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Service Employees International Union v. County of San Diego

filed: October 5, 1994.

SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 102; PROBATION OFFICERS ASSOCIATION; ROSLINDA ARELLANES; TERESA AYALA; RENEE U. BONNER, ET AL., PLAINTIFFS-APPELLEES,
v.
COUNTY OF SAN DIEGO, DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Southern District of California. D.C. No. CV-90-1211-GT-M. Gordon Thompson, District Judge, Presiding.

Before: James R. Browning, Robert R. Beezer and Stephen S. Trott, Circuit Judges. Opinion by Judge Trott.

Author: Trott

TROTT, Circuit Judge:

Employees of the County of San Diego sued the County of San Diego ("County"), claiming it failed to pay overtime compensation in accordance with the Fair Labor Standards Act ("FLSA"). 29 U.S.C. §§ 201-219. The district court issued three orders granting partial summary judgment for plaintiffs. See Service Employees Int'l Union, Local 102 v. County of San Diego, 784 F. Supp. 1503 (S.D. Cal. 1992). The court held that plaintiffs were not exempt from FLSA coverage and that, as a matter of law, plaintiffs were entitled to overtime compensation for on-site back-up duty. The County appeals, arguing the FLSA exemption should have precluded liability and that the employees' on-site stand-by time was not "work" as a matter of law.

We hold that the version of the "salary test" in existence prior to September 6, 1991 was invalid in its entirety as applied to the public sector. Thus, we reverse and remand to the district court for further proceedings consistent with this opinion.

I

County assistant deputy probation officers ("ADPOs"), nurses, and park rangers filed this suit against the County, claiming the County violated the FLSA by failing to pay them overtime for "on-site back-up duty," or "stand-by," time. The County defended by claiming plaintiffs were exempt from FLSA coverage.

The district court issued three orders granting partial summary judgment. On April 23, 1991, the court granted partial summary judgment for plaintiffs on their claim that ADPOs were eligible for overtime during their on-site back-up time. On February 11, 1992, the district court granted partial summary judgment concluding: 1) the three year statute of limitations applied because the County's violations were wilful; 2) the employees were entitled to liquidated damages; and 3) the County improperly exempted the ADPOs as salaried employees. On August 5, 1992, the court granted partial summary judgment, concluding: 1) liquidated damages and the three year statute of limitations should also apply to the nurses and park rangers; and 2) the court's holding in the April 1991 order should apply to nurses and park rangers.

II

The piecemeal nature in which this case was decided creates a jurisdictional question: whether the district court decision is final for purposes of 28 U.S.C. § 1291. "Under the final judgment rule embodied in 28 U.S.C. § 1291, parties may appeal only the final decisions of the district courts. A final judgment . . . is a decision by the District Court that ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Dannenberg v. Software Toolworks Inc., 16 F.3d 1073, 1074 (9th Cir. 1994) (quotation omitted). Partial summary judgment is not an inherently final order, id. ; Cheng v. Commissioner, 878 F.2d 306, 309 (9th Cir. 1989), and the orders in the instant case are not final because the district court has not yet calculated damages.

The Supreme Court has held that the requirement of finality is to be given a practical construction. Gillespie v. United States Steel Corp., 379 U.S. 148, 152-53, 13 L. Ed. 2d 199, 85 S. Ct. 308 (1964). In In re Subpoena Served on the California Public Utilities Commission, 813 F.2d 1473, 1479-80 (9th Cir. 1987), however, we observed that the "exercise of appellate jurisdiction in Gillespie was based upon the unique circumstances of the case" and noted that the decision should be applied "only sparingly." To satisfy the practical finality rule, the following factors must be satisfied:

(1) the [decision appealed] was a "marginally final order," (2) [which] "disposed of an unsettled issue of national significance," (3) review "implemented the same policy Congress sought to promote in § 1292(b)," and (4) the finality issue was not presented to the [appellate court] until argument on the merits, thereby ensuring that policies of judicial economy would not be served by remanding the case with an important unresolved issue.

Id. at 1480 (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 477 n.30, 57 L. Ed. 2d 351, 98 S. Ct. 2454 (1978)); accord Wabol v. Villacrusis, 958 F.2d 1450, 1454 (9th Cir. 1990), cert. denied, 113 S. Ct. 675 (1992).

The challenged orders are "marginally final" because the calculation of damages "will not affect the potentially dispositive and obviously central issue" in this case: whether the County employees were exempt from the FLSA. See Wabol, 958 F.2d at 1454. Moreover, deciding the merits will dispose of an unsettled issue of national significance. See id. at 1455. "Though the remaining [damages calculation] could eventually ascend to this court, this alone should not prevent our adjudication of important and potentially dispositive questions which have been fully briefed and argued." Id. Remanding would not promote judicial economy and would "therefore frustrate the very purpose of the final judgment rule." Id. Consequently, we have jurisdiction to consider this appeal.

III

Under the FLSA, employees must ordinarily be paid overtime compensation if they work more than forty hours in one week. 29 U.S.C. § 207(a)(1). However, the FLSA exempts from its overtime rule "any employee employed in a bona fide executive, administrative, or professional capacity." 29 U.S.C. § ...


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