Settlement Reached in North Carolina FLSA Misclassification Lawsuit

A North Carolina Volunteer Fire Department and a group of five firefighters have agreed to settle a 2024 lawsuit for a total of $86,573. The lawsuit, which was initially filed by a lone firefighter in federal court in 2024, expanded to include four additional firefighters. The main allegation made by the firefighters was that the department misclassified them as employees in fire protection activities, often referred to as §207(k) firefighters in violation of the FLSA. The FLSA’s §207(k) exemptions allows “public agency” fire departments avoid the FLSA’s traditional overtime requirement of overtime pay after working 40 hours in a 7-day workweek.  

The firefighters claimed this department is a privately held corporation, and not a public agency, and therefore cannot classify its firefighters as §207(k) firefighters and must pay overtime for all hours worked over 40 every 7 days. The terms of the settlement require the department pay the five plaintiffs one hundred percent of the unpaid overtime they claimed to be owed for the two years leading up to the filing of the lawsuit and their attorneys’ fees. However, the settlement reduces the standard award of liquidated damages from 100 percent to only 60 percent of the total back wages.

The Memorandum in Support of Plaintiffs’ Consent Motion for Approval of FLSA Settlement is found below along with a link to past coverage of the suit. For the FLSA junkies out there, the memo is likely an interesting read. The attorneys that drafted the memo did a very good job (IMHO) explaining how several key factors impacted the negotiation process that eventually led to the settlement. In particular, how valuable a “good faith” defense can be for any fire department that finds itself afoul of the FLSA’s maximum hour and overtime requirements. Here, the parties agreed to reduce the statute of limitations to two-years, as opposed to a maximum of three and reduce the liquidated damages award from the norm of 100 percent of back wages to only 60 percent of back wages. This is a bit unusual in FLSA litigation and is worth the read.