Diaz v. Bloomberg, L.P.

Background

Heidi Diaz sued her former employer, Bloomberg, L.P., on behalf of herself and other similarly situated workers. She asserted claims under the Fair Labor Standards Act (FLSA), a federal wage law, and the New York Labor Law. Her four causes of action alleged unpaid overtime under the FLSA, unpaid overtime under New York law, defective wage notices, and defective wage statements.

Bloomberg moved under Rule 12(c) for partial judgment on the pleadings. That motion asks the court to decide claims based on the pleadings after they are closed. Bloomberg sought dismissal of the first two causes of action only insofar as they challenged the overtime rate produced by Bloomberg’s use of the fluctuating-workweek (FWW) method. Bloomberg did not seek dismissal of allegations that it failed to pay Diaz for some overtime hours altogether.

Diaz alleged that Bloomberg reclassified her position as non-exempt in March 2019, making her eligible for overtime. She signed a notice stating that her fixed weekly salary compensated her for all hours worked in a week and that Bloomberg would pay an additional 50% premium for hours over 40. She nevertheless alleged that she worked unpaid time before and after scheduled shifts, during meal breaks, on weekends, on days off, and from home. She also alleged that, on occasions when she received overtime pay, Bloomberg paid one-half of her regular rate.

Court’s Analysis

The court explained that the FLSA and New York law generally require overtime pay at one and one-half times the regular rate for hours over 40 in a week. Under the FWW method, however, an employee receives a fixed weekly salary covering all hours worked, and the employer pays an additional 50% of the regular rate for overtime hours.

The court identified five requirements for using the FWW method: the employee’s hours must fluctuate; the employee must receive a fixed weekly salary regardless of hours worked, excluding overtime premiums; the salary must provide at least the minimum wage; the employer and employee must clearly understand that the fixed salary applies regardless of hours worked; and the employee must receive the 50% overtime premium for hours over 40.

The court concluded that Diaz’s allegations established the requirements at issue. Her allegations that she worked different amounts of time before and after shifts, through lunch, and during an additional eight-hour shift showed that her weekly hours fluctuated. The court stated that the rule did not require a material amount of variation. The court also found the fifth requirement satisfied because Diaz acknowledged that Bloomberg paid her reported overtime hours at the 50% rate.

The court rejected Diaz’s argument that Bloomberg could not use the FWW method because it allegedly failed to pay some overtime hours at all. It treated the legality of using the FWW method as different from whether Bloomberg owed back pay for particular unpaid hours. The court stated that the latter question was not resolved by this motion.

Disposition

The court granted Bloomberg’s motion for partial judgment on the pleadings. It dismissed Diaz’s first and second causes of action to the extent they alleged that Bloomberg improperly used the FWW method and therefore paid overtime at an incorrect rate. The court declined to grant Diaz leave to amend those claims, stating that she had already received an opportunity to amend and that the problems with these allegations could not be cured through better pleading. The ruling did not dismiss the allegations that Bloomberg failed to pay Diaz for certain overtime hours altogether, and it did not address the third and fourth causes of action. Judge Jesse M. Furman also reinstated the initial pretrial conference.