Secretary United States Department of Labor v. Comprehensive Healthcare Management Services LLC

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 24-2842
_____________
SECRETARY UNITED STATES DEPARTMENT OF
LABOR
v.
COMPREHENSIVE HEALTHCARE MANAGEMENT
SERVICES LLC; MAYBROOK-C KADE OPCO, LLC;
MAYBROOK-C EVERGREEN OPCO, LLC;
MAYBROOK-C WHITECLIFF OPCO, LLC;
MAYBROOK-C LATROBE OPCO, LLC; MAYBROOK-C
OVERLOOK OPCO, LLC; MAYBROOK-C SILVER OAKS
OPCO, LLC; MAYBROOK-C BRIARCLIFF OPCO, LLC;
MT LEBANON OPERATIONS LLC; MURRYSVILLE
OPERATIONS LLC; SOUTH HILLS OPERATIONS LLC;
CHESWICK REHABILITATION AND WELLNESS
CENTER, LLC; MONROEVILLE OPERATIONS LLC;
NORTH STRABANE REHABILITATION AND
WELLNESS CENTER, LLC; NORTH STRABANE
RETIREMENT VILLAGE, LLC; CHMS GROUP LLC;
SAMUEL HALPER, an individual,
Appellants
_____________

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On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No. 2:18-cv-1608)
District Judge: Honorable William S. Stickman IV
_____________
Argued: September 10, 2025
______________
Before: CHAGARES, Chief Judge, PORTER and ROTH,
Circuit Judges
(Filed: June 3, 2026)
_____________
Laura Bunting-Williams
Jackson Lewis
11 Stanwix Street
14th Floor
Pittsburgh, PA 15222
Jeffrey A. Schwartz [ARGUED]
Jackson Lewis
171 17th Street NW
Suite 1200
Atlanta, GA 30363
Counsel for Appellants
Dean Romhilt [ARGUED]
United States Department of Labor
Office of the Solicitor
200 Constitution Avenue NW

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Room N-2716
Washington, D.C. 20210
Counsel for Appellee
OPINION OF THE COURT
_____________
CHAGARES, Chief Judge.
Comprehensive Healthcare Management Services LLC
(“Comprehensive”) owned and operated a number of
healthcare facilities across Pennsylvania. Soon after
Comprehensive acquired the facilities, the United States
Department of Labor began investigating the facilities for
wage and hour violations. As a result of its investigation, the
Secretary of the Department of Labor (the “Secretary”) filed
suit against Comprehensive 1 on behalf of nearly 6,000
employees, alleging that Comprehensive violated several
provisions of the Fair Labor Standards Act (the “FLSA”).
The District Court held a bench trial and ultimately
found in favor of the Secretary, awarding $35,804,438.20 in
damages. Included in that sum was an award for “overtime”
gap time — that is, compensation for non-overtime hours
worked in a pay period when an employee has worked
overtime hours. While we have held that claims for “pure” gap
1 In full, defendant-appellants include sixteen entities, as well
as Samuel Harper, the chief executive officer of the facilities.
For ease of reference, the Court will refer to defendant-
appellants collectively as “Comprehensive.”

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time — compensation for non-overtime hours worked during
pay periods when an employee has not worked overtime hours
— are not cognizable under the FLSA, Davis v. Abington
Memorial Hospital, 765 F.3d 236, 244 (3d Cir. 2014), we have
not had occasion to consider whether claims for overtime gap
time are viable. Today, for the reasons set forth below, we hold
that they are not and will thus reverse the District Court’s order
on that ground.
We also address Comprehensive’s additional claims of
error. Namely, Comprehensive claims that the District Court
impermissibly held the Secretary to a lower burden of proof on
certain claims, committed clear error in several of its factual
findings, and improperly concluded that certain
Comprehensive employees were nonexempt under the FLSA.
As set forth below, we are not persuaded by Comprehensive’s
first two arguments: the District Court applied the proper
burden of proof, and its factual findings were not clearly
erroneous. We do, however, agree that the District Court’s
exemption analysis was flawed and will thus remand for the
District Court to conduct the proper analysis.
I.
We will briefly describe the relevant provisions of the
FLSA to provide necessary context before turning to the facts
of the instant case.
A.
Congress designed the FLSA to ensure that all covered
employees receive a “fair day’s pay for a fair day’s work” and
receive protection from the “evil of overwork as well as

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underpay.” Parker v. NutriSystem, Inc., 620 F.3d 274, 279 (3d
Cir. 2010) (quoting Barrentine v. Ark.-Best Freight Sys., Inc.,
450 U.S. 728, 739 (1981)). To effectuate these goals, the
FLSA imposes certain obligations on employers.
Fundamentally, employers must pay their employees a
minimum hourly wage for work performed, 29 U.S.C.
§ 206(a), and must pay one-and-one-half times the employees’
regular rate for hours worked in excess of 40 hours per
week, id. § 207(a)(2). The FLSA, however, exempts certain
employees from its mandates, including any employee who is
employed in a “bona fide executive, administrative, or
professional capacity.” Id. § 213(a)(1). We discuss these
exemptions in more detail infra. Finally, the FLSA obligates
employers to “make, keep, and preserve” records of the wages
paid, hours worked, and other employment policies. Id. §
211(c).
B.
Comprehensive began acquiring healthcare facilities
across Pennsylvania in 2014. By 2017, Comprehensive had
amassed 15 residential nursing, rehabilitation, and assisted
living facilities. The Department of Labor began investigating
Comprehensive for wage and hour violations around that time.
In 2018, the Secretary filed suit against Comprehensive in the
United States District Court for the Western District of
Pennsylvania, alleging that Comprehensive had violated the
FLSA by, inter alia, failing to maintain adequate and accurate
wage and hour records and failing to compensate employees at
the appropriate rate and for the actual number of hours worked.
The case proceeded to a bench trial in January of 2024.

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At trial, the Secretary presented live testimony from 34
former and current Comprehensive employees, including at
least one witness from 14 of Comprehensive’s 15 facilities.2
The District Court observed that the Secretary’s witnesses
“represented a broad cross-section of job types” across the
facilities, giving “detailed testimony that was remarkably
consistent” with both one another and with contemporaneous
documentary evidence. Appendix (“App.”) 74–75. The
District Court found the Secretary’s witnesses to be “clear,
consistent, and credible,” noting they often did not stand to
gain anything from the litigation. App. 75.
Comprehensive, on the other hand, called 11 witnesses.
The District Court found the testimony of these witnesses to be
“narrow and inconsistent.” App. 75. Comprehensive called
only current, senior employees at Comprehensive whose
testimony was not corroborated. Indeed, the District Court
observed these witnesses’ “seemingly selective memory”
when faced with conflicting documentary evidence. App. 75.
In light of these observations, the District Court found that
Comprehensive’s witnesses were “by and large . . . simply
unworthy of belief.” App. 77.
The District Court ultimately found in favor of the
Secretary. The District Court first found that Comprehensive
failed to maintain accurate records of employees’ hours
worked and wages paid, as the FLSA requires. This failure
was in part due to Comprehensive’s time clock system — the
system through which employees would punch in and out of
work. The court found that this system recorded employees’
2 The Secretary also submitted 44 declarations from past and
present Comprehensive employees.

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punches inaccurately or failed to record them at all, even if the
employee had used the system correctly. Indeed, Michael
Murray, a Department of Labor information technology (“IT”)
specialist who reviewed Comprehensive’s records, testified
that there were hundreds of thousands of time-punches missing
from Comprehensive’s records.
This failure, the District Court found, led
Comprehensive to miscalculate the wages its employees were
due by (1) paying employees for their scheduled hours instead
of the hours they actually worked and (2) failing to pay
employees for working through their meal breaks. With
respect to mealtime work, the District Court found that
employees often worked through their meal breaks even
though Comprehensive’s time clock system automatically
deducted employees’ pay for meal breaks. While
Comprehensive had a process in place for employees to seek
compensation for that time, the District Court found that this
process put the onus on employees, was “inconsistently
administered[,] and [was] not remotely accurate.” App. 92.
The District Court further found that Comprehensive
failed to pay its employees the overtime wages they were due.
And when Comprehensive did pay overtime, it did not do so at
the correct rate. Specifically, the District Court found that
Comprehensive miscalculated its employees’ overtime rates by
both failing to pay the required one-and-one-half times the
employee’s regular rate and miscalculating the regular rate in
the first instance by failing to include shift differentials,
bonuses, and other types of additional pay as required under
the FLSA. The District Court considered these mistakes to be
“systemic errors.” App. 101. Finally, the District Court found
that Comprehensive failed to pay overtime to certain

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employees because Comprehensive misclassified them as
exempt from the FLSA’s overtime requirements.
Based on these findings, the District Court concluded
that Comprehensive violated the FLSA and awarded
$35,804,438.20 in damages, including compensation for
overtime gap time. The District Court acknowledged that the
“viability of overtime gap time claims has not explicitly been
ruled upon” by our Court; nevertheless, the District Court
concluded that failing to award such compensation “would run
afoul of the FLSA’s core remedial purposes.” App. 119.
Comprehensive filed a timely appeal.
II.3
We first address Comprehensive’s argument that the
District Court erred by holding that claims for overtime gap
time are cognizable under the FLSA. We then turn to
Comprehensive’s remaining claims of error: that the District
Court erred by holding the Secretary to a lower burden of proof
on certain claims, finding a broader pattern of FLSA violations
than the evidence supported, and concluding that certain
Comprehensive employees were nonexempt. We address each
in turn below.
A.
Comprehensive contends that the District Court erred in
awarding damages for Comprehensive’s non-payment of
overtime gap time wages, arguing that claims for overtime gap
3 The District Court had subject matter jurisdiction pursuant to
28 U.S.C. § 1331. This Court has jurisdiction over the District
Court’s final order pursuant to 28 U.S.C. § 1291.

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time are not cognizable under the FLSA. We review the
District Court’s conclusion de novo, Ingram v. Experian
Information Solutions, Inc., 83 F.4th 231, 236 (3d Cir. 2023),
and, as set forth below, we will reverse.
We have explained that “gap time” generally
refers to time that is not covered by [the FLSA’s]
overtime provisions because it does not exceed
the overtime limit, and to time that is not covered
by [the FLSA’s] minimum wage provisions
because, even though it is uncompensated, the
employees are still being paid a minimum wage
when their salaries are averaged across their
actual time worked.
Davis, 765 F.3d at 243 (quoting Adair v. City of Kirkland, 185
F.3d 1055, 1062 n.6 (9th Cir. 1999)). Put differently, gap time
means “non-overtime hours worked for which an employee is
not compensated.” Id. at 244.
We have held that so-called “pure gap time claims —
straight time wages for unpaid work during pay periods
without overtime — are not cognizable under the FLSA, which
requires payment of minimum wages and overtime wages
only.” Id. (emphasis added). The Davis case did not, however,
present us with an opportunity to consider whether overtime
gap time claims are viable. See id.
Overtime gap time claims are claims “by an employee
who exceeds the overtime threshold” but does not receive pay
for all non-overtime hours worked. Id. So, for example,
consider a nonexempt employee whose regular rate of pay is

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well above the minimum wage. Assume that this employee
works 43 hours in a certain workweek, but his employer only
pays him for 38 hours of non-overtime work and three hours of
overtime work.4 If the employee sues under the FLSA seeking
compensation for those two remaining hours of non-overtime
work, he is asserting a claim for overtime gap time.
Two of our sister Courts of Appeals have already
addressed this issue, reaching opposite conclusions. See
Lundy v. Cath. Health Sys. of Long Island, Inc., 711 F.3d 106,
115–17 (2d Cir. 2013) (holding that claims for overtime gap
time are not cognizable under the FLSA); Conner v. Cleveland
County, 22 F.4th 412, 426 (4th Cir. 2022) (concluding such
claims are viable). We now consider this question of first
impression in our Court.
We hold that the FLSA does not afford a remedy for
overtime gap time. The text of the FLSA is clear. The FLSA
obligates employers to pay nonexempt employees: (1) a
minimum wage, 29 U.S.C. § 206, and (2) overtime pay for
hours worked in excess of 40 hours per workweek at a rate not
less than one-and-one-half times employees’ regular rate of
pay, id. § 207. The text does not contemplate overtime gap
time. See id. §§ 201–19; see also Davis, 765 F.3d at 244
(“[T]he FLSA . . . requires payment of minimum wages and
overtime wages only.”); Lundy, 711 F.3d at 116 (same). When
the statutory language is clear, the text is the beginning and the
4 This hypothetical assumes that this employee’s regular rate
of pay is sufficiently above the minimum wage such that his
employer’s failure to pay him for those two overtime hours
does not run afoul of the FLSA’s minimum wage requirement.

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end of our inquiry. Newton v. Comm’r Soc. Sec., 983 F.3d
643, 649 (3d Cir. 2020) (citation omitted).
The Secretary strains to find a textual hook, ultimately
pointing to Congress’s use of the words “regular rate” in § 207
and the fact that the FLSA’s overtime requirement is premised
on the calculation of an employee’s “regular rate” of pay.
Thus, in the Secretary’s view, to satisfy the FLSA, employees
must be paid their regular rates for all hours worked. But the
statutory text simply does not support that inferential leap.5
5 Our partially dissenting colleague also focuses on the term
“regular rate.” In her view, that term is ambiguous because
“neither case law nor the [FLSA] establishes whether the
regular rate, which is crucial to calculating the overtime wage,
is the amount actually paid by the employer or the amount for
which the employer contracted with the employee.” Dissent at
2. The only way to resolve this ambiguity, the dissent urges, is
to require an employer to pay the employee for all forty hours
of non-overtime work at the contracted rate before calculating
the overtime rate. This way, the actual rate, contracted rate,
and regular rate are one and the same.
We agree that these rates should be the same. The
question we face today is what happens when, due to the
employer’s errors, they are not — and, more specifically, does
the FLSA provide a remedy for that error. We do not believe
that it does. But an employee who finds himself or herself in
this situation is not left without recourse: the employee may
turn to his or her state’s employment law or file a breach-of-
contract action.

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Resisting this conclusion, the Secretary turns to
interpretive guidance from the Department of Labor that
supports her view. That guidance provides that “extra
compensation for the excess hours of overtime work under the
[FLSA] cannot be said to have been paid to an employee unless
all the straight time compensation due him for the nonovertime
hours . . . has been paid.” 29 C.F.R. § 778.315. We see no
reason, however, to turn to the Department’s guidance, as the
statutory text is not ambiguous. See Hagans v. Comm’r of Soc.
Sec., 694 F.3d 287, 295 (3d Cir. 2012) (“[W]e need reach the
deference question only if we find the statutory language is
ambiguous.”). Congress’s silence with respect to overtime gap
time “does not render the statute ambiguous.” Lundeen v. 10
W. Ferry St. Ops. LLC, 156 F.4th 332, 340 (3d Cir. 2025)
(quoting United States v. Craveiro, 907 F.2d 260, 262 (1st Cir.
1990)). Rather, as we have explained, “[a]mbiguity exists only
when, ‘despite a studied examination of the statutory context,
the natural reading of a provision remains elusive.’” Id.
(quoting In re Price, 370 F.3d 362, 369 (3d Cir. 2004)). And
as explained above, the natural reading of the FLSA is not
elusive: the plain text does not contemplate a remedy for
overtime gap time.
But even if we were to consider the Department’s
guidance on this issue, we would decline to afford it deference.
We consider the Department’s interpretive guidance and
positions under the framework set forth in Skidmore v. Swift,
323 U.S. 134 (1944). Smiley v. E.I. Dupont De Nemours &
Co., 839 F.3d 325, 329 (3d Cir. 2016).6 Through that lens, an
6 In 2024, the Supreme Court issued its decision in Loper
Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), which
overruled Chevron U.S.A., Inc. v. Natural Resources Defense

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agency’s interpretation is “‘entitled to respect . . . , but only to
the extent that’ it has ‘the power to persuade.’” Sanofi Aventis
U.S. LLC v. U.S. Dep’t of Health & Hum. Servs., 58 F.4th 696,
703 (3d Cir. 2023) (quoting Christensen v. Harris County, 529
U.S. 576, 587 (2000)). Skidmore deference asks us “to assign
a ‘weight’ to an administrative judgment based on ‘the
thoroughness evident in its consideration, the validity of its
reasoning, its consistency with earlier and later
pronouncements, and all those factors which give it power to
persuade, if lacking power to control.’” Hagans, 694 F.3d at
304 (quoting Skidmore, 323 U.S. at 140).
The Department’s interpretative guidance here does not
hold such persuasive power. To be sure, the Department’s
position on this issue has been consistent for several decades.
But the guidance provides no reasoning or support for its
position. And we cannot square it with the statutory silence.
Thus, even if we were to view the text as ambiguous, we would
not find the Department’s guidance, though consistent, to be
persuasive. Cf. K.D. ex rel. Dunn v. Downingtown Area Sch.
Dist., 904 F.3d 248, 255–56 (3d Cir. 2018) (declining to give
Skidmore deference to an agency opinion that “neither
thoroughly considers nor validly reasons about the meaning of
the statute” (cleaned up)); Sanofi Aventis, 58 F.4th at 703–04
(concluding that an agency interpretation is not persuasive
when it makes a “giant leap from the text”).
Council, Inc., 467 U.S. 837 (1984). Loper Bright, 603 U.S. at
412. The Court’s decision in Loper Bright, however, did not
disturb Skidmore deference. See id. at 394; see also id. at 476
(Kagan, J., dissenting) (“[T]he majority makes clear that what
is usually called Skidmore deference continues to apply.”).

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Our conclusion today is in accord with the Court of
Appeals for the Second Circuit’s decision in Lundy. See
Lundy, 711 F.3d at 115–17. There, the court explained that the
text of the FLSA “simply does not consider or afford a
recovery for gap-time hours,” even when an employee works
overtime hours in the same pay period. Id. at 116. The court
was similarly unpersuaded by the Department’s interpretative
guidance because the Department “provide[d] no statutory
support or reasoned explanation for this interpretation.” Id. at
117.
The Court of Appeals for the Fourth Circuit diverged on
this point, deferring to the Department’s interpretative
guidance “given the FLSA’s silence regarding overtime gap
time.” Conner, 22 F.4th at 421. But as set forth above, we do
not believe Congress’s silence created an ambiguity; we thus
see no need to resort to agency guidance. While the
Department’s reading may better serve “the policy objective of
the FLSA overtime provision by ensuring employers do not
mitigate or skirt the financial pressures of working their
employees above the forty-hour threshold,” id. at 422, that
does not allow us to read into the FLSA a remedy that Congress
did not create. “‘Congress wrote the statute it wrote’ —
meaning, a statute going so far and no further.” Lundeen, 156
F.4th at 341 (quoting Michigan v. Bay Mills Indian Cmty., 572
U.S. 782, 794 (2014)). Moreover, as the Court of Appeals for
the Second Circuit observed, putative plaintiffs are not left
without recourse — they may resort to state law. See Lundy,
711 F.3d at 116 (suggesting employees may bring “basic
contract action[s]” under state law); see, e.g., 43 Pa. Cons. Stat.
§§ 333.101, et seq. (Pennsylvania Minimum Wage Act); 43 Pa.
Cons. Stat. §§ 260.1, et seq. (Wage Payment and Collection
Law).

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For these reasons, we conclude that the FLSA does not
allow for overtime gap time claims. We will thus reverse this
portion of the District Court’s order and award.
B.
We turn to Comprehensive’s remaining arguments.
Comprehensive first urges that the District Court erred by
applying a lower burden of proof to certain of the Secretary’s
claims. We review this legal conclusion de novo, Martin v.
Selker Bros., Inc., 949 F.2d 1286, 1292 (3d Cir. 1991), and we
detect no error.
In Anderson v. Mt. Clemens Pottery Co., the Supreme
Court explained that “[t]he solution” to the evidentiary
problem created when an employer fails to keep adequate
records of an employee’s work “is not to penalize the employee
by denying him any recovery on the ground that he is unable
to prove the precise extent of uncompensated work.” 328 U.S.
680, 687 (1946). An employee may instead prove a violation
of the FLSA by “produc[ing] sufficient evidence to show the
amount and extent of [uncompensated] work as a matter of just
and reasonable inference.” Id. If the employee produces such
evidence, then “[t]he burden . . . shifts to the employer to come
forward with evidence of the precise amount of work
performed or with evidence to negative the reasonableness of
the inference to be drawn from the employee’s evidence.” Id.
at 687–88. If the employer fails to do so, then “the court may
. . . award damages to the employee, even though the result be
only approximate.” Id. at 688.

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Comprehensive contends that the District Court erred
by applying the Mt. Clemens framework to all of the
Secretary’s claims. Rather, in Comprehensive’s view, Mt.
Clemens should not reach the Secretary’s claims that
(1) Comprehensive paid employees for their scheduled hours
rather than for the hours they actually worked and
(2) Comprehensive computed employees’ overtime wages
using incorrect regular rates. Comprehensive urges that these
claims were not premised on inadequate recordkeeping, and
thus Mt. Clemens does not apply.
At the outset of its analysis, the District Court noted that
“[a]s a result of Defendants’ recordkeeping violations, the Mt.
Clemens burden-shifting framework applies,” without
specifying the claims to which the framework applied. App.
118. But as the Secretary points out, the damages the District
Court awarded for the claims at issue were based on
Comprehensive’s own records; thus, Mt. Clemens did not
affect the analysis for these claims.
With respect to the pay-by-schedule claim, the
Secretary’s damages model — which the District Court
accepted — relied on Comprehensive’s records to determine
the number of hours a given employee worked and calculate
the back wages owed. The same is true for the Secretary’s
claim of incorrect calculations of employees’ regular rates.
Indeed, the District Court emphasized that the damages
awarded “were based upon Defendants’ own time and pay
records.” App. 135. Accordingly, the core of the District
Court’s findings and award with respect to these claims was
not impermissibly premised on Mt. Clemens.

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Insofar as the District Court implied that the Mt.
Clemens scheme applied to all claims, we disregard this
statement as harmless error. See 28 U.S.C. § 2111 (providing
that an appellate court “shall give judgment after an
examination of the record without regard to errors or defects
which do not affect the substantial rights of the parties”).7 We
perceive no error because the District Court did not apply the
Mt. Clemens burden-shifting framework to the disputed
claims.
C.
Comprehensive next challenges three of the District
Court’s factual findings. We review the District Court’s
findings of fact for clear error. Covertech Fabricating, Inc. v.
TVM Bldg. Prods., Inc., 855 F.3d 163, 169–70 (3d Cir. 2017).
A factual finding is not clearly erroneous unless it “(1) is
completely devoid of minimum evidentiary support displaying
some hue of credibility, or (2) bears no rational relationship to
the supportive evidentiary data.” N.J. Retail Merchs. Ass’n v.
Sidamon-Eristoff, 669 F.3d 374, 390 (3d Cir. 2012) (citation
omitted). We see no clear error in the findings that
Comprehensive disputes.
7 It is not clear on this record that the application of the Mt.
Clemens framework to these two claims would have been
erroneous, as the scope and extent of these violations may have
been masked by Comprehensive’s inadequate recordkeeping.
But because we conclude that the District Court did not apply
the framework to these claims and the Secretary did not
advance such an argument, we have no occasion to consider it
here.

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1.
Comprehensive first contends that the evidence at trial
did not establish a pattern or practice through 2023 of paying
employees based on scheduled hours, rather than hours
worked. Comprehensive urges instead that the error was
corrected in 2018. In support of this argument, Comprehensive
highlights testimony from Abraham Pechman, the director of
payroll at Comprehensive’s corporate parent, in which he
explained that after he started at Comprehensive in May 2018,
he was not aware of any employees being paid based on their
schedule as opposed to “punch to punch.” App. 2288. The
District Court, however, found that Pechman was not a credible
witness. Without Pechman’s testimony, Comprehensive
identifies no evidence to support its argument. Moreover,
Michael Shuey, a Department of Labor investigator, agreed
that the “suggest[ion] . . . that the practice of paying according
to schedule . . . had ceased” by May 2018 was not “consistent
with what [he] heard from the[] employees” he had
interviewed. App. 2096. His testimony is corroborated by,
among other things, documentary evidence indicating that this
practice persisted after May 2018. It thus cannot be said that
the District Court’s finding “bears no rational relationship to
the supportive evidentiary data.” Sidamon-Eristoff, 669 F.3d
at 390 (citation omitted). Accordingly, the District Court did
not commit clear error by finding that pay-by-schedule errors
persisted beyond 2018.
2.
Comprehensive next argues that the evidence at trial did
not establish a pattern or practice of miscalculating employees’

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regular rates beyond July 2019. Comprehensive acknowledges
that employees’ regular rates were improperly calculated prior
to July 2019 but asserts that “uncontroverted evidence
established that the issue was corrected in July 2019.”
Comprehensive Br. 18. But again, Comprehensive’s argument
relies on testimony from Pechman, a witness the District Court
found incredible. Comprehensive thus fails to identify
competent evidence to support its position. On the Secretary’s
side, testimony from Michael Murray, a Department of Labor
IT specialist who presented the Secretary’s damages
calculations, supports the court’s finding. Murray testified
about an instance in January 2023 in which an employee’s
regular rate was miscalculated, and he further testified that
“additional pay” was not “consistently included in the
employees[’] regular rate” as required. App. 937–
38. Investigator Shuey also testified that he spoke to “at least
a hundred” employees across Comprehensive’s 15 facilities
after the “2016, 2017 era” and that these employees continued
to complain that bonuses and shift differentials were not being
included in their regular rates. App. 2095–98. We therefore
cannot conclude that the District Court’s finding is
“completely devoid of minimum evidentiary support” to
constitute clear error. Sidamon-Eristoff, 669 F.3d at 390
(citation omitted).
3.
Third, Comprehensive asserts that the trial evidence
does not support a finding of a pattern or practice at all facilities
of all employees working through their meal breaks every day
through 2023. The court’s finding, however, was not as broad
as Comprehensive claims. Rather, the District Court
concluded that “mealtime work was ubiquitous” across

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Comprehensive’s facilities and that “many employees” were
“simply not paid” for mealtime work. App. 95. The court later
clarified that it was “never . . . under the impression that every
employee, every day, was unable to take a full, bona fide
lunch.” App. 133. The District Court explained that the
evidence
conclusively established that (1) employees
often missed meal breaks or, at a minimum, did
not routinely receive an uninterrupted 30-minute
meal break; (2) actual practices related to
employees punching in and out for lunch were
inconsistent across [Comprehensive’s facilities]
during the relevant times; and (3) employees
were not always paid for meal time work.
App. 133–34.8
The District Court’s more limited finding is supported
by the evidence introduced at trial, including, inter alia,
testimony from 14 employees who stated that they had
regularly worked during lunchtime without compensation.
The court found each of these witnesses to be credible, noting
its conclusion was “bolstered by the fact that each of them told
the same story — despite working at different times and in
different [Comprehensive facilities].” App. 91. The court also
credited testimony from Comprehensive’s regional consultant,
noting that her testimony was “particularly illuminating and
8 This finding is further bolstered by testimony from Murray,
who explained that the Secretary’s damages model — which
was ultimately accepted by the Court — specifically accounted
for employees who did not work through their meal breaks.

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21
powerful” because she “regularly had her finger on the pulse
of multiple [Comprehensive facilities].” App. 88 n.15. She,
too, “credibly testified that employees worked through lunch.”
App. 88 n.15.9
Comprehensive argues that this evidence is
quantitatively insufficient because only a small number of
witnesses testified on behalf of the nearly 6,000 employees on
whose behalf the Secretary brought claims. We have,
however, often endorsed the practice of using “representative
employees to prove violations with respect to all employees.”
Reich v. Gateway Press, Inc., 13 F.3d 685, 701–02 (3d Cir.
1994); see also Selker Bros., 949 F.2d at 1298 (“The testimony
and evidence of representative employees may establish prima
facie proof of a pattern and practice of FLSA violations.”). It
is thus “not necessary for every single affected employee to
testify in order to prove violations or to recoup back wages.”
Selker Bros., 949 F.2d at 1298. And we recently clarified that
“there is no brightline test establishing the percentage of
employees necessary to achieve a representative sample.”
Sec’y U.S. Dep’t of Lab. v. E. Penn Mfg. Co., 123 F.4th 643,
650 (3d Cir. 2024) (citation omitted). Indeed, in East Penn, we
approved the use of a “small number” of employees as a
9 Comprehensive specifically urges that it was error for the
District Court to extend its finding to cover one facility —
Latrobe — because the Secretary did not introduce any
evidence of unpaid meal breaks at that facility. But
Comprehensive’s regional consultant oversaw the Latrobe
facility and testified that unpaid mealtime work occurred
“often” and “in many of [Comprehensive’s] building[s].” App.
754. That testimony is sufficient to support the District Court’s
finding.

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22
representative sample because they were “all subject to the
same pay and uniform policies” that led to the violations. Id.
(citation omitted). Thus, the proportionately small number of
employee-witnesses that testified at trial does not alone render
this evidence insufficient to constitute a representative sample.
The Secretary’s evidence in this case was, qualitatively,
strongly probative of systemic mealtime work violations. That
evidence included testimony from employees across
Comprehensive’s facilities about their own experiences,
testimony from employees about the experiences of their
coworkers who, too, frequently worked through their meal
breaks, and testimony from a regional consultant who had “her
finger on the pulse” of Comprehensive’s facilities, App. 88
n.15, as well as corroborating documentary evidence.
Finally, Comprehensive urges that there is no evidence
to support the District Court’s finding that the meal-break
violations extended into 2023. That is not so. Investigator
Shuey testified that employees worked through lunch “for the
entire investigative period.” App. 291. This testimony is
sufficient to dispense with Comprehensive’s claim of clear
error.
In sum, the District Court did not clearly err in rendering
these factual findings.10
10 Comprehensive contends that these factual findings led the
District Court to err in its damages award. Because we
conclude that the factual findings identified by Comprehensive
are not clearly erroneous, we need not address these arguments
further.

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23
D.
Comprehensive finally contends that the District Court
applied erroneous legal standards when determining whether
certain employees were exempt from the FLSA’s guarantee of
overtime pay. Whether an employee is covered by an
exemption under the FLSA “is a mixed question of law and
fact.” Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 900
(3d Cir. 1991). We review the District Court’s findings of fact
for clear error but its application of law to fact de novo. See
id.
The District Court observed that “[t]he burden of proof
lies with the employer to demonstrate that an employee
‘plainly and unmistakably’ falls within an exemption” and that
these exemptions should be “construed narrowly against the
employer.” App. 114–15 (citation omitted). The District
Court, applying those standards, concluded that
Administrators, Directors of Nursing, Dietary Directors, and
Rehab Directors were properly classified as exempt as working
in executive capacity. But the court determined that
Comprehensive had failed to demonstrate “plainly and
unmistakably” that Assistant Directors of Nursing,
Maintenance Directors, Activities Directors, Nursing
Supervisors/Unit Directors, and Housekeeping/Environmental
Directors were exempt from the FLSA’s overtime
requirements. App. 120.
Comprehensive argues that the District Court applied
incorrect and outdated legal standards in its exemption
analysis. We agree. The Supreme Court has clarified that

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24
FLSA exemptions should not be construed narrowly against an
employer; rather, they must be given a fair reading. Encino
Motorcars, LLC v. Navarro, 584 U.S. 79, 89–90 (2018). And
an employer bears the burden of proving an employee’s
exempt status by a preponderance of the evidence, not plainly
and unmistakably. E.M.D. Sales, Inc. v. Carrera, 604 U.S. 45,
54 (2025).
The Secretary concedes these errors but urges that they
were harmless. This Court has recognized that “a non-
constitutional legal error [is] harmless if it is highly probable
that the error did not affect the judgment” under review. Gen.
Motors Corp. v. New A.C. Chevrolet, Inc., 263 F.3d 296, 329
(3d Cir. 2001). In making that determination, we “need not
disprove every reasonable possibility of prejudice,” but we
“must be well-satisfied that the error did not prejudice a party.”
Id. We are not persuaded that the error was harmless.
The FLSA exempts certain employees from its overtime
mandate, including any employee who is employed in a “bona
fide executive, administrative, or professional capacity.” 29
U.S.C. § 213(a)(1). Most relevant here, the executive
exemption covers employees (1) who are compensated on a
salary basis at the requisite level; (2) “[w]hose primary duty is
management”; (3) “[w]ho customarily and regularly direct[]
the work of two or more other employees”; and (4) “[w]ho
ha[ve] the authority to hire or fire other employees or whose
suggestions and recommendations” on change-of-status issues
“are given particular weight.” 29 C.F.R. § 541.100(a).
With respect to the salary criterion, the employee must
regularly receive, subject to certain exceptions, “a
predetermined amount constituting all or part of the

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25
employee’s compensation, which amount is not subject to
reduction because of variations in the quality or quantity of the
work performed.” Id. § 541.602(a). An employee, however,
is not paid on a salary basis if the employer makes deductions
from the employee’s compensation for “absences occasioned
by the employer or by the operating requirements of the
business.” Id. § 541.602(a)(2). An employer’s “actual
practice” of making such improper deductions demonstrates
that the “employer did not intend to pay employees on a salary
basis,” and thus the exemption does not apply. Id. §
541.603(a). In determining whether an actual practice exists,
courts consider the following factors, among others:
the number of improper deductions, particularly
as compared to the number of employee
infractions warranting discipline; the time period
during which the employer made improper
deductions; the number and geographic location
of employees whose salary was improperly
reduced; the number and geographic location of
managers responsible for taking the improper
deductions; and whether the employer has a
clearly communicated policy permitting or
prohibiting improper deductions.
Id.
The Secretary asserts that the errors were harmless
because Comprehensive failed to offer any evidence that any
employee met the salary criterion of the executive exemption.
The Secretary further points to evidence of deductions to argue
that Comprehensive had an actual practice of making improper
deductions such that the exemption does not apply. Whether

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26
that evidence is sufficient to demonstrate an actual practice is
a question we cannot resolve on this record because the District
Court made no findings with respect to the salary criterion.
We will thus vacate this portion of the District Court’s
order and remand for the District Court to apply the proper
standards and make additional findings. 11 Accord E.M.D.
Sales, 604 U.S. at 54 (remanding rather than applying the
preponderance-of-the-evidence standard).
III.
For the foregoing reasons, we will reverse in part, affirm
in part, and remand for further proceedings consistent with this
Opinion.
11 Both before the trial court and on appeal, Comprehensive
argued that, to the extent the executive exemption does not
apply, other exemptions cover these employees. Because the
District Court did not make any findings with respect to other
exemptions, we do not address their applicability here and
instead leave them for the District Court to consider in the first
instance.

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1
ROTH, Circuit Judge, concurring in part, dissenting in part.
I did not join the judiciary because of my mathematical
talent. However, given that the computation of wages is at the
heart of this appeal, bear with me as we work through the
following hypothetical. Imagine that you were paid in your job
at a rate of $10 per hour. You worked every day, Monday
through Friday, from 9:00 a.m. to 5:00 p.m. with one hour off
for lunch, a total of 35 hours a week. But, on the week before
Christmas, your boss made you stay late and skip your lunch
hour every day, working from 9:00 a.m. to 6:00 p.m. without a
break. Because you worked 45 hours that week, you were
owed $400 for the first 40 hours of non-overtime work, plus an
additional $75 for the five hours of overtime, a total of $475.1
Yet, your boss paid you only $350, your pay for your normal
35-hour week.
Under the Majority’s holding, even though your
employer owes you $125 in unpaid wages, you may not be able
to recover that amount under the FLSA. Instead, your recovery
would be limited to $75 for the five hours of overtime. The
$50 shortfall is often referred to as “overtime” gap time—the
period between the end of your normal 35-hour work week and
40 hours, the time from which overtime is computed under the
FLSA. This shortfall runs afoul of the statute’s remedial
purpose: “to ensure that all covered employees receive a fair
day’s pay for a fair day’s work.”2 Because I would not reduce
1 The FLSA requires employers to pay employees at least one
and one-half times their regular rate for any hours worked over
40 in a given week. See 29 U.S.C. § 207.
2 Maj. Op. 4 (internal quotation marks omitted).

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2
your pay by disallowing overtime gap time claims, I
respectfully dissent in part.3
The Majority holds that the FLSA’s “text does not
contemplate overtime gap time,” and ends its analysis at the
statute’s plain text because it believes “the statutory language
is clear.”4 But the statute’s text is far from clear. 29 U.S.C. §
207 states that overtime wages for hours worked in excess of
40 are calculated as “one and one-half times the [employee’s]
regular rate.”5 The FLSA also defines the term “regular rate”
as “all remuneration for employment paid to, or on behalf of,
the employee” excluding certain discretionary payments.6
However, neither case law nor the statute establishes whether
the regular rate, which is crucial to calculating the overtime
wage, is the amount actually paid by the employer or the
amount for which the employer contracted with the employee.
Take the example I provided earlier. Your contracted
hourly wage was $10 per hour, but you were paid for only 35
hours, totaling $350, despite working for 45 hours. One way
to determine the regular rate for purposes of calculating
overtime compensation is to simply use the contracted rate of
$10 per hour. Another approach is to take the actual rate paid
by the employer, which in this hypothetical would be $7.77 per
3 I only dissent with respect to Part II.A of the Majority
opinion.
4 Id. at 10.
5 The regular rate is distinct from the minimum wage. See
Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 577
(1942) (noting that 29 U.S.C. § 207 “calls for 150% of the
regular, not the minimum, wage”).
6 29 U.S.C. § 207(e).

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3
hour ($350 divided by 45). While both approaches are
technically consistent with the statute’s text, determining
which is correct is “integral to the issue of overtime payment
under the FLSA.”7
The case law in which the Supreme Court has attempted
to define a regular rate is ambiguous and at times conflicting.
The Court in Walling v. Youngerman-Reynolds Hardwood Co.
explained the regular rate “must reflect all payments which the
parties have agreed shall be received regularly during the
workweek.”8 The word “agreed” suggests the dispositive rate
is the one that was contracted for, since that is what the parties
agreed upon.9 But the Court in Youngerman-Reynolds also
stated that the “regular rate coincides with the hourly rate
actually received for all hours worked during the particular
workweek, such rate being the quotient of the amount received
during the week divided by the number of hours worked.”10
This phrasing implies the regular rate is based on the money
7 Smiley v. E.I. Dupont De Nemours & Co., 839 F.3d 325, 330
(3d Cir. 2016).
8 325 U.S. 419, 424 (1945) (emphasis added).
9 See Contract, Black’s Law Dictionary (2nd ed. 1910)
(defining contract as “[a]n agreement, upon sufficient
consideration, to do or not to do a particular thing”) (emphasis
added).
10 Youngerman-Reynolds, 325 U.S. at 424 (emphasis added).

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4
actually paid, not the contracted rate.11 This ambiguity is not
limited to Youngerman-Reynolds—several Supreme Court
cases mention both actual and contracted rates when discussing
regular rates.12
In my view, the conflicting language in the case law
reveals that the Supreme Court’s determination of the regular
rate is premised on the actual and contracted rates being one in
the same. For example, in Youngerman-Reynolds, the
employer’s contract set one wage for “straight time” under 40
hours and a lower figure for the regular rate used to calculate
11 See also Smiley, 839 F.3d at 330 (defining regular rate as
“rate per hour that is determined by dividing [the] total
remuneration for employment (except statutory exclusions) in
any workweek by the total number of hours actually worked
by him in that workweek for which such compensation was
paid.”) (internal quotation marks omitted) (alteration in
original) (emphasis added).
12 See e.g., Bay Ridge Operating Co. v. Aaron, 334 U.S. 446,
464 (1948) (stating that the regular rate is calculated by
“dividing the weekly compensation by the hours” worked, but
also stating that the regular pay “must be drawn from what
happens under the employment contract”); Walling v.
Helmerich & Payne, 323 U.S. 37, 40, 42 (1944) (holding that
“the [FLSA] clearly contemplates 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” but calculating the regular
rate by “the simple process of dividing the wages received for
each [shift] by the number of hours in that [shift]”).

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5
overtime compensation.13 The Supreme Court held that the
arrangement was impermissible, explaining that the regular
rate for overtime must be based on the contracted rate used to
pay straight time wages.14 The Court assumed that at least with
regard to the first forty hours worked within a workweek, the
employees were paid at the rate they had contractually agreed
upon.
To avoid a conflict with Supreme Court precedent, the
actual rate, contracted rate, and regular rate should be the same.
The three rates can match only if employers pay employees for
all 40 hours of straight time at the contractually agreed upon
rate before calculating the overtime wage. Requiring
employers to do so means that employees can recover overtime
gap time wages under the FSLA. The Majority overlooks that
its holding—that the FLSA does not cover overtime gap
time—creates avoidable ambiguity in determining the regular
rate, an issue easily resolved by requiring the three rates to
match.
In addition, the Department’s interpretive guidance,
which states that an employer has not paid an employee
overtime compensation unless it has also paid the employee
“all the straight time compensation due him for the
nonovertime hours under his contract” aligns with my
position.15 Moreover, I believe we owe the Department’s
interpretive guidance deference under Skidmore v. Swift & Co.,
13 Id. at 425. “Straight time” refers to normal working hours,
as opposed to overtime. See Davis v. Abington Mem'l Hosp.,
765 F.3d 236, 244 (3d Cir. 2014).
14 Youngerman-Reynolds, 325 U.S. at 425–26.
15 29 C.F.R. § 778.315 (emphasis added).

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6
as agency interpretations of statutes “constitute a body of
experience and informed judgment to which courts and
litigants may properly resort for guidance.”16
The Majority does not afford the Department’s
interpretation any deference because it believes the guidance
does not hold “persuasive power.”17 I disagree and would
adopt the position of the Court of Appeals for the Fourth
Circuit, which held in Conner v. Cleveland Cnty that the
Department’s overtime gap time guidance was entitled to
Skidmore deference because of its longstanding nature.18 The
guidance has remained unchanged since 1968, and has been
referred to in numerous other Department interpretations and
administrative decisions, “thereby confirming [its] continued
validity and relevance.”19 The longstanding nature of the
Department’s interpretation, which the Majority unduly
minimizes, weighs heavily in favor of Skidmore deference.20
Ultimately, recognizing overtime gap time claims effectuates
the FLSA’s goal of ensuring that employers “do not mitigate
or skirt the financial pressures of working their employees
above the forty-hour threshold.”21
My position is also grounded in common sense. I
simply do not know what regular rate to use to calculate
overtime wages unless the employer has paid the employee the
wages they are due for the first forty hours. The Majority’s
16 323 U.S. 134, 140 (1944).
17 Maj. Op. 13.
18 Conner v. Cleveland Cnty, 22 F.4th 412, 422 (4th Cir. 2022).
19 Id.
20 Id.
21 Id.

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7
rule also produces an untenable result—employees have little
incentive to work beyond forty hours if they are not fully
compensated for all hours worked. Although the Majority
suggests employees can resort to state contract law to recover
for their unpaid gap time wages, that reasoning is at odds with
the FLSA’s role in setting a baseline for labor protections. Had
Congress believed employees should rely on private litigation
to protect their interests, it would not have enacted the FLSA.
For these reasons, I respectfully dissent in part.

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