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11th Circuit Update: Unpaid Wages, NLRA

Gilson, et al. v. Indaglo, Inc., et al, ___ F. 3d ___ (11th Cir. October 31, 2014)

Short Summary: Former employees appeal district court’s decision regarding unpaid minimum wage payments. The Eleventh Circuit affirmed.

In Gilson, et a. v. Indaglo, Inc., former employees Gilson and Hinz appealed the district court’s decision regarding Indaglo’s failure to pay minimum wages under the Fair Labor Standards Act (“FLSA”). Gilson and Hinz asserted that they were not compensated minimum wage and often worked through the lunch hour without being compensated. Gilson and Hinz argued that their evidence at trial was sufficient to trigger the FLSA’s burden-shifting analysis because Indaglo’s employment records were “inaccurate and inadequate.”

In support of their position, the plaintiffs cited Allen v. Bd. of Pub. Educ. For Bibb Cnty., asserting that they only had to prove the amount of uncompensated work as a matter of “just and reasonable inference” and not evidence of the “precise amount of work performed.” The Eleventh Circuit held that Gilson and Hinz failed to introduce more than a “mere scintilla of evidence.” The Court held that Gilson and Hinz neither produced documentary evidence nor stated with specificity particular dates on which their actual work hours were not accurately reflected in the employer’s records.In addition, the Court held, Gilson and Hinz did not estimate the number of days on which they did not take a lunch.

Finally, the Eleventh Circuit held that no reasonable juror could make a just and reasonable approximation of Gilson’s and Hinz’s undercompensated work hours. Accordingly, the Eleventh Circuit affirmed the district court’s decision.

Taft Coal Sales & Assocs., Inc., et al. v. N.L.R.B. ___ F. 3d ___ (11th Cir. October 2, 2014)

Short Summary: Three employers appealed an NLRB order finding that they were a single employer who violated Section 8(a)(5) of the NLRA. The Eleventh Circuit affirmed.

In Taft Coal Sales & Associates, Inc. v. N.L.R.B., three employers (Taft Coal Sales & Associates, Inc. (“Taft Coal”), Walter Energy, Inc., and Walter Minerals, Inc.) appealed a petition for review and cross-application for an enforcement order of the National Labor Relations Board (“NLRB”). The appeal stems from a layoff of twenty-one employees after coal production at Taft Coal’s Choctaw Mine reduced by 125,000 tons. Specifically, petitioners challenged the following findings of the NLRB:

  1. petitioners constituted a single employer,

  2. petitioners violated section 8(a)(5) of the National Labor Relations Act (“NLRA”) by failing to bargain in good faith with the United Mine Workers of America, and

  3. the NLRB’s award of reinstatement and back pay for the laid-off employees.

The Eleventh Circuit affirmed the NLRB’s decision defining the three employers as a single employer. The Court held that all three employers conceded to common ownership and shared a significant number of common directors and officers. In addition, The Eleventh Circuit held that Walter Energy, Inc. and Walter Materials, Inc. exercised common control over Taft Coal. The Court focused on the roles of three key employees, Walter Scheller, Thomas Lynch, and Steve Dickerson. The Court focused on the interrelationships between these three employees and Taft Coal. Dickerson, a Walter Materials, Inc. employee was the Director of Human Resources for Taft Coal. Next, the Court discussed the layoff notice procedure.

First, the chief union representative called Scheller regarding the layoff; Scheller, in turn, called Lynch who notified the union about the layoff and explained to the laid-off employees their options for seeking employment with Walter Energy. The Court deemed Lynch’s actions regarding the layoff significant. Finally, regarding petitioner’s challenge of the NLRB’s decision to constitute the three employers as a single employer, the Court briefly discussed and held that the fact that each employer maintained separate bank accounts and financial records is neither controlling nor required for a finding of single employer.

Next, petitioners challenged the NLRB’s finding of a unilateral layoff in violation of section 8(a)(5) of the NLRA. According to the record, once the workforce reduction was confirmed Lynch notified the union and announced that twenty-one employees would be laid off. The NLRB found that Lynch’s actions amounted to a “fait accompli” because the union learned of Lynch’s plan just two days before execution and did not receive a list of affected employees until two days after the layoff. This notice precluded the union and Taft Coal from any pre-implementation bargaining concerning the layoff.

Finally, because the NLRB ‘s order was not a patent attempt to contradict the policies the NLRA, the Eleventh Circuit affirmed the NLRB’s decision regarding reinstatement and back pay for the laid-off employees.

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* Cathleen Scott is licensed to practice in Florida only.

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