Summary
In Edwards v. Jet Blue Airways Corp., 873 N.Y.S.2d 233 (Table), 2008 WL 4482409 (N.Y. Sup. Ct. 2008) (unpublished), the Supreme Court, Kings County, upon reconsideration, relied on the NYCOL's interpretation of the Rule to hold that “payment of the employee's regular hourly pay rate for overtime is sufficient where the employee's regular hourly pay rate is greater than one and one-half times the minimum wage.” Id.
Summary of this case from Rowe v. Old Dominion Freight Line, Inc.Opinion
33998/07.
Decided October 6, 2008.
Thomas M. Lancia, Esq., New York, NY, Attorney for Plaintiff.
Elana Gilaad, Esq., Ford Harrison LLP, New York, NY, Attorney for Defendant.
Plaintiff Glenn Edwards brought this putative class action against Defendant Jet Blue Airways Corporation (Jet Blue) on behalf of himself and similarly situated Jet Blue employees alleging violations of New York Labor Law, Article 19 § 650 et seq and its supporting regulations. Jet Blue moves pursuant to CPLR 2221 to renew and reargue its Motion to Dismiss plaintiff's class action Complaint which this Court denied on February 15, 2008. Plaintiff cross-moved to renew and reargue. For the reasons set forth below, defendant's motion to renew is granted.
Plaintiff's motion to renew and reargue was denied at Oral Argument on the record on July 17, 2008 because plaintiff submitted no new proof but merely recapitulated the argument previously submitted in opposition to the motion to dismiss.
Background
In July 2001, Jet Blue hired the plaintiff as a ground operations agent and baggage handler. Since that time Jet Blue has paid plaintiff at least his regular rate for all hours worked over forty (overtime hours). However, plaintiff alleges in the Complaint that the administrative regulations promulgated under New York Labor Law Article 19, § 650 et seq require Jet Blue to pay him one and one-half times his regular hourly rate for all overtime hours.
On December 12, 2007, Jet Blue moved to dismiss the Complaint claiming that, under New York and Federal law, plaintiff was an employee of an "air carrier" subject to the Railway Labor Act (RLA) and thereby exempt from regulation under the Fair Labor Standards Act (FLSA) and, in turn, ineligible to receive overtime compensation at a rate of one and one-half times his regular rate. The applicable New York State Labor Law regulation stated that non-exempt FLSA employees were entitled to "one and one-half times the employee's regular rate" and also set forth a reduced overtime rate for FLSA exempt employees as "one and one-half times the basic minimum hourly rate" ( 12 NYCRR § 142-2.2). Therefore, Jet Blue argued that plaintiff was only entitled to a reduced overtime payment of one and one-half times the basic minimum hourly rate — calculated as the minimum wage rate plus one-half the minimum wage rate per hour. It was not disputed on the Motion to Dismiss, nor is it currently disputed, that Jet Blue paid plaintiff at least his regular rate, which was well above the rate of one and one-half times the basic minimum hourly rate, for all hours worked over forty. Therefore, Jet Blue argued that the complaint should be dismissed because it had fully complied with 12 NYCRR § 142-2.2 by paying plaintiff at least his regular rate for all hours worked.
In opposition to the Motion to Dismiss, plaintiff argued that he was not exempt under the FLSA based on his status as a non-union employee. Therefore, he claimed that he was entitled to overtime pay at one and one-half times his regular rate. Plaintiff never contested Jet Blue's argument that plaintiff would only be entitled to a reduced overtime at a rate of one and one-half times the basic minimum hourly rate if he was found to be exempt under the FLSA.
On February 15, 2008, this Court issued a Decision and Order denying Jet Blue's motion to dismiss but agreeing with Jet Blue that plaintiff was an employee of an air carrier subject to the RLA and, as such, an exempt employee under the FLSA entitling him only to the reduced overtime rate specified in 12 NYCRR § 142-2.2 ( Edwards v Jet Blue Airways Corp. , 19 Misc 3d 345 , 349 [Sup Ct Kings 2008]). However, this Court also found that, in the circumstances at issue, specifically where a plaintiff is exempt from the FLSA yet earning more than one and one-half times the minimum wage, the reduced overtime rate in 12 NYCRR § 142-2.2 should be calculated as the employee's regular rate plus half the applicable basic minimum hourly rate:
Logic dictates that the Department of Labor would not penalize someone for earning above the minimum wage. Therefore, in a scenario such as this, where a plaintiff is earning more than minimum wage, yet is exempt from the FLSA, plaintiff's overtime pay under the reduced overtime provision of 12 NYCRR 142-2.2 should logically be calculated as equal to his regular pay rate plus one-half times New York State's minimum wage.
( Edwards, 19 Misc 3d at 351). The Court denied defendant's motion to dismiss because, for those workweeks where plaintiff alleged that he was only paid his regular rate for hours worked over forty, Jet Blue paid plaintiff less than the Court's calculation of the reduced overtime rate and, therefore, plaintiff stated a cause of action for underpayment of overtime wages. On its motion to renew and reargue defendant contests only that part of the Court's decision which found that plaintiff is entitled to more than his regular rate of pay for hours worked over forty.
Subsequent to this Court's February 15, 2008 decision, Jet Blue contacted the New York State Department of Labor (DOL) and asked it how to calculate the reduced overtime rate set forth in 12 NYCRR § 142-2.2. Jet Blue also posed a hypothetical to DOL based upon the facts of this case. DOL, in its response letter, dated April 17, 2008, states that it has been its consistent interpretation of 12 NYCRR § 142-2.2 that, for an FLSA exempt
employee, the reduced overtime rate should be calculated as one and one-half times the minimum wage rate:
Therefore, if an FLSA exempt employee whose regular rate of pay is equal to or greater than one and one-half times the applicable minimum wage is paid his/her regular rate of pay for all hours worked over forty in a week, then the requirements of 12 NYCRR § 142-2.2 have been satisfied, and there is no requirement that such an employee be paid any extra wages beyond his/her regular rate for such overtime. (April 17, 2008 Department of Labor Opinion Letter, Exhibit B to the Gilaad Affidavit at 1).
However, DOL also found that Jet Blue was incorrect in asserting that 12 NYCRR § 142-2.2 only required it to pay plaintiff overtime at a rate of one and one-half times the minimum wage rate. DOL advised that where an employee's regular wages are greater than one and one-half times the minimum wage, Labor Law §§ 191 and 193 require an employer to pay the employee at least his regular rate for overtime. DOL stated that "to pay an FLSA exempt employee whose regular rate of pay is $15.20 at such rate for all hours worked, straight-time or overtime, would constitute compliance with 12 NYCRR § 142-2.2, but such employee may not be paid any less than that regular rate for any time worked" (April 17, 2008 Department of Labor Opinion Letter, Exhibit B to the Gilaad Affidavit at 2).
Discussion
CPLR 2221 provides that a motion for leave to renew must be based upon "new facts not offered on the prior motion that would change the prior determination or shall demonstrate that there has been a change in the law that would change the prior determination" (CPLR 2221[e][2]). The law also requires that the movant present a "reasonable justification for the failure to present such facts on the prior motion" (CPLR 2221[e][3]). On the other hand, a motion to reargue must be "based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion" (CPLR 2221[d][2]).
I. The Motion to Reargue
On Jet Blue's motion to dismiss, it was necessary for this Court to determine whether plaintiff stated a legally cognizable claim. ( See Leon v Martinez, 84 NY2d 83, 87[stating that the role of the court is to "determine only whether the facts as alleged fit within any cognizable legal theory"]). Inasmuch as neither party presented any evidence or case law suggesting how to calculate plaintiff's overtime rate under the circumstances, this Court interpreted the reduced overtime rate as the employee's regular rate plus one-half the minimum wage because Jet Blue's proposal to calculate it at the basic minimum hourly rate plus one-half the basic minimum hourly rate would allow Jet Blue to pay plaintiff less for overtime than he earned for straight-time. Plaintiff's complaint survived the motion to dismiss despite the fact that Jet Blue paid plaintiff at least his regular rate for all hours worked because Jet Blue paid plaintiff less than the Court's calculation for some workweeks. Therefore, plaintiff stated a cause of action for underpayment of overtime wages.
At the time this Court decided the motion to dismiss, there was no case law indicating that DOL or another court had been asked to apply the 12 NYCRR § 142-2.2 reduced overtime rate where an FLSA exempt plaintiff already earned more than one and one-half times the minimum wage. Jet Blue refers to the same case law in support of its motion to reargue as it did on its motion to dismiss. In Ballard v Community Home Care Referral Serv., Inc., 264 AD2d 747 (2d Dept 1999), the court held only that an FLSA exempt employee was not entitled to one and one-half times her regular rate for overtime but did not explicitly find that the employee was entitled to one and one-half times the basic minimum hourly rate or compare that number to her regular rate of pay. In Matter of Raymus v Roberts, 102 AD2d 154 (3d Dept 1984), the Court adopted a calculation of the reduced overtime rate as the current minimum wage plus one-half times the minimum wage. However, in that case, the employee's regular rate of pay was less than one and one-half times the minimum wage.
Jet Blue also relies on federal case law to support its motion to reargue. In Almeida v Aguinaga, 500 F Supp2d 366 (SDNY 2007), an FLSA exempt domestic servant was not paid an hourly rate at all and was earning less than one and one-half times the minimum wage at all times. Similarly, in Manliguez v Joseph, 226 F Supp 2d 377, 381 (EDNY 2002), defendants paid the domestic servant plaintiff only $1,050 for two years of work. Vaicaitiene v Partners in Care, Inc., 04 Civ. 9125, 2005 WL 1593053 (SDNY July 5, 2005), dealt with a notice provision for an employee bringing a collective action under the FLSA. There, the Court found that a jury could find plaintiff to be non-exempt under the FLSA ( Vaicaitiene, 2005 WL 1593053 at *5). The Court authorized plaintiff to send notice of a collective action to all of defendant's employees that were not paid one and one half times their regular wage ( Id. at *8).
None of the cases cited by Jet Blue on this motion apply the reduced overtime rate to a situation analogous to this case, where an employee already earns more than one and one half times the basic minimum hourly rate. Jet Blue, therefore, still fails to indicate how Ballard, Raymus, or any of the federal cases, or even 12 NYCRR § 142-2.2 entitle it to pay plaintiff only one and one half times the basic minimum hourly rate for overtime, an amount that would be less than his regular rate of pay. On its motion to reargue, Jet Blue fails to show how existing case or statutory law supported its contention that it had fully complied with 12 NYCRR § 142-2.2 and that the Court had misapprehended the law in its prior decision. ( See CPLR 2221[d][2]). The motion to reargue is accordingly denied. See William P. Pahl Equipment Corp. v Kassis, 182 AD2d 22, 28 [1st Dept 1992][finding that reargument should not be granted where movant makes the same arguments as it did in opposition to the original motion and still fails to state how the Court misapprehended the law on the original motion].
II. The Motion to Renew
In support of its motion to renew, Jet Blue points to DOL's April 17, 2008 letter. In the letter, DOL, for the first time, applies 12 NYCRR § 142-2.2 to the unique facts of this case. In doing so, DOL, like the Court, has found that it would be improper to pay plaintiff one and one-half times the minimum wage for overtime where the employee already earns more than that amount as his or her regular hourly pay. (April 17, 2008 Department of Labor Opinion Letter, Exhibit B to the Gilaad Affidavit at 2). Applying Labor Law §§ 191 and 193 to the facts of this case, DOL determined that payment of the employee's regular hourly pay rate for overtime is sufficient where the employee's regular hourly pay rate is greater than one and one-half times the minimum wage.
Jet Blue also attached, as exhibits C and D to the affidavit in support of its motion, two other DOL letters. Both letters are not based on the facts of this case. However, the letter dated December 6, 2004 dealt with an analogous situation where salaried truck drivers that worked fifty hours a week earned more than one and one-half times the basic minimum hourly rate for all hours worked. In that letter, DOL's response was based on the assumption that "under no circumstances would a driver work so many hours a week as to make his pay less than one and one-half times the basic minimum hourly rate." DOL found that, if the assumption was correct, and the employee always earned more than one and one-half times the basic minimum hourly rate on an hourly basis, then the employer would be in compliance with 12 NYCRR § 142-2.2. However, in that letter, DOL raised questions of whether it would have jurisdiction over the employer at all and whether the employee was FLSA exempt ( See December 6, 2004 Department of Labor Opinion Letter, Exhibit C to the Gilaad Affidavit). The second letter, dated June 21, 2007, merely reiterates that an FLSA exempt employee is still entitled to the reduced overtime rate in 12 NYCRR § 142-2.2 but does not elaborate on what that rate should be. ( See June 21, 2007 Department of Labor Opinion Letter, Exhibit D to the Gilaad Affidavit).
Labor Law § 191 sets forth various categories of employees and, for each category of employee, provides that the employer must pay the employee wages "in accordance with the agreed terms of employment." Furthermore, Labor Law § 193(1) states that "[n]o employer shall make any deduction from the wages of an employee" except in certain situations which are not raised on this motion. DOL's application of these provisions to the factual circumstances at issue here does not appear to be irrational or unreasonable. Therefore, the Court must defer to DOL's interpretation ( See Bernstein v Toia, 43 NY2d 437, 448[finding that the court must defer to the interpretation of an administrative agency responsible for administrating statutes]).
According to DOL, an employer which pays its employee at least his or her agreed regular rate for all hours worked, where that rate is greater than one and one-half times the minimum wage, complies with 12 NYCRR § 142-2.2 although payment of a lesser amount would be an illegal deduction of wages and not in conformity with the agreed terms of employment. Based on DOL's letter, it appears that the Court was correct to find that Jet Blue must pay plaintiff more than one and one-half times the basic minimum hourly rate, but was inconsistent with the DOL's statutory interpretation, in finding that Jet Blue would be required to pay plaintiff his regular rate plus one-half the basic minimum hourly rate for hours worked over forty, since payment of plaintiff's regular rate satisfies the requirements of 12 NYCRR § 142-2.2.
Had DOL's application of 12 NYCRR § 142-2.2 to the facts of this case been brought to the Court's attention on the motion to dismiss, Jet Blue's motion would have been granted. Jet Blue did not provide this information and also did not raise the applicability of Labor Law §§ 191 and 193 in its original motion or even on its motion to reargue. Nevertheless, the Court finds that Jet Blue was justified in not presenting this information on its prior motions because plaintiff never contested Jet Blue's argument that an FLSA exempt employee is only entitled to the reduced overtime rate. Instead, in opposition to the motion to dismiss, plaintiff merely argued that he was not exempt under the FLSA and, was therefore, entitled to one and one-half times his regular rate (Plaintiff's Memorandum of Law in Opposition to Defendant's Motion to Dismiss the Complaint filed December 5, 2007 at 14). Jet Blue had no reason to further justify its claim that it had complied with 12 NYCRR § 142-2.2 because defendant never contested the applicability of the reduced overtime rate. Indeed, even on this motion, plaintiff does not challenge the reduced overtime rate or dispute that Jet Blue paid plaintiff at least his regular rate in accordance with his agreed terms of employment for all hours worked. Nor does plaintiff dispute that, at all times, his agreed rate was greater than one and one-half times the basic minimum hourly rate. Instead, plaintiff attempts to reargue that he is not exempt under the FLSA. As there is no basis articulated to support such motion to reargue, that motion has been denied.
The Court sees no reason to penalize Jet Blue for failing to seek an administrative determination regarding an issue not originally presented in the pending litigation. Based upon DOL's interpretation of 12 NYCRR § 142-2.2, and the deference due to such administrative interpretation, in the interest of judicial economy, the motion to renew is granted. Upon reconsideration, the Court finds that Jet Blue has fully complied with New York State's overtime requirements insomuch as it has paid plaintiff his regular rate for all hours worked.
Conclusion
Defendant's motion to renew is granted and, upon renewal, Jet Blue's motion to dismiss plaintiff's complaint is granted. Jet Blue's motion to reargue is denied.
The foregoing constitutes the decision and order of this court.