On June 3, 2026, the U.S. Court of Appeals for the Third Circuit held that the Fair Labor Standards Act (FLSA) does not recognize overtime gap time claims, handing a partial win to a nursing and rehabilitation facility company after a court awarded employees $35.8 million in damages for wage and hour claims brought by the U.S. Department of Labor (DOL).

Quick Hits

• The Third Circuit ruled that the FLSA does not recognize claims for “gap time,” which refers to unpaid hours that do not exceed overtime limits.
• The court declined to rely on the DOL’s guidance suggesting gap time claims are cognizable, finding the FLSA to be unambiguous and the DOL’s guidance otherwise unpersuasive.
• This decision eliminates certain gap time claims in the Third Circuit, an area of aggressive DOL enforcement.

The Third Circuit ruling in Secretary of United States Department of Labor v. Comprehensive Healthcare Management Services LLC is a significant win for employers in finding that claims for gap time—or uncompensated time worked that does not exceed the overtime limit—are not cognizable under the FLSA.

The appellate court further handed the employer a partial win in finding that the district court applied improper standards in determining that certain employees were nonexempt, remanding that issue to the district court for proper analysis. However, the appellate court found that the district court had applied the proper burden of proof and did not err in certain disputed factual findings...

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