This Littler Lightbulb highlights some of the more significant employment and labor law developments in the federal courts of appeal in the last month.

Third Circuit Holds Overtime Gap Time Is Not Compensable Under the FLSA

In a case of first impression in the Third Circuit, Secretary United States Department of Labor v. Comprehensive Healthcare Management Services LLC, 177 F.4th 427 (3d Cir. June 3, 2026), the court considered whether “overtime gap time”— unpaid straight-time hours worked in weeks when employees also worked overtime—is compensable under the FLSA. The case arose following a U.S. DOL wage and hour investigation and lawsuit alleging FLSA violations. The federal court awarded more than $35 million in damages, including compensation for overtime gap time, and the defendant appealed to the Third Circuit.

The Third Circuit emphasized that the text of the FLSA requires employers to pay nonexempt employees only minimum wage and overtime pay, finding that the plain text of the statute “does not contemplate a remedy for overtime gap time.” The Third Circuit rejected the DOL’s reliance on its interpretive guidance, which 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,” finding the guidance “provides no reasoning or support for its position.” The court stated that even though the “gap...

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