A Victory For Garbage Collectors | High court rules against no-overtime policy
Garbage truck drivers around the state — including in Ashland, Fitchburg, Framingham, Gardner and Natick — can expect to see some extra money in their paychecks soon.
A recent decision by the state’s Supreme Judicial Court invalidates the formula that Waste Management, one of the major trash haulers in Massachusetts, has used for years to calculate employees’ pay. Now, the company has changed the way it pays the workers, and it will eventually give them a sizeable chunk of back pay.
Eliminating Overtime
Until the SJC decision, the formula Waste Management used to determine its employees’ wages effectively meant they didn’t get extra money for overtime.
As required by law for employers working under municipal contracts, it paid workers the prevailing wage, but it then used a different pay rate to determine their overtime. The outcome was that even if a driver worked 50 hours a week, their pay could average out at exactly the prevailing wage – not the prevailing wage plus time-and-a-half — for all those hours.
Prevailing wages, which are set by the state as a way to ensure that people who work indirectly for the government aren’t treated unfairly, vary from community to community and from job title to job title.
Heidi Goldstein Shepherd, a lawyer with Goodwin Procter LLP who represents Waste Management, said in an e-mail message that the company had good reason to believe it was complying with the law. She said prevailing wage and overtime laws are separate statutes that have nothing to do with one another. Besides, she said, the company worked with the Attorney General’s office in developing its pay formula.
But F. Henry Ellis, the Dedham-based attorney who represented the plaintiffs in the case, said he was sure the pay formula was illegal from the day, nearly three years ago, that two garbage truck drivers knocked on his door and asked him to take a look at it. He said no other garbage companies use a system like Waste Management’s.
“Frankly I think it’s for the simple reason that it’s so blatantly illegal,” he said.
Marc Pellegrino of P. Pellegrino Trucking Co. in Shrewsbury, said he doesn’t know anything about how Waste Management does business, but he said his company has always set its overtime rates using the prevailing wage as the base level.
“Prevailing wage is one of the top things companies like ours in the waste industry would have to look at and make sure all our numbers are correct before we submit anything,” he said.
Shepherd said she’s also uncertain whether any other companies used payment formulas similar to Waste Management’s, and that makes it unclear if the SJC decision will have an impact beyond the company.
Another thing that remains unclear is what the SJC decision will end up costing Waste Management. Shepherd said the company is now calculating how much back pay it owes.
Ellis said the lower court charged with determining how much the company owes could end up demanding $6 million or more, to be divided among 500 or 600 drivers. He said the amount depends on whether the court decides to ask for just the back pay owed, or for double or triple that amount. Not surprisingly, Ellis hopes it chooses the latter.
“If they only have to pay what they owned in the first place there’s really no punishment,” he said.
From Waste Management’s perspective, of course, there’s no reason for punishment because the way they were doing things seemed acceptable. But to Ellis it seems equally clear that the company was taking advantage of workers to keep its prices down.
“It’s one thing to try to be very competitive and keep your costs down in a legal way,” he said, “But when you do it on the backs of your workers and make them work 50, 60 hours a week, that is in my opinion unconscionable.”
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