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Employer Cannot Use Paid Meal Breaks to Offset Compensation Owed to Employees for Donning and Doffing


Smiley v. E.I. DuPont de Nemours and Co. - Third Circuit Court of Appeals


Facts:  Employees at an E.I. DuPont de Nemours and Co. ("DuPont") manufacturing plant worked twelve hour shifts.  These employees were required to be onsite before and after their designated shift in order to "don and doff" uniforms and protective gear necessary to do their job.  DuPont also required these employees to participate in "shift relief" in which outgoing employees shared information on the status of work with incoming shift employees.  Approximately 30 to 60 minutes per workday were spent donning, doffing, and providing shift relief.  

Of note, DuPont chose to compensate employees for meal breaks during the twelve hour shifts.  In doing so, DuPont included compensation for meal breaks when it calculated employees' regular rate for overtime purposes, and that compensation was subsequently included on the pay stubs of employees as part of their total hours worked.

Bobbi-Jo Smiley, Amber Blow, and Kelsey Turner ("Appellants") filed a putative collective action and class action against DuPont, claimed violations of the Fair Labor Standards Act ("FLSA") and Pennsylvania's Wage Payment and Collections Law ("WPCL"), and sought overtime compensation for time spent donning, doffing, and providing shift relief.  DuPont argued that it could offset the compensation it paid to employees for meal breaks (again, which DuPont voluntarily chose to pay and which the FLSA did not require) against such required overtime.  The District Court granted summary judgment in favor of DuPont on the grounds that the FLSA allowed DuPont to use paid non-work time to offset the required overtime.  Appellants subsequently appealed.

Holding:  The Third Circuit Court of Appeals began its analysis of the case with a look to the FLSA and a recognition that the Act requires employers to pay their employees for all hours worked.  With that being said, the FLSA does carve our permissible offsets that allows an employer to use certain compensation already given to an employee as credit against its overtime liability owed to that employee.  However, when the Court looked at the types of offsets permitted by the Act, the Court could not reconcile that with the arguments made by DuPont as to why it should be allowed to offset time paid for meal breaks against any required overtime compensation.  

In particular, the Court held that the policy rationals of the FLSA do not permit crediting compensation used in calculating an employee's regular rate of pay because it would allow employers to "double count" the compensation.  The Department of Labor had submitted a brief which the Court found useful, including recognizing that there was no authority to support DuPont's proposition that compensation already paid for hours of work can be used as an offset and subsequently counted a second time as "statutorily required compensation" for other hours of work.  Instead, the FLSA only provides an offset of an employer's overtime liability using other compensation that is excluded from the regular rate and paid to an employee at a premium rate.

Judgment:  The Third Circuit Court of Appeals reversed and remanded the case and held that an employer cannot use paid meal breaks to offset compensation owed to employees for donning and doffing work related clothes and protective gear.

The Takeaway:  Although I thought this case would deal more directly with the issue of donning and doffing (as several other cases have), I think it does provide a good analysis of the FLSA and how employers cannot use voluntarily paid meal breaks to offset any compensation that might be owed to employees (in this case, for overtime work spent donning, doffing, and providing shift relief).  Some might think that DuPont should have been given "credit" for voluntarily paying its workers for meal breaks and not subsequently "punished" for simply trying to offset this against any wages that would be due for overtime worked.  

I can understand that line of reasoning, and it seemed the Third Circuit Court of Appeals looked at all available statutory options to see if DuPont's "good faith" conduct could be justified.  However, when it came down to it, the language of the FLSA and prior caselaw simply did not support the precedent that an employer can lawfully use voluntarily paid meal breaks to offset compensation owed to employees for time spent donning, doffing, and providing shift relief.

Majority Opinion Judge:  Judge Rendell

Date:  October 7, 2016

Opinion:  hr.cch.com/ELD/SmileyDupont100716.pdf

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