Conner v. Cleveland Cnty.

22 F.4th 412

Sara B. CONNER, individually and on behalf of all others similarly situated, Plaintiff - Appellant,

v.CLEVELAND COUNTY, NORTH CAROLINA a/k/a Cleveland County Emergency Medical Services, Defendant - Appellee.

No. 19-2012

United States Court of Appeals, Fourth Circuit.

Argued: September 22, 2021

Decided: January 5, 2022

ARGUED: Philip J. Gibbons, Jr., GIBBONS LAW GROUP, PLLC, Charlotte, North Carolina, for Appellant. Christopher S. Edwards, WARD AND SMITH, PA, Wilmington, North Carolina, for Appellee. ON BRIEF: Craig L. Leis, GIBBONS LEIS, PLLC, Charlotte, North Carolina, for Appellant. Alexander C. Dale, Grant B. Osborne, WARD AND SMITH, PA, Wilmington, North Carolina, for Appellee.

Before WILKINSON and WYNN, Circuit Judges, and FLOYD, Senior Circuit Judge.

Vacated and remanded by published opinion. Judge Wynn wrote the opinion, in which Judge Wilkinson and Senior Judge Floyd joined.

WYNN, Circuit Judge

Plaintiff Sara Conner appeals from the district court's order granting judgment on the pleadings to her employer, the Cleveland County Emergency Medical Services ("Cleveland Emergency Services"), which is a department of Defendant Cleveland County, North Carolina. Conner's complaint alleged that Cleveland County underpaid her for straight (i.e., non-overtime) hours worked during weeks in which she also worked overtime.

At issue is whether this alleged underpayment is a violation of the overtime provision of the Fair Labor Standards Act, under the theory of "overtime gap time." After careful review, we hold that the district court dismissed the suit based on a misreading of our opinion in Monahan v. County of Chesterfield , 95 F.3d 1263 (4th Cir. 1996). Under the correct standard articulated hereinafter, Conner adequately alleged a Fair Labor Standards Act claim. Accordingly, we vacate and remand for further proceedings.

I.

We apply the same standard for Federal Rule of Civil Procedure 12(c) motions for judgment on the pleadings as for motions made pursuant to Rule 12(b)(6). See Butler v. United States , 702 F.3d 749, 751–52 (4th Cir. 2012) (citing Edwards v. City of Goldsboro , 178 F.3d 231, 243 (4th Cir. 1999) ). As such, we recount the facts as alleged by Plaintiff, accepting them as true and drawing all reasonable inferences in Plaintiff's favor. See E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc. , 637 F.3d 435, 440 (4th Cir. 2011).

A.

For at least three years preceding the filing of her complaint in 2018, Conner worked as an emergency medical services ("EMS") employee for Cleveland Emergency Services. Pursuant to its Standard Operating Guideline, Cleveland Emergency Services assigns EMS personnel such as Conner to a 21-day repeating schedule in which each employee works a 24-hour shift followed by 48 hours off (the "24 on/48 off schedule"). The Standard Operating Guideline refers to personnel who work this schedule as "full-time EMS personnel." J.A. 9.¹ Individuals working the 24 on/48 off schedule will always work more than 40 hours per week, since they will have at least two (and sometimes three) 24-hour shifts each week. See Reply Br. at 20 n.9 (providing an example of the 24 on/48 off 21-day schedule).

For the three-year period preceding the complaint, Cleveland County paid Conner under two pay plans. The first is the pay plan for county personnel administered by the county manager set forth in the Cleveland County Code of Ordinances (the "Ordinances"). The Ordinances establish salary "grades" for all full-time county employees and lay out "steps" within each grade. J.A. 10. All Cleveland Emergency Services full-time EMS personnel, like Conner, are paid on a semimonthly basis pursuant to the Ordinances. Each payment constitutes 1/24 of an employee's annual salary as specified by that employee's grade and step. Conner alleges the Ordinances constitute the valid employment agreement between herself and Cleveland County.

In addition to the Ordinances, EMS personnel are subject to "policies and procedures for ... payment of wages and overtime" administered by Cleveland Emergency Services as set forth in its Standard Operating Guideline "Section 14-Pay Plan" (the "Plan"). J.A. 12. As the "pay plan for overtime," the Plan provides the calculation method for determining the overtime rate for 24 on/48 off EMS personnel. Supp. J.A. 1. First, the employee's regular hourly pay rate is determined by dividing the employee's annual salary by 2,928 hours (the number of hours actually worked per year based on the 24 on/48 off schedule). Supp. J.A. 1 ¶ a(iii). Then, to determine the overtime rate, Cleveland Emergency Services multiplies the resultant hourly rate by 1.5. Id. Conner does not take issue with this aspect of the Plan.

In addition to the overtime rate, however, the Plan provides a "revised semi-monthly rate" for regular wages.² Id. ¶ (a)(iv). The semimonthly pay is determined by multiplying the hourly rate that was used to calculate overtime by 2,080 (representing 40 non-overtime hours per week worked for 52 weeks), and then dividing this number by 24. Id. The resulting number is paid to the employee each pay period. When an employee has worked overtime during a particular pay period, Cleveland Emergency Services will take the amount to be paid for overtime hours (calculated as described above) and add it to the revised semimonthly wages to be paid for that pay period. Id. ¶ (b).

Conner alleges that this "revised semi-monthly rate" unlawfully pays her regular wages using overtime compensation, resulting in overall lower pay. According to Conner, her annual salary established under the Ordinances represents her compensation for regular wages. Thus, she claims that for each semimonthly pay period, she should be paid regular wages—calculated as her salary established by the Ordinances divided by 24—plus any overtime as calculated under the Plan.

It is helpful to consider an example of how Conner would calculate her compensation due under the Ordinances and the Plan. Federal law mandates that employers pay employees a premium hourly rate for each hour worked in excess of forty hours per week, which works out to 2,080 hours per year (40 x 52). 29 U.S.C. § 207(a)(1). The Plan notes that the actual number of hours worked annually in a 24 on/48 off schedule is 2,928 hours. That means that employees on the 24 on/48 off schedule work 848 hours overtime in a given year. Using the calculation method provided in the Plan, Conner's hourly rate in 2017 was $12.60 (an annual salary of $36,900 divided by 2,928 hours). Accordingly, the hourly rate for overtime was $18.90 ($12.60 x 1.5). Multiplying 848 overtime hours by the overtime rate of $18.90 an hour should therefore have resulted in an additional $16,027.20 in compensation for Conner in 2017, which, combined with her regular wages of $36,900, would have meant her total compensation was to be $52,927.20.

Yet Conner alleges that she did not receive this amount of compensation under the Plan's "revised semi-monthly rate." She alleges that instead the Plan cut her annual salary for regular wages from $36,900 (the amount established in the Ordinances) to $26,208 (the hourly rate, $12.60, multiplied by the annual hours for a 40-hour workweek, 2,080). As such, Conner alleges that Cleveland County unlawfully used her overtime wages to fill the "gap" between her straight-time compensation under the Plan—$26,208—and her full salary—$36,900.

In this example, Conner's total 2017 salary as calculated under the Plan would be reduced to $42,235.20 ($26,208 for regular time plus $16,027.20 for the 848 hours of overtime we assume for purposes of this example).³ Because Conner alleges her actual total salary should be $52,927.20 (assuming 848 hours of overtime), she claims she is missing out on at least $10,692 of compensation in a given year.

At some point afterwards, Cleveland County changed its policy, effective January 1, 2018, to "beg[i]n paying [Cleveland Emergency Services] full-time EMS personnel regular wages in an amount equal to 1/24 of their annual salaries as designated by their corresponding salary grade and step" in the Ordinances. J.A. 14. Conner alleges, however, that Cleveland County should have paid EMS personnel in the same manner for the three years prior to January 1, 2018.

B.

In June 2018, Conner filed an amended complaint bringing a putative class action. She alleged that Cleveland County violated the overtime provisions of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 – 219, by underpaying straight time wages. She claimed that, under the FLSA, an employer cannot classify wages as overtime without first paying all straight time wages due to an employee. Conner also asserted that Cleveland County breached its contract with its EMS personnel under North Carolina law by failing to pay them their full annual salaries as designated by their respective grades and steps.

Conner sought to first bring her claim as a collective action under the FLSA, defining the class as "[a]ll current and former full-time EMS personnel who were employed during the period [of] January 2, 2015 through January 1, 2018," which she estimated to be between 50 and 75 people. J.A. 14–15. Conner sought to bring her breach-of-contract action as a class action under Federal Rule of Civil Procedure 23, defining the class as "[a]ll current and former full-time EMS personnel who were employed during the period [of] January 2, 2016^{[4 ]} through January 1, 2018." J.A. 15–18.

Cleveland County moved to dismiss Conner's complaint under Rule 12(b)(6) or, alternatively, for judgment on the pleadings under Rule 12(c). Cleveland County argued that Conner failed to affirmatively plead that she worked more than 40 hours in a given workweek such that she was entitled to overtime pay under the FLSA. Cleveland County also argued that Conner's breach-of-contract claim should be dismissed because Conner failed to plead that Cleveland County had waived its governmental immunity from suit, and that Conner...