hourglass-small.jpgThis blog post was authored by Paul Knothe

A California Court of Appeal decision recently went against existing authority interpreting the FLSA and found an employer’s change to employees’ FLSA workweeks with the purpose of  limiting the employer’s overtime obligations to “evade” the overtime requirements of the FLSA.  The decision has come under sharp criticism from a federal court. 

Under the FLSA, an employee is owed overtime for hours over 40 in a workweek, defined as a fixed and regularly recurring period of seven consecutive 24-hour periods that need not coincide with the calendar week but may begin on any day and at any hour of the day.

This allows employers to implement alternative and flex schedules, such as a 9/80, without incurring overtime.  Once the beginning of the workweek is established, it becomes fixed regardless of the actual hours worked.  Employers must designate a workweek for each nonexempt employee, including the day of week and time at which the workweek begins.  The employer my change the workweek if the change is intended to be permanent and is not designed to evade the overtime requirements of the FLSA.

In April 2011, the California Court of Appeal decided Seymore v. Metson Marine.  The court found that the employer’s only reason for changing the FLSA workweek to differ from the employees’ actual work schedules was to reduce its overtime obligations and that this violated the requirement that a workweek cannot be “designed to evade the overtime requirements of the Act.”  The court held that a workweek could only differ from the actual work schedule for a “bona fide business reason” other than reducing overtime. 

In October 2012, the 8th Circuit disagreed sharply with Seymore in Abshire v. Redland Energy Services, LLCin which it rejected the argument that the FLSA prohibits an employer from changing an existing workweek for the purpose of reducing employee overtime. Addressing Seymore directly, the 8th Circuit wrote, “we decline to afford that decision any weight in construing the FLSA.”

When changing an employee’s actual work schedule, such as to a 9/80, the employer should still change the FLSA workweek accordingly to ensure that there is no inadvertent creation of overtime.  This will require bargaining on behalf of represented employees because it will change the employees’ work hours. 

Whether wrongly decided or not, the Seymore decision is published and plaintiffs’ attorneys are likely aware of it.  If sued on this theory, an employer would be wise to remove the case to federal court to take advantage of federal court and Department of Labor interpretations of the FLSA which have permitted employers to modify FLSA workweeks even if the purpose is to reduce the payment of overtime.