Wilson v. Peckham, Inc.

LORI WILSON, on behalf of herself and others similarly situated, Plaintiffs, v. PECKHAM, INC., Defendant.

Case No. 1:20-cv-565

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

July 26, 2021

Hon. Hala Y. Jarbou

OPINION

This is a putative collective action seeking damages under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq. Plaintiff Lori Wilson worked for Defendant Peckham, Inc. as a call center agent. She seeks to bring this action on behalf of herself and other individuals who have worked as agents for Peckham at its call center in Battle Creek, Michigan.

Before the Court is Peckham's motion to dismiss the complaint (ECF No. 38). Because Peckham's motion relies on evidence that is not properly before the Court on a motion to dismiss, the Court converted it into one for summary judgment. The Court gave Wilson an opportunity to respond, and she has done so. After considering the parties' submissions, the Court will deny the motion.

I. BACKGROUND

Peckham's call center agents answer the consumer and customer telephone calls made to Peckham. According to the complaint, the agents generally work 8.5 hour shifts, five days per week, with a 30-minute unpaid lunch break per shift. Peckham paid its agents on an hourly basis; however, Wilson claims that Peckham has not properly compensated its agents as required by the FLSA. She asserts three claims.

A. Pre-Shift Work

First, Wilson alleges that agents performed significant "pre-shift" work that was not compensated. (Am. Compl. 6, ECF No. 31.) When agents arrived at the call center to start their shift, they followed a specific "protocol" in order to "start up and log into the company's computer network" before performing their work. (Id. ¶ 38.) According to Wilson, that protocol consisted of the following steps:

a. Turning on the computer;¹

b. If the computer had been off or asleep, I was prompted to login to Windows using the ctrl+alt+delete function and enter my username and password;

c. After logging into Windows and connecting to Peckham's network, I began the required login process to access the necessary computer applications;

d. I opened Peckham's intranet timekeeping program and entered my assigned username and password;

e. After navigating to the proper page, I clicked a box to "clock in"; and

f. I logged into my phone and began receiving phone calls.

(Wilson Decl. ¶ 6, ECF No. 50-2.)

For Wilson, this process sometimes took only 5 minutes to complete. At other times, the process took as long as 60 minutes because the computers were slow or because she encountered "technical problems." (See id. ¶ 7.) At some point, Peckham gave its agents a "grace period," meaning that they could "clock in" up to 15 minutes before the start of their shift and receive compensation for that time; however, Wilson contends that the bootup and login process that occurred before she clocked in constitutes "off-the-clock" work for which she and other agents were not compensated. (Id. ¶ 11.) And because agents like Wilson typically worked shifts totaling40 hours per week or more, they did not receive overtime pay for this additional work, which would have been compensable at one and a half times the rate of regular pay.

B. Mid-Shift Work

Second, Wilson claims that Peckham required its agents to perform off-the-clock work during their 30-minute, unpaid meal periods, when it should have paid them for this work. Wilson and other agents regularly returned to their workspaces 2-5 minutes early so that they would have enough time to log back into their computer and be "phone ready" by the end of their meal breaks. (Id. ¶¶ 20-21.) In addition, Peckham maintained a "policy and practice" of failing to pay agents for unscheduled breaks lasting less than 20 minutes. (Id. ¶ 22.)

C. Regular Rate Calculation

Finally, Wilson claims that Peckham did not pay its agents the correct overtime rate. Peckham allegedly used the agents' base hourly rate as their regular rate of pay, ignoring "shift premiums and other compensation" given to agents as part of their pay. (Id. ¶ 25.)

II. SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "Courts consider the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor." Quigley v. Tuong Vinh Thai, 707 F.3d 675, 679 (6th Cir. 2013). The Court must determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).

III. ANALYSIS

A. Pre-Shift Work

As indicated above, Wilson claims that Peckham's call center agents are entitled to compensation for the time spent booting up and logging into their computers before they clock in at the start of the day. According to Wilson, this process sometimes requires up to 60 minutes because the computers are slow or because of technical problems.

1. FLSA

The FLSA is designed to ensure that covered employees are paid for all time that they work, and that overtime wages be paid for all time worked in excess of 40 hours per workweek. The act does not define "work," "workweek," or "workday." See 29 U.S.C. § 203 (definitions).

Early Supreme Court cases defined these terms broadly. See IBP, Inc. v. Alvarez, 546 U.S. 21, 25 (2005) (reviewing the development of Supreme Court jurisprudence on the FLSA). In one case, it defined work as "physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business." Tenn. Coal, Iron & R.R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 598 (1944). In another case, it held that "exertion" is not strictly necessary for something to constitute work: "an employer, if he chooses, may hire a man to do nothing, or to do nothing but wait for something to happen." Armour & Co. v. Wantock, 323 U.S. 126, 133 (1944). It also held that a "workweek" covers "all time during which an employee is necessarily required to be on the employer's premises, on duty or at a prescribed workplace." Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 690-91 (1946). Using the latter definition, the Court concluded that "time necessarily spent by employees walking from timeclocks near the factory entrance gate to their workstations[,] must be treated as part of the workweek." IBP, 546 U.S. at 25 (citing Mt. Clemens Pottery, 328 U.S. at 691-92).

Congress responded to Mt. Clemens Pottery by passing the Portal-to-Portal Act (PPA), 29 U.S.C. § 251 et seq. That Act did not change the Supreme Court's definitions; instead, it excluded the following activities from those that are compensable under the FLSA:

(1) walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform, and

(2) activities which are preliminary or postliminary to said principal activity or activities,

which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities. For purposes of this subsection, the use of an employer's vehicle for travel by an employee and activities performed by an employee which are incidental to the use of such vehicle for commuting shall not be considered part of the employee's principal activities if the use of such vehicle for travel is within the normal commuting area for the employer's business or establishment and the use of the employer's vehicle is subject to an agreement on the part of the employer and the employee or representative of such employee.

29 U.S.C. § 254(a).

2. Principal or Preliminary Activity

Peckham argues that the time spent by agents completing the bootup and login process is not compensable under the FLSA because that process is a "preliminary activity" excludable by the PPA, rather than a principal activity.

The PPA does not apply to principal activities; thus, the Court must determine whether the bootup and login process is a principal activity or a preliminary one. A "principal activity" is one which "the employee is employed to perform." 29 U.S.C. § 254(a). The term also "embraces all activities which are an integral and indispensable part of the principal activities[.]" Steiner v. Mitchell, 350 U.S. 247, 252 (1956) (emphasis added, quotation marks omitted). Consequently, a principal activity can include "activities performed either before or after the regular work shift, on or off the production line . . . if those activities are an integral and indispensable part of theprincipal activities for which covered [employees] are employed and are not specifically excluded by [the PPA]." Id. at 256. In Steiner, for instance, the Supreme Court held that, for employees in a battery manufacturing facility, donning and doffing protective gear was a principal activity because it was necessary for the nature of the work that the employees performed in the factory. Id. at 252. Similarly, in IBP, the Supreme Court affirmed that donning and doffing "unique protective gear" was a principal activity for employees hired to cut and bag meat. IBP, 546 U.S. at 32. And in Mitchell v. King Packing Co., 350 U.S. 260 (1956), the Court concluded that the time meatpacker employees spent sharpening their knives was compensable as a principal activity because dull knives could "slow down production," "affect the appearance of the meat as well as the quality of the hides," "cause waste," and lead to "accidents." Id. at 262.

The Supreme Court subsequently clarified that an "activity is integral and indispensable to the principal activities that an employee is employed to perform—and thus...