American Federation of Government Employees, AFL-CIO, Local 3614 (Union) and United States, Equal Employment Opportunity Commission (Agency)

[ v60 p601 ]

60 FLRA No. 121

AMERICAN FEDERATION
OF GOVERNMENT EMPLOYEES, AFL-CIO, LOCAL 3614
(Union)

and

UNITED STATES
EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION
(Agency)

0-AR-3821

_____

DECISION

January 28, 2005

_____

Before the Authority: Dale Cabaniss, Chairman, and
Carol Waller Pope and Tony Armendariz, Members

I.      Statement of the Case

      This matter is before the Authority on exceptions to an award of Arbitrator Lucretia Dewey Tanner filed by the Union under § 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Agency filed an opposition to the Union's exceptions.

      The Arbitrator found that the Agency did not violate law or the parties' collective bargaining agreement by failing to compensate employees for overtime worked.

      For the reasons that follow, we remand the award for clarification.

II.      Background and Arbitrator's Award

      The Union filed a grievance alleging that the Agency violated the parties' agreement and the Fair Labor Standards Act (FLSA) when it failed to pay overtime to employees in the Agency's Baltimore, Norfolk, [ v60 p602 ] and Richmond field offices. [n1]  The Union also alleged that the Agency improperly failed to give employees who are covered by the FLSA the option of pay or compensatory time off (comp time) for overtime worked. The grievance was not resolved, and was submitted to arbitration.

      The Arbitrator framed the issue as follows:

Did the Agency violate the collective bargaining agreement, the Fair Labor Standards Act[,] and Title V when it failed to pay employees (both exempt and non exempt) for overtime worked and or "suffered and permitted" by the Agency? Were employees not given the option of overtime pay or compensatory time off? If so, what are the appropriate remedies?

Award at 1.

      The Union and the Agency presented testimony from both current and former employees. According to the Union, the testimony of its witnesses was representative of the bargaining unit. In addition, the Union presented an arbitrator's decision issued in April 2003 which awarded damages for uncompensated overtime to five employees in the Baltimore office. [n2] 

      The Arbitrator stated that she had reviewed the arbitrator's decision in EEOC Baltimore, and distinguished it on the ground that the instant case involved over 100 employees in three offices, rather than five employees in the Baltimore office. The Arbitrator went on to discuss the fact that some supervisors granted time off and maintained informal arrangements with employees who worked overtime. In this regard, the Arbitrator found that employees and supervisors are "better served by permitting informal arrangements if the requested overtime after the fact is of a de minimis amount, less than one hour." Id. at 22.

      Further, the Arbitrator found that "[t]he overtime worked but not compensated ranged from less than a few hours to the extreme case of [an administrative judge who claimed fifteen] hours overtime a week." Id. at 23. The Arbitrator also noted that the flexibility provided to employees, including "a flexi-place option, a compressed work week, a `slide and glide' option that permits a [forty-five minute] leeway both in starting and ending the day . . . appears to outweigh the need to account for the very few hours of overtime that may or may not have been worked, except in extreme situations." Id.

      Finally, the Arbitrator found that there was "conflicting information" regarding whether the Agency grants non-exempt employees the option of overtime pay or comp time. Id. As a result, the Arbitrator directed the Agency to instruct all supervisors to notify non-exempt employees who perform overtime work in writing of the option to accept overtime pay or comp time.

      In sum, the Arbitrator found that "[b]ased on the evidence presented, the Union has not shown that the entire bargaining unit has a claim to back pay for overtime worked or that [s]upervisors knew or should have known that overtime work was being performed." Id. at 24. As a result, the Arbitrator determined that, although "[i]t appears that there may be individual employee issues that require resolving[,]" the Union was not entitled to damages. Id.

III.      Positions of the Parties

A.      Union's Exceptions

      The Union claims that the Arbitrator found that employees worked "suffered and permitted" overtime without compensation and that they worked "informal, off the books comp time without 100% compensation." Exceptions at 4.

      The Union contends that the Arbitrator acknowledged that the employees worked uncompensated overtime, but found that overtime "worked in increments of less than one (1) hour is `de minimis[.]'" Id. In this regard, the Union asserts that the Arbitrator's findings are contrary to 5 C.F.R. § 551.412(a)(1) and the arbitrator's decision in EEOC Baltimore.

      The Union also asserts that the Arbitrator found that individual employees worked overtime, but failed to impute that finding to the entire bargaining unit. In this regard, the Union claims that the Arbitrator failed to resolve whether the employees who testified were representative of the bargaining unit and failed to order a remedy for the grievants who did testify.

      In addition, the Union claims that the Arbitrator did not provide a remedy for the Agency's failure to offer non-exempt employees a choice between comp time and overtime pay.

      Finally, the Union claims that the Arbitrator's finding "that employees did in fact work overtime without compensation, but that there was somehow a `wash' since they get a very flexible work schedule" is contrary to law. Id. at 7. The Union asserts that the award "must [ v60 p603 ] be reversed and remanded for processing of an evaluation of damages[.]" Id. at 1.

B.      Agency's Opposition

      First, the Agency asserts that, read in context, the Arbitrator's award found that overtime worked by employees was neither suffered and permitted nor approved in advance as required by the parties' agreement. The Agency claims that the Arbitrator "correctly noted that Agency supervisors could adhere to Agency policy and deny any overtime . . . [and] concluded that both the Agency and employees were better served by `permitting informal arrangements' - granting time off for such overtime -especially since it [wa]s de minimis (less than one hour)." Opposition at 2. In this regard, the Agency claims that the Union's argument is "misleading" and that "the Arbitrator did not find that overtime of less than one hour is not covered by the FLSA, [the parties' agreement,] or Title 5." Id. at 3.

      The Agency also claims that, by finding that there was conflicting information regarding the failure to offer non-exempt employees a choice of comp time or overtime pay, the Arbitrator concluded that "the Union failed to meet its burden of proof of showing uncompensated overtime and damages." Id.

      Further, the Agency argues that the Arbitrator did not determine that the employees were not entitled to overtime because of the flexibility granted them by the Agency. In this regard, the Agency claims that the Union misconstrued the Arbitrator's statements. The Agency asserts that, in the section of the award referenced by the Union, the Arbitrator was referring to the practice of informally granting employees comp time without documentation. In this regard, the Agency claims, the Arbitrator "simply acknowledged that the flexibility enjoyed by the employees outweighed the need for documentation." Opposition at 4.

      Finally, the Agency disputes the Union's argument that the Arbitrator failed to resolve any issues before her. In this regard, the Agency claims that the Arbitrator simply found that the Union failed to meet the burden of proof required under 5 C.F.R. § 551.104 and denied the grievance. [n3]  In addition, the Agency contends that the arbitrator's decision in EEOC Baltimore involved five employees' claims to overtime more than two years prior to this case, and that there is "no logical requirement that these two cases be decided in favor of the same party." Opposition at 6 n.1.

IV.      Preliminary Matter

      Under § 2429.5 of the Authority's Regulations, the Authority will not consider issues that could have been, but were not, presented to the arbitrator. See, e.g., United States Dep't of the Air Force, Air Force Materiel Command, Robins Air Force Base, Ga., 59 FLRA 542, 544 (2003).

      The Union argues, citing 5 C.F.R. § 551.412(a)(1), that the employees are entitled to overtime compensation, even if the hours worked are less than one hour. 5 C.F.R. § 551.412(a)(1) states that

[i]f an agency reasonably determines that a preparatory or concluding activity is closely related to an employee's principle activities, and is indispensable to the performance of the principal activities, and that the total time spent in that activity is more than 10 minutes per workday, the agency shall credit all of the time spent in that activity, including the 10 minutes, as hours of work.

      There is no indication in the record that the Union claimed before the Arbitrator that the employees were engaged in preparatory or concluding activities entitling them to overtime compensation under 5 C.F.R. § 551.412(a)(1). Therefore, we dismiss this exception because its consideration is barred by § 2429.5. See, e.g., AFGE, Local 1546, 59 FLRA 126 (2003).

V.      Analysis and Conclusions

      The Authority reviews questions of law de novo. See NTEU, Chapter 24, 50 FLRA 330, 332 (1995) (citing United States Customs Serv. v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994). In applying a standard of de novo review, the Authority determines whether the arbitrator's legal conclusions are consistent with the applicable standard of law. See NFFE, Local 1437, 53 FLRA 1703, 1710 (1998). In making that determination, the Authority defers to the arbitrator's underlying factual findings. See id.

A.      Individual Employees' Claims to Overtime Pay

      For purposes of overtime pay, employees who are covered by the FLSA are classified as "non-exempt." Employees who are "exempt" from FLSA are covered by the Federal Employees Pay Act (FEPA), 5 U.S.C. § 5542. FEPA states that employees will be paid overtime "[f]or full-time, part-time and intermittent tours of duty, hours of work officially ordered approved in excess of 40 hours in an administrative workweek, or . . . in excess of [ v60 p604 ] 8 hours in a day . . . ." 5 U.S.C. § 5542(a). Overtime work in excess of any included in a regularly scheduled administrative workweek may be ordered or approved only in writing by an officer or employee to whom this authority has been specifically delegated. 5 C.F.R. § 550.111(c).

      Under OPM's regulations implementing the FLSA, an agency must compensate an employee for all hours of work in excess of forty in a workweek at a rate "equal to one and one-half times the employee's hourly regular rate of pay[.]" 5 C.F.R. § 551.501(a). "Hours of work" include time during which the employee is "suffered or permitted" to work. 5 C.F.R. § 551.401(a)(2). Work is "suffered or permitted" when: (1) the work is performed by an employee for the benefit of the agency, (2) the employee's supervisor knows or has reason to believe that the work is being performed, and (3) the supervisor has an opportunity to prevent the work from being performed. 5 C.F.R. § 551.102(e).

      A quarter of an hour is the largest fraction of an hour used for crediting irregular or occasional overtime work. See 5 C.F.R. § 550.112(a)(2), 5 C.F.R. § 551.521(a) and (b). Irregular or occasional overtime work is overtime that is not scheduled in advance of an employee's work week. 5 C.F.R. § 551.501(8)(c).

      Here, although the Arbitrator stated that some employees worked uncompensated overtime ranging from "less than a few hours" to a claim of fifteen hours a week, she did not award overtime pay to any individual employees and stated that the Union has not shown that "the entire bargaining unit" has a claim to back pay. Award at 23-24. As set forth above, both exempt and non-exempt employees are entitled under the FLSA and the FEPA, as well as the parties' agreement, to overtime pay for uncompensated overtime, regardless of whether such overtime may be "less than a few hours."

      However, the award is unclear, and we are unable to determine from the record, whether the employees who worked uncompensated overtime to which the Arbitrator refers are entitled to overtime pay under the applicable standards. The Arbitrator failed to distinguish between exempt and non-exempt employees, did not discuss the standards set forth by the FEPA and/or the FLSA, and did not discuss how much of the overtime work performed was irregular and occasional. In addition, it is unclear from the award what effect is to be given to the Arbitrator's statement that "the Union has not shown that the entire bargaining unit has a claim to back pay for overtime worked or that [s]upervisors knew or should have known that overtime work was being performed." Id.

      Accordingly, this portion of the award is remanded to the parties for resubmission, absent settlement, to the Arbitrator for clarification. In particular, any subsequent award should address whether the individual employees are categorized as exempt or non-exempt, whether they worked uncompensated overtime entitling them to compensation under the applicable standards set forth by the FEPA or FLSA as discussed above, and, if so, the amount of compensation to which they are entitled.

B.      Non-exempt Employees' Option to Request Comp Time  [n4] 

      Under the regulations implementing the comp time provisions of the FLSA, "the head of an agency (or designee) may" grant comp time to non-exempt employees instead of payment under § 551.501 "[a]t the request of an employee." 5 C.F.R. § 551.531. "Hours of work" under § 551.501 include time during which the employee is "suffered or permitted" to work. 5 C.F.R. § 551.401(a)(2). An agency may not require that an employee be compensated for overtime work with an equivalent amount of comp time, and may not coerce employees or interfere with their "rights to request or not to request compensatory time off in lieu of payment for overtime hours." 5 C.F.R. § 551.531(c). [n5]  However, an agency may permissibly mandate overtime pay, as § 551.531 provides only that an agency "may" grant comp time "instead of payment under § 551.501 for an equal amount of irregular or occasional overtime work" at the request of a non-exempt employee. Under § 551.501, if an employee is required, or "suffered and permitted" to work overtime, he or she is entitled to overtime pay, unless comp time is requested and granted pursuant to § 551.531.

      Here, the Arbitrator found that some non-exempt employees received comp time, rather than pay, for overtime work. The Arbitrator also found that "the Agency has not strictly or uniformly enforced the FLSA and Collective Bargaining Agreement which grants nonexempt employees the option to select either overtime pay or compensatory time off. It was clear that employees who testified were not granted the overtime pay option." Award at 23. [n6]  As reflected in the regulations discussed above, the Arbitrator is incorrect in stating that the FLSA provides employees with the "option [ v60 p605 ] to select either overtime pay or compensatory time off." Id. Instead, employees have a right to overtime pay and an option to receive comp time, if offered by the employer.

      The Arbitrator found that at least some non-exempt employees were given comp time, but it is unclear which of these employees, if any, were entitled to overtime pay under § 551.501. If such employees were entitled to overtime pay, but were required to take comp time in lieu of pay because they were unaware that comp time may be granted only at their request, the appropriate remedy is the payment of overtime pay, reduced by the value of the comp time already granted. See, e.g., United States Dep't of the Navy, Naval Sea Systems Command, 57 FLRA 543, 548 (2001).

      Accordingly, this portion of the award is remanded to the parties, for resubmission to the Arbitrator, absent settlement, to determine, consistent with the foregoing, which, if any, employees were entitled to overtime pay and were erroneously granted comp time.

VI.      Decision

      The case is remanded to the parties for resubmission to the Arbitrator, absent settlement, to clarify: 1) whether individual employees are entitled to overtime pay under the FEPA or the FLSA; and 2) which employees, if any, are entitled to overtime pay, minus the value of time off already granted, because they were erroneously granted comp time in lieu of overtime pay to which they were entitled. [n7] 


APPENDIX

Article 31.00 Overtime

Section 31.01
The assignment of overtime work is a function of the EMPLOYER. The EMPLOYER retains the right to determine the need for overtime work.

Section 31.05
Overtime work must be authorized in advance; however, all required or approved work performed outside the basic work week shall be compensated in accordance with applicable overtime laws and regulations of OPM. It is the EMPLOYER's responsibility to ensure that the employee's workload can reasonably be accomplished within the employee's regularly scheduled work day or work week. It is the employee's responsibility to inform the EMPLOYER whenever the assigned workload is requiring more time than normally scheduled.

Section 31.06
Non-exempt employees who work overtime shall be paid at the rate of one and one half (1-1/2) times the rate of regular pay or within regulatory limits. In accordance with applicable law, government-wide rules or regulations, these employees may elect to receive compensatory time in lieu of pay. Non-exempt employees shall not work overtime when overtime pay is not available.

Section 31.07
All bargaining unit employees classified as non-exempt under the Fair Labor Standards Act shall be compensated in accordance with applicable laws and regulations for work performed as overtime. For employees to receive overtime, all overtime must be officially ordered or approved, and
(a) employees on a regular of flexible schedule must perform work beyond eight hours in a day or forty (40) hours in a week or,
(b) employees on a compressed schedule who perform work in excess of the established compressed schedule. (For example, an employee on a compressed four ten-hour-day weekly schedule is entitled to overtime pay for work officially ordered and performed beyond daily ten (10) hours or forty (40) hours for the week.)

Section 31.08
Compensatory time is time off in lieu of occasional or irregular overtime which has been approved in advance by the supervisor. All employees in positions which are non-exempt under FLSA and those exempt employees in positions whose basic rate of pay is below the maximum rate of GS-10 may elect, but are not required to receive compensatory time in lieu of overtime. Compensatory time is earned in amounts equal to the overtime hours worked.

Section 31.09
Suffered or permitted work means any work performed by an employee for the benefit of the agency, whether requested or not, provided the employee's supervisor knows or has reason to believe that the work is being performed and has an opportunity to prevent the work from being performed. The concept of suffered and permitted is only applicable to non-exempt employees covered by the Fair Labor Standards Act (FLSA).



Footnote # 1 for 60 FLRA No. 121 - Authority's Decision

   The relevant portions of the parties' agreement are set forth in the Appendix.


Footnote # 2 for 60 FLRA No. 121 - Authority's Decision

   This award was addressed by the Authority in United States EEOC, Baltimore Field Office, Baltimore, Md., 59 FLRA 688 (2004) (EEOC Baltimore).


Footnote # 3 for 60 FLRA No. 121 - Authority's Decision

   Under 5 C.F.R. § 551.104, suffered or permitted work "means any work performed by an employee for the benefit of an agency, whether requested or not, provided the employee's supervisor knows or has reason to believe that the work is being performed and has an opportunity to prevent the w