(Credit: istockphoto.com/Good_Stock)
Closing Argument
The FLSA Team Is Working
By Riva Parker
Since 2007, Army installations have found themselves on the receiving end of Fair Labor Standards Act (FLSA) “group grievances”filed by the same small law firm in Baltimore, Maryland. The FLSA provides minimum standards for wage and compensation, including overtime compensation, for employees in the United States.1 These grievances—which are identical in all substantive respects, regardless of installation or Army activity where filed—allege that the Army incorrectly designated bargaining unit employees (BUEs) as exempt from the FLSA’s overtime provisions and failed to properly compensate employees for overtime worked.
These grievances do so without asserting a single fact—not one employee named as incorrectly exempted or paid under FLSA—and are usually immediately preceded or followed by a Request for Information (RFI), a statutory mechanism for obtaining information that allows unions to obtain information from agencies upon showing of a particularized need. These RFIs—usually exceeding twenty pages in length—demand extensive documentation purportedly in support of the grievance, and demand production of time cards, evaluations, leave records, time and attendance records, travel records, etc.—for all bargaining unit employees (BUEs) on the installation, usually for the past six or seven years, or more. The number of BUEs on installations often exceeds 1,500, making complying with the RFI astronomically burdensome. The law firm uses this burden to try to extract very large settlements, often in the $40–80 million range.
The Army was more vulnerable to this approach than the other services. Unlike the Air Force or Navy, the Army’s labor defensive function is decentralized, with most installations serviced by a single labor counselor (or, rarely, two) in the consolidated legal office. Although the union had the benefit of the same attorneys working and refining arguments in their legal briefs, the Army’s labor counselors were almost always new to the FLSA, responsible for a caseload of over sixty-plus matters (including quick-paced litigation before administrative boards), and had neither the time nor experience to respond to the union’s burdensome demands for “class action” type litigation without the procedural protections provided in class actions. Despite this, many Army labor counselors heroically staved off FLSA multi-million dollar settlements.
This was the context for the formation of the Office of The Judge Advocate General’s (OTJAG) Fair Labor Standards Act Team (FLSA Team). Reporting to OTJAG’s Director of Civilian Personnel, Labor and Employment Law, the FLSA Team consists of five attorneys whose full-time practice is to defend the Army against FLSA group grievances. Operating as a force multiplier, the FLSA Team works closely with the OSJA and the installation labor counselors to defend FLSA actions.
FLSA Overtime Requirements
The FLSA’s overtime provisions presumptively apply to all employees in the United States, unless those employees are exempt under either the FLSA itself or another statute.2 Employees who are not covered by the FLSA are designated “FLSA Exempt.”3 This exemption status has no relation to their membership in the union, so an employee may be nonexempt, i.e., covered by the FLSA, but not in the union, and exempt employees may also be BUEs. Most federal employees are covered either by Title 5, United States Code (U.S.C.), or the FLSA’s overtime provisions.
There are two key differences between Title 5, U.S.C., and the FLSA that drive these boilerplate grievance claims: first, the FLSA entitles a nonexempt employee to overtime at one-and-a-half times their hourly rate of pay for all overtime worked,4 including “suffered or permitted overtime” (SPOT)—namely, the time an employee works before or after their tour of duty, and/or during an unpaid lunch, when supervisors know about it and do not prevent it.5 Moreover, a nonexempt employee is entitled to overtime pay unless they request—and the agency is willing to offer—compensatory time-off on an hour-for-hour basis.6 By contrast, an exempt employee who is covered by Title 5, U.S.C., is only entitled to compensation for overtime officially ordered and approved, in writing, in advance, and the agency may elect to compensate with overtime pay or compensatory time off.7 Further, as a practical matter, the overtime hourly rate of pay for exempt employees is usually the same as their regular hourly rate of pay.8
Initially applicable to the private sector only, the FLSA entitles nonexempt employees who work more than forty hours a week to overtime pay at its higher rate, and provides a cause of action when employers fail to compensate appropriately for overtime worked.9 However, the FLSA itself prohibits amorphous “class grievances” by requiring individual employees opt into any grievance brought on their behalf.10 Congress expressly added this provision shortly after first enacting the statute, specifically to curtail group grievances unions immediately started bringing on behalf of unwitting and perhaps unwilling bargaining unit employees.11
These legislative kinks were worked out long before Congress extended the FLSA to cover nonexempt employees in the federal sector, so perhaps it shouldn’t be surprising that this early history has been forgotten—or perhaps ignored—in the current world of federal labor arbitration. What is clear is that some arbitrators—perhaps driven by union brazenness and secure in the knowledge that arbitrator orders are rarely overturned on review—permit these group grievances to proceed to arbitration instead of dismissing the grievance as not arbitrable, as the agency always requests.
Once these grievances proceed to arbitration, the allegations are so unspecific and the claims so unwieldy that the arbitration proceedings themselves seem interminable. The Army is currently defending grievances at over sixteen installations. Several of these were filed as early as 2007. The number of grievances exceed three dozen. Only one has concluded by final award of the arbitrator, and that one resulted in a victory for the Army on all counts. The others, many into their second decade now, remain ongoing.
These proceedings appear interminable because the union, having been permitted to bring its boilerplate grievance on behalf of “all bargaining unit employees,” and without alleging a single fact or naming a single employee, then sits back and demands that the agency defend itself against unknown claims. It does so by improperly claiming that the agency is required to prove that every employee in the bargaining unit designated as FLSA-exempt was properly designated, or else flip those employees to FLSA nonexempt and pay them back pay. In other words, the union seeks to shift the burden of proof of its exemption claim to the agency, relying on the Office of Personnel Management regulations that guide exemption determinations. However, exemption status is not an affirmative claim. In other words, the FLSA does not entitle anyone to be correctly designated as falling under its overtime provisions. Rather, the FLSA is a pay statute. Employees are entitled to FLSA overtime pay unless it can be shown that FLSA does not apply. Stated differently, exemption status is an affirmative defense, not an affirmative claim. The agency choses whether to assert it, and makes this determination only when the affirmative defense applies to any of the affirmative claims brought by the union.
Using these arguments, the agency has successfully shifted the burden back to the union to prove its claims. Inevitably, when that happens, the union’s ability to find witnesses to testify to rampant agency “wage theft” is limited. Having brought a claim on behalf of hundreds and sometimes over a thousand bargaining unit employees, the union can typically muster witnesses (with dubious claims) in the single digits.
Despite its relatively short existence, the FLSA Team is already delivering results for the Army. The FLSA Team secured the first arbitration award in an Army FLSA boilerplate grievance. The award resulted in the dismissal of the grievance without award of attorneys fees, and thus constitutes a total victory for the Army. Other grievances are on going, but notably, where previously the Army drew three new boilerplate grievances annually, no new boilerplate FLSA grievances have been filed against an Army activity since the Team’s formation in 2017.
Judge advocate MAJ John Policastro points to a Named Area of Interest on a map board during a training exercise in Grafenwoehr, Germany, last fall. (Credit: Stefan Hobmaier/AP)
How the FLSA Team Works
Legal offices under the qualifying authority of The Judge Advocate General are required to engage the FLSA Team when an FLSA issue arises, and Army Material Command and Corps of Engineers legal offices are invited to do so as well. The optimal approach is to engage the FLSA Team at the earliest stage possible—typically, at receipt of a grievance or RFI. Staff Judge Advocates and/or labor counselors should contact OTJAG Labor and Employment Division and forward a copy of the grievance or RFI, as well as the collective bargaining agreement. However, although better outcomes result from the earliest engagement, the FLSA Team is willing to enter an appearance at any stage. Although the FLSA Team utilizes a collaborative approach with local attorneys, the FLSA Team’s subject matter expertise and experience with opposing counsel typically results in the FLSA Team attorneys assuming first chair responsibilities in the litigation and drafting of pleadings.
Conclusion
Anytime a FLSA issue arises, the FLSA Team is ready and able to help address the issue. The FLSA Team has attorneys with a wealth of knowledge prepared to go to battle with anyone who files any grievance. The FLSA Team has been getting strong results for the Army and hopes to continue that trend. TAL
Ms. Riva Parker served as the Chief, Labor Counselor and Litigation Branch and FLSA Team, Office of The Judge Advocate General, Washington, D.C.
Notes
1. Wages and the Fair Labor Standards Act, U.S. Dep’t of Labor, https://www.dol.gov/agencies/whd/flsa (last visited Jan. 22, 2020).
2. Title 38’s more generous overtime provisions preempt Fair Labor Standards Act (FLSA) for employees paid under Title 38.
3. 29 U.S.C. § 213 (2020).
4. 29 U.S.C. § 207 (2020).
5. 29 C.F.R. § 785.11 (2020).
6. 5 C.F.R. § 551.531 (2020).
7. If the employee is covered by overtime provisions in another statute, for example, Title 38, different requirements may apply to overtime entitlements.
8. Title 5 does require that employees be paid the greater of their hourly rate of pay or one-and-a-half times the hourly rate of a GS-10 Step 1. However, as a practical matter, most positions that are designated as FLSA-exempt are graded GS-13 or higher, so usually an exempt employee’s overtime rate of pay is the same as their regular rate of pay.
9. 29 U.S.C. § 201 (2020).
10. 29 U.S.C. § 216(b) (2020).
11. See Arrington v. National Broad Co., 531 F. Supp. 498, 500-01 (D.D.C. 1982); see also Cameron-Grant v. Maxim Healthcare Services, 347 F.3d 1240, 1248 (11th Cir. 2003).