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First Circuit rules 'highly compensated employees' exempt from overtime protections of FLSA

By Kyla Asbury | Nov 17, 2014

BOSTON (Legal Newsline) - A federal appeals court has ruled the plaintiffs in a class action lawsuit against the Saint Consulting Group Inc. are exempt from overtime pay protections of the Fair Labor Standards Act.

The three-judge panel concluded that the plaintiffs were highly compensated employees exempt from the overtime protections of the FLSA and affirmed the district court's grant of summary judgment in favor of Saint Consulting, according to an opinion filed Nov. 4 in the U.S. Court of Appeals for the First Circuit.

Circuit judges Juan R. Torruella, Jeffrey R. Howard and William J. Kayatta voted in the majority, with Kayatta authoring the opinion.

"This argument elevates form over substance, and simply ignores the economic reality of the guarantee," the opinion states. "Under the paystub formula, as backed by the undisputed guarantee, every single project manager in every single possible situation would receive exactly the same pay as under the more complicated formula that the plaintiffs say Saint Consulting should have used."

Crystal Litz joined Saint as a project manager in 2005, where she stayed until March 2010 and earned well over $100,000 per year as project managers during the years at issue.

Litz claimed she typically worked more than 40 hours per week, but Saint did not pay its project managers at a higher, overtime rate for hours worked over 40.

In September 2010, former project manager Leigh Mayo filed suit against Saint in the U.S. District Court for the Northern District of Illinois for unpaid overtime compensation under the FLSA.

Litz and another former project manager, Amanda Payne, consented to join the action as party plaintiffs in December 2010 and January 2011, respectively. Litz became the representative plaintiff in March 2011 after Mayo settled with Saint.

"With Mayo, an Illinois resident, out of the case, Saint Consulting filed and the court granted an uncontested motion to transfer venue to the District of Massachusetts," the opinion states. "After the transfer, the plaintiffs sought leave to file a second amended complaint with a claim under the Massachusetts overtime statute."

The district court denied their motion, reasoning that the Massachusetts statute did not apply because they did not allege that they or any other project manager worked, resided or had sufficient contact with Massachusetts.

The district court granted summary judgment on the FLSA claim to Saint Consulting and the plaintiffs appeal from that judgment, as well as from the denial of their motions to amend and reconsider.

Because the undisputed evidence shows that Saint, CEO P. Michael Saint and Patrick F. Fox, the majority shareholder, paid its project managers on a salary basis and the parties agreed that they received more than $100,000 per year for continuously performed the duties of a professional employee, the project managers were exempt as highly compensated employees, according to the opinion.

Litz and the class members are represented by Shannon Liss-Riordan and John E. Duke of Lichten & Liss-Riordan P.C.; and James B. Zouras and Ryan F. Stephan of Stephan Zouras LLP.

The defendants were represented by Sean P. O'Connor, Robert P. Joy, Daniel S. Field of Morgan, Brown & Joy LLP.

U.S. Court of Appeals for the First Circuit case number: 13-2437

From Legal Newsline: Kyla Asbury can be reached at

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