F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
SEP 20 2000
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
KATHY PABST; JAMES GILLEY;
and STEVE BARTON,
Plaintiffs-Appellees and
Cross-Appellants,
v. Nos. 99-6108 and 99-6150
OKLAHOMA GAS & ELECTRIC
COMPANY,
Defendant-Appellant and
Cross-Appellee.
Appeal from the United States District Court
for the Western District of Oklahoma
(D.C. No. 97-CV-1652-L)
Deborah H. Bornstein, Gardner, Carton & Douglas, Chicago, Illinois (Hugh D.
Rice, Roberta Browning Fields, Rainey, Ross, Rice & Binns, Oklahoma City,
Oklahoma, and Katherine N. O’Connell, Gardner, Carton & Douglas, Chicago,
Illinois, with her on the briefs), for the Defendant-Appellant and Cross-Appellee.
Andrew W. Lester (Susan B. Loving and Shannon F. Davies on the briefs), Lester,
Loving & Davies, P.C., Edmond, Oklahoma, for the Plaintiffs-Appellees and
Cross-Appellants.
Before SEYMOUR, Chief Judge, KELLY and LUCERO, Circuit Judges.
LUCERO, Circuit Judge.
We again explore the question of when “on-call” time becomes sufficiently
onerous to render it compensable under the Fair Labor Standards Act (“FLSA”).
Surveying our precedents and applying them to the facts of this case, we
conclude that plaintiffs’ on-call duties requiring them to continually monitor
automated alarms by pager and computer were compensable under the FLSA. In
so holding, we reject the argument that on-call monitoring time is not
compensable unless contemporaneously reported to the employer as overtime.
Further, we uphold the district court’s determination that the employer’s FLSA
violation was not willful, and affirm both the award of prejudgment interest and
the denial of liquidated damages. Exercising jurisdiction pursuant to 28 U.S.C.
§ 1291, we affirm.
I
Plaintiffs are Electronic Technicians in Oklahoma Gas & Electric’s
(“OG&E”) Facility Operations Department. Plaintiffs Pabst and Gilley were
Electronic Technician I’s (“Tech 1s”) and plaintiff Barton was an Electronic
Technician II (“Tech 2”). The three plaintiffs, along with two other employees,
monitored automated heat, fire, and security systems in several OG&E buildings.
Prior to an August 1994 reduction in force, these duties required twelve on-site
employees working three eight-hour shifts.
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Plaintiffs were on call to monitor OG&E building alarms weekdays from
4:30 p.m. to 7:30 a.m. and twenty-four hours a day on weekends. During these
hours, alarms went to computers at Pabst and Gilley’s homes, as well as to pagers
for all plaintiffs. After October 1994, Barton began to receive alarms at home
via lap-top computer. Plaintiffs were required to respond to the alarms initially
within ten minutes, then, after October 1996, within fifteen minutes. Failure to
respond within the time limit was grounds for discipline. Each plaintiff was
assigned, and required always to carry, an alpha-numeric pager. These pagers
were only 70% reliable. The short response time, coupled with unreliable pagers,
forced plaintiffs to remain at or near their homes while on call.
The district court found that plaintiffs received an average of three to five
alarms per night, not including pages for security issues. Although not all alarms
required plaintiffs to report to the office—it appears many could be fixed by
remote computer—the district court found it took an average of forty-five
minutes to respond to each alarm. Neither party disputes those findings on
appeal.
At trial, the parties did dispute whether a rotational on-call schedule was
ever proposed or implemented. Acknowledging the dispute, the district court
found that “[c]ontrary to OG&E’s contention, an examination of the overtime
hours actually billed by plaintiffs does not demonstrate that a rotational schedule
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was ever in effect; rather, the records reveal significant overlap among the
technicians, which indicates to the court that no rotational schedule was ever
implemented prior to June 1997.” (I Appellant’s App. at 57.) The district court
also found a rotational schedule would not have been feasible because of the
frequency of alarms and plaintiffs’ differing areas of expertise.
According to plaintiffs, their supervisor instructed them to report only on-
call time spent responding to an alarm. OG&E paid plaintiffs for at least one
hour for each alarm to which they responded, and two hours if they had to return
to OG&E facilities. Plaintiffs apparently reported some, but not all, of the alarms
they answered, but did not claim as overtime the remainder of their time spent on
call.
Considerable testimony was presented regarding the extent to which
monitoring interfered with plaintiffs’ personal activities. Most significantly, an
average of three to five alarms per night, each requiring on average forty-five
minutes of work, severely disrupted plaintiffs’ sleep habits; indeed, they testified
to rarely experiencing more than five hours of uninterrupted sleep per night. In
addition, even during waking hours, plaintiffs were unable to pursue many
personal activities while on call because of the need to come into their homes to
check their computers every fifteen minutes.
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The district court found plaintiffs’ on-call time compensable under the
FLSA and awarded them compensation for fifteen hours per weekday and twenty-
four hours per Saturday and Sunday, less any hours already paid for responding
to alarms. Because it found OG&E’s violation was not willful, however, the
district court limited recovery to the two-year limitations period. It also refused
to award liquidated damages, finding that the FLSA violation was reasonable and
in good faith. OG&E appeals the district court’s rulings on liability, damages,
and prejudgment interest, while plaintiffs cross-appeal the district court’s ruling
denying liquidated damages and its finding of no willful violation.
II
“We review the district court’s findings of fact under the clearly erroneous
standard; conclusions of law we review de novo.” Armitage v. City of Emporia ,
982 F.2d 430, 431 (10th Cir. 1992) (citations omitted).
With certain exceptions not relevant here, the FLSA requires an employer
to pay a minimum wage for each hour it “employ[s]” an employee, as well as an
overtime premium for hours in excess of forty per week. See 29 U.S.C. §§ 206,
207, 213. “Employ” is defined as including “to suffer or permit to work.” Id.
§ 203(g). The pertinent question, and one with which courts have struggled, is
whether on-call time is “work” for purposes of the statute. The FLSA does not
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explicitly address the issue of on-call time. 1
Courts, however, have developed a
jurisprudence of on-call time, based on the Supreme Court cases of Armour &
Co. v. Wantock , 323 U.S. 126 (1944), and Skidmore v. Swift & Co. , 323 U.S.
134 (1944). Those cases determine the relevant inquiry to be whether an
employee is “engaged to wait” or “wait[ing] to be engaged,” Skidmore , 323 U.S.
at 137, or, alternatively, whether on-call time is spent predominantly for the
benefit of the employer or the employee, see Armour , 323 U.S. at 133.
Necessarily, the inquiry is highly individualized and fact-based, see Skidmore ,
323 U.S. at 136-37; Norton v. Worthen Van Serv., Inc. , 839 F.2d 653, 654 (10th
Cir. 1988), and “requires consideration of the agreement between the parties, the
nature and extent of the restrictions, the relationship between the services
rendered and the on-call time, and all surrounding circumstances,” Boehm v.
Kansas City Power & Light Co. , 868 F.2d 1182, 1185 (10th Cir. 1989) (citing
Skidmore , 323 U.S. at 137). We also focus on the degree to which the burden on
1
Although regulations promulgated by the Department of Labor address
that issue, they are unhelpful to our analysis because they fail to anticipate a
scenario, like that in the present case, in which an on-call employee is able to
perform his or her duties from a location away from the employer’s premises. See
29 C.F.R. § 785.17 (stating that an “on call” employee is working if “required to
remain on call on the employer’s premises or so close thereto that he cannot use
the time effectively for his own purposes”). More helpful are those regulations
applicable to fire protection and law enforcement employees. See 29 C.F.R.
§ 553.221(d) (stating that time spent on call is compensable if “the conditions
placed on the employee’s activities are so restrictive that the employee cannot use
the time effectively for personal pursuits”).
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the employee interferes with his or her personal pursuits. See Armitage , 982
F.2d at 432. Several facts are relevant in assessing that burden: number of calls,
required response time, and ability to engage in personal pursuits while on call.
See id. ; Renfro v. City of Emporia , 948 F.2d 1529, 1537-38 (10th Cir. 1991).
A
OG&E argues that it did not know plaintiffs were working the entire time
they were on call and thus did not “suffer or permit” them to work. 29 U.S.C.
§ 203(g). Its theory goes as follows: Plaintiffs were responsible for reporting
their own overtime; 2
because they reported only time spent responding to calls
(and apparently not even all of that), rather than all of their on-call time, OG&E
lacked knowledge that they were working and therefore did not suffer or permit
them to work. This argument misinterprets the nature of the on-call time inquiry
and borders on the disingenuous.
As a factual matter, OG&E’s purported lack of actual knowledge is
dubious. Plaintiffs cite record testimony detailing a reprimand Pabst received for
attempting to report the entire time spent monitoring systems as overtime.
Although OG&E attempts to discount this testimony because the incident
occurred after the cessation of the particular on-call monitoring system at issue
2
Plaintiffs worked a forty-hour week in addition to their time on call.
Thus, to the extent on-call time was working time, it was compensable at the
overtime rate. See 29 U.S.C. § 207.
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here, the testimony nevertheless lends support to plaintiffs’ assumption that it
would have been futile—or even harmful—for plaintiffs if they had attempted to
report all of their on-call time as overtime. More significantly, OG&E’s policy
informed plaintiffs they would be compensated only for on-call time spent
responding to an alarm. The only logical inference was that they would not be
compensated for time spent monitoring their computers and pagers, unless they
took some specific action responding to an alarm. To claim, then, that OG&E did
not know plaintiffs were working because they did not report every hour of their
evenings and weekends as overtime is misleading. While OG&E arguably may
have lacked knowledge of the legal proposition that the FLSA required
compensating plaintiffs for their on-call time under the system at issue, OG&E
certainly knew that plaintiffs were performing the duties they had been assigned.
OG&E relies heavily on Davis v. Food Lion , 792 F.2d 1274, 1276 (4th Cir.
1986) for its knowledge theory. In Davis , 792 F.2d at 1275, the court found that
“Food Lion has an established policy which prohibits employees from working
unrecorded, so-called ‘off-the-clock’, hours.” Davis argued that Food Lion’s
“Effective Scheduling” system required him to work such off-the-clock hours in
order to perform his required duties and avoid reprimand. See id. at 1275-76.
The Fourth Circuit held the FLSA “required Davis to prove Food Lion’s actual or
constructive knowledge of his overtime work,” id. at 1276, and found no clear
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error in the district court’s “factual finding that Food Lion has no actual or
constructive knowledge of Davis’s off-the-clock work,” id. at 1277.
Davis is not applicable to the case before us. First, there is no evidence of
anything like an explicit prohibition on plaintiffs’ performing after-hours
monitoring duties; on the contrary, such was the very essence of their
responsibilities. Moreover, Davis was not, as plaintiffs correctly note, an on-call
time case. In the on-call context, an employer who creates an on-call system
obviously has constructive, if not actual, knowledge of employees’ on-call duties.
An employer must evaluate whether those duties are compensable under the
FLSA, and if the employer concludes they are not, the employees do not bear the
burden of submitting overtime requests for hours that fall outside the definition
of what the employer classifies as compensable. Plaintiffs reported (apparently
with some omissions) the hours to which they were entitled under OG&E’s
policy. That they did not report the entirety of their remaining on-call hours does
not preclude the obvious conclusion that OG&E had knowledge of their on-call
status.
OG&E’s contention that the existence of a rotating on-call schedule
prevented it from gaining actual or constructive knowledge of the full extent of
plaintiffs’ on-call hours implicates a disputed issue of fact. We review the
district court’s resolution of that dispute for clear error. See Armitage , 982 F.2d
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at 431. If plaintiffs were only on call one week out of three, there would
certainly be a problem with each claiming on-call time for every week. However,
as the district court noted, the alleged existence of a rotational schedule is
contradicted by the significant overlap in the overtime hours reported by
plaintiffs. Indeed, in its motion for reconsideration, OG&E conceded that even
under its preferred “rotational schedule” analysis—under which one plaintiff was
on call for a week running from 7:30 a.m Friday to 7:30 a.m. Friday, rather than
calendar weeks—there were weeks when both Pabst and Barton recorded time.
Given that concession the district court’s resolution of the disputed factual
question of the existence of a rotational schedule did not amount to clear error.
B
Whether a particular set of facts constitutes compensable “work” under the
FLSA is a legal question we review de novo. See Berry v. County of Sonoma , 30
F.3d 1174, 1180 (9th Cir. 1994). In Renfro , 948 F.2d at 1536-38, we granted
FLSA compensation to firefighters for their on-call time. Renfro ’s facts include
the following:
the firefighter must be able to report to the stationhouse within
twenty minutes of being paged or be subject to discipline; that the
on-call periods are 24-hours in length; and primarily that the calls
are frequent—a firefighter may receive as many as 13 calls during an
on-call period, with a stated average frequency of 3-5 calls per on-
call period.
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Id. at 1535 (quoting Renfro v. City of Emporia , 729 F. Supp. 747, 751 (D. Kan.
1990)).
OG&E emphasizes that all but one published Tenth Circuit case addressing
on-call time have found it non-compensable. See, e.g. , Andrews v. Town of
Skiatook , 123 F.3d 1327, 1328-32 (10th Cir. 1997); Gilligan v. City of Emporia ,
986 F.2d 410, 413 (10th Cir. 1993); Armitage , 982 F.2d at 432-33; Boehm , 868
F.2d at 1185; Norton , 839 F.2d at 654. But see Renfro , 948 F.2d at 1538.
Counting published cases, however, is meaningless in resolving a fact-intensive
question such as the compensability of on-call time. Rather, the proper question
is which case is most analogous. Comparing Renfro with the cases cited by
appellant reveals that a critical distinction in the highly fact-specific inquiry is
the frequency of calls. See Gilligan , 985 F.2d at 412 (“[W]e noted in Renfro that
the frequency of call backs was the factor which the Renfro district court cited as
distinguishing that case from others which had previously held that on-call time
was not compensable.”); cf. Armitage , 982 F.2d at 432 (holding on-call time non-
compensable, unlike in Renfro , because the plaintiffs were “called in on average
less than two times per week”). As in Renfro , 958 F.2d at 1537, plaintiffs
experienced three to five calls per on-call period. Additionally, although
plaintiffs did not always actually report to OG&E’s plant, they were required to
take some action by computer within fifteen minutes, another burdensome
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element present in Renfro , id. In sum, this case is far more analogous to Renfro
than to the more numerous precedents cited by OG&E.
Although OG&E complains bitterly against having to compensate plaintiffs
for working twenty-four hours a day, seven days a week, the cost to an employer
of an “always on call” arrangement does not mean that such a system is not
cognizable under the FLSA, so long as the on-call time qualifies as work under
the relevant FLSA precedents. While one circuit has held that always being on
call, while extremely burdensome, does not in and of itself make the on-call time
compensable for FLSA purposes, see Bright v. Houston Northwest Med. Ctr.
Survivor, Inc. , 934 F.2d 671, 678-79 (5th Cir. 1991) (en banc), another circuit
found that requiring employees to monitor and respond all day, every day is a
factor weighing in favor of compensability , see Cross v. Arkansas Forestry
Comm’n , 938 F.2d 912, 916-17 (8th Cir. 1991) (holding that on-call time is
compensable under the FLSA because employees were required to continuously
monitor transmissions and respond within thirty minutes, and because they were
subject to on-call status twenty-four hours per day for every day of a work
period). We agree with both Bright and Cross : Although always being on call is
not dispositive, such an added burden is relevant in assessing the extent to which
all-the-time on-call duty deprives employees of the ability to engage in personal
activities.
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The only significant difference between the burden on the plaintiffs in
Renfro and the burden on Pabst, Gilley, and Barton is that plaintiffs here often
did not have to report to the employer’s workplace in order to respond to calls.
This lighter burden, however, is offset by the fact that plaintiffs, unlike the
firefighters in Renfro , were not on call for “six shifts of twenty-four hours each
in a 19-day cycle,” Renfro , 948 F.2d at 1531, but rather during all of their off-
premises time. The frequency of calls here actually is greater than in Renfro
because plaintiffs’ calls during weekdays occurred during a fifteen hour, rather
than a twenty-four hour, period. Additionally, in Renfro , we found on-call time
compensable despite the fact that the firefighters “had participated in sports
activities, socialized with friends and relatives, attended business meetings, gone
shopping, gone out to eat, babysitted, and performed maintenance or other
activities around their home.” Id. at 1532 (citation and internal quotation
omitted). Renfro controls the application of the FLSA to the facts before us, and
leads us to hold that the district court was correct in finding plaintiffs’ on-call
time compensable.
III
We next consider OG&E’s claims that the award of overtime compensation
should be reduced by subtracting out several time periods.
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We reject, as a matter of law, OG&E’s argument that time spent in
personal pursuits should be subtracted. The relevant inquiry in on-call cases is
not whether plaintiffs’ duties prevented them from engaging in any and all
personal activities during on-call time; rather it is “whether ‘the time is spent
predominantly for the employer’s benefit or the employee’s.’” Boehm , 868 F.2d
at 1185 (quoting Armour , 323 U.S. at 133). This is a yes-no inquiry—whose
benefit predominated? OG&E cites no authority for the proposition that a court
must determine whose benefit predominated during each on-call hour. Cf.
Renfro , 948 F.2d at 1532, 1538 (holding firefighters’ on-call time compensable
even though they engaged in some personal pursuits during that time).
OG&E’s other arguments for reductions in the damages award, which
pertain to individual plaintiffs, are factual issues subject to clear error review.
See Armitage , 982 F.2d at 431.
OG&E contends Gilley was not responsible for after-hours alarms from
October 1996 through May 1997. The record reflects that from October 1996 to
June 1997, Pabst and Barton were responsible for answering alarms, but would
call Gilley if they were unable to resolve the problem. Although plaintiffs’
supervisor, Randy Valdez, testified that Gilley “wasn’t on call or he was taken
out of the rotation, so after working hours I didn’t expect him to do anything,”
(V Appellant’s App., Tab 30, at 554), Gilley testified that he “was never removed
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out of the system,” ( id. at 328), and that he continued to be confined to his home
after hours and to regularly respond to calls to assist Barton or Pabst. We find no
clear error in the district court’s decision to credit Gilley’s rather than Valdez’s
account of his duties during the period he was on backup on-call duty.
OG&E argues that Barton should not have been awarded overtime
compensation from October 1994 through October 1, 1996 because during that
time he was monitoring alarms only by pager and not by computer. OG&E
primarily focuses on the comparatively small amount of remote overtime Barton
charged during that period, as compared to Gilley and Pabst. However, we are
persuaded the district court did not clearly err in determining that Barton, like
Gilley and Pabst, received between three and five pages per night during this
period, despite the comparatively smaller amount of overtime Barton recorded.
We note that Barton testified that he did not report overtime for every alarm he
received, but only those in response to which he either went to an OG&E location
or “dialed into” OG&E and attempted a repair. ( Id. at 472.) The district court’s
finding is supported by Barton’s differing responsibilities as a Tech 2, which
involved “assist[ing] each of the tech 1s.” ( Id. at 436.) Even though Barton
initially did not have a computer at home, he testified that he was required to
keep his pager on at all times and that calls prevented him from getting more than
five hours of uninterrupted sleep and engaging in personal activities. While the
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record does not make especially clear the precise contours of Barton’s duties
during the relevant period, OG&E does not point to anything in the record that
renders clearly erroneous the district court’s finding that he received a similar
number of calls to the other plaintiffs and experienced similar interference with
sleep and other personal activities.
Finally, as discussed above, we find no clear error in the district court’s
factual finding that OG&E’s alleged rotational schedule was never put into
effect. We therefore decline to overturn the district court’s award of overtime
compensation.
IV
Prejudgment interest is ordinarily awarded in federal cases, although it is
not available as a matter of right. See Towerridge, Inc. v. T.A.O., Inc. , 111 F.3d
758, 763 (10th Cir. 1997). “[T]he standard of review on appeal is whether the
trial court abused its discretion in awarding . . . prejudgment interest.” Id.
(quoting U.S. Indus., Inc. v. Touche Ross & Co. , 854 F.2d 1223, 1255 n.43 (10th
Cir. 1988)). OG&E first argues that the award was an abuse of discretion
because it did not know of the alleged overtime, an equitable factor weighing
against the award of interest. As discussed above, this ignorance argument is
without merit because OG&E created the on-call policy and the terms under
which plaintiffs could submit overtime.
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OG&E advances a second argument—prejudgment interest should be
awarded only from the time the complaint was filed, rather than for the entire
period of recovery. The general rule, however, is that interest runs “from the
time of the loss to the payment of judgment.” Zuchel v. City and County of
Denver , 997 F.2d 730, 746 (10th Cir. 1993) (quoting U.S. Indus., Inc. , 854 F.2d
at 1256). We thus discern no abuse of discretion in the district court’s award of
prejudgment interest.
V
Plaintiffs cross-appeal the district court’s denial of liquidated damages.
We review this issue for abuse of discretion: “[I]f the employer shows to the
satisfaction of the court that the act or omission giving rise to such action was in
good faith and that he had reasonable grounds for believing that his act or
omission was not a violation of the [FLSA], the court may, in its sound
discretion , award no liquidated damages . . . .” Department of Labor v. City of
Sapulpa , 30 F.3d 1285, 1289 (10th Cir. 1994) (quoting 28 U.S.C. § 260)
(emphasis added). The district court found that OG&E’s actions were reasonable
and in good faith for several reasons: OG&E paid double time, rather than just
time-and-a-half, for each hour of overtime plaintiffs reported; it permitted
plaintiffs to report an hour every time they responded to an alarm, even if they
actually spent as little as five minutes; and it was not fully aware of the extent of
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the burden on plaintiffs until some time in 1997, at which point it took corrective
action.
Perhaps we might reach a different conclusion as fact-finders of the first
instance, but we find it difficult to call the district court’s conclusion an abuse of
discretion. Admittedly, the record here is devoid of the sort of
evidence—reliance on attorneys or other experts in personnel matters—that
courts have found particularly persuasive in holding FLSA violations reasonable.
See, e.g. , Cross , 938 F.2d at 917-18 (holding it “was objectively reasonable . . .
to rely on the decisions of the state’s personnel experts”). Nevertheless, because
the law of on-call time under the FLSA is fact-sensitive, and because the facts
relied upon by the district court lend at least some support to the conclusion that
OG&E acted in good faith under a reasonable, albeit mistaken, belief that its
particular on-call scheme was non-compensable under the statute, we find no
abuse of discretion. See United States v. Robinson , 39 F.3d 1115, 1116 (10th
Cir. 1994) (when reviewing a decision for abuse of discretion, “[w]e will not
challenge [the district court’s] evaluation unless it finds no support in the record,
deviates from the appropriate legal standard, or follows from a plainly
implausible, irrational, or erroneous reading of the record”).
Additionally, although we uphold the district court’s finding that no
rotational schedule was ever actually put into effect, the record could support a
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conclusion that OG&E supervisors at some times may have operated under a
mistaken but good faith belief that such a schedule was in place. Detailed
examination of plaintiffs’ overtime records might have remedied this mistaken
belief; however, given the lack of clarity in the record regarding when and how
plaintiffs complained of their onerous on-call duties, we do not view the district
court’s finding of OG&E’s reasonableness and good faith as an abuse of
discretion.
VI
Similarly, we reject plaintiffs’ contention that the district court erred in
holding OG&E’s violation of the FLSA was not willful and consequently limiting
the damages award to the statute’s two year limitations period. See 29 U.S.C.
§ 255(a). “The standard for willful violations is whether the employer ‘knew or
showed reckless disregard for the matter of whether its conduct was prohibited by
the [FLSA].’” Reich v. Monfort, Inc., 144 F.3d 1329, 1334 (10th Cir. 1998)
(quoting McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988)) (further
citations omitted). “Whether an FLSA violation is willful is a mixed question of
law and fact, but we believe the factual issues predominate and therefore
consider the issue under a clearly erroneous standard of review.” Id. (citing
Reich v. Newspapers of New England, Inc., 44 F.3d 1060, 1079 (1st Cir. 1995)).
We find no such error: The same facts that support the district court’s conclusion
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that OG&E’s failure to compensate plaintiffs for all of their on-call time was
reasonable and in good faith support the district court’s conclusion that OG&E’s
violation of the FLSA was not willful.
VII
The judgment of the district court is AFFIRMED .
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Pabst v. Oklahoma Gas & Electric Co.
Court: Court of Appeals for the Tenth Circuit
Date filed: 2000-09-20
Citations: 228 F.3d 1128
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