The opinion of the court was delivered by: HUYETT
DANIEL H. HUYETT, 3rd, UNITED STATES DISTRICT JUDGE
This action is brought by the Secretary of Labor to enjoin the individual defendants and defendant corporations they own and control from violating sections 6, 7, 11, 12, and 15 of the Fair Labor Standards Act of 1938, 29 U.S.C. § 201, et seq. [hereinafter, the Act or the FLSA]. The complaint seeks injunctive relief, backwages, and an award of liquidated damages pursuant to section 16(c) of the Act, 29 U.S.C. § 216(c).
During the period covered by the complaint, January, 1985 through February, 1989, defendants employed over 300 individuals in the solid waste disposal industry. The vast majority of these individuals are covered by the FLSA. Complexity is added to what would have been a relatively straightforward case by defendants' corporate structure and payroll practices. In three separate "divisions," defendants maintain at least twenty-five separate payroll classifications.
Trial without a jury was held over eleven days in February and March, 1989.
During the course of pre-trial proceedings, it became clear that this is essentially a factual dispute in which the result turns largely upon the credibility of the witnesses and the accuracy of the Secretary's methods of computing overtime wages due employees. In addition to voluminous documentary exhibits, testimony from sixty-five witnesses was presented. The parties also submitted pre- and post-trial motions, briefs, and proposed findings of fact and conclusions of law.
In the post-trial motions, the Secretary moves to amend the complaint to add Lackawanna Transport, Inc. as a defendant and to include employees employed by it in the action. Because I will grant plaintiff's motion to amend the complaint, I shall include Lackawanna Transport, Inc. as a defendant in making the findings of fact and the caption of the action will be amended accordingly. Defendants move to strike the Secretary's request for liquidated damages under section 16(c) of the Act. Because the substance of this motion should have been raised as a demand for a jury trial in advance of trial, I will deny defendants' motion. I will discuss these motions further below.
Pursuant to Fed.R.Civ.P. 52(a), I make the following findings of fact:
1. Defendants are engaged in the trash removal and solid waste disposal industry. Notes of Testimony, March 23, 1989 at 70-71.
2. J. P. Mascaro & Sons, Inc. was incorporated in or about 1970. The original shareholders were J. P. Mascaro,
Joe Mascaro, Frank Mascaro, Lou Mascaro, Mike Mascaro, and Pasquale ("Pat") Mascaro. N.T., 3/23 at 74.
3. Hoch Sanitation, Inc. was formed by the Mascaros in late 1984 or early 1985. N.T., 3/23 at 75.
4. Lackawanna Transport Company, Inc. was formed by the Mascaros in late 1985 or early 1986. N.T., 3/23 at 76.
5. On or about January 1, 1987, the Mascaros formed Solid Waste Services, Inc. On or about the same date, J. P. Mascaro & Sons, Inc., Hoch Sanitation, Inc., and Lackawanna Transport Company, Inc. became owned and controlled by Solid Waste Services, Inc. ("Solid Waste"). Each of the predecessor companies became an operating division of Solid Waste. N.T., 3/23 at 76-78.
6. At all times relevant to this action, these companies were owned and controlled by Joseph P. Mascaro, Mike M. Mascaro and Pat Mascaro (collectively, the "Mascaros").
7. The business affairs of all defendants are operated together. The operating divisions of Solid Waste, defendants Hoch Sanitation, Inc. ("Hoch"), Lackawanna Transport, Inc. ("Lackawanna"), and J. P. Mascaro & Sons, Inc. ("JPM") share the same officers and controller. N.T. 3/27 at 96, 3/23 at 74-76, 78. The payroll system for all defendants is operated from the corporate headquarters by a payroll clerk. N.T., 3/23 at 83. At the operating centers, payroll data is compiled on a daily basis. Id.
8. Lou and Frank Mascaro are not actively engaged in the management of the companies' affairs. N.T., 3/23 at 84. Pat, Joe, and Mike Mascaro are employers, as defined by section 3(d) of the Act, 29 U.S.C. § 203(d), of the employees listed on schedules A, B, and C of the complaint as amended by plaintiff's motion to amend during trial. Court Exhibit 1 at para. 3;
N.T., 3/23 at 82-83.
9. Pat Mascaro sets pay practices for employees, N.T., 3/27 at 38, and the budget for payroll. N.T., 3/27 at 84.
10. Joe Mascaro manages existing facilities, oversees the construction of new facilities and purchasing. N.T., 3/23 at 82. Joe also informs employees about wage rates and practices. N.T., 2/22 at 137.
11. Mike Mascaro manages the defendants' business in Montgomery County. N.T., 3/23 at 82. He hires employees for Lackawanna, N.T., 2/22 at 94, directs employees' work hours, N.T., 2/22 at 87; 3/23 at 37; 3/20 at 74, and sets wage rates for Lackawanna employees. N.T., 2/21 at 119; 3/20 at 58; 3/23 at 37. He also answers employee inquiries concerning wages and employment policies. Id.
II. Employment of Minors
12. The following minors were employed by defendants:
Date of Age when
Name Birth Employed Citation
Vernon Wright 10/30/69 17 GX 24
Troy Schneck 11/5/71 16 GX 24 DX 4
E. Hardy n/a 17 N.T., 2/22 at 48
J. Hardy n/a 15 Id.
H. Reynolds 1/20/70 16 N.T., 3/8 at 61.
J. Reynolds 11/6/68 17 N.T., 3/8 at 58.
III. Deduction of Time for Lunch Breaks
14. Solid Waste and its operating divisions deducted one-half hour per day from the pay of all hourly employees for a lunch break. DX 1 at 9; N.T., 3/8 at 46; 3/13 at 8, 29; 3/21 at 27.
15. Defendants' general manager testified that the half hour is deducted whether or not the employee actually takes the break. N.T., 3/21 at 53.
16. The employee policy manual states:
Each employee must take a thirty (30) minute lunch period every day. Employees are not allowed to work through lunch without prior approval from your supervisor. The lunch period must be indicated on the daily time record.
17. Despite this written policy, there is overwhelming credible evidence that defendants actively discouraged employees from taking a lunch break.
18. Employees were threatened with termination if they took too long to complete a load; the threats discouraged employees from taking the meal break. N.T., 3/7 at 17, 3/8 at 16-17; 3/13 at 7-8. On one occasion, Joe Mascaro responded to a delay at the Souderton yard caused by employees leaving their work to get lunch by saying, "We'll get them on the ball, we do not take lunch breaks around here." N.T., 3/7 at 20. When at the yard during lunch periods, truck driver employees were told to stay with their trucks. N.T., 3/13 at 45.
19. The per trip pay system, the long hours required to fulfill job requirements, and time restrictions at landfills discouraged tractor-trailer drivers from eating other than while working. N.T., 2/22 at 57, 72, 88, 119-20; 2/23 at 16, 24; 3/20 at 6; 3/23 at 48.
20. In response to the practices of defendants and the work requirements, the vast majority of employees did not take a regular half hour lunch break. N.T., 2/22 at 43, 72, 119-20, 138, 165; 3/7 at 17, 19; 3/8 at 7, 38-39; 3/13 at 7, 25-26; 3/20 at 6; 3/23 at 40, 48. Most employees ate while performing work related tasks. N.T., 2/22 at 18, 72, 88, 165; 2/23 at 16, 24, 27; 3/7 at 19, 23, 33; 3/8 at 7, 38-39; 3/13 at 7-8, 22; 3/20 at 6, 28-29; 3/21 at 79-80; 3/23 at 40, 48.
21. Through cross-examination, defendants attempted to establish that all employees did take a lunch break on at least sporadic occasions.
22. The Secretary's evidence establishes that the defendants were not justified in uniformly deducting the 2 1/2 hours per week per employee.
23. Accordingly, the Secretary's compliance officer's calculation that employees are entitled to 2 1/2 hours per week of additional compensation for the time defendants wrongfully deducted as a lunch break is reasonable.
24. The employee classifications of this division relevant to this case are 200 rear loader drivers; 201 front loader drivers; 202 roll-off drivers; 203 tractor-trailer drivers; 300 pickers; and 301 station laborers. CX 1, CX 2.
25. Classification 200 employees are rear-end loader route drivers in Norristown, Ambler, and Jenkintown, Pennsylvania and other municipalities. Employees in this category are listed in GX 9 and GX 25. There are approximately 25 employees in this class.
26. These employees were paid a day rate or salary that was based incorrectly on a fluctuating work week method of computing wages. N.T., 3/7 at 29; 3/13 at 21-22, 102-05; 3/21 at 49-51.
27. Hours worked were not recorded for these employees. N.T., 3/7 at 32; 3/8 at 89; 3/13 at 22.
29. This period of time is corroborated by the periods of time that the pickers generally worked when the extra duties of the drivers are considered. One picker testified that he met the truck around 5:00 a.m., and generally finished his route between 1:30 p.m. and 4:30 p.m. N.T., 3/8 at 138-39.
30. Defendants introduced the testimony of Ron Kershner, a management employee who worked for a short period as a Norristown route driver. N.T., 3/23 at 5, 8. Based on the short period of time Kershner worked as a driver, his current position as a management employee, and my observation of him at trial, I do not find credible his testimony that the routes could be generally completed in seven and one-half to eight hours.
31. Based on credible testimony, classification 200 employees worked an average twelve hour day for the days their payroll records reflect they were paid. N.T., 3/7 at 28; 3/8 at 85; 3/13 at 23.
32. Classification 200 employees did not receive time and a half wages for hours worked in excess of 40 hours worked per week. These employees are entitled to time and one-half wages for hours worked in a week over 40.
33. Employees in this classification generally did not take lunch. Finding 23.
34. Accordingly, I find that classification 200 employees worked 60 hour weeks, and did not take the 2 1/2 hours per week lunch breaks which were deducted from their pay.
35. The Secretary's compliance officer's calculations of wages due classification 200 employees in GX 9, GX 25, Appendix D and Appendix F (submitted post-trial) are not consistent with the evidence adduced at trial.
B. Classifications 201 and 202
36. Classification 201 employees are front-loader drivers. Employees in this category are listed in GX 6 and GX 25. There are 27 employees in this class.
37. Classification 202 employees are "roll-off" drivers. Employees in this category are listed in GX 7 and GX 25. There are 59 employees in this class.
38. Many employees in these classifications did not record their own hours. N.T., 3/7 at 18, 3/8 at 16, 32, 37, 47, 87; 3/13 at 5, 26. Some employees in these classifications did not know when their time cards were being punched. N.T., 3/7 at 18. Many employees performed work related tasks before their time cards were punched in, or after their time cards were punched out. N.T., 3/7 at 18, 3/8 at 15-16, 19, 37, 87, 88; 3/13 at 5-7, 16-17, 27-28.
39. On some occasions, when employees returned from their routes, they were not punched out when their duties were completed because they did not have access to their time cards, and management personnel had left for the day. N.T., 3/8 at 30-31, 41, 51; 3/13 at 16.
40. Some employees in these classifications credibly testified that the hours reflected in their paychecks did not correspond to the hours they actually worked. N.T., 3/8 at 48; 3/13 at 9, 28.
41. The Secretary has computed backwages for employees in these categories for the period from January, 1985 to June 24, 1987. GX 6, 7, 25.
42. Defendants offered the testimony of several witnesses to show that employees in these classes punched their own time cards. However, some of these witnesses testified that they did not punch their own time cards during the times at which the Secretary is seeking backwages. N.T., 3/20 at 131, 136, 153. Others were not employed by defendants during the relevant time period. N.T., 3/20 at 118, 127; 3/21 at 16. Thus, defendants offered no testimony that conflicts with that of the Secretary's witnesses on the issue of time card punching during the January, 1985 to June, 1987 period.
43. Defendants have produced no time records for employees in these classifications.
45. The Secretary's compliance officer calculated an average five hours per week of uncompensated time for employees in these classifications. GX 6; GX 7; 3/13 at 91, 98-101. This estimate includes the 2 1/2 hours of additional work time and 2 1/2 hours of time that the defendants deducted for lunch breaks not taken. Finding 23. This estimate is reasonable, conservative and consistent with the evidence adduced during trial.
46. Employees in these classifications received overtime pay for hours worked in excess of 40 during one week. N.T., 3/13 at 143-44; 3/23 at 96.
47. Classification 203 employees are tractor-trailer drivers. Employees in this category are shown on GX 4, GX 20 and GX 25. There are approximately 68 employees in this class.
48. Payroll records for these employees reflect the number of trips per employee per week. GX 5, 19, 20, 25.
49. No records of hours worked were kept for classification 203 tractor-trailers drivers. They did not punch a time clock. N.T., 2/22 at 57-58, 72-73, 89, 144, 156-57, 165; 2/23 at 7, 24-25.
50. Until approximately November, 1987, employees in classification 203 drove tractor-trailer rigs back and forth between the company's transfer facility at Souderton, Pennsylvania and the Keystone Landfill at Dunmoore, Pennsylvania. This distance is approximately 105 miles one way. N.T., 2/22 at 60, 138.
51. Classification 203 drivers were paid on a per-trip basis at the rate of $ 40 per trip. During the average full work week, each driver made approximately eleven trips, two each day during the week and one on Saturday. N.T., 2/22 at 56, 72, 129, 141, 153, 164; 2/23 at 3, 11.
52. Many of these employees began work by arriving at the landfill with a full load or would pick-up a full load near the landfill between 4:00 a.m. and 5:00 a.m. N.T. 2/22 at 78, 80, 116, 130, 154, 160.
53. The Keystone Landfill began allowing trucks to dump at various times between 5:00 a.m. and 7:00 a.m.
54. On days when the weather caused delays at the landfill, it could take up to four hours for a truck to be emptied at the landfill. N.T. 2/22 at 122, 131, 2/23 at 13.
55. During the period immediately prior to the landfill's closing, drivers experienced significant delays while their loads were checked by environmental authorities. N.T. 2/22 at 70, 124.
56. Accordingly, I find that the time spent at the landfill per trip averaged three-quarters of an hour, or forty-five minutes.
57. At the Souderton transfer station, drivers performed maintenance checks of the trailers, refueled their rigs and completed paperwork as they dropped off the empty trailers and picked up a full trailer. On some occasions, drivers experienced significant delays at the Souderton yard while they waited for full trailers. N.T., 2/22 at 81-82, 144, 147, 156, 162; 2/23 at 6-7, 20, 22.
58. Accordingly, I find that the drivers averaged one-half hour per trip engaged in work related duties at the Souderton yard.
59. The one way driving time from Souderton to the landfill was two and one-half hours on average. N.T., 2/22 at 61, 73, 132, 143, 151, 155; 2/23 at 6, 13; 3/21 at 57.
61. Some drivers experienced significant delays occasionally caused by mechanical failures in their rigs. N.T., 2/22 at 55-56, 75, 133-34, 145-46; 2/23 at 5.
62. Accordingly, I find that the credible testimony establishes that the average total round trip time, including all work related tasks, was six and one-quarter hours. This includes five hours of driving time, three-quarters of an hour at the landfill, and one-half hour at the Souderton yard.
63. Given eleven trips per week at six and one-quarter hours per trip, classification 203 drivers worked approximately 68 and 3/4 hours per week.
64. Classification 203 drivers worked weeks longer than 40 hours consistently. Defendants did not pay these employees time and one-half their regular rate of pay for hours worked in excess of 40 in a week. N.T., 2/22 at 56, 72, 134, 146, 158, 164; 2/23 at 8, 17, 22-30.
65. Employees who inquired about pay for time spent waiting at landfills or at the Souderton yard were told that they were paid on a "per trip" basis regardless of the hours it took to complete each trip. N.T., 2/22 133, 158; 2/23 at 23-24.
66. Classification 300 employees are trash pickers in Norristown, Pennsylvania and other municipalities. CX 2. There are approximately 69 employees in this classification. GX 5, 25.
67. Employees in this classification are paid on a day rate basis. N.T., 3/8 at 125.
68. The Secretary presented one employee witness from this class, Donald Dorman, Jr. N.T., 3/8 at 120.
69. Dorman credibly testified that he typically began his work day at approximately 5:00 a.m. and ended work for the day between 1:30 p.m. and 4:30 p.m. N.T., 3/8 at 138-39.
70. In the middle of the working day, after the trash truck was filled with the first load of the day, Dorman would be allowed to return to his home for approximately three hours. N.T., 3/8 at 126-28.
71. A Norristown route truck driver credibly testified that he regularly left his pickers in Norristown while the driver traveled to Souderton to empty his truck. N.T., 3/7 at 26.
72. Defendants' management employee witnesses Pat Thornhill and Ron Kershner credibly testified that employees in this classification were allowed to go home while the truck on which they were working was being dumped at Souderton. N.T., 3/23 at 6-7; 3/21 at 45.
73. Therefore, employees in classification 300 had ample opportunity to take a lunch break during the day and are not entitled to compensation for 2 1/2 hours of time for lunch breaks not taken.
74. Through the one employee witness in this classification, the Secretary did present evidence that one picker, James Eubanks remained with his driver while the truck was emptied. N.T. 3/8 at 123-24, 127.
75. However, the Secretary produced no evidence that Eubanks was required to ride with the driver as part of his job, or that Eubanks performed any work related tasks while he was riding with the driver.
76. Accordingly, the evidence at trial does not establish that any employees in classification 300 worked over 40 hours in a week and were not compensated for overtime hours worked in a week in excess of 40.
77. Pat Mascaro testified that some employees in this classification who met their driver at the Souderton yard punched a time clock at that facility. N.T., 3/23 at 91.
78. Defendants did not introduce any time records for these employees at trial.
79. Pat Mascaro further testified that employees who met their drivers on the routes in the municipalities did not punch a time clock. N.T., 3/23 at 91.
81. Classification 301 employees include yard laborers at the Souderton transfer station. CX 2. However, at least one employee in this class was a driver. GX 5 (Martin Schmidt).
82. The Secretary presented one witness, James Reynolds, Jr. from this class. N.T., 3/8 at 57. I found him a candid and credible witness. His testimony was corroborated by the statements of other witnesses.
83. Reynolds testified that he worked as a "yard jockey" from June, 1986 to December, 1986. Id. at 58.
84. Reynolds did not punch his time card. It was punched by his supervisors. Id. at 62-63. Frequently, the supervisor punched Reynolds out when he (the supervisor) left for the day. Id. at 64.
85. This testimony is consistent with that of the truck drivers who utilized the Souderton yard during this time period. Findings 57, 62, 64.
86. On many occasions, Reynolds and the other laborers with whom he worked continued work after the supervisor left for periods of two to four hours. Id. at 63-65, 74.
87. Reynolds worked with Bob Bedford, Mike Engdahl, Frankie Brown, Chris Engdahl, Daniel Engdahl, his brother, Danny Basco, and another employee, Kip (last name unknown). Id. at 66. These employees worked the same hours Reynolds did.
88. Because of the nature of his work, and the constant arrival of trucks to be dumped, these employees did not receive a lunch break. Id. at 67. This is corroborated by the testimony of the truck drivers who dumped at the Souderton yard during this time period. Findings 20, 23.
89. Defendants produced no evidence which controverted Reynolds testimony for the period prior to January, 1987.
90. Defendants introduced the testimony of two witnesses who worked in the yard subsequent to January, 1987. Joseph C. Todd, Sr., began working at the yard on August 19, 1987. N.T., 3/20 at 138. Jefferey A. Thompson began working in the Souderton yard in January, 1988. Id. at 162-63. Defendants also introduced the testimony of Samuel E. Smith, who was the Souderton yard manager from November, 1987 to January, 1989. N.T., 3/21 at 22-23.
91. These employees testified that yard employees punched their own time cards for the period during which they had knowledge of the yard and that the time cards accurately reflect the time each employee worked. N.T., 3/20 at 140-42, 158-59; 3/21 at 25.
92. These employees also testified that they regularly took a one-half hour lunch break during the period of their employment. N.T., 3/20 at 146, 159; see also 3/23 at 2-3.
93. The defendants have produced no evidence to controvert that of the Secretary's that before August, 1987, classification 301 employees regularly worked hours "off the clock" and through their lunch hours.
94. Accordingly, I find that classification 301 employees who worked in the Souderton yard prior to August, 1987 are entitled to compensation for an average of three hours per day for time not recorded on their time cards, or fifteen hours per week, and two and one-half hours per week for time deducted from their pay for a lunch break which they did not take. To the extent that when this additional 17 1/2 hours is added to the hours shown on the defendants' time records for each employee, the total exceeds 40 hours worked in a week, the employee is entitled to compensation at time and one-half his regular rate of pay. This estimate is reasonable and consistent with the evidence adduced at trial.
95. The Secretary seeks compensation for three employees shown as classification 301 employees, Joann Imalka, Sharon Levandowski and Deborah Tomazewski, who worked as dispatchers at the Souderton yard. GX 25. The defendants' records show that these employees were paid on a salary basis with no overtime wages paid for hours worked in a week over 40, and that no time records were kept for these employees.
96. The defendants knew the Secretary was seeking compensation for these employees and defendants produced no evidence concerning these employees.
97. The total evidence presented at trial supports a finding that these employees were not performing management tasks.
98. Given the failure of the defendants to provide any evidence concerning these employees, an estimate of five additional hours per week worked in excess of 40 is reasonable and justified by the evidence adduced at trial. This reasonable and very conservative estimate is derived from the hours worked by the yard employees, the truck drivers whom these employees were presumably dispatching, and the strong likelihood that these employees were required to perform job related tasks while they ate lunch on numerous occasions.
99. Classification 301 employee Homer Butler was employed as a mechanic for two years at the Keystone landfill by J. P. Mascaro and Lackawanna. 3/20 at 96-97. Butler was paid a salary of $ 600.00 per week and was not paid a premium for hours worked in excess of 40 per week. Id. at 98-99.
100. No records of Butler's hours worked were maintained. Id. at 102.
101. Butler was a mechanic who completed some minor paperwork, and did not perform management functions. Id. at 103-104.
102. Butler credibly testified that he reported to work at the landfill between 4:00 a.m. and 5:00 a.m., id. at 97, 99, and completed his job generally at 3:00 p.m. Id. at 97. Butler's presence at the landfill during these hours was corroborated by the testimony of the drivers who dumped at the landfill. On average, Butler worked an additional hour twice a week. Id. at 98-99. He generally took a thirty to forty-five minute lunch break. Id. at 103.
103. Accordingly, I find that Butler worked an average 57 hours per week, with 17 hours of overtime each week. The Secretary has calculated backwages due Butler based on a 57 hour week. GX 25. This average is based on Butler's credible and uncontradicted testimony. It is reasonable and conservative.
104. The employee classifications relevant to this case are 200 rear loader drivers; 201 front loader drivers; 202 roll-off drivers; 300 Borough Pickers; 303 Allentown Pickers; 305 Allentown Drivers; and 306 Northern Division employees. CX 1, 2.
A. Classifications 200, 201, 202 and 300
105. Classification 200 employees are rear-loader drivers. CX 1, 2. There are approximately ten employees in this class. GX 16, 26, 26A.
106. Classification 201 employees are front-loader drivers. CX 1, 2. There are approximately six employees in this class. GX 15, 26, 26A.
107. Classification 202 employees are roll-off drivers. CX 1, 2. There are approximately five employees in this class. GX 17, 26A.
108. Classification 300 employees are laborers and pickers in the "Borough" division. CX 1, 2. There are approximately twenty employees in this class. GX 13, 26.
110. Further, these employees were paid an additional "bonus," which was a flat payment, for performing extra work, such as additional trips or routes. N.T., 3/7 at 74-75; 3/8 at 11.
111. The defendants' payroll records reflect that these employees were paid a half time premium for hours worked over 40 in a week. Further, the records reflect that these employees were paid additional "bonus" payments for the performance of additional work. GX 13, 15, 16, 17, 26, 26A. The "bonus" payments were not included in computing the employees' regular rate of pay for purposes of computing the proper overtime premium wage. N.T., 3/16 at 34-35, 37-38, 38-39, 39-40.
112. The Secretary's compliance officer calculated additional overtime for these employees based on inclusion of the "bonus" payments in ...