The U.S. Court of Appeals for the Second Circuit once again disappointed employers by deferring to the Department of Labor’s restrictive interpretation of the Fair Labor Standards Act’s overtime exemptions. This time, in Mullins v. City of New York, __ F.3d __, 2011 U.S. App. LEXIS 16132 (2d Cir. Aug. 5, 2011), the Second Circuit held that sergeants employed by the New York City Police Department do not qualify for the executive exemption.
The overtime claims in this case arose under both the old and new versions of the regulations. The district court granted summary judgment to the City on the claims arising under the pre-August 23, 2004 FLSA regulations, concluding that the sergeants were exempt executives because their primary duties involved the management of two or more employees. However, the district court determined there was an issue of fact as to whether the sergeants satisfied the requirement of the revised duties test that an exempt executive enjoy “the authority to hire or fire other employees” or that their “suggestions and recommendations as to the hiring, firing, advancement, promotion or other change of status of other employees are given particular weight.” After a five day trial in 2009 a jury returned a verdict in favor of the City and the district court denied the sergeants’ motion to overturn the verdict.
On appeal the Second Circuit invited the Secretary of the Department of Labor to submit her views as to whether the sergeants’ primary duty was management in light of the first responder regulation, adopted in August 2004, providing that police officers who prevent or detect crimes do not fall within the executive exemption. In her amicus brief the Secretary criticized the district court for ostensibly failing to consider the first responder regulation, and asserted that even police officers who supervise subordinate employees in the field are not primarily performing management duties. The City countered that the first responder regulation did not serve to classify supervisory functions performed by police officers in the field as non-exempt or otherwise alter the content of the primary duties test. However, the Second Circuit was not persuaded, reasoning that “[e]ven to the extent that the City identifies a tension between the text of the first responder regulation and the primary duties test, this is, at best, an ambiguity that does not preclude the Secretary’s interpretation.” And so the Second Circuit deferred to that interpretation. Making matters worse, the Court went on to hold that because the new regulations merely clarified existing protections in the statute, the district court improvidently granted summary judgment to the City on the sergeants’ claims under the old regulations.
Mullins serves as a poignant reminder of the substantial deference courts will often afford the Department of Labor’s interpretations of its own regulations. Indeed, this case illustrates how even where the Department of Labor is not actively involved in the litigation it can be invited to weigh in on appeal and help turn a significant victory for an employer into a stunning defeat.