Court affirms dismissal of FLSA wage claims over unpaid pre-employment training

SUMMARY

• Federal court dismissed wage claims over unpaid pre-employment training in Wade v. JMJ Enterprises LLC
• Plaintiff alleged required CPR, first aid, and seizure management trainings were uncompensated
• Court found trainings transferable, benefiting employees more than employer, making them non-compensable under FLSA
• Decision relied on precedent and Department of Labor‘s six-factor trainee test

By Brett Carpenter

The United States District Court for the Middle District of North Carolina has affirmed the dismissal of wage claims arising out of unpaid trainings employees were required to complete prior to their first day of work. In that case, Wade v. JMJ Enterprises LLC, the plaintiff alleged she was required to undergo pre-employment CPR, first aid, medication management, and seizure management trainings, and that she was not paid for her time spent completing those trainings.

The defendant, which operates a residential mental health company and three group homes, explained that, to receive funding from the state of North Carolina, it was required to have all employees complete these training certifications prior to working in the homes. Importantly, the trainings were not specific to the functions related to JMJ’s business and were instead transferable to other health care businesses. JMJ argued that the pre-employment training time was not compensable because the workers did not become employees until they completed these voluntary, state-mandated training requirements related to all similar healthcare providers.

In its prior order, the court noted that when a training program more greatly benefits the trainee, it is not covered by the federal Fair Labor Standards Act. Transferability of the training is particularly relevant when balancing who — employer or trainee — benefits most from the training. Ultimately, the court found that the state-mandated training mostly benefited the employees because it was transferrable to other businesses. JMJ had hired employees who did not need to attend pre-employment training because they already had the necessary certifications.

Relying on legal precedent holding that such training does not require compensation, the court dismissed the plaintiff’s pre-employment unpaid training wage claims, ruling that the time employee’s spent completing state-required, pre-employment trainings was not compensable under the FLSA.

Determining whether to compensate workers for the time they spend completing pre-employment training and obtaining relevant certifications for a job can involve a complex legal analysis with significant implications. FLSA claims for unpaid wages can involve liquidated (double) damages and recovery of the plaintiff’s attorneys’ fees. The U.S. Department of Labor has published guidance on training wage issues that says trainees must be compensated for training time unless the following six criteria are met:

• The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school.
• The training is for the benefit of the trainees or students.
• The trainees or students do not displace regular employees, but work under close supervision.
• The employer that provides the training receives no immediate advantage from the activities of the trainees or students and, on occasion, his operations might even be impeded.
• The trainees or students are not necessarily entitled to a job at the conclusion of the training period.
• The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

If your business requires pre-employment trainings or certifications, you should review these elements to ensure that any unpaid trainings satisfy all criteria.

Brett Carpenter, a partner with Poyner Spruill, practices labor and employment law at its Raleigh office.

EXTERNAL LINKS

• U.S. Department of Labor: Fair Labor Standards Act
• U.S. Courts Opinions Database