Union Bargaining Agreements Likely Cannot Waive Overtime Pay Rights

When casino banquet servers asserted claims that they were due overtime pay under Nevada’s state wage and hour law, the casino pointed to the union Collective Bargaining Agreement (“CBA”) which provided for a different compensation method and claimed that no overtime pay was owed. The Ninth Circuit Court of Appeals disagreed.

Instead, the Court affirmed a long standing tenet that CBAs cannot waive employees’ rights to overtime pay under state law unless the waiver is “clear and unmistakable.”  Here, the Court found that it was not so clear that the servers had bargained away their state overtime law protections.  Thus, the case was sent back for further proceedings on the issue.

Had the servers asserted claims under the federal Fair Labor Standards Act (“FLSA”) instead of Nevada state law, the CBA likely could not have waived such rights, without regard to the clarity of the agreement’s language. Under federal law, “collective bargaining agreements cannot waive or reduce the [FLSA]'s protections.”,  except in limited circumstances described by the regulations.

In another banquet server case, however, a Nevada Clark County Judge ruled that those servers are not entitled to overtime pay under state or federal law, and noted that such had been an industry practice for years. Generally, industry practice does not trump state law either. The attorney for those servers is intending on appealing that ruling.

It is clear that this battle is far from over. In the meanwhile, employers would be wise to refrain from relying on CBA language to avoid paying overtime wages to employees who are otherwise entitled to these payments under either state or federal wage and hour laws.