[00:00:00] Speaker 03:
Thank you.

[00:00:02] Speaker 03:
Well now my argument in the last case of the day which is Sean Kennedy et al versus Las Vegas Sands Corporation.

[00:00:26] Speaker 03:
So Mr. Largo-Marcino, right?

[00:00:28] Speaker 02:
Yes, Your Honor, thank you.

[00:00:35] Speaker 02:
Good morning, Your Honors.

[00:00:36] Speaker 02:
May it please the court?

[00:00:39] Speaker 02:
I've got a little malfunction here.

[00:00:54] Speaker 02:
Thank you.

[00:00:54] Speaker 02:
My name is Andre Lagomarsino, and I represent the appellants in this case.

[00:00:59] Speaker 02:
I'd like to respectfully request two minutes for rebuttal.

[00:01:02] Speaker 03:
Keep your eye on the clock, okay?

[00:01:03] Speaker 02:
Yes, your honor.

[00:01:05] Speaker 02:
The appellants respectfully ask this court to reverse the district court's decision on finding exemption from overtime and denying overtime pay to five pilots for Las Vegas Sands.

[00:01:17] Speaker 03:
You saw the district court thoroughly went through and gave reasons why they weren't entitled under the federal statute to what you're seeking.

[00:01:28] Speaker 03:
What is your best argument out of all those that the district court got it wrong?

[00:01:34] Speaker 02:
Thank you, Your Honor.

[00:01:36] Speaker 02:
Our best arguments here relate to textualism and relate to the deference due to the Department of Labor's interpretation of the regulations.

[00:01:46] Speaker 02:
Particularly, the best argument on exemption relates to the fact that the pilots did not use independent judgment and discretion with respect to matters of significance.

[00:01:57] Speaker 03:
Wait a minute.

[00:01:59] Speaker 03:
The district court went through and explained that, you know, pilots are really important people.

[00:02:04] Speaker 03:
They make all the decisions.

[00:02:05] Speaker 03:
The weather, the, you know, the wind, the length of the runway, the size of the plane, the weight of the passengers, and all kinds of things so that it's safe.

[00:02:18] Speaker 03:
How can what you're saying really control here?

[00:02:21] Speaker 02:
Well, matters of significance in the FLSA arena are different.

[00:02:26] Speaker 02:
Everything is important when it comes to business.

[00:02:28] Speaker 02:
Somebody who serves a hamburger, that's important for that business.

[00:02:31] Speaker 02:
But matters of importance in the FLSA arena relate to the way that the business operates.

[00:02:39] Speaker 02:
Are there business operations decisions being made?

[00:02:42] Speaker 02:
If you look at section 541.202 of the regulation, that gives a very broad

[00:02:50] Speaker 02:
list of examples as to the types of decisions that are deemed to be important.

[00:02:55] Speaker 01:
Like, for example, whether the employee carries out major assignments in conducting the operations of the business?

[00:03:02] Speaker 02:
That's correct, Your Honor.

[00:03:04] Speaker 02:
And operations could mean everything.

[00:03:07] Speaker 02:
Well, it could.

[00:03:09] Speaker 01:
But here, as the district court found and as Judge Smith pointed out, the major operations

[00:03:15] Speaker 01:
of this business are flying planes keeping people safe and under 541-200 they have to be with respect to matters of significance and while to the business flipping burgers may be very important,

[00:03:40] Speaker 02:
Matters of significance Seems to me to apply a lot more to flying the planes And and holding in your hands the lives of many many people Well that could also apply to bus drivers to taxi drivers you know these were frontline workers and what matters of significance means is These frontline workers basically every day they flew these planes and

[00:04:07] Speaker 02:
The company had employees who did address matters of significance.

[00:04:12] Speaker 02:
They had the director of operations.

[00:04:14] Speaker 02:
They had the executive vice president of aviation.

[00:04:16] Speaker 02:
They had the chief pilot.

[00:04:18] Speaker 02:
Those were the individuals that

[00:04:20] Speaker 02:
handle the matters of importance, such as dictating who was going to fly the planes, dictating when the planes were going to be maintained, and those sorts of things, and the budgets.

[00:04:30] Speaker 03:
But Council, doesn't the record reflect the fact that, as amongst the pilots themselves, they regularly trade it off?

[00:04:37] Speaker 03:
Somebody call and say what?

[00:04:38] Speaker 03:
Somebody needs to go at 7 o'clock.

[00:04:40] Speaker 03:
Can you cover that for me?

[00:04:41] Speaker 03:
Doesn't that happen all the time?

[00:04:43] Speaker 02:
The record does not, respectfully, the record does not reflect that.

[00:04:46] Speaker 03:
Is that not what happened?

[00:04:47] Speaker 02:
That is not what happened.

[00:04:48] Speaker 02:
The reason is because the pilots had different flight ratings for different planes.

[00:04:53] Speaker 03:
So they couldn't just... Well, somebody would say they have the same flight rating.

[00:04:56] Speaker 03:
Are you saying that pilot for, I don't know, some kind of a Learjet, Learjet A, that you don't have pilots that could fly Learjet A and pilot

[00:05:09] Speaker 03:
One called pilot two and said, Hey, I got a something going to, can you cover this for me?

[00:05:14] Speaker 02:
Absolutely is is not in the record your honor that never happened they in fact there was one instance in the record with Randy Weston who had done a cross-country flight to Miami and He relayed that he was tired and did not want to do the subsequent flight and he was made to Completely write up all of the reasons why he couldn't do it and received a lot of flack for doing that The record should be clear

[00:05:40] Speaker 02:
The pilots could not freely trade responsibilities with the other pilots.

[00:05:43] Speaker 03:
They could not.

[00:05:54] Speaker 02:
If that happened, that would be a different scenario.

[00:05:57] Speaker 02:
But that never happened.

[00:05:59] Speaker 02:
They had to request permission from dispatch.

[00:06:01] Speaker 02:
And dispatch, that just was infrequent at best, Your Honor.

[00:06:06] Speaker 02:
That, I think, maybe in the record, maybe happened once or twice, I think, is the best.

[00:06:13] Speaker 03:
All these pilots, if I understand it correctly, were paid more than $100,000 a year.

[00:06:18] Speaker 03:
What role, if any, do the regulations play, given that fact?

[00:06:24] Speaker 02:
Congress has not deemed a strict income level requirement that if somebody makes more than a certain amount of money, they automatically are exempt.

[00:06:36] Speaker 02:
The Hewlett case and the Hewlett case that just came out in 2023 from the Supreme Court made that clear.

[00:06:43] Speaker 02:
While the regulations do say that a detailed analysis of their duties is not required, it does not mean no analysis of the pilot's duties is required.

[00:06:56] Speaker 02:
OK.

[00:06:57] Speaker 02:
With respect to the discretion and the independent judgment part of the matters of significance, the regulation makes clear that the pilots have to be free from immediate supervision.

[00:07:09] Speaker 02:
And what is clear here is that the pilots were immediately supervised at every stage of their flight.

[00:07:17] Speaker 02:
They were told when they could leave, and for the majority of the time, that was through air traffic control.

[00:07:21] Speaker 02:
The pilots could not go up or down an altitude or take a different route without air traffic control's direction.

[00:07:28] Speaker 03:
So you think that the fact that, like every pilot, they were controlled by the control towers and the like, air traffic control, but they don't work for SANS, what does that have to do with this contractual relationship?

[00:07:42] Speaker 02:
Well, they're nonetheless supervised at all times.

[00:07:48] Speaker 03:
So you're saying the fact that the government can control when planes land, when they can change altitude affects our analysis here?

[00:07:56] Speaker 02:
I feel like when you look at the regulation, it doesn't make clear who's doing the supervising, what the nature of the supervision is.

[00:08:02] Speaker 02:
They are being supervised at all times.

[00:08:08] Speaker 02:
Wow.

[00:08:08] Speaker 02:
That's a novel argument.

[00:08:13] Speaker 02:
Pilots could not change the flights.

[00:08:15] Speaker 02:
They could not go to a different city if they felt otherwise.

[00:08:18] Speaker 02:
The big argument that the defense makes, or excuse me, the appellees make in this case, is that the pilots could use discretion and independent judgment in an emergency.

[00:08:28] Speaker 02:
Well, while that is very, very true, emergencies rarely, if ever, happen.

[00:08:32] Speaker 02:
And so the customarily and regularly piece of the primary duty doesn't apply because emergencies just never happen.

[00:08:39] Speaker 03:
Let's switch a little bit.

[00:08:41] Speaker 03:
You make the argument that they were on duty.

[00:08:44] Speaker 03:
for more than 40 hours a week.

[00:08:46] Speaker 03:
My understanding is that basically all these pilots were free to do whatever they wanted to when they were not actually obligated to fly a particular day.

[00:08:54] Speaker 03:
They had other jobs.

[00:08:55] Speaker 03:
They did other things.

[00:08:57] Speaker 03:
Basically, they were on their own.

[00:08:59] Speaker 03:
How does your model fit with that?

[00:09:02] Speaker 03:
I mean, basically, if you apply your formula, they're entitled to millions of dollars.

[00:09:08] Speaker 03:
One, in fact, their employer seems to say

[00:09:13] Speaker 03:
They understood that they were going to fly within a certain time framework, and the rest of the time they were on their own, but they were not acting as their employees at that point.

[00:09:24] Speaker 03:
What's your argument to that?

[00:09:26] Speaker 02:
Your Honor, our argument to that goes to one talk in Skidmore as well as the Code of Federal Regulations 785.16 and the testimony in this case.

[00:09:37] Speaker 02:
The testimony established that the pilots, and I'll just briefly point to the record, that the pilots were hired to wait.

[00:09:49] Speaker 02:
And Wantok and Skidmore make clear that an employer can do that.

[00:09:53] Speaker 02:
They can hire somebody to wait.

[00:09:57] Speaker 00:
executive director of flight operations Tom Mason stated quote Pilots are paid to wait for calls if a pilot is working as an uber lift driver During the time that you claim that they're hired to wait that that fits this standard

[00:10:15] Speaker 02:
Your Honor, it does, because they were paid to wait.

[00:10:19] Speaker 02:
The secondary employment piece.

[00:10:21] Speaker 00:
I thought the idea of paid to wait is they're taking your time and seizing it, making you sit around and wait.

[00:10:28] Speaker 00:
But if, in fact, you have the freedom to do what you want and you're actually working another job, that seems hard to say that it fits within that doctrine.

[00:10:37] Speaker 02:
It does, Your Honor, only because the pilots were fired.

[00:10:40] Speaker 02:
in fact, for taking secondary employment.

[00:10:44] Speaker 02:
And that was made clear in the record.

[00:10:46] Speaker 02:
So the company made clear that the pilots that had a second job and maybe had done a few lift rides.

[00:10:53] Speaker 00:
They were going to the gym.

[00:10:55] Speaker 00:
They were shopping.

[00:10:56] Speaker 00:
That's all company time?

[00:10:59] Speaker 02:
because they were paid to wait.

[00:11:00] Speaker 02:
I don't think the law envisions that the pilots are required to sit and stare at the wall while they're waiting for flights.

[00:11:06] Speaker 01:
The district court in paragraph 28 of its order just misinterpret the regs.

[00:11:12] Speaker 01:
The regs at 785.14-17, which clarify the waiting to be engaged document, clearly state that an employee is only compensated for idle time

[00:11:24] Speaker 01:
when, quote, the employee is unable to use the time effectively for his own purposes.

[00:11:30] Speaker 01:
Is that just a misinterpretation or a misquotation of the regulation?

[00:11:36] Speaker 01:
I don't understand why that doesn't mean what I took Judge Collins to be saying is the circumstance here.

[00:11:44] Speaker 02:
It does, respectfully, with respect to the court.

[00:11:47] Speaker 02:
785.16, which is in that range that you just cited, specifically states, and I'll read verbatim,

[00:11:54] Speaker 02:
periods during which an employee is completely relieved from duty and Which are long enough to enable him to use the time effectively for his own purposes are not hours worked however And this is where we focus in terms of reading the unambiguous language of the regulation he is not completely relieved from duty and Cannot use the time effectively

[00:12:16] Speaker 02:
For his own purposes unless he is definitely told in advance that he may leave the job and that he will not have to commence work until the definitely specified hour has arrived and It was we we open the door for the appellees in the brief It was undisputed that the plaint or that the appellants were never told hey You're good to go for the next 12 hours.

[00:12:40] Speaker 00:
You don't have to respond you don't have to raise mean he may leave the job

[00:12:45] Speaker 00:
Does that is that does that have a temporal physical?

[00:12:50] Speaker 02:
aspect to it or no It definitely could but you have to remember the temporal part of it We're now here where people are working on their phones reviewing emails communicating constantly and so yes in part temporal But also it didn't matter where they were they could be working either at the gym or at home or or whatever that they were doing

[00:13:13] Speaker 02:
And I just it's just very important your honor because the statute is very clear They have to be told you are released from duty and it was uncontested at trial

[00:13:26] Speaker 02:
That these pilots were not released from duty the nature of the business you have to understand these are gamblers these are Executives who they want to come and go as they please these are private jets these are people who are under intoxicants who are just frivolous and they can they want to leave in five minutes or they want to leave in two days it really it's up, it's up to the gambler and it's up to

[00:13:52] Speaker 02:
others depending on what the schedule is.

[00:13:54] Speaker 02:
It was unscheduled.

[00:13:55] Speaker 02:
And that's why if you look at the language that the appellees use, it's unstructured.

[00:14:03] Speaker 02:
And all the cases, Owens, Berry, Brigham, those are all having to do with off time where the employees were on call.

[00:14:15] Speaker 02:
It is undisputed in this case that they were never let go to be free and completely relieved from duty.

[00:14:23] Speaker 02:
With, of course, permission, I'll- Very well.

[00:14:25] Speaker 02:
Thank you.

[00:14:27] Speaker 03:
All right.

[00:14:28] Speaker 03:
We will now hear from Mr. Kaplan.

[00:14:37] Speaker 04:
Thank you, Your Honors, and may it please the court, Brian Kaplan, for appellees.

[00:14:42] Speaker 04:
Let me really quickly address the last series of questions that you were asking my friend here.

[00:14:48] Speaker 04:
I'll preface it by saying when an employee is not entitled to overtime in the first place because they're exempt, none of this matters.

[00:14:55] Speaker 04:
Because when they're exempt, the waiting time issue is irrelevant.

[00:14:58] Speaker 04:
You never need to get to that.

[00:15:00] Speaker 00:
I want to make sure I understand the legal underpinning of the exemption theory.

[00:15:07] Speaker 00:
I understand the claim how it ties into the regulations, but how does it tie into the statute?

[00:15:13] Speaker 00:
Because the statute is any employee employed in a bona fide executive, administrative, or professional capacity.

[00:15:21] Speaker 00:
Which bucket is being invoked here as the predicate for the regulations that you're invoking?

[00:15:30] Speaker 04:
Yeah, it's a good question, Your Honor, and it's a bit confusing.

[00:15:32] Speaker 04:
It's not directly in the statute itself, but what the Department of Labor has said is for certain type of exemptions, we're going to create an administrative rule, and there's a specific rule that's in the regulations.

[00:15:43] Speaker 00:
Okay, so it's administrative.

[00:15:46] Speaker 04:
Correct.

[00:15:46] Speaker 00:
So we're supposed to believe that airline pilots

[00:15:52] Speaker 00:
work in an administrative capacity and that that's what that means in that statute?

[00:15:58] Speaker 00:
Does anyone think of an airline pilot as an administrative employee?

[00:16:03] Speaker 04:
Yes, so maybe I misspoke, Your Honor.

[00:16:05] Speaker 04:
I meant administrative, meaning it's within the regs as opposed to within the statute.

[00:16:09] Speaker 04:
So it's the highly compensated.

[00:16:10] Speaker 00:
But it's ultimately the statute controls.

[00:16:13] Speaker 00:
And I understand the statute gives them some authority to define the terms.

[00:16:17] Speaker 00:
But if we're at the point that we're calling airline pilots administrative employees, I think maybe we've gotten way outside the statute.

[00:16:25] Speaker 00:
And I don't understand that the Department of Labor actually thinks that pilots are airline employees or administrative employees.

[00:16:34] Speaker 04:
No, in fact, they don't.

[00:16:35] Speaker 04:
And there's a position of non-enforcement specifically as to corporate pilots here.

[00:16:39] Speaker 04:
Most airline pilots are going to be exempt under a different

[00:16:42] Speaker 04:
that's not an issue in this case, because they're preempted by the Railway Labor Act.

[00:16:46] Speaker 04:
But let me just get to one quick point.

[00:16:47] Speaker 04:
They're not administrative.

[00:16:48] Speaker 04:
What it is, it's a highly compensated employee exemption that's right in the regs.

[00:16:53] Speaker 04:
It's 29 CFR.

[00:16:54] Speaker 04:
541-601.

[00:16:55] Speaker 04:
And what that requires is a few different prongs you can pull from different things.

[00:17:00] Speaker 00:
But the regulation ultimately has to tie into one of the, they can't just make up anything they want in the regulations.

[00:17:06] Speaker 00:
It's got to ultimately tie into one of those categories.

[00:17:09] Speaker 00:
So it's got to be an employee who is an executive.

[00:17:12] Speaker 00:
Airline pilots are not executives.

[00:17:14] Speaker 00:
Professionals, they're not professionals, even according to the regs, so they don't have the specialized intellectual training.

[00:17:22] Speaker 00:
And in fact, it is administrative.

[00:17:24] Speaker 00:
That's how it's classified.

[00:17:26] Speaker 00:
And I just, I'm not sure this works.

[00:17:27] Speaker 04:
If I can please clarify, Your Honor, they don't need to satisfy either administrative, executive or professional.

[00:17:34] Speaker 04:
They need to satisfy one of the many prongs of each of those.

[00:17:38] Speaker 04:
So what happens with a highly compensated individual, once you meet the salary test, which is here,

[00:17:43] Speaker 04:
You need to customarily and regularly perform any one or more exempt duties or responsibilities of any of those categories.

[00:17:50] Speaker 04:
So those categories are there, like Your Honor said, maybe they don't fall neatly within one, but you just need any one of those prongs.

[00:17:56] Speaker 04:
And here, one of the prongs for, they call it administrative employee, but I agree with you, Your Honor, if we were naming it now, maybe it'd be a slightly different name, is an employee whose primary duty

[00:18:06] Speaker 04:
includes the exercise of discretion and independent judgment with matters of significance.

[00:18:10] Speaker 00:
The other thing that's peculiar is there's a disparity between the framing of the manual work standard in 601 than in 200.

[00:18:23] Speaker 00:
So the general rule for administrative employees in 541-200 says, whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers.

[00:18:42] Speaker 00:
And then 601 just says, this section applies only to employees whose primary duty includes performance

[00:18:48] Speaker 04:
Performing office or non-manual work is that gloss part of the test here in 200 no your honor It's it's so basically the highly compensated exemption is the salary the salary element one of the many duties that would fall under any of the other the white-collar exemptions the executive administrative or professional and then basically a carve out if the individual's primary duty is

[00:19:12] Speaker 04:
includes performing office or non-manual work and if it doesn't it's basically an exception to those other two and that's where they list the blue-collar exemptions.

[00:19:20] Speaker 03:
If we for the reason articulated by Judge Collins or otherwise conclude that there's a little problem with this compliance with the statute is the alternative that we like to determine whether the pilots were in quotes on duty for more than 40 hours a week

[00:19:39] Speaker 04:
So I'd say no, but I'll answer your on-duty question as well.

[00:19:43] Speaker 04:
So there's no problem at all with the statute.

[00:19:46] Speaker 04:
Appellate in trial courts across the nation.

[00:19:49] Speaker 04:
have enforced the Department of Labor's regulations, which is what most of my counsel's brief and argument is arguing to your honors.

[00:19:56] Speaker 04:
We should be following what the Department of Labor says.

[00:19:58] Speaker 04:
The Department of Labor has for many years said, highly compensated exemption is one of the exemptions that says an employee is not eligible for overtime.

[00:20:06] Speaker 04:
We can go down those prongs, but no one's debating, including my colleague, that somehow the highly compensated exemption is not

[00:20:13] Speaker 04:
a valid act of the Department of Labor or somehow inconsistent with the statute.

[00:20:16] Speaker 04:
And that goes back many, many years.

[00:20:18] Speaker 04:
And we can go over the different prongs.

[00:20:20] Speaker 04:
Part of what was a little bit complicating, I think, is that all you need is one little prong.

[00:20:24] Speaker 04:
So it doesn't need to be tied to the business.

[00:20:26] Speaker 04:
It doesn't need to be tied to the management.

[00:20:27] Speaker 04:
You just need one prong.

[00:20:29] Speaker 04:
And that's why the court focused on the exercise of discretion and independent judgment.

[00:20:33] Speaker 04:
That element is enough under the case law and under the regs, so long as it's highly compensated and so long as it's not manual labor.

[00:20:40] Speaker 00:
So the fact that pilots have to make safety judgments about when to fly and changing the flight plan, that's them acting in an administrative capacity?

[00:20:55] Speaker 04:
That is them acting with the exercise of discretion and independent judgment, which is one of the prongs of the administrative exemption.

[00:21:04] Speaker 00:
But ultimately, they qualify as an employee

[00:21:09] Speaker 00:
in an administrative capacity.

[00:21:14] Speaker 04:
I'm not sure of that.

[00:21:15] Speaker 04:
No, Your Honor, with respect, it doesn't make them administrative exempt employees.

[00:21:21] Speaker 04:
All you need to do, we're talking about the highly compensated employee exemption.

[00:21:24] Speaker 04:
They just need to have one of several prongs that would make someone an administrative employee.

[00:21:29] Speaker 03:
So the regulations that talk about who's an administrator for purposes of a highly compensated individual is what

[00:21:39] Speaker 03:
allows you to merge these things.

[00:21:42] Speaker 04:
Exactly.

[00:21:42] Speaker 04:
Highly compensated says, let me be a little more generic.

[00:21:45] Speaker 04:
Highly compensated says, as long as you meet this test, just look at these different prongs within the exemption.

[00:21:53] Speaker 04:
Any one of the 20 elements that make up these different exemptions, if you meet one of them, along with highly compensated, you fall there.

[00:22:00] Speaker 04:
And that's because the Department of Labor has said,

[00:22:02] Speaker 04:
We don't need to do a detailed analysis of all of the duties tests.

[00:22:08] Speaker 04:
It's a recognition that these folks are likely, are not as needed in protection as to why these regulations were put in the first place.

[00:22:16] Speaker 04:
But if I can pivot a little bit to your honor's question about on duty.

[00:22:19] Speaker 04:
And this is important too because of my colleague's discussion of the regulations, the waiting time regulations they're called, the 29 CFR part 785.

[00:22:30] Speaker 04:
The first inquiry is not, how do you get off duty?

[00:22:34] Speaker 04:
The first inquiry is, are you on duty in the first place?

[00:22:38] Speaker 04:
And that goes back to Armour.

[00:22:39] Speaker 04:
It goes back to Skidmore.

[00:22:41] Speaker 04:
Regardless of the label that you put on it, what the Supreme Court has said is that the analysis is whether or not the time is predominantly spent for the employer's benefit or the employee.

[00:22:51] Speaker 04:
And for on-duty time, which is section 785.15, this is 29 CFR, if the employee is unable to use the time effectively for his own purposes, which I believe was asked, did the judge misquote that?

[00:23:05] Speaker 04:
Absolutely not.

[00:23:06] Speaker 04:
Because these employees were able to use the time effectively, you're not on duty in the first place.

[00:23:11] Speaker 04:
So it's a red herring to say, where's the specific statement that you're off duty?

[00:23:15] Speaker 04:
My colleague's pointing to a different way.

[00:23:16] Speaker 04:
You never get there.

[00:23:18] Speaker 04:
Because they're never on duty in the first place when they're home engaging in personal activities.

[00:23:22] Speaker 04:
And Your Honors, this court, it's a straight application of this court's precedence with the trial court did when it went through what these folks were doing on their time.

[00:23:31] Speaker 04:
Barry and Owens for 30 years have said, we look at the degree to which an employee was free to engage in personal activities

[00:23:39] Speaker 04:
in the agreements between the parties.

[00:23:41] Speaker 04:
Specifically, Your Honor just asked about on duty.

[00:23:43] Speaker 04:
This isn't a new gambit to use the court's language.

[00:23:47] Speaker 04:
This is what folks do all the time.

[00:23:49] Speaker 04:
They didn't say, appellants didn't say at trial, I wasn't paid for this particular time when I was working.

[00:23:56] Speaker 04:
Their challenge was what they presented to the court.

[00:23:59] Speaker 04:
We want to be paid 24-7, forever, the entire year, with the exception of these very few days when I had vacation time.

[00:24:05] Speaker 04:
And what this court in Varner said, we're not going to look at a gotcha.

[00:24:10] Speaker 04:
We're not going to say, if you say you're on duty, that somehow you could evade this court's precedent and bury an Owen to look at those factors.

[00:24:18] Speaker 04:
That's just a circular argument.

[00:24:19] Speaker 04:
That's a label.

[00:24:20] Speaker 04:
This court has said, regardless of the label attached by the employee to this on-duty time, the proper inquiry of whether someone's working under the FLSA is whether the time is spent predominantly for the employer's benefit.

[00:24:32] Speaker 04:
And the plaintiff cannot escape Owens's ambit simply by proclaiming that he was always on duty.

[00:24:37] Speaker 00:
That's exactly what the- Looking at that issue, what's the role of the factor of where they are

[00:24:44] Speaker 00:
physically, because a lot of the examples given in the regulation are, you know, the plumber is waiting at the house, you know, for things to get ready or, you know, the secretary is waiting to be called in to do the dictation.

[00:25:00] Speaker 00:
Does it matter whether they're at the gym or at home?

[00:25:05] Speaker 00:
Do they have to sort of take your time in a temporal sense?

[00:25:08] Speaker 04:
Yeah, it's a good question, Your Honor.

[00:25:10] Speaker 04:
So what this Court has said in Owens and Berry is we're going to provide an illustrative, non-exhaustive list of factors to try and examine the degree to which an employee is able to engage in personal activities, whether it's his own time or whether it's the employer's time.

[00:25:25] Speaker 04:
Those factors include, one of them is whether there's an on-premises living requirement.

[00:25:29] Speaker 04:
Another one, I think there was a question before about whether you could easily trade on-call responsibilities.

[00:25:34] Speaker 04:
Another factor would be,

[00:25:36] Speaker 04:
whether or not the employee has actually engaged in personal activities during this time.

[00:25:40] Speaker 04:
So there's a series of seven factors that the courts typically, in this circuit and three other circuits, have weighed to decide how do we answer the Supreme Court's inquiry of is it primarily for the employer's time or the employee's time.

[00:25:52] Speaker 04:
And real quick, this is important because I think some of this, when the record is reviewed, it's extremely clear.

[00:25:59] Speaker 04:
There's a question, is there any formal on-call

[00:26:02] Speaker 04:
I'm sorry, formal trading of your on-call time.

[00:26:06] Speaker 04:
And my friend said that there wasn't.

[00:26:08] Speaker 04:
But in fact, there essentially was because all you needed to do was say that you couldn't fly during a particular time, and they would just move on to the next person.

[00:26:17] Speaker 04:
And so in the record, the court has detailed findings on this point that the scheduling department would just contact the next person down.

[00:26:24] Speaker 04:
They actually employed a series of on-call pilots, day pilots, who just worked in case people couldn't do it.

[00:26:31] Speaker 04:
And the records replete with a week's worth of testimony and 10,000 documents about how these pilots did, in fact, reject flights for various reasons, personal reasons, fatigue, illness, et cetera.

[00:26:42] Speaker 04:
The reason that we thought almost bordered on absurd in terms of trying to get paid

[00:26:46] Speaker 04:
by one employer while you're working for another employer.

[00:26:49] Speaker 04:
But the reason why one employee was disciplined, as my colleague mentioned, wasn't because they were doing it, it's because they didn't report it.

[00:26:56] Speaker 04:
And if you're flying for another carrier and not reporting it, you might be fatigued and safety is paramount for these pilots when they're pilots in command.

[00:27:04] Speaker 04:
So when you went down the factors, your honor, each of the factors, I don't think there was a single factor that was even a close call, Judge Collins, this all went

[00:27:12] Speaker 04:
in support of the employer.

[00:27:14] Speaker 04:
I can't stress enough that you never get to that argument in the first place if you credit the lower court's extremely detailed findings of fact that these pilots are exempt in the first place.

[00:27:26] Speaker 03:
I gather from your perspective all the court needs to do is to basically affirm the district court on the issue of the exemption as opposed to whether they were on duty.

[00:27:39] Speaker 03:
Is that right?

[00:27:40] Speaker 04:
I would be very happy to take however affirmance you'd like to give it, but I would just wanted to make clear that if there was any particular concern.

[00:27:47] Speaker 00:
But you see them as fully covering the judgment, either one.

[00:27:52] Speaker 04:
Yes, although I think it's important to recognize the lower court's findings.

[00:27:56] Speaker 04:
There was a trial here because there was an issue brought up pre-trial.

[00:28:01] Speaker 04:
We're engaged in manual labor.

[00:28:02] Speaker 04:
We don't have independence and discretion.

[00:28:05] Speaker 04:
We just follow checklists.

[00:28:06] Speaker 04:
And this court had extremely detailed findings about what pilots do.

[00:28:11] Speaker 04:
That was a week's worth of trial testimony before Judge Gordon.

[00:28:14] Speaker 04:
And the key traits of a pilot, sound judgment, complex analysis,

[00:28:17] Speaker 04:
flying involving a continuous series of decisions, critical thinking, making sound, safe decisions, being specialized and highly skilled, just like the McCoy Court in District of Alaska.

[00:28:28] Speaker 04:
I mean, that's extremely important.

[00:28:29] Speaker 04:
So what I think the court did, which was helpful,

[00:28:33] Speaker 04:
is say, we just had a week's long trial and saw a dozen witnesses.

[00:28:37] Speaker 04:
Let's make sure that if, for whatever reason, someone were to disagree with me, putting myself in the lower court's words, here's what I just heard and here's what I just read over the course of that week.

[00:28:47] Speaker 04:
But I want to make no mistake.

[00:28:49] Speaker 04:
I think this case should be dismissed because these pilots are exempt and were ineligible for overtime in the first place.

[00:28:54] Speaker 04:
And if, for whatever reason, the court was willing to analyze it, the lower court analyzed the Barry and Owens factors in Varner exactly right

[00:29:02] Speaker 04:
With a very detailed opinion, and I think it obviously would be helpful for other employers nationwide to be able to get that guidance Thank you all right.

[00:29:13] Speaker 03:
Thank you.

[00:29:14] Speaker 03:
All right.

[00:29:15] Speaker 03:
Mr.. Lagomar.

[00:29:16] Speaker 03:
See you know you have some rebuttal time Thank you honors

[00:29:25] Speaker 02:
The first thing we have to look at is acknowledge that hours worked is not defined in the FLSA statute.

[00:29:33] Speaker 02:
So therefore, you go to what are hours worked under the regulations.

[00:29:37] Speaker 02:
Hours worked are defined as whether you're released from duty or not.

[00:29:42] Speaker 02:
That was not addressed in my colleague's presentation.

[00:29:45] Speaker 02:
Because they were not released from duty, those are considered hours worked.

[00:29:50] Speaker 02:
There's not an exception in... The phrase was released from the job.

[00:29:54] Speaker 00:
But that means that you have enough factors to suggest you're actually on the job.

[00:29:59] Speaker 00:
And if you're at the gym or you're driving an Uber, you're not on this job.

[00:30:06] Speaker 02:
Well, Your Honor, their job

[00:30:08] Speaker 02:
was to wait to be called for flights.

[00:30:11] Speaker 02:
So as detailed in the briefing, they had to bring bags with them in their cars.

[00:30:15] Speaker 02:
They had to take separate cars from their spouses because they had to wait.

[00:30:19] Speaker 02:
There were pop-up flights.

[00:30:20] Speaker 02:
There were emails that were constant.

[00:30:22] Speaker 02:
That was their job was to wait.

[00:30:24] Speaker 00:
Were they working?

[00:30:25] Speaker 02:
They had to respond even when they were asleep.

[00:30:28] Speaker 02:
They would get chastised.

[00:30:29] Speaker 00:
So the answer is yes.

[00:30:30] Speaker 00:
So while they're sound asleep, they're on the job and should be paid for that overtime.

[00:30:35] Speaker 02:
If we are to follow the textual language, the clear and unambiguous language of 785.16, the answer is yes.

[00:30:42] Speaker 02:
And there's no exception for misconduct.

[00:30:46] Speaker 02:
I think there's an implication, hey, they went to the gym or they went to the restaurant.

[00:30:51] Speaker 02:
The FLSA doesn't address misconduct.

[00:30:53] Speaker 02:
They were fired for whatever reasons that the FLEs want to state.

[00:30:57] Speaker 02:
But the fact is, the central inquiry here is, were they working?

[00:31:01] Speaker 02:
And was their job to wait?

[00:31:03] Speaker 02:
Their job was to wait and fly planes.

[00:31:05] Speaker 02:
Because they waited 24 hours a day, they are entitled to overtime.

[00:31:08] Speaker 03:
So they're constantly on duty.

[00:31:10] Speaker 03:
It just doesn't stop, right?

[00:31:12] Speaker 03:
No matter what they're doing.

[00:31:13] Speaker 02:
Under 78516 and under Skidmore and on Armory, yes.

[00:31:19] Speaker ?:
OK.

[00:31:20] Speaker 03:
Other questions by my colleague?

[00:31:21] Speaker 03:
All right, thanks, counsel, for your argument.

[00:31:24] Speaker 03:
The case of Kennedy versus Las Vegas Sands Corporation is submitted and the court stands adjourned for the day.