Unites States Federal District Court Judge Rosanna Malouf Peterson has ruled in favor of thirteen Hanford, Washington fire captains in their pursuit of FLSA overtime. This judgement is the latest in a series of recent rulings involving fire officers and FLSA overtime eligibility. For more on those see:
This latest ruling follows an FLSA lawsuit filed by Hanford Fire Department fire captains, on April 5, 2018 in the U.S. District Court for the Eastern District of Washington. The Hanford Fire Department is not the typical municipal or county fire department. The Hanford Fire Department is a division of Mission Support Alliance (MSA)(the defendant in this case). Mission Support Alliance is a Delaware corporation under contract with the U.S. Department of Energy to provide fire services (among other services) to the “Hanford Site”. The “Hanford Site” is an enormous federal nuclear clean-up site—roughly the size of Rhode Island—located in rural Washington State.
According to the complaint, Hanford fire captains are assigned to 24-hour shifts and regularly work either forty-eight or seventy-two hours per week without receiving any FLSA overtime. Additionally, the captains claimed they were only paid straight time—as opposed to time and one-half—for any additional unscheduled hours worked. In response to these claims, MSA argued several different legal theories designed to reduce or even eliminate the need to pay the captains any overtime.
The first legal theory advanced by MSA was that fire captains are exempt from any FLSA overtime because their primary duty is managing firefighters and fire stations and not acting as first responders. Second, MSA argued—as a federal contractor—it was entitled to utilize the §207(k) partial overtime exemption only applicable for public agency fire departments. This would not eliminate the company’s need to pay overtime, however it would have drastically reduced the company’s potential liability from any unpaid overtime award. Finally, MSA argued it was able to deduct meal and sleep time from hours worked under the Department of Labor’s (DOL’s) unique regulations related to sleep and meal time deductions. Again, this would not exempt the captains from FLSA overtime, however it would theoretically reduce the amount of back overtime wages the company might owe if the captains claims were proven.
In the end, the judge dismissed all three theories proposed by MSA for various reasons. However, the judge found that MSA did not act intentionally in misclassifying the captains and most importantly, the judge agreed to MSA’s method of determining the amount of back wages owed to the captains. These two findings will likely reduce the captains’ monetary damages significantly.
FLSA’s Executive & Highly Compensated Employee Exemption
The judge dismissed MSA’s efforts to classify the captains are overtime exempt executives and highly compensated employees. In order to utilize these common FLSA exemptions MSA needed to prove the fire captains’ primary duty was acting as managers as opposed to first responders. The court found [absent a trial] that the captains’ primary duty was acting as first responders and not managers of the fire department [or stations]. In making this determination, the court noted the following: “although the Captains play a role in the activities considered by the first responder regulation to be exempt activities, the Captains do not have the final authority on any of those decisions.” Additionally, the court found the following facts relevant to determination the captains’ primary duty was acting as first responders as opposed to managers:
- The Captains do not have the authority to discipline subordinate employees.
- They do not create or alter department policies.
- The Captains can make recommendations as to equipment purchases and supplies but cannot authorize the expenditure of the Department’s money.
- They are not expected to write performance evaluations for subordinate officers.
- The Captains are ultimately the people who call and offer overtime to off-duty firefighters when vacancies need to be filled, but the Captains perform this duty as a part of an predetermined process negotiated in the collective bargaining agreement (“CBA”) without the authority to bypass the process.
- The Captains participate in the hiring and promoting processes, but as appointed representatives of the union rather than as representatives of MSA or the Hanford Fire Department.
- Under the CBA, the Captains act “[a]s assigned by the [Battalion Chief].”
- In short, the Captains do not have the authority to perform many of the duties that the first responder regulation identifies as exempt duties.
FLSA’s Public Agency Only §207(k) Exemption
The court also rejected MSA’s efforts to avail itself to the §207(k) partial overtime exemption. Only public agency employers can claim the §207(k) exemption. The court found that MSA failed to show that is was a public agency as defined by the FLSA and a result could not qualify for the §207(k) exemption. This result was not unexpected. The FLSA and DOL regulations allow public agency employers [i.e. municipally run fire departments] a great deal of relief from the traditional FLSA overtime requirements. For profit private agencies are not eligible for any of these special rules.
Sleep and Meal Time Deductions
Mission Support Alliance also sought to deduct sleep and meal time from hours worked for FLSA overtime purposes. Department of Labor regulations allow employers to deduct bona fide meal and sleep time provided certain criteria are met. The rules and requirements that accompany sleep and meal time deductions are many, however paramount among these rules is a requirement that the employer and the employee agree to exclude sleep and meal time from hours worked. Here, the court found that no such agreement existed. The court specifically noted that three of MSA’s witnesses, including the fire chief, director of employee and labor relations, and an expert witness hired by MSA all testified that there was not an agreement to deduct sleep and meal time from the captains’ hours worked for overtime purposes.
Finally, all was not lost for MSA. The court found that its actions were not willful and as a result reduced the statute of limitations from a maximum of three years of back wages, to only the last 2 years. Plus, the court allowed MSA to utilize a very “employer friendly” method of determining back overtime wages. The court held that MSA can utilize the “fluctuating workweek” method of overtime compensation when calculating back wages owed to the captains. Combined, these two factors will likely save MSA significant amounts of damages resulting from misclassifying these fire captains as overtime exempt employees.
Here are copies of the complaint and latest order.