Reich v. Department of Conservation and Natural Resources, State of Ala.

• Decision Date: 01 August 1994
• Docket Number: No. 92-6978,92-6978
• Citation: 28 F.3d 1076
• Parties: 128 Lab.Cas. P 33,133, 2 Wage & Hour Cas.2d (BNA) 385 Robert REICH, Secretary of Labor, United States Department of Labor, Plaintiff-Appellant, v. DEPARTMENT OF CONSERVATION AND NATURAL RESOURCES, STATE OF ALABAMA, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1076

28 F.3d 1076

128 Lab.Cas. P 33,133, 2 Wage & Hour Cas.2d

(BNA) 385

Robert REICH, Secretary of Labor, United States Department of Labor, Plaintiff-Appellant, v. DEPARTMENT OF CONSERVATION AND NATURAL RESOURCES, STATE OF ALABAMA, Defendant-Appellee.

No. 92-6978.

United States Court of Appeals Eleventh Circuit.

Aug. 1, 1994.

Office of the Solicitor, U.S. Dept. of Labor, Lauriston H. Long, Birmingham, AL, for appellant.

Samuel D. Payne, William F. Gardner, E. Taylor Abbot, Jr., Cabaniss, Johnston, Gardner, Dumas & O'Neal, Birmingham, AL, and Otis J. Goodwyn, Asst. Atty. Gen., Montgomery, AL, for appellee.

Appeal from the United States District Court for the Middle District of Alabama.

Before TJOFLAT, Chief Judge, BIRCH, Circuit Judge, and HENDERSON, Senior Circuit Judge.

HENDERSON, Senior Circuit Judge:

The Secretary of Labor ("Secretary") appeals from the judgment of the United States District Court for the Middle District of Alabama finding in favor of the Alabama Department of Conservation and Natural Resources ("Department") in this action filed by the Secretary pursuant to the Fair Labor Standards Act of 1938 ("FLSA"), 29 U.S.C. Secs. 201-219. The issues on appeal are confined to whether the Department had actual or constructive knowledge of FLSA violations and, if so, whether the claims are subject to a two-year or a three-year statute of limitations. We affirm in part and reverse in part and remand for further proceedings consistent with this opinion.

I. BACKGROUND

The Secretary brought this action against the Department in August 1990, alleging infractions of the overtime and record-keeping provisions of the FLSA. ¹ The suit sought backpay, liquidated damages and injunctive relief on behalf of 118 present and former conservation enforcement officers for the period of three years immediately preceding the filing of the cause of action. ² The district court bifurcated the issues of liability and damages and, after a six-day bench trial on the question of liability, concluded that, although the Secretary proved a pattern of uncompensated overtime work by the officers during the 1987 through 1990 deer hunting seasons, for which no records were kept, the Department was not accountable because it had no actual or constructive knowledge of the overtime hours. Having so found, the court did not reach the issue of damages.

On appeal, the Secretary contends that the district court erred by finding that the Department had no constructive knowledge of the officers' overtime work. The Secretary also urges that the Department's violations were "willful" and that, consequently, the claims are subject to the three-year statute of limitations.

II. THE DISTRICT COURT'S FINDINGS

The following facts found by the district court are not in dispute. The Law Enforcement Section of the Game and Fish Division of the Department is charged with enforcing the game and fish laws of the State of Alabama. It is divided into twelve districts, each with one captain, one lieutenant and a varying number of officers. The officers, who work independently out of their homes, are required to answer citizens' complaints referred to them at all hours of the day and night. The number of these complaints increases during deer hunting season, when illegal night hunting becomes a substantial enforcement problem. The need to be responsive to public reports of hunting violations and to make "cases" or arrests has been consistently emphasized by the Department.

Because the officers work independently, the Department relies on their written reports to keep track of the number of their working hours. Every week each officer fills out a form on which he records the hours he spends on his enforcement duties (the "weekly report"), as well as an arrest report. These documents are mailed to the officer's district captain, who reviews them for completeness and accuracy, and then forwards them to the Department's Montgomery office for examination by the Department's chief. The officers have direct contact with their supervisors at monthly district meetings and occasionally work with their captains or lieutenants out in the field.

In 1975, the Alabama legislature enacted a law requiring the State to pay law enforcement officers one and one-half times their normal rate of pay for "[h]ours worked in excess of 40 in any calendar week." ³ See Ala.Code Sec. 36-21-4. At that time, the Department formulated a policy which stated that employees in the classified service of the Department would not be assigned to more than forty hours of duty per week. According to James Goodwyn, Chief Legal Counsel for the Department, the purpose of this policy was to establish that, "as long as an officer was not assigned to work more than 40 hours a week, he was not compensated for overtime." (R7-972) (emphasis added). Charles Kelley, the Director of the Department's Game and Fish Division, became aware in 1982, however, that officers were working more than forty hours per week, particularly during hunting season. (See R6-754, 756-57). Officer Henry Lowry testified that, when he was hired in 1983, his captain informed him that during the hunting season the job could not be done in forty hours per week and required working from "can to can't." ⁴ (See R3-309-11). Nevertheless, the Department continued to maintain its position that overtime compensation could be legally avoided by limiting the officers' assignments to no more than forty hours per week, no matter how many hours they actually worked pursuing violators of state hunting laws. ⁵

In 1983, Officer William Foley filed suit against the Department seeking unpaid overtime compensation pursuant to the Alabama overtime law. The Department denied that Foley had actually worked overtime hours, but eventually settled the case. As a result of this lawsuit, the Department began using a new weekly report form which advised that officers were not allowed to work more than forty hours per week, unless directed otherwise by the Commissioner, and which required the officers to certify an accounting of their activities and vehicle operation for the week. In addition, in 1985, in response to a Supreme Court decision which established the constitutionality of the extension of the federal wage and hour provisions to state employees, see Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985), the Department issued a memorandum to the effect that "it continues to be Departmental policy that law enforcement officers may only work 40 hours per week." (Defendant's Exh. 18). All the enforcement personnel were informed of this restriction in writing and their supervisors were instructed to monitor their hours closely to insure compliance. District captains reiterated the policy often at the monthly district meetings. Officers were never told that they could or should violate the forty-hour policy. In spite of this strict admonition against overtime work, many of the Department's officers continued to work in excess of forty hours per week during the busy hunting seasons, without documenting the additional hours on their weekly reports. No officer was ever disciplined, however, for violating the forty-hour rule.

In 1987, the State commissioned a study of government operations, the Alabama Management Improvement Program ("AMIP"), in an effort to identify ways to reduce costs and increase efficiency. Persons from within and without the Department were selected to make up the AMIP study team, including Chief Counsel James Goodwyn as well as Assistant Director Sam Spencer and Lieutenant William Fuller, ⁶ both of the Game and Fish Division. Ann Lucas, an employee of the accounting firm of Ernst and Whinney, which conducted the study, was the team's facilitator. The group gathered information through employee interviews and confidential questionnaires. Lucas testified that the team was informed through the questionnaires that officers were working in excess of forty hours a week during hunting season in order to adequately perform their duties, and falsifying their weekly reports to conceal their overtime. The study team identified this as an issue to be addressed in their report on which they should make a recommendation. ⁷ The recommendation set forth in the team's "Final Draft Report" issued on August 7, 1987, stated:

1. RECOMMENDATION

Amend the forty hour work week for DCNR law enforcement officers to allow the first day of the week to begin on Friday and the last day of the week to end on Thursday.

Basis for Recommendation

. Presently Game and Fish officers cannot adequately perform the enforcement requirements as dictated by the demands of the public during the peak of hunting season because they are not allowed to work any overtime.... Officers are not presently allowed to work any overtime because there is no overtime money available and there is no alternative, such as compensatory time.

. There appears to be some lack of control and supervision by district supervisors in monitoring the 40 hour work week.

. The current work week begins on a Sunday and runs through Saturday. The Conservation enforcement job requires many more hours during the period of Friday through Sunday. Often officers have already expended the majority of their 40 hours prior to the latter part of the week. This leaves the officer with a minimum number of hours remaining to enforce laws on Friday and Saturday. Changing the first day of the work week to Friday should allow the officer to better manage the 40 hours he is required by law to work.

2. IMPACT

Cost of Implementation

. Should be no additional cost.

Benefits of Implementation

. Improve the efficiency of DCNR.

. Officers should be better able to manage their 40 hour work week. This should result in less overtime worked and help prevent the falsification of reports.

3. IMPLEMENTATION

Major Obstacles to Implementation

. Resistance from...