Overtime Advisor : New York Employment Lawyer & Attorney : Greenwald Doherty Law Firm : NY Wage & Hour & Discrimination : Overtime Advisor Law Blog

Boston-based Partners HealthCare Systems and its 14 affiliated hospitals and health care companies recently signed a consent decree in federal district court agreeing to pay $2.7 million in back wages to 700 employees to resolve an overtime lawsuit filed by the U.S. Department of Labor (“DOL”).

The interesting twist in this lawsuit was that Partners HealthCare contacted the DOL itself after realizing that perhaps affiliated entities sharing employees had run afoul of statutory overtime requirements under the Fair Labor Standards Act. Indeed, they had. The DOL’s investigation confirmed that defendants failed to combine hours worked on separate payrolls for employees who provided services for two or more defendants during a single workweek.  

Evidently, there existed a joint employment relationship between these entities. The analysis was based on some of the following factors:

• Whether an arrangement existed between employers to share the employee;
• Whether the companies acted in the interest of one another in relation to the employee;
• Whether the companies shared control of the employee’s employment;
• Whether there was common ownership of the employers; and
• Whether there was common management of the employers.

No single factor is controlling in joint employment cases. Courts, as well as the DOL, look at the “economic realities” of the work relationship to determine if a joint employer relationship truly exists. 

Partners HealthCare may actually have been lucky – or wise – in this situation. By bringing the matter to the attention of the DOL itself, Partners HealthCare may have saved itself liquidated damages and attorneys’ fees that would likely have resulted had the lawsuit been brought by an attorney on behalf of its employees.

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The Fair Labor Standards Act (“FLSA”) requires employers to pay most employees the statutory overtime rate of 1 ½ times regular wages for hours worked in excess of 40 in a single workweek. However, the under the federal Motor Carrier Act and similar state laws, many companies can take advantage of an exemption from overtime pay for certain truck drivers and employees in other positions related to commercial conveyances.  

An Appellate Court recently upheld a New Jersey Department of Labor and Workforce Development ruling that the state’s version of this exemption applies only to businesses primarily engaged in trucking or moving and storage, and not to companies that “transport goods incident to a different business purpose.” This was not good news for the giant furniture retailer Raymour and Flanigan, which was on the wrong end of the decision [In re Raymour & Flanigan Furniture, 405 N.J. Super. 367 (App. Div., March 2, 2009)]. The company argued that its trucking operation was completely separate from its retail furniture business, and that New Jersey’s narrowly-written trucking industry exemption therefore applied with respect to its transportation and distribution employees.  The Court disagreed, mandating that approximately 500 current and former delivery workers share more than $2 million in back overtime wages, much to the chagrin of the retailer.  

The impact of this case cannot be understated.  Under the FLSA, when federal and state wage laws are in conflict, employees must be given the benefit of the law that is the most favorable to them. In this case, while the truckers in question might have been covered by the federal exemption from overtime pay, the narrower New Jersey exemption did not cover them.  Not only New Jersey companies, but also other businesses across the nation must be careful to consider the state laws as well as federal laws when attempting to determine whether employees are entitled to overtime pay.  

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It is generally common knowledge that employees who do not fall into one of the statutory exemptions to the overtime pay regulations (i.e. “non-exempt” employees) need to be paid for all of the time they work. What about those after-hour minutes checking e-mails and text messages on BlackBerrys® and other PDA devices? Actually, it is possible that employees should be paid for this work-related activity, even if it is occurring outside what would be considered to be normal working hours.

T-Mobile recently found this out the hard way when it was the recipient of a class-action lawsuit asserting claims for overtime wages. Among other assertions, the employees claim that they were required to review and respond to numerous “e-mails and text messages at all hours of the day and night.”

T-Mobile is not the first.  AT&T Mobility was subject to a similar suit at the end of 2008 which is still on-going, and a Milwaukee office of property management firm CB Richard Ellis  was sued by a maintenance worker earlier this year alleging that he was forced to work after hours without compensation for time spent on his BlackBerry®. 

This topic is not new. In fact, a Yahoo! TECH blog post warned about such potential lawsuits over a year ago.
 

In an environment where so many non-exempt employees now use a myriad of hand-held devices to send and receive work-related e-mails, and where companies are expecting fewer employees to do the work of the former many, companies need to be mindful of the overtime pay requirements so that they do not become targets of such lawsuits as well. In short, if non-exempt employees are performing work, they need to be compensated for it. Companies are advised to review the time-keeping policies and after-hours communications policies they impose on non-exempt employees. In the long run, it will likely be less expensive to devise a time-keeping system and pay the employees for after-hours work, rather than defend against a class-action lawsuit.

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