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Ontario Police Lieutenants Settle Overtime Lawsuit
Under the Fair Labor Standards Act (FLSA), police lieutenants may be considered "exempt" from the requirements of being paid overtime. For an employer to classify an employee as exempt the employee must pass both a duties test and a salary basis test. Under the duties test the requirements for exemption are that the employee's primary duties involve management tasks and that the employee regularly direct or supervise two or more other employees. The U.S. Supreme Court has held that even police sergeants can be held exempt under the FLSA. Auer v. Robbins, 519 U.S. 452. The City of Ontario did not meet the second test, the "salary basis" test in regard to its police lieutenants. Under the salary basis test, an exempt employee's salary cannot be subject to reduction based on quality or quantity of work performed during any one-week period. In other words, an employee must receive a full salary for any week in which he or she performs work. 29 C.F.R. §541.118(a)(4). Accordingly, if an employee is subject to a disciplinary suspension of less than one week, that employee is non-exempt under the FLSA. The exemption is destroyed where there is either "an actual practice of making such disciplinary deductions or an employment policy that creates a 'significant likelihood' of such deductions." Auer v. Robbins. 519 U.S. 452. Less than one week suspensions are allowed, without destroying the exemption, for only "major safety violations." 29 CFR §541.118(a)(5). In addition to the lieutenants' claim that the salary basis test excluded them from being FLSA exempt, they complained that the City violated their MOU which called for them to be paid premium overtime regardless of the FLSA.
A lawsuit was filed in Federal District Court by Dieter Dammeier of Lackie & Dammeier LLP, on behalf of the Ontario Police Management Association alleging the FLSA and MOU violations. To destroy the salary basis exemption, it was shown that the police department had in place a general order which calls for the accumulation of points based on either "preventable" traffic collisions or loss or destruction of city property. The police captains and chief of police testified at depositions that this policy was applicable to everyone in the department, including police lieutenants. Under the policy, if a department employee earns three points in any two-year period, he or she would automatically receive a one-day suspension. Even though no lieutenants had received a suspension of less than one week under this policy, there were several lieutenants who had accumulated up to two points under the system. One of these points was for breaking a city cell phone and another was for losing a city pager, not "major safety violations." Since the point accumulations had a "practical effect" and created a "reasonable likelihood" that the lieutenants would receive a suspension of less than one week if they had received the requisite points, the FLSA exemptions did not apply to them.
Under the applicable MOU covering police lieutenants, they were to be paid premium overtime for all hours in excess of 40 with the exception of court time and emergency call out time. Between April 1998 and March of 2000, the police lieutenants were paid straight time for all hours worked in excess of 40 hours rather than the time and one-half they should have received under both the FLSA and their MOU.
After concluding the discovery phase of the litigation and the lieutenants initiated the filing of a Motion for Summary Judgment, a settlement was reached which included paying all of the police lieutenants their uncompensated overtime at their current rate of pay and reimbursing their attorney's fees and costs in the case.
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