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March 5, 2013

Circuit Rules on the Pleading Standard and Gap-Time Claims in FLSA Actions

On March 1, 2013, in a case in which Putney Twombly represented the prevailing employers, the U.S. Court of Appeals for the Second Circuit for the first time definitively ruled on the pleading standard and so-called “gap-time” claims arising under the federal Fair Labor Standards Act (“FLSA”).  Lundy v. Catholic Health System of Long Island, Inc., (2d Cir. Docket No. 12-1453). 

Pleading Standard under the FLSA   

Despite the flood of FLSA claims in recent years, the Second Circuit “had not previously considered the degree of specificity needed to state an overtime claim under the FLSA.”   In Lundy, the Second Circuit ruled that a plaintiff suing for overtime “must sufficiently allege 40 hours of work in a given workweek, as well as some uncompensated time in excess of 40 hours.”

Finding Plaintiffs’ general allegations not specific enough to allege and FLSA violation, the Second Circuit affirmed dismissal of the Plaintiff’s Fourth Amended Complaint. In so holding, the Court rejected as insufficient allegations that the Plaintiffs “typically” missed meal breaks or were interrupted during meal breaks; “typically” worked an additional 15 minutes before or after each without additional compensation; and were not paid for training time “such as” a monthly staff meeting that “typically” lasted 30 minutes and other training that consisted of, “on average,” 10 training hours per year.  The Second Circuit held that although Plaintiffs’ allegation “could theoretically put [Plaintiffs] over the 40-hour mark in one or another unspecified week (or weeks)…. [Plaintiffs’] allegations supply nothing but low-octane fuel for speculation, not the plausible claim that is required.”  Such speculation alone failed to state a “plausible claim” under the FLSA.

Gap-Time Claims are Not Covered by FLSA

A gap-time claim is one for uncompensated hours below the 40-hour threshold.  The Second Circuit held that the FLSA does not provide for a gap-time claim even when an employee has worked in excess of 40 hours in particular workweek.  The Second Circuit explained that the “FLSA requires only payment of minimum wages and overtime wage.”   According to the Court, while the federal FLSA does not provide a remedy for gap-time claims, state laws (such as the New York Labor Law) do provide remedies.

Significance for Employers

The Lundy decision provides a rare victory for employers defending FLSA actions.  Complaints under the FLSA are generally broadly construed in favor of plaintiff employees.  As a result, many complaints contain only conclusory or speculative allegations of FLSA violations.  Such allegations are difficult for employer to defend.  In light of Lundy, employers have an avenue to consider moving to dismiss where the complaint does not articulate at least a single specific workweek in which the employer violated the FLSA.  Moreover, Lundy makes clear that, in the Second Circuit, gap-time claims generally do not state a cause of action under the FLSA.

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We are proud to have worked closely with our clients to achieve this important, precedent-setting victory that will assist employers in the defense of meritless FLSA claims.   Should you have any questions regarding the Lundy decision or the FLSA generally, please do not hesitate to contact us.