Five pilots for the Las Vegas Sands Corporation unsuccessfully appealed a district court’s ruling that they were exempt from the Fair Labor Standards Act’s (FLSA’s) overtime pay requirements.
The FLSA generally requires that covered employees receive overtime pay when they work more than 40 hours per week. Employees are exempt from FLSA overtime rules as Highly-Compensated Employees (HCE’s), however, if they earn total annual compensation of at least $107,432 (increased to $132,964 effective 7/2024), and customarily and regularly perform any of the exempt duties or responsibilities of an executive, administrative, or professional employee. The HCE exemption applies only to employees whose primary duty includes performing office or non-manual work.
The five pilots’ primary duties included ensuring the safety of passengers, crew, and aircraft, which involved complex decision-making and discretionary actions. The pilots were also required to be on call for pop-up flights, typically scheduled 24 hours in advance, and had to respond to emails regarding flight notifications within 30 minutes. While on call, they participated in various personal activities and secondary employment. Rarely did the pilots get a call for a pop-up flight.
The pilots referred to a 2018 U.S. Department of Labor (DOL) opinion letter that found that helicopter pilots were not qualified for any overtime exemption because flying a helicopter was manual work.
The district court ruled in favor of Sands. The Ninth Circuit of the U.S. Court of Appeals agreed. The pilots were HCE’s who were exempt from the FLSA overtime because they made over $107,432 per year and performed primarily non-manual labor. The Court was not persuaded by the 2018 DOL opinion letter because: 1) the conclusions in the DOL letter were not supported by facts; and 2) the Sands pilots made complex, discretionary decisions focused on ensuring the safety of the passengers, crew, and the airplane.
Even if the pilots had not qualified for the HCE exemption, the Court found that the pilots’ on call time was not work time because the pilots could and did participate in personal activities. If a pilot said they were unavailable for a pop-up flight, the scheduler moved to the next pilot on the list. The pilots did not receive compensation for the on call time, which also indicated that the time was not work. The Ninth Circuit affirmed the district court and dismissed the case.
Kennedy v. Las Vegas Sands Corp., 2024 US App Lexis 19122 (9th Cir. 2024).
Note: Although few public employees work as pilots, this case is still instructive on two areas of high FLSA liability: 1) whether an employee is exempt from overtime; and 2) when on call time is compensable work time. The fact that the Ninth Circuit did not give any deference to a DOL opinion letter means that public agencies should be wary of relying on them.