In a long-running lawsuit first filed in 2004, some 4,000 New York City police sergeants charged they had been wrongly classified as exempt, or management, employees. They contended they are not managers and therefore are nonexempt and deserve overtime pay. There’s another ruling in the case, but whether it’s final remains to be seen.

What happened. The sergeants launched their case in April 2004, seeking overtime from 2001 to the present. Significantly, the U.S. Department of Labor (DOL) then made the first major revisions to the Fair Labor Standards Act (FLSA) in decades, which were effective in August 2004. They eliminated the former “short” and “long” tests for exemption, raised the minimum weekly salary from $250 to $455, and specifically excluded all “first responders”—police and fire personnel at a variety of levels, involved in crime detection, rescue, firefighting, and so on—from exemption.

But by 2008, a federal district court had twice ruled that DOL hadn’t intended to “depart … from established case law” in its regulatory revisions, so it upheld the sergeants’ exempt status. Plaintiffs appealed to the 2nd Circuit, which covers Connecticut, New York, and Vermont.

What the court said. Appellate judges first asked DOL for help in the case, to interpret its revised regulations. On the surface, they clearly appeared to identify the sergeants as nonexempt. And as expected, DOL’s Secretary asserted in a legal brief that the district court had failed to consider the new first responder regulation when applying the primary duties test to the sergeants, and thus mistakenly concluded that their primary duty is “management.”

The Secretary stressed that the regulation applies when “the employees at issue are police officers who perform law enforcement in the field,” as these sergeants clearly do. She went on to say that, in fact, it had always been unclear in the earlier regulations whether first responders should be classified as exempt, and courts had repeatedly disagreed on the matter. So DOL’s goal in the revision was not to depart from established case law but to clarify an area of law that had not been clear.

Ruling that DOL’s opinion deserved their deference, judges noted that because FLSA is “a remedial law, exemptions to the overtime pay requirement are narrowly construed against the employers seeking them.” Mullins, et al. v. City of New York, U.S. Court of Appeals for the 2nd Circuit, No. 09-3435-cv (2011).

Point to remember: An employer that declares an employee exempt from FLSA bears the burden of proving that the worker should be exempt. And, DOL is now focusing on so-called “misclassification.”