David Thompson v. Regions Security Services, Inc

USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 1 of 20
[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-10954
____________________
DAVID THOMPSON,
Plaintiff-Appellant,
versus
REGIONS SECURITY SERVICES, INC.,
a Florida corporation,
Defendant-Appellee.
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 0:20-cv-62152-WPD
____________________
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 2 of 20
2 Opinion of the Court 21-10954
Before WILSON and ROSENBAUM, Circuit Judges, and CONWAY,*
District Judge.
ROSENBAUM, Circuit Judge:
The Fair Labor Standards Act prohibits an employer from
scheduling an employee “for a workweek longer than forty hours”
without paying that employee overtime compensation. 29 U.S.C. §
207(a)(1). To enforce that command, the FLSA requires an em-
ployer to pay two different compensation rates: (1) an employee’s
regular rate, which describes the non-overtime hourly rate that he
regularly earns; and (2) an employee’s overtime rate, which must
be at least “one-and-one-half times the regular rate at which he is
employed.” Id.In this case, Plaintiff-Appellant David Thompson, a security
guard, alleged that his employer set two different “regular rates”
and that one of those rates was an artificial one that his employer
designed to avoid complying with the FLSA’s overtime-compensa-
tion requirement. When Thompson became a security guard for
Defendant-Appellee Regional Security Services, Inc., his estab-
lished regular rate was $13.00, and he typically worked a forty-hour
week. But seven months after Regional Security first started sched-
uling Thompson to work overtime, it reduced his rate to $11.15 per
hour. About a year later, Regional Security stopped scheduling
* The Honorable Anne C. Conway, United States District Judge for the Middle
District of Florida, sitting by designation.
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 3 of 20
21-10954 Opinion of the Court 3
Thompson to work overtime hours and at the same time restored
his non-overtime pay rate to $13.00 per hour.
This case requires us to decide whether Thompson’s “regu-
lar rate” was $13.00 per hour or $11.15 per hour during the year or
so that he worked overtime hours and earned $11.15 per hour.
Thompson’s allegations support his theory that Regional Security
set an artificial $11.15 rate during the year that it scheduled him to
work significant overtime hours so that it could avoid paying him
$19.50 (one-and-a-half times his $13.00 rate) for his overtime hours.
Indeed, during the year that Thompson worked significant over-
time hours, his reduced $11.15 rate caused him to earn on average
$13.00 per hour for all sixty hours in a sixty-hour workweek. See
infra n.4. Plus, Regional Security immediately reverted to paying
Thompson’s $13.00 rate when it stopped scheduling him to work
overtime hours.
Because these allegations plausibly support Thompson’s
claim that Regional Security reduced Thompson’s regular rate to
avoid paying him overtime compensation, we conclude that Re-
gional Security’s motion for judgment on the pleadings was re-
quired to be denied. We therefore vacate the district court’s order
granting that motion and remand for further proceedings.
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 4 of 20
4 Opinion of the Court 21-10954
I.
David Thompson worked as a security guard for Regional
Security Services, Inc. 1 He typically worked forty hours per week,
and Regional Security paid him $13.00 per hour. But in January
2019, Regional Security began scheduling Thompson for an addi-
tional twenty or so hours per week, raising his weekly total to
about sixty hours. For the next seven months, Thompson contin-
ued to earn his established hourly rate of $13.00 per hour for the
first forty hours he worked in a week. And for each hour he worked
beyond that, he earned an overtime rate of $19.50 per hour (time-
and-a-half ).
Then, on July 22, 2019, Regional Security reduced Thomp-
son’s rate to $11.15 per hour for the first forty hours. Correspond-
ingly, Regional Security lowered Thompson’s overtime rate to
$16.73 per hour (again, time-and-a-half ). For the next eleven-some-
odd months, Thompson worked between fifty-five and seventy-five
hours per week.
After scheduling Thompson to work overtime and paying
him a reduced rate for nearly a year, Regional Security made an
1 Because we are reviewing the district court’s order entering judgment on the
pleadings, our description of the facts accepts the allegations in Thompson’s
complaint as true. See, e.g., Perez v. Wells Fargo N.A., 774 F.3d 1329, 1335 (11th
Cir. 2014) (citation omitted). The actual facts may or may not be as alleged.
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 5 of 20
21-10954 Opinion of the Court 5
abrupt turn. All at once, it cut Thompson’s workweek to forty
hours and restored his non-overtime hourly rate to $13.00.
Based on these facts, Thompson sued Regional Security, al-
leging that it reduced his hourly rate “to an artificially low rate to
avoid” the FLSA’s overtime provisions during the year that it paid
him a non-overtime hourly rate of $11.15. In other words, Thomp-
son asserted that Regional Security diminished his hourly rate to
$11.15 from $13.00 so that it could schedule him for significant
overtime hours without having to pay him $19.50 (one-and-a-half
times his $13.00 hourly rate) for those overtime hours.
Regional Security moved for judgment on the pleadings, and
the district court granted that motion. Thompson now appeals.
II.
We use the de novo standard to review a district court’s order
granting judgment on the pleadings. Perez, 774 F.3d at 1335 (cita-
tion omitted). Granting judgment on the pleadings is appropriate
when “there are no material facts in dispute and the moving party
is entitled to judgment as a matter of law.” Id. (quoting Cannon v.
City of W. Palm Beach, 250 F.3d 1299, 1301 (11th Cir. 2001)). When
determining whether judgment on the pleadings should be
granted, “we accept as true all material facts alleged in the non-
moving party’s pleading, and we view those facts in the light most
favorable to the non-moving party.” Id. (citation omitted).
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 6 of 20
6 Opinion of the Court 21-10954
III.
Under the FLSA, if an employee’s “workweek [is] longer
than forty hours,” the employer must pay that employee overtime
compensation. 29 U.S.C. § 207(a)(1). And the rate at which the
FLSA requires a covered employer to compensate its employee for
each hour beyond forty in that employee’s workweek is “not less
than one-and-one-half times the regular rate at which he is em-
ployed.” Id.This appeal turns on the meaning of the statutory phrase
“regular rate.” As the Supreme Court has explained, an employee’s
“regular rate” is the “keystone” of the FLSA’s overtime provisions.
Walling v. Youngerman-Reynolds Hardwood Co. (“Youngerman-Reyn-
olds”), 325 U.S. 419, 424 (1945). Because an employee’s overtime
rate must equal at least one-and-a-half times his regular rate, an
employee’s overtime rate depends on his regular rate. “The proper
determination of that rate is therefore of prime importance.” Id.Significantly, the regular rate “is not an arbitrary label chosen by
the parties; it is an actual fact.” Id.In construing the term “regular rate,” we begin with the
statutory text. Ross v. Blake, 578 U.S. 632, 638 (2016) (“Statutory
interpretation, as we always say, begins with the text.”).
The FLSA generally defines the “‘regular rate’ . . . to include
all renumeration for employment paid to” the employee. 29 U.S.C.
§ 207(e). But the term excludes from its parameters certain sums,
payments, and compensation. See id. As relevant here, “regular
rate” excludes an employee’s compensation for overtime hours
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 7 of 20
21-10954 Opinion of the Court 7
worked. See id. at § 207(e)(5), (7); see also Bay Ridge Operating Co. v.
Aaron, 334 U.S. 446, 464 (1948) (“Congress intended to exclude over-
time premium payments from the computation of the regular rate
of pay.”). As a result, “the regular rate refers to the hourly rate
actually paid to the employee for the normal, non-overtime work-
week for which he is employed.” Youngerman-Reynolds, 325 U.S. at
424 (citation omitted). That is, an employee’s regular rate is his
total weekly non-overtime wages divided by his total weekly non-
overtime hours. See Aaron, 334 U.S. at 461 (“Wage divided by hours
equals regular rate.”).
Thompson had two different non-overtime hourly rates, so
we must decide which of those two rates was his “regular rate” for
purposes of the FLSA during the year or so that he worked signifi-
cant overtime hours. Regional Security urges that Thompson’s
$11.15 hourly rate—the non-overtime hourly rate that it paid him
over that year—was Thompson’s “regular rate” during that period.
Thompson, on the other hand, contends that his regular rate was
$13.00—the rate that he earned both before he started and after he
finished working overtime.
The statutory definition of “regular rate,” in and of itself,
does not resolve this dispute. So we delve further.
Because the statute does not further define “regular,” we
give the term its “ordinary public meaning.” Bostock v. Clayton
Cnty., 140 S. Ct. 1731, 1738 (2020). To discern that meaning, we
consult dictionaries in use when Congress enacted the FLSA in
1938. See, e.g., Taniguchi v. Kan Pac. Saipan, Ltd., 566 U.S. 560, 566
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 8 of 20
8 Opinion of the Court 21-10954
(2012); United States v. Dominguez, 997 F.3d 1121, 1124 (11th Cir.
2021) (citation omitted).
Those dictionaries define the word “regular” to mean
“[s]teady or uniform in course, practice, or occurrence.” Webster’s
New International Dictionary 2099 (2d ed. 1934); see also Black’s
Law Dictionary 1518 (3d ed. 1933) (noting that regular “implies uni-
formity, continuity, consistency, and method”). A regular rate
therefore refers to a rate that is “selected . . . in conformity with
established or prescribed usages, rules,” or principles. Webster’s
New International Dictionary, supra, at 2099; Black’s Law Diction-
ary, supra, at 1518 (describing regular as “[a]ccording to rule; as op-
posed to that which constitutes an exception to the rule”).
We do not think that definition unambiguously answers the
question of whether, on these facts, Thompson’s regular rate was
$13.00 or $11.15.
To be sure, Thompson alleged that his “established” non-
overtime hourly rate was $13.00, based on his first several months
of employment with Regional Security. This argument has a cer-
tain amount of appeal. After all, right up until July 22, 2019, $13.00
was the only non-overtime hourly rate Regional Security ever paid
Thompson. And as soon as Regional Security stopped scheduling
Thompson to work overtime hours following the period when it
paid him a non-overtime rate of $11.15, it immediately reverted to
paying Thompson’s $13.00 rate. In this sense, Thompson’s “estab-
lished or prescribed” rate might fairly be characterized as $13.00.
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 9 of 20
21-10954 Opinion of the Court 9
On the other hand, under § 207, an employer can lawfully
reduce an employee’s non-overtime rate in some situations. In-
deed, the Supreme Court has said that “[t]he Act clearly contem-
plates the setting of the regular rate in a bona fide manner through
wage negotiations between employer and employee, provided that
the statutory minimum is respected.” Walling v. Helmerich & Payne,
323 U.S. 37, 42 (1944). So “[a]s long as the minimum hourly rates
established by Section 6 are respected, the employer and employee
are free to establish [the] regular rate at any point and in any man-
ner they see fit.” Youngerman-Reynolds, 325 U.S. at 424. The sole
limitation on “this freedom of contract” is that it “does not include
the right to compute the regular rate in a wholly unrealistic and
artificial manner so as to negate the statutory purposes” of the
FLSA. Helmerich & Payne, 323 U.S. at 42.
In Parth v. Pomona Valley Hospital Medical Center, 630 F.3d 794(9th Cir. 2010), for instance, the Ninth Circuit, relying in part on
Youngerman-Reynolds, held that an “employer may reduce” its em-
ployees’ regular rates to accommodate their scheduling desires “so
long as the rate reduction was not designed to circumvent the pro-
visions (including overtime) of the [FLSA].” Id. at 797.
Here, Regional Security paid Thompson $11.15 for nearly a
year, and Regional Security’s answer to Thompson’s complaint al-
leges that it did so to accommodate Thompson’s “requested sched-
uling modifications.” Still, though, we must view the pleadings in
the light most favorable to Thompson, and in doing that, we can’t
tell based on the pleadings alone whether the parties permissibly
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 10 of 20
10 Opinion of the Court 21-10954
contracted for the $11.15 rate. So we can’t say that the statutory
language unambiguously answers the question of whether
Thompson’s “regular rate” was $13.00 or $11.15.
On top of that, the Supreme Court has acknowledged the
ambiguous nature of the term “regular rate.” More generally, in
Bay Ridge Operating Co. v. Aaron, the Court explained that in the
FLSA, “Congress necessarily had to rely upon judicial or adminis-
trative application of its standards in applying sanctions to individ-
ual situations. These standards had to be expressed in words of
generality.” 334 U.S. at 461–62. And as for the phrase “regular rate”
in particular, the Supreme Court characterized Walling v. A.H. Belo
Corp., 316 U.S. 624 (1942), as having “refrained from rigidly defin-
ing ‘regular rate’ in a guaranteed weekly wage contract that met
the statutory requirements of § 7(a) for minimum compensation.”
Aaron, 334 U.S. at 462 (citing A.H. Belo Corp., 316 U.S. at 634).
In sum, then, the statutory language is inconclusive about
whether $11.15 or $13.00 is “the regular rate at which [Thompson]
is employed.” Perhaps for that reason, the parties’ dispute centers
on the Department of Labor’s (the “Department”) interpretations
of the FLSA’s overtime provisions. Those interpretations reside in
Part 778 of Title 29 of the Code of Federal Regulations. See 29
C.F.R. § 778.1.
Before we dive into that part of the Code of Federal Regula-
tions, though, we pause to consider the weight that we accord to
the interpretations in Part 788. To determine the answer to that
question, we begin with Part 788’s origins. Before the Department
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 11 of 20
21-10954 Opinion of the Court 11
promulgated Part 788, the agency’s interpretations of the FLSA’s
overtime requirements appeared “in an interpretative bulletin and
in informal rulings.” Skidmore v. Swift & Co., 323 U.S. 134, 137
(1944). Faced with a question involving one of these interpretive
bulletins, the Supreme Court acknowledged that the Department’s
informal interpretations are “not controlling upon the courts by
reason of their authority,” id. at 140; see also Overnight Motor Transp.
Co. v. Misel, 316 U.S. 572, 580 n.17 (1942), superseded by statute, Port-
to-Portal Pay Act of 1947, 61 Stat. 84, as recognized in Trans World
Airlines, Inc. v. Thurston, 469 U.S. 111, 128 n.29 (1985); Foremost Dair-
ies, Inc. v. Wirtz, 381 F.2d 653, 659 (5th Cir. 1967) (“We are, of
course, not bound by interpretative bulletins or administrative
opinions.”). 2
The Department replaced those interpretive bulletins with
Part 788, which it published to the Code of Federal Regulations “to
make available in one place the” agency’s interpretations of the
FLSA’s overtime requirements. See Overtime Compensation, 33
Fed. Reg. 986, 987–88 ( Jan. 26, 1968) (codified as amended at 29
C.F.R. pt. 788). In so doing, the Department invoked the Adminis-
trative Procedure Act’s exception for interpretive rules to the
2 The decisions of the former Fifth Circuit handed down before October 1,
1981, are binding on this Court. Bonner v. City of Prichard, 661 F.2d 1206, 1209
(11th Cir. 1981) (en banc).
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 12 of 20
12 Opinion of the Court 21-10954
notice-and-comment requirements. 3 33 Fed. Reg. at 986; see also 5
U.S.C. § 553(b)(A) (excepting “interpretative rules” from notice and
comment). Still, we continued to acknowledge that the bulletins in
Part 788 “provide us with guidance simply because they reflect the
position of those most experienced with the application of the
3 When an agency promulgates an interpretation of an ambiguous statute us-
ing notice-and-comment procedures, the resulting interpretation is generally
entitled to deference under Chevron U.S.A., Inc. v. Natural Resources Defense
Council, 467 U.S. 837 (1984), meaning it receives “controlling weight unless [it
is] arbitrary, capricious, or manifestly contrary to the statute,” id. at 844. See,
e.g., U.S. v. Mead Corp., 533 U.S. 218, 230–31 (2001) (describing “notice-and-
comment” procedures “as significant . . . in pointing to Chevron authority”).
On the other hand, an agency interpretation that was not promulgated
through notice-and-comment procedures generally does not receive Chevron-
style deference. See, e.g., Miccosukee Tribe of Indians v. U.S., 566 F.3d 1257,
1272–73 (11th Cir. 2009) (quoting Christensen v. Harris County, 529 U.S. 576, 587
(2000)). Instead, interpretations promulgated through less formal proce-
dures—as Part 778 was—generally receive Skidmore deference. Rodriquez v.
Farm Stores Grocery, Inc., 518 F.3d 1259, 1268 n.5 (11th Cir. 2008). In contrast
to Chevron deference, Skidmore deference is deference to an agency’s interpre-
tation that corresponds to “the thoroughness evident in [the agency’s] consid-
eration, the validity of its reasoning, its consistency with earlier and later pro-
nouncements, and all those factors which give it power to persuade, if lacking
power to control.” Skidmore, 323 U.S. at 140. The level of deference that may
apply—Chevron or Skidmore—is not always apparent. See, e.g., Durr v. Shinseki,
638 F.3d 1342, 1348 (11th Cir. 2011) (noting that we have “applied Chevron level
deference to an agency handbook when Congress has authorized an agency
to ‘issue regulations that have the force of law’ and the agency’s handbook has
been subject to notice-and-comment rulemaking,” but deciding not to deter-
mine whether Chevron or Skidmore deference applies to certain regulations in
VA Handbook 5021/6 (citation omitted)).
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 13 of 20
21-10954 Opinion of the Court 13
[FLSA].” Brennan v. Great Am. Disc. & Credit Co., 477 F.2d 292, 296–
97 (5th Cir. 1973) (citing Wirtz, 381 F.2d at 659).
In sum, then, we have consistently accorded Skidmore defer-
ence to the interpretative bulletins that now reside in Part 778. See
Wirtz, 381 F.2d at 659 (citing Skidmore, 323 U.S. at 140). So we will
do so here as well. That means we will accord Part 788 “deference
proportional to the thoroughness evident in its consideration, the
validity of its reasoning, its consistency with earlier and later pro-
nouncements, and all those factors which give it power to per-
suade.” Rafferty v. Denny’s, Inc., 13 F.4th 1166, 1179 (11th Cir. 2021)
(quoting Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 159
(2012)); see also Skidmore, 323 U.S. at 140.
In his complaint, Thompson cites 29 C.F.R. § 778.500 to sup-
port his claim that his regular rate was $13.00 per hour during the
year or so that he worked significant overtime. Under that rule, an
employee’s regular rate cannot “vary from week to week inversely
with the length of the workweek.” Id. § 778.500(b). Citing this
rule, the Ninth Circuit has observed that an “agreement, practice,
or device that lowers the hourly rate during statutory overtime
hours or weeks when statutory overtime is worked is expressly pro-
hibited under” the Department’s interpretive regulations. Brunozzi
v. Cable Commc’ns, Inc., 851 F.3d 990, 997 (9th Cir. 2017); see also Les
A. Schneider & Larry J. Stine, Wage and Hour Law: Compliance and
Practice § 9:1 (2023) (“The FLSA regulations expressly prohibit any
agreement, practice, or device that provides for a lower hourly rate
to be paid during . . . weeks when overtime is worked.”).
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 14 of 20
14 Opinion of the Court 21-10954
That prohibition on lowering an employee’s regular rate and
increasing the hours in his workweek prevents an employer from
circumventing the FLSA’s overtime requirements. As 29 C.F.R. §
778.327 demonstrates, this non-circumvention rule prevents an em-
ployer from playing with an employee’s hours and rates to effec-
tively avoid paying time-and-a-half for an employee’s overtime
hours. Otherwise, an employer could use “simple arithmetic” to
lower an employee’s rate and increase his hours so that he could
never earn time-and-a-half pay—“no matter how many hours he
worked.” Id. § 778.327(a).
Consider an example: our hypothetical employee has
earned a $7 non-overtime hourly rate while working forty-hour
workweeks for ten weeks. At the start of week eleven, our hypo-
thetical employer reduces the employee’s non-overtime hourly rate
to $6 and schedules him to work sixty hours that week. If we treat
that new non-overtime hourly rate as the employee’s regular rate
for his sixty-hour workweek, the employee will gross $420 for that
sixty-hour workweek. (The employee’s $6 non-overtime hourly
rate times forty hours equals $240. The employee’s overtime rate
of $9 (time-and-a-half, based on a $6 non-overtime hourly rate)
times twenty hours equals $180. The sum of $180 and $240 is
$420.) But the employee would have earned the same amount if
the employer simply paid him $7 per hour—the established non-
overtime hourly rate he earned during his first ten non-overtime
workweeks—for all sixty hours of work ($7 times sixty hours
equals $420). So by reducing the employee’s non-overtime hourly
rate to $6 at the start of week eleven, the employer effectively
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 15 of 20
21-10954 Opinion of the Court 15
escapes its obligation to pay the employee overtime compensation.
That kind of arithmetic “is an obvious bookkeeping device de-
signed to avoid the payment of overtime compensation and is not
in accord with law.” Id. And this an employer cannot do. Rather,
the employee’s regular rate of pay “for overtime purposes is, obvi-
ously, the rate that he earns in the normal non[-]overtime week—
in this case, $[7] per hour.” Id.
We find that this interpretation has the “power to persuade,”
Skidmore, 323 U.S. at 140, because it preserves what the Supreme
Court has said is “the Congressional purpose” behind the FLSA’s
overtime provisions. Helmerich & Payne, 323 U.S. at 40. As the
Court has explained, Congress enacted the FLSA’s overtime provi-
sions “to spread employment by placing financial pressure on the
employer through the overtime pay requirement” and “to compen-
sate employees for the burden of a workweek in excess of the hours
fixed in the Act.” Id. (citation omitted).
The Department’s interpretation of the regular rate serves
that purpose by prohibiting an employer from using “simple arith-
metic” to ensure that an employee earns no more than his non-
overtime hourly rate—“no matter how many hours he work[s].”
29 C.F.R. § 778.327(a). Without that prohibition, the FLSA would
neither (1) place “financial pressure” on employers to hire addi-
tional workers instead of scheduling their existing employees to
work overtime, nor (2) ensure that employees receive additional
compensation “for the burden of a workweek in excess of the
hours fixed in the Act.” Helmerich & Payne, 323 U.S. at 40 (citation
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 16 of 20
16 Opinion of the Court 21-10954
omitted). In sum, then, 29 C.F.R. § 778.327 interprets the term
“regular rate” in a way that prevents employers from nullifying the
FLSA’s overtime provisions. For that reason, we find that the regu-
lation persuasively interprets the term.
Applying that interpretation to the allegations in Thomp-
son’s complaint and viewing those allegations in the light most fa-
vorable to him, we conclude that Thompson plausibly alleged that
Regional Security used prohibited arithmetic here. Thompson in-
itially earned a $13.00 non-overtime hourly rate and worked a
forty-hour workweek. But soon after Regional Security started
scheduling Thompson for sixty-hour workweeks, it slashed his
non-overtime hourly rate to $11.15. Under this new non-overtime
hourly rate, Thompson would gross $780.50 for a sixty-hour work-
week—which is only $.50 more than he would have earned if he
were paid his former $13.00 non-overtime hourly rate for all sixty
hours of work.4 This arithmetic, together with Thompson’s alle-
gations that Regional Security paid him $13.00 per hour as a regular
rate during his initial tenure with the company and during the
workweeks after it stopped scheduling him for overtime, supports
the reasonable inference that Regional Security slashed Thomp-
son’s non-overtime hourly rate to avoid paying him an overtime
rate equal to one-and-a-half times his established $13.00 rate.
4Thompson’s weekly average rate of $11.15 multiplied by forty hours equals
$446. His overtime hourly rate of $16.725—that is, one-and-a-half times
$11.15—multiplied by twenty overtime hours equals $334.50. The sum of
$446 and $334.50 is $780.50.
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 17 of 20
21-10954 Opinion of the Court 17
Of course, it’s also possible that Regional Security reduced
Thompson’s weekly average rate for a different and permissible
reason. As we’ve noted, employers like Regional Security can law-
fully reduce an employee’s weekly average rate, as long as they do
not do so as a work-around of the FLSA’s overtime-pay require-
ments. Youngerman-Reynolds, 325 U.S. at 424; see also Schneider &
Stine, supra, § 9:7 (observing that an employer’s right to reduce an
employee’s regular rate does not enable an employer “to manipu-
late the regular rate so as to prevent overtime pay”).
The difference between a permissible reduction in an em-
ployee’s non-overtime hourly rate and an impermissible one comes
down to whether the rate change “is justified by no factor other
than the number of hours” an employee worked. 29 C.F.R. §
778.327(b); see also Parth, 630 F.3d at 797 (holding that an employer
“may reduce” an employee’s weekly average rate “so long as the
rate reduction was not designed to circumvent” the FLSA’s over-
time provisions). When a reduction in an employee’s non-overtime
hourly rate is justified by the length of his workweek, “the device
is evasive and the rate actually paid in the shorter or non[-]overtime
week is his regular rate for overtime purposes in all weeks.” 29
C.F.R. § 778.327(b).
As we’ve indicated, Thompson’s allegations suggest that Re-
gional Security fluctuated his non-overtime hourly rate as a device
to evade paying him overtime. In particular, he alleged that Re-
gional Security “reduced” his “established” non-overtime hourly
rate “to an artificially low rate to avoid the overtime provisions of
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 18 of 20
18 Opinion of the Court 21-10954
the FLSA.” He also alleged that Regional Security increased the
length of his workweek and reduced his non-overtime hourly rate
from $13.00 to $11.15 to avoid those provisions. During the year
that Regional Security paid Thompson a reduced non-overtime
hourly rate and scheduled him to work sixty-hour workweeks,
Thompson averred, his non-overtime hourly rate across all sixty
hours of work was $13.00. See supra n.4. And Thompson asserted
that once Regional Security ceased scheduling him to work over-
time hours, it restored his non-overtime hourly rate to $13.00.
Taken as true, these allegations suggest that Regional Security fluc-
tuated Thompson’s non-overtime hourly rate for the purpose of
ensuring that he would always earn $13 per hour—“no matter how
many hours he worked.” 29 C.F.R. § 778.327(a).
In urging us to reach the opposite conclusion, Regional Se-
curity distinguishes the “agreement, practice, or device that pro-
vides for a lower hourly rate to be paid during . . . weeks when
overtime is worked,” as the regulation prohibits, reasoning that
Thompson failed to allege that his non-overtime hourly rate “fluc-
tuated from week to week depending upon whether or not he
worked overtime hours.” And in a sense, Regional Security is right:
Thompson alleged that Regional Security paid him a $13.00 non-
overtime hourly rate and worked overtime hours at time-and-a-
half based on that rate for seven months before Regional Security
reduced his non-overtime hourly rate.
The seven-month period between when Regional Security
first scheduled Thompson to work overtime and when it reduced
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 19 of 20
21-10954 Opinion of the Court 19
his non-overtime hourly rate could support competing inferences.
For instance, it could suggest that Regional Security changed
Thompson’s non-overtime rate after seven months because of le-
gitimate “factor[s] other than the number of hours” in his work-
week. Id. § 778.327(b). But it could alternatively suggest that Re-
gional Security tried to camouflage the fact that it was attempting
to circumvent the FLSA when it began effectively paying Thomp-
son roughly $13.00 for every hour—regular and overtime—that he
worked during the year or so that followed that seven-month pe-
riod.
At this stage, though, we “must accept the facts alleged in
the complaint as true and view them in the light most favorable to”
Thompson. Samara v. Taylor, 38 F.4th 141, 149 (11th Cir. 2022)
(quoting Cannon, 250 F.3d at 1301); see also Newman v. Advanced Tech.
Innovation Corp., 749 F.3d 33, 37 (1st Cir. 2014) (explaining that “the
regular . . . rate . . . is a fact question” (citing Aaron, 334 U.S. at 461)).
And when we do that, we must conclude that the district court
erred in granting judgment on the pleadings. Even though
Thompson alleged that Regional Security reduced his non-over-
time hourly rate and scheduled him to work overtime in two suc-
cessive steps, he also alleged that Regional Security simultaneously
restored his non-overtime hourly rate and ceased scheduling him
to work overtime. And during the year or so that Thompson
worked overtime hours at a reduced non-overtime hourly rate, his
average hourly rate for all those hours, including the overtime
hours, was the same as his non-overtime hourly rate before the re-
duction. Those facts plausibly suggest that Regional Security used
USCA11 Case: 21-10954 Document: 35-1 Date Filed: 05/18/2023 Page: 20 of 20
20 Opinion of the Court 21-10954
the fluctuation in Thompson’s weekly average rate as a device to
avoid paying overtime compensation at one-and-a-half times the
non-overtime hourly rate that Thompson earned during the weeks
he did not work overtime hours.
IV.
Because Thompson’s allegations plausibly suggest that Re-
gional Security used the fluctuation in his weekly average rate as a
device to avoid paying him overtime, we vacate the district court’s
order granting Regional Security’s motion for judgment on the
pleadings and remand for further proceedings consistent with this
opinion.
VACATED AND REMANDED.