Brian A. Weil and Melissa D. Fulk v. Metal Technologies, Inc.

Brian Weil and Melissa Fulk filed

class and collective actions against Metal Technologies, alleging

wage violations under the Fair Labor Standards Act and

Indiana wage laws. They had two basic complaints. First, they

2 Nos. 18-2556 & 18-2440

argued that Metal Technologies unlawfully paid employees

only for the hours that they were scheduled to work even

when employees’ timestamps showed that they were clocked

in for longer than that. The district court conditionally certified—

but then later decertified—those claims. After decertification,

the plaintiffs proceeded in their individual capacities

and secured a very modest damages award. Second, the plaintiffs

contended that Metal Technologies withheld wages from

employees’ paychecks for uniform rentals, even though Indiana

law authorized withholding only for uniform purchases.

The district court entered judgment for the class on the wagededuction

claims, which had been split into two time periods,

and they won a much larger damages award.

Both sides appealed. The plaintiffs argue that the district

court should not have decertified the time-rounding claims,

and Metal Technologies insists that Indiana law permitted it

to deduct wages to cover uniform rentals. Each side thinks

that the district court should have awarded it costs. And while

the plaintiffs think that they have recovered too little in attorneys’

fees, the defendants say that the plaintiffs have recovered

too much.

If the law remained as it stood on the day that the case was

argued, we would affirm the district court across the board.

After argument, however, the Indiana legislature introduced

a wrinkle: it amended its wage-deduction law to authorize

withholding for uniform rentals, and it made that amendment

retroactive. Given this turn of events, we affirm the district

court’s decertification order but vacate the judgment and remand

the case for the district court to reconsider the wagededuction

claim in light of the new law. That will likely also

Nos. 18-2556 & 18-2440 3

require the district court to recalculate attorneys’ fees and

costs.

I.

Metal Technologies is a manufacturer of automobile parts

in Bloomfield, Indiana. It employs around 500 workers. These

employees work one of three shifts throughout the day, which

overlap by 30 minutes to ensure time to clean up and exchange

information with the next shift. Metal Technologies

keeps track of employees’ time with an electronic time clock.

It calculates pay based on scheduled shifts rather than timeclock

punches—so employees are typically paid for 40 hours

per week, and if they need to go over, they must fill out an

overtime authorization form. Metal Technologies also deducts

wages from employees who elect to rent work uniforms.

Two of Metal Technologies’s former employees, Brian

Weil and Melissa Fulk, filed class and collective actions and

individual claims alleging that Metal Technologies committed

wage violations under the Fair Labor Standards Act of

1938 (FLSA) and Indiana wage laws. See FED. R. CIV. P. 23; 29

U.S.C. § 216(b). They brought two categories of claims: timerounding

claims and wage-deduction claims. The timerounding

claims asserted that Metal Technologies unlawfully

paid employees only for the hours that they were scheduled

to work even when their timestamps showed that they were

clocked in for longer than that. The wage-deduction claims

focused on Metal Technologies’s practice of taking payment

for work uniforms out of employees’ paychecks. These latter

claims were broken down into two time periods: January 20,

2013 to April 10, 2016, when the original wage-deduction

4 Nos. 18-2556 & 18-2440

form was used, and after April 10, 2016, when Metal Technologies

began using a new form.

The plaintiffs sought Rule 23 and FLSA certification on

both the time-rounding claims and the wage-deduction

claims.1 The district court conditionally granted Rule 23 certification

on both claims, but it granted FLSA certification only

on the time-rounding claim.

The plaintiffs later moved for summary judgment on their

certified claims. Metal Technologies opposed that motion and

moved to decertify the time-rounding claims under both the

FLSA and Rule 23. Yet it conceded liability on the wage-deduction

claim—although only under the original wage-deduction

form. See IND. CODE § 22-2-6-2(a) (the form must state

that the deduction can be revoked at any time upon written

notice to the employer).

The district court granted Metal Technologies’s motion to

decertify the time-rounding claims and denied as moot the

plaintiffs’ motion for summary judgment on those claims. In

doing so, the court relied on 29 C.F.R. § 785.48(a), which specifies

that employers do not have to compensate employees for

minor pre- and post-shift time-clock punches (for example,

clocking in ten minutes before a shift starts) as long as they

aren’t working during that time. In other words, an employee’s

time stamp is not a per se record of work. And because

the plaintiffs had provided no evidence that Metal Technologies’s

employees were actually working beyond their

1 Although class actions are brought under Rule 23 and collective actions

under the FLSA, they are typically analyzed together—the primary

difference being that collective actions require would-be members to opt

in while class actions require them to opt out. See Herrington v. Waterstone

Mortg. Corp., 907 F.3d 502, 507 n.4 (7th Cir. 2018).

Nos. 18-2556 & 18-2440 5

shifts, the court concluded that they could not prove a theory

of liability common to the class. The court permitted the plaintiffs

to proceed with only their individual claims for unpaid

wages.

On the wage-deduction claim, the district court split its decision.

It granted the plaintiffs’ summary-judgment motion

with respect to the original wage-deduction form—the issue

on which Metal Technologies had conceded liability. But it denied

summary judgment with respect to the amended form.

Weil and Fulk proceeded to a one-day bench trial on their

individual claims for unpaid wages, the damages calculation

pertaining to the original wage-deduction form, and the class

claim pertaining to the amended wage-deduction form. The

plaintiffs recovered very little on their individual claims because

the court found that there were only a handful of occasions

on which Weil and Funk were clocked in and working

but not paid—once in Weil’s case and four times in Fulk’s.

Their greatest success came with the wage-deduction claims.

The district court determined that trebled damages for the

class under the original wage-deduction form totaled

$93,152.58. And it sided with the class on the amended wagededuction

form, reasoning that Indiana law permitted wage

deductions only for purchasing, not renting, uniforms. The

court awarded an additional $8,102.04 for that claim.

Following the trial, the district court awarded $99,229.58

in attorneys’ fees for the wage-deduction claims and

$16,869.03 for the time-rounding claims. The district court denied

both parties’ requests for costs.

Both sides appealed. Metal Technologies insists that the

district court erred in finding that it had unlawfully deducted

6 Nos. 18-2556 & 18-2440

uniform rentals. The plaintiffs argue that the district court

erred in decertifying the time-rounding claims. And both parties

appeal both attorneys’ fees and costs.

II.

After we heard oral argument, the Indiana state legislature

passed a law permitting an employer to deduct employee

wages for renting uniforms. See IND. CODE § 22-2-6-2(b)(14).

Metal Technologies filed a notice under Federal Rule of Appellate

Procedure 28(j) arguing that we must reverse the district

court’s decision that it unlawfully deducted uniform

rental costs under the amended wage deduction form.

The new statute expressly states that it applies retroactively.

IND. CODE 22-2-6-3(b); see State v. Pelley, 828 N.E.2d 915,

919 (Ind. 2005) (“Statutes are to be given prospective effect

only, unless the legislature unequivocally and unambiguously

intended retrospective effect as well.” (emphasis added)).

There is no general prohibition on applying retroactive laws

to cases pending on appeal. See Plaut v. Spendthrift Farm, Inc.,

514 U.S. 211, 226 (1995) (“When a new law makes clear that it

is retroactive, an appellate court must apply that law in reviewing

judgments still on appeal that were rendered before

the law was enacted, and must alter the outcome accordingly.”).

On the contrary, courts generally must honor the legislature’s

choice to make a law retroactive. See Bourbon Mini–

Mart, Inc. v. Gast Fuel & Servs., Inc., 783 N.E.2d 253, 260 (Ind.

2003) (“Ultimately … whether or not a statute applies retroactively

depends on the Legislature’s intent.”); see also Landgraf

v. USI Film Products, 511 U.S. 244, 267–68 (1994) (“Retroactivity

provisions often serve entirely benign and legitimate purposes,

whether to respond to emergencies, to correct misNos.

18-2556 & 18-2440 7

takes, to prevent circumvention of a new statute in the interval

immediately preceding its passage, or simply to give comprehensive

effect to a new law….”). The only exception is if

applying the law retroactively would violate a vested right or

constitutional guarantee. Bourbon, 783 N.E.2d at 260. Thus,

unless the plaintiffs can show that applying Indiana’s new

statute deprives them of a vested right or constitutional guarantee,

the new statute controls.2

It seems unlikely that the plaintiffs could successfully

make that showing, but they should have a chance to try. We

therefore vacate the judgment and remand the case so that the

district court can consider whether the new law applies to

Weil and Fulk’s wage-deduction claims. If it does, the district

court will also have to revisit the attorneys’ fees and costs that

it awarded the plaintiffs on those claims.3

III.

Before reaching the merits of the plaintiffs’ decertification

arguments, we must first address Metal Technologies’s contention

that this issue is moot because we can no longer grant

2 As to the plaintiffs’ argument that Metal Technologies still violated

Indiana law because it did not sign the wage-deduction form, the district

court correctly concluded that Metal Technologies agreed to the wage assignment

in writing—which is all that the statute required. See IND. CODE

§ 22-2-6-2(a)(1).

3 On appeal, the plaintiffs argue that they were entitled to costs under

Indiana law. See IND. CODE § 22-2-5-2. But we note that because federal,

not state, law governs an award of costs, the district court does not have

to consider costs under this provision. See Abrams v. Lightolier Inc., 50 F.3d

1204, 1223 (3d Cir. 1995) (“[W]here there is a valid applicable Federal Rule

of Civil Procedure, it is to be applied by a federal court even where the

plaintiff’s claim is based on state law.… Rule 54(d)(1) will thus trump a

state cost shifting provision with which it conflicts.”).

8 Nos. 18-2556 & 18-2440

the plaintiffs relief. Metal Technologies argues that neither

Weil nor Fulk has a concrete interest in certification because

they went to trial on their individual time-rounding claims

and lost. But we have held that the possibility of an incentive

award—which Weil and Fulk could receive here—is enough

of an interest to keep the claim justiciable. See Espenscheid v.

DirectSat USA, LLC, 688 F.3d 872, 875 (7th Cir. 2012).4 We

therefore have jurisdiction to consider the plaintiffs’ argument,

reviewing the district court’s certification order for

abuse of discretion and its legal determinations supporting

the decision de novo. Philips v. Sheriff of Cook Cty., 828 F.3d

541, 549 (7th Cir. 2016).

The plaintiffs make several arguments as to why we

should reverse the district court’s decision to decertify the

time-rounding claims under Rule 23 and the FLSA. None succeeds.

First, the plaintiffs argue that because the district court initially

certified the claims, it was bound by that decision unless

Metal Technologies put forth new evidence. But neither

Rule 23 nor the FLSA includes such a requirement. Rule 23

grants courts the discretion to reconsider certification at any

point before final judgment, see FED. R. CIV. P. 23(c)(1)(C), and

it says nothing about limiting that discretion to when new evidence

is raised. Collective actions under the FLSA likewise

permit courts to reconsider certification after discovery has

been completed. See Espenscheid, 688 F.3d at 877. And this

makes sense in light of our repeated assertions that district

4 We note, though, that Chief Justice Roberts disagrees. See Campbell-

Ewald Co. v. Gomez, 136 S. Ct. 663, 679 n.1 (2016) (Roberts, C.J., dissenting)

(asserting that “obtaining a class incentive award does not create Article

III standing”).

Nos. 18-2556 & 18-2440 9

courts have wide discretion in managing class and collective

actions. See, e.g., Alvarez v. City of Chicago, 605 F.3d 445, 449

(7th Cir. 2010); Chavez v. Illinois State Police, 251 F.3d 612, 629

(7th Cir. 2001). The district court did not err by reconsidering

its earlier certification decisions.

Second, the plaintiffs argue that the district court was

wrong to conclude that an employee’s time stamp is not a per

se record of work. The plaintiffs claim that because the time

stamps of some employees show more than 40 hours of time

in weeks for which they were compensated for only 40 hours,

Metal Technologies necessarily underpaid those employees.

The district court disagreed, relying on the following FLSA

regulation to untangle the issue:

(a) Differences between clock records and actual

hours worked. Time clocks are not required. In

those cases where time clocks are used, employees

who voluntarily come in before their regular

starting time or remain after their closing time, do

not have to be paid for such periods provided, of

course, that they do not engage in any work. Their

early or late clock punching may be disregarded.

29 C.F.R. § 785.48(a) (emphasis added). As we have noted before,

this regulation means that “employees who clock in

early do not have to be paid so long as they are not working.”

See Kellar v. Summit Seating, Inc., 664 F.3d 169, 177 (7th Cir.

2011). Put another way, an employee can clock in, grab a coffee,

read the newspaper, and then start working once his

scheduled shift begins—and an employer wouldn’t have to

compensate him for that time. Because the plaintiffs failed to

provide evidence that employees were actually working without

compensation—not simply that they were clocked in for

10 Nos. 18-2556 & 18-2440

over 40 hours—plaintiffs lack, as the district court pointed

out, “both a theory of liability and proof of any injury.”5 So

decertification of both the class and collective claims was appropriate.

See FED. R. CIV. P. 23(b); 29 U.S.C. § 216(b).6

Finally, the plaintiffs suggest that the Metal Technologies

employee manual says that compensation will be provided

based on clock time, and so they seek to hold Metal Technologies

liable for violating that guarantee. But the manual does

not say that employees will be compensated for every minute

that they are clocked in even if they aren’t working. In fact, it

says the opposite: employees will be compensated only for actual

time worked. So any argument that Metal Technologies

violated its own manual fails as well.

For all these reasons, the district court did not abuse its

discretion in decertifying the claims.



* * *



5 For the same reason, Weil and Fulk had very little success on their

individual claims. They could not recover simply because of the discrepancy

between their scheduled hours and the time clock; they could recover

only for the handful of occasions on which they could prove that they

were clocked in and actually working. That happened on only one occasion

for Weil and on four for Fulk.

6 The plaintiffs also say that Metal Technologies failed to keep accurate

records. That argument fails because the plaintiffs haven’t introduced

sufficient evidence to support it. See Anderson v. Mt. Clemens Pottery Co.,

328 U.S. 680, 686–87 (1946) (“An employee who brings suit … for unpaid

minimum wages or unpaid overtime compensation, together with liquidated

damages, has the burden of proving that he performed work for

which he was not properly compensated.”).

We AFFIRM in part, VACATE in part, and REMAND to

the district court for proceedings consistent with this opinion.