Labor & Employment Law

The EEOC Does Not Trump The FLSA: Arbitrator Finds Overtime Violations

By Mark E. Tabakman, Esq.

Not every allegation of FLSA violation or class action must weave its way through the courts for a resolution. Union members who feel aggrieved may challenge alleged improper pay practices through arbitration. In these settings, the Arbitrator will apply and incorporate federal laws, such as the FLSA, in order to render a decision on the alleged labor contract violations.

That is exactly what just happened in National Council of EEOC Locals No 216, AFGE and Equal Employment Opportunity Commission, Case No. 0761012-00226, in which Arbitrator Steven Wolf ruled that the agency violated the FLSA rules on payment of overtime. The Arbitrator also found that the violations were willful and also that the grievants were entitle to liquidated (i.e. double) damages. These last two findings represent a direct application of FLSA statutory remedies to the arbitration forum.

What prompted this case was the agency's reclassification of many individuals to exempt status, following the recommendations of an outside consultant. When these employees then worked overtime, the agency did not give them the choice between cash overtime and compensatory time, as it was obligated to do.

Another issue was the ostensible failure of the employees to work overtime that was 'authorized.' The Arbitrator resolved this by applying the long-established maxim that work that is 'suffered or permitted' to be done is work that must then be compensated, whether or not the employees had formalized permission. That is what happened here.

There are many ways for a plaintiff or group of plaintiffs to come after an employer and it need not be in a court proceeding. These working time cases are particularly perilous. They become more dangerous when there is a triggering event, such as a reclassification of employees from non-exempt to exempt so people that used to receive overtime are, all of a sudden, not receiving it.

Full post as published by Wage & Hour - Development & Highlights on April 08, 2009 (boomark / email).