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Workweek needn't maximize overtime pay to comply with FLSA, 5th Circuit decides

Texas company did not violate FLSA, 5th Circuit rules

This story originally ran on July 16 on Bloomberg BNA

 

A Texas environmental solutions company didn't violate the Fair Labor Standards Act by using a Monday through Sunday workweek that didn't maximize overtime wages for two hourly employees, the U.S. Court of Appeals for the Fifth Circuit ruled July 14.

Affirming summary judgment for Heckmann Water Resources Inc., the Fifth Circuit found that the FLSA, as interpreted by Labor Department regulations, requires employers to establish a workweek that is a “fixed and regularly recurring period of 168 hours” or “seven consecutive 24-hour periods.”

The court said Heckmann complied with that requirement by setting a work schedule for hourly employees Kevin Johnson and Brad Smith that involved 12-hour shifts over seven consecutive days beginning every other Thursday—even though that schedule spanned two Monday-through-Sunday workweeks and reduced their potential overtime hours from roughly 44 hours to between four and eight hours.

“The mere fact that an established workweek does not maximize an employee's overtime compensation does not, standing alone, violate the FLSA,” the court said.

Judge Edward C. Prado wrote the opinion, joined by Judges Patrick E. Higginbotham and Edith Jones.

Workers Sought Thursday-to-Wednesday Workweek

Heckmann established two-week pay periods for employees based on a Monday through Sunday workweek.

Smith and Johnson were assigned to work 12-hour shifts over seven consecutive days beginning every other Thursday, with Smith starting at 6 a.m. and Johnson at 6 p.m.

The employees argued that Heckmann should have established a Thursday-to-Wednesday workweek to align their pay periods with their actual work schedules, instead of using a Monday-to-Sunday workweek.

Under a Thursday-to-Wednesday workweek, Smith and Johnson contended that they each would have earned roughly 44 hours of overtime pay per two-week pay period. However, under the Monday-to-Sunday workweek, they received only four to eight hours each of overtime pay.

In October 2011, they sued Heckmann, alleging that the company violated the FLSA by calculating their overtime pay based on the Monday through Sunday workweek.

The U.S. District Court for the Eastern District of Texas granted summary judgment to Heckmann, and the workers appealed.

FLSA Workweek Needn't Reflect Actual Schedule

The Fifth Circuit affirmed and ruled that Smith and Johnson failed to point to any authority requiring Heckmann to ensure that its established FLSA workweek coincided with the employees' actual Thursday through Wednesday schedules.

The FLSA's implementing regulations at 29 C.F.R. § 778.105 state that a workweek “may begin on any day and at any hour of day” and “need not coincide with the calendar week,” so long as it is a “fixed and regularly recurring period of 168 hours—seven consecutive 24-hour periods.”

Heckmann's Monday through Sunday workweek complied with that requirement, and nothing in the plain text of the FLSA's rules required the company to use Smith and Johnson's proposed Thursday through Wednesday workweek, the court found.

“The mere fact that an established workweek does not maximize an employee's overtime compensation does not, standing alone, violate the FLSA,” Judge Prado wrote.

The appeals court added that a January 2009 DOL opinion letter, as well as the Eighth Circuit's factually similar and persuasive ruling in Abshire v. Redland Energy Services, LLC, 695 F.3d 792, 19 WH Cases2d 1217 (8th Cir. 2012), supported its conclusion.

“[N]umerous federal and state courts have concluded that an employer does not violate the FLSA merely because, under a consistently-designated workweek, its employees earn fewer hours of overtime than they would if the workweek was more favorably aligned with their work schedules,” the court said, quoting Abshire. “Thus, a schedule whereby an employee's actual work schedule is split between two workweeks does not violate the [FLSA].”

Charles R. Dendy of Lufkin, Texas, represented Johnson. Hermes Sargent Bates LLP represented Heckmann.

Jay-Anne B. Casuga

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