A Pa. battery factory must give workers $22 million in back wages for underpaid shower and changing time, appeals court agrees
At East Penn Manufacturing in Berks County, workers should be paid for the actual amount of time they spend showering and changing before and after work, the court said.
An appeals court has agreed with a federal jury in Pennsylvania that a Berks County battery manufacturer owed employees more than $22 million in back pay for their time spent changing clothes before and showering after their shifts, which is a safety requirement.
When the decision came down last year, the U.S. Department of Labor said it was the largest verdict the department had ever won on workers’ behalf under the Fair Labor Standards Act.
The employer, East Penn Manufacturing Co. Inc., appealed the decision, which affected 7,500 employees. On Thursday, the U.S. Court of Appeals for the Third Circuit upheld the verdict.
“Under the Fair Labor Standards Act, employers must pay hourly employees for the time that they actually work, not just a reasonable amount of time,” U.S. Circuit Judge Stephanos Bibas wrote. “If employers claim that time was trivial, they bear the burden of proving that.”
Certain workers at East Penn’s manufacturing complex must wear protective gear and shower after their shifts to avoid lead exposure and other health risks. The Labor Department argued that the extra time spent doing so should have been paid as overtime.
According to the appeals court ruling, East Penn didn’t pay workers at all for time spent showering and changing until 2003. Then, it started giving them a five-minute grace period at the beginning of each shift and five minutes after. In 2016, the company lengthened the after-work period to 10 minutes.
The company did not record the actual amount of time workers spent showering and changing, the court opinion said, but should have been doing so.
When the Labor Department sued the company, it hired an expert to estimate how long workers needed to change and shower pre- and post-shift. His finding: 15.6 minutes before and 11 minutes after work, the appeals court opinion said.
East Penn argued that employers should only pay for a reasonable amount of time spent doing these things, not the actual time. “Focusing on actual time, [East Penn] worries, would reward employees for dragging their feet or tending to personal matters,” Bibas wrote.
The appeals court rejected that argument. But it also rejected the Labor Department’s argument that workers should be awarded even more than the back pay.
The department had argued that workers should get an additional $22 million in liquidated damages to compensate them for the time it took to recover their back pay.
In 2023, the U.S. District Court for the Eastern District of Pennsylvania did not give that additional amount, finding that East Penn thought it had been paying workers appropriately under the law.
The appeals court agreed, noting that East Penn’s lawyers had said the company’s practices were legal. Until taking on this case, Bibas wrote, the Third Circuit had not given guidance on whether employers “had to pay for actual or reasonable time.”
“East Penn asked legal counsel how to follow the law, and counsel advised East Penn that it might be able to disregard pre-shift work,” Bibas wrote. “Even though that advice turned out to be mistaken, following it was reasonable.”
A spokesperson for East Penn had emphasized the company’s effort to pay workers legally in a statement about the verdict last year. “East Penn had made every effort to comply with the laws as it understood them,” spokesperson Donna Snyder said. “As a company, it stands behind the time paid to employees to put on and take off uniforms and to shower.
East Penn was established in 1946 in a one-room creamery, according to the company’s website, and grew into one of the world’s largest battery manufacturers with over 10,500 full-time employees. The battery manufacturing complex in Lyons Station, Berks County, is 520 acres. The company also has a facility in Iowa.
The company did not immediately respond to a request for comment on Friday.
Samantha Thomas, a regional solicitor with the Labor Department in Philadelphia, said in a statement that the department is pleased with the Third Circuit decision. “The court’s decision will provide significant relief to East Penn employees who were not sufficiently paid for the time they worked,” she said.