Court Rules High Compensation Leads to No Overtime for Virginia Chiefs

An FLSA lawsuit filed by ten battalion chiefs with the Alexandria Fire Department has come to a rather surprising conclusion. The US District Court for the Eastern District of Virginia granted summary judgment to the city based upon a rarely used exemption for fire officers: the highly compensated employee exemption.

The chiefs filed the suit last year claiming they were hourly employees, entitled to overtime.  The plaintiffs included chiefs who served in both operational and staff positions. The city paid the chiefs straight time for all of the hours worked, at either a 53-hour or 40-hour rate.

The city countered suit with the normal defense argument: that the chiefs were exempt employees, qualifying under either the executive or administrative exemptions. However, the city also argued the chiefs qualified under the highly compensated employee exemption.

The HCE exemption reads as follows:

• 29 CFR § 541.601 Highly compensated employees.
• (1)  Beginning on January 1, 2020, an employee with total annual compensation of at least $107,432 is deemed exempt under section 13(a)(1) of the Act if the employee customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee as identified in subparts B, C or D of this part.

In rendering his decision, US District Court Judge Claude M. Hilton concluded as follows:

• From 2019-2022, Plaintiffs’ total annual compensation ranged from $170,105 to $237,761
• HCEs are exempt so long as they regularly and customarily perform any one of the duties listed above, “thus eliminating the need for a detailed analysis of the [their] job duties.” § 541.601. HCEs also must be employees “whose primary duty includes performing office or non-manual work.” § 541.601(d).
• The Court finds that operational BCs regularly and customarily perform administrative and executive duties.
• The record shows they are responsible for evaluating personnel performance, making recommendations on personnel matters, coordinating and implementing training (at least mentoring), deciding where and how to allocate personnel, and directing operations at crime, fire, or accident scenes.
• These are all administrative or executive duties that on their own would be sufficient to confer exemption under the highly compensated employee standard.
• These duties also clearly qualify as office or non-manual work.
• A major part of an operational BC’s responsibility for emergency call response entails directing operations at crime, fire, or accident scenes, and such direction constitutes non-manual work insofar as it involves communication and judgment rather than any physical action.
• The Court also finds that administrative BCs, in all their roles, regularly and customarily perform administrative and executive duties.
• It is undisputed that administrative BCs in Professional Responsibility evaluate personnel performance, make recommendations on personnel matters, and coordinate and implement training. Administrative BCs in Logistics and Community Risk Reduction direct and evaluate subordinates who themselves have subordinate employees.
• Both administrative BCs in Special Operations as well as in Community Risk Reduction represent the City to other jurisdictions, government agencies, or members of the public, and administrative BCs in Logistics supervise such work.
• All of these duties constitute non-manual work, which means the HCE duties test applies.
• Because at least some of the duties that Plaintiffs perform are administrative and executive in nature, and they otherwise qualify for HCE status, the Court finds that the Battalion Chiefs are exempt from the FLSA.
• Plaintiff’s state law claims also fail as a matter of law because they require the City to be liable under the FLSA.

Two rather concerning issues arise from the decision. The first is the court failed to discuss (or attempt to distinguish) the ruling from the First Responder Regulations, which would appear to control the case for the operational chiefs. These regulations were enacted in 2004 to address some of the confusion judges were having relating to line officers being improperly designated as exempt “white collar” employees under 29 USC § 213 (a)(1). These regulations state:

• § 541.3 Scope of the section 13(a)(1) exemptions.
• The section 13(a)(1) exemptions and the regulations in this part do not apply to manual laborers or other “blue collar” workers who perform work involving repetitive operations with their hands, physical skill and energy. Such nonexempt “blue collar” employees gain the skills and knowledge required for performance of their routine manual and physical work through apprenticeships and on-the-job training, not through the prolonged course of specialized intellectual instruction required for exempt learned professional employees such as medical doctors, architects and archeologists. Thus, for example, non-management production-line employees and non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers and laborers are entitled to minimum wage and overtime premium pay under the Fair Labor Standards Act, and are not exempt under the regulations in this part no matter how highly paid they might be.
• The section 13(a)(1) exemptions and the regulations in this part also do not apply to police officers, detectives, deputy sheriffs, state troopers, highway patrol officers, investigators, inspectors, correctional officers, parole or probation officers, park rangers, fire fighters, paramedics, emergency medical technicians, ambulance personnel, rescue workers, hazardous materials workers and similar employees, regardless of rank or pay level, who perform work such as preventing, controlling or extinguishing fires of any type; rescuing fire, crime or accident victims; preventing or detecting crimes; conducting investigations or inspections for violations of law; performing surveillance; pursuing, restraining and apprehending suspects; detaining or supervising suspected and convicted criminals, including those on probation or parole; interviewing witnesses; interrogating and fingerprinting suspects; preparing investigative reports; or other similar work.

The judge made no mention of the First Responder Regulations, nor made any effort to explain why they did not apply.

The second (and no doubt related to the first) pertains to characterizing line chiefs as being “white collar” non-manual employees as opposed to “blue collar” employees. Physical evidence including helmets, turnout gear, photos of chiefs after fires, and even white shirts soiled with soot and sweat from fires often bely the contention that city attorneys may make about a line chief’s duties being non-manual desk jobs. The fact they are required to stop what ever they are doing and respond to alarms to when dispatched would also suggest their primary duty is as a first responder.

We will be discussing this case and others in our June 15, 2023 webinar: Advanced FLSA: Executive Exemption – Fire Officers and Overtime. Here is a link for more details. Join us at 1:00PM Eastern.

Here is a copy of the decision.