FEDERAL APPEALS COURT REVERSES JURY AWARD; NO LIABILITY FOR STATE LAW WAGE PAYMENT LINE TIME CLAIMS, OR WORKERS’ COMPENSATION RETALIATION CLAIMS
In a major victory for a South Carolina poultry processor, the U.S. Court of Appeals for the Fourth Circuit has reversed a jury’s verdict in favor of 16 plaintiffs who claimed they were promised they would be paid “punch-to-punch,” instead of line time, as was the practice in the unionized facility where they worked. This wiped out an award of more than $270,000, including attorneys’ fees. The Court also invalidated verdicts in favor of six employees who claimed they were fired in retaliation for initiating workers’ compensation claims, cancelling more than $100,000 of the damages awarded by the jury. Awards in favor of only two employees were affirmed. The case is Barton et al. v. House of Raeford, Nos. 12-1943. 12-1945, & 12-1946 (4th Cir., March 11, 2014). The employer was represented by Larry Stine of our firm's Atlanta office.
Background: The plaintiffs originally filed suit alleging violations of the Fair Labor Standards Act (FLSA) as well as South Carolina’s wage payment act. They claimed that when they went to work for House of Raeford, they were told at orientation they would be paid clock time, not line time. They also claimed that they didn’t get proper breaks, and should be paid for that time as well. Some of the plaintiffs also asserted that they were terminated in violation of a South Carolina statute that prohibits terminating an employee who has “instituted proceedings” under the state’s workers’ compensation law. Binding precedent compelled the District Court to enter judgment in favor of the employer on the FLSA claims, and the case proceeded to a jury trial on the South Carolina wage act and bench trials on the workers’ compensation retaliation claims. All the plaintiffs prevailed on the wage claims, and half of those who claimed retaliation won. The employer appealed.
Decision: A majority of the 3-judge panel of the U.S. Court of Appeals for the Fourth Circuit reversed nearly all of the District Court’s decisions. (One judge dissented, saying he would have affirmed the District Court in every respect). Because the plant where the plaintiffs had worked was a unionized facility, the plaintiffs’ claims were governed by the Labor Management Relations Act (LMRA), and by the collective bargaining agreement (CBA) that set the terms and conditions of employment. One of those terms was that complaints be resolved through the grievance and arbitration process, which the plaintiffs had failed to use. The Court of Appeals rejected the plaintiffs’ argument that they were not bound by the CBA, and that their state law claims could be resolved without reference to that document. Because the LMRA governed, their state law claims should have been dismissed.
As to the retaliation claims, the majority found that the District Court applied the wrong test to determine whether 6 of the employees would not have been discharged “but for” their institution of workers’ compensation proceedings. The District Court had found that a visit to the plant nurse, coupled with a request to see a company doctor, was sufficient to put the employer on notice that a workers’ compensation claim was imminent, but the Court of Appeals found this inconsistent with precedent from the South Carolina Supreme Court. The Court of Appeals deferred to the District Court with respect to the claims of the two remaining employees, both of whom had instituted workers’ compensation proceedings prior to their termination. Their judgments were affirmed.
Commentary: This is a significant victory because it affirms a central tenet of Federal labor law that the District Court had failed to respect: that Federal labor law pre-empts State law claims. This decision also corrects the District Court’s erroneous conclusion that employees who work at unionized facilities are not bound by the provisions of a valid CBA. The Court of Appeals also restored the South Carolina Supreme Court’s standards for determining what triggers coverage under the workers’ compensation anti-retaliation law. South Carolina had held that protection is triggered when a claim is filed, a company doctor is consulted, or the employer is billed for medical services rendered to an employee: simply going to see the plant nurse and asking to be sent to a company doctor is not sufficient. Left uncorrected, the District Court’s ruling could have exposed South Carolina employers to a retaliation charge almost every time an employee sought first aid.
This ruling puts an end to a hard-fought battle that spanned four years, one jury trial, and one bench trial. The Court of Appeals’ decision upholds the primacy of Federal labor law and standards decreed by the South Carolina Supreme Court that clarify when the workers’ compensation anti-retaliation law is triggered.