Friday, September 28, 2012

The Case of the Chief and the Missing Overtime



Turnley v. Town of Vernon, 2012 VT 69.

Today’s case is a basic employment law issue wrapped in a coat of municipal law. 

Plaintiff was hired to be chief of police in 2006 for the Town, a small, sleepy hamlet in the southeast corner of the state on the New Hampshire and Massachusetts borders, not known for anything in particular

Plaintiff was paid a salary and held the position for three years.  At the end of that time, Plaintiff sued the Town for back pay.  Specifically, he claimed that he was due approximately 1335 hours of overtime for the hours he regularly worked above and beyond the normal 40-hour work week.  Town denied the claim, and Plaintiff filed his action.


The basis of Plaintiff’s claim is the federal Fair Labor Standards Act and its state equivalent at 21 V.S.A. § 384.  Under the FLSA, anyone who performs a primarily physical job must be paid on an hourly basis and time-and-a-half wages for any work hours over the 40-hour work week. 

The FLSA is the main reason that we do not have “salaried” ditch diggers, laborers who earn a weekly stipend, or factory employees paid by the number of bobbins they can thread through the mill before they lose a hand.  The idea is that if your work is primarily physical, you should be paid on an hourly basis and should not be expected to work beyond the normal work week unless you receive additional reward in the form of additional pay.  Such workers are known in employment parlance as nonexempt because they are not exempt from the FLSA.

The big exceptions to FLSA are office workers—the drones who file paper and while away the hours between morning coffee and afternoon water-cooler chats by surfing the internet. 

Actually, the definition encompasses any worker whose job is primarily non-physical and/or whose job is to supervise two or more employees.  Such employees, so long as they are paid in a regular salary above $455 per week, are known as exempt because they are exempt from the provisions of the FLSA and may be used and abused by the employer as the market will bear.  Hence, we have the salaryman who works twice as many hours for a fixed salary that when broken down is probably not much more than the hourly rate of the floor employee. 

But what of the employee who has a foot in both worlds?  The manager who works on the line or the laborer who is expected to complete office tasks?

The answer to the second is simple.  There is no law that says you cannot be paid hourly.  If you are an hourly employee, there is no violation if some of your work is management or clerical.  You get paid the same, and every hour worked puts you closer to overtime.  Remember exempt employees are the exception to the rule, even if the modern workforce is essentially the exception that threatens to swallow said rule.

The other scenario—when an exempt employee starts doing nonexempt work—is where there is often a problem and is the focus of Plaintiff’s case.

As the head of a small town police force, Plaintiff was not simply a manager.  He was a “working chief,” which meant that he was expected to work patrols, cover for officers on his staff, and regularly perform police work in addition to his supervision tasks.  This type of police work, it should be mentioned, has consistently been classified as nonexempt work, making patrol officers and detectives routinely eligible for overtime.  (See, e.g., any police drama, ever.)  

Going forward, Plaintiff characterized himself as a First Responder rather than a supervisor given the regular likelihood that would be called out to respond to an emergency just as often as he would stay in the office and file papers. 

At the trial court level, though, Plaintiff’s position was rejected.  The trial court ruled that he was an exempt employee because: 1) his salary met the qualifications of the FLSA; 2) he regularly supervised three to five employees; 3) his job was primarily management; and 4) he had the power to hire or recommend the hiring of employees.  While the trial court acknowledged that he did some physical police work, the trial court was not impressed.  Such is to be expected in a small town police department, and his helping out did not fundamentally change the classification of his job in the eyes of the FLSA.

On appeal, Plaintiff dropped his state law claim and focused solely on the issue of whether the trial court correctly identified his primary duty.  He argued that it did not, and that it erred in concluding that he was an exempt employee (also known as an executive employee). 

The SCOV starts with the definition of an exempt (executive) employee under the FLSA.  It has four elements: 1) employee must make $455 or more per week; 2) her primary duty must be the management of the enterprise/department/subdivision; 3) she must regularly direct the work of two or more other employees; and 4) she must have the authority to hire or fire other employees or have a strong role in such hiring/dismissal process.

In this case, Plaintiff does not dispute elements 1 or 3.  So the SCOV focuses on elements 2 and 4.  It notes that the burden of proving an employee is exempt falls on the employer.

Taking the management prong first, the SCOV looks to the FLSA statute for a definition of management.  The definition fits Plainitff’s duties, but the SCOV takes up Plaintiff’s first responder argument.  As discussed above, police work has long been held to disqualify an employee from the FLSA exempt status as its physical nature is more akin to the labor for which the law guarantees hourly pay.  As such, the law allows for “first responders” to claim overtime notwithstanding the other qualities of their job.

The problem for Plaintiff is that the SCOV does not accept his argument that his duties were primarily first responder.  The Town’s evidence and even Plaintiff’s definition supported the trial court’s finding that Plaintiff acted as a first responder only part of the time and mainly to cover for others.  The primary duties were management as defined in the FLSA.  The SCOV goes on to note that even if Plaintiff’s overtime calculations were correct there was no way to determine which of those hours were spent as a first responder and which were done fulfilling management tasks.  The whole affair is too tangled up, and the SCOV is not willing to untangle the facts when the evidence shows that Plaintiff’s primary work was exempt. 

The lesson for future practitioners is clear: get your client’s hours in order before trial and be able to show a significant portion of them dedicated to labor or first responder work or you will lose.  The SCOV will not uphold a FLSA claim simply because your client works a portion of the job doing non-exempt work, so long as he generally qualifies as exempt. 

Plaintiff’s second argument under element 2 is that the Selectboard micromanaged him to the point that he was no longer managing the Police Department.  This argument gets short shrift from the SCOV that concludes such micromanagement to be incidental and does not transform the nature of Plaintiff’s job.  The SCOV also clarifies that the management requirement is primarily to distinguish the claimant’s position from other employees at the same or lower level and does not involve how the supervisors oversee the claimant’s work.  In other words, you do not cease to be management just because your boss sticks her finger into the soup every time she passes by. 

This brings the SCOV to the fourth element and swift conclusion to the decision.  Plaintiff makes a novel argument here.  He claims that this prong (power to hire and fire) is informed by state law, which he claims vests sole authority in the police chief.  Because the Selectboard never fully gave him this power and insisted on overseeing all hiring and firing in the police department, Plaintiff never fulfilled his duty under the statute to do the hiring and firing.  Therefore, the Town never vested the fourth FLSA element in him, and this failure means that he does not qualify as an exempt employee.

The SCOV is not impressed.  It quickly notes that the general power to set up and oversee a police department is vested in the town.  The statute cited by Plaintiff, 24 V.S.A. § 1931, does not change the Town’s inherent power.  It just gives the chief concurrent authority to oversee his department.  It was not intended to alter the FLSA, and a result, the SCOV declines to adopt Plaintiff’s line of reasoning. 

The SCOV goes on to note that this statute does nothing more than vest departmental oversight and authority in the chief to work under and with the selectboard in the management, hiring, and termination of police department personnel.  This is exactly what the FLSA requires, and the statute proves the Town’s argument about Plaintiff’s exempt status. 

So Plaintiff goes home empty handed without overtime, but given the circumstances of the case, it is difficult to ignore the fact that maybe the Town expected too much for too little.  Unless this is a case of oil and water (or tritium) personalities, the Town would be well advised to be more generous with Plaintiff’s replacement to avoid the hard feelings that lead to litigation and its concurrent expense.

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