Each Paycheck Starts New Statute of Limitations Period for Overtime Lawsuits

The U.S. Court of Appeals for the DC Circuit has ruled that police officers may pursue their lawsuit for unpaid overtime with respect to any pay period that is not barred by the statute of limitations [Figueroa v. District of Columbia Metropolitan Police Department, CA DC, Dkt. No. 09-7133, 2/11/11].

The facts. Officers at the District of Columbia Metropolitan Police Department (MPD) sued their employer under the Fair Labor Standards Act (FLSA), alleging that MPD had failed to include in their overtime calculation additional pay ($595 per year) that they were entitled to receive under the District of Columbia Code after being promoted to detective sergeant. Following an arbitrator's ruling, the MPD agreed to give the officers lump sum payments of $595 for every year since they had been promoted to the position of detective sergeant. However, the MTD did not recalculate the officers' overtime to take into account the $595 stipend.

The law. 29 USC 216(b) of the FLSA allows employees to seek damages from their employer for overtime violations. However, 29 USC 255(a) of the FLSA bars any action for unpaid overtime if not commenced within two years of a non-willful violation and within three years of a willful violation.

The officers first became aware of the overtime miscalculation on Dec. 12, 2003. They filed a lawsuit to have their overtime recalculated to include the stipend on Nov. 5, 2007.

A federal district court ruled that the officers could not pursue their overtime claim since they filed their lawsuit more than three years after the initial overtime violation. The officers appealed the ruling. They argued that the statute of limitations begins again each time after they receive a paycheck without proper overtime compensation.

The ruling. The DC Circuit agreed with the officers. It said that the officers' lawsuit was not based on a single violation of the FLSA that occurred outside the statute of limitations, but on repeated violations, some of which fell within the limitations period. Therefore, the officers may pursue their overtime claim with respect to pay periods that occurred within two years of the date of their lawsuit for a non-willful violation, and within three years of the date of their lawsuit for a willful violation.

The DC Circuit remanded the case back to the district court for further proceedings consistent with its opinion.