Aug. 13, 2024 – A district court did not err by denying a motion for sanctions against attorneys for plaintiffs who sued a company with an inaccurate timekeeping system, the U.S. Court of Appeals for the Seventh Circuit has ruled in Mazurek v. Metalcraft of Mayville, Inc., No. 22-1743 (Aug. 2, 2024).
Judge Candace Jackson-Akiwumi wrote the majority opinion, joined by Judge Michael Scudder. Judge Thomas Kirsch dissented.
In October 2017, Richard Mazurek filed a Fair Labor Standards Act (FLSA) collective action against Metalcraft of Mayville, Inc. (Metalcraft) in the U.S. District Court for the Eastern District of Wisconsin.
Mazurek claimed the company denied workers overtime pay. Specifically, Mazurek alleged that Metalcraft’s timekeeping system allowed workers to punch in 15 minutes early and punch out 15 minutes late.
When a worker punched in early but didn’t do any compensable work, the clock-in time was changed to the worker’s scheduled start time.
Mazurek and the other workers claimed that the Metalcraft changed clock-in times even when workers who’d clocked in early did perform compensable work.
Sorting the Cases
The district court decertified the collective action in April 2020. The workers other than Mazurek then filed 24 individual cases, and the district consolidated the cases.
Jeff M. Brown , Willamette Univ. School of Law 1997, is a legal writer for the State Bar of Wisconsin, Madison. He can be reached by
email or by phone at (608) 250-6126.
The district court dismissed nine of the additional 24 cases. The district court asked each party to pick two of the remaining cases for briefing on summary judgment.
The district court granted summary judgment to Metalcraft in each of the four cases picked by the parties. The district court ruled that the plaintiffs’ estimate of the work time alleged to be lost was nothing more than “guesswork.”
In the remaining 12 cases (including Mazurek’s), the plaintiffs moved for voluntary dismissal with prejudice, because the court’s summary judgment order in the four sample cases would likely determine their cases.
Company Moves for Sanctions
Metalcraft moved for sanctions in each of the 16 cases, claiming violations of Federal Rule of Civil Procedure Rule 11.
Metalcraft argued that each of the cases was based on the same facts and law but offered only speculation and no evidence.
Metalcraft alleged that Mazurek’s deposition demonstrated the frivolity shared by the 16 cases, because in the deposition he admitted he had no proof the company had violated the FLSA.
The district court denied Metalcraft’s motion for sanctions. Metalcraft appealed.
Memories Are Sufficient
Metalcraft argued that the 16 FLSA claims lacked factual substance because Mazurek, in his deposition, said he had only memories of the times he performed compensable work before his shift, rather than written evidence.
But Judge Jackson-Akiwumi pointed out that under Seventh Circuit precedent, reconstructed memories can serve as the basis for an FSLA claim.
“When an employer does not keep accurate records of time worked, employees have a lower burden for proving FLSA damages,” Judge Jackson-Akiwumi wrote.
Jackson-Akiwumi pointed out that, because of the 15-minute grace period and the practice of rounding time up or down, Metalcraft’s timekeeping system didn’t give an accurate representation of the time that employees spent on compensable work before the start of their shifts.
“Consequently, as the district found, the lowered burden for FLSA claimants came into play, and the invocation of memory did not render the suit unfit for filing,” Judge Jackson-Akiwumi wrote.
Reasoning Applied to All Claims
The majority also concluded that the district court’s decision on sanctions applied to all 16 claims, even though it quoted the discussion of Mazurek’s claim that appeared in the summary judgment order.
“The district court stated, ‘Plaintiffs present the court with “a handful of facts that might support an FSLA action,”’” Jackson-Akiwumi wrote.
“This indicates that the district court was speaking not only about Mazurek when making the ‘handful of facts’ comment, but also about the collective of suits.”
Judge Jackson-Akiwumi also reasoned that there was nothing that compelled the Seventh Circuit to address each of the 16 sanctions motions separately, as the dissent argued the district court should have done.
The majority concluded that the district court’s decision to treat the 16 claims collectively for purposes of the sanctions motions was entitled to discretion.
“We are also mindful that the district court’s explanation must suffice to allow us to meaningfully review the denial of sanctions,” Jackson-Akiwumi wrote.
Belated Citation
Metalcraft also argued that the plaintiffs should have been sanctioned because their argument that their claims were not barred by the Portal-to-Portal Act was foreclosed under Chagova v. City of Chicago, 992 F.3d 607 (7th Cir. 2021).
Under the Portal-to-Portal Act, activities that are “preliminary to or postliminary” to an employer’s principal activities are not compensable.
But Judge Jackson-Akiwumi pointed out that the plaintiffs argued from the beginning that a U.S. Department of Labor regulation specified that the relevant section of Portal-to-Portal Act doesn’t apply to time between the “first principal activity on a particular workday and before [the employee] ceases the performance of the last principal activity.”
She also noted that Metalcraft hadn’t mentioned the 2021 case until its reply brief for summary judgment.
“Mazurek … rebutted, in advance, the very point for which Metalcraft belatedly cited Chagova,” Jackson-Akiwumi wrote.
Kirsch Dissent
Judge Kirsch argued in his dissent that the district court was correct to deny Metalcraft’s sanctions motion against Mazurek, but not the other 15 plaintiffs.
Kirsch argued that the district court erred by failing to analyze the factual basis of those 15 claims.
“If party moves for sanctions in multiple lawsuits that were consolidated for litigation, a district court cannot take shortcuts,” Judge Kirsch wrote.
“Determining whether an attorney’s behavior was sanctionable in one case neither blesses nor condemns his actions in another.”
Kirsch also argued that the “handful of facts that might support an FLSA action” mentioned by the circuit court explicitly referred solely to the discussion in the summary judgment order’s discussion of Mazurek’s claim.
“The district court’s conclusion that Mazurek’s suit … was not sanctionable does not mean that the other plaintiffs’ suits can get away with sanctionable conduct, if there was any.”
