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Minces PLLC Obtains Fifth Circuit Victory in FLSA Overtime Case Against O’Connor & Associates

April 3rd, 2020 by David Minces

Today, in a published opinion by Judge Jennifer Walker Elrod, the Fifth Circuit Court of Appeals affirmed Texas Southern District Court Magistrate Judge Frances H. Stacy’s judgment in favor of 11 property tax consultants represented by Minces PLLC. Judge Stacy found, and the Fifth Circuit affirmed, that O’Connor & Associates violated the Fair Labor Standards Act (“FLSA”) by failing to pay overtime to property tax consultants. As a result, the consultants, who were misclassified as exempt, were entitled to recover 100% of their unpaid overtime. The FLSA mandates that employers pay their non-exempt employees time and one half for each hour worked over 40 in a workweek.


There are numerous exemptions to the overtime provision of the FLSA. The employer has the burden of proof to establish an exemption applies. O’Connor & Associates attempted to rely on the FLSA’s administrative exemption. The administrative exemption requires that employees are “employed in a bona fide executive, administrative, or professional capacity.” To avail itself of this exemption, an employer must prove by a preponderance of the evidence that: (1) the employee was paid on a salary basis at a rate not less than $455 per week (now $684 per week), (2) the employee’s the employee’s primary duty consisted of “work directly related to the management or general business operations of the employer or the employer’s customers,” and (3) the employee exercised “discretion and independent judgment with respect to matters of significance.” As discussed in its Opinion, the Fifth Circuit agreed with the district court that “the plaintiffs’ ‘duties were ‘production’ in nature,’ such that O’Connor did not meet its burden of proving that its employees’ duties related to the management or general business operations of the company.”

The Opinion addressed the second element of the requirements listed above, which was dispositive. As the Opinion states “O’Connor admitted that the consultants did not manage the business and that their duties in producing tax savings ‘fell squarely on the production side of the equation.’” The Opinion concludes:

O’Connor pointed to no job responsibility carried out by a property-tax consultant that related in any way to the management or general business operations of the company or its customers. The consultants merely provided the day-to-day service that O’Connor sold to its clients—the reduction of property taxes. We agree with the district court that O’Connor failed to meet its burden on this requirement; we therefore need not address the other two.

The Fifth Circuit also affirmed the district court’s finding that the fluctuating workweek method of calculating damages did not apply. The fluctuating workweek method only allows employees to recover 1/2 of their base rate of pay for each hour worked over 40 in a workweek. When the fluctuating workweek method does not apply, employees are entitled to 1.5 times their rate of pay for each hour worked over 40 in a workweek. If the fluctuating workweek method of damages calculation applied, it would have reduced the amount of overtime wages the Plaintiffs in this case were entitled to.

The fluctuating workweek method is only appropriate when the employer and the employee have agreed that the employee will be paid a fixed weekly wage to work fluctuating hours and there is a clear mutual understanding between the business and employees about how workers are paid. The district court found that these requirements were not met and therefore the fluctuating workweek method did not apply. The Fifth Circuit affirmed.

Minces PLLC has chronicled its nearly 9 year battle against O’Connor & Associates, America’s largest property tax consulting firm, in its blogs from September 2018 and April 2019, which dive deeper into details about the property tax consultants’ job duties and the district court’s findings. Minces PLLC is very happy that the Fifth Circuit affirmed the district court’s decision which awarded our clients every dollar of unpaid overtime they sought.

If you think you may be owed overtime wages contact our firm, we would love to help.

Story covered by Law360 and Justia.

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