In Lundy v. Catholic Health System of Long Island, Inc., 2013 U.S. App. LEXIS 4316 (2d Cir. Mar. 1, 2013), the Second Circuit Court of Appeals recently held for the first time that the Fair Labor Standards Act (FLSA) does not provide a claim for uncompensated "gap" time wages even when employees work overtime, provided the alleged uncompensated time does not drop employees' wages below the minimum wage. Gap time is time worked under 40 hours in a week. For example, an employee may work 39 hours in a week but be paid for only 35, in which case she has four hours of uncompensated gap time. If she works 42 hours in a week but is paid for only 38, she has two hours of uncompensated gap time (hours 39 and 40) and two hours of unpaid overtime (hours 41 and 42). In Lundy, the Second Circuit held that employees must plead "some" amount of uncompensated but compensable time worked over 40 in a week, but left open the possibility, depending on the case, that employees may need to also plead an approximation of overtime hours to establish a plausible claim. The decision also bolsters employers' arguments that district courts may exercise supplemental jurisdiction to decide state law claims even where the court dismisses all federal law claims.
Background
The case was brought as a putative class and collective action by three non-exempt, clinical employees who worked at Good Samaritan Medical Hospital Medical Center, one of many healthcare defendants in the suit. The employees originally asserted several federal and state law causes of action, although on appeal the only claims addressed were the employees' overtime and gap time claims under the FLSA and the New York Labor Law (NYLL), and claims under the Racketeer Influenced and Corrupt Organizations Act (RICO). All the employees' causes of action were based on allegations that their employer failed to compensate them for time worked during meal breaks, before and after scheduled shifts, and during required training sessions. After prolonged litigation, ultimately involving four amended complaints and an admonition from the court to the employees' counsel to stop "hiding the ball," the district court dismissed all claims.
Gap Time Claims Are Prohibited Under the FLSA
On appeal, the Second Circuit affirmed the dismissal of claims for overtime and gap time wages under the FLSA, holding as to gap time wages that: "So long as an employee is being paid the minimum wage or more, [the] FLSA does not provide recourse for unpaid hours below the 40-hour threshold, even if the employee also works overtime hours in the same week." Lundy thus extends the Second Circuit's prohibition of FLSA gap time claims to weeks in which...
