Last week, President Obama directed the U.S. Department of Labor to revise and modernize the “white- collar” overtime exemptions of the Fair Labor Standards Act to extend overtime benefits to a broader range of workers. This alert summarizes the President’s Memorandum, outlines what employers might expect in the coming months, and reminds employers to remain
Second Circuit Requires Specificity In FLSA Pleading
In Lundy v. Catholic Health System of Long Island Inc., Plaintiffs – a respiratory therapist and two nurses – sued on behalf of a putative class of similarly situated employees and alleged that the Catholic Health System of Long Island, Inc. (a collection of hospitals and healthcare providers) failed to compensate them for time worked during meal breaks, before and after scheduled shifts, and during required training sessions, which they alleged brought them over the 40 hour overtime threshold on occasion. They sought, among other things, overtime and “gap-time” pay (i.e., unpaid hours worked below the 40-hour overtime threshold).
U.S. Supreme Court Grants Review on Important Mootness Issue
The U.S. Supreme Court recently granted review in a Fair Labor Standards Act (FLSA) case in order to decide whether a case becomes moot, and thus beyond the judicial power of Article III of the United States Constitution, when the lone plaintiff receives an offer from the defendants to satisfy all of the plaintiff’s claims. The Court’s eventual answer to that question may have a significant impact not only in FLSA cases, but in Rule 23 class actions as well. We previously discussed this issue here: https://classactions.proskauer.com/2011/09/01/decapitating_class_actions/
Supreme Court Finds Pharmaceutical Sales Representatives Exempt From Overtime; Department of Labor’s Interpretation of FLSA Regulations Not Entitled To Any Deference
In a much-anticipated decision in Christopher v. SmithKline Beecham Corp., on June 18, 2012, the U.S. Supreme Court held 5-4 that pharmaceutical sales representatives are exempt from overtime under the Fair Labor Standard Act’s outside sales exemption because they “make sales” under the most reasonable interpretation of the law. In its holding, the Court unanimously ruled that the Department of Labor’s interpretation of its own regulations – put forward for the first time in an amicus brief – was not entitled to deference, and instead relied on its own analysis of the relevant FLSA provisions and regulations as to what it means to “make sales.”
Supreme Court Hears Oral Argument On Whether Pharmaceutical Sales Representatives Are Exempt From Overtime
Yesterday, in a packed courtroom, the United States Supreme Court heard oral argument in Christopher v. SmithKline Beecham Corp., No. 11-204 (on appeal from the Ninth Circuit) to determine whether the pharmaceutical industry has been properly classifying its sales representatives as “exempt” from overtime for the past 75 years under the Fair Labor Standards Act’s outside sales exemption. In addition, the Court considered what deference, if any, to give to the Department of Labor’s interpretation of the outside sales exemption regulations, and its position, explained for the first time in an amicus brief filed in a similar action before the Second Circuit, that sales reps do not “make sales” within the meaning of the statute because they do not transfer title or physically sell pharmaceutical products to the ultimate end users.
Third Circuit Signals End To “Hybrid” Class Action Debate
In February 2011, we previously posted about two decisions from Hon. John E. Jones III, of the Middle District of Pennsylvania, who ruled that FLSA collective actions are inherently incompatible with state law wage and hour claims when brought in the same action – i.e., so-called dual-filed or “hybrid” class actions. [Insert Link to February 24, 2011 Post] Judge Jones reasoned that Congress’s intent in requiring FLSA claims to be decided on an opt-in only basis meant that FLSA actions were incompatible with allowing the same plaintiffs to pursue state claims based on the same underlying conduct but on an opt-out basis, because to do so would nullify Congress’s command and would usurp employers’ substantive rights under the FLSA.