On October 7, 2016, the Third Circuit ruled that employers may not offset paid meal breaks against overtime obligations to employees. Smiley v. E.I. DuPont de Nemours & Co., No. 14-4583 (3rd Cir. July 14, 2016).

DuPont provided the non-exempt employees at issue in the case with one paid thirty-minute lunch break and two non-consecutive thirty-minute breaks during their twelve-hour shift, even though they were not required to do so. Those employees were also required to spend between thirty and sixty minutes a day, without pay, donning and doffing their uniforms and communicating with incoming shift workers about the status of work. The amount of paid non-working break time was always greater than the amount of uncompensated work time.

Plaintiffs sued to recover unpaid overtime for the time spent donning and doffing their uniforms and sharing work-related information with incoming shift workers. Plaintiffs argued that there was no express authorization under the Fair Labor Standards Act that would allow DuPont to offset their paid meal breaks against their overtime hours. DuPont argued that because the paid breaks, during which the employees were not working, were always longer than the uncompensated donning and doffing time, it should be permitted to offset its overtime obligations against the paid nonworking time.

The District Court dismissed the employees’ case on a motion for summary judgment. The Court agreed with DuPont that because the unpaid time was less than the paid breaks, Plaintiffs were not entitled to any additional compensation.

The Third Circuit disagreed. As with the District Court, the Third Circuit assumed for purposes of its opinion that both the employees’ pre-and post-shift work was compensable under the FLSA. It found that the compensation paid for the breaks was included in the employee’s regular pay, and therefore it did not qualify as “extra compensation” that may be offset against overtime obligations. The Court stated that “permitting DuPont to use pay given for straight time–and included in the regular rate of pay–as an offset against overtime pay is precisely the type of ‘creative bookkeeping’ that the . . . FLSA sought to eradicate.” The Third Circuit reversed the District Court’s grant of summary judgment, and it remanded for further proceedings.