Nigg v. U.S. Postal Service

• Decision Date: 04 February 2009
• Docket Number: No. 05-55650.,05-55650.
• Citation: 555 F.3d 781
• Parties: Robert NIGG; Keith Lewis, as private attorney generals and on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, and Gina Harrell, Plaintiff, v. UNITED STATES POSTAL SERVICE, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

555 F.3d 781

Robert NIGG; Keith Lewis, as private attorney generals and on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, and Gina Harrell, Plaintiff, v. UNITED STATES POSTAL SERVICE, Defendant-Appellee.

No. 05-55650.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted April 9, 2007.

Filed February 4, 2009.

Daniel A. Osborn, Beatie & Osborn, LLP, New York, NY, for the appellants.

Leon W. Weidman and Jason K. Axe, Assistant United States Attorneys, Los Angeles, CA, for the appellee.

Appeal from the United States District Court for the Central District of California; Gary L. Taylor, District Judge, Presiding. D.C. No. CV-03-01611-GLT.

Before: B. FLETCHER and M. MARGARET McKEOWN, Circuit Judges, and RONALD M. WHYTE,^* District Judge.

ORDER AND OPINION ORDER

The petition for panel rehearing is granted in part. The opinion filed August 27, 2007, and appearing at 501 F.3d 1071, is withdrawn. It may not be cited as precedent by or to this court or any district court of the Ninth Circuit. A new opinion is filed contemporaneously.

OPINION

McKEOWN, Circuit Judge:

This appeal principally involves the relationship between two labor statutes — the Fair Labor Standards Act of 1938 and a 1996 statute related to compensation for postal inspectors, 39 U.S.C. § 1003(c). Robert Nigg, a postal inspector¹ currently employed by the United States Postal Service ("the Postal Service") and Keith Lewis, a retired postal inspector, sued the Postal Service alleging that the inspectors are entitled to overtime pay under the Fair Labor Standards Act ("FLSA" or "the Act"), 29 U.S.C. §§ 201-219. The Postal Service does not pay postal inspectors FLSA overtime, instead claiming that their pay is governed by 39 U.S.C. § 1003(c). At issue is whether the compensation provision in § 1003(c) trumps the overtime provisions of the FLSA.

The district court granted summary judgment in favor of the Postal Service, reasoning that 39 U.S.C. § 1003(c), which requires the Postal Service to pay the inspectors on a basis of "comparability" to other similarly tasked executive branch employees, permits the Postal Service to provide "availability pay" rather than FLSA overtime. The court adopted the Postal Service's argument that postal inspectors are comparable to certain other federal law enforcement officers who receive availability pay under the Law Enforcement Availability Pay Act, Pub.L. No. 103-329 § 633, 108 Stat. 2382 (1994).

FLSA overtime and availability pay differ significantly, both in terms of the hours of work required to qualify, and the way in which pay is calculated. For example, FLSA overtime entitles a covered employee to overtime pay for all hours worked in excess of 40 hours per week. See 29 U.S.C. § 207(a)(1). In contrast, availability pay requires a covered employee to work an average of two extra hours of overtime per day beyond the eight hour day for the entire year to be entitled to extra pay for the extra hours worked. See, e.g., 5 U.S.C. § 5545a(a)-(d).

FLSA's overtime provisions presumptively apply to federal employees, such as the inspectors, unless a specific FLSA exemption applies. See 5 C.F.R. § 551.202(a)("Each employee is presumed to be FLSA nonexempt unless the employing agency correctly determines that the employee clearly meets one or more of the exemption criteria[.]"). In enacting § 1003(c), Congress did not explicitly amend or repeal the FLSA. However, whether these statutes implicitly conflict depends on whether any employees of the executive branch are both (1) engaged in work comparable to that of the postal inspectors, and (2) paid FLSA over-time. See Moyle v. Dir., Office of Workers' Comp. Programs, 147 F.3d 1116, 1120 (9th Cir.1998) ("`Repeals by implication ... are not favored and will only be found when the new[er] statute is clearly repugnant, in words or purpose, to the old statute ....'") (quoting Kee Leasing Co. v. McGahan (In re Glacier Bay), 944 F.2d 577, 581 (9th Cir.1991)). We reverse the district court's grant of summary judgment to the Postal Service and remand with instructions to consider (1) whether any employees of the executive branch who are eligible to receive FLSA over-time perform work comparable to that of the inspectors, and (2) whether the inspectors satisfy any FLSA exemption or are entitled to FLSA overtime.

ANALYSIS

I. THE LEGISLATIVE LANDSCAPE

Because our decision rests on a series of labor statutes, principally the FLSA and 39 U.S.C. § 1003(c), we begin by briefly reviewing the relevant Congressional enactments and their implications for postal inspectors' pay.

A. THE FAIR LABOR STANDARDS ACT — 1938

In 1938, Congress enacted the FLSA to improve "conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers." 29 U.S.C. § 202(a). The FLSA requires most employers to pay "overtime" compensation to employees working more than forty hours per week "at a rate not less than one and one-half times the regular rate." Id. § 207(a)(1). In 1974, Congress amended the FLSA to include all federal, state, and local government employees, and in particular, individuals employed by the Postal Service. See id. § 203(e)(2)(B) ("`[E]mployee' means ... any individual employed by the United States Postal Service....").

The FLSA provides detailed exemptions excluding certain classes of employees from the Act's overtime pay requirements. See id. § 213. For example, § 213(a)(1) exempts "administrative" employees, a matter we address in more detail below. Section 213(b)(20) exempts federal law enforcement officers if the federal agency "employs during the workweek less than 5 employees ... in law enforcement activities." Id. § 213(b)(20). According to the implementing regulations "in all exemption determinations," employees are "presumed to be FLSA nonexempt." 5 C.F.R. § 551.202.

B. FEDERAL LAW ENFORCEMENT PAY REFORM ACT — 1990

In 1990, Congress passed the Federal Law Enforcement Pay Reform Act ("FLEPA") as part of the Federal Employees Pay Comparability Act of 1990. Under FLEPA, certain federal law enforcement officers are guaranteed overtime pay (referred to as "administratively uncontrollable overtime" or "AUO") among other pay protections. See 5 U.S.C. § 5305. At the request of the Postal Service, postal inspectors were not included in FLEPA. See Postal Inspection Service Compensation Task Force: Pay Comparability for Postal Inspectors Report, June 1991.

C. THE LAW ENFORCEMENT AVAILABILITY PAY ACT ("LEAP") — 1994

In 1994, Congress enacted LEAP, codified at 5 U.S.C. § 5545a, amending FLEPA and ending administratively uncontrollable overtime for most federal law enforcement agents, though some federal agents still receive AUO pay. See Pub.L. No. 103-329 § 633, 108 Stat. 2382 (1994). LEAP requires that covered federal law enforcement officers, in addition to their regular work schedule, be available to work an average of two extra hours per day. 5 U.S.C. § 5545a(d)(1). If a law enforcement officer averages two extra hours of availability each work day for the whole year, then the officer is entitled to additional pay in the amount of 25% of the annual base pay. See 5 U.S.C. § 5545a(h).

Because postal inspectors were not included in FLEPA, they were not included in LEAP, which basically sought to revise the FLEPA pay regime. See id. § 2105(e)("Except as otherwise provided by law, an employee of the United States Postal Service or of the Postal Rate Commission is deemed not an employee for purposes of this title."); see also Nigg v. Merit Sys. Prot. Bd., 321 F.3d 1381, 1384 (Fed.Cir.2003). To protect federal agencies from having to pay law enforcement officers both LEAP and FLSA overtime, Congress amended the FLSA to exempt officers who received LEAP from receiving FLSA overtime. See 29 U.S.C. § 213(a)(16).

D. POSTAL INSPECTORS' COMPENSATION, 39 U.S.C. § 1003(c) — 1996

In 1996, Congress passed 39 U.S.C. § 1003(c) to raise the salaries and benefits paid to postal inspectors to correspond with the compensation for investigators from other federal agencies. Section 1003(c) provides:

Compensation and benefits for all Postal Inspectors shall be maintained on a standard of comparability to the compensation and benefits paid for comparable levels of work in the executive branch of the Government outside the Postal Service. As used in this subsection, the term "Postal Inspector" included [sic] any agent to whom any investigative powers are granted under section 3061 of title 18.

Thus, the statute requires that compensation and benefits for postal inspectors be comparable to that paid to executive branch employees with comparable levels of work, but does not define more precisely how this comparability should be determined. In enacting § 1003(c), Congress did not amend the FLSA to exempt overtime pay for postal inspectors as it did to exempt investigators receiving availability pay under LEAP.

II. THE PARTIES' POSITIONS

According to the Postal Service, § 1003(c) permits the Postal Service to pay the inspectors comparably to those federal law enforcement officers who receive availability pay and not FLSA overtime. The Postal Service claims that GS-1811 investigators in the executive branch perform comparable work to postal inspectors and are not paid FLSA overtime because they are exempt under LEAP, 5 U.S.C. § 5545(a), and the LEAP amendment to the FLSA, 29 U.S.C. § 213(a)(16). But see Nigg, 321 F.3d at 1384 ("The provisions of Title 5 do not apply to the Postal Service unless Congress has specifically so provided.... [LEAP] section 5545a is not one of the exceptional provisions that Congress has made applicable to the Postal Service.") (citations omitted).

The inspectors reject the Postal Service's interpretation of § 1003(c) because it fails to give full effect to both that statute and the FLSA's overtime provisions. The inspectors counter that the Postal Service...