In Lundy v. Catholic Health System of Long Island Inc., Plaintiffs – a respiratory therapist and two nurses – sued on behalf of a putative class of similarly situated employees and alleged that the Catholic Health System of Long Island, Inc. (a collection of hospitals and healthcare providers) failed to compensate them for time worked during meal breaks, before and after scheduled shifts, and during required training sessions, which they alleged brought them over the 40 hour overtime threshold on occasion. They sought, among other things, overtime and “gap-time” pay (i.e., unpaid hours worked below the 40-hour overtime threshold).
On Monday March 1, 2013, a distinguished panel of the Second Circuit Court of Appeals made up of current Chief Judge Dennis Jacobs, former Chief Judge John Walker, and retired Associate Justice of the Supreme Court, Sandra Day O’Connor, issued an important decision affirming the dismissal of FLSA and New York Labor law overtime claims for failure to plead relevant details with the a sufficient degree of specificity. The Court also affirmed that there is no cause of action under the FLSA for “gap time” claims.
To support their wage claims, Plaintiffs relied on broad allegations that they worked more than 40 hours per week without receiving all overtime to which they were entitled, that they occasionally worked through or missed parts of meal breaks, and that they were required to show up early for or leave late from their shifts, but did not provide any additional details.
While some lower courts have deemed such conclusory allegations sufficient to state an overtime claim under the FLSA, the Second Circuit, relying on Iqbal and Twombley, rejected this position. The Court concluded that in order to state a plausible FLSA overtime claim, a plaintiff must “sufficiently” allege at least 40 hours of work per week and allege that they worked some uncompensated time in excess of the 40 hours. The Court held that determining when a pleading becomes “plausible” is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.”
So what does this mean exactly? While the Second Circuit does not give a definitive answer, it does provide employers with some clues and a potential roadmap for motions to dismiss.
First, the Court notes that “some courts” might find that an approximation of overtime hours worked might help move the claims closer to being plausible.
Second, the Court criticized the plaintiffs for not alleging any specific workweeks in which they worked at least 40 hours and worked some additional hours for which they were not compensated.
Third, the Court rejected the use of vague or broad allegations that plaintiffs “typically” missed meal breaks or “typically” worked uncompensated time before and after shifts, without any further details about the nature and frequency of the unpaid work – particularly where their “typical” schedules did not even get them to 40 hours in a week (and the occasional additional compensable time would not get them over the 40 hour threshold).
Thus, employers should strongly consider making early motions to dismiss overtime claims where: (i) the complaint simply alleges that the plaintiff typically, usually, or on occasion worked more than 40 hours per week without proper overtime compensation; (ii) where the complaint alleges that the plaintiff typically, usually or on occasion worked – for example – 10 hours of overtime each week on average, without any additional details about specific workweeks in which he or she worked the overtime or variations in overtime hours in different weeks; and (iii) where the complaint alleges that the plaintiff worked unpaid overtime as a result of working through or missing meal breaks or engaging in unpaid pre- or post-shift activity, but does not provide any additional detail about the nature or frequency of the unpaid work, or specific weeks in which the plaintiff worked more than 40 hours.
The Second Circuit also affirmed, as a matter of law, that the FLSA does not recognize a separate claim for “gap time” or straight time pay for unpaid hours worked – i.e., failure to pay meal breaks or pre- or post-shift activity. Rather, the FLSA only recognizes claims for failure to pay minimum wage – where the total wages for the week, divided by the total hours worked, fail to meet the minimum wage; and failure to pay overtime. Of course, aggrieved employees who do not have a viable minimum wage or overtime claim can still sue for breach of contract or under relevant state laws for failure to timely pay wages (for example, New York Labor Law Section 191).