Federal appeals court backs Department of Labor in wage case against Unitil

Panel sends misclassification case back to District Court

Us Court First CircuitA three-judge panel on the U.S. First Circuit Court of Appeals has ruled that Hampton-based utility Unitil misclassified two groups of workers as overtime-exempt administrative employees

The panel ruled that U.S. District Court Judge Landya McCafferty erred in her previous decision in the case of Walsh v. Unitil Service Corp., that Unitil dispatchers and controllers were primarily engaged in high-level administrative tasks. The ruling thus sends back the court the U.S. Department of Labor claims that the company illegally deprived those workers of overtime pay.

The opinion, issued Jan. 11, stems from a dispute over whether dispatchers and controllers managed their employer’s business operations, which would exempt them from overtime rules, or were directly engaged in Unitil’s primary business offering.

“Unitil Service has not demonstrated that the dispatchers’ and controllers’ primary duty consists of work ‘directly related to the management or general business operations’ of its customers,” U.S. Circuit Judge Gustavo Gelpí wrote for the panel.

The panel ruled that the lower court wrongly determined that dispatchers and controllers, who spent roughly 60 spent of their workdays monitoring electrical and gas pipeline systems, were engaged in regulatory compliance, quality control and health and safety tasks. While dispatchers and controllers monitored gas and electric distribution networks, they did not design, plan, test or evaluate those systems, the panel noted.

“Their duties lack the level of generality required by the regulation and the case law to conclude, without further inquiry, that they were engaged in ‘management or general business operations’ as opposed to routine, day-to-day affairs,” the panel ruled.

Under the Fair Labor Standards Act, most employees are owed time-and-a-half overtime premium pay when they work more than 40 hours in a single week. However, certain salaried workers whose primary duties are related to higher-level management of business functions, such as accounting or human resources operations, are exempt from those requirements.

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