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Friday, July 20, 2012

Sovereign Immunity Trumps FLSA


By: Tommy Eden
Alabama@Work

Natalie Versiglio was employed as an administrative assistant for the Board of Dental Examiners of Alabama. During the majority of her employment she was paid an hourly wage, but during the last few months of her employment she was paid a salary for each week of work. However, Natalie was not paid for overtime, mostly related to attendance at Board meetings, but rather was told she was being compensated in "comp time." She accumulated a significant amount of "comp time,” but when Natalie's employment ended with the Board in 2009 she was not compensated for this accumulated "comp time" of over $10,000.

Natalie then sued in federal court in Birmingham alleging violations of the Fair Labor Standards Act (FLSA) seeking unpaid wages, overtime, liquidated damages, together with a reasonable attorney fee and costs. The FLSA mandates that covered employers pay nonexempt employees overtime for all hours worked in excess of 40 hours in each work week. The FLSA does not contain language authorizing the payment of overtime in the form of "comp time" other than in limited situations involving firefighters and some other public employees.

In response, the Board filed a Motion to Dismiss claiming sovereign immunity from suits under the FLSA based upon the 11th Amendment to the Constitution of the United States. Federal District Judge Acker denied the Motion to Dismiss citing 37 different boards or agencies created by the Alabama Legislature that would fall within the same category as the Board of Dental Examiners. His Order was appealed to the 11th Circuit Court of Appeals which initially ruled that there was not sufficient evidence to find that the Board enjoyed the State of Alabama's sovereign immunity.

Subsequently, the Alabama Supreme Court, on May 25, 2012, issued a decision in Wilkinson v. Bd. of Dental Exam'rs of Ala, holding that "that the Board is 'an arm of the state' rather than a mere 'franchisee licensed for some beneficial purpose,' and therefore entitled to immunity from suits in Alabama state courts.”

On July 13th, granting deference to the Alabama Supreme Court decision, the 11th Circuit held in Natalie Versiglio v. Board of Dental Examiners of Alabama, that “it is well-settled that 11th Amendment immunity bars suits brought in federal court when the State itself is sued and when an 'arm of the State' is sued," and ruled that the Board enjoyed sovereign immunity from suit.

Common Sense Counsel: This is a significant decision to all of the boards and agencies created by the Alabama Legislature. This case is also a valuable lesson for all employers that jurisdictional grounds involving federal statutes can trump federal claims.

Tommy Eden is a Lee County native, an attorney with the local office of Capell & Howard, P.C., a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at tme@chlaw.com or 334-501-1540 or www.AlabamaAtWork.com. Alabama Immigration updates at www.ImmigrationAlabamaLaw.com.