On August 25, 2023, the United States Court of Appeals for the Second Circuit upheld a judgment of $17.78 million which was rendered in favor of EMTs and Paramedics who worked for the City of New York. The case arose based on the EMTs’ and Paramedics’ allegations that they worked overtime hours, but were not compensated for that work. Today’s Long Island employment law blog takes a closer look at the facts of the case – Perry v. City of New York, the reasons the City appealed the jury’s verdict, and the reasons the Court upheld the judgment.
2,519 EMTs and Paramedics who worked for the City of New York joined a collective action alleging that the City failed to pay them overtime. In brief, the emergency workers alleged that they were required to perform work for the City for which they were not paid. The City required that the EMTs and Paramedics be ready to start work “ready for duty.” To be ready for duty, the workers must have already checked personal protective equipment such as their helmet, gloves, pants, coat, and respirator. Thus, they alleged they were not paid for the work done to check their personal protective equipment.
The jury determined that the City was liable for overtime pay, and that the City willfully violated the Fair Labor Standards Act, the federal law which requires certain workers to receive overtime pay. The jury awarded total damages of $17.78 million, comprised of actual damages, liquidated damages, and attorneys’ fees.
The primary question presented in the case is what happens when an employer requires its employees to report working overtime in order to receive overtime compensation, but the employee fails to do so. Does that mean the employer is liable for a violation of the wage and hour laws?
The Second Circuit noted that the law requires that an employer pay overtime if it was on notice of the work, even if the employee did not report the work. Notice may be actual notice or constructive notice, meaning that the facts and circumstances of the case show that the employer should have known that employees were working overtime but not reporting it.
The City argued that it cannot be liable unless it knew that the employees were not getting paid properly. In other words, because the workers were claiming that the City failed to pay overtime for only certain types of work — not as a matter of policy — and that they received overtime for other work, the City couldn’t know that it wasn’t paying the EMTs and Paramedics for the preparation work.
The appellate court rejected the argument, holding explicitly that “knowledge of non-payment is irrelevant.” The Court first determined that the plain language of the FLSA requires employers to pay employees for work it requires, knows about, or should know about. Second, the Court ruled that employees cannot waive the protections of the FLSA. To require employees to report work hours which the employer knows were worked be equivalent to an employee waiving his or her rights. Third, because the FLSA distinguishes between willful conduct and “ordinary” violations, the City’s proposed rule would destroy the boundary between willfulness and ordinary violations.
Accordingly, the Second Circuit affirmed the jury’s determination of FLSA liability.
The appellate court also ruled that the jury had sufficient factual evidence before it to determine that the employees in fact perform work for which they were not paid. The City maintained a policy which required that the employees be ready to respond to calls as soon as possible after the start of the shift, and set certain parameters to determine whether the employees were abiding by that policy. In order to complete these tasks in time to start responding to emergencies, the Court concluded that a jury could infer that the EMTs and Paramedics were required to arrive to work early to start their pre-shift responsibilities.
The City also argued that the jury could not have reasonably determined that the violations of the FLSA were willful, an argument also rejected by the appellate court. When conduct is willful under the FLSA, it extends the statute of limitations from two years to three years and it allows the plaintiff to recover liquidated damages of 100% of the actual damages.
An employer can willfully violate the FLSA when it knew or showed reckless disregard for conduct prohibited by the FLSA. In the context of overtime, willfulness is shown when the employer knew that it failed to properly pay its employees or was reckless with regard to that failure.
With this framework, the Court held that the facts supported the jury’s verdict that the City’s conduct was willful. Some of the facts supporting this decision included, testimony from the City’s senior labor lawyer that she advised the FDNY that supervisors must ensure that employees are paid for work that the City knows about; when the City implemented its time keeping system in 2005, EMTs and Paramedics asked whether it would account for the pre and post shift work they were doing; and two senior FDNY supervisors testified that employees were not allowed to request overtime for pre-shift work.
Finally, the City argued that the pre-shift work was de minimus, meaning the FLSA does not require that it pay its workers for such work. This argument was similarly dismissed by the Second Circuit. The Court determined that the work could be easily recorded by the City’s timekeeping system, that in the aggregate, the size of the work was not de minimus, and much of the work was performed regularly and some of it was required to be done every day.
The Perry decision is striking because of the size of the jury verdicts, but the case decided some very important legal issues related to FLSA litigation. Those issues include the level of knowledge an employer must have of its employees’ work to be liable under the FLSA, what evidence can show willful conduct under the FLSA, and what does de minimus work mean under the FLSA.
If you have questions about unpaid the FLSA, unpaid overtime, or unpaid wages for time worked, contact a Long Island employment lawyer. The lawyers at Famighetti & Weinick PLLC are experienced in handling unpaid wage and hour cases. Our phone number is (631) 352-0050.