Judge Finds Lack of Established Work Period Results in Loss of §207(k) Exemption for One OH Fire Department

How important is establishing a qualifying work period for §207(k) firefighters? Officials from the Village of Highland Hills, a small suburb outside of Cleveland, found out this past week. In a succinct easy to read six-page opinion, U.S. District Court Judge James S. Gwin, found that the village had not established a work period and was therefore unable to claim the §7(k) exemption for one of the village’s former firefighters. While the judge’s opinion only impacts one former firefighter from one very small fire department, there are important lessons to be learned from this decision. This decision can serve as a valuable lesson for professionals that manage or represent firefighters working under the FLSA’s §207(k) partial overtime exemption.

Basic Requirements of the FLSA’s §207(k) partial overtime exemption

The vast majority of firefighters, fire chiefs, and public sector HR/finance professionals are keenly aware of the many special FLSA rules that only impact firefighters and other first responders. Perhaps the most important and common of these special rules relate to a firefighters’ hours worked and overtime eligibility. The §207(k) partial overtime exemption, or as it is commonly referred to as the §7(k) exemption, is the FLSA provision that allows public agency fire and police departments avoid the traditional FLSA overtime requirement (i.e. overtime for all hours worked over 40 every 7 days).

However, in order for any public agency fire department to avail itself to the special provisions of the §7(k) exemption, it must satisfy two basic requirements. First, the exemption can only apply to employees engaged in fire protection activities. The FLSA, Department of Labor (DOL) regulations, and legal precedent have provided some clarity into what skills and job duties an employee engaged in fire protection activities must possess. Second, and key to this discussion, the public agency fire department must establish a qualifying work period.

A work period can be any length between 7 and 28 days. While many courts and even the DOL have set a relatively low bar necessary to establish a qualifying work period, it is still a necessary component for utilizing the §7(k) exemption. Failure to establish a work period can result in the fire department losing the exemption. For an in-depth guide on the ins-and-outs of work periods, click here.

The Facts

Here, the Village of Highland Hills made several errors related to compensating former firefighter David Vance and according to court documents, other village firefighters. Vance initially filed an FLSA lawsuit in the U.S. District Court for the Northern District of Ohio, on January 22, 2020. Vance claimed the village failed to pay him any overtime, despite working as many as seventy hours per week, over a course of almost five years of employment. The village paid Vance and other firefighters (according to the fire chief’s deposition) straight time pay for all hours worked. In fact, the fire chief further explained in his deposition that “the fire department followed a policy of never paying overtime.” Vance’s attorneys made the standard claim for back wages, liquidated damages, and attorneys’ fees.

In the process of litigation, the village admitted that it had not paid Vance any overtime and even agreed to pay Vance his back wages and an equal amount of liquidated damages (as typically required by the FLSA). However, the village and Vance disagreed over how many hours of overtime were owed. The village argued that it should be able to claim the FLSA’s §7(k) exemption retroactively. Specifically, the village pointed to the village’s employee manual which clearly stated the village’s “safety forces” were paid on a “28-day overtime cycle.” If the court agreed with the village, Vance would have only received overtime and damages for all hours worked over 212 every 28 days for the preceding two or three years.

However, Vance argued that the village never adopted a “qualifying work period” and as a result could not claim the FLSA’s §7(k) exemption. Vance’s theory would result in him receiving back overtime wages and damages for all hours worked over 40 every 7 days for the preceding two or three years. As you can easily see, Vance’s claims would represent a significant difference in both potential back wages and damages paid by the village.  

The Opinion

On December 21, 2020 District Court Judge James S. Gwin found that village had not established a qualifying §7(k) work period and as a result Vance was entitled to overtime for all hours worked over 40 every 7 days. The judge did not dispute the validity of the village’s handbook proclamation of a 28-day work period for “safety forces.” Instead, the judge found that the village failed to “apply” that work period to Vance. Basically, the village failed to implement the work period contained within its own rulebook. It is too early to know if the village will appeal Judge Gwin’s opinion, however the costs associated with such an appeal would most likely outweigh the cost of paying Vance the full amount of back wages. It also remains to be seen if other village firefighters may opt to pursue litigation given the outcome here.

Lessons Learned

Best practice dictates that public agencies establish a qualifying work period in writing and most importantly put the work period into “effective operation.” Here is a passage from a 2005 decision out of the Fifth Circuit Court of Appeals that illustrates this notion rather well. In that ruling the court wrote the following:

The FLSA does not require the selection of a longer work period to be made in writing, or that certain “magic words” be used.   A city may show that it has established a longer work period through documents which state that it has established a longer work period.   To be established by a city, the longer work period, however, must have been put into effective operation by the city.   A longer work period is put into effective operation when a city actually pays its fire fighting employees in accordance with the longer work period.

Additionally, changing or even adopting a work period may trigger a collective bargaining issue. That would not be an FLSA issue. That would be controlled by local labor relations statutes and regulations.

Needless to say, it is wise for public agency employers that utilize the FLSA’s §7(k) exemption to review your practices and documentation related the adopted work period and consult with local counsel with questions. If you have questions about to the FLSA’s §7(k) exemption, or anything else related to the FLSA as it applies to firefighters or other first responders, please consider attending one of the upcoming FLSA for Fire Departments live webinars. The live webinar format allows us to provide real-time interaction and Q & A with the attendees while covering a wide variety of topics related to the FLSA, DOL regulations, opinions, and legal precedent. The next class is scheduled for February. Click here for more info.

Here are copies of Vance’s complaint from earlier this year and Judge Gwin’s decision.