Tag Archives: FLSA

District Court Rules That FLSA Cases Can Be Dismissed Based On Private Settlements, But Employers "Take Their Chances" On Enforcement.

By Michael D. Thompson

The prohibition against private settlements of FLSA claims was scrutinized again last week, when U.S. District Court for the Eastern District of New York held that parties could voluntarily dismiss an FLSA lawsuit without obtaining approval of the settlement agreement from the court.  Picerni v. Bilingual SEIT & Preschool Inc.

Courts in FLSA cases have historically expressed the concern that individual waivers of FLSA rights would enable employers to use their superior bargaining power to extract individual waivers from their employees and “thwart the legislative policy [that the FLSA] was designed to effectuate.”  Brooklyn Sav. Bank v. O’Neill

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Modifying Workweeks to Avoid Overtime: Employers Should Still Proceed With Caution

By:  Elizabeth Bradley

The U.S. Court of Appeals for the Eighth Circuit recently confirmed that the Fair Labor Standards Act (“FLSA”) does not prohibit an employer from modifying its workweek in order to avoid overtime costs. The Court’s ruling in Redline Energy confirms that employers are permitted to modify their workweeks as long as the change is intended to be permanent. Employers are not required to set forth a legitimate business reason for making the change and are permitted to do so solely for the purpose of reducing their overtime costs. The only requirement on employers is that the change must be intended to be permanent.

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Landmark Fifth Circuit Ruling Allows Private FLSA Settlements Without DOL/Court Supervision

By: Greta Ravitsky and Jordan Schwartz

On July 24, 2012, the Fifth Circuit became the first federal appellate court in over thirty years to enforce a private settlement of a wage and hour dispute arising under the Fair Labor Standards Act (“FLSA”) in Martin v. Spring Break ’83 Productions LLC.

For decades, federal courts have consistently held that FLSA wage and hour disputes may not be settled privately without approval from either the Department of Labor (“DOL”) or a federal district court.  This apparently “settled” area of law was based exclusively on the Eleventh Circuit’s decision in Lynn’s Food Stores, Inc. v. United States. As a result, courts and employment attorneys alike have cautioned employers to undertake a private resolution of an FLSA dispute at their own peril.  Until now, the Eleventh Circuit wasthe only court of appeals that had ruled on this issue. In this recent groundbreaking decision, the Fifth Circuit declined to apply Lynn’s Food Stores’ requirement of supervision and approval of private settlements, finding that a private settlement unapproved by either the DOL or federal district court can be enforceable under certain circumstances.

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Harley Storrings quoted in Society for Human Resource Management newsletter on FLSA lawsuits

Arnstein & Lehr Attorney Harley Storrings

Harley Storrings

Arnstein & Lehr Miami Partner Harley Storrings was quoted in the July issue of The Society for Human Resource Management newsletter. The article, titled “FLSA: The Dinosaur in the Room,” discusses the Fair Labor Standards Act of 1938 and the increase in lawsuits as the law has increasingly fallen out of step with the modern workplace. Regarding off-the-clock work, Mr. Storrings comments that broad interpretations of what constitutes de minimis work are problematic because in many cases responding to certain e-mails and phone calls immediately is imperative.

To read the article in full, please click here.

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Supreme Court Will Decide Whether an Employer Can Moot an FLSA Collective Action With an Offer of Judgment to the Plaintiff

By Amy Traub, Michael Kun and Anna Kolontyrsky

As employers know, not only are FLSA collective actions more prevalent than ever, but they can be costly to defend or resolve.  In an attempt to bring quick closure to such cases, somedefendants have attempted to settle such claims with the individual plaintiff alone through a Rule 68 offer of judgment before a class has been conditionally certified.

This strategy has come under attack.  And the United States Supreme Court will now determine whether it is permissible.

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Seventh Circuit: Pharmaceutical Sales Representatives Are Exempt Because They Use Significant Discretion In Visits With Physicians.

By Michael Thompson

The Seventh Circuit has ruled that pharmaceutical sales representatives are covered by the Administrative exemption to the FLSA because “the core function of the representatives’ duties, the physician office visits,” requires significant discretion and independent judgment. While other courts have applied a case specific analysis to determine the applicability of the Administrative exemption in this context, the Seventh Circuit’s analysis appears to be applicable to virtually all sales representatives in the pharmaceutical industry. Indeed, without separate analyses, the Court of Appeals dismissed two distinct class actions (against Eli Lilly and Abbott Laboratories) in one fell swoop.

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In the Name of "Fairness," a New Jersey Federal Court Strikes the Confidentiality and Release Provisions from a Fair Labor Standards Act Settlement Agreement

By: Douglas Weiner and Meg Thering

In one of the many “wrinkles” in Fair Labor Standards Act (“FLSA”) litigation, settlements of wage and hour disputes between an employer and its employees are only enforceable if supervised by the U.S. Department of Labor or approved by a court. Courts will approve settlements if they are “fair”; however, as demonstrated in a recent decision arising out of New Jersey – Brumley v. Camin Cargo Control – courts may need to be reminded that employers also have rights and legitimate interests. The Brumley Court took what was a bargained-for exchange between both parties and turned it into what could only be considered a one-sided deal, good only for the plaintiffs. 

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Gaga about the FLSA

Lady_Gaga_on_Fame_Ball_Courtesy of Wikipedia.org.jpgEmployment lawyers don’t often get a chance to write about pop superstars, but as it turns out the Fair Labor Standards Act is providing just such an opportunity.

In December 2011, Lady Gaga’s personal assistant, Jennifer O’Neill, filed a lawsuit against Lady Gaga’s touring company claiming that she is owed more that $350,000 in unpaid overtime under the Fair Labor Standards Act and New York State Labor Law.

What’s the crux of the dispute?  

Well, really it’s not much different than those faced by many “more traditional” employers.  The former personal assistant claims that she was misclassified as an “exempt” employee when she was actually non-exempt.  As a result, she alleges that she is owed over 7,000 hours of overtime compensation for time that she spent attending to Lady Gaga at “stadiums, private jets, fine hotel suites, yachts, ferries, trains, and tour buses.”  

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The Department of Labor Issues Proposed Rule Expanding FLSA Coverage to Companionship and Live-In Workers

By: Dean Silverberg, Evan Spelfogel, Peter Panken, Douglas Weiner and Donald Krueger

Reversing its prior stance, the U.S. Department of Labor (“DOL”) proposes to extend the minimum wage and overtime requirements of the Fair Labor Standards Act (“FLSA”) to domestic workers who provide in-home care services to the elderly and infirm. See Notice of Proposed Rulemaking to Amend the Companionship and Live-In Worker Regulations. In 1974, when domestic service workers were first included in FLSA coverage, the DOL published regulations that provided an exemption for such “companions”, whether employed directly by the families of the elderly and infirm, or by a third party employer/staffing agency. Now, heeding calls from organized labor and certain members of Congress, the DOL is moving to close this “loophole.” See“Is the Department of Labor Considering a Revision to the Domestic Service Exemption for Home Health Care Aides?” .

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The Discretion to Formulate Business Strategies Remains Critical to the Status of Pharmaceutical Sales Representatives

By:  Michael Thompson

In Ibanez v. Abbott Laboratories, Inc., the Eastern District of Pennsylvania issued the latest ruling in the ongoing dispute over whether pharmaceutical sales representatives are exempt from the overtime requirements of the FLSA.

The plaintiff in Ibanez was a former sales representative for Abbott.  Among other things, the plaintiff helped create “business plans which tracked doctors by market share and potential.”  The plaintiff also developed “game plan[s] or strateg[ies] for individual calls with physicians.”  Thus, the District Court ruled that the plaintiff exercised significant independent discretion, and therefore fell within the Administrative exemption of the FLSA. 

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