Opinion
Case No. 5:03-cv-244.
June 28, 2004
ORDER AND PARTIAL JUDGMENT
In accordance with the Court's Opinion of this date;
IT IS HEREBY ORDERED that Plaintiffs Kyle J. Allison, et al.'s Motion for Partial Summary Judgment (Dkt. No. 21) is GRANTED and judgment is entered in favor of Plaintiffs' and against Defendant as to the issue of liability only.
IT IS FURTHER ORDERED that Defendant The Pepsi Bottling Group, Inc.'s Motion for Summary Judgment (Dkt. No. 18) is DENIED.
OPINION
This matter is before the Court on competing summary judgment motions. The legal issue is purely one of law and can be promptly resolved, without resort to oral arguments, based on the briefs filed. See W.D. Mich. L. Civ. R. 7.2(d).I. Background
Plaintiffs (including lead Plaintiff Kyle J. Allison) are a group of employees of Defendant The Pepsi Bottling Group, Inc. ("PBG"). They are employed to shelve and deliver bottles to retailers, and they are paid on commission based on the sales of the retailer customers. Plaintiffs regularly work in excess of 40 hours in a single week and have never received overtime wages. Whether they are entitled to those wages depends on whether the Michigan Minimum Wage Law of 1964, ("MWL"), Mich. Comp. Laws §§ 408.381 et seq., or the federal motor carrier exemption, 29 U.S.C. § 213(b)(1), to the Fair Labor Standards Act of 1938 "FLSA," 29 U.S.C. § 201 et seq, is the controlling authority.
II. Standard for Summary Judgment
Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Canderm Pharmacal, Ltd. v. Elder Pharmaceuticals, Inc. 862 F.2d 597, 601 (6th Cir. 1988) ( citing Fed R. Civ. P. 56(c)). Given the pertinent standards, summary judgment is particularly apt in those cases which may be decided based purely on questions of law. See, e.g., Feeney v. Shipley, 164 F.3d 311, 314 (6th Cir. 1999); Ambercrombie Fitch Stores, Inc. v. American Eagle Outfitters, Inc. 280 F.3d 619, 628-29 (6th Cir. 2002).
III. Legal Analysis
A FLSA analysis begins with a determination of who falls within it. Title 29 U.S.C. § 206(a) states:
. . . Every employer shall pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages at the following rates: (1) except as otherwise provided in this section . . . not less than $5.15 an hour beginning September 1, 1999.
Additionally, FLSA sets the maximum number of hours of work allowable in a single week without being required to pay overtime wages. Title 29 U.S.C. § 207(a) states:
(1) Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.
There are exemptions, however, to the FLSA overtime wage requirement. Title 29 U.S.C. § 213(b)(1) in relevant part creates an exemption for, "any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of section 31502 of Title 49." This is commonly referred to as the "motor carrier" exemption.
Under FLSA, Defendant meets the requirements of 29 U.S.C. § 206(a) as it is engaged in commerce and Plaintiffs receive a wage at or above $5.15 per hour. Additionally, Plaintiffs fall within the FLSA maximum hours statute, 29 U.S.C. § 207, as they have worked in excess of 40 hours in a single week. This entitles Plaintiffs to overtime wages absent an exemption. What § 207 of the title grants, however, 29 U.S.C. § 213 takes away, as Plaintiffs fall within the FLSA motor carrier exemption.
Congress expressly authorized states to offer more stringent protections to employees. The Michigan Legislature has acted on this grant of authority and passed more stringent employee protection provisions. The applicability of MWL is determined by Michigan Compiled Laws § 408.383, which states in part, "No employer shall pay any employee at a rate of less than prescribed in this act." Therefore, MWL may require greater employee protection than FLSA requires if it applies.
Michigan's corresponding minimum wage act, Mich. Comp. Laws § 408.384a(1) states, "Except as otherwise provided in this section, an employee shall receive compensation at not less than 1-1/2 times the regular rate at which the employee is employed for employment in a workweek in excess of 40 hours," while Mich. Comp. Laws § 408.384a(6) further states, "For purposes of administration and enforcement, an amount owing to an employee that is withheld in violation of this section is unpaid minimum wages under this act." Additionally, Michigan Compiled Laws § 408.394 provides, "This act does not apply to an employer who is subject to the minimum wage provisions of the fair labor standards act of 1938, chapter 676, 52 Stat. 1060, 29 U.S.C. § 201 to 216 and 217 to 219, unless application of those federal minimum wage provisions would result in a lower minimum wage than provided in this act." This grants greater protection to Plaintiffs as overtime wages are not taken away by any federal exemptions which would result in a lower minimum wage. Since application of FLSA would result in a lower minimum wage, MWL applies and Plaintiffs are entitled to overtime wages equal to one and one-half times the regular rate at which each Plaintiff is employed. Therefore, MWL grants greater protection to Plaintiffs than FLSA.
A review of the legislative history is helpful in determining the Michigan Legislature's intent. In 1978, the Michigan Legislature amended MWL in response to state employees losing their FLSA protections because of the Supreme Court decision in Nat'l League of Cities v. Usery, 426 U.S. 833 (1976), which held it unconstitutional to apply federal minimum wage laws to state employees. These amendments included changes to Mich. Comp. Laws § 408.384a. The timing indicates that the overtime provision, Mich. Comp. Laws § 408.384a(6), which converts unpaid overtime wages into unpaid minimum wages, was added for the benefit of state employees. However this amendment indicates an intent that overtime wages be applied broadly. It is more likely that the Michigan Legislature utilized this opportunity to insure that all employees, whether employed by a state or non-state employer, would have similar access to unpaid minimum wages.
In 1998, Mich. Comp. Laws § 408.394 was amended and FLSA provisions were expressly identified (sections 201 through 219 of Title 29 of the United States Code) as FLSA sections which determine the minimum wage "unless application of those federal minimum wage provisions would result in a lower minimum wage than provided in this act." The motor carrier exemption, 29 U.S.C. § 213(b)(1), falls within these enumerated FLSA provisions. Because the exemption results in a lower wage for Michigan workers subject to the FLSA motor carrier exemption, the higher MWL wage is the controlling minimum wage.
Furthermore, case authority for this issue is limited. Few courts have interpreted Mich. Comp. Laws § 408.394, and there are even fewer cases relating to whether federal overtime exemptions have an impact on MWL wages. Available cases are slightly off point, unpublished or both.
The most persuasive authority is Allen v. MGM Grand Detroit, LLC, 675 N.W.2d 907 (Mich.Ct.App. 2003), as it is the only published case issued since the 1998 amendments to MWL. This Michigan Court of Appeals case is helpful; however, it does not resolve the most contentious issue before this Court. Plaintiffs in Allen had very similar reasoning to that adopted by Plaintiffs. However, the Allen court resolved the case without ever directly accepting or rejecting Allen's theory. The Allen decision merely addresses which FLSA provisions can be used to find that MWL provides a higher minimum wage. That court reasoned that a FLSA exemption must be an expressly identified FLSA provision named in Mich. Comp. Laws § 408.394 in order to result in a lower minimum wage under FLSA. Plaintiffs fall within the rule set out in Allen as the motor carrier exemption, 29 U.S.C. § 213(b)(1), is one of the expressly identified provisions named in Mich. Comp. Laws § 408.394.
Two federal cases from this circuit have also touched on this issue: Hazel v. Michigan State Employees Ass'n, 826 F. Supp. 1096 (W.D. Mich 1993) and Vezina v. Jewish Cmty. Center of Metro. Detroit, No. 93-CV-74163, 1994 WL 762214 (E.D. Mich. Sept. 23, 1994). However, neither case is conclusive, as both decisions were handed down before the 1998 Amendments. Additionally, the applicability of MWL was not a major issue in either case.
Another source of persuasive authority in appropriate cases is provided by agency interpretation. The Michigan Wage and Hour Division is in charge of enforcement of MWL. The Wage and Hour publication "An Overview of the Michigan Minimum Wage Overtime Law," indicates that FLSA applies when MWL minimum wage rate is above FLSA minimum wage rate without consideration of whether unpaid overtime wages are equal to minimum wages. Additionally, the State Attorney General authored a letter in support of Defendant's theory. Attorney generals' interpretations are not binding, but may be persuasive. See Lysogorski v. Charter Township of Bridgeport, 662 N.W.2d 108, 110 (Mich.Ct.App. 2003); Williams v. City of Rochester Hills, 625 N.W.2d 64, 74 (Mich.Ct.App. 2001).
However, neither the Wage and Hour literature nor the Attorney General's letter have any analytical value and merely explain the applicability of the MWL in the most basic of instances, i.e. when the MWL has a higher wage rate. Furthermore, agency "[i]nterpretations contained in policy statements, agency manuals, and enforcement guidelines . . . do not warrant Chevron-style deference. They are entitled to respect, but only to the extent that [they] ha[ve] the power to persuade." Shaliehsabou v. Hebrew Home of Greater Washington, Inc., 369 F.3d 797, 802 (4th Cir. 2004); see also Christensen v. Harris County, 529 U.S. 577, 586 (2000) (internal citation omitted). The Wage and Hour materials and the State Attorney General's letter in support of Defendant are not persuasive in this context.
Minimum wage provisions are read to broadly protect employee rights. Employers in an overtime compensation case bear:
the burden of establishing that its employees are exempt, and because of the remedial nature of the [MWL], exemptions are to be narrowly construed against the employers seeking to assert them and their application limited to those establishments plainly and unmistakably within their terms and spirit.Reich v. Newspapers of New England, Inc., 44 F.3d 1060, 1070 (1st Cir. 1995) (quoting Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, (1960); Sec'y of Labor v. DeSisto, 929 F.2d 789, 797 (1st Cir. 1991) (citations omitted)). Defendant has introduced no evidence supporting that Michigan adopted a motor carrier exemption. Recognizing an exception to minimum wage protection that is not clearly articulated "flies in the face of the Supreme Court's express direction that `[t]o extend an exemption to other than those clearly and plainly within its [the MWL's] terms and spirit is to abuse the interpretive process and to frustrate the announced will of the people.'" Shaliehsabou, 369 F.3d at 798; see also A.H. Phillips, Inc. v. Walling, 324 U.S. 490, 493 (1945).
Minimum wage law's underlying purpose is the "maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers." Chao v. Hosp. Staffing Servs., Inc., 270 F.3d 374, 390 (6th Cir. 2001) citing 29 U.S.C. § 202. The Michigan Legislature, by grant of Congress, expanded overtime protection for the health and well being of motor carriers. "The FLSA is designed to be a broadly remedial and humanitarian statute." Fegley v. Higgins, 19 F.3d 1126, 1132 (6th Cir. 1994) (quoting Dunlop v. Carriage Carpet Co., 548 F.2d 139, 143 (6th Cir. 1977) (internal quotes omitted)). Courts, therefore, should construe employee wage protection liberally. Id. at 1132. MWL's underlying social policies of maintaining the health, efficiency and well being of employees is satisfied by applying overtime wage protection to workers who are not subject to any of its exemptions.
Defendant contends that there is no exception to the FLSA exemption because MWL provides for the same $5.15 minimum wage rate as does FLSA. This interpretation, however, would positively undermine the intent of Congress and the Michigan Legislature in allowing Michigan to set a higher wage, including a higher wage rate for selected industries and lines of work. As such, Defendant's interpretation contradicts both the provisions of MWL and FLSA.
Conclusion
For the reasons stated, Defendant's Motion for Summary Judgment will be denied. Plaintiffs' Motion for Partial Summary Judgment on the issue of liability under MWL will be granted. An Order and Partial Judgment shall issue consistent with this Opinion.