Labor & Employment Law

Ninth Circuit Authorizes a Practical "Alternative Workweek" Solution -- Parth v. Pomona Valley Hospital

In Parth v. Pomona Valley Hospital Medical Center, the Ninth Circuit authorized employers and employees to exercise some flexibility in attempting to work around the overtime requirements of the FLSA.

In Parth, a group of nurses was originally assigned to work almost exclusively in 8-hour shifts.  The majority of the nurses, however, "preferred working 12-hour shifts in order to have more days away from the hospital."  As a result, the Company implemented a new pay plan.

The pay plan provided nurses the option of working a 12-hour shift schedule in exchange for receiving a lower base hourly salary (that at all times exceeded the minimum wage set forth by the FLSA) and time-and-a-half pay for hours worked in excess of eight per day. The result: nurses, who volunteered for the 12-hour shift schedule, would make approximately the same amount of money as they made on the 8-hour shift schedule (while working the same number of hours and performing the same duties).

Several years later Parth filed a class action claiming that the whole plan was just an artificial scheme to avoid paying overtime, and that the lower base rate for 12 hour shifts therefore violated the FLSA.  The Court disagreed.  It held instead that the use of a lower base rate of pay for longer shifts is permissible so long as the rate is not so low as to be wholly "unrealistic and artificial." 

A number of other factors, while not strictly relevant to its interpretation of the FLSA, also influenced the Court.  For example, the employees had apparently expressed their preference for the longer shifts, the 12 hour shifts were voluntary, and  the whole arrangement was eventually codified in a CBA that was ratified by the bargaining unit.   Under these circumstances it was pretty difficult to paint a picture of employees being unfairly exploited.

Since its passage in the 1930's the FLSA has been one of the preeminent examples of government paternalism designed to protect employees by taking away their right to bargain with their employers over certain working conditions.  The Parth decision is an especially refreshing development because it restores a small degree of discretion to employers and employees to work together to craft "win-win" alternatives to the standard 9 to 5 workweek.  

Full post as published by California Labor & Employment Defense Blog on October 26, 2009 (boomark / email).