Brinkman v. United States

• Decision Date: 17 February 2022
• Docket Number: 21-1376C
• Parties: KOREY BRINKMAN, et al., Plaintiffs, v. THE UNITED STATES, Defendant.
• Court: U.S. Claims Court

KOREY BRINKMAN, et al., Plaintiffs,
v.
THE UNITED STATES, Defendant.

No. 21-1376C

United States Court of Federal Claims

February 17, 2022

Gregory Keith McGillivary, McGillivary Steele Elkin LLP, Washington, D.C., for Plaintiffs.

Tanya B. Koenig, Trial Attorney, Elizabeth M. Hosford, Assistant Director, Martin F. Hockeny, Jr., Acting Director, Brian M. Boynton, Acting Assistant Attorney General, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington, D.C., with Leonard H. DePasquale, Chief Counsel, FHFA-OIG, for Defendant.

MEMORANDUM OPINION AND ORDER

DAVID A. TAPP, JUDGE.

Generally speaking, uncodified agency policies are not enforceable by the United States Court of Federal Claims. In this civilian pay case, the United States moves to dismiss Plaintiffs' claims that the Federal Housing Finance Agency deprived them of overtime benefits to which they are entitled under Title V and the agency's premium pay policy or, alternatively, the Fair Labor Standards Act. Specifically, the United States argues that agency policies are not money-mandating sources of law and therefore this Court lacks jurisdiction. The Court agrees with that contention. However, the United States also bears the burden at this stage to establish that Plaintiffs are not afforded similar statutory protections. The United States has failed to do so. Therefore, the United States' Motion is denied.

I. Background^[1]

Plaintiffs are sixteen current and former criminal investigators of the United States Federal Housing Finance Agency ("FHFA"), in its Office of Inspector General ("FHFA-OIG"). (Am.

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Compl. at 2, ECF No. 6). Because the structure of that agency is relevant to the facts of this case, a synopsis of its objective and inception are provided for illustrative purposes.

A. History and Structure of the Federal Housing Finance Agency

In the aftermath of the 2008 housing crisis, mortgage companies suffered significant losses that carried the potential to jeopardize the national economy. See generally Collins v. Yellen, 141 S.Ct. 1761 (2021) (providing a history of the FHFA). To combat the nation's concerns, Congress established the FHFA by enacting the Housing and Economic Recovery Act of 2008 ("HERA"), Pub. L. 110-289, 122 Stat. 2654, 12 U.S.C. § 4501 et seq. The FHFA is responsible for the supervision, regulation, and housing mission oversight of mortgage companies such as the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac"). 12 U.S.C. § 4511; see also National Housing Act Amendments of 1938, Pub. L. 75-424, 52 Stat. 8, 23; Federal Home Loan Mortgage Corporation Act, Pub. L. 91-351, 84 Stat. 451.

Relevant here, HERA delegates the FHFA the power to act as "an independent agency" tasked with regulating the mortgage companies and, if necessary, acting as their conservator or receiver. §§ 4511, 4617. Given that status, the FHFA is not funded through the ordinary appropriations process that funds many other government agencies. §§ 4516(a). It is thus classified as a non-appropriate d fund instrumentality, which is defined as a federal government entity whose "monies do not come from congressional appropriation but rather primarily from [their] own activities, services, and product sales." El-Sheikh v . United States, 177 F.3d 1321, 1322 (Fed. Cir. 1999) (internal quotations omitted). The FHFA is funded by assessments on its regulated financial institutions: Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. § 4516(a). The FHFA-OIG is an independent component of the FHFA funded from those same assessments. (Am. Compl. at 2).

Congress installed a single Director as head of the FHFA to set salaries and payments of FHFA employees. §§ 4512(a), (b)(2). Regarding employee compensation, HERA provides that:

[T]he FHFA Director may appoint and fix the compensation of such officers and employees of the Agency as the Director considers necessary to carry out the functions of the Director and the Agency. Officers and employees may be paid without regard to the provisions of Chapter 51 and subchapter III of Chapter 53 of Title V relating to classification and General Schedule Pay rates

12 U.S.C. § 4515(a). Stated plainly, this provision allows the FHFA to pay its employees at rates with near indifference to the General Schedule (GS) pay rates that apply to most other federal agencies. See Office of Personnel Management, General Schedule Classification and Pay, available at https://www.opm.gov/policy-data-oversight/pay-leave/pay-systems/general-schedule/ (last visited Feb. 11, 2022). Similarly, under 12 U.S.C. § 1833b, the FHFA has independent authority to "establish and adjust" employees' compensation and benefits in a manner determined solely by the FHFA in accordance with applicable provisions of the law. § 1833b(a).

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The FHFA is in a cast of financial institution regulators that Congress exempts from limitations of the GS pay scale. Similar exemptions exist for the Federal Deposit Insurance Corporation, the Comptroller of the Currency, the National Credit Union Administration Board, the Office of Financial Research, the Bureau of Consumer Financial Protection, and the Farm Credit Administration. § 1833b. Like those regulatory agencies, the FHFA and its component, the FHFA-OIG, offer enhanced pay and benefits to its employees.

B. Law Enforcement Availability Pay and the Fair Labor and Standards Act

Plaintiffs initiated this litigation in an effort to recover payments allegedly owed to them either by the Law Enforcement Availability Pay Act ("LEAPA") as it is codified in Title V or, alternatively, overtime pay afforded to them under the Fair Labor Standards Act ("FLSA"). The Court thus provides a cursory overview of those statutory schemes.

Congress passed LEAPA to benefit criminal investigators who routinely worked more than eight hours each day. Pub. L. No. 103-329, 108 Stat. 2425 (1994) (codified at 5 U.S.C. § 5545(a); see also Floyd v. District of Columbia, 129 F.3d 152, 154 (D.C. Cir. 1997) (providing a history of LEAPA). On its face, LEAPA increased the average workday of federal criminal investigators by two hours and awarded all investigators Law Enforcement Availability Pay ("LEAP") at the rate of 25 percent of their basic pay, ostensibly eliminating uncontrollable overtime. 5 U.S.C. § 5545a(c), (d). In practice, LEAPA requires criminal investigators to be available f or two more hours each workday; in return, those employees automatically receive an additional 25 percent of basic pay instead of the overtime pay they would have otherwise received. See Floyd, 129 F.3d at 154.

Under Title V, LEAP does not come without limitation; it is subject to a statutory cap. 5 U.S.C. § 5547(a). Title V's premium pay provisions, including § 5545a, apply "only to employees in Grade [GS] 15 or below, and an employee may not receive overtime if such payment would increase the employee's aggregate compensation in excess of the maximum allowable rate for Grade 15 employees."^[2] Doe v. United States, 463 F.3d 1314, 1351 (Fed. Cir. 2006) (citing 5 U.S.C. § 5547); see also Adams v. United States, 141 Fed.Cl. 428, 431 (2019); Aletta v. United States, 70 Fed.Cl. 600, 604 (2006).

Relatedly, the FLSA, 29 U.S.C. § 201 et seq., imposes minimum wage, overtime, and record-keeping requirements for the protection of employees. See 29 U.S.C. §§ 206(a) (m inimum wage), 207 (overtime), 211(c) (record-keeping). Congress enacted the FLSA "to protect all covered workers from substandard wages and oppressive working hours, 'labor conditions [that are] detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers.'" Barrentine v. Ark.-Best Freight Sys. Inc., 450 U.S. 728, 739 (1981) (quoting 29 U.S.C. § 202(a)). Employers who violate the FLSA are liable to covered employees for their unpaid overtime compensation. 29 U.S.C. § 216(b).

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II. Discussion

Plaintiffs allege that the FHFA-OIG has failed to correctly provide premium pay in accordance with the agency's Premium Pay Policy and Title V (Count I). Should that claim fail, Plaintiffs alternatively allege that they are entitled to recover unpaid overtime pay pursuant to the FLSA (Count II). (See Am. Compl.). The United States moves to dismiss both counts. (See Mot. to Dism., ECF No. 9).

As to Count I, the United States argues that the Court lacks subject matter jurisdiction because HERA, the statutory scheme Plaintiffs are paid under, is not a money-mandating statute and because the agency's Premium Pay Policy lacks the force of law. (Id. at 7-8). In the alternative, the Government also asserts that Count I should be dismissed for failure to state a claim upon which relief can be granted because their requested relief is barred by Title V's statutory cap. (Id. at 9-13). As to Count II, the United States argues it should be dismissed because Plaintiffs are classified as FLSA exempt or, alternatively, that Plaintiffs should be ordered to amend...