What you need to know about the recent FLSA decision on overtime compensation: Allen v. City of Chicago

December 16, 2015

Employment Law Alert

Author(s): Laura B. Bacon, Brittany A. Bogaerts

A recent federal district court opinion sheds light on questions surrounding overtime compensation for work performed remotely.

Many employers may be seeking guidance in developing policies for work performed by employees that are offsite or “off-duty.” The Fair Labor Standards Act (“FLSA”) requires that non-exempt employees receive overtime compensation for time worked in excess of 40 hours per week. But accounting for work performed remotely can present challenges. A recent decision by the U.S. District Court for the Northern District of Illinois provides some important points of clarification for employers looking for answers.

A class of 51 officers employed by the Chicago Police Department’s Bureau of Organized Crime (“BOC”) pursued a claim for overtime compensation, alleging that they were not properly compensated for time spent working on their Department-issued BlackBerry devices while off duty. The case proceeded to trial on the threshold question of whether the Chicago Police Department (“CPD”) maintained an unwritten policy to deny plaintiffs compensation for off-duty work performed on their BlackBerrys.

After hearing several days of testimony, Magistrate Judge Schenkier held that the plaintiffs failed to prove that the CPD “maintained an unwritten policy not to pay plaintiffs for compensable work performed outside of normal work hours on their CPD-issued BlackBerry devices.” Although his decision was limited to the facts specific to this case, Judge Schenkier’s 38-page opinion provides some insight on this difficult-to-navigate issue:

  1. Work performed remotely may be compensable work pursuant to the FLSA. The court focused on testimony presented about whether e-mails or calls that the officers received on their BlackBerrys did in fact require immediate action or response. If the work could wait until the next workday or the next time the officer is on shift, it did not warrant overtime pay. But e-mails or calls that did necessitate immediate follow-up work while off-duty constituted compensable work activity under the FLSA.
  2. Merely “monitoring” a BlackBerry or other electronic device is likely not compensable work time. The litmus test for compensable work time while “off-duty” is whether employees can still spend their time off “primarily for their own benefit without persistent interruptions.” If they can, they need not be compensated simply for possessing an electronic device.
  3. DON’T issue an impractical policy for overtime pay that employees don’t understand. The court was critical of the CPD’s attempts to issue written “guidelines” that purported to define compensable off-duty work and communicate to officers that they were generally not to use the BlackBerrys while off-duty unless they sought pre-approval to do so. The officers’ trial testimony indicated overall confusion about these guidelines, particularly because the nature of the work performed using BlackBerrys did not lend itself to pre-approval. In fact, the court determined that these guidelines did not change the officers’ general practices for working off-duty or whether or not they submitted time slips for this work.
  4. DO issue a written policy that fairly compensates employees for off-duty time spent using an electronic device. The court wondered why the CPD didn’t issue a policy as simple as “if you perform off-duty work on the BlackBerry that is necessary to your job, submit a time due slip for it and it will be approved.” Several witnesses testified that when they submitted time slips for off-duty work performed on their BlackBerry they were approved, but most officers never submitted time slips for this work. If an employer establishes a reasonable process for an employee to report off-duty work time, and the process is followed, the employer is not liable for non-payment if the employee fails to follow the established process. Indeed, the FLSA “stops short of requiring the employer to pay for work it did not know about, and had no reason to know about.”

The court concluded with some words of advice to the parties, which perhaps serves as valuable guidance to all employers facing similar issues:

Our ruling today only resolves the plaintiffs’ claims for payment of overtime in this specific lawsuit. Even had we found for plaintiffs, this Court would lack the authority to dictate the procedures that the City should adopt to deal with off-duty use of the BlackBerrys…. That said, we hope our ruling today provides helpful guidance to the parties. The march of technology has been steadily (indeed, rapidly) moving forward. We expect that this march forward will continue, and that our use of and reliance on devices that allow work to be performed remotely will not abate. We thus expect that members of the BOC will continue to use their BlackBerrys or like devices while off duty, because of the important work that can be accomplished with them. It is up to the parties to work cooperatively to prevent future litigation concerning compensation for the off-duty use of Department-issued BlackBerrys.

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

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