Monahan v. County of Chesterfield
1996 WL 524080, 95 F. 3d 1263 (1996)
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Rule of Law:
The Fair Labor Standards Act (FLSA) does not provide a cause of action for salaried employees to recover straight-time pay for 'gap time' hours—hours worked above a regular schedule but below the statutory overtime threshold—so long as the employee's effective hourly rate exceeds the minimum wage and all overtime hours are properly compensated.
Facts:
- The County of Chesterfield employed police officers as salaried, nonexempt employees.
- Job advertisements and interviews described the positions as being compensated with an annual salary.
- The officers worked a 24-day cycle, under which FLSA § 207(k) requires overtime pay only for hours worked in excess of 147.
- The County typically scheduled the officers for 135 or 144 hours per cycle, but they received a fixed biweekly paycheck equivalent to 1/26th of their annual salary regardless of the hours worked below the threshold.
- Officers frequently worked hours that exceeded their regular schedule but did not reach the 147-hour overtime threshold.
- A County policy stated that officers would be paid overtime for hours worked in excess of the 147-hour threshold.
- The County also paid officers at an overtime rate for call-outs, court appearances, and extra shifts, even when the 147-hour threshold for the cycle had not been met.
Procedural Posture:
- A group of police officers sued the County of Chesterfield in the United States District Court for the Eastern District of Virginia, seeking back pay under the Fair Labor Standards Act (FLSA).
- Both the officers and the County filed cross-motions for summary judgment.
- The district court (trial court) granted summary judgment in favor of the officers (Plaintiffs).
- The County of Chesterfield (Defendant-Appellant) appealed the district court's decision to the United States Court of Appeals for the Fourth Circuit.
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Issue:
Does the Fair Labor Standards Act (FLSA) provide a cause of action for salaried employees to recover straight-time compensation for hours worked in excess of their regular schedule but below the statutory overtime threshold, when they are paid above the minimum wage and are properly compensated for all hours worked over the overtime threshold?
Opinions:
Majority - Norton
No. The Fair Labor Standards Act does not create a cause of action for straight-time 'gap pay' if the employee's compensation does not violate the FLSA's minimum wage or maximum hour provisions. The court's primary task is to examine the terms of the employment agreement, whether express or implied. Here, the evidence—including advertisements for salaried positions, a policy defining the overtime threshold, and the officers' continued acceptance of paychecks—demonstrated an implied agreement that the annual salary was intended to compensate for all non-overtime hours worked, up to the 147-hour threshold. For pay cycles where no overtime is worked ('pure gap time'), an FLSA claim is only viable if the employee's pay falls below the minimum wage; any other dispute over compensation is a matter of state contract law. For cycles where overtime is worked ('overtime gap time'), as long as the salary covers all straight-time hours due under the employment agreement and overtime is properly paid for hours exceeding the threshold, the FLSA is satisfied. To allow such claims would improperly expand the FLSA beyond its core purpose of ensuring a minimum wage and maximum hours.
Analysis:
This decision significantly clarifies and limits the scope of the FLSA for salaried, nonexempt employees. It establishes that the FLSA is not a vehicle for resolving all compensation disputes; rather, its protections are triggered only by minimum wage or overtime violations. By emphasizing the primacy of the employment agreement in defining what straight-time hours a salary covers, the ruling channels 'gap time' disputes into state contract law, thereby preventing the federalization of such claims. This precedent provides employers with greater flexibility in scheduling salaried workers, as long as they adhere to the FLSA's fundamental wage and hour mandates, and it discourages litigation over hours for which compensation was implicitly included in an agreed-upon salary.
