What do I always say? If an employer is sued in a FLSA action, collective or otherwise, and is unionized, always look for a National Labor Relations Act/Labor Management Relations Act preemption defense. Well, it has happened again! A federal judge has dismissed a collective action alleging that a rehabilitation center did not pay nurses their correct overtime. The Court held that matter required interpretation of the labor contract and thus had to go to arbitration. The case is entitled Freeman v. River Manor Corp. and was filed in federal court in the Eastern District of New York.
The Judge noted that when putative FLSA claims are “‘substantially dependent on or ‘inextricably intertwined’” with the provisions of the labor agreement, that “will govern the procedural trajectory of those statutory claims.”
The Judge determined that the issues involved an initial focus on whether the plaintiff exceeded the thirty-five hour work week of the contract, before the determination could be made whether the forty-hour FLSA work week was impacted. The contract is between Local 1199, SEIU and the Greater New York Health Care Facilities Association Inc.
The Judge observed that “even if plaintiff worked over 40 hours per work week and is entitled to FLSA overtime wages, his FLSA claim is nevertheless precluded by Section 301 [of the Labor Management Relations Act] because attempting to reach plaintiff’s FLSA overtime claim out of sequence with his contractual overtime claim for hours worked under 40 per week would be impractical, unworkable and would go against the judiciary’s preference for arbitration.”
The action commenced in August 2017 when a Licensed Practical Nurse filed this potential collective action. He alleged that he worked in excess of the seven hour days mandated by the contract and did not receive overtime pay for those hours. He also claimed that he was compelled to work through lunch breaks, although those hours were deducted from his paycheck.
The Company defended by asserting that these extra hours were not authorized by the Company, as the labor contract required.
Sometimes these initiatives do not pay off because there is a strong body of law that protects the “independence” and separateness of FLSA, statutory, claims as opposed to labor contract claims. With that said, an enterprising and thoughtful defense lawyer should look hard at provisions in the contract that bear on the claim at issue and which need to be “interpreted.”
The gold at the end of this rainbow is a dismissal of the case….