In Spoerle v. Kraft Foods Global, Inc., the Seventh Circuit Court of Appeals recently held that Wisconsin employers must pay employees for pre- and post-shift activities, despite the existence of a collective bargaining agreement where the parties agreed that such time is not compensable. The Court reasoned that the Fair Labor Standards Act (FLSA) does not preempt a more favorable Wisconsin state law.
While the FLSA requires employers to pay employees for the time they spend donning and doffing safety gear that is "integral and indispensable" to their job, Section 203(o) allows employers and unions to alter this requirement through collective bargaining. Wisconsin has no such collective bargaining exemption; the statute requires that all time spent donning and doffing safety gear be compensated at a rate of minimum wage or higher and counted toward the employees' weekly overtime limit.
Kraft Foods Global Inc. (Kraft Foods) and the UFCW had bargained for a provision in their collective bargaining agreement stating that Kraft Foods did not have to pay union members employed at the Oscar Mayer plant in Madison, Wisconsin for the time they spent donning and doffing steel-toed boots, hard hats, smocks and hairnets, even though the employees had to wear the safety gear to perform their jobs. A union member brought suit against Kraft Foods claiming that the employer was required to abide by the Wisconsin law, despite the collective bargaining exception in FLSA Section 203(o). The district court and the Seventh Circuit agreed.
Section 218(a) of the FLSA does not excuse employers from complying with federal or state laws that establish higher wage rates, or lower the maximum length of the 40 hour workweek. In this case, the Court reasoned that the Wisconsin statute established a higher minimum wage rate for donning and doffing than required by the FLSA: the Wisconsin statute required employers to compensate for the time at or above minimum wage, whereas the FLSA allowed employers to pay nothing for the time pursuant to a collective bargaining agreement.
The Seventh Circuit also rejected Kraft Foods' claim that the Wisconsin statute was preempted by Section 203(o) of the FLSA. The Court noted that the statute did not require state officials to interpret or enforce the collective bargaining agreement, it merely required that the agreement "be ignored to the extent it sets lower wages or hours than state law specifies." Id. at *3 (emphasis in original). The Court analogized the case to a similar situation where a state statute requires a higher minimum wage rate than the federal minimum wage rate. In that instance, an employer must pay employees at the higher state rate, even if the collective bargaining agreement set the wage rate at the lower federal rate. The Court remarked that Section 203(o) does not give employers and unions the power to override or contract around state substantive law.
This case is a good reminder for employers to remember to comply with both federal and state wage and hour laws.
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