United States Department of the Navy, Naval Explosive Ordnance Disposal Technology Division, Indian Head, Maryland (Agency) and American Federation of Government Employees, Local 1923 (Union)
[ v57 p280 ]
57 FLRA No. 60
UNITED STATES DEPARTMENT OF THE NAVY
NAVAL EXPLOSIVE ORDNANCE
DISPOSAL TECHNOLOGY DIVISION
INDIAN HEAD, MARYLAND
AMERICAN FEDERATION OF GOVERNMENT
EMPLOYEES, LOCAL 1923
June 21, 2001
Before the Authority: Dale Cabaniss, Chairman; Donald S. Wasserman and Carol Waller Pope, Members. [n1]
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Mollie H. Bowers filed by the Agency under § 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Union filed an opposition to the Agency's exceptions.
The Arbitrator sustained in part and denied in part a grievance claiming that the Agency improperly exempted eleven technicians from overtime pay under the Fair Labor Standards Act (FLSA). In sustaining the grievance, the Arbitrator ordered the Agency to reclassify ten of the eleven technicians as non-exempt. The Arbitrator also ordered back pay and statutory liquidated damages for uncompensated overtime for a period of two years prior to the filing date of the grievance. The Arbitrator denied the grievance as to one of the technicians who the Arbitrator found was properly exempted as an administrative employee on the basis of non-technician duties.
For the following reasons, we deny the Agency's exceptions.
II. Background and Arbitrator's Award
This case has its genesis in a group grievance that originally covered all bargaining unit members who were classified as exempt by the Agency. The parties reached settlement agreements resolving the FLSA status of all contested positions except those of Equipment Specialist, Mechanical Engineering Technician, Engineering Technician and Electronics Technician. In United States Dep't of the Navy, Naval Explosive Ordinance Disposal Tech. Div., Indian Head, Md., 56 FLRA 280 (2000) (United States Dep't of the Navy), the Authority reviewed and denied exceptions to the award of the same Arbitrator regarding the exemption status of Equipment Specialists. In this case, we review exceptions to the Arbitrator's award regarding the exemption status of eleven employees: one Mechanical Engineering Technician, seven Engineering Technicians, and three Electronics Technicians.
The parties stipulated the following issues before the Arbitrator:
(1) Whether, as to the eleven individuals at issue holding the position[s] of Mechanical Engineering Technician (1), Engineering Technician (7), and Electronics Technician (3) in the bargaining unit, the Agency has properly exempted them from overtime pay under the FLSA, and, if not, should the remedy include liquidated damages and attorneys fees as well as back pay; and
(2) Whether, as to these eleven Technicians in the bargaining unit, the Agency's actions were 'willful' so as to precipitate a three-year limitation period.
Award at 2.
Since the majority of the Engineering Technicians work in the same department and do similar work, the parties designated certain Engineering Technicians as representatives and stipulated that the determinations regarding these representatives would be binding on the other Engineering Technicians in the same department. Also, "the parties agreed that the FLSA status [of the Electronics Technicians] would be based on a review of the[ir] official position descriptions [PDs] and individual responses to the questionnaire submitted as Joint Exhibits 9I-K. Id. at 7. The Arbitrator also noted that the parties incorporated into the record prior testimony establishing that the FLSA exempt status determinations were made by the Agency's Human Resource Office of the parent organization and were based on [PDs] prepared and classified by [department] personnel. Id. The Arbitrator stated that the record in its entirety was carefully [ v57 p281 ] considered in determining the award in this second phase of the arbitration regarding the eleven technicians. Id. at 2.
The Arbitrator found that: (1) [the] employees testifying stated unequivocally that he/she had recently reviewed his/her PD and found it to be a correct statement of the parameters of his[/her] position and (2) that each of the . . . supervisors testified that the PD's for his employees were correct. Id. at 14. The Arbitrator further noted that, for the most part, all of the Technicians "responded in the affirmative to a question on an agency questionnaire that: (1) they had recently reviewed their PD; and (2) the PD was correct. Id. citing Joint Exhibit 9A-K. The Arbitrator stated that she found these statements to be creditable and therefore compelling. Id.
The Arbitrator reviewed the official PDs for the eleven technicians at issue along with the relevant Office of Personnel Management (OPM) classification standards in order to establish the appropriateness of the FLSA exemption determination. Id. The Arbitrator found that all of the Engineering Technician positions were governed by the classification standard for Engineering Technician Series GS-0802, which states that `[t]he Engineering Technician Series, GS-0802, is a composite, general series for nonprofessional technical positions.' Id. at 15. Based on this statement, the Arbitrator concluded that these positions were nonexempt based on the binding and unambiguous nature of the [GS-0802 standard] that the Engineering Technician position is not a professional position. Id. The Arbitrator also concluded that since the same OPM standard (0802) was used to classify the Mechanical Engineering Technician position, . . . that position must also be a nonprofessional position. Id. The Arbitrator "noted for the record that the PD and the notation on the Agency employee listing for [one of the] Engineering Technician[s] . . . shows a nonexempt FLSA status." Id.
Similarly, regarding the Electronics Technician positions, the Arbitrator reviewed the relevant OPM classification standard, Electronics Technician Series GS-0856, which stated that `[t]he Electronics Technician Series, GS-0856, is the technician counterpart of the Electronics Engineering Series, GS-0855, and thus, in effect, the Electronics specialization of the Engineering Technician Series GS-802.' Id. at 16. In light of this cross-reference to Series GS-802, the Arbitrator concluded that the Electronics Technician positions were nonprofessional positions like the Engineering Technician position[s]. Id.
Conversely, regarding the administrative exemption for the Engineering Technician who also functions as the Radiation Safety Officer (RSO), the Arbitrator concluded that the RSO position satisfied the tests for exemption under 5 C.F.R. § 551.206. In particular, the Arbitrator concluded that the RSO responsibilities meet the FLSA criteria by involving `services of substantial importance to the organization serviced' and of a `specialized or technical nature that requires considerable special training, experience, and knowledge' done using discretion and independent judgment. Award at 16. In so concluding, the Arbitrator stated that great weight was given to [this technician's] testimony and his responses to the FLSA questionnaire (Joint Exhibit 9H), and Agency Instruction Notices (Agency Exhibits 8, 9, 10). Id.
On the subject of liquidated damages, the Arbitrator concluded that although the Agency's actions were not willful, its failure to make a good faith effort in determining the FLSA status of the eleven technicians warranted liquidated damages. In this regard, the Arbitrator determined that as a minimum, such good faith effort would include studying both the PD's and the overarching OPM classification standards, and found that [t]his clearly did not happen. Id. at 17. Specifically, the Arbitrator found that
In the intervening months since the formation of the original grievances into a class action case, the Agency had an obligation to have carefully reviewed each of the PD's for challenged positions. Such a review would have shown problem areas such as the conflict with OPM standards revealed here. Unfortunately, there seems to have been either no in-depth review or a review that was haphazard at best.
Finally, the Arbitrator sustained the grievance and ordered the Agency to remove the FLSA professional exemption for ten of the eleven technicians at issue. The Arbitrator denied the grievance regarding the Engineering Technician with RSO duties as nonexempt. The Arbitrator also ordered the Agency to pay backpay and statutory liquidated damages to the ten technicians for uncompensated overtime for a period of two years prior to the filing date of the grievance. The Arbitrator remanded the issue of attorney's fees to the parties and retained jurisdiction over this issue pending resolution. [ v57 p282 ]
III. Positions of the Parties
A. Agency's Exceptions
The Agency asserts that the Arbitrator's award is deficient because: (1) the Arbitrator lacked jurisdiction; (2) the award is contrary to law; and (3) the award is based on a nonfact.
1. Arbitrator's Lack of Jurisdiction
The Agency contends that the Arbitrator lacked jurisdiction over this grievance since the Union did not demonstrate that the eleven technicians gave their written consent to be part of the class action grievance as required by § 216(b) of the FLSA. [n2] The Agency maintains that it timely filed and placed before the Arbitrator its Motion to [r]equire [p]arty-[g]rievants [t]o '[o]pt-[i]n' [p]ursuant [t]o [t]he [c]lass [a]ction [p]rovisions of 29 U.S.C. § 216(b) and incorporates this motion by reference. [n3] Exceptions at 10. Citing the parties' Partial Settlement Agreement involving the Equipment Specialists, the Agency maintains that it specifically reserved the right, with the Arbitrator's approval, to raise the issue of [the] Arbitrator['s] jurisdiction over class members prior to [the] hearing in the instant matter. [n4] Id. Thus, the Agency contends that it is now entitled to raise the issue before the Authority even though the Arbitrator failed to address this issue in her award. Id. at 11.
The Agency maintains that Congress added the opt-in provision by the Portal-to-Portal Act of 1947 to limit the nature of FLSA class actions by banning representative actions and to reduce the burden on employers and the courts. Id. at 11-12. In this regard, the Agency notes that the Tenth Circuit in Dolan v. Project Constr. Corp., 725 F.2d 1263, 1267 (10th Cir. 1984) (Dolan), has emphasized that "unlike the 'opt-out' provisions of Fed[eral] R[ule] [of] Civ[il] P[rocedure] 23 governing class action suits, [the] provisions of § 216(b) absolutely require similarly situated employees to 'opt-in' to FLSA suits. Exceptions at 12. The Agency cites several decisions by other federal courts in this regard. Also, the Agency challenges "the Union's position that the Arbitrator is free to apply only select portions of § 216(b)" that provide for unpaid overtime and liquidated damages. Id. at 14. The Agency maintains that the clear congressional intent to discourage collective litigation, like the instant action, by requiring all class members to opt-in, must be followed, and the fact that the forum for the class action is arbitration rather than a judicial proceeding is a distinction without a difference. Id. at 15. The Agency emphasizes that the Authority's decisions support its position regarding the applicability of § 216(b) to arbitration proceedings, namely, NTEU, 53 FLRA 1469 (1998) (hereinafter FDIC), and United States Dep't of the Treasury, Internal Revenue Serv., Washington, D.C., 46 FLRA 1063, 107273 (1992) (IRS).
The Agency stresses that it "does not contest the Union's ability to represent individual employees or groups of employees on issues arising out [of] their employment conditions. Exceptions at 15. However, the Agency argues that the Union cannot file a FLSA class action grievance without the represented members filing written consent with the Arbitrator. In this regard, the Agency argues that the Union's status as the exclusive representative of the employees in its bargaining unit cannot act to trump the specific opt-in requirements of § 216(b). Id. at 16.
2. Contrary to Law
The Agency contends that under OPM's regulations, as well as a large and uniform body of case law interpreting the FLSA regulations, the federal employees' `actual duties' or day-to-day duties' govern the FLSA exemption status of the federal employee. Id. at 18. The Agency emphasizes the Federal Circuit's decision in Berg v. Newman, 982 F.2d 500, 503 (Fed. Cir. 1992) in support of its claim that the Arbitrator's mere reliance on position descriptions and/or occupational standards is not enough to establish the FLSA exemption status of an employee. Exceptions at 19. The Agency also maintains that FLSA exempt status determinations "must be determined on a case-by-case basis[, . . . that is] independent of the government's treatment of similarly situated employees with the same title." Id. at 19-20. In this regard, the Agency contends that the Arbitrator failed to conduct her mandatory [ v57 p283 ] exploration into the [t]echnicians' day-to-day or `actual duties. Id. at 20. The Agency stresses that such information [regarding the technicians' actual duties] was presented by the Agency during the course of the arbitration hearing and captured in over 360 pages of written transcripts and in the work products of the employees entered into the record. Id. Lastly, the Agency argues that the award "contained no statutory, regulatory or competent jurisdictional authority" for the imposition of liquidated damages. Id. at 8.
The Agency contends that the award must be set aside or remanded to the parties since the award lacks the necessary factual findings regarding the technicians' actual duties. Id. at 23.
The Agency argues that the Arbitrator's finding that the FLSA exempt status determination is derived exclusively from respective PD's and/or their OPM classification standards is a clearly erroneous nonfact and, but for her reliance upon it, the Arbitrator would have reached a different result. Id. at 21.
B. Union's Opposition
The Union maintains that the Agency's exceptions should be denied as there is no basis in either law or fact to support [the Agency's] assertions. Opposition at 11.
Regarding the Agency's claim that the Arbitrator lacked jurisdiction under § 216(b), the Union maintains that this provision applies solely to suits brought in court and not to grievance and arbitration proceedings. In this regard, the Union argues that all the cases cited by the Agency involve civil suits in court and clearly establish that in 1947, Congress added § 216(b)'s requirement for written consents specifically to limit FLSA class actions brought in Federal court under Federal Rule of Civil Procedure 23. Id. at 13, citing Dolan. The Union also notes that [u]nder the very same amendment, labor organizations are effectively precluded from bringing any representative FLSA law suits on behalf of bargaining unit employees. Id.
The Union argues that the Agency's § 216(b) claim is contrary to established labor-management relations policies, and provisions under the parties' negotiated grievance procedure and the Statute. Id. at 15. The Union maintains that the Agency's opt-in claim is akin to [requiring employees] to . . . fil[e] individual grievances, [and as a result] runs completely counter to the basic goal of a negotiated grievance procedure. Id. Moreover, the Union emphasizes that it is well established "that `the grievance process . . . is controlled by the union', that `only the union . . . has the right to demand that a grievance be taken to arbitration', and that `a grievance filed by the union may not require the signature of a particular employee'. Id. at 15-16 citing Elkouri & Elkouri, How Arbitration Works, 230-31 (5th ed. 1997). Lastly, in this connection, the Union asserts that the opt-in requirement is completely at odds with the principle that a union [as the exclusive representative of the bargaining unit] is free to act on issues affecting the entire bargaining unit without the express consent of any individual employee, as reflected in the parties' negotiated grievance procedure and § 7121 of the Statute. Id. at 16.
Alternatively, the Union argues that the Agency's failure to raise the opt-in issue in a timely manner and its acquiescence in the characterization of this case as a class-action grievance constitute a waiver of any such purported defense. Id. at 16-17 citing United States Dep't of Veterans Admin. Med. Ctr., Leavenworth, Kan., 38 FLRA 232 (1990). In this regard, the Union notes that the Agency raised the opt-in issue approximately ten months after the initial grievance was filed. Also, the Union emphasizes that two months prior to raising the opt-in issue, the Agency's chief official sent a letter to all unit employees that "acknowledged the case as a `class action grievance'" and that expressly notified" the employees that their positions had been included in the grievance class. Id. at 17.
The Union maintains that the Agency's claim that the award is contrary to law since it is allegedly based on [the Arbitrator's] review of the employees' PD's and not on an examination of each individual employee's actual duties should be rejected. Id. at 18. Similarly, the Union contends that the Agency's claim that the Arbitrator's failure to examine the technicians' actual or day-to-day duties, renders her opinion and award deficient in fact-finding and premised upon nonfacts should be denied. Id. In this regard, the Union emphasizes that the Arbitrator stated that she considered the record in its entirety, which included the parties' post-hearing briefs and transcripts from two days of hearings during which both parties presented evidence and testimony. The Union contends that the Arbitrator determined that the technicians were nonexempt after considering the employees' PDs in line with the testimony of employees and their supervisors that the PDs accurately described the employees' actual duties.
The Union contends that the Arbitrator's legal conclusions regarding the technicians' nonexempt status are supported by the record and are consistent with well established rules that FLSA exemptions should be narrowly [ v57 p284 ] construed against the employer who has the burden to prove that the exemption criteria have been met. In this regard, the Union maintains that the technicians are technical rather than professional employees and that they do not have the educational prerequisite for FLSA exemption as a `professional.' Id. at 24.
Finally, the Union claims that the absence of any evidence in the record that the Agency conscientiously undertook its FLSA determinations is glaring. Id. at 27. The Union emphasizes that the Agency essentially ignored the fact that wide scale FLSA classification errors were made despite awareness of three consecutive and adverse arbitration decisions and the Arbitrator's adverse decision in the first phase regarding Equipment Specialists. Id.
IV. Analysis and Conclusions
A. Contrary to Law Claims
1. Standard of Review
Under section 7122(a)(1) of the Statute, an arbitration award will be found deficient if it conflicts with any law, rule or regulation. Overseas Educ. Ass'n, 51 FLRA 1246, 1251 (1996). As the Agency's exceptions involve the award's consistency with applicable law, the Authority reviews questions of law raised by the award and the Agency's exceptions de novo. NTEU, Chapter 24, 50 FLRA 330, 332 (1995). In applying a standard of de novo review, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable standard of law. NFFE, Local 1437, 53 FLRA 1703, 1710 (1998). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. See id. An arbitrator's failure to apply a particular legal analysis "does not render [an] award deficient because, . . . in applying the standard of de novo review, the Authority assesses whether the arbitrator's legal conclusions are consistent with law, based on the underlying factual findings." AFGE, Nat'l Border Patrol Council, 54 FLRA 905, 910 n.6 (1998).
2. The Arbitrator Possessed Jurisdiction over the Grievance
We construe the Agency's exception that the Arbitrator lacked jurisdiction over the arbitration proceeding because none of the eleven technicians gave their written consent to be part of a class grievance under § 216(b) as a contrary to law claim. [n5] The Authority has not previously addressed whether this provision requiring the filing of written consents by all party plaintiffs in § 216(b) (otherwise referred to as the opt-in provision) is applicable to the arbitration of an FLSA group or class grievance filed by the Union under the parties' collective bargaining agreement. For the following reasons, we find that this opt-in provision does not apply to grievance and arbitration proceedings involving claims under the FLSA.
First, we look to the words of the statute itself. The first two sentences of § 216(b) provide the substantive right to unpaid minimum wages, unpaid overtime compensation, liquidated damages and other legal or equitable relief, such as reinstatement or promotion. However, the requirement for filing written consent in the third and fourth sentences is related to a party plaintiff to any such action, which clearly refers to Federal or state court action. [n6] There is nothing in the law that suggests that the written opt-in provision is applicable to proceedings other than actions initiated in courts.
In addition, as relevant here, the Authority has previously addressed the application of FLSA provisions to grievance and arbitration proceedings under the Statute. FDIC, 53 FLRA at 1484-94; IRS, 46 FLRA at 1072-74. The general rule is that statutory provisions that encompass substantive, as opposed to procedural rights, must be followed in arbitration. Id.
In FDIC, the Authority determined that the FLSA's statute of limitations set forth in 29 U.S.C. § 255(a) applies to an arbitrator's award of backpay for a claim brought under the FLSA. [n7] In reaching this conclusion, the Authority determined that "statutes of limitations [such as § 255(a)] are considered an integral part of the substantive rights afforded by a statute because time limitations on enforcing a statutory right not only bar [ v57 p285 ] recovery but extinguish the underlying rights and liabilities of the parties." FDIC, 53 FLRA at 1490 (emphasis added). Moreover, the Authority found that "the policies and Congressional intent underlying the FLSA's statute of limitations" are in line with the conclusion that § 255(a) represents a substantive right. Id. The Authority emphasized that, in amending § 255(a), Congress created "'a significant distinction' between willful and nonwillful violations . . . [that] establishe[d] standards by which violations of the FLSA are to be judged." Id. In this connection, the Authority reasoned that "[t]he failure to apply § 255(a) in the context of negotiated grievance procedures would defeat the Congressional purpose in creating a two-tiered level of responsibility for violations of the FLSA and ignore a substantive part of the FLSA." [n8] Id.
In IRS, the Authority found that liquidated damages, as provided in § 216(b), are properly awarded in arbitration proceedings. In making this conclusion, the Authority rejected the agency's contention that there was no waiver of sovereign immunity because § 216(b) applies only to suits brought in Federal or state courts. The Authority found that, despite the fact that awards of liquidated damages are not authorized under the Back Pay Act, arbitration awards granting liquidated damages based on § 216(b) are proper because this section independently provides a substantive right to money damages against a Government employer and, thus, constitutes a waiver of sovereign immunity.
In contrast to the statute of limitations provision in § 255(a) and the liquidated damages provision in § 216(b), the opt-in provision in § 216(b) is procedural in nature. In this respect, the opt-in provision, along with the provision in § 216(b) that FLSA claims may be brought by one or more employees on behalf of other similarly situated employees, establish the framework for collective or class action proceedings in Federal or State court under the FLSA. As such, § 216(b) supplants the class action procedures established by the Federal Rules of Civil Procedure in Rule 23. Generally, Rule 23 applies in any civil action unless the statute under which the action is brought provides an alternative means for class or group relief. See LaChapelle v. Owens-Illinois, Inc., 513 F.2d 286, 288-89 (5th Cir. 1975). Rule 23 binds absent parties who fall within a certified class, unless they have opted out of the action. See Fed. R. Civ. P. 23(c)(2). 5 Moore's Federal Practice § 23.06 (Matthew Bender 3d ed. 1999). In contrast, § 216(b) provides that no person may be bound by, or benefit from, a judgment unless the person has opted in to the proceeding. In light of this fundamental difference, courts have concluded that it would be inconsistent with § 216(b) to apply the requirements of Rule 23. See id.; Kinney Shoe Corp. v. Vorhes, 564 F.2d 859, 862 (9th Cir. 1977); Dolan v. Project Constr. Corp., 725 F.2d 1263, 1266-67 (10th Cir. 1984); Behr v. Drake Hotel, 586 F. Supp. 427 (N.D. Ill. 1984); Wagner v. Loew's Theatres, Inc., 76 F.R.D. 23 (N.D.N.C. 1977); McGinley v. Burroughs Corp., 407 F. Supp. 903 (E.D. Penn. 1976).
By supplanting a Federal Rule of Civil Procedure as illustrated above, the opt-in provision in § 216(b) embodies a procedural, as opposed to a substantive, right. Since § 216(b) and Rule 23 are intrinsically procedural devices for collective and class action proceedings, they should be treated in the same manner regarding the issue of applicability to grievance and arbitration proceedings. [n9] In this regard, we note that the Authority's long-standing precedent does not require that arbitration proceedings be governed by the Federal Rules of Civil Procedure." AFGE, Local 2004, 55 FLRA 6, 10 (1998). In so holding, the Authority has noted that the Federal Rules were designed to govern procedures in the United States district courts and do not purport to be applicable in administrative proceedings. Id. citing 1 James W. Moore et al., Moore's Federal Practice, ¶ 1.20[e] (ed. 1997). Cf. Champ v. Siegel Trading Co., Inc., 55 F.3d 269, 276 (7th Cir. 1995) (under the Federal Arbitration Act "[w]hen contracting parties stipulate that disputes will be submitted to arbitration, they relinquish the right to certain procedural niceties which are normally associated with a formal trial . . . [and o]ne of those `procedural niceties' is the possibility of pursuing a class action under Rule 23"). In line with this well-settled precedent, we find that the opt-in provision in § 216(b), as a corollary procedural [ v57 p286 ] device to Rule 23, is not applicable to grievance and arbitration proceedings. [n10]
Furthermore, imposition of the FLSA's opt-in provision would create an unnecessary conflict between that requirement and the scope of the Union's rights as exclusive representative under the Statute. [n11] Section 7114(a) of the Statute accords the union, as exclusive representative, the right to act on behalf of all unit employees. As relevant here, § 7121(b)(1)(C)(i) of the Statute affords the union, as exclusive representative, "the right, in its own behalf or on behalf of any employee in the unit[,] . . . to present and process grievances." Also, the broad definition of grievance under § 7103(a)(9)(B) as any complaint "by any labor organization concerning any matter relating to the employment of any employee," reinforces the Union's right to act on behalf of all or groups of employees. As importantly, the right to invoke arbitration resides solely with the exclusive representative, not the unit employees. See § 7121(b)(1)(C)(iii). Consequently, group grievances can proceed to arbitration if invoked by the union. In any event, our determination that the opt-in provision is procedural and therefore not applicable to grievance and arbitration proceedings obviates the need to resolve this potential conflict between the FLSA's opt-in provision in § 216(b) and §§ 7121 and 7103 of the Statute. See Detweiler v. Pena, 38 F.3d 591, 594 (D.C. Cir. 1994) ("'when two statutes are capable of co-existence, it is the duty of the courts, absent a clearly expressed congressional intention to the contrary, to regard each as effective.'") (quoting Morton v. Mancari, 417 U.S. 535, 551 (1974)).
Based on the foregoing, we find that the opt-in provision in § 216(b) does not apply to grievance and arbitration procedures. Thus, the Arbitrator's award, which did not require the grievants to opt-in to the group grievance by filing written consents, is not contrary to law.
Accordingly, we deny the Agency's exception.
3. The Arbitrator's Consideration of PDs and OPM Classification Standards is Not Contrary to Law
Under OPM's implementing regulations, [t]he designation of an employee as FLSA exempt or nonexempt ultimately rests on the duties actually performed by the employee. 5 C.F.R. § 551.202(h)(i). Moreover, it is the employer's burden to prove that employees are exempt. Corning Glass Works v. Brennan, 417 U.S. 188, 196-97 (1974). Exemptions are construed narrowly against the employer who seeks to assert the exemptions. See Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960).
We reject the Agency's claims that the Arbitrator failed to consider the employees' actual duties, relying instead on PDs and/or occupational standards, in contravention of the court's decision in Berg. As we noted in United States Dep't of the Navy, in making FLSA exempt status determinations, "'a trial court must have before it sufficient facts concerning the daily activities of that position to justify its legal conclusion.'" United States Dept't of the Navy, 56 FLRA at 284, citing Berg, 982 F.2d at 503. The Authority found that the agency had not established that the arbitrator failed to consider the employees' day-to-day duties as required by Berg. In this regard, the Authority emphasized the arbitrator's reliance on the direct, uncontested testimony of the employees and their supervisors that the PDs were accurate representations of their actual duties and the fact that neither party disputed the sufficiency of the record, unlike the situation in Berg.
As in United States Dep't of the Navy, the Agency in this case has not established that the Arbitrator failed to consider the technicians actual or day-to-day duties in making the exempt status determinations. The Agency argues that the Arbitrator "reject[ed] . . . the substantive testimony of the [technicians who testified] as to their day-to-day activities in favor of their static PDs and OPM classifications." Exceptions at 20. However, the Arbitrator specifically stated that she relied on: (1) the unequivocal testimony of all of the employees who testified at the arbitration hearing that each had recently reviewed his/her PD and found it to be a correct statement of the parameters of his[/her] position and (2) the testimony of the supervisors that the PDs for their employees who testified at the hearing were correct. Award at 14. The Arbitrator further noted that all of the [ v57 p287 ] technicians, with the exception of one of the Electronics Technicians and the Radiation Safety Officer, responded in the affirmative to a question on an agency questionnaire that: (1) they had recently reviewed their PD; and (2) the PD was correct. Id. The Arbitrator stated that she found these statements to be creditable and therefore compelling. Id. In line with the direct, uncontested testimony of these employees and their supervisors that the PD's were accurate representations of the work performed, we find that the Arbitrator appropriately considered the PDs in terms of the technicians' actual duties. Furthermore, the parties' agreed that the Arbitrator should rely on the PDs and questionnaires for the Electronics Technicians. See Award at 7. Under these circumstances, we find that the Agency has implicitly sanctioned the Arbitrator's reliance on the PDs as accurate representations of their actual duties. In light of the sufficiency of the record before the Arbitrator and the Arbitrator's consideration of the employees' actual duties, we find that the Agency has not established that the award is deficient as contrary to law.
Accordingly, we deny the Agency's exception.
4. The Arbitrator's Award of Liquidated Damages is Not Contrary to Law
We reject the Agency's claim that the award is contrary to law. In FDIC, the Authority delineated the standards for imposing liquidated damages under the FLSA. The Authority stated that the FLSA in effect establishes a presumption that an employee who is improperly denied overtime shall be awarded liquidated damages, unless the employer shows that the `act or omission giving rise [to the violation of the FLSA] was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the [FLSA]. FDIC, 53 FLRA at 1481, citing 29 U.S.C. § 260. In this regard, an employer in violation of the FLSA has a `substantial burden' of proving that he acted in good faith and on a reasonable belief [that] he was in compliance[,] and thus `double damages are the norm, single damages are the exception. Id. (citations omitted).
As relevant here, the Authority noted that at least one reviewing court has ruled that an employer's failure to take affirmative steps to ascertain its employees' exemption status, particularly where there have been changes in regulation or the employer has information calling into question its employees' status, demonstrates that the employer lacked good faith in complying with the responsibilities imposed by the FLSA. FDIC, 53 FLRA at 1483, citing Bankston v. State of Illinois, 60 F.3d 1249, 1255 (7th Cir. 1995). Here, the Agency has offered no evidence that it took affirmative steps that would meet the substantial burden necessary to overcome the presumption in favor of liquidated damages. Thus, we affirm the Arbitrator's legal conclusion that the Agency did not act in good faith with reasonable grounds that its determination was lawful. The award of liquidated damages is, therefore not contrary to law.
Accordingly, we deny the Agency's exception.
B. Nonfact Claim
To establish that an award is based on nonfacts, the appealing party must demonstrate that the central facts underlying the award are clearly erroneous, but for which a different result would have been reached by the Arbitrator. See United States Dep't of the Air Force, Lowry Air Force Base, Denver, Colorado, 48 FLRA 589, 593 (1993). An award will not be found deficient based on an arbitrator's determination on any factual matters that the parties disputed below. Id. at 594 (citing Mailhandlers v. Postal Service, 751 F.2d 834, 843 (6th Cir. 1985)).
A review of the record reveals that the parties disputed the alleged nonfact before the Arbitrator regarding whether the exemption status is based exclusively on the PDs and OPM classification standards. Moreover, the Agency's nonfact claims do not challenge the Arbitrator's findings of fact, but rather take issue with the Arbitrator's interpretation of what evidence governs the determination of the professional FLSA exemption. See United States Dep't of the Navy, Philadelphia Naval Shipyard, 39 FLRA 590, 605 (1991) (agency's nonfact argument disputing the arbitrator's interpretation of regulation rather than the arbitrator's factual findings provided no basis for finding that the award was based on nonfact).
Accordingly, we deny the Agency's exception.
The Agency's exceptions are denied. [ v57 p288 ]
Dissenting Opinion of Chairman Cabaniss:
I respectfully dissent from my colleagues regarding whether the opt-in provision under 29 U.S.C. § 216(b) is a substantive right with which arbitration must comply. For the reasons that follow, I would find that statutory provision to be substantive and therefore binding in this and all other arbitration cases.
Because the issue of substantive versus procedural has no precedent directly on point, we are left with examining (hopefully) analogous circumstances. I note, however, that as to the argument that this provision in 29 U.S.C. § 216(b) does not apply to arbitration because the statute speaks only of Federal or state court action, the Authority has already rejected any inference alleged from the reference to just judicial actions. See, e.g., NTEU, 53 FLRA 1469, 1487 (1998) (hereinafter FDIC) (Authority concluded that other portions of the same statute applied to arbitration proceedings, notwithstanding the reference to only Federal and state court actions), discussing United States Dep't of the Treasury, IRS, Washington, D.C., 46 FLRA 1063, 1072-73 (1992); Cf. Gibson, 527 U.S. at 221-22 (language of 42 U.S.C. § 1981a(c), providing that "[i]f a complaining party seeks compensatory . . . damages under this section . . . any party may demand a trial by jury," did not act to deprive EEOC of authority to award compensatory damages against the Federal government).
I am not persuaded by the majority's attempt to distinguish this portion of § 216(b) from those other parts already found to be applicable to the arbitration process. The fourth sentence of § 216(b), which is in dispute, states that "[n]o employee shall be a party plaintiff to any such action" unless the required written consent is filed in court. The "any such action" discussed refers to the preceding sentence, which reads as follows:
An action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.
Thus, the "any such action," that the majority wants to find as not being subject to arbitration, pertains to matters the Authority has already found to be applicable to arbitration, i.e., those "action[s] to recover the liability prescribed" by the statute, such as liquidated damages. No matter how it is described, the majority's argument on this issue does not avail itself of any persuasive conclusions.
In looking more directly at the issue of whether the opt-in provision is substantive or procedural in nature, I note that the purpose of this Fair Labor Standards Act (FLSA) provision, unlike Rule 23 of the Federal Rules of Civil Procedure (Rule 23), is to limit employer liability, and thus is akin to the limitations period in that a failure to abide by its terms precludes recovery. As we have found limitations period under the FLSA to be substantive in nature, so would I find the opt-in provision to be substantive.
The substantive nature of this opt-in provision is reflected in the legislative history underlying its enactment. The opt-in provision of § 216(b) was originally enacted as part of Section 5 of the Portal-to-Portal Act of 1947 (1947 Act), Pub. L. 49, ch. 52, 61 Stat. 87. The legislative history of the 1947 Act consists of House Report No. 71 of the 80th Congress, 1st Session, reprinted in 1947 U.S.C.C.A.N. 1029. Both the House Report and the 1947 Act expressly reveal congressional concern about "employers' potential liability" and "the threat to the national economy" in the wake of the Supreme Court's decision in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 66 S. Ct. 1187, 90 L.Ed. 1515 (1946) (Anderson). 1947 U.S.C.C.A.N. at 1031. In Anderson, the Court expanded the scope of compensable "working time" for FLSA purposes, thereby increasing potential employer liability. Congress noted that in response to Anderson, "between July 1, 1946, and January 31, 1947, 1,913 such [portal-to-portal] cases were filed in the Federal district courts[, and that] . . . 1,515 [of these] cases claimed a total of $5,785,204,606." Id. Congress also noted that "the fact that the time period involved includes the war [World War II] years when wages were high with many hours worked over the statutory maximum, has greatly increased the potential liability[,]" and that the number of employers covered by the FLSA had greatly increased since the FLSA's enactment in 1938. Id. at 1032.
The ban on representative actions and the opt-in provision originated with the Senate's consideration of the bill. See 93 Cong. Rec. 4371. Senator Donnell, the then Chairman of the Senate Judiciary Committee, made several remarks specifically as to the congressional intent to ban representative actions and require the opt-in provision. See 93 Cong. Rec. 2182. In reviewing Senator Donnell's comments, the United States District Court for the District of Columbia noted that the purpose of the ban on representative actions "was to prevent [ v57 p289 ] large group actions, with their vast allegations of liability, from being brought on behalf of employees who had no real involvement in, or knowledge of, the lawsuit," especially in response to the onslaught of litigation precipitated by the Anderson decision in 1947. Arrington et al v. National Broadcasting Company, Inc., 531 F. Supp. 498, 501 (D.D.C. 1982). Finally, in Hoffman-La Roche Inc. v. Sperling, et al, 493 U.S. 165, 173 (1989), the Supreme Court made the following statements regarding Congress' intent in enacting those portions of the Portal-to-Portal Act at issue here:
In 1938, Congress gave employees and their representatives" the right to bring actions to recover amounts due under the FLSA. No written consent requirement of joinder was specified by the statute. In enacting the Portal- to-Portal Act of 1947, Congress made certain changes in these procedures. In part responding to excessive litigation spawned by plaintiffs lacking a personal interest in the outcome, the representative action by plaintiffs not themselves possessing claims was abolished, and the requirement that an employee file a written consent was added.(Citations omitted.) The relevant amendment was for the purpose of limiting private FLSA plaintiffs to employees who asserted claims in their own right and freeing employers of the burden of representative actions.
From this legislative history and judicial discussion, I conclude that the congressional intent behind § 216(b), to affirmatively limit employer liability by the imposition of the opt-in provision, mandates the finding that the statutory provision is a substantive matter, much like a limitations period, because of its express intent to place limitations upon the rights and responsibilities of the parties.
I am not persuaded by the argument that the opt-in provision is procedural because it supplants Rule 23, since the question remains whether the opt-in provision is substantive or procedural. The Rules Enabling Act notes that the Federal Rules of Civil Procedure take precedence over laws in conflict with them when such rules have taken effect, except that those rules "shall not abridge, enlarge or modify any substantive right." 28 U.S.C. § 2072(b). As already noted by the Majority at 14-15 of its decision, courts have found that the § 216(b) opt-in provision takes precedence over Rule 23. I also note that the 1966 amendments to Rule 23 also expressly note that § 216(b) of the FLSA was not to be affected by any of the new amendments of Rule 23. Fed. Rule Civ. Proc. 23 advisory committee's note. I believe this primacy of § 216(b) over Rule 23 reflects the substantive nature of that provision, as mandated by 28 U.S.C. § 2072(b).
I also find it unusual that Congress would establish both substantive and procedural matters alongside each other in the very same statutory subsection, given the Authority's earlier findings of the substantive aspects of the liquidated damages provision of § 216(b), which precedes the opt-in provision by two sentences. Therefore, based on all of the considerations set out above, I would find the opt-in provision of § 216(b) to be substantive in nature, and therefore binding in arbitration.
Footnote # 1 for 57 FLRA No. 60
Footnote # 2 for 57 FLRA No. 60
An action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction . . . . No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.
Footnote # 3 for 57 FLRA No. 60
Footnote # 4 for 57 FLRA No. 60
Paragraph 3 of the Partial Settlement Agreement states that [t]he Agency has ceded its Motion regarding the 'opt-in/opt-out' issue as regards Equipment Specialists and Engineers, but without prejudice or precedent to its right to assert and argue that Motion as regards subsequently arbitrated groups of employees." Agency's Exhibit 5, Partial Settlement Agreement at 2.
Footnote # 5 for 57 FLRA No. 60
The issue concerning the application of the opt-in provision to the eleven technicians was raised and litigated before the Arbitrator. See Transcript of Arbitration Hearing at 4-37. Therefore, we reject the Union's assertion that the Agency waived its right to raise § 216(b).
Footnote # 6 for 57 FLRA No. 60
The dissent asserts that the Authority has "already rejected" any inference that the reference in § 216(b) to federal or state court actions might indicate that matters in that section are procedural. Dissent at 1; citing FDIC, 53 FLRA at 1487. However, the liquidated damages provision at issue in FDIC does not contain a reference to "a party plaintiff in such action," in "Federal or State court." It is that language that supports our overall conclusion that the opt-in class action provision is a procedural rule that does not apply to the grievance procedure, rather than a substantive provision that would apply.
Footnote # 7 for 57 FLRA No. 60
Section 255(a) provides in pertinent part that "any cause of action for unpaid minimum wages, unpaid overtime compensation, or liquidated damages, under the FLSA . . . may be commenced within two years after the cause of action accrued, . . . except that a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued.
Footnote # 8 for 57 FLRA No. 60
In this regard, contrary to the dissent's implications, the Authority's conclusion in FDIC that the statute of limitations provision in § 255(a) is a substantive provision that applies to awards of backpay in grievance and arbitration proceedings was not based solely on Congress' concern for the employer's liability, but rather on a number of considerations, including Congress' intent to ensure that employees are adequately compensated and to set different standards for willful and nonwillful violations of the FLSA. See FDIC, 53 FLRA at 1490-91.
Footnote # 9 for 57 FLRA No. 60
The dissent maintains that the analogy between the opt-in provision and Rule 23 of the Federal Rules of Civil Procedure as procedural devices for group action is inapposite since unlike Rule 23, the purpose of the opt-in provision is to limit employer liability. However, the Supreme Court has stated that one of the objectives of Rule 23 is to protect defendants/employers from inconsistent adjudications and obligations by providing a single proceeding in which to determine the merits of the plaintiffs' claims. See United States Parole Comm'n v. Geraghty, 445 U.S. 388, 402-403 (1980).
Footnote # 10 for 57 FLRA No. 60
We find no support for considering the opt-in provision to be substantive in the dissent's reliance on the Rules Enabling Act. Dissent at 3, citing 28 U.S.C. § 2072(b). The judicial authority specifically construing § 216(b) as overriding Rule 23 does not rely on this provision, or on the substantive nature of § 216(b). See e.g. Kinney Shoe Corp., 564 F.2d at 862; Dolan, 725 F.2d at 1266; see also Woodall v. Drake Hotel, Inc., 913 F.2d 447, 450 (7th Cir. 1990) ("the procedures for instituting a class action under the Federal Rules and under § 16(b) are different and exclusive of each other") (emphasis deleted).
Footnote # 11 for 57 FLRA No. 60
The dissent emphasizes that the Authority's application of the statute of limitations provision in § 255(a) to awards of backpay mandates the application of the opt-in provision to grievance and arbitration proceedings. However, the application of § 255(a) to negotiated grievance procedures did not result in a direct conflict with the Statute as it does here, and § 255(a) by its own terms applies to "any cause of action," as opposed to the narrower application of § 216(b) to actions in federal or state court.