UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
__________________
No. 98-11436
__________________
BRETT HARTSELL, JACOB WELLS, JOSEPH WELLS, III,
SHAWN PATRICK, CHRISTOPHER SIEMS, SHAWN BEGLEY,
OSCAR TORRES, GERALD DAVIS, Captain,
JEKEITH WILSON, BENITO TORRES,
Plaintiffs-Appellees,
versus
DR. PEPPER BOTTLING COMPANY OF TEXAS,
Defendant-Appellant.
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Appeal from the United States District Court
for the Northern District of Texas
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 20, 2000
Before JONES, BARKSDALE, and DENNIS, Circuit Judges.
RHESA HAWKINS BARKSDALE, Circuit Judge:
The overtime, based on a day-rate, paid by Dr. Pepper Bottling
Company of Texas to employees, who claimed compensation on an
hourly basis, having been found violative of the Fair Labor
Standards Act, 29 U.S.C. §§ 201-19 (FLSA), primarily at issue is
whether, before Dr. Pepper could pay overtime on that day-rate
basis, pursuant to the method set by 29 C.F.R. § 778.112, employees
had to have agreed to be compensated on that, rather than an
hourly, basis. We AFFIRM in PART and VACATE and REMAND in PART.*
*
This case was consolidated for oral argument with Dufrene v.
Browning-Ferris, Inc., No. 98-31321, __ F.3d __ (5th Cir. 2000),
which also concerns application of 29 C.F.R. § 778.112. The
opinion in that case, being issued simultaneously with this
opinion, holds, inter alia, that § 778.112 provides a proper method
for calculating day-rate overtime compensation; and that, as
discussed infra, employee-agreement is not a prerequisite for its
I.
Hartsell and the other plaintiffs (employees) were employed as
merchandisers for Dr. Pepper. Merchandisers build and stock
displays in stores where Dr. Pepper products are sold. Although
employees claimed that Dr. Pepper had agreed to pay them on an
hourly basis, it paid them, instead, on a day-rate basis.
Employees were paid every two weeks, and paid only for days
they worked. However, regardless of the number of hours worked in
a day, they received a full day’s pay.
In the light of this day-rate basis, and to satisfy FLSA
overtime pay requirements, Dr. Pepper paid overtime pursuant to the
method prescribed by 29 C.F.R. § 778.112, quoted infra. For each
workweek, the product of the number of days worked and the day-rate
was divided by the total hours worked that week. That determined
the hourly rate of pay. For each hour worked in excess of 40 for
that workweek, employees received an additional one-half of the
calculated hourly rate. Accordingly, for each hour worked in
excess of 40, they received 150% of the calculated hourly rate of
pay.
Because of this method, the greater the number of hours worked
in a week, the lower the calculated hourly rate. This translated
into a lower rate of overtime compensation.
Normally, employees worked more than eight hours a day, 40
hours per week. Additionally, one-half hour was deducted for
lunch, regardless of whether they took it. Although employees
application.
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cashed their paychecks on a regular basis, they did not understand
how their overtime pay was calculated.
Pursuant to one of the instructions challenged here by Dr.
Pepper, the question of whether employees agreed to be paid an
hourly or day-rate was tried to the jury. One employee admitted at
trial that he had agreed to a day-rate. For the remainder, the
jury found that all but one had agreed with Dr. Pepper to be paid
an hourly rate.
Whether employees were entitled to compensation for the meal
period and the issue of damages, including, inter alia, overtime
pay and liquidated damages (to include Dr. Pepper’s good faith vel
non), were tried by the court. It concluded that, inter alia,
employees were entitled to be compensated for the meal period and
to liquidated damages. Damages awarded the ten employees totaled
approximately $232,000.
II.
Among other issues, Dr. Pepper challenges the instruction
requiring employee-agreement to the day-rate; employees being
compensated for the meal period; and liquidated damages being
awarded.
A.
The jury was instructed that, for the day-rate to be
applicable, and, therefore, for employees to be subject to overtime
pay being calculated pursuant to 29 C.F.R. § 778.112, there had to
be a clear, mutual understanding between employee and employer that
the day’s wage compensated for all the hours worked in a day. Dr.
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Pepper contests such agreement being required before § 778.112 can
come into play.
Our standard of review for challenged instructions, if the
issue is properly preserved in district court, is well-settled:
First, the challenger must demonstrate that
the charge as a whole creates substantial and
ineradicable doubt whether the jury has been
properly guided in its deliberations. Second,
even if the jury instructions were erroneous,
we will not reverse if we determine, based
upon the entire record, that the challenged
instruction could not have affected the
outcome of the case.
Johnson v. Sawyer, 120 F.3d 1307, 1315 (5th Cir. 1997) (internal
citation and quotation marks omitted). Of course, if the issue is
not preserved, we review only for plain error. E.g., Highlands
Ins. Co. v. National Union Ins. Co. of Pittsburgh, 27 F.3d 1027,
1031-32 (5th Cir. 1994), cert. denied, 513 U.S. 1112 (1995).
1.
Concerning whether this challenge was preserved for appellate
review, FED. R. CIV. P. 51 states:
No party may assign as error the giving or the
failure to give an instruction unless that
party objects thereto before the jury retires
to consider its verdict, stating distinctly
the matter objected to and the grounds of the
objection.
Dr. Pepper’s proposed instructions did not include the basis-
of-pay-agreement-requirement as a prerequisite for application of
§ 778.112. A party, however, may not satisfy Rule 51's
requirements by merely submitting a proposed instruction that
differs from that ultimately given. See Kelly v. Boeing Petroleum
Servs., Inc., 61 F.3d 350, 361 (5th Cir. 1995).
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Employees maintain that Dr. Pepper failed to specifically
object to the given-instruction. The failure to do so may be
excused when a party’s position equating to an objection has
previously been made clear to the trial judge, and further
objection would be unavailing. Russel v. Plano Bank & Trust, 130
F.3d 715, 720 (5th Cir. 1997). But, we must be sure that the trial
court was adequately informed in this fashion. Id.
On 13 July 1998, two days before trial, and by a memorandum
supporting its supplemental proposed instructions, Dr. Pepper
brought to the court’s attention Dufrene v. Browning-Ferris, Inc.,
994 F. Supp. 748 (E.D. La. 1998), holding, inter alia, that
employee-agreement was not required for application of § 778.112.
(As noted, simultaneously with this opinion, we have rendered an
opinion in Dufrene, affirming the summary judgment in that case.)
At the pre-trial conference that same day, the district judge
questioned Dr. Pepper’s counsel’s interpretation of Dufrene,
asking: “you mean there doesn’t have to be any understanding?”
When they replied such was their reading of Dufrene, the court
stated: “I’ll be amazed if that’s true. This is a Fair Labor
Standards Act [dispute] that goes on the basis of hourly rates, and
that’s what the statute says, and for a regulation to take out the
idea of a contract or agreement or understanding, seems to me
unlikely”.
On 14 July 1998, just prior to voir dire, the court provided
the proposed instructions to counsel. Included was the agreement-
requirement. This was discussed at length by the court and
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counsel. In fact, employees’ counsel noted that, if employees
prevailed in district court, Dr. Pepper intended to challenge the
instruction in our court, because, in Dufrene, the district court
had held such agreement was not required.
Obviously, as required by Rule 51, Dr. Pepper brought its
objection to the attention of the district court, prior to the
instruction being given. This issue was preserved.
2.
The instruction stated in part: “The regular rate [of pay] is
determined by an agreement between the employer and the employee,
either expressly by words or impliedly by conduct”. But, no such
requirement is found in 29 C.F.R. § 778.112; it states:
If the employee is paid a flat sum for a day’s
work or for doing a particular job, without
regard to the number of hours worked in the
day or at the job, and if he receives no other
form of compensation for services, his regular
rate is determined by totaling all the sums
received at such day rates or job rates in the
workweek and dividing by the total hours
actually worked. He is then entitled to extra
half-time pay at this rate for all hours
worked in excess of 40 in the workweek.
(Emphasis added.)
Again, the plain language of this interpretative bulletin does
not require that employee and employer have a mutual understanding
concerning the “regular rate” of pay. All that is required is that
employee be, in fact, paid a day-rate. Dufrene v. Browning-Ferris,
Inc., No. 98-31321, ___ F.3d ___ (5th Cir. 2000).
Notwithstanding employees’ claimed hourly-rate basis for
compensation, Dr. Pepper paid them a day-rate. Overtime was
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calculated and paid in accordance with § 778.112. Even assuming
some form of breach of contract by Dr. Pepper, that is not
equivalent to a FLSA violation.
In sum, for FLSA purposes, the instruction was erroneous.
Restated, the jury was instructed improperly that § 778.112 could
not be used to calculate overtime pay, unless employees had agreed
to a day-rate. Obviously, this affected the outcome of the trial.
Accordingly, a new one is required.
It appears that the parties agreed in district court on
alternative damages, depending on how different issues were
decided. Dr. Pepper urges that we utilize one of the agreed,
alternative damages’ schedules now. For example, it states that,
if this challenged instruction is found wanting, we can simply
reverse and render, using one of those schedules. But, as we
pointed out at oral argument, to which Dr. Pepper seemed to agree,
those schedules do not seem to contemplate our reversing the
instruction and liquidated damages, but affirming the finding that
compensation is due for the meal period, discussed infra.
Obviously, on remand, a new trial will not be necessary if, as
they were apparently able to do previously, the parties can agree
on the amount of damages.
B.
Dr. Pepper challenges employees being compensated for their
meal period. As discussed, this issue was tried to the court.
“Bona fide meal periods are not worktime.” 29 C.F.R. § 785.19.
For the period to be classified as a meal time, an employee “must
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be completely relieved from duty for the purposes of eating regular
meals”. Id.
The “predominant benefits test” is applied to determine who
primarily benefits from the period. Bernard v. IBP, Inc. of
Nebraska, 154 F.3d 259, 264 (5th Cir. 1998). This is a question of
fact, determined in this instance by the district court. Of
course, factual findings by the court are reviewed only for clear
error. E.g., Riviere v. Banner Chevrolet, Inc., 184 F.3d 457, 459
(5th Cir. 1999).
Examples of different employees’ lunch break testimony are:
occasionally took it, but not too often, because of required work;
perhaps took it four or five times during entire employment;
disciplined verbally for taking it; never had time for it and only
took it here or there; worked most of the time without it; and
fairly hard to take it.
Based on our review, the district court did not clearly err in
finding the meal period was predominantly for the benefit of Dr.
Pepper. Therefore, employees are entitled to compensation for such
time.
C.
Dr. Pepper contests the FLSA liquidated damages, awarded
pursuant to 29 U.S.C. § 216(b). They were based on the court
finding that, for the overtime pay, Dr. Pepper had not acted in
good faith, because, inter alia, the explanations to employees of
how it was calculated were “inept”.
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Our reversal of the overtime compensation award compels
vacating these damages as well. Although we have upheld the meal
period finding, we cannot determine from the district court’s
findings of fact and conclusions of law how, or even whether, that
finding was translated into liquidated damages.
III.
In the light of the foregoing, we need not reach the other
issue presented by Dr. Pepper. That part of the judgment as to the
lunch period being compensable time is AFFIRMED; the remainder of
the judgment is VACATED; and this case is REMANDED for further
proceedings consistent with this opinion.
AFFIRMED in PART;
VACATED and REMANDED in PART
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DENNIS, Circuit Judge, specially concurring:
I agree with the majority that the lunch-time portion of the
judgment should be affirmed and that the remainder of the judgment
should be vacated and the case remanded because the jury was given
an erroneous instruction that affected the outcome of the trial.
I write separately to emphasize that I find nothing in the majority
opinion that limits this remand.
As the majority correctly points out, the standard of review
for jury instructions is:
First, the challengers must demonstrate that the charge
as a whole creates substantial and ineradicable doubt
whether the jury has been properly guided in its
deliberations. Second, even if the jury instructions
were erroneous, we will not reverse if we determine,
based upon the entire record, that the challenged
instruction could not have affected the outcome of the
case.
Johnson v. Sawyer, 120 F.3d 1307, 1315 (5th Cir. 1997) (Barksdale,
J.). I agree with the majority that the jury instruction requiring
an agreement as to the employees’ wage structure was erroneous.
See Dufrene v. Browning-Ferris, Inc., ___ F.3d ___ (5th Cir. 2000).
The majority states in passing that, based on the record, it
appears that the employees were in fact paid a day-rate
notwithstanding the employees’ claimed hourly-rate basis for
compensation. Ante at ___. However, such a resolution of a
disputed issue of a material fact determinative to Dr. Pepper’s
liability is in direct contradiction to the special verdict of the
jury, which found that as a matter of fact the employees (save one)
were paid an hourly wage. The majority does not address the jury’s
special verdict nor does it fully explain that the verdict is
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reversed solely because of the erroneous instruction and not
because of a lack of sufficient evidence to support the verdict.
“We employ a deferential standard of review when examining a
jury’s verdict for sufficiency of the evidence. Unless the
evidence is of such quality and weight that reasonable and
impartial jurors could not arrive at such a verdict, the findings
of the jury must be upheld. We may not reweigh the evidence,
re-evaluate the credibility of the witnesses, nor substitute our
reasonable factual inferences for the jury’s reasonable inferences.
We must view the evidence in the light most favorable to upholding
the jury’s verdict and may only reverse if the evidence points so
strongly and overwhelmingly in favor of one party that the court
believes that reasonable men could not arrive at a contrary
conclusion.” Douglas v. DynMcDermott Petroleum Operations Co., 144
F.3d 364, 369 (5th Cir. 1998) (citing Ham Marine, Inc. v. Dresser
Indus., Inc., 72 F.3d 454, 459 (5th Cir. 1995)). Although based on
the record this court may have found differently than the jury,
under the deferential standard afforded jury verdicts it cannot be
said that the jury’s special verdict on the disputed factual issue
in the present case is not supported by sufficient evidence. Thus,
it is not appropriate to reverse the jury’s verdict based on
insufficiency of the evidence. It is telling that the majority
does not attempt to do so.
The only basis for reversal of the jury verdict, therefore, is
the erroneous jury instruction requiring an agreement between Dr.
Pepper and the employees before Dr. Pepper may properly utilize the
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overtime calculation method defined in section 778.112. As opposed
to reversing and rendering for insufficiency of the evidence, “[a]
new trial is the appropriate remedy for prejudicial errors in jury
instructions.” Aero International, Inc. v. United States Fire Ins.
Co., 713 F.2d 1106, 1113 (5th Cir. 1983); see also Johnson, 120 F.3d
at 1315 (holding that remand for new trial due to an erroneous jury
instruction is proper because the appellant had not properly
challenged for sufficiency of the evidence); Schweitzer v. Advanced
Telemarketing Corp., 104 F.3d 761 (5th Cir. 1997); Branch-Hines v.
Hebert, 939 F.2d 1311 (5th Cir. 1991); cf. United States v. Cornett,
195 F.3d 776, 781 n.6 (5th Cir. 1999) (“[s]ince we are reversing for
a reason other than sufficiency of the evidence, remand is proper
. . .”). This is because appellate courts lack the institutional
competence to review facts as they must base their factual
determinations solely on a cold record; a properly instructed jury,
however, may take into account such intangibles as courtroom
atmosphere and witness demeanor. See In re Clay, 35 F.3d 190, 194
(5th Cir. 1994) (“[A] cold record cannot capture the atmosphere, the
expressions, the attitudes that are the marrow of a jury trial.”);
Caldarera v. Eastern Airlines, Inc., 705 F.2d 778, 782 (5th Cir.
1983) (“Our review is not only hindsight, but is based on a written
record with no ability to assess the impact of the statement on the
jury or to sense the atmosphere of the courtroom.”). Since the
jury verdict is being reversed due to an erroneous jury instruction
and not due to insufficient evidence, a full remand for a new trial
as to both liability and damages is the only appropriate remedy.
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While it may be true, as the majority points out, that the
parties may be able to agree to a settlement on the issue of
damages, such possibility should not influence the proper procedure
this court should employ. Rather, keeping with circuit precedent,
I believe that remand of the case for a new trial on the issues of
liability, compensatory damages and liquidated damages is necessary
so that a properly instructed jury may determine whether the
employees were in fact paid an hourly wage or a day-wage. It is
not the province of this court to replace the fact-finding function
of a properly instructed jury. If such jury determines that the
employees were paid hourly, then Dr. Pepper violated the FLSA; if
it determines the employees were paid daily, then Dr. Pepper did
not violate the FLSA. Since the present case turns on precisely
this issue, I do not believe it appropriate for this court to
express an opinion on the issue, and I feel that any such
expression is mere dicta. Any such dicta notwithstanding, I find
nothing in the majority opinion limiting the ability of the jury on
remand to determine whether the employees were in fact paid daily
or hourly. I thus concur.
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