On September 30, 2010, the United States District Court for the District of Massachusetts entered an interesting order in a case involving multiple issues under the Fair Labor Standards Act.
In Travers v JetBlue Airways.pdf., airline JetBlue engaged an independent contractor named Flight Services and Systems ("FSS") to provide skycaps Boston Logan Airport. Because these skycaps received tips from passengers, the employer (more about that in a minute) took advantage of the tip credit of 29 U.S.C. § 203(m) to meet its minimum wage obligations. At some point, however, the airline instituted a $2 "curbside check-in fee" that cut into the skycaps' tip income. In many cases, the plaintiffs claimed, they "covered" the fee themselves or, in other words, paid the fee from the tips they had received. The parties disputed whether their doing so was voluntary or not. In either case, the plaintiffs contended that their payment of the fee undercut the tip credit and therefore caused them not to be paid the minimum wage. The plaintiffs also complained that they were subject to a policy that made them liable for shortages, which also destroyed the tip credit.
Unlike the fleetingly famous disgruntled JetBlue flight attendant, they did not activate the emergency exits, but did bring suit under the FLSA and sought to represent a class of skycaps performing services for JetBlue nationwide.
In a remarkably brief order given the subject matter, the court addressed a series of arguments raised by the parties. It found, for example, that a question of fact existed as to JetBlue's liability for the acts of its contractor FSS due to evidence that JetBlue actually supervised and disciplined skycaps. It also addressed the issue of the tip credit itself. Underlying the case was a simple notion of human behavior - if passengers are assessed a fee for the skycap service, they are likely to tip less for it, reasoning that they are already paying extra for it. Thus, the skycaps implicitly argued, the curbside check-in fees cut into their tip income and lowered their compensation. This notion, however, is not a part of the statute, so the issue came down to one of whether the tip credit could be applied if the skycaps paid the fee themselves. The court found that while an entirely voluntary decision by the plaintiffs to "share" tips with customers by paying the fee would not violate the FLSA, there was a question of fact as to whether their payment was truly voluntary.
In a footnote, the court disposed of an argument raised by FSS essentially that it was not aware of the alleged wage violations and had taken reasonable steps to prevent them. The court found no authority that such an argument, one drawn from the sexual harassment arena, would apply under the FLSA . In any case, the court also also found the evidence insufficient to support it.
In the last part of its order, the court denied conditional certification of the class even though it had, for the most part, denied the defendants' summary judgment motions. The court found no evidence that the practices complained of existed anywhere than at Boston, the sole facility where FSS was the contractor.
The bottom line: Many cases involving technical wage and hour violations are tough for both sides. The plaintiffs may be able to raise questions of fact to defeat summary judgment based upon informal practices, but be unable to demonstrate sufficiently uniform policies across a large group of employees to establish a class.