Federal jury finds East Penn Manufacturing violated federal law; awards $22M in back wages

Department of Labor finds company denied over 7.5K workers overtime; will seek damages.

A federal court jury has awarded back wages of more than $22 million to the U.S. Department of Labor for more than 7,500 employees working for East Penn Manufacturing Company Inc. — one of the world’s largest battery manufacturers — after the department proved that the company failed to pay them overtime pay.

The award by the 12-member jury marks the largest recorded verdict under the Fair Labor Standards Act obtained by the department, which intends to ask the U.S. District Court for the Eastern District of Pennsylvania to award an equal amount in liquidated damages for the affected workers. The department will also seek an injunction requiring future FLSA compliance by the Lyons Station, Pennsylvania, manufacturer.

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In an earlier summary judgment ruling, the court found that East Penn violated the FLSA’s overtime requirement by failing to pay uniformed workers for all actual working time.

Read more: Hunton Andrews Kurth secures favorable FLSA Verdict for East Penn Manufacturing

A 30-day trial ended when the jury found that the battery manufacturer was required to pay the affected workers for all of their working time, resulting in overtime violations. Typically, East Penn paid workers only for their 8-hour scheduled shift. The employer did not pay for additional time employees needed to put on and remove protective equipment and to shower to avoid the dangers of lead exposure and other hazards. Federal law requires employers to include all hours employees worked and to pay an overtime premium for hours over 40 in a workweek.

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This historic jury award follows a 2016 investigation by the department’s Wage and Hour Division and subsequent litigation by its Office of the Solicitor.

“This verdict of more than $22 million is a long-overdue victory for more than 7,500 workers at East Penn Manufacturing,” said Principal Deputy Wage and Hour Administrator Jessica Looman. “Federal law requires employers to pay workers for the hours they work, including time these workers needed to protect themselves from dangerous workplace hazards.”

The verdict ends a trial in response to the department’s March 2018 complaint against East Penn Manufacturing in federal district court. During the trial, the department presented the following evidence:

Testimony from 39 employees confirming they and other co-workers performed unpaid work.

A witness who had performed a time study and provided testimony on the estimated time employees spent on this work.

Testimony from a witness who calculated back wages due and how much time the employer shaved from its employees’ time punches.

Volumes of employer time records that showed East Penn did not pay employees based on their actual clock-in and clock-out times. The records also showed how the company would adjust times to pay employees only for their scheduled shift, and how East Penn did this every day and for every employee.

“Decades of settled law states that employers must pay employees for all hours worked, and this includes the time employees spend changing into and out of uniforms and showering where such activities, as here, were necessary and indispensable to their work. Contrary to the law, East Penn allowed employees to work off-the-clock for years,” said Solicitor of Labor Seema Nanda.

“The jury’s verdict will go a long way towards making the employees whole and serves as a stark reminder for employers like East Penn to think twice before instituting policies designed to skirt the law.”

The division’s Wilkes-Barre District Office conducted the investigation. Regional Solicitor Oscar Hampton and trial attorneys Elizabeth Kuschel and Alexander Gosfield in the department’s Regional Solicitor’s Office in Philadelphia litigated and tried the case.

Founded in 1946, East Penn Manufacturing Company Inc. is one of the world’s largest battery manufacturers. The company designs, manufactures, distributes its products and recycles more than 30,000 batteries daily in Berks County, Pennsylvania. It also maintains a distribution network in the U.S. and Canada with nearly 90 warehouses and fulfillment centers and about 750 tractors, trucks and trailers.

Statement from East Penn Manufacturing

On May 9, 2023, a jury determined that employees of East Penn Manufacturing should have been allocated more paid time for putting on and taking off uniforms. The jury also found that East Penn did not act in a knowing or reckless disregard of the law.

Before the trial started, the Department of Labor claimed that the company owed employees over $214 million in back wages. Instead, the jury determined that the back wages owed to uniformed employees (who worked for East Penn in Lyon Station, Pennsylvania from November 2015 to September of 2021) is $22.25 million.

East Penn had made every effort to comply with the laws as it understood them. As a company, it stands behind the time paid to employees to put on and take off uniforms and to shower. The company believes it provided proper compensation for these activities and was fair in determining the reasonable time required to perform them.

The amount of the ultimate judgement is subject to further argument to the trial judge and adjustment. In addition, either the DOL or East Penn may file an appeal.

East Penn appreciates the time and attention of the jurors over the course of this lengthy and complex trial. East Penn greatly appreciates its family of employees who diligently work to support and sustain the company and provide the essential products that help power people’s lives.

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Berks Weekly
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