PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

PATRICIA D. GRIFFIN; MICHAEL E.
POOLE; DAVID W. WRENCH;
PHILLIP A. ZIADY; REBECCA M.
ZIADY; FRANKIE BAILEY; RICKY V.
BOWLING; DARIN W. S. BRADLEY;
VIRGINIA K. BRUCHI; TIMOTHY WARD
BULLOCK; REBECCA A. CLAUSS;
BOBBY S. COCKRELL; CHRISTOPHER
ALLEN COLANGELO; STUART DOUGLAS
COWARD, IV; THOMAS EDWARD
DAVENPORT, II; TROY A. DAVIS;
SCOTT PETER DEL POZZO; PETER C.
EURE, JR.; EDITH P. EVANS; THOMAS
                                    No. 97-1136
TROY GARDNER; PATSY O. GENTRY;
MARK D. GOTTLIEB; JEFFREY STEPHEN
HAMERSTEIN; RICHARD G. HARDIN;
CHRISTOPHER D. HENDGES; ROHN F.
HULL; AMY ELIZABETH HUMPHREY;
FREDERICK C. HUTCHINS; MARK
KEVIN JUSTICE; JOSEPH S. KIMREY;
J. PAUL KUMHYR; WILLIAM S.
LANDON; CURTIS L. LOWE; DAVID
WILLIAM MINOR; DWIGHT E. MINOR;
EDWARD DENNIS MOXIN; MICHAEL
WILLIAM NORTON; BRYAN EVERETT
PERRY; WALLACE EARL PIPER;
CHRISTOPHER PAUL PITRE; ROBERT D.
POWERS; JERRY B. RADFORD; JOSEPH
W. ROBBINS, JR.; DWAYNE C. SMITH;
SCOTT C. TOTH; LEE M. VAN VLEET;
ARDIE C. WATKINS; PHILIP WAYNE
WHEELER; SEAN ROIBIN WOOLRICH,
Plaintiffs-Appellants,

v.

WAKE COUNTY,
Defendant-Appellee.

Appeal from the United States District Court
for the Eastern District of North Carolina, at Raleigh.
Terrence W. Boyle, Chief District Judge.
(CA-96-281-5-BO)

Argued: March 6, 1998

Decided: April 27, 1998

Before WILKINSON, Chief Judge, MICHAEL, Circuit Judge, and
CLARKE, Senior United States District Judge for the Eastern
District of Virginia, sitting by designation.

_________________________________________________________________

Affirmed by published opinion. Chief Judge Wilkinson wrote the
opinion, in which Judge Michael and Senior Judge Clarke joined.

_________________________________________________________________

COUNSEL

ARGUED: Marvin Schiller, Raleigh, North Carolina, for Appellants.
Shelley Tager Eason, WAKE COUNTY ATTORNEY'S OFFICE,
Raleigh, North Carolina, for Appellee. ON BRIEF: Michael R. Fer-

                    2
rell, WAKE COUNTY ATTORNEY'S OFFICE, Raleigh, North Car-
olina, for Appellee.

_________________________________________________________________

OPINION

WILKINSON, Chief Judge:

A class of emergency medical technicians (EMTs) employed by
Wake County, North Carolina, allege that the County erroneously
paid them a half-time overtime premium according to the "fluctuating
workweek" pay plan rather than the standard time-and-a-half over-
time compensation under the Fair Labor Standards Act (FLSA), 29
U.S.C. § 207(a)(1). Finding no violation of the FLSA, we affirm the
judgment of the district court dismissing the suit.

I.

Plaintiffs are or were employed by the County as EMTs. According
to a preset written schedule, the County's EMTs work twenty-four
hours on, twenty-four hours off, twenty-four hours on, twenty-four
hours off, twenty-four hours on, and then ninety-six hours (four days)
off. Thus, the EMTs work either forty-eight or seventy-two hours in
any given week throughout the year.

Since February 1, 1990, the County has utilized the"fluctuating
workweek" pay plan, a recognized method of compensation under the
FLSA. See 29 C.F.R. § 778.114. The plan allows employees the
advantages of a base salary irrespective of the hours worked along
with some overtime pay for hours in excess of forty per week. The
system enables the employer to place workers on a variable schedule
tailored to the nature of their work without incurring prohibitive over-
time costs for weeks in which the hours are the longest.

Under this plan EMTs are paid a flat weekly salary as straight-time
pay for the hours they work each week, whether forty-eight, seventy-
two, or some other number. In addition, EMTs are paid an overtime
premium of one-half their regular hourly rate for hours worked in
excess of forty per week. If EMTs do not work all their scheduled

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hours, the County deducts time from available sick leave and vacation
balances.

Plaintiffs filed suit alleging that the County could not avail itself
of the fluctuating workweek plan (1) because EMTs work a set, alter-
nating schedule rather than irregular hours each week and (2) because
the plan was "unilaterally imposed." Plaintiffs subsequently sought to
add two other allegations to the complaint: (1) that EMTs lacked the
requisite "clear mutual understanding" of the fluctuating workweek
plan and (2) that the County impermissibly deducted from vacation
and leave balances when EMTs worked less than their scheduled
hours. The district court granted the County's motion to dismiss under
Fed. R. Civ. P. 12(b)(6). Reasoning that the EMTs could not prevail
on any of their claims, the court denied plaintiffs' motion to amend
the complaint on grounds of futility and denied plaintiffs' motion for
partial summary judgment. The EMTs now appeal.1

II.

This circuit has considered the fluctuating workweek pay plan in
several recent cases. Flood v. New Hanover County outlined the con-
ditions for using the plan:

           The language of section 778.114 suggests that an
           employer must meet the following requirements before it
           can pay an employee pursuant to the fluctuating workweek
           method: 1) the employee's hours must fluctuate from week
           to week; 2) the employee must receive a fixed weekly salary
           that remains the same regardless of the number of hours that
           the employee works during the week; 3) the fixed amount
           must be sufficient to provide compensation at a regular rate
           not less than the legal minimum wage; 4) the employer and
           the employee must have a clear, mutual understanding that
           the employer will pay the employee the fixed weekly salary
           regardless of the hours worked; and 5) the employee must
           receive a fifty percent overtime premium in addition to the
_________________________________________________________________
1 The EMTs do not appeal the dismissal of their claim that they were
retaliated against for filing this FLSA action.

                    4
          fixed weekly salary for all hours that the employee works in
          excess of forty during that week.

125 F.3d 249, 252 (4th Cir. 1997) (citing 29 C.F.R.§ 778.114; Condo
v. Sysco Corp., 1 F.3d 599, 601-02 (7th Cir. 1993)). Flood also con-
firmed that "section 778.114 does not represent an `exception' to
FLSA. It merely provides an alternative means by which an employer
can determine its employees' regular and overtime rate of pay." Id.
In their original and proposed amended complaints, the EMTs allege
several violations of section 778.114.

A.

First, the EMTs charge the County has not satisfied the first Flood
condition, that their "hours must fluctuate from week to week." 125
F.3d at 252; see also 29 C.F.R. § 778.114. The EMTs assert that
because their work schedule fluctuates in a predictable manner, rather
than in a wholly irregular and unpredictable manner, the County can-
not use the fluctuating workweek pay plan. Flood rejected an identi-
cal claim, adopting the position of the Wage and Hour Division of the
Department of Labor "that section 778.114 does not require an unpre-
dictable schedule," 125 F.3d at 253. The regulation merely requires
a schedule that fluctuates, as the EMTs' unquestionably does.

B.

The EMTs next allege a violation of the fourth Flood condition,
that "the employer and the employee must have a clear, mutual under-
standing that the employer will pay the employee the fixed weekly
salary regardless of the hours worked." Id. at 252; see also 29 C.F.R.
§ 778.114. This claim also fails.

In the original complaint the EMTs object that the County "unilat-
erally imposed" the fluctuating workweek pay plan. Plaintiffs appear
to suggest that there was no "clear mutual understanding" of the plan
because they were not asked to consent to the plan, but rather were
told about it. But this argument confuses understanding with agree-
ment, and the regulation speaks only in terms of the former. We are
unable to find, and the EMTs have not identified, any case in which

                    5
a court has required that employees consent to the fluctuating work-
week plan to satisfy section 778.114 -- employees need only under-
stand it.

In their amended complaint the EMTs refine the claim that they
lack the "clear mutual understanding" of the fluctuating workweek
plan required by section 778.114. This circuit confirmed in Bailey v.
County of Georgetown that this prong of section 778.114 only
requires employees to understand the essential feature of the fluctuat-
ing workweek plan -- "that the fixed salary is compensation (apart
from overtime premiums) for the hours worked each workweek,
whatever their number, rather than for working 40 hours or some
other fixed weekly work period." 94 F.3d 152, 156 (4th Cir. 1996)
(quoting 29 C.F.R. § 778.114). This basic message was communi-
cated to Wake County's EMTs in several ways.

When the fluctuating workweek pay plan was implemented in
1990, the County took pains to explain it to employees. The plan was
introduced at mandatory employee meetings, at which EMTs received
an explanatory memorandum from the County's Emergency Medical
Services Director, Gerald Brown. This memorandum indicates --
twice -- that the weekly base salary reflects straight-time pay for
"whatever" number of hours were worked during the week and pro-
vides sample calculations of overtime under the plan. Plaintiffs make
much of the fact that some examples in the memorandum refer to
forty-eight and seventy-two hours. This is hardly surprising, as it
reflects the schedule EMTs customarily work. And the memorandum
nowhere suggests that EMTs must work these hours, and not less, in
order to receive their base salary. In fact, the memorandum plainly
states "your weekly base salary reflects straight-time pay for whatever
number of hours you work during the week." The Assistant Director
for Operations of the County's Emergency Medical Services, Lin-
wood E. Barham, provided this memorandum to EMTs hired after the
fluctuating workweek plan went into effect. He also explained the
fluctuating workweek plan to all candidates for EMT positions, say-
ing, in part: "To determine your weekly pay for regular hours worked,
divide your annual salary by 52. You will be paid this figure even if
you work less than forty hours." Thus either when the fluctuating
workweek plan was adopted or when EMTs were hired, the County
plainly communicated to its EMTs the essence of the plan: EMTs

                    6
would receive the same amount of base pay each week they worked
any regular hours, regardless of the number of hours worked. More-
over, the County took the additional step of asking EMTs to sign a
copy of the explanatory memorandum, indicating "The Fluctuating
Workweek Pay Plan (29 C.F.R. 778.114) has been explained to me
and I have had an opportunity to have any questions answered." Writ-
ten acknowledgments are not required to satisfy section 778.114.
Bailey, 94 F.3d at 156 ("Nor do the regulation and the FLSA in any
way indicate that an employer must secure from its employees written
acknowledgments indicating that the employees' pay plan has been
explained to them."). But securing such acknowledgments is certainly
probative of the employees' clear understanding of the fluctuating
workweek plan. See Highlander v. K.F.C. Nat'l Management Co.,
805 F.2d 644, 648 (6th Cir. 1986) (finding clear mutual understanding
when employee signed form explaining calculation of overtime under
the fluctuating workweek method); cf. Condo, 1 F.3d at 602 n.4 (not-
ing importance of the fact that employment contract contained chart
illustrating method of overtime pay). By taking this extra step, the
County further established its employees' clear understanding of the
fluctuating workweek plan.

Nor can we overlook the fact that Wake County implemented the
fluctuating workweek plan nearly eight years ago. In these eight years
the EMTs have not identified a single instance of the County paying
an EMT less than his full salary for a week in which he performed
any regular work. Thus, since 1990, the EMTs have received a regular
lesson -- in the form of their paychecks -- about how the fluctuating
workweek plan operates. This circuit noted in Monahan v. County of
Chesterfield that "an employer can also demonstrate the existence of
this clear mutual understanding from employment policies, practices,
and procedures." 95 F.3d 1263, 1275 n.12 (4th Cir. 1996). The EMTs
lived with the fluctuating workweek plan for nearly six years before
filing this lawsuit in 1996. Thus "it is clear from [the EMTs'] actions
that [they] understood the payment plan in spite of after-the-fact ver-
bal contentions otherwise." Id. at 1281 n.21.

The EMTs seek to shore up their claims with the County's so-
called "admission" that the pay plan is confusing and with the charge
that some supervisors misunderstood the details of overtime calcula-
tion under the plan. But this argument reads too much into the

                    7
requirement of a "clear mutual understanding" outlined in section
778.114. Bailey clarified that "[n]either the regulation nor the FLSA
in any way indicates that an employee must also understand the man-
ner in which his or her overtime pay is calculated." 94 F.3d at 156.
That is to say, the regulation does not require an employer to make
all employees personnel specialists. "Further, we do not find that the
FLSA places the burden on the employer to hold an employee's hand
and specifically tell him or her" precisely how the payroll system
works, particularly "if that fact can be easily gleaned from employ-
ment policies, practices, and procedures," Monahan, 95 F.3d at 1275.
It is enough if, as here, the employer "provide[d] its employees with
a reasonably clear and accurate explanation of their compensation,"
Roy v. County of Lexington, 928 F. Supp. 1406, 1419, vacated in part
on other grounds, 948 F. Supp. 529 (D.S.C. 1996), aff'd, ___ F.3d
___, 1998 WL 170143 (4th Cir. Apr. 14, 1998), and paid its employ-
ees according to that system of compensation, Monahan, 95 F.3d at
1275, 1281.

In light of the diligent efforts the County took to inform the EMTs
about the fluctuating workweek plan, and in the face of the County's
careful administration of the plan over eight years, plaintiffs cannot
now claim that they have never understood they would receive the
same base salary each week they worked, whether it was a short or
long one. Any misunderstanding of the plan's details is certainly not
due to the County's lack of trying to explain it. A challenge to the
County's entire pay system cannot proceed on the basis of an occa-
sional misstatement or alleged confusion about the technical details
of administering the fluctuating workweek plan. If it could, nearly
every employer who uses this plan would be open to a lawsuit based
on little more than "after-the-fact verbal contentions" that employees
do not understand the plan in all of its particulars.2 See id. at 1281
n.21.
_________________________________________________________________
2 While the EMTs have alleged that they did not understand the compli-
cated details of the plan, this alone is insufficient. The regulation requires
a clear mutual understanding of only the basic message that employees
will be paid a fixed amount of straight-time weekly pay if they work any
regular hours during the week. The regulation does not require an under-
standing of anything more. Because the EMTs have not alleged that they
lacked a clear mutual understanding of this essential feature of the fluctu-
ating workweek plan, the regulation is satisfied. As a result, they fail to
state a claim upon which relief may be granted.

                    8
C.

Finally, the EMTs allege that deductions from available leave or
vacation balances taken when they did not show up for scheduled
shift work somehow violate section 778.114. Specifically, the EMTs
complain:

         Whenever I took a one (1) week vacation which occurred
         during a week when I was scheduled to work seventy-two
         (72) hours, my earned vacation time was subtracted by
         seventy-two (72) hours.

         Whenever I took a one (1) week vacation when I was
         scheduled to work forty-eight (48) hours, my earned vaca-
         tion time was subtracted by forty-eight (48) hours.

         If I took vacation for part of a week when I was sched-
         uled to work for seventy-two (72) hours, but only worked
         forty-eight (48) hours, my earned vacation time was sub-
         tracted by twenty-four (24) hours.

         The deduction of earned sick time would occur on the
         same basis.

Plaintiffs do not allege that their pay was ever docked for these
absences. And section 778.114 does not mention leave or vacation at
all -- it only governs the pay that employees receive. See 29 C.F.R.
§ 778.114. Likewise, the authority on which plaintiffs rely, a Depart-
ment of Labor Letter Ruling dated May 18, 1966, and Yourman v.
Dinkins, 865 F. Supp. 154, 165 & n.20 (S.D.N.Y. 1994), aff'd, 84
F.3d 655 (2d Cir. 1996), vacated sub nom. Giuliani v. Yourman, 117
S. Ct. 1078 (1997), addresses only deductions from pay, not leave or
vacation.3 Wake County has voluntarily provided its EMTs with the
extra benefit of paid vacation and sick leave. The EMTs now claim
that the County violates federal law when it requires its employees to
draw down their accrued leave or vacation balances when they exer-
_________________________________________________________________
3 Deductions from pay are also consistent with the fluctuating work-
week plan, if the employee does no work at all in a given week. See
Department of Labor Letter Ruling dated May 18, 1966.

                   9
cise this benefit. Unlike deductions from base pay, such deductions
from leave simply do not constitute a violation of section 778.114. To
countenance the EMTs' claim to the contrary would beg the question
how, if at all, any system of earned vacation time is to operate if an
employer may not deduct from it when an employee takes a vacation.

III.

The EMTs' original complaint was properly dismissed as legally
insufficient. The EMTs' amended complaint fails to cure this defi-
ciency, so the district court properly denied leave to amend. We there-
fore affirm the judgment of the district court.

AFFIRMED

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