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Grid v. Rhode Island Department of Labor and Training

Superior Court of Rhode Island

January 25, 2017

NATIONAL GRID
v.
RHODE ISLAND DEPARTMENT OF LABOR AND TRAINING, LABOR STANDARDS DIVISION, through its Director, CHARLES J. FOGARTY; MARK ZITO (Members of Utility Workers Union of America, Locals 310 and 310B)

         Providence County Superior Court

          For Plaintiff: Robert P. Brooks, Esq.; Julie A. Sacks, Esq.

          For Defendant: Bernard P. Healy, Esq.; Joseph F. Rodgers III, Esq.

          DECISION

          MATOS, J., MAGISTRATE JUSTICE

         The present matter is before this Court on National Grid's (National Grid) appeal from an administrative decision (the Decision) of the Department of Labor and Training (the DLT). The DLT required National Grid to pay its employees the difference between what they were paid on Sundays and holidays and the statutory premium pay, plus a 25% penalty of the amount due to each employee. Jurisdiction is pursuant to G.L. 1956 § 42-35-15. For the reasons set forth in this decision, this Court affirms the Decision of the DLT.

         I

         Facts and Travel

         The facts of this case are undisputed. The Utility Workers Union of America, Local 310 and Local 310B Brotherhood of Utility Workers Council, AFL-CIO (Local 310 and Local 310B or, collectively, the Union) are bargaining agents for National Grid employees in Rhode Island. (Stipulation of Facts ¶ 1, App. Ex. B.) The employees are hourly and non-supervisory, and they are not exempt from the definition of "employee" in G.L. 1956 § 25-3-1(3).[1] Id. at ¶ 2. National Grid is a public utility that provides customers with electricity and natural gas. Id. at ¶ 7. As a public utility that operates in the state, National Grid is subject to Rhode Island laws and regulations. Id. at ¶ 3. National Grid is also subject to federal law and is regulated by the Rhode Island Public Utilities Commission (PUC). Id. at ¶¶ 5, 6.

         Although National Grid provides service to its customers 24 hours a day, it ceases regular business operations on Sundays and all Rhode Island holidays, except Columbus Day. Id. at ¶ 11. On Sundays and holidays, a few National Grid employees work in the event that customers need assistance. Id.

         Pursuant to § 25-3-1(5), Rhode Island holidays are as follows: New Year's Day; Memorial Day; July 4th; Victory Day; Labor Day; Columbus Day; Veterans' Day; Thanksgiving; and Christmas. Id. at ¶ 10. On those holidays, Rhode Island law provides that employers must pay employees who work one and one-half times their normal pay rate. Id.

         National Grid has a valid Collective Bargaining Agreement (CBA) with both Local 310 and Local 310B. Id. at ¶ 12. Under the Local 310 CBA, employees regularly scheduled for a Sunday are paid twenty-five (25%) percent of their base hourly rate for each hour they work, in addition to their base pay. Id. at ¶ 13. Local 310 employees that work overtime on Sundays are paid double time for each hour they work. Id. at ¶ 14. Under the Local 310B CBA, employees regularly scheduled for a Sunday are paid thirty (30%) percent of their base hourly rate for each hour they work, in addition to their base pay. Id. at ¶ 15. Local 310B employees that work overtime on Sundays are paid one and one-half times for each hour they work. Id. at ¶ 16.

         Under the CBAs' provisions, members of both Local 310 and Local 310B who are regularly scheduled to work on state holidays-with the exception of Columbus Day-are paid at least one and one-half times their hourly rate for each hour worked on that holiday. Id. at ¶ 17. Under both the Local 310 CBA and the Local 310B CBA, employees regularly scheduled for a state holiday are paid one and one-half times their base hourly rate for all hours they work. Id. at ¶¶ 18, 19. Members of both unions that work overtime on a holiday are paid two and one-half times their hourly rate for each hour they work. Id.

         Before May 12, 2003, National Grid treated Columbus Day like other state holidays, and employees working that day received the holiday pay rate. Id. at ¶¶ 20, 21. However, since then, the CBAs of both unions have recognized Columbus Day as a floating holiday, and National Grid treats the holiday as a typical business day. Id. at ¶ 22. Both parties agree "that with the exception of Columbus Day, all employees from both locals, who are scheduled to work on the state holiday are paid at least one and one-half (1 ½) times their normal wages for hours worked on those days." (Decision 3, App. Ex A.)

         In 1998, the Rhode Island Work Permits on Holidays and Sundays Statute was amended. (Stipulation of Facts ¶ 25, App. Ex. B.) Prior to 1998, the law forbid employers to require employees to work on Sundays and holidays, unless it was absolutely necessary or the employer had a permit from the DLT for cases of economic necessity. Id.; see P.L. 1976, ch. 110, § 25-3-2.[2] As a result of the 1998 amendments, the statute no longer requires that the work be absolutely necessary, nor does it require employers to secure a work permit. (Stipulation of Facts ¶ 26, App. Ex. B); see R.I. Pub. Laws 1998, ch. 73. Consequently, § 25-3-3 (the Sunday and Holiday Pay Statute) requires that employees be paid time and one-half for work on Sundays and holidays, with limited exceptions. (Stipulation of Facts ¶ 28, App. Ex. B); § 25-3-3.

         The Sunday and Holiday Pay Statute also continued to provide that the DLT Director would have the power to promulgate regulations in conjunction with the statute, [3]and to allow the DLT Director to exempt any employer from the statute because of its operations or size, by the adoption of such regulations. (Stipulation of Facts ¶¶ 29, 30, App. Ex. B); see §§ 25-3-6, 25-3-7. Some of the pre-amendment regulations promulgated by the DLT remained on file even after the amendments to the Sunday and Holiday Pay Statute were passed. (Stipulation of Facts ¶ 35, App. Ex. B.) One such regulation-promulgated before the 1998 amendments-included public utility companies as one of the employers considered "absolutely necessary" for purposes of the statute. Id. at ¶¶ 31, 35.

         These pre-amendment regulations were addressed in two post-amendment advisory letters, and National Grid relied on those letters in failing to pay the statutory premium to all its employees.[4] In the advisory letters, the DLT found that National Grid was exempt from the coverage of the Sunday and Holiday Pay Statute.[5] Id. at ¶¶ 37, 38. On November 11, 2009, Mark Zito, on behalf of members of Local 310 and Local 310B, filed a complaint with the DLT's Division of Labor Standards alleging National Grid's failure to pay the premium hourly rate provided in the Sunday and Holiday Pay Statute. (Decision 1, App. Ex. A.) In accordance with Rhode Island law, the DLT Director's designee (Hearing Officer) conducted a hearing on August 16, 2010. Id.; see § 28-14-19.[6] The parties did not present any testimony or evidence at the hearing, and instead submitted a Stipulation of Facts, along with exhibits, to the DLT on January 24, 2012.[7] Id.

         On April 25, 2012, the DLT entered its Decision, finding that the advisory letters were not binding, and, as such, employees were to be paid at least one and one-half times their hourly rate for Sunday and holiday work. Id. at 5, 7. As a result, the DLT ordered that, for employees that had received less than the statutory premium on Sundays, National Grid should pay "the difference less the standard deductions." Id. The DLT also ordered that National Grid pay "a 25% penalty of the amount determined to be due each employee." Id.

         National Grid appealed the Decision to this Court, arguing that the Decision should be reversed and vacated as the state law claim was preempted under § 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185(a) (Section 301). Additionally, National Grid argues that the DLT abused its discretion in ordering National Grid to pay a 25% penalty. The Union asks this Court to affirm the Decision, arguing that the Decision articulated the relevant law and there is no manifest error. National Grid has waived its right to raise a Section 301 preemption defense because it raises the issue for the first time on appeal.

         II

         Standard of Review

         Under the Rhode Island Administrative Procedures Act, the Superior Court has appellate jurisdiction to review final orders of state administrative agencies. Sec. 42-35-15. Upon review of an administrative agency appeal, the Superior Court "'reviews the record to determine whether legally competent evidence exists to support the findings.'" Champlin's Realty Assocs. v. Tikoian, 989 A.2d 427, 437 (R.I. 2010) (quoting Sartor v. Coastal Res. Mgmt. Council, 542 A.2d 1077, 1083 (R.I. 1988)). The Superior Court may "not . . . substitute its judgment on questions of fact for that of the agency whose actions are under review." Barrington Sch. Comm. v. R.I. State Labor Relations Bd., 608 A.2d 1126, 1138 (R.I. 1992). That is, where "'competent evidence exists in the record, the Superior Court is required to uphold the agency's conclusions.'" Auto Body Ass'n of Rhode Island v. State Dep't of Bus. Regulation, 996 A.2d 91, 95 (R.I. 2010) (quoting R.I. Pub. Telecommunications Auth. v. R.I. State Labor Relations Bd., 650 A.2d 479, 485 (R.I. 1994)).

         The Superior Court may reverse or modify an agency decision in limited circumstances, pursuant to § 42-35-15, if

"substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
"(1) In violation of constitutional or statutory provisions;
"(2) In excess of the statutory authority of the agency;
"(3) Made upon unlawful procedure;
"(4) Affected by other error or ...

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