Judge Gustavo Gelpí, nominated by President Biden to the US Court of Appeals for the First Circuit, wrote a unanimous opinion that reversed a district court ruling in favor of a corporation and ordered it to use proper legal standards in determining the eligibility of an energy company’s employees for overtime pay.  As Judge Gelpí wrote, compliance with the overtime pay requirements of the Fair Labor Standards Act (FLSA) is “critical to ensuing worker protections” across the country. The March 2023 decision was in Walsh v. Unitil Service Corp.

 

What’s the Background of the Case?

 Unitil Service Corp. operates and controls the electrical grid and gas pipelines that provide energy to 200,000 customers in New England. The company employs dispatchers and controllers whose primary job is to control these systems “to keep electricity or gas flowing safely.” Unitil claims, however, that these employees are primarily administrative and refuses to pay them overtime pay.

After an investigation, the Department of Labor (DOL) disagreed, and filed suit seeking overtime pay for these workers. The lower court agreed with the corporation, however, and granted summary judgment without a trial to Unitil. DOL appealed.

 

How did Judge Gelpí rule and why is it important?

 Judge Gelpí held that the district court was wrong to find for the corporation and sent the case back for more thorough consideration of the DOL case for the workers. He explained that circuit precedent on the issue was “limited,” particularly as applied to companies that provide energy and other service to customers and do not have employees who perform  manual labor. After a careful analysis, Judge Gelpí found that the corporation had failed to demonstrate that most of the work of dispatchers and controllers concerned its “management and general business operations” so that they were exempt for overtime. Instead, he went on, these employees worked on the “running or servicing of the business” and should be paid overtime.

In addition to providing significant assistance to workers at Unitil, Judge Gelpí’s opinion is important to the “critical” function of ensuring that workers receive overtime pay as required by FLSA. More and more businesses employ few if any workers who perform manual labor. Judge Gelpí’s ruling will help ensure that overtime eligibility is properly determined for all employees, in the First Circuit and across the country.  The ruling also provides another illustration of the importance of promptly confirming fair-minded judicial nominees by President Biden like Judge Gelpí.