Dive Brief:
- Butterball did not violate the Fair Labor Standards Act or North Carolina state law when it failed to pay a turkey loader anticipated overtime wages, the 4th U.S. Circuit Court of Appeals ruled Tuesday.
- The turkey loader sued Butterball in 2020 for unpaid wages, alleging violations of the North Carolina Wage and Hour Act and Fair Labor Standards Act for himself and similarly situated workers. A district court dismissed both claims, finding that the plaintiff was not an hourly employee, but a piece-rate employee. The worker appealed to the 4th Circuit, representing only himself.
- The 4th Circuit upheld the lower court’s decision, finding there was “no genuine dispute of material fact” of whether the plaintiff and other opt-in plaintiffs were piece-rate employees.
Dive Insight:
As Circuit Judge DeAndrea Gist Benjamin said in the court documents, “Disputes over turkey typically happen in late November and involve who gets a better portion of the meat. This is not that.”
The plaintiff reviewed his pay stubs — which contained three separate line items for overtime hours, total base pay (not including overtime) and the total number of hours worked, with several columns regularly zeroed out — and alleged that Butterball had shortchanged him and other turkey loaders.
Per court documents, the plaintiff signed an offer letter agreeing that he was a piece-rate employee, a system other employees testified to their awareness of. Additionally, the plaintiff argued he was not paid for certain pre-shift tasks; while records show that other opt-in plaintiffs to the initial lawsuit did these tasks regularly, the courts determined that the lead plaintiff did not.
A piece-rate employee is paid for each unit produced instead of by the hour. Many workplace experts recommend this pay structure for output-heavy businesses. Pay is calculated by multiplying the number of units made by the fixed pay rate. According to payroll processor Gusto, piece-rate pay is often used in manufacturing and construction, but also by freelancers in creating art or providing services.
The U.S. Department of Labor offers a Piece Rate Calculator to “facilitate compliance” with the Fair Labor Standards Act. Still, DOL says, the calculators can’t determine if an employee meets all the criteria for section 14(c) coverage — and may not be appropriate for determining wages in “every possible situation encountered in the workplace.”
