Fair Labor Standards Act Does Not Cover "Gap Time" Claims and Requires Specificity in Pleading: Third Circuit | Practical Law

Fair Labor Standards Act Does Not Cover "Gap Time" Claims and Requires Specificity in Pleading: Third Circuit | Practical Law

This wage and hour update discusses Davis v. Abington Memorial Hospital, in which the US Court of Appeals for the Third Circuit affirmed the district court's finding that plaintiffs who did not allege that they worked extra hours during a typical 40-hour workweek failed to state a plausible claim for overtime under the Fair Labor Standards Act (FLSA). The court also held that no FLSA cause of action was available for "gap time" claims, but did not address the possibility that the plaintiffs' claims might constitute claims for "overtime gap time" because the plaintiffs did not satisfy the pleading standard for overtime hours.

Fair Labor Standards Act Does Not Cover "Gap Time" Claims and Requires Specificity in Pleading: Third Circuit

by Practical Law Labor & Employment
Published on 02 Sep 2014USA (National/Federal)
This wage and hour update discusses Davis v. Abington Memorial Hospital, in which the US Court of Appeals for the Third Circuit affirmed the district court's finding that plaintiffs who did not allege that they worked extra hours during a typical 40-hour workweek failed to state a plausible claim for overtime under the Fair Labor Standards Act (FLSA). The court also held that no FLSA cause of action was available for "gap time" claims, but did not address the possibility that the plaintiffs' claims might constitute claims for "overtime gap time" because the plaintiffs did not satisfy the pleading standard for overtime hours.
On August 26, 2014, in Davis v. Abington Memorial Hospital, the US Court of Appeals for the Third Circuit affirmed the district court's finding that plaintiffs who were unable to show that they worked extra hours during a typical 40-hour workweek failed to state a plausible claim for overtime under the FLSA. The Third Circuit did not address the possibility that the plaintiffs' gap time claims might constitute claims for "overtime gap time" because the plaintiffs did not plausibly allege that they worked overtime in any given week. (12-3522, (3d Cir. Aug. 26, 2014).)

Background

The plaintiffs are nurses and other patient-care professionals, on behalf of a putative class. The defendants are healthcare systems and affiliates (the nurses and other patient-care professionals' alleged employers). The plaintiffs allege that their employers implemented timekeeping and pay policies that failed to compensate them for all hours worked in violation of the FLSA and Pennsylvania law. Specifically, the plaintiffs allege that the defendants maintained the following three unlawful timekeeping and pay policies (the Policies):
  • Meal Break Deduction Policy. Under this policy the defendants' timekeeping system automatically deducted 30 minutes of pay daily for meal breaks, without ensuring that the employees actually received a break.
  • Unpaid Pre- and Post-schedule Work Policy. Under this policy the defendants prohibited employees from recording time worked outside of their scheduled shifts.
  • Unpaid Training Policy. Under this policy the defendants did not pay employees for time spent at allegedly compensable training sessions.
Because of the Policies, the plaintiffs allege that they regularly worked both under and over 40 hours per week and were not paid for all of those hours.
The district court:
  • Dismissed the plaintiffs' FLSA claims with prejudice on the grounds that plaintiffs did not plausibly allege:
    • employer-employee relationships between plaintiffs and all of the defendants; or
    • that any of the named plaintiffs had worked overtime and were not compensated.
  • Declined to exercise supplemental jurisdiction over the Pennsylvania state law claims, dismissing those claims without prejudice.
The plaintiffs appealed to the Third Circuit, arguing that:
  • The defendants did not compensate them for hours worked in excess of 40 per week, including compensable time during meal breaks, at training programs and outside of their scheduled shifts.
  • Their claims for gap time are within the scope of the FLSA.

Outcome

The Third Circuit:
  • Affirmed the district court's dismissal of the plaintiffs' FLSA overtime claims.
  • Held that plaintiffs had no FLSA cause of action for "pure" gap time wages.
  • Declined to address whether the plaintiffs' gap time claims were for "overtime gap time" because the plaintiffs did not plausibly allege that they worked overtime in any given week.
The Third Circuit observed that:
The Third Circuit concluded that:
  • It agrees with the middle-ground approach taken by the Second Circuit in Lundy v. Catholic Health System of Long Island Inc., in which the court held that to state a plausible FLSA overtime claim, a plaintiff must sufficiently allege 40 hours of work in a given workweek and some uncompensated time in excess of the 40 hours (711 F.3d 106 (2d Cir. 2013)).
  • It disagrees with the plaintiffs' argument that, because they allege they "typically" worked full time shifts of between 32 and 40 hours per week and "frequently" worked extra time, it is plausible that at least some of their uncompensated work was performed during weeks when their total work time was more than 40 hours.
  • None of the named plaintiffs has alleged a single workweek in which he worked at least 40 hours and also worked uncompensated time in excess of 40 hours. Of the plaintiffs who allege that they typically worked at least 40 hours per week, in addition to extra hours frequently worked during meal breaks or outside of their scheduled shifts, none indicates that he, in fact, worked extra hours during a typical 40-hour workweek. Their allegations are therefore insufficient, as other courts have held, for example:
    • Lundy, in which the court held that to state a plausible FLSA overtime claim, a plaintiff must sufficiently allege 40 hours of work in a given workweek as well as some uncompensated time in excess of the 40 hours (711 F.3d at 114); and
    • Nakahata v. New York-Presbyterian Healthcare System, Inc., in which the court held that plaintiffs must provide sufficient detail about the length and frequency of their unpaid work to support a reasonable inference that they worked more than 40 hours in a given week (723 F.3d 192, 201 (2d Cir. 2013)).
  • A plaintiff need not identify the exact dates and times that he worked overtime. For example, a plaintiff's claim that he "typically" worked 40 hours per week, worked extra hours during such a 40-hour week, and was not compensated for extra hours beyond the 40 hours he worked during one or more of those 40-hour weeks, is enough. Because the plaintiffs made no such allegation, the district court did not err in dismissing their claims for overtime under the FLSA.
Regarding the plaintiffs' argument that their claims for gap time are within the scope of the FLSA, the Third Circuit concluded that:
  • Courts widely agree that there is no cause of action under the FLSA for "pure" gap time wages (Nakahata, 723 F.3d at 201). "Gap time" is non-overtime hours an employee works but for which he is not compensated. For example, if an employee is normally scheduled to work 37.5 hours, and works 39, but receives the same compensation as weeks in which he works 37.5 hours, he might claim 1.5 hours of straight-time pay for this "gap time." However, if the employee's hourly rate is high enough that he still averages more than the FLSA minimum for each hour worked, he has no viable claim. The FLSA does not govern wages that do not fall below the statutory minimum or hours that do not exceed the overtime threshold.
  • Some courts have recognized gap time claims by employees who exceed the overtime threshold, but whose employment contracts do not compensate them for all non-overtime hours, for example Monahan v. Cnty. of Chesterfield, Va., 95 F.3d 1263, 1272-73 (4th Cir. 1996); Valcho v. Dallas Cnty. Hosp. Dist., 658 F.Supp.2d 802, 811-12 (N.D.Tex. 2009) and Koelker v. Mayor & City Council of Cumberland, 599 F.Supp.2d 624, 635 (D.Md. 2009).
  • It agrees with existing authority and holds that pure gap time claims are outside the scope of the FLSA. The district court's finding, that, to the extent the plaintiffs seek recovery under the FLSA for hours worked but not compensated below the 40-hour weekly threshold, the FLSA does not provide a cause of action, was correct.
  • The district court did not address the possibility that the plaintiffs' gap time claims might constitute claims for "overtime gap time." "Overtime gap time" claims are to compensate for "gap time" work during workweeks with overtime hours. For example, if an employee is normally scheduled to work 37.5 hours and works 45 instead, he may seek overtime compensation for hours over 40, and straight-time pay for the "overtime gap time," the hours between 37.5 and 40. Overtime gap time claims require courts to determine whether plaintiffs' regular pay compensated them for all hours worked up to the overtime threshold. Here, the Third Circuit did not need to resolve this issue because the plaintiffs have not plausibly alleged that they worked overtime in any given week.

Practical Implications

Employees suing for overtime violations under the FLSA must state a plausible claim for overtime under the FLSA. Employers should look for proof from the plaintiffs that they typically worked 40 hours per workweek, worked extra hours during a typical 40-hour workweek and were not compensated for the extra hours over 40 they worked during those 40-hour workweeks.