Flores v. City of San Gabriel, No. 14-56421 (9th Cir. 2016)Annotate this Case
Plaintiffs, current and former police officers employed by the City, filed suit against the City under the Fair Labor Standards Act (FLSA), 29 U.S.C. 201-19, alleging that the City failed to include payments of unused portions of plaintiffs’ benefits allowances when calculating their regular rate of pay, resulting in a lower overtime rate and a consequent underpayment of overtime compensation. Plaintiffs asserted that the City’s violation of the FLSA was “willful,” entitling them to a three-year statute of limitations. The court concluded that the City’s payment of unused benefits must be included in the regular rate of pay and thus in the calculation of the overtime rate for its police officers as well. Furthermore, because the City took no affirmative steps to ensure that its initial designation of its benefits payments complied with the FLSA and failed to establish that it acted in good faith in excluding those payments from its regular rate of pay, plaintiffs are entitled to a three-year statute of limitations and liquidated damages for the City’s violations. The court concluded, however, that the City has demonstrated that it qualifies for the partial overtime exemption under section 207(k) of the Act, limiting its damages for the overtime violations. Accordingly, the court affirmed in part and reversed in part the district court's summary judgment partially in favor of plaintiffs.