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BARTON V. HOUSE OF RAEFORD FARMS, INC., NOS. 12-1943; 12-1945; 12-1946

Decided: March 11, 2014

A group of former employees brought suit against Raeford Farms, Inc. d/b/a/ Columbia Farms, Inc. (“Columbia Farms”), a chicken processing plant in Greenville, South Carolina for the payment of unpaid wages and for unlawful retaliation against them after instituting workers’ compensation proceedings. The jury returned a verdict for the employees on the unpaid wages and retaliation claims. On appeal, the Fourth Circuit reversed the district court on the unpaid wages claims, finding that the Labor Management Relations Act (“LMRA”) preempted the employees’ state law claims. Additionally, the Fourth Circuit reversed the district court’s verdict regarding certain retaliation claims, but affirmed as to other employees.

Employees at Columbia Farms received wages under a collective bargaining agreement (“CBA”) negotiated by the United Food and Commercial Workers’ Union (the “Union”). In 2004, Columbia Farms negotiated a change in its “meal and rest policy” in exchange for a one-time raise to the employees’ hourly rate that changed the structure of employees’ breaks. The revised CBA also provided a grievance procedure with respect to any dispute “aris[ing] over the interpretation” of the CBA. The CBA did not specify how employees’ compensable time would be calculated, but Columbia Farms’ practice was to pay its employees based on their “line time,” meaning the time that they actually spent working on the production line. Hence, the employees were not compensated for time spent cleaning up, putting on protective gear, or walking to and from the production line. According to numerous employees, Columbia Farms never informed its employees that their hours were based solely on “line time.” A group of employees brought suit for wages due under the Fair Labor Standards Act (“FLSA”) and the South Carolina Wages Act (“Wages Act”). The FLSA claim was dismissed prior to trial, but the court allowed the Wages Act claims to be heard by the jury, over Columbia Farms’ arguments that the Wages Act was preempted by the LMRA. Columbia Farms’ appealed, arguing that the district court erred by not holding that the LMRA preempted the Wages Act.

On appeal, the Fourth Circuit agreed with Columbia Farms, holding that the LMRA preempted the Wages Act. The LMRA applies where a plaintiff’s entitlement to unpaid wages stems from the application and construction of a CBA. Under the Columbia Farms CBA, the employees were not allowed to have alternate contracts with Columbia Farms outside of the agreed terms of employment contained in the CBA. Thus, the CBA was the only contract that the court had to examine to determine whether employees were owed wages. The employees responded that their claims were not preempted by the LMRA because the Wages Act provides a remedy for failing to properly notify employees that they are to be paid according to line time. The Court disagreed, however, emphasizing that any determination regarding unpaid wages turned on the interpretation and application of the CBA, a remedy reserved exclusively for the LMRA. Furthermore, the employees failed to follow the grievance procedure proscribed by the CBA. Thus, the Fourth Circuit reversed the district court’s decision on the Wages Act claims and dismissed the claims.

Additionally, another group of employees alleged that the Columbia Farms terminated them as retaliation for instituting workers’ compensation proceedings in violation of South Carolina Code Annotated § 41-1-80. At trial, the district court found that Columbia Farms retaliated through its use of the “point system” designed to enforce its attendance policy. Under the point system, employees were terminated if they accumulated more than five “points.” Employees received points for violations of the attendance policy. Of particular importance was Columbia Farms’ application of a point to an employee who missed time with a medical excuse but who failed to provide at least two days notice. The employee would receive just one point for the entire excused absence, in contrast with an average absence for which the employee received one point per day. An employee received no points for workers’ compensation injuries, absences, or approved doctor’s visits when the employee visited the company doctor. Columbia Farms’ supervisors confirmed that they kept a list of employees who frequently visited the plant’s doctor for medical care. Two groups of employees complained about retaliation. The first group received first aid treatment from the plant nurse, sought private treatment when they were denied treatment from the plant doctor, and were terminated when the point that they received for their absence placed them above the five point threshold (“Group I Employees”). A second group of employees sustained workplace injuries, were seen by company doctors, and received accommodations for injuries sustained in their workplace injuries (“Group II Employees”). Columbia Farms terminated the Group II Employees after they were found away from their workstation seeking treatment for their injuries. The court found retaliation for both groups of employees. Columbia Farms appealed, arguing that there was insufficient evidence that the employees “instituted a workers’ compensation proceeding” and that the employees failed to adequately allege a causal connection between the workers’ compensation proceeding and termination.

On appeal, the Fourth Circuit reversed the district court’s retaliation award with respect to the Group I employees, but affirmed with respect to the Group II employees. With respect to the Group I employees, the court explained that the “instituting” of a workers’ compensation proceeding required more than simply receiving treatment for an injury. South Carolina law does not to so far as to require the formal filing of a workers’ compensation claim to give rise to a claim for retaliation, however. For example, an employer’s agreement to pay for medical care or the employer’s receipt of written notice from a health care provider are enough to give rise to a claim for retaliation. No South Carolina courts have held that conduct as insignificant as receiving treatment is sufficient to give rise to an action for retaliation. Furthermore, the Fourth Circuit held that the Group I employees failed to show that their termination “resulted from” instituting workers’ compensation proceedings. Although the employees received “points” for receiving medical treatment, the employees failed to show that the point system was a mechanism for retaliation rather than the uniform application of a company policy.

On the other hand, the Fourth Circuit affirmed the district court’s verdict for the Group II employees. Unlike the Group I employees, the Group II employees fell at work and were treated by the company doctor. In fact, one of the Group II employees even instituted a formal workers’ compensation proceeding. Furthermore, a supervisor at Columbia farms indicated that one of the Group II employees “would likely be terminated as a result of her injury.” Therefore, the Fourth Circuit upheld the district court’s verdict with respect to the Group II employees.

Full Opinion

– Wesley B. Lambert