Employees with Different Job Titles Still Similarly Situated

​Employees, regardless of their position, who claimed they were all paid a daily rate that did not accurately account for their overtime hours, were found to have sufficiently similar claims to move forward with their collective action for unpaid overtime under the Fair Labor Standards Act (FLSA). 

The named plaintiff brought a lawsuit against his employer, Furmanite America, on behalf of himself and "similarly situated" pipeline inspectors. He was employed by Furmanite as a pipeline inspector in Tulsa, Okla. He alleged that Furmanite paid him and other pipeline inspectors a daily rate as opposed to an hourly rate, and intentionally and unlawfully disguised it by maintaining pay records that artificially divided the daily rate into straight time pay and overtime pay.

The plaintiff's time records revealed that when he worked five days a week, he was always paid the same amount of straight time (40 hours) and the same amount of overtime hours (12.22 hours). A similar pattern existed for a six- and seven-day workweek. 

Furmanite took the position that it did pay the plaintiff an hourly wage and complied with the FLSA. Furmanite explained that the company was paid a daily rate on a client project and used that rate to calculate workers' hourly rates.

The company set the plaintiff's hourly wages by first determining what it was being paid per day and then subtracting from that figure the amount of profit it wanted to make per day; the rest was used for its staffing budget. Using a backward calculation, the company determined the hourly rate that would allow it to pay employees straight time and overtime while staying within its staffing budget. Furmanite argued that this was not the same as paying its employees a daily rate, which would be a violation of the FLSA.

The plaintiff sought conditional certification of a collective class under the FLSA, to include all inspectors who were employed by Furmanite in its Tulsa branch office. Furmanite opposed the certification of the class on grounds that the employees did not hold the same positions or have the same job duties and responsibilities and thus were not similarly situated, which is a requirement for certification.

The court found that the employees were similarly situated and thus satisfied the test to establish a conditional collective class. While plaintiffs are generally required to have similar jobs, a class that encompasses a wide range of positions may be conditionally certified as long as the differences between the class members are not material to the allegations in the case, the court said.

The FLSA violation alleged in this matter—a compensation scheme—did not depend on the job title or responsibilities of the employee. Therefore, holding similar jobs was not a requirement to meet the standard. "Similarly situated" does not necessarily mean identically situated, the court said.

Wade v. Furmanite America Inc., D. Tex., S.D. Texas, No. 3:17-cv-00169 (May 4, 2018). 

Professional Pointer: In reviewing employee compensation packages for compliance with the FLSA, it is important to ensure that employees are being appropriately compensated for overtime hours and that proper time records are being kept. Employers also must review the process by which the hourly rates are being determined. They should note that the definition of "similarly situated" in a collective class FLSA matter is not limited to employees in the same or similar positions but can be defined as employees in different positions who are paid using the same formula.  

Anthony J. Vinhal is an attorney with Carmagnola & Ritardi LLC, the Worklaw Network member firm in Morristown, N.J.