Average hourly wage across a workweek is relevant unit for determining FLSA minimum wage violation

By Ronald Miller, J.D. — Agreeing with its sister circuits and the Department of Labor, the Seventh Circuit ruled that under the FLSA, the relevant unit for determining a pay violation is not wages per hour, but the average hourly wage across a workweek. Because none of the flight attendants in this action pleaded a single workweek in which they were paid an average wage less than $7.25 per hour, the appeals court affirmed the dismissal of their FLSA claims. However, because the FLSA itself reserves that authority to the states and localities to regulate the labor of their own citizens and companies, the appeals court reversed the dismissal of the employees’ state and local wage claims (Hirst v. SkyWest, Inc., December 12, 2018, Brennan, M.).

SkyWest charters planes for other airlines. It employs over 2,600 individual as cabin crew. SkyWest flight attendants are based out of airports in ten different states, including the flight attendants in this action who reside in Arizona, California, Washington, and Illinois. A typical workday for a flight attendant is long and varied, including time onboard the aircraft, and in airports before, between, and after flights. SkyWest flight attendants are paid only for their time in the air, known in the industry as “block time.” The amount of block time worked in a given day is much shorter than the “duty day.”

Flight attendants for SkyWest challenged the airline’s compensation policy of paying for their work in the air but not on the ground. Beginning in March 2015, three groups of SkyWest flight attendants filed suit alleging that the airline violated the FLSA and the wage laws of their respective states by failing to pay minimum wage. The also sought to certify a class of similarly situated SkyWest employees. The cases were consolidated in the Northern District of Illinois.

Following multiple amended complaints and limited discovery, the district court dismissed all of the flight attendants’ claims with prejudice. The court determined that, in assessing violations of the federal minimum wage, an employee’s wage is calculated as the average hourly wage across the workweek. Because none of the flight attendants pleaded a single workweek in which they were paid an average wage less than $7.25 per hour, the federal minimum wage, the court concluded that they had not properly pleaded an FLSA claim. Additionally, the district court held that their state and local wage claims were preempted by the dormant Commerce Clause.

FLSA claims. On appeal, the flight attendants first challenged the dismissal of their FLSA claims. The text of 29 U.S.C. § 206 does not state what measure should be used to determine compliance with the minimum wage. Thus, the Seventh Circuit turned to the interpretation of the Department of Labor. In 1940, the DOL issued a policy statement adopting the workweek as “the standard period of time over which wages may be averaged to determine whether the employer has paid [the minimum wage.]” Other circuits have uniformly adopted the Department’s per-workweek measure, including the Ninth, Fourth, Sixth, Eighth, Eleventh, Second and D.C. Circuits. Seeing no reason to deviate from the DOL’s interpretation or the consensus of other federal appellate courts, the Seventh Circuit adopted the per-workweek measuring for determining compliance with the federal minimum wage.

Next, the appeals court applied the per-workweek measure to this case. A plaintiff alleging a federal minimum wage violations must provide sufficient factual context to raise a plausible inference there was at least one workweek in which he or she was underpaid. As found by the district court, none of the flight attendants pleaded a single workweek in which they were paid an average wage less than $7.25 per hour. Claiming that they worked many hours and citing several weeks in which they were paid the minimum wage was not enough to render their claims plausible. Accordingly, the appeals court affirmed the dismissal of their FLSA claims.

State and local claims. Next, the flight attendants argued that their state and local wage claims should be reinstated. Specifically, the contended that the dormant Commerce Clause did not apply to this case. The appeals court agreed that application of the dormant Commerce Clause was not appropriate in this case. Under the dormant Commerce Clause, courts invalidate a state law only where there is a clear showing of discrimination against interstate commerce “either expressly or in practical effect. In this instance, SkyWest failed to allege any discrimination against interstate commerce. This failing precluded application of the dormant Commerce Clause to the flight attendants’ state and local claims.

Moreover, even if minimum wage laws did discriminate against interstate commerce, the dormant Commerce Clause does not apply to state and local laws expressly authorized by Congress. Here, the appeals court observed that the FLSA itself reserves authority to the states and localities to regulate the labor of their own citizens and companies. Thus, the dormant Commerce Clause did not preclude state regulation of flight attendants wages in this case. Accordingly, the court reversed the dismissal of the employees’ state and local wage claims and remand for further proceedings.

Source: http://www.employmentlawdaily.com/index.php/news/average-hourly-wage-across-a-workweek-is-relevant-unit-for-determining-minimum-wage-violation/