when employees chose compensatory time instead of cash. The City did not dispute that these practices would violate the Fair Labor Standards Act if proved.

The plaintiffs relied on testimony from the City’s witnesses and an expert declaration identifying miscalculations in the payroll data. The City responded that the plaintiffs received night-shift differentials and compensatory time, but the court found that response did not address whether the overtime rate was calculated correctly.

The court granted the plaintiffs’ motion for summary judgment on these overtime-rate claims: Count 2 of the amended complaint in 16-CV-4240 and Counts 2 and 4 of the complaint in 18-CV-4338. It denied the City’s motion on those claims.

Liquidated damages and willfulness

Liquidated damages generally equal the plaintiff’s actual damages under the Fair Labor Standards Act. An employer may avoid them by proving that it acted in subjective good faith and had objectively reasonable grounds for believing it was complying with the law. A finding of willfulness extends the limitations period from two years to three years.

Because the court denied the plaintiffs’ motion on the underlying unpaid-overtime claims, it also denied their motion on liquidated damages and willfulness. The court likewise denied the City’s motion. Evidence showed that the City’s chief employment lawyer had been told that CityTime’s certification language was inaccurate because some employees worked without compensation. The plaintiffs also offered evidence that supervisors observed overtime, had reason to know it was unpaid, and that employees accumulated substantial amounts of noncompensable CityTime. The court concluded that a reasonable factfinder could determine that the City lacked the required good faith and acted willfully.

Disposition

Judge Alison J. Nathan granted the plaintiffs’ motion for summary judgment with respect to the claims that the City improperly calculated overtime compensation. The plaintiffs’ motion was otherwise denied. The City’s motion for summary judgment was denied in its entirety. The court directed the parties to submit a joint letter proposing trial dates and addressing the estimated trial length and possible settlement procedures.