Paresi v. City of Portland

182 F.3d 665, 1999 WL 394999
Court of Appeals for the Ninth Circuit·Decided June 17, 1999·No. No. 98-35530·Published·Cited by 9 cases

Opinion

ORDER

SCHWARZER, Senior District Judge:

The memorandum disposition filed April 16, 1999, is redesignated as an authored opinion by Senior District Judge William W Schwarzer.

OPINION

Two groups of Portland City employees (“employees”) filed suit against the City of Portland (“City”) seeking overtime compensation, alleging that the City violated the overtime pay provisions of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-219 (1994), and that the City is not [667] entitled to correct the violations under the FLSA’s “window of correction.” The district court granted the City’s motion for summary judgment, holding that while there was a material issue of fact as to whether the City had violated the FLSA’s overtime pay provisions, the City was entitled to invoke the window of correction to avoid liability. We affirm, holding that the window of correction is available to the City.

BACKGROUND FACTS & PROCEDURAL HISTORY

In 1994, forty-three commanding officers in the Portland Police Bureau filed Paresi v. Portland, alleging a City policy of impermissible reductions in their weekly pay. In 1997, nineteen managerial employees from several other City bureaus filed Delk v. Portland, making the same allegations. The two cases were consolidated by the district court.

Prior to 1994, the City’s Charter and personnel policies permitted disciplinary suspensions without pay to be imposed on both salaried and nonsalaried employees. Bureau supervisors also testified in depositions and by affidavit that they believed they had the authority to discipline salaried employees by imposing suspensions without pay for periods of less than a week. The district court found that two of the plaintiffs had been suspended for periods of less than a week resulting in deductions from their weekly pay.1 Four others were threatened but suspensions were never imposed, while the remaining fifty-seven plaintiffs were neither threatened with nor actually subjected to any impermissible deductions.

In 1994, the City adopted a new employment policy which prohibited any suspensions of FLSA-exempt employees in increments of less than a full week. In 1997, during the course of this litigation, the City acknowledged that the two actual deductions may have been improper, reimbursed the employees, and promised to comply in the future.

The district court granted the City’s motion for summary judgment, holding that even if the City had a policy of imposing suspensions of less than a week on otherwise FLSA-exempt employees, it was entitled to resort to the window of correction to avoid overtime liability.

Subject matter jurisdiction arises under 29 U.S.C. § 1331 (1994). We have appellate jurisdiction pursuant to 28 U.S.C. § 1291 (1994) and affirm.

DISCUSSION

We review the district court’s grant of summary judgment de novo. See Margolis v. Ryan, 140 F.3d 850, 852 (9th Cir.1998).

Under the FLSA, covered employers are required to compensate their employees at a rate of at least time and one-half for all hours worked in excess of forty per week, see 29 U.S.C. § 207(a)(1), unless the employee works in an “executive, administrative, or professional capacity,” 29 U.S.C. § 213(a)(1). To be an executive, administrator or professional, and therefore exempt from overtime, an employee must work “on a salary basis.” See id.; 29 C.F.R. §§ 541.1-.3, 541.118(a) (1998). Under the so-called “salary basis test,” the employee must “receive his full salary for any week in which he performs any work” and his salary may “not [be] subject to reduction because of variations in the quality or quantity of the work performed.” 29 C.F.R. § 541.118(a). If an employer subjects a salaried employee to an imper[668] missible reduction in his weekly pay, the employee ceases to be overtime-exempt. See id. The employer will then have to pay overtime unless the employer corrects the impermissible deduction through the so-called “window of correction” provided for in the regulations as follows:

The effect of making a deduction which is not permitted under these interpretations will depend upon the facts in the particular case. Where deductions are generally made when there is no work available, it indicates that there was no intention to pay the employee on a salary basis. In such a case the exemption would not be applicable to him during the entire period when such deductions were being made. On the other hand, where a deduction not permitted by these interpretations is inadvertent, or is made for reasons other than lack of work, the exemption will not be considered to have been lost if the employer reimburses the employee for such deductions and promises to comply in the future.

29 C.F.R. § 541.118(a)(6)(emphasis added).

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Paresi v. City of Portland, 182 F.3d 665, 1999 WL 394999 (9th Cir. 1999).

182 F.3d 665 (Paresi v. City of Portland) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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