9th Circuit Addresses Details Of Overtime Exemptions

The Ninth Circuit Court of Appeals, which has jurisdiction over Nevada, has issued a decision interpreting elements of the Fair Labor Standard Act’s (FLSA) overtime exemption for highly compensated employees. While this decision involved airline pilots, the principles interpreted by the court are relevant to a broader scope of jobs. This decision provides helpful guidance to employers who rely upon the highly compensated employee exemption as well as other overtime exemptions, such as the administrative exemption. 

The case, Kennedy v. Las Vegas Sands Corp., posed the question of whether corporate jet pilots were properly classified as exempt from overtime under the highly compensated employee exemption. The Ninth Circuit Court of Appeals ultimately agreed with the employer and the Nevada trial court that the pilots were properly classified as exempt. 

One of the issues for the court’s consideration was whether the pilots “performed primarily non-manual work” – an element that must be satisfied for the highly compensated employee exemption but also for the administrative employee exemption. The court explained that while the pilots used their hands and feet to fly the plane, their primary function was actually making decisions and taking actions to ensure a safe flight. Because most of their tasks involved the “complicated decision-making processes” required to safely operate an airplane, they were different than manual laborers. 

The pilots also argued that they should be classified as manual laborers because they obtained their job skills via apprenticeships and on-the-job training, instead of a college degree. The court disagreed, finding that an employee without an advanced degree can still be classified as performing non-manual work. “The distinction between the two depends on the mental complexity of the task performed and the amount of physical labor required.” Since the pilots’ “primarily engaged in complex decision making focused on ensuring the safety of the passengers, crew, and airplane,” the court determined that they were primarily non-manual laborers.  

If you are interested in learning more about how FLSA exemptions are analyzed, this is an interesting case to read. If you have questions about wage and hour laws, please contact a KZA attorney. 

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.