Bailey v. United States
| Decision Date | 10 January 2019 |
| Docket Number | No. 15-995C,15-995C |
| Parties | MICHAEL C. BAILEY et al., Plaintiffs, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Fair Labor Standards Act, 29 U.S.C. §§ 201-209; Judgment Fund, 31 U.S.C. § 1304; RCFC 56; Summary Judgment
Gregory K. McGillivary, Washington, DC, for plaintiffs.
Molly L. Finnan, United States Department of Justice, Washington, DC, for defendant.
Plaintiffs Michael Bailey and Jason Hughes, employed by the United States Department of Homeland Security as Customs and Border Protection ("CBP") canine handlers, seek payment from defendant for overtime work performed without compensation between 2013 and 2016 pursuant to the Fair Labor Standards Act of 1938 ("FLSA"), ch. 676, 52 Stat. 1060 (). During settlement negotiations, defendant questioned whether it could compensate plaintiffs beyond a cap on overtime payments established in appropriations acts covering the relevant period (collectively, "Appropriations Acts"). The parties filed cross-motions for partial summary judgment pursuant to Rule 56 of the Rules of the United States Court of Federal Claims ("RCFC") regarding the effect the Appropriations Acts have on plaintiffs' ability to recover overtime pay pursuant to the FLSA and defendant's ability to settle such a claim. For the reasons articulated below, the court finds that the Appropriations Acts, which establish a cap on CBP overtime pay, prohibit plaintiffs from receiving overtime payments that exceed $35,000 per annum.
On September 19, 2015, eight CBP canine handlers filed suit in this court seeking payment for overtime work performed, but not compensated. See generally Compl. An amended complaint, filed on August 5, 2016, increased the number of plaintiffs to 291. See Am. Compl. 1-13. In the amended complaint, plaintiffs allege that they are or were employees within the meaning of the FLSA pursuant to 29 U.S.C. § 203(e)(1), and that CBP is also subject to the FLSA as an employer pursuant to 29 U.S.C. §§ 203(d) and 203(x). Id. ¶¶ 4-5. Plaintiffs further allege that under the terms of the FLSA, as law enforcement officers receiving Administratively Uncontrollable Overtime pay, they are entitled to one and one-half times their regular rate of pay for each hour worked in excess of 85.5 hours in a fourteen-day work period. Id. ¶ 7. According to plaintiffs, CBP failed to properly compute their overtime, caused or suffered them to work in excess of allowable overtime, and, in some cases, instructed them to improperly calculate their hours worked to avoid documenting overtime performed. Id. ¶¶ 12-19.
On October 15, 2016, plaintiffs and defendant filed a consent motion to dismiss sixteen plaintiffs from the action. See Consent Mot. to Dismissal of Sixteen Pls. 1. Subsequently, the parties began settlement negotiations, and on June 12, 2018, they jointly stipulated to dismiss an additional 273 plaintiffs whose claims were resolved through settlement. See Joint Stipulation of Dismissal of Two Hundred Seventy-Three (273) Pls. 1. The two remaining plaintiffs, Messrs. Bailey and Hughes, did not reach a settlement with defendant due to a dispute over the applicability of the overtime pay caps in the Appropriations Acts. Pls.' Cross-Mot. 1. Mr. Bailey seeks overtime pay of $30,401.78 and Mr. Hughes seeks overtime pay of $33,631.52, amounts that would cause them to receive overtime pay in excess of the caps. Def.'s Mot. Summ. J. 3-4. The parties do not dispute that Messrs. Bailey and Hughes performed the work underlying these claims.
On May 4, 2018, defendant moved for partial summary judgment, arguing that awarding the two remaining plaintiffs overtime pay of more than $35,000 per annum would impermissibly exceed the overtime pay caps in the Appropriations Acts. See generally id. Defendant argues that both plaintiffs were previously entitled to at least some overtime compensation during the relevant time frame, such that the caps potentially limit the amount of money they can recover. Id. at 2-4, 11-14, App. 14-15. In particular, defendant contends that the portion of the proposed settlement that is intended to compensate for the overtime pay claims is subject to the caps. Id. at 2-4, App. 14-15.
Defendant offers several arguments in support of its view that the Appropriations Acts bar settlement payments that would exceed $35,000 per annum. First, defendant argues that the United States Court of Appeals for the Federal Circuit ("Federal Circuit") has recognized that overtime pay caps establish firm statutory maximum amounts for retirement calculations, referencing Grover v. OPM, 828 F.3d 1378 (Fed. Cir. 2016), and in FLSA compensation, relying on Bull v. United States, 479 F.3d 1365, 1372-75, 1378 (Fed. Cir. 2007). See Def.'s Mot. Summ. J. 15-17. Defendant asserts these decisions demonstrate that the Federal Circuit views the caps as absolute, including in FLSA cases. Id. at 17. Defendant also contends that the Appropriations Acts demonstrate clear congressional intent to amend CBP's statutory obligations. Id. at 18-19. Defendant relies on United States v. Dickerson, 310 U.S. 554, 555 (1940), and United States v. Will, 449 U.S. 200, 202 (1980), for the proposition that appropriations acts, coupled with supporting legislative history, can supersede permanent legislation. Def.'s Mot. Summ. J. 18. Defendant further contends that a plain-language reading of the Appropriations Acts and prior legislation shows unambiguous congressional intent to impose an overtime ceiling within each fiscal year. Id. at 19, 23-26. Lastly, defendant argues that the caps established in the Appropriations Acts prevent payment for plaintiffs' claims in any case, arguing that the Judgment Fund cannot "pick up the slack" because "[t]he Judgment Fundis only available for payments of final judgments entered upon a finding of liability in the first instance, which cannot exist in light of the statutory cap at issue here." Id. at 26-27.
Defendant proposes two monetary amounts to settle the claims of each of the remaining plaintiffs. Id. at 2-4. One amount does not cause the specified plaintiff to exceed the $35,000 per annum overtime pay caps, and the other is an amount that would exceed those caps. Id. Defendant explains that it is prepared to settle in either amount, but first requires a determination from the court as to whether the caps restrict the amount it may pay for overtime compensation. Id.
In their cross-motion for partial summary judgment, plaintiffs disagree with defendant that the Appropriations Acts prevent them from receiving compensation for their overtime work. Pls.' Cross-Mot. Summ. J. 8. Plaintiffs argue that the FLSA requires that employers must pay employees for all hours worked. Plaintiffs contend that waivers of FLSA rights must be "clear and unmistakable." Id. at 12 (citing Wright v. Universal Mar. Serv. Co., 525 U.S. 70, 80 (1998)). Plaintiffs further argue that exemptions from the FLSA are "express and enumerated," and for an employee to be exempted, "the employee's position must fall within the 'fair reading' of the exemption contained within the FLSA." Id. (citing Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134, 1142 (2018)). Plaintiffs contend that they were not exempted from the FLSA until January 2016, the end date of plaintiffs' overtime claims. Id. at 12-13. Therefore, plaintiffs argue, the Appropriations Acts do not defeat their rights under the FLSA. Id. at 13.
Plaintiffs instead contend that the FLSA may be read harmoniously with the Appropriations Acts because backpay settlements are not counted toward the overtime pay caps pursuant to the applicable regulation. Id. at 14, 18-20 (citing 19 C.F.R. § 24.16(h) (2004)). Further, plaintiffs assert that the statutory source of the appropriations does not enable defendant to avoid FLSA liability. Id. at 15. Finally, plaintiffs contend that the caps are not violated because funds for settlements do not come from those appropriations, but from the Judgment Fund, which is a separate appropriation. Id. at 12-22.
The parties each proffered additional arguments in favor of their positions. To the extent these arguments are not included here, the court finds them unnecessary to adjudicate the parties' motions. Deeming oral argument unnecessary, the court is prepared to rule.
Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. RCFC 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material if it "might affect the outcome of the suit under the governing law. . . ." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue is genuine if it "may reasonably be resolved in favor of either party." Id. at 250.
The moving party bears the initial burden of demonstrating the absence of any genuine issue of material fact. Celotex Corp., 477 U.S. at 323. The nonmoving party then bears the burden of showing that there are genuine issues of material fact for trial. Id. at 324. Both parties may carry their burden by "citing to particular parts of materials in the record, includingdepositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials" or by "showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." RCFC 56(c)(1).
The court must view the inferences to be drawn from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Ind. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). However, the court must not weigh the evidence or make findings of fact. See Anderson, 477 U.S. at 249 (...
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