Sara Conner v. Cleveland County, NCSara Conner v. Cleveland County, NC
Before WILKINSON and WYNN, Circuit Judges, and FLOYD, Senior Circuit Judge.
Vacated and remanded by published opinion. Judge Wynn wrote the opinion, in which Judge Wilkinson and Senior Judge Floyd joined.
ARGUED: Philip J. Gibbons, Jr., GIBBONS LAW GROUP, PLLC, Charlotte, North Carolina, for Appellant. Christopher S. Edwards, WARD AND SMITH, PA, Wilmington, North Carolina, for Appellee. ON BRIEF: Craig L. Leis, GIBBONS LEIS, PLLC, Charlotte, North Carolina, for Appellant. Alexander C. Dale, Grant B. Osborne, WARD AND SMITH, PA, Wilmington, North Carolina, for Appellee.
WYNN, Circuit Judge:
Plaintiff Sara Conner appeals from the district court‘s order granting judgment on the pleadings to her employer, the Cleveland County Emergency Medical Services (“Cleveland Emergency Services“), which is a department of Defendant Cleveland County, North Carolina. Conner‘s complaint alleged that Cleveland County underpaid her for straight (i.e., non-overtime) hours worked during weeks in which she also worked overtime.
At issue is whether this alleged underpayment is a violation of the overtime provision of the Fair Labor Standards Act, under the theory of “overtime gap time.” After careful review, we hold that the district court dismissed the suit based on a misreading of our opinion in Monahan v. County of Chesterfield, 95 F.3d 1263 (4th Cir. 1996). Under the correct standard articulated hereinafter, Conner adequately alleged a Fair Labor Standards Act claim. Accordingly, we vacate and remand for further proceedings.
I.
We apply the same standard for
A.
For at least three years preceding the filing of her complaint in 2018, Conner worked as an emergency medical services (“EMS“) employee for Cleveland Emergency Services. Pursuant to its Standard Operating Guideline, Cleveland Emergency Services assigns EMS personnel such as Conner to a 21-day repeating schedule in which each employee works a 24-hour shift followed by 48 hours off (the “24 on/48 off schedule“). The Standard Operating Guideline refers to personnel who work this schedule as “full-time EMS personnel.” J.A. 9.1 Individuals working the 24 on/48 off schedule will always work more than 40 hours per week, since they will have at least two (and sometimes three) 24-hour shifts each week. See Reply Br. at 20 n.9 (providing an example of the 24 on/48 off 21-day schedule).
For the three-year period preceding the complaint, Cleveland County paid Conner under two pay plans. The first is the pay
In addition to the Ordinances, EMS personnel are subject to “policies and procedures for . . . payment of wages and overtime” administered by Cleveland Emergency Services as set forth in its Standard Operating Guideline “Section 14-Pay Plan” (the “Plan“). J.A. 12. As the “pay plan for overtime,” the Plan provides the calculation method for determining the overtime rate for 24 on/48 off EMS personnel. Supp. J.A. 1. First, the employee‘s regular hourly pay rate is determined by dividing the employee‘s annual salary by 2,928 hours (the number of hours actually worked per year based on the 24 on/48 off schedule). Supp. J.A. 1 ¶ a(iii). Then, to determine the overtime rate, Cleveland Emergency Services multiplies the resultant hourly rate by 1.5. Id. Conner does not take issue with this aspect of the Plan.
In addition to the overtime rate, however, the Plan provides a “revised semi-monthly rate” for regular wages.2 Id. ¶ (a)(iv). The semimonthly pay is determined by multiplying the hourly rate that was used to calculate overtime by 2,080 (representing 40 non-overtime hours per week worked for 52 weeks), and then dividing this number by 24. Id. The resulting number is paid to the employee each pay period. When an employee has worked overtime during a particular pay period, Cleveland Emergency Services will take the amount to be paid for overtime hours (calculated as described above) and add it to the revised semimonthly wages to be paid for that pay period. Id. ¶ (b).
Conner alleges that this “revised semi-monthly rate” unlawfully pays her regular wages using overtime compensation, resulting in overall lower pay. According to Conner, her annual salary established under the Ordinances represents her compensation for regular wages. Thus, she claims that for each semimonthly pay period, she should be paid regular wages—calculated as her salary established by the Ordinances divided by 24—plus any overtime as calculated under the Plan.
It is helpful to consider an example of how Conner would calculate her compensation due under the Ordinances and the Plan. Federal law mandates that employers pay employees a premium hourly rate for each hour worked in excess of forty hours per week, which works out to 2,080 hours per year (40 x 52).
Yet Conner alleges that she did not receive this amount of compensation under the Plan‘s “revised semi-monthly rate.” She alleges that instead the Plan cut her annual salary for regular wages from $36,900 (the amount established in the Ordinances) to $26,208 (the hourly rate, $12.60, multiplied by the annual hours for a 40-hour workweek, 2,080). As such, Conner alleges that Cleveland County unlawfully used her overtime wages to fill the “gap” between her straight-time compensation under the Plan—$26,208—and her full salary—$36,900.
In this example, Conner‘s total 2017 salary as calculated under the Plan would be reduced to $42,235.20 ($26,208 for regular time plus $16,027.20 for the 848 hours of overtime we assume for purposes of this example).3 Because Conner alleges her actual total salary should be $52,927.20 (assuming 848 hours of overtime), she claims she is missing out on at least $10,692 of compensation in a given year.
At some point afterwards, Cleveland County changed its policy, effective January 1, 2018, to “beg[i]n paying [Cleveland Emergency Services] full-time EMS personnel regular wages in an amount equal to 1/24 of their annual salaries as designated by their corresponding salary grade and step” in the Ordinances. J.A. 14. Conner alleges, however, that Cleveland County should have paid EMS personnel in the same manner for the three years prior to January 1, 2018.
B.
In June 2018, Conner filed an amended complaint bringing a putative class action. She alleged that Cleveland County violated the overtime provisions of the Fair Labor Standards Act (“FLSA“),
Conner sought to first bring her claim as a collective action under the FLSA, defining the class as “[a]ll current and former full-time EMS personnel who were employed during the period [of] January 2, 2015 through January 1, 2018,” which she estimated to be between 50 and 75 people. J.A. 14–15. Conner sought to bring her breach-of-contract action as a class action under
Conner‘s claims were first adjudicated by a magistrate judge, who provided a report and recommendation. Conner v. Cleveland Cnty., No. 1:18 CV 2, 2019 WL 5294418, at *1 (W.D.N.C. June 27, 2019), report and recommendation accepted, No. 1:18-CV-00002-MR-WCM, 2019 WL 3948365 (W.D.N.C. Aug. 21, 2019). Construing Cleveland County‘s motion as one for judgment on the pleadings under
The magistrate judge concluded, however, that Conner did not adequately plead how Cleveland County failed to pay the requisite overtime wages she was due. Id. at *4. The magistrate judge thus recommended that the district court dismiss Conner‘s FLSA claim and decline to exercise supplemental jurisdiction over Conner‘s North Carolina breach-of-contract claim. Id. at *6. In the alternative, if the district court decided not to dismiss Conner‘s FLSA claim, the magistrate judge recommended denying Cleveland County‘s
In considering the magistrate judge‘s recommendation and the parties’ objections thereto, the district court analyzed Conner‘s claim under this Court‘s decision in Monahan, 95 F.3d 1263. Conner v. Cleveland Cnty., No. 1:18-CV-00002-MR-WCM, 2019 WL 3948365, at *2–3 (W.D.N.C. Aug. 21, 2019). The court concluded that if the terms of Conner‘s employment agreement did not violate the minimum wage and overtime provisions of the FLSA and provided compensation for straight time worked up to the overtime threshold, then there could be “no viable claim for [pure] gap time under the FLSA” as long as overtime wages were properly paid. Id. at *1–2 (quoting Monahan, 95 F.3d at 1273). It noted that Conner had “concede[d]” that all her overtime hours were “properly accounted for and appropriately compensated.” Id. at *2.
In short, the district court found Conner had not alleged a violation of the FLSA‘s overtime provisions because she “merely assert[ed] that she and other employees were shorted on their straight time pay pursuant to their contract.” Id. And because the court found that this amounted to a state-law contract claim, rather than an FLSA claim, the court dismissed Conner‘s FLSA claim, declined to exercise supplemental jurisdiction over Conner‘s breach-of-contract claim, and granted Cleveland County‘s motion for judgment on the pleadings. Id. at *2–3. Conner timely appealed.
II.
We review de novo a district court‘s order granting a motion for judgment on the pleadings under
III.
Conner asserts that the district court made two key errors in dismissing her FLSA claim.5 She argues the district court misinterpreted and misapplied (1) Department of Labor official interpretation
A.
We begin with a review of the purposes of the FLSA and the concept of “gap time.”
Congress enacted the FLSA “to protect all covered workers from substandard wages and oppressive working hours.” Trejo v. Ryman Hosp. Props., Inc., 795 F.3d 442, 446 (4th Cir. 2015) (quoting Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 739 (1981)). To accomplish these goals, the FLSA requires employers “to pay their employees both a minimum wage and overtime pay.” Hall, 846 F.3d at 761.
Specifically, the FLSA requires employers to pay their employees at least the federal minimum wage.
There are situations, however, that fall between these two provisions of the FLSA. “In addition to seeking unpaid overtime compensation, employees may seek to recover wages for uncompensated hours worked that ‘fall between the minimum wage and the overtime provisions of the FLSA,’ otherwise known as ‘gap time.‘” Davis v. Abington Mem‘l Hosp., 765 F.3d 236, 243 (3rd Cir. 2014) (quoting Adair v. City of Kirkland, 185 F.3d 1055, 1062 (9th Cir. 1999)). Gap time “refers to time that is not [directly] covered by the [FLSA‘s] overtime provisions because it does not exceed the overtime limit, and to time that is not covered by the [FLSA‘s] minimum wage provisions because . . . the employees are still being paid a minimum wage when their salaries are averaged across their actual time worked.” Id. at 243-44 (quoting Adair, 185 F.3d at 1062 n.6).
There are two types of gap time—pure gap time and overtime gap time. In pure gap time claims, the employee seeks to recover for unpaid straight time in a week in which they worked no overtime. In overtime gap time claims, the employee seeks to recover unpaid straight time for a week in which they did work overtime. See Monahan, 95 F.3d at 1266.
While direct minimum wage and overtime violations can clearly be addressed by the FLSA,
To be sure, courts may be united in rejecting pure gap time claims under the FLSA but they are divided on whether an employee can bring an overtime gap time claim for unpaid straight time worked in an overtime week. The FLSA does not include language about overtime gap time, but that does not end our inquiry.
B.
Indeed, our inquiry continues because given the FLSA‘s silence regarding overtime gap time, we turn as a “resort for guidance” to the “interpretations and opinions of the [Department of Labor] under [the Fair Labor Standards] Act.” Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944). Although “[w]e recognize that there is a difference between ‘regulations’ . . . and official ‘interpretations’ of the Department of Labor, such as those” at issue here, and that such interpretations and opinions are “not controlling upon the courts by reason of their authority,” we nevertheless give “considerable deference” to “the interpretation of a statute by the agency charged with its enforcement.” Monahan, 95 F.3d at 1272 n.10 (quoting Watkins v. Cantrell, 736 F.2d 933, 943 (4th Cir. 1984)).
The Department of Labor provides an official interpretation of the FLSA overtime provisions in part 778 of the Code of Federal Regulations, title 29. See
In determining the number of hours for which overtime compensation is due, all hours worked by an employee for an employer in a particular workweek must be counted. Overtime compensation, at a rate not less than one and one-half times the regular rate of pay, must be paid for each hour worked in the workweek in excess of the applicable maximum hours standard. This extra compensation for the excess hours of overtime work under the Act cannot be said to have been paid to an employee unless all the straight time compensation due him for the nonovertime hours under his contract (express or implied) or under any applicable statute has been paid.
We give “considerable deference” to the “body of experience and informed judgment” of the Department represented in § 778.315. Id. at 1272 n.10 (quoting Skidmore, 323 U.S. at 140). In considering “the weight of [this] judgment,” we look to “the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade.” Skidmore, 323 U.S. at 140.
The Section 778.315 interpretation was released by the Department in 1968 and has remained unchanged for the past fifty-three years. Compare
Further, this interpretation makes sense as it reflects the policy objective of the FLSA overtime provision by ensuring employers do not mitigate or skirt the financial pressures of working their employees above the forty-hour threshold. See Donovan v. Crisostomo, 689 F.2d 869, 872, 876 (9th Cir. 1982) (finding a violation of the FLSA‘s overtime provisions and frustration of its objectives when an employer, in a scheme similar in effect to overtime gap time violations, required its employees to pay a cash “kickback” to the employer during overtime weeks, resulting in a reduction in the employees’ regular rate of pay compared to the employment agreement).
For example, assume an employee‘s salary is $1,500 each work week for straight-time wages, and in a given work week, the
As the example illustrates, § 778.315 clarifies that employers may not invent “creative payment schemes” to shirk their responsibilities under the FLSA. U.S. Dep‘t of Lab. v. Fire & Safety Investigation Consulting Servs., LLC, 915 F.3d 277, 286 (4th Cir. 2019). Without such guidance, an employer can engage in wage theft (e.g., stealing $500 of overtime wages in the example above) while claiming to abide by the letter of the FLSA overtime provision. Such a scheme is contrary to congressional intent, which “was to protect employees from detrimental labor conditions” including “excessive work hours and substandard wages.” Monahan, 95 F.3d at 1267 (citing Barrentine, 450 U.S. at 739).
Section 778.315 is part of a large body of official interpretative guidance from the Department on the FLSA‘s overtime provisions. For instance,
Like § 778.315, these sections are long-standing interpretations—they were issued thirty years ago. And this Court has employed, and continues to employ, them as guides for adjudication. See Monahan, 95 F.3d at 1270, 1273 (1996) (referencing
We conclude that the Department‘s guidance in § 778.315 has significant “power to persuade.” Skidmore, 323 U.S. at 140. Accordingly, we will follow the Department‘s guidance and will look to its interpretation of the overtime provision to analyze overtime gap time claims.
Using the guidance of § 778.315, we acknowledged the viability of overtime gap time claims in Monahan, though we found the claim in that case to fail. See Monahan, 95 F.3d at 1272–73, 1284. We disagree with Cleveland County that the discussion of overtime gap time claims in Monahan was dicta.7 But to the extent any doubt remains after Monahan that overtime gap time claims are cognizable under the FLSA overtime provision, today we explicitly conclude that they are.
In Monahan, twelve police officers sued their county for straight time compensation under the FLSA, conceding that the county did not owe them overtime pay and had not paid them less than the minimum wage. Id. at 1265–66. The officers sought to recover back pay for hours worked “in the gap,” that is, for hours when they “worked more than the regularly scheduled 135 hours, but did not exceed the 147 hour overtime threshold.” Id. at 1266. They brought two claims, one for “pure gap time” pay for those weeks without overtime, and one for “overtime gap time” pay for uncompensated straight time hours worked during weeks when there was overtime. Id. The district court granted summary judgment for the plaintiffs on both theories. Id.
We reversed, granting summary judgment to the defendants. Regarding the pure gap time claim, we held there was no remedy under the FLSA absent a minimum wage violation or overtime violation. Id. at 1280. But regarding the officers’ overtime gap time claim, we focused on § 778.315 and asked whether “all straight time compensation due to the employee for nonovertime hours under the express or implied employment agreement or applicable statute ha[d] been paid” for the week when overtime hours were worked. Id. at 1273. In other words, an overtime gap time violation is a species of overtime violation: an employee who has not been paid all the straight time she is owed has not been properly paid her overtime.
Reviewing the evidence in the summary-judgment record in Monahan, we rejected the officers’ overtime gap time claim after determining that the officers’ salaries were “intended to compensate them for all hours worked up to the overtime threshold” of 147 hours, such that they had no “gap” of uncompensated labor for hours worked between 135 and 147 hours. Id. at 1273. Considering the guidance of § 778.315, then, we concluded that because the officers had been paid their regular wages in accordance with the terms of the employment agreement, their overtime could be considered properly paid, and there was no violation of the FLSA. Id. at 1273, 1279. That is, we rejected the officers’ overtime gap time claim because it suffered from insufficient factual, rather than legal, support. See Balducci, 1999 WL 604040, at *3, *7 (applying our holding in Monahan to reject the “identical issue” of police officers’ overtime gap time claim based on the terms of the employment agreement).
Notably, in Monahan, the plaintiffs claimed there was nonpayment of all straight-time wages for a specified period of time—to wit, the gap between hours worked beyond the normally scheduled 135-hour 24-day cycle but shy of the 147-hour overtime threshold. Id. at 1266. However, this is not the only type of gap
In a previous example, we assumed an employer owed their employee $1,500 in straight-time wages and $750 in overtime wages; however, the employer only paid a total of $1,750, designating $1,000 as straight-time wages and $750 as overtime. In this example, there is not a direct lack of payment for a period of time, so the gap is not precisely the same as the one alleged in Monahan. Instead, the “gap” is the $500 owed for straight-time wages, effectively meaning the employee has been paid for only 2/3 of their straight time worked ($1,000 out of $1,500). Because overtime “cannot be said to have been paid . . . unless all the straight time” is paid,
As this example shows, allowing any amount other than the full amount of straight-time wages to count as compliance would frustrate the purposes of the FLSA just as surely as would nonpayment for specified hours. See Fire & Safety Investigation Consulting Servs., 915 F3d at 286 (holding that allowing an employer to “merely label” components of employee‘s salary as “non-overtime” and “overtime” “would permit employers to invent [creative] payment schemes that . . . [are a] post-hoc attempt to reverse-engineer compliance with the FLSA” (quoting
Accordingly, our decision in Monahan recognized there is a cause of action under the FLSA for overtime gap time claims. Although many courts acknowledge our holding, see, e.g., Davis, 765 F.3d at 244 (3d Cir.) (citing Monahan as an example of courts recognizing as “viable” overtime gap time claims), some have declined to follow our reasoning and have rejected overtime gap time as a cognizable violation of the FLSA, see Lundy v. Catholic Health Sys. of Long Island, Inc., 711 F.3d 106, 116 (2d Cir. 2013). The only other circuit to squarely consider § 778.315 and a claim for overtime gap time is the Second Circuit, which rejected the plaintiffs’ gap-time claims. Id. at 116–17. Applying Skidmore, the Second Circuit summarily concluded that § 778.315 was owed no deference after finding it unpersuasive because
For the reasons previously noted, we afford “considerable deference” to the Department‘s interpretation of § 778.315. See Monahan, 95 F.3d at 1272 n.10. In Monahan, we “weighed the evidence . . . in the light of the [Department‘s § 778.315 guidance] and reached a result consistent” with such interpretation.9 Skidmore, 323 U.S. at 140 (reversing the district court‘s judgment for the defendant because its interpretation of the FLSA overtime provision was contrary to the guidance provided by the Wage and Hour Administrator‘s interpretive bulletin).
Accordingly, we hold that overtime gap time claims are cognizable under the FLSA.
D.
Consistent with § 778.315 and Monahan, we now lay out the standard for determining whether a plaintiff has pled sufficient factual allegations of an FLSA overtime gap time violation to overcome a
We begin our analysis by looking to our prior case law regarding overtime claims since overtime gap time violations fall under the larger umbrella of overtime violations. In Hall, we held that “a plausible overtime claim” could be sustained when the employee “worked more than forty hours in at least one workweek,” and the “employer failed to pay the requisite overtime premium for those overtime hours.” Id. at 776–77 (discussing and adopting a lenient pleading approach). For the first part—at least one week of overtime work—a reasonable inference can be supported by “sufficient detail about the length and frequency of [the employee‘s] unpaid work.” Id. at 777 (quoting Nakahata v. N.Y. Presbyterian Healthcare Sys., Inc., 723 F.3d 192, 201 (2d Cir. 2013). This standard “does not require plaintiffs to identify a particular week in which they worked uncompensated overtime hours.” Id. Rather, they must “provide some factual context that will ‘nudge’ their claim ‘from conceivable to plausible.‘” Id. (quoting Dejesus v. HF Mgmt. Servs., LLC, 726 F.3d 85, 90 (2d Cir. 2013)).
The second part of the standard in Hall—uncompensated overtime wages—provides a useful model for an overtime gap time claim. In an overtime gap time claim, we ask whether “all the straight time compensation” has been paid pursuant to the relevant employment agreement “(express or implied)” or “under any applicable statute,” such that the employee can actually be said to have been compensated for their overtime.
For purposes of a motion-to-dismiss analysis, therefore, we ask whether Conner has adequately alleged that, under the terms of the employment agreement or statute, she did not receive the full amount of compensation due for straight-time wages.
To summarize, we apply a two-prong test for determining an overtime gap time violation under the FLSA. To overcome a
IV.
Having provided the foundation for analyzing overtime gap time claims, we now turn to the matter before us. For the reasons stated below, we hold that Conner has sufficiently pleaded allegations of an overtime gap time violation under the FLSA. We vacate and remand accordingly.
A.
Conner alleges that she worked overtime hours and that Cleveland County undercompensated her and similarly situated EMS personnel for their straight time worked. To sustain this case, Conner must provide sufficient factual allegations to support a plausible overtime gap time claim according to our two-prong test set forth above—(1) the employee worked overtime in at least one week; and (2) the employee was not paid all straight-time wages due under the employment agreement or applicable statute. We address each prong in turn.
1.
First, Cleveland County contends that Conner‘s complaint does not plausibly allege that she ever worked more than 40 hours a week because her amended complaint only states that full-time EMS personnel like Conner “are scheduled pursuant to a 21-day repeating schedule” to work more than 40 hours a week. J.A. 9 (emphasis added). Further, Cleveland County argues that Conner only provides a “conclusory statement that she ‘regularly worked in excess of forty hours per week without receiving overtime pay‘” and that the FLSA requires more. Response Br. at 27 (quoting Hall, 846 F.3d at 777). These arguments are without merit.
In the Consent to Become a Party Conner attached to her amended complaint as an exhibit, Conner states she “worked the 24 hours on-48 hours off schedule during one or more work weeks of [her] employment.”
Taken together and by Cleveland County‘s own admission, Conner sufficiently alleges she actually worked more than forty hours in at least one work week. Conner need not “identify a particular week” when she worked overtime, Hall, 846 F.3d at 777, but must merely provide enough “factual context” to “‘nudge’ [her] claim ‘from conceivable to plausible.‘” Id. (quoting Dejesus, 726 F.3d at 90). We are satisfied that Conner has done that by alleging she worked a 21-day, 24 on/48 off schedule. Thus, she satisfies the first prong.
2.
Conner also sufficiently alleges that the terms of her employment agreement were violated when Cleveland County failed to pay all of her straight-time wages, satisfying the second prong.
Conner contends the Ordinances are the employment agreement, and that they establish the salary that provides Conner‘s regular wages. See J.A. 10 (alleging the employment relationship is “one of contract,” and Conner “and all other similarly situated employees have contractual rights to wages previously earned based on the . . . Ordinances“). She claims that the Plan is only relevant insofar as she is “subject to the same policies and procedures” for the payment of overtime set forth in the Plan. J.A. 12.
Conner alleges that, from 2015 to 2018, Cleveland County disregarded her employment agreement under the Ordinances and paid her regular wages under a different calculation provided in the Plan, resulting in lower pay than she would otherwise receive under the Ordinances. Conner points to Cleveland County‘s decision to change its method for compensating EMS personnel in 2018, when it began calculating “regular wages” by dividing the annual salary designated by the corresponding salary grade and step by 24. J.A. 14. She alleges that Cleveland County should have paid EMS personnel in the same manner for the three years prior to January 1, 2018.
We leave it to the district court in the first instance to gain “a foundational understanding” of these pay plans in order to determine the terms of the employment agreement at issue in this case and to determine the merits of Conner‘s claims. Monahan, 95 F.3d at 1273–74 (considering, at the summary judgment stage, local ordinances, the employer‘s policies and procedures, classified advertisements for the specific position, and the conduct of the parties in order to determine “the terms of the employment agreement“). For present purposes, we conclude that Conner has sufficiently averred (1) there was an employment agreement between the parties that governed the work and compensation arrangement between them, and (2) her straight-time wages have not been paid according to that arrangement.
B.
Finally, regarding Monahan, the district court did not reject the validity of Monahan nor conclude that Monahan does not recognize overtime gap time claims. Rather, it found that Conner had not pleaded a valid overtime gap time claim under Monahan. See Conner, 2019 WL 3948365, at *2–3. In so concluding, the district court seized on Monahan‘s holding that
if the mutually agreed upon terms of an employment agreement do not violate the FLSA‘s minimum wage/maximum hour mandates and provide compensation for all nonovertime hours up to the overtime threshold, there can be no viable claim for straight gap time under the FLSA if all hours worked above the threshold have been properly compensated at a proper overtime rate.
Id. at *3 (quoting Monahan, 95 F.3d at 1273) (emphasis added). The district court believed that because Conner had been paid the appropriate rate for her overtime hours, she needed to “assert plausible factual allegations that her ‘straight time’ compensation agreement either violate[d] the minimum wage or maximum hour mandates of the FLSA.” Id. at *2. Because Conner “made no such allegation[],” the district court concluded that her FLSA claim failed. Id. at *2–3.
The district court misconstrued our holding in Monahan regarding the importance of the employment agreement when analyzing an overtime gap time claim. The test is not whether the underlying employment agreement facially violates either the minimum wage or maximum hour requirements. In such a case, an overtime gap time claim would be unnecessary—the claim would instead be a normal minimum wage or overtime claim. Instead, to determine whether there is an overtime gap time claim, we look to whether the straight time wages have been paid pursuant to the terms of the employment agreement. If the straight time wages have not been paid as such, and an employee works overtime that week, then there could be an overtime gap time claim.
V.
In sum, we hold that an overtime gap time claim is cognizable under the FLSA. The FLSA ensures employees are adequately paid for all overtime hours. To do this, courts must ensure employees are paid all of their straight time wages first under the relevant employment agreement, before overtime is counted.
For the foregoing reasons, the district court erred in granting Cleveland County‘s motion for judgment on the pleadings. Accordingly, we vacate its opinion and remand for a determination on the merits of Conner‘s overtime gap time claim under the FLSA.10
VACATED AND REMANDED