Court rules Gerber owes back pay to Arkansas workers

Hundreds of workers at an Arkansas baby food production facility are owed pay for the hours spent "donning and doffing" required clothes and equipment.

By a 4-3 opinion, the Arkansas Supreme Court ruled the more than 800 workers involved in the class-action suit against Gerber Products Co. are entitled to the more than $3 million in back pay because the time they spent preparing for and finishing their shifts at a Fort Smith facility qualified as work.

Despite arguments from Gerber attorneys that the employees' union contract protected the company from having to pay for the time workers spent putting on, taking off, and sterilizing their clothes and equipment, the majority justices -- in an opinion written by Justice Karen Baker -- found that the state's minimum wage law compelled Gerber to pay for the workers' time.

But Justice Rhonda Wood -- joined by Chief Justice Howard Brill and Justice Jo Hart -- said the "windfall" coming to the former and current Gerber employees breaks from past court precedent and will impair the state's business community.

"Arkansas will repeat the past mistakes of the federal government, and the floodgates will open to litigation at an enormous cost to business in Arkansas," Wood wrote. "In addition, the majority undermines the collective-bargaining process and destroys any confidence employers and employees have in the enforceability of their agreements."

An attorney representing the employees, John Holleman, said he was "absolutely dumbfounded" by Wood's dissent, saying there would be no floodgates opened and that the ruling may reduce litigation by giving a clear answer as to what counts as "work" in Arkansas industry.

"Truthfully, we don't view this as a conservative or a liberal thing, pro-business and anti-business, Republican, Democrat, whatever. This is simple: if you have somebody working for you, you have to pay them," Holleman said. "[Wood's warning] is a red herring. ... Absolutely ridiculous."

A call to a spokesman for Gerber was not returned Thursday.

The case began in 2012 in Sebastian County Circuit Court where attorneys for the employees first filed suit and it was granted class action in 2013.

According to Gerber attorneys, there was an "established custom and practice" understood between management and the workers' union that "donning and doffing" time -- which court officials estimated ranged from about 14 to 20 minutes a day -- was not compensable.

During union contract negotiations in 2010, the union withdrew its stipulation that workers be paid for that time.

In August 2015, Sebastian County Circuit Judge James Cox ruled that the company owed a little more than $3 million plus interest to the employees.

In Thursday's opinion, Baker wrote that "donning and doffing" was not a "preliminary or postliminary" activity as suggested by Gerber attorneys, but rather, a central condition of their job function and qualifies as "work," even though it is not expressly defined as such in state law.

Gerber attorneys argued the state's Minimum Wage Act mirrors federal law. And since federal law explicitly allows for "donning and doffing" arrangements made between unions and management to be exempt from pay, state law and policy does the same.

The company's attorneys also argued that, though that exemption is not explicit in state law, the portion of the state's minimum wage law that states the "right of collective bargaining [shall] not be affected" by the state's law.

"Gerber's position appears to be that because the agreement at issue is a collective-bargaining agreement between an employer and a union, the parties were free to enter into an agreement in violation of other provisions of the [minimum wage law]," Baker wrote. "We disagree with Gerber's position. ... It is clear that had the legislature intended [union agreements to be exempt], it would have included a provision similar to the [federal law]."

To do otherwise, Baker wrote, would require the justices to add words to existing state law.

Wood argued there was no need in state law for the exemption because of the clause in state law that defers to union-employer agreements.

The dissenting justice also wrote that collective bargaining agreements are "of upmost importance to the public policy of the state" and should be inviolate, a sentiment Holleman found interesting, because Arkansas has one of the lowest unionization rates in the country.

Wood also wrote that the state's wage law wasn't violated because it only applied to situations where employers weren't paying the minimum wage. At the Gerber facility, employees made two if not three times the state's minimum wage.

Business on 05/27/2016

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