Palardy v. Horner, Civ. A. No. 87-2732-T.
| Decision Date | 07 April 1989 |
| Docket Number | Civ. A. No. 87-2732-T. |
| Citation | 711 F. Supp. 667 |
| Court | U.S. District Court — District of Massachusetts |
| Parties | William PALARDY, John Murphy, Steven Fontaine, Domenic Petrola, et al., Plaintiffs, v. Constance J. HORNER, Director, Office of Personnel Management, James H. Webb, Jr., Secretary, Department of the Navy, and United States of America, Defendants. |
Jeffrey Sumberg, Suzanne L. Kalfus, Nat. Federation of Federal Employees, Washington, D.C., and Frederick T. Golder, Bernstein, Golder & Field, P.A., Lynnfield, Mass., for plaintiffs.
Christine M. Roach, Asst. U.S. Atty., for defendants Horner, Webb and U.S.
Plaintiffs, 29 employees of the Department of the Navy,1 bring this action to challenge the Navy's decision to classify all of them as exempt from the overtime requirements of the Fair Labor Standards Act, 29 U.S.C. § 207 ("FLSA"). Additionally, they seek to recover back pay to November 1, 1985, the date of their change in FLSA status, as well as liquidated damages.
The parties have submitted the case to this court on an agreed-upon documentary record. This opinion constitutes this court's findings of fact and conclusions of law, pursuant to Fed.R.Civ.P. 52(a).
Plaintiffs are employed by the Navy in fifteen different positions. All are technicians rated at the GS-11 grade level.2 Although the technical fields vary, there are no material differences in the basic functions these plaintiffs perform.
Plaintiffs perform technical tasks relating to the proper design, repair, testing and overhaul of naval ship systems and equipment, as well as the vessels themselves. They are primarily responsible for preparing drawings and schematics used in installing and reconfiguring equipment on navy vessels. These tasks are accomplished by consulting standard texts, guides and established formulas. The work is practical rather than theoretical, and does not require an advanced course of academic study.3 Rather, the skills needed to perform all assigned tasks are obtained through on the job training. And although plaintiffs often work with only a minimum amount of supervision, the more complex tasks related to their work are performed by professional engineers.
The FLSA requires employees, not exempt from its provisions, to receive "compensation for ... employment in excess of 40 hours per week at a rate not less than one and one-half times their regular rate of pay." 29 U.S.C. § 207(a)(1). Executive, administrative and professional employees are exempt from the overtime provisions of the FLSA. 29 U.S.C. § 213(a).
Rather than pay exempt employees their regular rate of pay for overtime, as the FLSA would permit, the federal government utilizes a slightly different compensation formula. See 5 U.S.C. § 5542(a). Employees, such as plaintiffs, who are classified higher than GS-10 receive one and one-half times the GS-10, step 1 rate of pay. While plaintiffs were classified as FLSA-exempt, therefore, they received more than their regular hourly wage for overtime work, but less than time and a half.
Originally, all the positions held by plaintiffs were classified as exempt from the overtime provisions of the FLSA. The positions were assigned to the Portsmouth Naval Shipyard in Kittery, Maine until 1978, when they were transferred to the Supervisor of Shipbuilding, Conversion & Repair in Boston, Massachusetts ("SUPSHIP Boston"). At that time, all of these positions were reclassified from exempt to non-exempt. No substantive changes were made to the position descriptions when the transfer occurred.4
In 1985, the Office of Personnel Management ("OPM") finalized a regulation that established a rebuttable presumption that any government employee classified at GS-11 or higher was exempt from the overtime provisions of the FLSA. 5 C.F.R. § 551.203(c), repealed, 53 Fed.Reg. 1739 (January 22, 1988) ("presumption regulation"). In accordance with this regulation, all the plaintiffs in this case were reclassified as exempt, effective November 1, 1985.
The rebuttable presumption regulation was short-lived. On June 26, 1987, the D.C. Circuit declared it invalid. American Federation of Government Employees v. OPM, 821 F.2d 761, 769-71 (D.C.Cir.1987) ().
Rather than reclassify plaintiffs as nonexempt immediately after the presumption regulation was invalidated, the Navy decided to retain plaintiffs' classification as exempt, pending a case-by-case review of all affected positions. That review was completed during the summer of 1988, and was accomplished without reference to the presumption regulation. Rather, the review was based on criteria that pre-dated the presumption regulation. All but one of the plaintiffs, Robert Garnett, were determined to be exempt from the FLSA overtime provisions.
These same plaintiffs now challenge their exempt reclassification. The parties agree that this court reviews the FLSA status of the employees de novo.
The FLSA provides that "any employee employed in a bona fide executive, administrative or professional capacity" is exempt from the overtime provisions of the FLSA. 29 U.S.C. § 213(a)(1). The burden of proving that an employee fits within a particular exemption is on the employer. See Corning Glass Works v. Brennan, 417 U.S. 188, 196-97, 94 S.Ct. 2223, 2229, 41 L.Ed.2d 1 (1974). The government seeks to meet its burden of proof by characterizing the technician positions at issue in this case as both administrative and professional.
In evaluating the applicability of the challenged exemptions, this court is guided by two regulatory sources. The first, 29 C.F.R. § 541, is published by the Wage and Hour Division of the Department of Labor, the agency charged with enforcement of the FLSA's overtime provisions in the private sector. The second is an attachment to a letter prepared by the Office of Personnel Management, the agency charged with enforcement of the FLSA's overtime provisions against government agencies. See Federal Personnel Manual System Letter No. 551-7 and Attachment (July 1, 1975) ("Attachment to FPM Letter"). The FPM letter is meant to assist government agencies in classifying their employees for purposes of the FLSA.
Generally, the administrative exemption is meant to apply to employees whose primary duties are "directly related to management policies or general business operations." 29 C.F.R. § 541.2. To classify an employee as administrative, at a minimum, the employee's primary duty must be work that:
Attachment to FPM Letter at 4. Each of these three alternatives are discussed seriatim.
Work that "significantly affects the formulation or execution of ... policy" refers to employees who either "actually make policy" or "develop proposals that are acted on by others." Attachment to FPM letter at 8. These employees typically are involved in "planning, developing, promoting, coordinating, controlling, or evaluating operating programs of the employing organization." Id. Plaintiffs neither make nor implement policy. Their role is limited to performing technical tasks to assure that naval ship systems and equipment is properly designed, repaired, tested and overhauled. Consequently, they do not fit within the first alternative.
Neither are plaintiffs involved in "general management or business functions or supporting services of substantial importance." The FPM letter defines this category as:
Attachment to FPM letter at 9. Although plaintiffs perform important work, it does not rise to the level the regulations require. They do not provide expert advice that is typical of consultants or systems analysts. Moreover, they do not perform management functions. Finally, they neither represent management nor provide support services. The second alternative, therefore, is unavailing.
The remaining alternative includes individuals who "substantially participate in the executive or administrative functions of a management official." Typically, these employees are "secretaries, administrative or executive assistants, aids, etc." Attachment to FPM Letter at 9. Plaintiffs do not fit this category. Consequently, none of plaintiff's positions may properly be characterized as administrative.
The professional exemption is meant to apply to employees whose primary work requires "knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study." 29 C.F.R. § 541.3(a)(1). The FPM letter defines professional employees, at a minimum, as those that perform work that:
(a)(1) ... requires knowledge in a field of science or learning customarily and characteristically acquired through education or training that meets the requirements for a bachelor's or higher degree ... or involves work comparable to that performed...
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