5th Circuit says no to FLSA misclassification claim

The U.S. 5th Circuit Court of Appeals (which covers Louisiana, Mississippi, and Texas) recently analyzed the proper application of the administrative exemption under the Fair Labor Standards Act (FLSA). The court’s decision serves as a reminder of the fact-intensive analysis required in employee misclassification cases and the importance of an employer’s diligence in ensuring compliance.

Employees claim misclassification to deny them overtime pay

Six employees holding three different job titles filed a collective action under the FLSA against their former employer, New Orleans Regional Physician Hospital Organization, LLC, (which does business as People’s Health). They alleged the employer had misclassified them as exempt under the FLSA, and they were entitled to overtime.

People’s Health, a managed care company that offers a Medicare Advantage Plan insurance product to eligible individuals, contended the six were properly classified as exempt administrative employees. The district court granted summary judgment (dismissal without a trial) in the employer’s favor, and the former employees appealed.

Four of the employees were contracting specialists responsible for signing up physicians and hospital-based providers to join the People’s Health network. One employee was an operations specialist responsible for working on projects designed to improve operational processes and efficiencies. The sixth employee was a pharmacy specialist who had several responsibilities, including preparing documentation for audits, reviewing claims, and analyzing compliance issues.