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Saturday, October 22, 2011

When A Deal Is Not A Deal -- You Can't Waive Overtime

It is not uncommon to claim that a "deal is a deal" in employment cases like overtime and independent contractor lawsuits as a defense. It is often argued that the plaintiff agreed to be classified as an independent contractor or agreed to accept a salary in lieu of overtime even though expecting to work more than 40 hours a week. In Brooklyn Bank v. O’Neal, 324 U.S. 697, 707 (1945), however, the Supreme Court held:

"No one can doubt that to allow waiver of statutory wages by agreement would nullify the purposes of the [FLSA]. [P]olicy considerations ... forbid waiver of basic minimum and overtime wages under the Act ...."

Almost 40 years later, the Court reaffirmed in Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 745 (1981), that FLSA rights are not waivable. Lower courts have obviously followed suit. See, e.g., Abbott v. Beatty Lumber Co. 90 Mich. App. 500, 504, 282 N.W.2d 369, 371, 282 N.W.2d 369 (1979)(statutory entitlement to overtime compensation may not be waived by the employee even by a collective bargaining agreement, since to do so would nullify the purposes of the FLSA); Marshall v. R&M Erectors, 429 F. Supp. 771, 780 (D. Del. 1977); Kendrick v. Alternative Care, Inc., 2006 WL 4756451 (M.D. Fla. Oct. 25, 2006); Underwood v. NMC Mort. Corp., 445 F.R.D. 720, 723 (D. Kan. 2007)(employees cannot waive their right to overtime wages); Harrington v. Despatch Indus. L.P., 2005 U.S. Dist. LEXIS 12781 (D. Mass. 2005) (even though Plaintiff’s hiring letters stated that he was an exempt employee, plaintiff did not thereby relinquish his entitlement to overtime pay).

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