Last week, the Sixth Circuit rejected the overtime compensation challenge of an exempt computer professional under the Fair Labor Standards Act and contract law. Bennink v. Cincinnati Bell Telephone Company LLC, No. 26-3150 (6th Cir. 10/29/26). The Court found that there was sufficient evidence that he was an exempt computer professional and did not examine whether he satisfied the administrative or executive exemptions. The Court rejected the plaintiff’s contention that the exemption required any formal training or degree because “the statute’s lack of an explicit educational requirement “reflects the reality that someone [could] learn[] such skills through work experience or self study.” More interestingly, the Court found that the letter offering him employment at $75/hour was not a binding contract because the letter explicitly said it was not a contract. Therefore, the employer’s failure to pay $75/hour and to instead pay him a $3,000 weekly salary was not a breach of contract even though he regularly worked more than 15 hours/day. “The mere mention of a rate of pay similar to his previous rate as a contractor, without any assurances as to whether that rate was to be on an hourly or salaried basis, is insufficient to show that the parties agreed to a $75 hourly rate.” Less controversally, the Court also found that the plaintiff had implicitly agreed to the terms of his actual compensation by accepting $3K/week for almost seven years without complaint. Such a course of conduct during at-will employment constitutes agreement to the terms of employment because under Ohio law, the terms and conditions of at-will employment can be changed prospectively at any time.
According to the Court’s opinion, the plaintiff had been a
long time engineer working with the employer developing its interactive voice
response technology (IVR) system, first with outside contractors and then,
starting in 2016 as a W-2 employee, to be paid $75/hour but treated as an exempt
computer professional. On his resume, he
“described his position . . . as an “Ops/IT Solutions & Services
Engineer” and . . . that he “design[ed], implement[ed], and
maintain[ed] IT solutions and services, such as IVR call flow designs, dial
plans, and various end user support applications.” . . . He highlighted that he “leveraged in depth
knowledge of contact center technologies, platforms, and tools,” and
accomplished “successful contact center infrastructure migrations (both on
premise and Cloud based solutions).”
After regularly working 18 hour days and not receiving more assistance
despite his complaints, he resigned in 2023. He later filed suit because he claimed that he
was not paid $75/hour, but only $3000/week and claimed that this both violated
the FLSA and breached his contact of employment.
The FLSA exempts from the statute’s
overtime protections “any employee who is a computer systems analyst, computer
programmer, software engineer, or other similarly skilled worker” with one of
the specified “primary dut[ies].” 29 U.S.C. § 213(a)(17). In particular, 29
U.S.C. § 213(a)(17)(B) exempts employees who have the primary duty of “design,
development, documentation, analysis, creation, testing, or modification of
computer systems or programs . . . based on and related to user or system
design specifications.”1 Computer employees “who [are] compensated on an hourly
basis” must be “compensated at a rate of not less than $27.63 an hour” to be
exempt. 29 U.S.C. § 213(a)(17). Although the parties dispute whether [the
plaintiff] was paid on an hourly or salary basis, both agree he was paid at a
rate well over the statutorily required hourly rate of $27.63. So we focus on
the responsibilities targeted by the statute.
.. . .
First, 29 U.S.C. § 213(a)(17)(B)
requires that the relevant responsibilities—“design, development,
documentation, analysis, creation, testing, or modification”—concern “computer
systems or programs.” Here, much of Bennink’s work revolved around Cincinnati
Bell’s IVR system. Although the statute does not define “computer system or
program[],” 29 U.S.C. § 213; 29 C.F.R. § 541.400, we have little trouble
concluding that an IVR system is one. An IVR system is complex and technical. It
automatically routes a user’s call based on a programmed menu, pulling in
information from various databases and other systems. In fact, even while
disputing that his role involved working on a computer system, Bennink himself
describes “the various computer systems that contributed to IVR’s
functionality” and how part of his role was working with others to ensure the
requested IVR updates “were even feasible within the computer systems.” . . . . This description corroborates our
assessment of the IVR system. After all, a program made up of smaller computer
systems is still a computer system.
Many of [the plaintiff’s]
responsibilities regarding the IVR system fell within several of the duties
described in 29 U.S.C. § 213(a)(17)(B), namely, “documentation,” “design,” and
“development.” For one, [he] extensively documented the IVR system, mapping out
where and how the system routed callers based on their needs. He worked in
collaboration with others in IT, updating the map to reflect changes made by
programmers or giving the programmers direction on what should be updated to
make the system more effective. Although [he] insists that this responsibility
was little more than creating “complicated flowcharts,” . . . , his documentation was essential to
helping others in the company understand how the current system worked, and
therefore how it could be successfully changed in the future. . . .
[The plaintiff’s] documentation
responsibilities also bled over into “design” and “development.” 29 U.S.C. §
213(a)(17)(B). In a system like IVR, which exists solely to route customers to
the relevant assistance, “the design is the flow.” . . . . [He] met with the team members who
would be using or supporting the IVR, taking their feedback and determining how
the system should be structured to meet user needs while complying with
technical demands. By gathering these inputs and proposing the flow of the IVR,
Bennink was designing and developing the system.
. . .
To be sure, not all of Bennink’s
work fell cleanly within the exemption. Bennink relied on other team members to
carry out the actual programming of the system and ensure that the necessary
data would be pulled in accordance with the goals laid out by his document. He
also often acted as a project manager, coordinating across teams, negotiating
deadlines and budgetary requirements, or preparing for the launch of a new IT
solution. But it is not surprising that a job like Bennink’s was
multi-dimensional. On this record, Bennink’s responsibilities concerning
documentation, design, and development of the IVR system were the “main” or
“most important” part of his job, making them his “primary duty.” 29 C.F.R. §
541.700(a). Although the parties do not present an exact breakdown of how much
time Bennink spent on his various responsibilities, the evidence demonstrates
that Bennink’s IVR related responsibilities were key to his role at Cincinnati
Bell. Bennink himself believed he was brought on as an employee at Cincinnati
Bell in large part because of his IVR expertise. These skills later made him an
integral part of the efforts to migrate and update Hawaii Telecom’s IVR system,
a task he admitted was sensitive, complex, and time-consuming. Because these
responsibilities were so central to Bennink’s initial hiring and his workload,
we conclude that they were his primary duty.
The Court also rejected the breach of contract claim based
on his offer letter’s promise to pay him $75/hour when the employer “only” paid
him $3,000/week despite him regularly working more than 15 hours per day. As a contractor, he had been paid $75/hour
for all hours worked, but he was not paid more when he worked more than 40
hours in a week after he became a W-2 employee. To his detriment, despite his complaints
about his working hours, he never complained about his compensation until he
filed the lawsuit.
Even drawing all inferences in [the
plaintiff’s] favor, [he] cannot show that his offer letter created a valid
contract between him and [the defendant employer]. Two facts are
insurmountable. First, [his] offer letter, which he signed, stated twice that
it “does not constitute an employment contract.” . . . . Second, in his
deposition, [he] himself stated that he “d[idn’t] think there was a meeting of
the minds” when the parties exchanged the offer letter. . . . . . To find that
the offer letter itself constituted a valid contract here, where one party
clearly stated that it did not intend to enter into a contract and the other
party admits to understanding that lack of intent, would require us to ignore
the fundamentals of contract law.
It is true that despite the lack of
an initial contract, [the plaintiff] went on to work as an at-will employee for
[the defendant employer] for several years. And Ohio recognizes that at-will
employment is generally “contractual in nature.” . . . But even if at-will employment
necessarily creates some sort of contractual relationship, enforcing any
contract provision requires sufficiently definite terms. . . . Ohio courts allow the trier of fact to
consider the facts and circumstances surrounding at-will employment, including
the custom and course of dealing between parties, to determine whether “implied
or express contractual provisions . . . alter[ed] the terms” of employment. . . . So the ultimate question is whether [he]
can demonstrate that a $75 hourly rate (including hours beyond forty per week)
was a term the parties agreed upon.
In contrast to cases where
employees have alleged that specific conversations or company documents
provided guarantees about their employment, . . . [the
plaintiff] argues only that he was being paid $75 per hour as a contractor
before joining [the defendant employer as an employee]. So, he believed the
offer was intended to be under “precisely the same terms.” . . . . But the offer letter containing the
$75 per hour rate did not say whether this would be on an hourly or salary
basis, nor did it provide any details regarding overtime pay or hours to be
worked per week. And [he] does not provide any evidence of other, later
assurances made by [the employer] on such matters. The mere mention of a rate
of pay similar to his previous rate as a contractor, without any assurances as
to whether that rate was to be on an hourly or salaried basis, is insufficient
to show that the parties agreed to a $75 hourly rate.
And regardless of the parties’
initial understanding regarding Bennink’s compensation, in at-will employment
relationships, either party “may propose to change the terms of their
employment . . . at any
time.” . .
. Here, [the plaintiff] was paid $6,000
per pay period, or $3,000 per week (the equivalent of $75 x forty hours), no
matter how many hours he worked since October 2016. Although [he] argued below
that he did not assent to any change in the terms, this argument is unavailing.
[He] reviewed his paychecks, which stated he was being paid “$3,000 weekly.” . . . [He], moreover, knew he was unable to
log more than 40 hours per week and that he was categorized as an “exempt”
employee. For its part, management knew that [he] was working many hours,
partly because of [his] own complaints about his schedule—complaints where he
did not mention any issues concerning his compensation. So even if [he] and [the
employer] had initially agreed to a $75 hourly rate for all hours worked, we
conclude on these facts that [he] agreed to continued employment on a salary
basis.
NOTICE: This summary is designed merely to inform and alert
you of recent legal developments. It does not constitute legal advice and does
not apply to any particular situation because different facts could lead to
different results. Information here can change or be amended without notice.
Readers should not act upon this information without legal advice. If you have
any questions about anything you have read, you should consult with or retain
an employment attorney.
