Districts increasingly hit with lawsuits alleging labor violations

Soronen reports on this topic in the June issue of Inquiry & Analysis, a newsletter for members of NSBA's Council of School Attorneys.

David S. Fortney, the former acting solicitor of labor general for the U.S. Department of Labor, says the most common form of employment class action lawsuits now deal with the FLSA. Most of these cases involve the failure of districts to pay employees for overtime.

Aggressive attorneys

Mike Espy, a former member of Congress and U.S. secretary of agriculture, has teamed up with other lawyers to form the School Litigation Group to aggressively seek school employees whose FLSA overtime rights might have been violated.

According to Soronen, the School Litigation Group sets up shop in various cities and then advertises for potential plaintiffs by holding press conferences, putting up bulletin boards, advertising on the radio with a toll-free number, and even chartering planes carrying slogans about the issue.

The School Litigation Group says it represents plaintiffs in Alabama, Arkansas, Georgia, Mississippi, Tennessee, and South Carolina. Its next targets are Illinois, Missouri, and Louisiana.

Mississippi has dealt with thousands of FLSA claims in the last few years. Since the summer of 2000, approximately 6,000 employees in 105 of Mississippi's 152 districts have filed FLSA claims. Most of the cases have been settled for $4,000 to $5,000 per plaintiff.

The Harrison County, Miss., school district, when faced with lawsuits, determined that it owed approximately $500,000 to about 250 of its 2,000 employees. More than 100 employees thought the district owed them more, and a federal judge agreed, to the tune of an additional $160,000.

The total cost to Mississippi school districts is estimated at $15 to $20 million.

The most common complaint in Mississippi was that employees were not paid for working overtime.

The FLSA requires that "covered" or "non-exempt" employees (generally non-administrator, support staff) receive overtime or compensatory time when working more than 40 hours a week at the rate of time and one-half of their basic hourly rate for the excess hours.

The overtime provisions of the FLSA do not apply to teachers or other academic administrative employees.

Examples of employees who should have received overtime pay include a superintendent's secretary who took notes once a week at evening board meetings, a teacher assistant who came to work early with a spouse who taught at the same school, and a conscientious employee who skipped lunch when things were hectic.

Under the FLSA, an employee who works two non-exempt positions for a total of more than 40 hours a week, must be paid a blended overtime rate for the excess hours. A common example of dual employment is a bus driver who also works as a custodian.

Another case where districts sometimes fail to pay overtime is when a person works for two employers, such as when a custodian also drives a school bus for a private company under contract with the district.

If the FLSA considers such employees "joint employees" of the school, they are eligible for overtime if they work more than 40 hours a week in both positions.

In general, employers are not required to compensate employees for non-working hours related to out-of-town travel. However, out-of-town time is only considered non-working if the employee is not required to perform any work.

An employee who performs two jobs for the district, one of which involves out-of-town travel, can easily work more than 40 hours a week. An example is a bus driver who drives regular routes and drives students to extracurricular events.

The FLSA does not require employees to be compensated for meal periods that last 30 minutes or more or rest periods of 20 minutes or more. But if a district has a 23-minute lunch period, non-exempt employees must be paid for this time.

Comp time

In lieu of overtime pay, the act allows school districts to give employees one and one-half hours of compensatory time for each hour worked over 40. However, a plan to give comp time must be agreed to before the work is performed -- either through a collective bargaining agreement or a memorandum of understanding.

Employees can only accrue up to 160 overtime hours (240 comp-time hours). Additional time above 160 hours must be paid. Employees must be permitted to use comp time within a "reasonable period" after the request is made as long as using it does not "unduly disrupt" the operations of the school.

The FLSA exempts executives and administrative employees from overtime pay. For an employee to be classified as an executive, his or her primary duty must be the management of the enterprise, and he or she must direct the work of two or more employees.

An administrative employee's primary duty must be office or non-manual work that directly relates to policies or the general business operations and requires the exercise of discretion and independent judgment.

According to the U.S. Department of Labor, an employee generally must spend more than 50 percent of his or her time on primary duties to be classified as executive or administrative.

Often in rural schools, the head cook or the lead food service worker has management duties and supervises the kitchen staff, but also performs non-management duties, such as preparing and serving food. If such an employee's management duties do not exceed 50 percent of the work time, he or she would not qualify as an executive employee.

School districts in Mississippi largely were compelled to pay claims under the FLSA because the burden is on the employer to prove that it did not violate the law. Districts often kept poor records, so even if an employee did not have a solid case, the districts could not prove it.

Both the district and individual supervisors might be liable for civil damages for FLSA violations. Penalties can include double the amount of back pay owed, plus additional fines and plaintiff's attorney fees. The Labor Department also can seek criminal penalties of up to $10,000 for the first offense and up to six months in jail for a second offense.

Avoid FLSA violations

Soronen offers the following tips for avoiding FLSA violations:

• Make sure employees have been properly classified as exempt or non-exempt.

• Keep accurate, detailed records on the amount of time nonexempt employees worked. Time clocks could eliminate many record keeping problems.

• If a school district does not want overtime performed, it should adopt a policy prohibiting unauthorized overtime -- and enforce it through discipline, if necessary.

• Make sure FLSA notices are posted where all employees are likely to see them.

• Review all policies regarding overtime, particularly relating to record keeping, dual employment, out-of-town travel, breaks, compensatory time, and joint employment.

• Provide training on the requirements of FLSA to managerial and supervisory employees, such as superintendents and principals, and to human resource personnel, business managers, and bookkeepers who administer this law on a day-to-day basis.

• Make sure covered employees receive copies of FLSA policies and that these policies are explained and enforced.

If a district is faced with an FLSA claim, Soronen urges district officials to call the district's legal counsel immediately to get advice on how to investigate and settle the claim as quickly as possible.

Districts should work to defeat plaintiffs' attorneys' attempts to establish "collective actions," she says. FLSA allows employees to file a collective action and recover on behalf of other similarly situated employees. That could result in many employees joining the claim.

While the courts' interpretations of "similarly situated" vary from state to state, school attorneys in Alabama have successfully argued in many cases that district employees are not "similarly situated" and have avoided collective actions.

Soronen advises district officials to stay on good terms with union representatives. In states that are unionized, union representatives rather than plaintiffs' attorneys can help employees resolve FLSA claims. As a result, districts might have a better chance at out-of-court settlements and thus avoid paying attorneys' fees.

Finally, if a district believes it might be violating the FLSA but has not yet been sued, it should consider hiring a law firm that specializes in this area to perform an FLSA audit.