FLSA ruling hammers employer with record verdict

Eight-figure landmark award over unpaid 'work'

FLSA ruling hammers employer with record verdict

East Penn Manufacturing Co., Inc., one of the world's largest battery manufacturers, has just been hit a significant legal setback – over the time its workers took to put on protective gear and shower. A federal jury returned a verdict of over $22 million against the company, marking the largest award under the Fair Labor Standards Act (FLSA) to date.

The jury's decision stemmed from East Penn's violations of the FLSA, the federal law that establishes standards for minimum wage, overtime pay, recordkeeping, and child labor in both private and public employment. The case, Su v. East Penn Manufacturing Co., Inc., involved over 7,500 East Penn employees who sought unpaid overtime wages.

The lawsuit, initiated by the U.S. Department of Labor (DOL) in 2018, alleged that the company failed to compensate employees for time spent changing into and out of protective gear and showering, measures taken to mitigate workplace hazards like lead exposure. The DOL argued that this time should be considered as hours worked and subject to overtime compensation.

Early in 2023, the U.S. Supreme Court ruled that a former Helix Energy Solutions Group oil rig worker who made $200,000 annually is entitled to overtime pay despite the employer’s claim that legislation prohibits that.

In a significant development, a 2021 summary judgment ruling favored the DOL on its FLSA claim. The court determined that East Penn did not dispute employee testimony regarding the routine donning and doffing of uniforms and protective gear outside of their eight-hour shifts, a key factor in the ruling. However, the question of damages was reserved for the jury to decide.

Earlier this year, the DOL tried to add temporary workers to the case and gained the ire of a judge who accused the body of endlessly trying to broaden the scope of the case.

“Groundhog Day has come and gone, but in this Court, it feels as if this case is stuck in a time-warp” he said, accusing the DOL of “once again” wanting to  “broaden the scope” of the suit filed nearly five years ago.

During the 30-day trial held in the federal district court for the Eastern District of Pennsylvania, the jury heard extensive testimony from numerous workers who described unpaid work and examined East Penn's time records to assess clock-in and clock-out times.

Ultimately, the jury concluded that East Penn must compensate the affected workers for the time spent on donning, doffing, and showering, resulting in a landmark damages award exceeding $22 million. Moreover, the DOL is seeking liquidated (double) damages, an additional penalty available under the FLSA.

This case serves as a stark reminder to employers of the importance of complying with federal, state, and local overtime laws. Employers must diligently track all hours worked by employees and ensure the payment of overtime premiums, at a rate of time and one-half, for any hours exceeding 40 in a workweek

The 426 employee company HR function is headed up by VP of Personnel Robert Harrop. Georgia State educated Harrop has 30 years of HR experience, 22 of which have been with the battery company.

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