Wage & Hour - Development & Highlights : New Jersey Labor and Employment Lawyer & Attorney : Fox Rothschild LLP Law Firm : Serving Essex County, Sussex County, Roseland, New Jersey

I have often addressed the issue of Department of Labor Opinion Letters and how they provide very good guidance on the myriad wage-hour issues that employers must deal with. They are useful because they highlight the DOL’s thinking on any given issue, which, if then followed by an employer, gives that employer a “safe harbor” from any allegation that it has violated the Fair Labor Standards Act.

In Wage and Hour Opinion Letter FLSA 2009-6 (January 14, 2009), the issue was whether jet and helicopter pilots for a corporation were exempt as executives or professionals. Although the DOL could not definitively answer the particular question, since the company did not provide enough information for the agency to make a determination, the DOL reaffirmed its position of “non-enforcement” relating to pilots performing who flew aircraft as business or company pilots. This means that, essentially, the DOL will not investigate overtime claims by such employees and will “treat” these workers as exempt.

This company employed eight full-time pilots. They transported executives, customers, and guests to meetings/company facilities. All of the pilots held commercial pilot licenses and they all met/exceeded the Federal Aviation Administration requirements for acting as a pilot in command. The DOL tried to consider whether the “chief pilot” would be exempt under the executive exemption, but the FLSA regulations mandate that an exempt executive have, as his “primary duty” the management of an “enterprise or a customarily recognized department of subdivision thereof.” Thus, the chief pilot would not neatly fit this cubbyhole.

The Opinion Letter also noted that the DOL has long considered pilots to be non-exempt as learned professional employees, but nevertheless took a position of “non-enforcement” as far as certain pilots were concerned. This non-enforcement view applies to pilots and co-pilots who: 1) possess a FAA airline transport certificate or commercial certificate 2) receive compensation on a salary or fee basis of at least $455 per week; and, 3) engage in one of nine categories of aerial work, such as test flights, aerial photography, and meteorological research. One of the categories covered by the agency’s non-enforcement policy is “flying of aircraft as business or company pilots.”

The point here is that sometimes the DOL will simply back away from determination of the exempt status of a particular classification, especially if it is gray area and if the employees at issue are sufficiently well compensated so the DOL believes that “overtime” may not be a real issue for them.
 

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A federal court has ruled that an airline was not required under the Fair Labor Standards Act to compensate a prospective flight attendant for the periods of time that she attended a full-time training program that lasted five weeks. Interestingly, during this period, the trainee received free housing and an allowance for meals. The case was brought in federal court in Washington and was docketed as Ulrich V. Alaska Airlines Inc.

The court dismissed the case because the judge determined that the training was of benefit to the trainee. It enabled her “to qualify for employment by Alaska” Airlines and to gain “first-hand experience in the type of customer service provided by Alaska.” Of equal significance was the concomitant finding that the airline-employer “received no immediate benefit” from her work “serving passengers on board the training flights, because the airline still had to staff the airplane with a full complement of regular flight attendants.” This element, i.e. the employer deriving benefit, meaning productive work, is a key component of the analysis.

Also, the airline made no representation that the trainee would in fact receive a position with it following the completion of the training (although the majority of trainees did receive job offers)

The United States Department of Labor has, through issuance of numerous Opinion Letters, adopted a six-part test for determining whether an individual engaged in a training program is an employee and unless all six factors are satisfied, the person is deemed an “employee” and must receive compensation for his endeavors/efforts for that employer.

The factors are: (1) whether the training, even though it includes actual operation of the employer’s facilities, is similar to that which would be given in a vocational school; (2) whether the training is for the trainees’ benefit; (3) whether the trainees displace regular employees and work under close observation; (4) whether the employer derives an immediate advantage from the trainees’ activities;(5) whether the trainees are entitled to a job after completing training; and (6) whether the employer and the trainees understand that the trainees are not entitled to wages for the training time.

Under the “benefit” test, the court made clear that the benefit to the employer must be “immediate” and cannot be speculative or in the future. Indeed, the court observed that the airline may even have lost money in the training process, because the trainees took up seats that otherwise would have gone to paying passengers. The airline was also required to have a flight fully staffed with regular flight attendants, notwithstanding that the trainees may have performed some minor tasks on the flight, such as service cart work and trash pick-up.” In sum, the employer-airline did not derive the benefit, although the regular flight attendants may have been relieved of some of their usual (tedious) duties.

As with all of these issues, an employer must closely scrutinize the tests applicable to determining employee, as opposed to trainee, status. An incorrect answer will could mean thousands of dollars in potential liability.
 

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Most of my postings about class actions have concerned white collar, service or retail sales occupations and whether employees fit within certain FLSA exemptions. A few have concerned working time (e.g. donning and doffing) in factories. None has concerned so exotic an occupation as loggers, or, as the TV show likes to label them, “Ax Men.”

A FLSA class action lawsuit, entitled Maudlin v. Johnny Kynard Logging, Inc., has been filed by a logger who claims he always worked from about 5AM-6PM, without being paid the required premium rate (i.e. time and one-half) for overtime hours. In an important victory for him and other putative plaintiffs, his case has been granted collective action certification, which means that more plaintiffs will throw their axes in with this gentleman and seek overtime.

Judge Kristi K. DuBose of the U.S. District Court for the Southern District of Alabama granted the plaintiff’s motion for class certification, as well as an Order facilitating notice to other loggers who may wish to join the suit. Evidently, according to the plaintiff’s attorney, there have been a number of suits filed against logging companies and this industry is rife for other overtime suits.

The attorney asserted that failing to pay loggers proper overtime is “somewhat of a common practice” among logging companies. For example, in this case, it is claimed that the employees were all paid on a flat per-day or per-week basis that did not account for the actual number of hours the employees worked, with an appropriate overtime calculation then made. Such a calculation would be based on the total remuneration received (i.e. adding all of the day rate monies) divided by the total hours worked in the week to arrive at a regular rate. Half-time overtime would then computed on that week’s regular rate.

The named plaintiff and the opt-in plaintiffs in this action worked as loggers cutting, gathering and delivering timber. The lesson here is that no occupation, business or industry is immune from these kinds of overtime suits, albeit based on different theories.

If a tree falls in the forest and no one is there, does it make a sound? If the tree is felled by a logger not being paid proper overtime, it will indeed---a big one.
 

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