Articles Posted in Unpaid Overtime

A recent unpaid overtime case originating in Tennessee placed into conflict two competing legal concepts:  an employee’s right to pursue collective action litigation under the Fair Labor Standards Act and an employer’s right to obtain employees’ waiver of their right to sue under the terms of contractual arbitration agreements. This case highlights some of the complexities that can arise in FLSA cases and the importance of retaining skilled Tennessee employment counsel, who can help guide you through the sometimes complicated process of navigating the procedural pathways required in taking on your case.

The lead plaintiff in this collective action case was a woman named Arvion. Arvion worked for two years as an hourly employee for a national chain of truck stops. Arvion’s case, like many unpaid overtime actions, involved allegations that the employer altered her time sheets to reduce the number of reported hours she had worked in a week, thereby dodging its obligation to pay her overtime. Furthermore, she alleged that the employer rolled back the number of reported hours of its hourly employees (in order to avoid paying overtime) as a matter of policy at locations across the country.

FLSA collective actions operate somewhat similarly to class actions. A lead plaintiff brings the case, identifies a group of employees who were harmed, and then contacts all of the members of that group to give them the opportunity to “opt in” to the collective action. (FLSA collective actions differ from class actions in that, unlike class actions in which class members must proactively opt out of the class action case, members of the group of similarly situated employees must proactively opt in to a collective action.)

A law student once joked with his law professor, who was discussing a topic that involved math skills, by interjecting, “Excuse me, sir. I must object. I was told there’d be no math (in law school).” While perhaps a good source of humor after a long day of legal studies, it’s actually not true. Many lawyers are very adept at math, including your Georgia wage-and-hour attorney. Compliance with the Fair Labor Standards Act means understanding many things, including some math. It also means knowing which mathematical calculation methods for determining compliance with minimum wage and overtime rules are allowed by the law, and which aren’t. In the case of a salesman who received commissions, the law required allocating his commissions to the month when he earned them, rather than just doing a calculation that averaged the salesman’s commissions across his entire 12-month period of employment.

The employee was a salesman who sold cruises for a cruise company. He held that job from December 2013 to December 2014. The job paid $500 per week plus monthly commissions. During his 12½ months of employment, the salesman earned roughly $70,000. While there were some months in which the salesman made as much as $11,000, there were others in which he made only $2,000.

He worked, on average, approximately 60 hours per week. The salesman sued his employer for violating the FLSA. The employer, the salesman contended, owed him overtime pay that it had not paid him. The employer, on the other hand, argued that the salesman was an exempt employee and, as a result, didn’t qualify under federal law to receive overtime pay.

A multi-million dollar class action case involving numerous Tennessee cable TV installers who were wrongly denied overtime pay will once again go before the Sixth Circuit Court of Appeals. In a very short order, the U.S. Supreme Court ordered the Sixth Circuit to take another look at the installers’ case in light of another case that, like the installers’ case, involved using statistical evidence to arrive at the amount of damages.

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The Fair Labor Standards Act allows employers to use various different methods to pay employees while still remaining compliant with the law. One of these methods is the “fluctuating workweek method,” or paying a base weekly salary to an employee regardless of the hours the employee worked. The key to using this method and remaining in compliance with the law is establishing a clear understanding about how the employee will be paid. In a recent 11th Circuit Court of Appeals case of note to Georgia employers and employees, the employee’s testimony in a deposition proved that the required level of “clear understanding” existed in this case, and the employer was not in violation of the law’s overtime pay rules.

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Recent court cases have addressed a steadily wider array of workers — from exotic dancers to NFL cheerleaders to home health workers to, most recently, a hip-hop music producer’s bodyguard — and whether those workers’ employment situations qualify them for the minimum wage and overtime protection of the Fair Labor Standards Act. The 11th Circuit Court of Appeals’ recent ruling in the bodyguard’s case upheld a lower court ruling in his favor, concluding that the guard’s employment situation clearly met the FLSA’s “economic dependence” standard for qualifying as an employee under the statute.

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Georgia employers and employees will soon be operating by a new set of rules when it comes to overtime pay for certain salaried employees. On May 18, the White House and the US Department of Labor announced new rules that will greatly expand the range of salaried employees who qualify to receive overtime. The new rules more than double the salary cap for eligible employees and, according to the White House, make an additional 4.2 million workers eligible for overtime. The White House also expects the new rules to increase earnings by roughly $12 billion over the next decade.

The rules governing salaried employees’ eligibility for overtime contain within them a maximum salary above which salaried workers cannot receive overtime pay. Prior to the adoption of the new rules, the salary cap was $23,660. The new rules hike that eligibility maximum to $47,476. These new rules arose from a 2014 Presidential Memorandum in which President Obama directed the Labor Department to update the regulations related to who is covered by the Fair Labor Standards Act’s overtime provisions. This was done in order to further “the President’s goal of ensuring workers are paid a fair day’s pay for a hard day’s work.”

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In a recent case (and a noteworthy one to Tennessee employers and employees) that continues the exploration of which employees are, or are not, qualified under the Fair Labor Standards Act to receive overtime pay, the Sixth Circuit Court of Appeals ruled that a bank’s failure to pay its residential mortgage loan underwriters overtime did not violate the FLSA. The underwriters performed tasks that were integral to one of the employer’s primary business objectives (lending money) and did their jobs using a substantial degree of discretion and independent judgment, so they were exempt from receiving overtime.

In this situation, a group of residential mortgage loan underwriters sued their employer, Huntington Bancshares, Inc., for failing to pay them overtime in violation of the FLSA. A federal district court in Ohio concluded that the underwriters were exempt from receiving overtime pay under 29 U.S.C. § 207(a)(1) because they qualified as administrative employees.

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Workers at a business that housed, raised, and sold worms for fishing bait lost another round in their case seeking compensation for unpaid overtime. The Sixth Circuit Court of Appeals agreed with a Chattanooga-based federal district judge that the agriculture exception to the Fair Labor Standards Act’s overtime pay requirement applied to the worm farm. The worm farm, the Sixth Circuit decided, reasonably resembled an ordinary agricultural operation in almost every relevant way. The only major difference was the unfamiliar item that the farm was farming.

The business under scrutiny in this case was one run by Bruno Durant, a French immigrant who relocated to Georgia to grow and raise worms that he then sold for use as fishing bait. After a decade in Georgia, Durant moved his operation to rural Tennessee. The business consisted of importing baby worms from Europe before housing and feeding them on his property in Tennessee. Once the worms reached maturity and grew to a sufficient size to be fit for sale as bait (roughly double their size during their time on Durant’s farm), the farm sold them to retailers.

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