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Poe v. IESI MD Corp.

Court of Special Appeals of Maryland

November 20, 2019

LEONARD POE
v.
IESI MD CORPORATION

          Circuit Court for Prince George's County Case No. CAL16-42381.

          Arthur, Reed, Zarnoch, Robert A. (Senior Judge, Specially Assigned), JJ. [*]

          OPINION

          Arthur, J.

         Under Md. Code (1991, 2016 Repl. Vol., Supp. 2019), § 3-415 of the Labor and Employment Article ("LE"), "each employer shall pay an overtime wage of at least 1.5 times the usual hourly wage." This case presents the question of how the overtime wage is computed when an employee is not paid by the hour.

         Appellant Leonard Poe was employed by appellee IESI MD Corp., a trash-hauling business. IESI paid Poe a "day rate" - i.e., it paid him a specified amount of money per day rather than per hour of work. Day-rate compensation is common in the trash-hauling industry, because it motivates employees to work quickly and efficiently: the sooner the employees finish the job, the greater their rate of pay.

         When Poe worked more than 40 hours in a week, he was entitled to overtime compensation under the Fair Labor Standards Act, 29 U.S.C. §§ 201-219, and the Maryland Wage and Hour Law, LE §§ 3-401 to -431. IESI computed Poe's overtime compensation by employing 29 C.F.R. § 778.112, a longstanding federal regulation that dictates the method for computing overtime compensation for day-rate employees under federal law.

         Poe disputed IESI's calculations. He filed suit, claiming that the federal regulation was inconsistent with the Maryland Wage and Hour Law and that, in relying on the federal regulation, IESI had understated the amount of overtime compensation that he was due under State law. The Circuit Court for Prince George's County granted IESI's motion for summary judgment.

         The circuit court placed its decision on two grounds. First, the court reasoned that the federal regulation is consistent with Maryland law. Second, the court reasoned that, under the so-called Motor Carrier Act exemption in LE § 3-415(b)(1), the Maryland Wage and Hour Law did not apply to IESI.

         Poe appealed. He presents the following questions:

1. Did the trial court err by granting summary judgment against Mr. Poe based upon a federal Department of Labor regulation permitting the payment of a "half-time" overtime rate, where Mr. Poe brings no claim under federal law, and where Maryland law mandates that non-exempt employees like Mr. Poe shall receive 1.5 times their regular rate of pay for overtime hours?
2. Did the trial court err by granting summary judgment against Mr. Poe based upon the application of the Motor Carrier Act exemption to the Maryland Wage and Hour Law, where Mr. Poe did not engage in any interstate commerce during the relevant time period, or where any interstate activity was de minimis?

         We shall affirm the judgment on the ground that IESI's computation of Poe's overtime compensation did not violate the Maryland Wage and Hour Law. We do not reach the separate question of whether IESI is immune from the Maryland Wage and Hour Law under the Motor Carrier Act exemption.

         Standard of Review

         When a party moves for summary judgment, the court "shall enter judgment in favor of or against the moving party if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law." Md. Rule 2-501(f). In this case, the parties appear to agree that there is no genuine dispute as to any material fact. Consequently, the only issue before us is whether the circuit court correctly concluded that IESI was entitled to judgment as a matter of law. "[T]his Court conducts a de novo review to determine whether the circuit court's conclusions were legally correct." Trim v. YMCA of Cent. Maryland, 233 Md.App. 326, 332 (2017).

         The Pertinent Statutes and Regulations

         In 1938 Congress passed the Fair Labor Standards Act. Among its many achievements, the Act created a federal right to overtime compensation for certain employees who were engaged in interstate commerce. At present, that right is expressed in 29 U.S.C. § 207(a)(2)(C), which generally prohibits an employer from employing an employee for a workweek longer than 40 hours "unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed." "The statute contains no definition of regular rate of pay and no rule for its determination." Bay Ridge Operating Co. v. Aaron, 334 U.S. 446, 460 (1948).

         LE § 3-415(a) states the general rule for overtime compensation under Maryland law: "Except as otherwise provided in this section, each employer shall pay an overtime wage of at least 1.5 times the usual hourly wage, computed in accordance with § 3-420 of this subtitle." LE § 3-420(a) instructs us that, "[e]xcept as otherwise provided in this section, an employer shall compute the wage for overtime under § 3-415 of this subtitle on the basis of each hour over 40 hours that an employee works during 1 workweek." Read together, the two Maryland statutes generally require employers to pay an overtime wage equal to "at least 1.5 times the usual hourly wage" for "each hour over 40 hours that an employee ...


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