Sixth Circuit Court of Appeals Upholds Lower Court Ruling on Overtime, Establishment of a Qualifying Work Period, and the FLSA’s §207(k) Exemption

The U.S. Court of Appeals for the Sixth Circuit has upheld a lower court’s finding that in order to utilize the FLSA’s §207(k) partial overtime exemption, a fire department must establish a qualifying work period. This story began back in January 2020 when former Highland Hills, Ohio firefighter David Vance filed an FLSA lawsuit against his former employer.

Vance’s allegations were extremely straight-forward. Vance claimed that he was not paid any overtime while working as a firefighter in Highland Hills in violation of the FLSA. In fact, according to the village’s fire chief, “nobody was paid overtime.” The village conceded this fact to the court, however the village sought to offset the back wages owed to Vance by claiming the FLSA’s §207(k) partial overtime exemption.

In December 2020, U.S. District Court Judge James Gwin found the Village liable for the unpaid overtime. This was not a big surprise, however Judge Gwin also found that since the village had failed to establish a work period as required by the FLSA, it could not utilize the FLSA’s §207(k) exemption to reduce back wages owed to Vance. If the village was able to utilize the FLSA’s §207(k) exemption it would have owed Vance around $11,000 in back wages and another $11,000 in liquidated damages as required by the FLSA. However, due to the judge’s ruling, the village owed Vance around $25,000 in back wages and an equal amount in liquidated damages. For more on Vance’s initial claims, click here.

The village opted to appeal this decision to the U.S. Court of Appeals for the Sixth Circuit Court in early 2021. On October 26, 2021, the Circuit Court of Appeals handed down a decision agreeing with the findings of the lower court. Now the village will be on the hook for the maximum amount of back wages owed to Vance and in addition will most likely be responsible for a significant amount of legal fees associated with the initial suit and the appeal.

This is an important ruling for several reasons. First, properly establishing a qualifying work period is an essential requirement of the FLSA’s §207(k) partial overtime exemption. Basically, if a fire department does not want to pay firefighters’ overtime after working only 40 hours in a 7-day workweek, it must establish a qualifying FLSA work period. Failure to follow this basic and easy requirement can prove financially disastrous for an organization. It is absolutely essential that professionals responsible for paying and managing firefighters have a basic understanding of the FLSA.

Second, once an FLSA violation is discovered, employers need to carefully weigh different courses of action. Protracted litigation is not always the best choice depending on the specific circumstances. Paying firefighters and other first responders is not easy. Mistakes can happen. Once an FLSA mistake is discovered, whether small or significant, take a step back and evaluate the actual cost of mistake and the potential unknown costs associated with protracted litigation. The FLSA mandates employers pay the legal fees for any employee that proves his or her claim. The attorney fees paid to the prevailing party’s attorney or attorneys are in addition to the costs the employer is likely spending defending the claim. It is not uncommon for the costs of the litigation to easily exceed the amount of back wages owed to employees. Spending tens or even hundreds of thousands of dollars on litigation is not always the best course of action.

Here is a copy of the latest ruling.