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LADEGAARD v. HARD ROCK CONCRETE CUTTERS

August 17, 2004.

SEAN LADEGAARD, individually and on behalf of a class of employees, similarly situated, Plaintiff,
v.
HARD ROCK CONCRETE CUTTERS, INC., et al., Defendants.



The opinion of the court was delivered by: JOAN H. LEFKOW, District Judge

MEMORANDUM OPINION AND ORDER

This case involves allegations that defendants, Hard Rock Concrete Cutters, Inc. ("Hard Rock"), James M. Dvoratchek ("Dvoratchek"), and Peter M. Held ("Held"), failed to pay hourly employees wages and overtime for compensable work time (preparation, travel, and cleanup) before and after the period of the workday that Hard Rock considered to be compensable time. Plaintiffs' Third Amended Complaint contains four counts. Count I asserts that defendants' alleged failure to properly compensate its employees violated the minimum wage and overtime pay requirements of the Illinois Minimum Wage Law ("IMWL"), 820 ILCS 105/1, et seq. Count II is a claim for unpaid wages under the Illinois Wage Payment Collection Act ("IWPCA"), 820 ILCS 115/1, et seq. Counts III and IV assert that defendants' alleged failure to properly compensate its employees violated the minimum wage and overtime pay requirements of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 206-07. Count IV alleges that the FLSA violations were willful. Before the court are cross-motions for partial summary judgment. The parties do not attempt to resolve questions regarding particular uncompensated time worked by specific employees. Rather, the parties' arguments focus on which categories of alleged work time are compensable under the federal and state statutes that plaintiffs invoke. For the reasons stated below, plaintiffs' motion for partial summary judgment is granted in part and denied in part. Defendants' motion for partial summary judgment is granted in part and denied in part.

SUMMARY JUDGMENT STANDARDS

  Summary judgment obviates the need for a trial where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R. Civ. P. 56(c). To determine whether any genuine fact exists, the court must pierce the pleadings and assess the proof as presented in depositions, answers to interrogatories, admissions, and affidavits that are part of the record. Fed R. Civ. P. 56(c) Advisory Committee's notes. The party seeking summary judgment bears the initial burden of proving there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In response, the non-moving party cannot rest on bare pleadings alone but must use the evidentiary tools listed above to designate specific material facts showing that there is a genuine issue for trial. Id. at 324; Insolia v. Philip Morris Inc., 216 F.3d 596, 598 (7th Cir. 2000). A material fact must be outcome determinative under the governing law. Insolia, 216 F.3d at 598-599. Although a bare contention that an issue of fact exists is insufficient to create a factual dispute, Bellaver v. Quanex Corp., 200 F.3d 485, 492 (7th Cir. 2000), the court must construe all facts in a light most favorable to the non-moving party as well as view all reasonable inferences in that party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). FACTS

  Hard Rock is engaged in the business of cutting concrete. Peter Held ("Held") is the president and a shareholder of Hard Rock. James V. Dvoratchek ("Dvoratchek") is the secretary-treasurer and a shareholder of Hard Rock. Held and Dvoratchek have authority over the pay practices of Hard Rock.

  Plaintiffs are current and former employees of Hard Rock.*fn1 From July 19, 1997 through August 2001, the hourly wage plaintiffs received for "covered work" under their collective bargaining agreements ranged from $14.90 to $30.41. The number of hours plaintiffs worked per week varied substantially per week and per plaintiff. Plaintiffs did not always work forty hours in a week. Plaintiffs recorded and submitted their own time sheets.

  Hard Rock employs both "driver-operators" ("drivers") and "helpers." Drivers drive company vehicles to and from the job site. Although drivers are allowed to bring their assigned vehicles home at night, some drivers park the vehicles in the yard at night. Drivers pick these vehicles up on the morning of the following workday. Helpers are supposed to meet drivers with whom they are paired at the job site. Drivers may pick up helpers at Hard Rock's yard if it is convenient for the driver. Most Hard Rock employees — drivers and helpers — travel directly from their homes to the first job site of the day, and from the last job site of the day to their homes. However, drivers occasionally need to stop by Hard Rock's yard prior to traveling to the job site to perform some or all of the following tasks: picking up work orders; filling water tanks and portable gas tanks on work trucks; picking up additional equipment necessary for the day's work; hooking up trailers needed for work; and performing safety and operational checks on the vehicles and trailers.*fn2 Following the work day, drivers occasionally need to stop by Hard Rock's yard to drop off vehicles or equipment for repair or to turn in completed work orders. Debris such as concrete slabs removed from the work site are also unloaded at this time.*fn3 Helpers occasionally perform some of these tasks. Hard Rock also asks drivers to have the oil changed in their assigned vehicles on a regular basis. Two supervisory employees were usually at Hard Rock's yard in the morning when work crews would be arriving and departing from the yard: Ken Leazer and Mike DeBartolo. Held was also there occasionally. (Dvoratchek Dep., at 48-49.) Some supervisory employees were also at the yard at the end of the workday, usually until approximately 5:30 pm. (Id. at 101.)

  Prior to September 2000, Hard Rock's policy was to pay employees only for time spent at job sites and not for time spent at the beginning of the workday driving to a job site nor for time at the end of the workday driving from a job site. Plaintiffs were aware of this policy. There were two exceptions to this policy. First, if the drive time to the first job site exceeded one hour, as measured from Hard Rock's yard, Hard Rock paid the driver his regular hourly wage for the total drive time, regardless of whether the driver had worked more than forty hours in the week. (Pl. L.R. 56.1 ¶ 49.) Second, if a driver came to Hard Rock's yard for preparation or cleanup before going to the first job site, Hard Rock paid him for all time spent, not just time in excess of one hour, traveling between the yard and job site if the driver reported this time on his time sheet. Hard Rock also contends that drivers who reported time spent having the oil changed on a company vehicle were paid for that time.

  However, Hard Rock never informed its employees that they would be paid for time spent in preparation, travel, or cleanup nor instructed them to report such time worked on their time sheets. Hard Rock also never instructed employees to report time spent having the oil changed in company vehicles. "Employees learned how to put down time on their time sheets from what other employees told them to do." (Pl. L.R. 56.1 ¶ 44.) Factual disputes exist as to whether plaintiffs were compensated for all hours worked. Held testified that he had no records reflecting the number of hours plaintiffs worked for which they would have been paid had they reported their hours. However, Hard Rock's payroll records reflect that some plaintiffs received straight time rather than overtime pay for hours worked in excess of forty.*fn4 Factual disputes exist as to how often this occurred.

  DISCUSSION

  Plaintiffs contend that they were not properly compensated for certain preparation, travel, and cleanup time. Plaintiffs seek compensation at their regular rate of pay for all such uncompensated work performed in weeks in which plaintiffs did not work in excess of 40 hours ("straight time compensation") and at one and one-half times their regular pay for all such work performed in weeks in which plaintiffs worked over 40 hours ("overtime compensation"). Plaintiffs argue that, as to all counts, they are entitled to summary judgment on liability for the time period from August 15, 1997 through September, 2000. Defendants contend that they are entitled to summary judgment on plaintiff's claims for (1) straight time compensation; (2) punitive damages under the IMWL; and (3) a three-year statute of limitations under the FLSA.

  I. "Principal Activity" Under the FLSA and IMWL

  Under the FLSA, any time an employee spends performing the "principal activity or activities which such employee is employed to perform" is compensable, 29 U.S.C. § 254(a). "Principal activities" include all activities which are an integral part of the principal activity. See 29 C.F.R. §§ 785.24. An activity is integral to a principal activity if

 
. . . the activity is made necessary by the nature of the work performed, it fulfills mutual obligations between the employer and his employees, the activity directly benefits the employer in the operation of his business, and the activity is closely related to other duties performed by the employees. Thus, in order for a particular activity to be "integral and indispensable," it must be necessary to the principal activity performed and done for the benefit of the employer.
Gonzalez v. ...

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