Introduction

In Lynwood Pickens v. Hamilton-Ryker IT Solutions, LLC, the Sixth Circuit addresses how the Fair Labor Standards Act’s “salary basis” test operates when an employer guarantees a small weekly amount and pays the remainder of compensation hourly. The decision, recommended for publication, squarely answers a question that has percolated after the Supreme Court’s 2023 decision in Helix Energy Solutions Group v. Hewitt: what does it mean to be paid “on a weekly basis” under 29 C.F.R. § 541.602(a)?

The facts are simple but revealing. Hamilton-Ryker guaranteed pipe inspector Lynwood Pickens $800 each week (the equivalent of 8 hours at $100/hour), then paid him $100/hour for every hour worked beyond those eight. Pickens regularly worked about 52 hours per week, never received overtime, and was labeled “salaried.” He sued under the FLSA, arguing he was not paid on a salary basis and so was entitled to overtime. The district court held for the employer; the Sixth Circuit reversed.

The opinion does three notable things:

• It rejects offensive nonmutual issue preclusion based on the Fifth Circuit’s Gentry v. Hamilton-Ryker decision, because Pickens could have joined that earlier action.
• It holds that a “weekly” salary under § 541.602(a) must compensate an employee for a regular week’s worth of work; a nominal weekly guarantee covering only a sliver of the week does not suffice. Employers who pay by the hour/day can instead use § 541.604(b), but then must meet the “reasonable relationship” condition.
• It upholds the Department of Labor’s salary-basis framework as a valid exercise of Congress’s explicit delegation to “define and delimit” the executive, administrative, and professional (EAP) exemptions—even after Chevron’s demise in Loper Bright.

Summary of the Opinion

Writing for the court, Chief Judge Sutton (joined by Judge Kethledge; Judge Murphy concurred in part and dissented in part) reverses summary judgment for the employer and remands. The key holdings are:

• No offensive issue preclusion: Pickens cannot offensively preclude Hamilton-Ryker based on the Fifth Circuit’s Gentry decision because he could have joined that suit. Parklane Hosiery’s general rule bars such “free riding.”
• Salary-basis ruling under § 541.602(a): To be “paid on a weekly basis,” the predetermined amount must cover a week’s work. A guaranteed $800 for only 8 hours, with all other hours paid at an hourly rate, is not a weekly salary. The arrangement here is “Helix II.”
• Harmonization with § 541.604(b): Reading § 541.602(a) as any weekly token would render § 541.604(b)’s “reasonable relationship” test superfluous. The court preserves § 604(b) by limiting § 602(a) to true weekly salaries.
• Validity of DOL regulations: The salary-basis test (including § 604(b)’s “reasonable relationship” requirement) is within Congress’s express grant to the Secretary to “define and delimit” the EAP exemptions; the rule is reasonable and reasonably explained, and survives post–Loper Bright review.
• Remand on collective issues: The court leaves to the district court whether Pickens’s suit may proceed as a collective action and how the ruling applies to opt-ins.

Analysis

Precedents Cited and Their Influence

• Helix Energy Solutions Group v. Hewitt, 598 U.S. 39 (2023): The anchor precedent. Helix held that an employee paid a daily rate, however high, is not “paid on a salary basis” under § 541.602(a) absent compliance with § 541.604(b). The Sixth Circuit extends Helix’s logic: a “weekly” payment that is merely the first slice of hourly/daily pay is functionally the same as a day-rate scheme—both tie pay to time worked rather than pay a true weekly salary. The court repeatedly invokes Helix’s insistence on the ordinary meaning of “salary” and the need to give § 604(b) work to do.
• Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979): Supports the refusal to apply offensive nonmutual issue preclusion when the plaintiff could have joined prior litigation. The Sixth Circuit collects cases from multiple circuits reinforcing Parklane’s “no free ride” principle; Pickens’s choice to litigate separately forecloses preclusion.
• Wilson v. Schlumberger Technology Corp., 80 F.4th 1170 (10th Cir. 2023): The employer’s best support, reading § 602(a) to allow a base biweekly payment plus hourly “rig” rates. The Sixth Circuit distinguishes Wilson on facts: there, base pay was not computed on an hourly, daily, or shift basis and represented genuine base compensation unrelated to hours; here, all pay was effectively hourly (8 hours “guarantee” plus hourly thereafter). The court thus avoids a direct conflict with Wilson and aligns with the Fifth Circuit’s contrary holding in Gentry.
• Gentry v. Hamilton-Ryker IT Solutions, LLC, 102 F.4th 712 (5th Cir. 2024): A closely analogous case involving the same employer and compensation model. The Fifth Circuit held the workers were entitled to overtime, and the Sixth Circuit’s merits analysis tracks Gentry’s logic about what counts as a weekly salary versus hourly pay with a nominal guarantee.
• Ysleta Del Sur Pueblo v. Texas, 596 U.S. 685 (2022); Marx v. General Revenue Corp., 568 U.S. 371 (2013); Pulsifer v. United States, 601 U.S. 124 (2024): Canons against surplusage used to avoid reading § 602(a) in a way that would leave § 604(b) “with no work to perform.”
• Babbitt v. Sweet Home (Scalia, J., dissenting); Sackett v. EPA; Bond v. United States: Employed to rebut the employer’s insistence that the defined term “salary basis” renders the ordinary meaning of “salary” irrelevant. The court emphasizes that a defined term’s ordinary meaning remains an interpretive check where the definition and ordinary usage diverge.
• Goldberg v. Whitaker House; Keller v. Miri Microsystems; Powell v. U.S. Cartridge: Support the “economic reality” principle: the FLSA looks to substance over labels. Calling an 8-hour weekly payment a “weekly salary” does not change its true nature.
• Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024) and FCC v. Prometheus Radio Project, 592 U.S. 414 (2021): Post-Chevron framework for reviewing agency rules. The court recognizes express delegation, fixes the scope (“define and delimit”), and upholds the salary-basis rule and § 604(b)’s reasonable-relationship requirement as reasonable within that grant.
• Historic appellate approvals of salary tests: Fanelli (2d Cir. 1944); Yeakley (10th Cir. 1944); Craig (9th Cir. 1959); Wirtz (5th Cir. 1966); Prakash (D.C. Cir. 1984); Sixth Circuit’s own Walling v. Morris (1946) (vacated on other grounds). The court situates the salary-basis approach in 80+ years of consistent judicial acceptance; the Fifth Circuit reaffirmed in Mayfield v. DOL (2024).

Legal Reasoning

1) What “paid on a weekly basis” means under § 541.602(a)

The court anchors its interpretation in text, context, and ordinary meaning. In § 541.602(a), “basis” signifies the foundation or unit around which the payment is structured; paired with “weekly,” the regulation requires a predetermined amount set with reference to a week’s work—what “ordinary people think of as a salary.” A true weekly salary pays for the “general value of services performed” over the week without regard to hours or days worked. A token weekly sum tied to a fraction of the week cannot be the “foundation” for weekly pay.

The court draws on examples embedded in § 602 to confirm the reading:

• “Full salary” must be paid for any week in which any work is performed—even if the employer has no work available (§ 602(a)(2)).
• Deductions for “one or more full days for personal reasons” are permitted; partial-day docking is not (§ 602(b)(1)).
• FMLA leave permits proportionate reduction tied to time not worked (§ 602(b)(7)).
• Employees paid only for occasional days are not salaried (§ 602(b)(6)).

These provisions presuppose that the salary covers the regular workweek; they collapse if the “salary” covers only minutes or a single day.

2) Harmonizing § 602(a) with § 604(b)

Section 541.604(b) supplies an alternative path: an employee whose earnings are computed hourly/daily/shift may still be treated as salaried if the employer guarantees at least the minimum weekly-required amount and a “reasonable relationship” exists between the guarantee and the usual weekly earnings. If every nominal weekly payment qualified under § 602(a), § 604(b)’s reasonable-relationship condition would be largely meaningless. Reading “weekly basis” to require a true weekly salary gives § 604(b) “room to operate.”

The court also cabins § 604(a), which permits “additional compensation” without losing the exemption, as covering commissions, profit percentages, and overtime beyond the normal workweek—not hourly pay for the regular workweek itself. Pickens’s pay was not “additional”; it was the main event.

3) Applying Helix—“Helix II”

The Sixth Circuit deems this case “Helix II.” In Helix, the employee’s weekly pay varied solely with the number of days worked; here, the employee’s weekly pay varied solely with the number of hours worked after the first eight. In both, the employer ensured a minimum that did not truly pay for a week’s worth of work and then tied compensation to time worked. Labels (calling the first day’s or first eight hours’ pay a “weekly salary”) do not change the economic reality.

4) Practicality and policy

The employer’s plea that compliance is “impracticable” when hours fluctuate cannot trump the regulation’s text. The regulatory scheme offers two lawful routes: pay a true salary (§ 602(a)), or pay by the hour/day but meet § 604(b)’s reasonable-relationship test. The court emphasizes that employers may not choose “neither”—i.e., avoid paying a true salary and avoid overtime.

5) Post–Loper Bright review of DOL’s authority

After Loper Bright, courts no longer defer to agency interpretations just because text is ambiguous. But this case involves an express delegation: the FLSA exempts EAP employees “as such terms are defined and delimited” by regulation. The court:

• Recognizes a constitutional delegation with an intelligible principle (define and delimit EAP status).
• Fixes the boundaries (the Secretary may clarify what “bona fide” EAP entails and draw administrable lines).
• Confirms the agency acted reasonably (salary-basis rules capture the independence characteristic of EAP roles and supply an objective, enforceable proxy; the “reasonable relationship” condition reasonably carries the salary concept into hourly/daily pay arrangements).

The court canvasses the 1940 Stein Report and 1949 Weiss Report, the long history of judicial approval, and modern rulemaking to conclude the salary-basis framework sits comfortably within the delegated discretion and is reasoned, not arbitrary.

6) Issue preclusion

Relying on Parklane Hosiery and similar cases, the court rejects Pickens’s bid to offensively preclude Hamilton-Ryker with the Fifth Circuit’s Gentry outcome. Where a plaintiff could have joined the earlier action (and here he plainly could have), offensive preclusion is generally unavailable, regardless of whether preclusion would be “unfair” to the defendant.

Impact

The decision has immediate, practical implications for FLSA compliance and litigation:

• Salary-basis clarity: In the Sixth Circuit, a token “weekly guarantee” that covers only a portion of a week (e.g., eight hours) does not satisfy § 602(a). Employers must either:
  • Convert to a true weekly salary covering the regular workweek; or
  • Use § 604(b): keep hourly/daily pay but ensure the guaranteed weekly amount bears a reasonable relationship to usual weekly earnings and meets the minimum weekly-required amount (currently set by DOL regulations).
• Overtime exposure: Pay schemes that guarantee a minimal weekly sum and then pay hourly thereafter will likely trigger overtime obligations unless they meet § 604(b). Staffing firms, energy services, IT contractors, petrochemical inspection, and other industries using blended or day-rate-like structures should reassess.
• Regulatory stability post–Loper Bright: Despite Chevron’s demise, the DOL’s EAP salary-basis rules remain on solid ground as a valid exercise of express delegation. The “reasonable relationship” test also survives.
• Alignment with Helix and Gentry: The Sixth Circuit joins the Fifth in applying Helix robustly to close perceived loopholes. The opinion distinguishes, rather than conflicts with, the Tenth Circuit’s Wilson on its facts, reducing the risk of a direct circuit split on § 602(a).
• Litigation strategy: Plaintiffs cannot offensively preclude an employer with another circuit’s win if they could have joined that earlier action; defendants cannot escape Helix by re-labeling the first portion of hourly pay as a “weekly salary.”
• Collective actions: The court leaves “similarly situated” determinations to the district court, signaling that case management of collectives remains fact-intensive even after a dispositive merits ruling on the named plaintiff.

Complex Concepts Simplified

• Salary basis (§ 541.602(a)): To be exempt under the EAP rules, an employee must be paid a predetermined amount that is truly a weekly salary—i.e., it covers a week’s work without regard to hours worked. Partial-week guarantees do not count.
• Minimum guarantee plus extras (§ 541.604(b)): If an employee’s earnings are computed by the hour/day/shift, the employer can still satisfy the salary-basis concept if it guarantees at least the minimum weekly-required amount and that guarantee is “roughly equivalent” to the employee’s usual weekly earnings. This keeps pay “salary-like” even in hourly structures.
• “Reasonable relationship”: The guaranteed weekly amount and the usual weekly earnings must be in the same ballpark. A tiny guarantee followed by large hourly earnings won’t qualify.
• Helix day-rate rule: Paying a high day rate does not make pay “salaried.” Without a true weekly salary or compliance with § 604(b), the exemption fails.
• Offensive issue preclusion: A plaintiff cannot use a win from earlier litigation against the same defendant if the plaintiff could have joined that earlier case. Parklane bars such “free riding.”
• Post–Loper Bright review: Courts no longer defer to agency interpretations simply because text is ambiguous. But when Congress expressly delegates authority—here, to “define and delimit” EAP exemptions—courts respect the delegation by ensuring the agency stays within the granted bounds and acts reasonably.
• HCE threshold vs. salary basis: Even for highly compensated employees, the employer must meet the salary-basis requirement; high pay alone does not confer exemption if the pay method flunks § 602(a) (or § 604(b)).

Concurring and Dissenting Views

• Judge Kethledge (concurring): Sees no ambiguity in § 602(a) when read in context; agrees with the majority’s interpretation.
• Judge Murphy (concurring in part, dissenting in part): Would affirm for Hamilton-Ryker. He reads “on a weekly basis” to mean simply “paid once per week,” sees the regulation as unambiguously satisfied by the $800 weekly guarantee regardless of additional hourly pay, and warns against importing an “exclusivity” notion into § 602(a). He leans on ordinary usage, cites Wilson, and flags statutory doubts if the regulations are read too strictly in light of § 213(a)(1)’s focus on duties. He analogizes the employer’s structure to lawful tax avoidance and urges regulatory amendment if the Secretary dislikes the result.

Practice Guidance and Compliance Roadmap

• Audit pay structures labeled “salary”: If the “salary” covers only part of the week (e.g., first 8 hours or first day), the employee is not salaried under § 602(a). Expect overtime exposure unless another exemption applies.
• Two compliant paths:
  • Convert to a true weekly salary covering the regular workweek, with permissible “additional compensation” such as commission, profit percentage, or overtime beyond the normal workweek (§ 604(a)).
  • Retain hourly/daily pay but implement a guaranteed weekly amount that is roughly equivalent to usual weekly earnings, meeting the minimum weekly-required amount applicable at the time (§ 604(b)).
• Document the “regular” workweek: For § 604(b), track employees’ normal scheduled workweeks and usual earnings to substantiate the reasonable-relationship test.
• Beware “labels”: Calling a payment a “weekly salary” will not control if the economic reality shows pay for time worked. Plan structures so that salary genuinely covers the week.
• Collective action strategy: After a merits win for the named plaintiff, be prepared to litigate “similarly situated” issues; courts retain discretion over scope and manageability.
• Preclusion planning: Plaintiffs should consider consolidation and joinder strategies; defendants should anticipate that adverse rulings in one circuit may not automatically bind subsequent plaintiffs in another.

Unresolved Questions and Future Litigation

• Defining the “regular” workweek under § 602(a): The court analogizes to § 604(b)’s “normal scheduled workweek” concept but does not set a formula. Expect disputes over employees with highly variable schedules.
• Metrics for “reasonable relationship”: How close is “roughly equivalent”? Agencies and courts have given examples but case-by-case proofs will matter.
• Circuit alignment: The Sixth and Fifth Circuits are aligned post-Helix on token guarantees. Wilson remains factually distinguishable; still, further appellate refinement may come as employers test the § 602/§ 604 boundary.
• HCE updates and thresholds: Salary thresholds have changed over time and are subject to ongoing rulemaking and litigation. While thresholds did not drive this case, they affect compliance planning for HCE strategies.

Conclusion

Pickens establishes a clear, administrable rule in the Sixth Circuit: a “weekly salary” under § 541.602(a) must pay for a week’s worth of work. A nominal weekly guarantee that merely front-loads the first hours or day is not a salary. Employers who rely on hourly/daily computations must either pay overtime or satisfy § 541.604(b)’s minimum guarantee and “reasonable relationship” test. The decision robustly applies Helix, preserves the coherence of the salary-basis framework by giving § 604(b) independent work, and affirms the Department of Labor’s regulatory architecture under the post–Loper Bright standard for express delegations.

For wage-and-hour law, the ruling forecloses a “secret third option” between salary and overtime. For administrative law, it is an early exemplar of courts respecting express legislative delegations while independently interpreting and enforcing the boundaries of agency discretion. And for litigants, it underscores two strategic points: labels will not defeat “economic reality,” and offensive issue preclusion is unavailable when a plaintiff could have joined the prior case. On remand, the district court will decide collective-action issues, but on the merits the path is set: Pickens was not paid on a salary basis; he is entitled to FLSA protections.