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The U.S. Court of Appeals for the Second Circuit Court has again nixed a “gap time” pay claim under the Fair Labor Standards Act. “Gap-time” claims are those in which employees seek recovery for unpaid time worked even though they have not worked 40 hours in a week. In Nakahata v. New York Presbyterian Hospital, the Second Circuit followed its recent decision in Lundy v. Catholic Health Systems of Long Island, Inc., holding again that the FLSA does not provide a cause of action for unpaid gap time. Rather, the FLSA is only available where wages fall below the statutory minimum or hours rise above the overtime threshold because the FLSA “simply does not contemplate a claim for wages other than minimum or overtime wages.”
Nakahata involved claims by a putative class of healthcare employees against four large New York City healthcare systems who alleged their employers did not pay them for work performed during meal breaks, before and after scheduled shifts, and during required training sessions. They asserted both “gap-time” claims and overtime claims under the FLSA and New York Labor Law (NYLL).
The Second Circuit affirmed the district court’s dismissal of the FLSA gap time claim with prejudice, and also affirmed the dismissal of the FLSA and NYLL overtime pay claims because the allegations in the plaintiffs' complaints did not allege sufficient facts to support an inference that they worked more than 40 hours in a given week. However, the Second Circuit found the district court had abused its discretion in denying the plaintiffs an opportunity to seek to amend their complaints and remanded the cases to allow the plaintiffs an opportunity to replead the overtime claims.
The court also remanded the dismissal of the NYLL gap time claims for reconsideration, acknowledging that the New York statute permitted recovery of wages when an “employee is paid . . . less than the wage to which he or she entitled” without regard to the number of hours the employee worked in a week.
The court also noted that the plaintiffs could renew their motions for certification on remand. As in most recent decisions, the Second Circuit also affirmed dismissal of the plaintiffs’ fraud, negligent misrepresentation, conversion and Racketeer Influenced and Corrupt Organizations Act (RICO) mail fraud claims, in which the plaintiffs claimed their paychecks misleadingly purported to pay them for all hours worked. On the contrary, the court held, mailing pay stubs cannot further a fraudulent scheme because the pay stubs would have revealed, not concealed, that the plaintiffs were not being paid for all of their alleged compensable overtime.
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