On November 5, 2014, a Pennsylvania federal court granted summary judgment to employer DuPont on unpaid work time claims presented by plant employees. The court ruled that employers are allowed to use paid non-work time to offset unpaid work time, thus significantly limiting DuPont’s overtime liability under the Fair Labor Standards Act (FLSA).

In Smiley v. E.I. Du Pont De Nemours & Co., hourly plant workers employed by DuPont were assigned to work 12-hour shifts. The plant workers filed suit against their employer seeking overtime wages, claiming that DuPont failed to compensate them for time worked before the start and after the end of their 12-hour shifts – namely, time they spent putting on or taking off their uniforms and protective gear. Donning and doffing cases are not uncommon, but here comes the twist…

During each shift, DuPont compensated it employees for three 30-minute meal breaks – which are not considered work time under the FLSA. DuPont argued that any liability for not paying employees for time they were working should be offset by the time it voluntarily paid employees for time spent not working. DuPont also argued that the employees were not owed any backpay for unpaid overtime since the paid non-work time exceeded the unpaid work time.

The FLSA does not expressly allow employers to use paid non-work time to offset unpaid work time. On the other hand, it does preclude offsetting when paid non-work time is excluded from the regular rate of pay or when the parties have agreed to treat non-work time as “hours worked” and such time is included in the regular rate of pay. Here, however, neither scenario barred offsetting: DuPont included the meal breaks in the employees’ regular rate of pay.

The court agreed with DuPont, finding that since neither conditions were present, the offset was permissible. The court rejected the employees’ argument that the meal period policy in the employee handbook converted the meal periods into hours worked and held that the meal periods were non-compensable because the employees were not performing activities for the employers’ benefit during those periods. Further, since the meal break time exceeded the amount of time the employees spent putting on or taking off their uniforms and protective gear, the court determined there was no liability under the FLSA. Summary judgment was granted for DuPont.

Given the recent flurry of FLSA overtime claims, the decision should come as a welcome surprise to employers. While the success of the offsetting argument is dependent on the specific facts involved, employers may have an additional defense available to them to thwart overtime claims if they pay employees for non-work time.