Moreau v. Klevenhagen

CourtUnited States Supreme Court
Citation508 U.S. 22,113 S.Ct. 1905,123 L.Ed.2d 584
Docket NumberNo. 92-1,92-1
PartiesLynwood MOREAU, etc., et al., Petitioners, v. Johnny KLEVENHAGEN, Sheriff, Harris County, Texas, et al
Decision Date03 May 1993
Syllabus*

Under subsection 7(o)(2)(A) of the Fair Labor Standards Act (FLSA or Act), a state or local government agency may provide its employees compensatory time off, or "comp time," instead of the generally mandated overtime pay, so long as, inter alia, it is done pursuant to "(i) applicable provisions of a collective bargaining agreement or any other agreement . . . between the . . . agency and representatives of such employees . . ." or "(ii) in the case of employees not covered by subclause (i), an agreement . . . arrived at between the employer and the employee before the performance of the work. . . ." Department of Labor (DOL) regulations provide that, where employees have designated a representative, a comp time agreement must be between that representative and the agency, 29 CFR § 553.23(b); according to the Secretary of Labor, the question whether employees have a "representative" is governed by state or local law and practices, 52 Fed.Reg. 2014-2015. Petitioners are a group of deputy sheriffs in a Texas County who sought, unsuccessfully, to negotiate a collective FLSA comp time agreement by way of their designated union representative. Petitioners' employment terms and conditions are set forth in individual form agreements, which incorporate by reference the County's regulations providing that deputies shall receive comp time for overtime work. Petitioners filed this suit alleging, among other things, that they were "covered" by subclause (i) of subsection 7(o)(2)(A) by virtue of their union representation, and that the County therefore was precluded from providing comp time pursuant to individual agreements under subclause (ii). The District Court disagreed, relying on its conclusion that Texas law prohibits collective bargaining in the public sector, and entered summary judgment for the County. The Court of Appeals affirmed.

Held: Because petitioners are "employees not covered by subclause (i)," subclause (ii) authorized the individual comp time agreements challenged in this litigation. The phrase "employees . . . covered by subclause (i)" is most sensibly read as referring to employees who have designated a representative with the authority to negotiate and agree with their employer on "applicable provisions of a collective bargaining agreement" authorizing comp time. This reading accords significance to both the focus on the word "agreement" in subclause (i) and the focus on "employees" in subclause (ii); is true to subsection 7(o)'s hierarchy, which favors subclause (i) agreements over individual agreements by limiting use of the latter to cases in which the former are unavailable; and is consistent with the DOL regulations, interpreted most reasonably. Although 29 CFR § 553.23(b), read in isolation, would support petitioners' view that selection of a representative—even one without lawful authority to bargain—is sufficient to bring the employees within subclause (i)'s scope, that interpretation would prohibit entirely the use of comp time in a substantial portion of the public sector and would be inconsistent with the Secretary's statement that the "representative" determination is a local matter. The latter clarification establishes that when the regulations identify representative selection as the condition necessary for subclause (i) coverage, they refer only to those representatives with lawful authority to negotiate agreements. In this case, both lower courts found that Texas law prohibits petitioners' representative from entering into an agreement with their employer. Accordingly, petitioners did not have a representative with such authority. Pp. ____.

956 F.2d 516 (CA5 1992), affirmed.

STEVENS, J., delivered the opinion for a unanimous Court.

Michael T. Leibig, Washington, DC, for petitioners.

Harold M. Streicher, Houston, TX, for respondents.

Justice STEVENS delivered the opinion of the Court.

The Fair Labor Standards Act (FLSA or Act) generally requires employers to pay their employees for overtime work at a rate of one and a half times the employees' regular wages.1 In 1985, Congress amended the FLSA to provide a limited exception to this rule for state and local governmental agencies. Under the Fair Labor Standards Amendments of 1985 (1985 Amendments), public employers may compensate employees who work overtime with extra time off instead of overtime pay in certain circumstances.2 The question in this case is whether a public employer in a State that prohibits public sector collective bargaining may take advantage of that exception when its employees have designated a union representative. mance of the work; and

"(B) if the employee has not accrued compensatory time in excess of the limit applicable to the employee prescribed by paragraph (3).

"In case of employees described in clause (A)(ii) hired prior to April 15, 1986, the regular practice in effect on April 15, 1986, with respect to compensatory time off for such employees in lieu of the receipt of overtime compensation, shall constitute an agreement or understanding under such clause (A)(ii). Except as provided in the previous sentence, the provision of compensatory time off to such employees for hours worked after April 14, 1986, shall be in accordance with this subsection."

Because the text of the Amendments provides the framework for our entire analysis, we quote the most relevant portion at the outset. Subsection 7(o)(2)(A) states:

"(2) A public agency may provide compensatory time [in lieu of overtime pay] only —

"(A) pursuant to —

"(i) applicable provisions of a collective bargaining agreement, memorandum of understanding, or any other agreement between the public agency and representatives of such employees; or

"(ii) in the case of employees not covered by subclause (i), an agreement or understanding arrived at between the employer and employee before the performance of the work. . . ."

Petitioners are a group of employees who sought, unsuccessfully, to negotiate a collective FLSA compensatory time agreement by way of a designated representative. The narrow question dispositive here is whether petitioners are "employees not covered by subclause (i)" within the meaning of subclause (ii), so that their employer may provide compensatory time pursuant to individual agreements under the second subclause.

I

Congress enacted the FLSA in 1938 to establish nationwide minimum wage and maximum hours standards. Section 7 of the Act encourages compliance with maximum hours standards by providing that employees generally must be paid on a time-and-one-half basis for all hours worked in excess of 40 per week.3

Amendments to the Act in 1966 4 and 1974 5 extended its coverage to most public employers, and gave rise to a series of cases questioning the power of Congress to regulate the compensation of state and local employees.6 Following our decision in Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985), upholding that power, the Department of Labor (DOL) announced that it would hold public employers to the standards of the Act effective April 15, 1985.7

In response to the Garcia decision and the DOL announcement, both Houses of Congress held hearings and considered legislation designed to ameliorate the burdens associated with necessary changes in public employment practices. The projected "financial costs of coming into compliance with the FLSA—particularly the overtime provisions"—were specifically identified as a matter of grave concern to many States and localities. S.Rep. No. 99-159, p. 8 (1985). The statutory provision at issue in this case is the product of those deliberations.

In its Report recommending enactment of the 1985 Amendments, the Senate Committee on Labor and Human Resources explained that the new subsection 7(o) would allow public employers to compensate for overtime hours with compensatory time off, or "comp time," in lieu of overtime pay, so long as certain conditions were met: the provision of comp time must be at the premium rate of not less than one and one-half hours per hour of overtime work, and must be pursuant to an agreement reached prior to performance of the work. Id., at 10-11. With respect to the nature of the necessary agreement, the issue raised in this case, the Committee stated: "Where employees have a recognized representative, the agreement or understanding must be between that representative and the employer, either through collective bargaining or through a memorandum of understanding or other type of agreement." Id., at 10.

The House Committee on Education and Labor was in substantial agreement with the Senate Committee as to the conditions under which comp time could be made available. See H.Rep. No. 99-331, p. 20 (1985). On the question of subsection 7(o)'s agreement requirement, the House Committee expressed an understanding similar to the Senate Committee's: "Where employees have selected a representative, which need not be a formal or recognized collective bargaining agent as long as it is a representative designated by the employees, the agreement or understanding must be between the representative and the employer. . . ." Ibid.

Where the Senate and House Committee Reports differ is in their description of the "representative" who, once designated, would require that compensatory time be provided only pursuant to an agreement between that representative and the employer. While the Senate Report refers to a "recognized" representative, the House Report states that the representative "need not be a formal or recognized collective bargaining agent." Supra this page. The Conference Report does not comment on this difference, see H.R.Conf.Rep. No. 99-357, (1985), and the 1985 Amendments as finally enacted do...

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