Adams v. Hinchman

• Decision Date: 09 November 1998
• Docket Number: No. 97-5121,97-5121
• Citation: 332 U.S.App. D.C. 98,154 F.3d 420
• Court: U.S. Court of Appeals — District of Columbia Circuit
• Parties: , 5 Wage & Hour Cas.2d (BNA) 568 Stephen S. ADAMS, et al., Appellants, v. James F. HINCHMAN, Acting Comptroller General of the United States General Accounting Office, et al., Appellees.

Page 420

154 F.3d 420

332 U.S.App.D.C. 98, 5 Wage & Hour Cas.2d (BNA) 568

Stephen S. ADAMS, et al., Appellants, v. James F. HINCHMAN, Acting Comptroller General of the United States General Accounting Office, et al., Appellees.

No. 97-5121.

United States Court of Appeals District of Columbia Circuit.

Argued March 12, 1998.

Decided Aug. 28, 1998.

Rehearing Denied Nov. 9, 1998.

Appeal from the United States District Court for the District of Columbia (95cv02015).

Jules Bernstein argued the cause for appellants. With him on the briefs were Linda Lipsett and Edgar N. James.

Wendy M. Keats, Attorney, U.S. Department of Justice, argued the cause for appellees. With her on the brief were Frank W. Hunger, Assistant Attorney General, Wilma A. Lewis, U.S. Attorney, and Barbara C. Biddle, Assistant Director, U.S. Department of Justice.

Edgar N. James was on the brief for amicus curiae Federal Law Enforcement Officers Association. Martha L. Walfoort entered an appearance.

Before: RANDOLPH, ROGERS, and TATEL, Circuit Judges.

PER CURIAM:

This is an appeal from the district court's judgment rejecting the claims of 14,122 current and former federal criminal investigators or other law enforcement officers. The plaintiffs were employed between 1984 and 1995 in federal agencies such as the Customs Service, the Secret Service, the Internal Revenue Service, the Drug Enforcement Agency and the Bureau of Alcohol, Tobacco and Firearms. ¹ Between February 16, 1990, and December 13, 1995, they filed civil actions in the Court of Federal Claims alleging that they had been wrongfully classified as exempt from the overtime provisions of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. During the same period, each employee also filed an administrative claim at the Government Accounting Office. Of the 14,122 employees, 11,247 brought suit before June 30, 1994.

In a consolidated case, the Court of Federal Claims held that certain grades of employees--namely, GS-9 and GS-11 investigators at BATF, DEA, IRS, and Secret Service, and GS-9 investigators at Customs Service--were not exempt from FLSA, and thus had been entitled to overtime pay. Adams v. United States, 27 Fed. Cl. 5 (1992). On March 16, 1994, these plaintiffs entered into settlement agreements with the United States. The agreements gave the plaintiffs "back pay and interest ... for the two-year period prior to the date that each such plaintiff filed suit" but did not prejudice their rights to pursue administrative remedies. Counsel then corresponded with the GAO regarding the pending administrative claims.

The authority of the GAO to settle claims against the United States is found in the Barring Act, 31 U.S.C. § 3702. ² According to the GAO, "to settle a claim means to administratively determine the validity of that claim.... Settlement includes the making of both factual and legal determinations. The authority to settle and adjust claims does not, however, include the authority to compromise claims." GENERAL ACCOUNTING OFFICE, PRINCIPLES OF FEDERAL APPROPRIATIONS LAW 11-6 (1982); see also Illinois Surety Co. v. United States ex rel. Peeler, 240 U.S. 214, 219, 36 S.Ct. 321, 60 L.Ed. 609 (1916). Under 31 U.S.C. § 3702(b)(1)(A), a claim against the government "must be received ... within six years after the claim accrues except ... as provided in this chapter or another law."

Lawsuits for back pay under FLSA are subject to the Portal-to-Portal Act's statute of limitations--two years for non-willful violations and three years for willful ones. ³ See 29 U.S.C. § 255(a). Shortly after FLSA coverage was extended to federal employees, however, the GAO ruled that "the time limitation for the filing of claims by federal employees under the FLSA which may be considered by our office is six years...." In re Transportation Sys. Ctr., 57 Comp. Gen. 441 (1978). The GAO relied in part on a letter from the Civil Service Commission, reasoning that the language of 29 U.S.C. § 255--which spoke exclusively in terms of a "cause of action"--limited it to judicial proceedings and did not apply to administrative claims. See also PRINCIPLES 11-22 ("[T]he time limit for filing a claim under the Fair Labor Standards Act is the six years prescribed by [then-] 31 U.S.C. § 71a, notwithstanding a two-year statute of limitations for commencing actions at law. Thus, a claim filed under the FLSA more than two years but less than six years after it accrued could still be considered administratively, although the claimant would have lost his recourse to the courts.").

In back pay and overtime cases, the statute of limitations determines how many years of compensation each claimant receives. Since these are continuing claims, a separate cause of action accrues each payday. A six-year statute of limitations means that an employee could recover six years of back pay or overtime compensation dating from the time he or she first filed suit.

On May 23, 1994, the GAO overruled Transportation Systems Center. ⁴ In In re Joseph M. Ford, 73 Comp. Gen. 157 (1994), the GAO held that the shorter statute of limitations found in the Portal-to-Portal Act would henceforth be applied "in the settlement of pending and future FLSA claims filed with GAO by federal employees." The GAO concluded that 29 U.S.C. § 255 was "another law"--and thus an exception to the six-year limitation period in 31 U.S.C. § 3701(b)(1)(A).

On July 1, 1994, Senator Sarbanes introduced legislation intended, he said, "to reverse a very destructive ruling by the General Accounting Office to apply a retroactive change in the statute of limitations from 6 years to 2 years for Federal employees to file back pay claims under" FLSA. 140 CONG. REC. S8400 (July 1, 1994). As enacted on September 30, 1994, § 640 of the Treasury, Postal Service and General Government Appropriations Act of 1995, Pub.L. No. 103-329, 108 Stat. 2383, 2432, provided:

In the administration of Section 3702 of title 31, United States Code, the Comptroller General of the United States shall apply a 6-year statute of limitations to any claim of a Federal Employee under the Fair Labor Standards Act of 1938 (29 U.S.C. § 201 et seq.) for claims filed before June 30, 1994.

Senator Sarbanes added that while "the underlying question regarding the appropriate length of the statute of limitation for FLSA claims is one of continuing debate ... under no circumstances should GAO apply the proposed change retroactively." 140 CONG. REC. S8400.

In what was apparently its first decision after passage of § 640, the GAO applied a six-year statute of limitations to claims filed on May 22, 1989, and pending before it as of June 30, 1994. See In re Molly D. Kinsley, 1995 WL 9720 (Jan. 9, 1995). The GAO explained that § 640 "obviates the need for us to discuss the effect, if any, of Joseph M. Ford. ... In light of section 640, the Ford holding is applicable only to claims filed on or after June 30, 1994." Id. at n. 7.

Meanwhile, counsel for the employees again contacted the GAO and requested a meeting to resolve pending claims in light of § 640. The GAO acknowledged that "the Act of Congress has modified our Ford decision" but pointed out that "our regulations require that the agency from which the claim originated shall initially adjudicate the claim. See 4 C.F.R. § 31.4 (1994)." ⁵ Counsel then brought their clients' claims to the attention of the employing agencies, each of which responded that § 640 gave specific authority to apply a six-year statute of limitations only to the Comptroller General and that the agencies themselves were without statutory authority to do so. Counsel appealed these denials to the GAO, but the GAO did not respond. However, with regard to an unrelated FLSA case, the GAO informed the Personnel Director of the U.S. Customs Service that it did "not intend to issue a decision in Marvin B. Atkinson ... until the Treasury, Postal Service, and General Government Appropriations Bill, 1996 ... is enacted (because of the possible retroactive repeal of § 640)."

In November 1995, Congress amended § 640 to state:

This section shall not apply to any claim where the employee has received any compensation for overtime hours worked during the period covered by the claim under any other provision of law, including, but not limited to, 5 U.S.C. 5545(c), or to any claim for compensation for time spent commuting between the employee's residence and duty station.

Pub.L. No. 104-52, 109 Stat. 468. Introducing this amendment, Representative Lightfoot said that the GAO, in its 1978 decision, "made a mistake and established regulations stating that Federal employees can get up to 6 years back pay for overtime claims" under the FLSA. The GAO discovered and corrected "its mistake," but then the 103rd Congress "reversed GAO, and passed a law allowing Federal workers to get up to 6 years back pay. The problem is that this act will cost as much as $460 million.... The conferees were faced with a choice--either pay hundreds of millions for work done many years ago ... or give the Federal workers the same rights as their private sector counterparts.... [W]e included language providing for the same treatment for public and private workers ... not just because it costs a lot of money, but because it is fair." 141 CONG. REC. H12376 (Nov. 15, 1995).

After the amendment of § 640, the GAO decided Atkinson, a case in which the plaintiffs here had been granted leave to intervene. In re Marvin B. Atkinson, 1996 WL 31212 (Jan. 29, 1996). Atkinson's claim had been filed on January 1, 1994, and sought compensation for the time he spent traveling between home and work while driving a government vehicle. Atkinson's employing agency denied his claim after the GAO decided Ford; he based his administrative appeal on the original § 640. The GAO held that "the November 19, 1995 amendment to section 640 effectively reestablishes the two-year statute of limitations for any claim where the employee...