United States District Court, S.D. Texas, Corpus Christi Division
FINDINGS OF FACT AND CONCLUSIONS OF LAW REGARDING
LIABILITY PHASE OF BIFURCATED TRIAL
GONZALES RAMOS UNITED STATES DISTRICT JUDGE.
filed this collective action for unpaid wages and overtime
premium pursuant to the Fair Labor Standards Act (FLSA)
against their employers, Republic Services, Inc., BFI Waste
Services of Texas, L.P., Republic Waste Services of Texas,
Ltd., and Allied Waste Services, Inc. (jointly Republic). The
parties agreed to a bifurcated bench trial of this matter in
which the first phase would cover liability issues. The Court
tried that phase on April 25 to 27, 2017.
liability issues are:
(1) Whether the FLSA requires that the employer and employee
come to an agreement or understanding regarding compensation
for non-production time;
(2) Whether there was an agreement or understanding between
Plaintiffs and Republic that the piece rate by which they
were paid compensated Plaintiffs for both production and
(3) Whether Plaintiffs' on-the-clock work was unpaid
(4) Whether Republic violated the maximum hour overtime
provision by paying an incorrect regular rate for the first
40 hours in a workweek and, therefore, an incorrect overtime
premium for all hours worked over 40 in a workweek;
(5) Whether Republic acted in good faith so as to avoid
(6) Whether any FLSA violation was willful so as to extend
the statute of limitations to three years; and
(7) Whether the collective action should be decertified.
Court issues the following as its findings of fact and
conclusions of law and DENIES Defendants' Motion for
Judgment on Partial Findings (D.E. 230).
Work and Method of Driver Compensation A Driver's Typical
are Roll-Off Drivers in Republic's industrial division. In
a typical day, they clock in upon arrival at Republic's
yard by 5:00 a.m. On some days, they are required to attend
safety, OSHA, or training meetings. Bradley, D.E. 234, p. 68.
Those meetings are held approximately two or three times a
month for fifteen to twenty minutes each. Bradley, D.E. 234,
p. 69. They then check in with the dispatchers and get route
sheets that list their tasks for the day, which they are
ordinarily free to accomplish in any order they choose. Those
tasks include any combination of: (a) delivering a box to a
new customer; (b) dropping an empty box and hauling an
existing customer's filled box to the landfill and
dumping it, taking the now-empty box to the next customer and
repeating the process; (c) hauling an existing customer's
box to the landfill and dumping it, and then returning the
same box to that same customer; and (d) hauling a box,
dumping it, and taking the box back to Republic for a
terminating customer. The assignments are unpredictable and
are revised daily such that the drivers do not have regular
routes that they service exclusively; each driver may be
assigned to any customer on a given day. They average about
6-8 hauls per day when circumstances permit.
dispatcher also provides an activity sheet (for logging
certain events of the day), along with truck assignments, a
fuel card, and keys. The drivers then conduct Department of
Transportation (DOT) mandated pre-trip inspections of their
vehicles and retrieve any necessary trash boxes before
heading out to their first customers. If all goes smoothly,
the driver picks up a full trash box, hauls it to the
landfill, gets the haul weighed, dumps the trash from the box
into the landfill, gets a ticket evidencing completion of
that dump, then proceeds to the next task. The drivers refer
to this as a “bump and dump.”
not unusual, however, for drivers to encounter impediments to
completing the bump-and-dumps. Sometimes a box would be
overflowing with trash or have trash stacked unevenly such
that the driver has to reposition the load for safe hauling.
Climbing on top of the box and redistributing the trash for
safe transport can take about twenty to thirty minutes.
Rincon, D.E. 234, p. 126. The drivers also testified to
frequent blockages, in which something under the
customer's control blocks their access to the box they
are to pick up. When these customer service issues arise,
which happens two to three times a day on average, the
drivers have to alert dispatch so that dispatch can contact
the customer to resolve the issue. See generally,
Baca, D.E. 234, p. 205; Sanchez, D.E. 234, p. 232.
dispatchers who testified confirmed this. The drivers stated
that it could take fifteen to thirty minutes on average to
resolve those problems. Serrano, D.E. 234, p. 87; Rincon,
D.E. 234, p. 127; Benavides, D.E. 234, p. 167; Sanchez, D.E.
234, p. 232 (one might be real quick and the other take
“like forever, ” twenty-five to thirty minutes).
Dispatcher Theresa Ortiz testified that it would take three
to five minutes. Ortiz, D.E. 234, pp. 23-24. The Court FINDS
that the dispatcher's call takes three to five minutes,
but that the customer's resolution of the issue-removing
that which blocks the trash container pickup-generally takes
fifteen to twenty-five minutes.
there are boxes in need of repair and the drivers have to
find ways to keep the doors shut or replace missing tarps to
cover the load so that the trash does not fly out in route to
the landfill. Sometimes, the drivers cannot make the haul
safe and they lose that haul. Rincon, D.E. 234, p. 126. If
Republic agrees, the driver may still be paid for a
“dry run.” And if a load was picked up too late
to go to the landfill, then that (or another) driver will
have to start the next day by dumping that load before
proceeding with his route. All of these circumstances cause
delays, making the drivers' day longer and impairing
their ability to complete all of the hauls on their routes.
are also frustrated by Republic's poor stock of empty
boxes because they lose time in search of the right sized box
in sufficient condition to deliver to a customer on their
route. If the box is in stock at the yard, it takes ten to
fifteen minutes to load it on the truck. Serrano, D.E. 234,
p. 92. Sometimes-on average two to three times a week-they
are required to search more than one yard to find an
acceptable box, which can extend the time an additional
twenty to twenty-five minutes for drive time and ten to
fifteen minutes for search and load. Serrano, D.E. 234, p.
92; Rincon, D.E. 234, p. 130; Benavides, D.E. 234, p. 171;
Sanchez, D.E. 234, p. 233 (looking for boxes takes about 45
minutes). And the trucks can have mechanical breakdowns and
flat tires. In those situations, the drivers have to wait for
a Republic mechanic to arrive and repair the truck before
they can continue their routes. Last, the drivers complained
that there can be extensive wait times at the landfill,
particularly in bad weather, sometimes exceeding an hour in
which all they can do is wait in line.
and the ExxonMobile, Oxy, NRG Energy, and similar facilities
have elaborate security clearance procedures by which the
driver and the truck have to be cleared. The driver might
have to wait in line to enter the inspection area; park the
truck and open its hood; go inside the facility, surrender
his wallet, and go through a personal safety check; then,
after getting clearance, obtain an escort; drive very slowly
and attend to the pick-up of the container; return through
the same inspection area and have the truck re-inspected; and
retrieve his wallet before exiting, all of which adds fifteen
to thirty minutes on each side of the container pick-up.
Serrano, D.E. 234, pp. 93-95; Rincon, D.E. 234, pp. 154-55.
end of the day, the drivers return to the Republic yard, fuel
up their truck (sometimes having to wait in line to do so),
park it, and conduct a DOT-mandated post- trip
inspection. They fill out any additional DOT
paperwork, such as duty logs when their work day exceeded 12
hours, and complete their route and activity sheets. They
then check out with dispatch, turning in their fuel card and
keys and wait for the dispatcher to review the paperwork to
ensure that it is complete. Then the drivers clock out. This
procedure takes, on average, forty-five minutes to an hour
each day. Rincon, D.E. 234, pp. 132-33; Sanchez, D.E. 234,
pp. 234-35 (post-trip activities normally take about 30
minutes; bad days can add another 20 minutes).
drivers' testimony regarding the nature of the work and
the typical delays that frequently impair their ability to
complete their bump-and-dump tasks was uncontroverted, if not
corroborated, by Republic witnesses.
Structure Disclosed to Drivers.
the manner in which Republic compensated the drivers is
largely uncontroverted. Republic formulated a series of rates
that it calls “Roll Off and Longhaul Commission
Zones.” Plaintiffs' Exhibit 13 (DEF 000273, 00281).
In FLSA terms, these are “piece rates.” See
generally, 29 U.S.C. § 207(g). The confidential
table of rates lists the amount that Republic will pay the
driver for each haul. It is undisputed that this table was
the only information provided to the drivers regarding
Republic's pay plan when they were hired. Republic told
the drivers that they were hired to work only on this
Republic's management witnesses were involved in the
original formulation of the zone/commission pay rates and
they did not know how they had been calculated, other than
that they appear to be based upon the distance of the
customers' boxes to the landfill or to Republic's
yard. See Map, Defendant's Exhibit
see also Chapa, D.E. 233, pp. 54, 167-68; Bradley,
D.E. 234, p. 45 (zones are from the office); D.E. 230, p. 3
(Defendants reciting that zone rates are based on distance to
landfill). Plaintiffs acknowledged that Republic did not
agree to pay additional monies for non-production time or
make any representations to that effect. Serrano, D.E. 234,
p. 99; Benavides, D.E. 234, p. 190. However, Plaintiffs
provided a number of route and activity sheets detailing down
time. Plaintiffs' Exhibit 43.
of uncompensated non-production time included arriving to
find a customer who did not want the haul that day, a
customer's location that included twenty minutes after
arrival to get to the box and another twenty minutes to get
the box off the property, sixty-five minutes from arrival to
loading of a box at a ranch, thirty-five minutes for a flat
tire, finding a container that was damaged with spray
painting, ninety-five minutes having to return to the yard to
replace a missing tarp, and twenty minutes spent closing a
door on the container. Id. The fact that these
obstacles to efficiency exist and are confronted on a daily
basis was undisputed and even corroborated by the dispatchers
Provisions of the Pay Plan.
maintains a pay plan with provisions in addition to the zone
commission rate sheet. The content of the full pay plan is
not shared with drivers. And it is not always followed. For
instance, the pay plan calls for the payment of the zone rate
for dry runs-where the driver gets to the customer but, for
some reason, the container cannot be hauled. That dry run
payment would not be made if there was a nearby customer that
the driver could move on to. Serrano, D.E. 234, pp. 112-13;
Baca, D.E. 234, pp. 210-11.
plan also states that day rates apply to Roll-Off Drivers, but
only if they make no hauls. Republic's General Manager,
Robert Bradley (Bradley) testified that, contrary to the
letter of this plan, day rates were used even when a driver
made hauls if the day rate exceeded the alternative zone
commissions that had been earned by those hauls. Bradley,
D.E. 234, p. 61. Also, contrary to the letter of the plan,
Bradley testified that when drivers had completed some hauls,
their day rate would be supplemented with a small amount per
haul rather than the regular zone rate. Bradley, D.E. 234, p.
reasoned that a day rate compensated a driver for all hours
worked. Therefore, if a driver received the greater of the
day rate or his piece rate commissions (earned despite having
obstacles to completing a route), either method of
compensation necessarily paid the driver for all hours
worked. In this manner, even if a truck breakdown kept the
driver from making hauls all or part of a day, he was still
paid for all of his time. Thus, without ever having disclosed
the existence or amount of a day rate to the drivers prior to
them beginning work, Bradley contends that Republic's
safety net of the prescribed day rate (or a greater piece
rate) fully compensated a driver who normally worked only on
a commission or piece rate basis.
compare the standard zone rate potential earnings to the day
rate, the Court looked at the average zone rate and multiplied it
by seven hauls. The day rates were, on average, roughly
38% of what could be earned by completed hauls. By the third
haul, using the average rate, the daily rate would be
exceeded. So by Republic's logic, obstacles that prevent
four out of seven hauls do not require separate compensation.
theory appears to be put in practice by Republic's policy
of not providing any day rate in addition to hauls unless the
driver's down time exceeds four hours. Chapa, D.E. 233,
p. 110. Jose Rincon testified that he had never seen a day
rate applied where there was excessive down time caused by a
mechanical breakdown or other significant loss of ability to
make hauls. Rene Sanchez once turned in a route sheet showing
4.5 hours of down time. He was paid the zone commission rate
for the two hauls he managed to make because they rendered a
greater amount of pay than the alternative day rate would
have. Sanchez testified that he had been instructed to write
down all down time. He did so, but never saw any additional
compensation for it.
contends that the drivers agreed to this arrangement despite
never being advised of the terms of the full pay plan and its
day rate (original or as applied). When a day rate was paid,
it appeared on the corresponding pay stub. Republic relies on
the drivers' continued work after each pay period to
demonstrate actual or constructive knowledge of how they had
testified that the only reason to clock driver hours was to
keep track of overtime. In this manner, Republic has equated
the overtime premium triggered by hours over 40 in a workweek
as compensation for the down time, straight time hours within
the initial 40 hours. Pursuant to this logic, a driver might
work 30 hours of production time and 11 hours of
non-production time in a week, triggering one overtime hour.
Republic's assertion is that one hour's fifty percent
overtime premium pay is deemed to compensate for the ten
hours of straight time worked but not productive toward a
zone rate. Republic supplied no authority for conflating
straight time pay and overtime premiums.
Operations Manager, Elbert “Dennis” Chapa,
testified to the history of driver pay at the Corpus Christi
facility. He stated that, during the time that BFI owned the
business, Roll-Off Drivers were paid a day rate plus $4.00
per haul. After Allied acquired BFI, they were paid a day
rate or a day rate plus a per haul amount. It was only after
Republic took over that Roll-Off Drivers lost the day rate
component of their pay, but instead worked for the
Drivers and Long-Haul Drivers handle similar loads and work
for the same zone rates. However, the Long-Haul Drivers also
receive a day rate along with the zone rates. Bradley, D.E.
234, p. 56. Chapa and Bradley testified that they received
this combination rate because their routes included more
drive time, the loads were heavier and transport was slower,
and they were limited in the number of hauls they could
complete in a day-their pay was supplemented for impediments
to production. Chapa, D.E. 233, p. 61; Bradley, D.E. 234, p.
20, 2013, Sally Scordato, a Division Human Resources Manager
for Republic, sent an email to Chapa asking for the Corpus
Christi pay plan. “Specifically, I need to know your
zone pays, day rates for RO drivers, downtime pay, help pay,
landfill wait time pay etc.” Plaintiffs' Exhibit
71. Chapa responded, in part, “We do not pay downtime
or landfill wait time unless Supervisor approves or has
efficient reasons to authorize increase.” Id.
Responding to her next email, Chapa wrote,
In what situation would a supervisor approve downtime pay . .
. and what would that rate be? Depending on the downtime if
driver goes down more than 4 hours and there's not an
available truck, driver will get his day rate which
avg.118.00 per day plus his completed hauls.
Id. Scordato then forwarded the email thread to
General Manager Bradley, saying,
I guess I am still confused on the downtime and landfill wait
time pay. In my previous divisions, drivers were paid wait
time and downtime much sooner than 4 hours. Doesn't the
downtime and wait time affect the drivers' overall pay
since they more than likely will not get as many hauls due to
something that was not within their control? Have we ever
paid downtime less than 4 hours?
Id. There is no response to this inquiry or
clarification in the record.
Senior Corporate Counsel, Kim Bullerdick, testified that in
late 2012 or early 2013, he was advised by outside counsel
experienced in wage and hour law about piece rates in
California. He was advised that California law required a
specific agreement with respect to the amount to be paid for
non-production time. That discussion, Bullerdick testified,
gave him the impression that California law was different
from the requirements of the FLSA in that respect. D.E. 235,
pp. 28-29, 31. So he believed that the FLSA does not require
an agreement or understanding with respect to compensation
for non-production time and no Texas law contradicted that.
admitted that the specific question of the FLSA requirements
was not addressed expressly. It was only implied. He
testified that he did not seek any legal opinion on whether
the Corpus Christi pay plan complied with the FLSA and did
not recall ever seeing the pay plan prior to this lawsuit
being filed. D.E. 235, pp. 38, 41. He was not aware of
whether anyone at Republic ever sought or obtained an opinion
regarding the Corpus Christi pay plan prior to settling the
Rodriguez case in San Antonio. And when an opinion
was sought, it was clear that the lawyers did not have the
full parameters of how the Corpus Christi area drivers were
actually being paid, as opposed to what was set out in the
pay plan. See Plaintiffs' Exhibit 32.
About Non-Production Time.
drivers testified that no one ever explained to them that
zone rates included any non-production time. Rincon, D. E.
234, pp. 123-24; Baca, D.E. 234, pp. 202-03. They consider
their pay, based on what they have to do to earn it, to
include bump-and-dump time-what it takes to get a landfill
ticket on which the zone rate is earned. Serrano, D.E. 234,
pp. 83-84, 107; Rincon, D.E. 234, p. 127; Baca, D.E. 234, pp.
221-22; Sanchez, D.E. 234, pp. 224-25. So when they
encountered a lot of down time, they would complain to their
supervisor and would be told, “I'll take care of
you, ” “Talk to Dennis, ” or they would be
Baca testified that he complained to Supervisor Larry Kelly
and was told to ask Dennis. He had meetings with Dennis Chapa
and got no resolution of the issue. Then he had an encounter
with Bradley at the recycling center and asked about down
time compensation. Bradley indicated that he knew they did
not get extra pay for down time but did not offer any
explanations for how the zone rates were supposed to
compensate for that. Baca complained that they could pick up
two boxes a block apart and have a smooth two-hour trip to
the landfill for one and a delayed five-hour trip for the
other, but get paid no more than they did for the two-hour
job. Baca, D.E. 234, pp. 213-14.
Benavidez testified that he asked two supervisors about
getting paid extra compensation for hauls from refineries
because of the additional time it takes to get in and out of
those facilities. But he did not get clear answers about how
he was supposed to be paid for that additional time. Rene
Sanchez asked Supervisor Larry Kelly, who responded,
“Talk to the man, ” meaning Dennis Chapa. He also
asked Supervisor Ray Medrano, who said “Write it down,
” referencing the route sheet. But the time written
down did not bring extra compensation.
FLSA Requires an Agreement
primarily upon 29 C.F.R. § 778.318, Plaintiffs contend
that the FLSA requires that there be an agreement between the
employer and employee with respect to compensation for
non-productive time when the employer uses a piece rate pay
structure. Republic contends that the FLSA does not require
an agreement regarding payment for non-productive time and
that the Department of Labor (DOL) interpretations embodied
in § 778.318 are neither regulations nor binding.
competing positions each have their place in an FLSA
analysis. It is true that, despite § 778.318, the FLSA
does not require an employer to pay a certain amount for
non-production time in straight-time calculations.
See DOL Opinion Letter, 1981 DOLWH LEXIS 10 (July
14, 1981). These “gap time” claims are not
cognizable under the FLSA. Karna v. BP Corp. North
America, Inc., 11 F.Supp.3d 809, 817 (S.D. Tex. 2014);
The statute does not provide a cause of action for
straight-time pay unless, and to the extent that, it falls
below the minimum wage. Plaintiffs do not seek straight time
statement in § 778.318(a) that such non-production time
must be counted and paid for has only two purposes: (1) to
ensure that all time worked is paid at a rate of at least the
minimum wage; and (2) to ensure that all time worked counts
toward the maximum hours/overtime requirements. Those two
purposes are satisfied by Republic's pay structure. The
Court rejects any suggestion that Plaintiffs seek or would be
entitled to damages for straight-time pay in an FLSA gap
§ 778.318 does come into play here is with respect to
determining the regular rate for purposes of calculating
overtime compensation. While dividing all compensation paid
by all hours worked may yield the correct regular hourly rate
for most pay schemes, the FLSA requires special handling
where piece rates apply. Without any definition of the number
of hours included in a piece rate, the mathematical
conversion to an hourly rate is uncertain and vulnerable to
the dangers of detrimental labor conditions that the FLSA was
intended to remedy. See generally, 29 U.S.C. §
202(a) (congressional finding and declaration of policy).
Burkel highlighted the dilemma of piece rates requiring some
agreement when he responded to the question whether a
pre-trip inspection is non-production time:
"Q Okay, so pre-trip would be -- is that -- what is
that, where does that fall?
"A It depends on -- I don't mean to answer this way,
but it kind of depends on who you answer - who you ask that
question. You know, in my mind that's part of the -- part
of running a route.
"Q Okay, all right. What about post-trip?
"A Same answer.
"A It could be considered, you know, non-productive
because it's not actually running a route but, you know,
depends on -- I don't --you know, it could be included in
the incentive pay rate or it could - you know, most of the
time it is as being, you know, part of the incentive.
D.E. 234, pp. 33-34. Bullerdick also testified to the
confusing concept of non-production time: “Q: So do you
understand what non-production time is? A: Yes and no. I
think it's a very difficult term to put your arms around,