[ v53 p1469 ]
The decision of the Authority follows:
53 FLRA No. 134
FEDERAL LABOR RELATIONS AUTHORITY
NATIONAL TREASURY EMPLOYEES UNION
FEDERAL DEPOSIT INSURANCE CORPORATION
February 27, 1998
Before the Authority: Phyllis N. Segal, Chair; Donald S. Wasserman and Dale Cabaniss, Members.(1)
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Robert J. Ables filed by the Union under section 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 denied in part and sustained in part a grievance alleging that the Agency violated law and regulation by classifying certain employees as exempt from coverage under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. The Arbitrator awarded backpay, without regard to the statute of limitations set forth in the FLSA, and denied the request for liquidated damages.
For the following reasons, we deny the Union's exception that the award is contrary to 5 C.F.R. § 551.206. The Arbitrator's award is modified to include the payment of liquidated damages under 29 U.S.C. § 260. With regard to the appropriate statute of limitations, the award is remanded to the parties for further action consistent with this decision.
II. Background and Arbitrator's Award
The Agency employs bank liquidators (liquidators) and bank examiners (examiners) to manage failing banks. Prior to May 1995, the Agency classified examiners and liquidators at the GG-9 level and above, along with liquidators at the LG-7 level and above, as "professional" employees within the meaning of the FLSA.(2) As a result, these examiners and liquidators were designated as "exempt" from the time-and-a-half pay overtime provisions of the FLSA, and therefore were not entitled to receive compensation at the rate set forth in the FLSA for overtime work they performed.
In November 1992, the Union filed a lawsuit in Federal District Court against the Agency and subsequently, in June 1993, filed a grievance, alleging that the Agency violated the FLSA by exempting examiners and liquidators from the overtime pay provisions of the FLSA and seeking backpay. The grievance was held in abeyance pending the district court's determination whether it had jurisdiction to hear the lawsuit. The United States Court of Appeals for the Second Circuit, in O'Connell v. Hove, 22 F.3d 463 (2d Cir. 1994), affirmed the district court's decision that it lacked jurisdiction to hear the case because the plaintiffs' claims were covered by the negotiated grievance procedure and that procedure was the exclusive forum for resolving the claims. As a result of the court's ruling, the grievance was taken out of abeyance.
In May 1995, while the grievance was pending, the Agency conceded that examiners below the GG-11 level and all liquidators had been erroneously classified as professional employees, and changed their professional employee classification. As a result, GG-9 level examiners and all levels of liquidators were no longer exempt from the overtime provisions of the FLSA. However, examiners at the GG-11 level and above were still classified as professional employees and remained exempt from the FLSA.
The grievance continued without resolution and was submitted to arbitration where the parties stipulated the following issues before the Arbitrator:
(1) whether the employer violated [the] agreement and applicable law by exempting [GG-11 level and above examiners] from provisions of the [FLSA] on grounds they were "professional" employees, which had the effect of taking them out of coverage for overtime pay, at the time-and-a-half rate of pay;
(2) the appropriate statute of limitations for those [examiners] and [liquidators], whom the Agency concedes were erroneously determined, previously, to be exempt from the overtime provisions of the FLSA; and
(3) appropriate procedures and elements of remedial relief, including liquidated damages, back pay, interest and attorney fees, for those FDIC employees determined (by stated concession of the Agency or in this arbitration proceeding) to have been erroneously classified as exempt from the overtime pay provisions of the FLSA, including, as a separate consideration, compensation for work which may have been "suffered or permitted" (i.e., overtime work for the benefit of the [A]gency, without compensation, when a supervisor knew, or should have known, of such circumstances).
Award at 2.
A. GG-11 Level and Above Examiners
As to the first stipulated issue, the Arbitrator found that the Agency had not violated the parties' agreement or the FLSA by exempting examiners at the GG-11 level and above from the overtime pay provisions of the FLSA. The Arbitrator examined the FLSA and found that exemptions from the time-and-a-half overtime pay provisions must be narrowly construed and that an employee must be presumed to be non-exempt, with the burden on the employer to make the case for an exception. The Arbitrator found that the Agency met this burden because it "'clearly' and convincingly" demonstrated that examiners at the GG-11 level and above are professional employees within the meaning of 5 C.F.R. § 551.206. Id. at 14. In this regard, the Arbitrator determined that "[s]uch employee[s] . . . have [the] requisite education, [their] work is predominately intellectual and varied in nature, [requiring] creative, analytical, evaluative[,] or interpre[ta]tive [thought], [and they] exercis[e] discretion and independent judgment under only general supervision in performing usual day-to-day work, in satisfaction of subparagraphs (a), (b) and (c) of 5 C.F.R. [§ 551.]206."(3) Id.
B. Remedial Relief
The second and third stipulated issues concern the appropriate remedial relief to be awarded to those examiners and liquidators who the Agency conceded were improperly classified as exempt prior to May 1995. The Arbitrator determined that these employees were not entitled to liquidated damages under 29 U.S.C. § 216(b).(4) He also determined that these employees were entitled to backpay for the overtime work they performed, retroactive only to February 1992.
1. Liquidated Damages
In determining that liquidated damages were not warranted, the Arbitrator found that the Agency "marginally . . . met its burden to show requisite good faith and reasonable grounds" under 29 U.S.C. § 260 for exempting such employees.(5) Award at 19. In this regard, the Arbitrator considered two inquiries that were made by an Agency personnel specialist to the Office of Personnel Management (OPM) prior to May 1995 regarding exempt and non-exempt criteria under the FLSA. The Arbitrator found these inquiries gave the Agency "no credit" for meeting the applicable standards because the "subject matter was not in the [personnel specialist's] area of responsibility"; "the inquiry was not from 'headquarters'"; the status of the OPM official contacted was not "certified"; and the bad advice the Agency received and was relying on to defend its actions was in its interest. Id. at 18. The Arbitrator also found that the Agency was not a "good model of personnel management in its action -- or inaction -- on the exemption question since it maintained the [exemption of examiners below the GG-11 level and liquidators] in the face of [a] court decision . . . [that] remov[ed] the OPM presumption that grade [level] controls exemptions . . . ."(6) Id.
Despite these findings, the Arbitrator determined that the Agency's failure to change the exempt status of those examiners and liquidators who the Agency conceded were improperly classified as exempt did "not rise to unreasonable actions sufficient to justify imposing liquidated damages[,]" because: (1) although OPM abolished the presumption based on grade level, its criteria for exemptions did not change; (2) the Agency could reasonably believe based on the "frenzied time of bank failures" during which these exemptions were in place that examiners and liquidators were "somewhat more professional than all the facts would support"; and (3) other "agencies, with similar responsibilities for financial examination, continued the same exemption status as the FDIC . . . ." Id. at 18-19.
2. Backpay for Overtime
After resolving the issue of liquidated damages, the Arbitrator addressed whether examiners below the GG-11 level and liquidators, who the Agency conceded were improperly exempted from the FLSA prior to May 1995, were entitled under 29 U.S.C. § 207(a) to backpay because their overtime work was "suffered or permitted" within the meaning of 5 C.F.R. § 551.102(e).(7) Relying on witness testimony and affidavits, the Arbitrator found that "the evidence was clear and convincing" that such employees worked for the benefit of the Agency "substantial overtime, without compensation, [and that] managers knew or had reason to know that [such employees] had done so . . . ." Award at 23, 19-20. Based on this finding the Arbitrator determined that these employees were entitled to backpay for the overtime work they had performed.
3. Statute of Limitations
With respect to the statute of limitations applicable to the award of backpay for "suffered or permitted" overtime, the Arbitrator found that employees were entitled to recover backpay only retroactive to February 1992. In determining the appropriate limitation period for recovery, the Arbitrator relied on Authority precedent providing that an arbitrator has great latitude to fashion a remedy. Thus, the Arbitrator did not apply the statute of limitations set forth in the FLSA.(8) The Arbitrator limited the time period for recovery because he determined that the Union had knowledge of a "cause of action," or a grievance, for backpay for overtime work that was "suffered or permitted" in February 1992, and therefore, the Union's failure to bring a grievance at that time "offset . . . the period of backpay" employees were entitled to. Id. at 25. Specifically, the Arbitrator found that a liquidator who became a National Union Representative in February 1992 had knowledge that grievances could be filed, and that this knowledge could be "imputed to the Union in chief." Id. Based on that finding, the Arbitrator determined that examiners below a GG-11 level and liquidators, who the Agency conceded were improperly classified as exempt from the FLSA, were entitled to recover backpay retroactive only to February 1992.
III. Positions of the Parties
A. Union's Exceptions
The Union asserts that the award is deficient on four grounds.
First, the Union contends that the "[A]rbitrator's ruling that [examiners at the GG-11 level and above] are properly classified as exempt pursuant to the 'professional exemption' is contrary to law because [the Agency] failed to demonstrate that paragraph (a)(1) of 5 C.F.R. [§ 551.]206 is satisfied." Exceptions at 21. The Union argues that section 551.206(a)(1) provides that a position must "require" an applicant to satisfy particular criteria and that the Agency's policy that allows individuals to qualify for an examiner position based on either education or experience, is not a job requirement. In particular, the Union claims that the Agency's policy does not require an examiner to possess a bachelor's degree.
The Union further argues that even if the academic and experience component of the Agency's hiring standard is considered a job requirement, it does not meet the regulatory requirement that it include a major in a "specialized field." The Union also asserts that the Agency-sponsored training program examiners must complete in order to become a commissioned examiner at the GG-11 level is analogous to an "apprenticeship" and, therefore, is not the equivalent of a degree in a specialized field for the purpose of meeting the educational criteria set forth in 5 C.F.R. § 551.206(a)(1). Exceptions at 32.
Second, the Union contends that the award denying liquidated damages is contrary to 29 U.S.C. § 260. In this regard, the Union claims that liquidated damages are mandatory unless the employer meets its burden of showing that its decision to exempt an employee from the FLSA was (1) in good faith; and (2) objectively reasonable. The Union argues that the Arbitrator "committed legal error" when he found that the Agency "marginally" met its burden of proof. Id. at 40. According to the Union, the Agency has a "plain and substantial" burden that cannot be met marginally. Id. at 41. The Union claims that the Arbitrator failed to apply the proper legal standard and burden of proof, and that, if he had, then the Arbitrator would have awarded liquidated damages because his factual findings established that the Agency failed to meet the substantial good faith requirement.
Third, the Union contends that the period of backpay imposed by the Arbitrator, which limited recovery to 9 months prior to the filing of the lawsuit, is contrary to 29 U.S.C. § 255(a) because, under that section, employees are entitled to recover backpay for at least 2 years from the date the claim was brought, or in the case of a willful violation, 3 years. The Union asserts that the Authority's precedent that an arbitrator has discretion to impose a shorter limitations period in the grievance procedure is "in error, and should be reconsidered." Id. at 51. In particular, the Union claims that: (1) the Authority's rationale for not imposing the FLSA statute of limitations, first articulated in U.S. Department of Health and Human Services, Social Security Administration, Baltimore, Maryland and American Federation of Government Employees, 47 FLRA 819, 828 (1993) (SSA II), is based on misapplication of Carter v. Gibbs, 909 F.2d 1452 (Fed. Cir. 1990); (2) the "decision to shorten the FLSA's [statutory] limitations period prevents an employee from effectively vindicating his FLSA claim and necessarily collides with the statute's remedial and deterrent purposes[,]" Exceptions at 54; and (3) "allowing the arbitrator to apply a shorter limitations period for federal employees, notwithstanding that arbitration is their only forum for review, conflicts with Congressional intent that federal sector employees receive the same FLSA benefits as their private sector entitlements counterparts." Id. at 55-56.
Finally, the Union contends that the award is deficient because it is based on a nonfact. The Union argues that the Arbitrator's conclusion that the FLSA statute of limitations is not applicable is based on his erroneous determinations that the Union National Representative had "knowledge of a 'cause of action' as early as February 1992" and that the Agency suffered prejudice as a result of the failure of the Union to file the grievance at that time. Exceptions at 59.
B. Agency's Opposition
First, the Agency contends that the Arbitrator's finding that GG-11 level examiners are professional employees within the meaning of 5 C.F.R. § 551.206 is not contrary to law, rule or regulation. The Agency claims that determining an employee's exemption status under the FLSA is fact-specific, and that the Union "simply is disputing the [A]rbitrator's analysis of the facts to the requisite standards." Opposition at 25.
Second, the Agency contends that the Arbitrator properly found that those employees erroneously classified as exempt from the FLSA were not entitled to liquidated damages. The Agency claims that the Arbitrator had discretion to determine that the Agency had acted in good faith and on a reasonable basis, and that "[t]he Union's exceptions constitute disagreement with the arbitrator's factual findings and conclusions . . . ." Id. at 32. The Agency contends that the Arbitrator recognized that the Agency bore the burden to support its good faith and reasonable grounds defense, and that he appropriately found that burden was met.
Third, in response to the Union's contention that the statute of limitations imposed by the Arbitrator is contrary to 29 U.S.C. § 260, the Agency claims that the Authority has consistently held that for violations of the FLSA the appropriate statute of limitations is resolved "in accordance with the Back Pay Act and the negotiated grievance procedure contained in the parties' [agreement.]" Opposition at 39. In this regard, the Agency claims that "nothing in the Back Pay Act limits the period of time for which an award of back pay may be made." Id. The Agency also argues that "FLSA overtime claims for bargaining unit employees are prosecuted under grievance procedures and, accordingly, arbitrators are not required to follow certain provisions of the FLSA that apply in court actions, such as the FLSA limitations period." Id. at 39 n.15.
Finally, in response to the Union's nonfact contention, the Agency claims that the Union "simply is disputing the arbitrator's findings of fact and determinations on evidence." Id. at 38.
IV. Analysis and Conclusions
Where a party's exceptions involve an award's consistency with law, the Authority reviews the questions of law raised by the Arbitrator's award and the parties' exceptions de novo. National Treasury Employees Union, Chapter 24 and U.S. Department of the Treasury, Internal Revenue Service, 50 FLRA 330, 332 (1995) (citing U.S. Customs Service v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994) (NTEU).
A. The Award Exempting GG-11 Level Examiners From the FLSA is Not Contrary to 5 C.F.R. § 551.206(a)(1)
As set forth in the appendix, 5 C.F.R. § 551.206 establishes three distinct requirements that must be satisfied in order to classify an employee as a "professional." See 5 C.F.R. § 551.206(a), (b), and (c). In this case, only the first requirement, subsection (a), concerning the employee's "primary duty," is in dispute.(9) In particular, the Union contends that the Arbitrator's award is contrary to subsection (a)(1).
The requirement in subsection (a)(1) may be satisfied based either on: (1) the education or training that "customarily and characteristically" provides the knowledge required for the work the employee performs; or (2) the basis on which the employee's work, comparable to work performed by professional employees, is performed. With regard to the latter, the ability to perform the work must be based on either specialized education or training and experience. If the employee's ability to perform the work derives from training and experience, that training and experience must have provided both "theoretical and practical knowledge of the specialty, including knowledge of related disciplines and new developments in the field." 5 C.F.R. § 551.206(a)(1).
The Union argues that GG-11 examiners do not satisfy 5 C.F.R. § 551.206(a)(1) because the educational requirements for the position are insufficient. Without reaching the issue of the position's educational requirements, however, for the reasons that follow, we find that GG-11 examiners satisfy the alternative requirement in section 551.206(a)(1) because the ability to perform this work is based on "training and experience."
First, with respect to training, promotion to a GG-11 level examiner position requires, among other things, completion of the Agency's Core Safety and Soundness Training Program, which in turn includes a total of 10 weeks of formal classroom training, along with other formal training classes. Award, Appendix C, Stipulation of Facts at 17. The Arbitrator specifically found, and it is not disputed, that these training programs are "designed to update and expand information [on] how to understand and treat the dynamic, creative and sometimes ingenious . . . ways banks got into trouble before they failed." Award at 10. As such, these programs provide an examiner with both theoretical knowledge about failing banks and practical knowledge regarding how to deal with those banks.
The Arbitrator also found that the training program requires examiners to complete an "independent development plan" and successfully complete comprehensive exams. Id. In addition, testimony before the Arbitrator established that the Agency requires examiners to attend "'building block' courses in 'centralized' training"; uses mentors to train; and uses "outside experts to keep commissioned bank examiners abreast of dynamic changes in the industry." Id. at 12. Moreover, the Arbitrator found that this training provides GG-11 examiners with the skills that satisfy the following theoretical and practical requirements for their position:
[a GG-11 examiner must be] throughly informed as to banking theory and practice, banking and commercial law, economics, business administration and accounting; and possess qualitative judgment and the ability to analyze credits and accurately appraise all types of loans, securities, other categories of assets and liabilities, evaluate capital adequacy and the quality of bank management.
Id. at 11.
We reject the Union's argument that such training is not appropriately considered in determining GG-11 examiners' exemption status because it constitutes an "apprenticeship" within the meaning of the analogous Department of Labor (DOL) regulations applying the FLSA professional exemption to the private sector.(10) The DOL regulation expressly addresses the types of knowledge requirements that can be considered to establish that an employee is exempt. Specifically, the DOL regulation distinguishes between knowledge acquired through an apprenticeship, on the one hand, and knowledge "customarily acquired by a prolonged course of specialized intellectual instruction and study," on the other. 29 C.F.R. § 541.3(a)(1). The use of the word "'customarily' implies that in the vast majority of cases specific academic training is a prerequisite for entrance in to the profession." 29 C.F.R. § 541.301(d). However, the use of the word "customarily" also indicates that this is not the only type of training relevant to determining whether an employee is exempt. Individuals who have gained their knowledge through "formal specialized training" and "experience" may also satisfy the DOL regulation. Id. Thus, training that is akin to "specialized intellectual instruction and study" is relevant to determining whether an employee is a professional under the DOL regulations.
Consistent with the DOL regulation, the OPM regulation that applies here states that training "provid[ing] both theoretical and practical knowledge of the specialty" work being performed is relevant to determine whether an employee is exempt. 5 C.F.R. § 551.206(a)(1). We are persuaded that the training that GG-11 examiners must complete is relevant to determining whether their ability to perform the duties of that position is based on the "training" described in section 551.206(a)(1). See AFGE v. OPM, 821 F.2d at 770 (holding that OPM regulations implementing FLSA must be consistent with DOL regulations).
Second, with respect to the "experience" referenced in 5 C.F.R. § 551.206(a)(1), we also find that the ability to perform GG-11 work is based on such experience. Specifically, an examiner is promoted to a GG-11 level "commissioned examiner" after 3 years as an examiner, provided that other criteria are satisfied. Award at 10. During that 3-year period, an examiner is a trainee working for a team of examiners that is directed by a commissioned examiner. Id. at 9-10. The Union refers to this period as the Agency's "three-year career progression[,]" and notes that "'95%' of the knowledge a bank examiner needs to perform the duties of the position is learned on the job[.]" Exceptions at 35. Clearly, operating as an examiner for 3 years during which there is constant supervision and training, constitutes "experience," which has provided the examiner with the knowledge that is the basis for a GG-11 examiner's ability to perform his or her work. 5 C.F.R. §551.206(a)(1).
In sum, we find that GG-11 examiners perform their work on the basis of extensive training and 3 years of experience as an examiner trainee. This training and experience provides GG-11 examiners with "both theoretical and practical knowledge of [their] specialty, including [as found by the Arbitrator] knowledge of related disciplines and of new developments in the field[.]" 5 C.F.R. § 551.206(a)(1). Thus, we find that GG-11 examiners satisfy the criteria set forth in section 551.206(a)(1). As it is undisputed that GG-11 examiners satisfy the criteria in sections 551.206(b) and (c), we conclude that they are properly classified as professional employees and exempt from the overtime provisions of the FLSA.
Consistent with the foregoing, the award is not deficient as contrary to 5 C.F.R. § 551.206. Accordingly, we deny the exception.
B. The Award Denying Liquidated Damages is Contrary to 29 U.S.C. § 260
Congress provided in 29 U.S.C. § 216(b) that an employer who violates the FLSA's overtime provisions "shall be liable to the employee or employees affected in the amount of . . . their overtime compensation . . . and in an additional equal amount as liquidated damages . . . ." The standard for when an award of liquidated damages is appropriate is set forth in 29 U.S.C. § 260. That standard, 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]." 29 U.S.C. § 260. An employer who has violated the Act bears "a 'substantial burden' of proving that he acted in good faith and on a reasonable belief he was in compliance[,]" and thus, "'double damages are the norm, single damages are the exception[.]'" Kinney v. District of Columbia, 994 F.2d 6, 12 (D.C. Cir. 1993) (quoting Walton v. United Consumers Club, Inc., 786 F.2d 303, 310 (7th Cir. 1986)) (Kinney). See also Mireles v. Frio Foods, Inc., 899 F.2d 1407, 1414 (5th Cir. 1990) (liquidated damages under the FLSA are "ministerial, not discretionary") (Mireles); Brock v. Wilamowsky, 833 F.2d 11, 20 (2d Cir. 1987) ("The Act does not authorize the court to decline to award liquidated damages . . . unless the employer has established its good-faith, reasonable-basis defense.") (Brock).
In applying section 260, "good faith" requires "a showing that the employer subjectively acted with an 'honest intention to ascertain what the . . . Act requires and to act in accordance with it[.]'" Kinney, 994 F.2d at 12 (citing Laffey v. Northwest Airlines, Inc., 567 F.2d 429, 464 (D.C. Cir. 1976). To meet this burden, "[a]n employer 'must affirmatively establish that he acted in good faith by attempting to ascertain the Act's requirements.'" Martin v. Cooper Electric Supply Co., 940 F.2d 896, 907 (3rd Cir. 1991) (citing Williams v. Tri-County Growers, Inc., 747 F.2d 121, 129 (3rd Cir. 1984) (Tri-County)) (Martin). The "reasonableness" requirement "'imposes an objective standard by which to judge the employer's conduct[, and i]gnorance alone will not exonerate the employer under the objective reasonableness test . . . .'" Martin, 940 F.2d at 907-908 (citing Tri-County, 747 F.2d at 129).
Upon review, the determination whether liquidated damages have been properly denied or awarded under 29 U.S.C. § 260, requires a legal conclusion based on factual findings regarding whether conduct constitutes either "good faith" or "reasonableness." See, e.g., Bankston v. State of Illinois, 60 F.3d 1249, 1254 (7th Cir. 1995) (the district court's application of law to the facts is reviewed de novo) (Bankston); Dybach v. State of Florida Department of Corrections, 942 F.2d 1562, 1566-67 (11th Cir. 1991) (questions involving the application of legal principles to established facts are legal; "as a matter of law" the evidence did not establish "good faith" under section 260) (Dybach); Martin, 940 F.2d at 908 (the district court's finding that the employer acted "reasonably" was a legal conclusion; the "court erred as a matter of law" by making that conclusion). Thus, an arbitrator's conclusion that his or her factual findings establish "good faith" or "reasonableness" under 29 U.S.C. § 260 is a legal conclusion that the Authority reviews de novo under section 7122(a)(1) of the Statute. See NTEU, 50 FLRA at 332. If the factual findings do not constitute "good faith" or "reasonableness," a denial of liquidated damages is inconsistent with 29 U.S.C. § 260.
In this case, the Arbitrator's specific factual findings, as relevant here, are that: (1) the Agency only made two informal inquiries into its compliance with the FLSA; (2) it took no affirmative steps to ascertain its employees' exemption status in the face of court decisions and regulatory changes to the FLSA; and (3) other agencies continued the same exemption status as the FDIC. We conclude, for the reasons explained below, that these findings do not support the Arbitrator's conclusion that the Agency met its burden of showing good faith and reasonableness.
With respect to the first factual finding, the inquiries made by an employer concerning compliance with the FLSA are clearly relevant to determining whether the employer acted in good faith and reasonably. See Martin, 940 F.2d at 909. In Renfro v. City of Emporia, Kansas, 948 F.2d 1529, 1541 (10th Cir. 1991) (Renfro), the court ruled that the employer did not meet its burden of proof under 29 U.S.C. § 260 because the only inquiry made by the employer was a phone call to an individual at DOL whose position was unknown. See also Mireles, 899 F.2d at 1415 (discussions with those not involved with enforcing the FLSA fails to demonstrate good faith). The Renfro court found it significant that the employer never requested a written opinion from DOL. 948 F.2d at 1541. Even where opinion letters are sought by an employer, reliance on those letters does not satisfy the good faith and reasonableness standard unless there is a "showing that the employer received advice on the specific compliance issue in question, not just that he sought advice about the statute." Kinney, 994 F.2d at 12. Thus, the failure to request "any specific advice" is evidence that the employer did not act in good faith. Id.
Here, the Arbitrator found that the only attempts made by the Agency to ascertain its employees' exemption status were two informal telephone inquiries to OPM in 1993. These inquiries concerned general application of exemption criteria, not the specific exemption status of examiners and liquidators. In addition, the individual at the Agency who made the calls was not responsible for making determinations about employees' exemption status. Moreover, the Arbitrator specifically found that the inquiries were directed to someone "whose status to speak for OPM was not certified -- formally or informally[,]" and that the individual making the inquiries failed to inquire into the title, grade or status of the person contacted at OPM. Award at 18.
With respect to the Arbitrator's second factual finding, 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. See Bankston, 60 F.3d at 1255. The Arbitrator here found that the Agency maintained the status quo despite court decisions that "rais[ed] substantial doubt about [the appropriate] standards on exemption." Award at 18. In particular, the 1993 inquiries occurred 6 years after the D.C. Circuit's decision vacating OPM's FLSA exemption regulations, and 5 years after OPM made regulatory changes to its exemption provisions.
Finally, as to the Arbitrator's third factual finding, following industry practice does not support a conclusion that an employer acted appropriately in exempting its employees from the FLSA. Specifically, "[i]n lieu of any affirmative attempt by an employer to determine the legality of its wage payment practices, the employer's adherence to customary and widespread practices that violate the Act's over-time pay provisions is not evidence of an objectively reasonable good faith violation." Martin, 940 F.2d at 910. Therefore, "reasonableness" is not supported by the Arbitrator's finding that "other federal agencies, with similar responsibilities for financial examination, continued the same exemption status as the FDIC, in about the same grade levels . . . ." Award at 19. Contrary to the Arbitrator's finding that this fact supported a conclusion that the Agency acted in good faith, industry practice in determining status under the FLSA is not persuasive. See Brock, 833 F.2d at 19-20. Thus, the Arbitrator's conclusion that this finding established good faith is erroneous.
Consistent with the foregoing, the Arbitrator's factual findings do not support his legal conclusion that the Agency met its substantial burden to establish that liquidated damages were not warranted. See Bankston, 60 F.3d at 1255; Martin, 940 F.2d at 909; Brock, 833 F.2d at 19-20. Accordingly, we conclude that the award denying liquidated damages is deficient as contrary to 29 U.S.C. § 260, and modify the award to include the payment of liquidated damages to those examiners and liquidators who were wrongfully classified as exempt under the FLSA.
C. The Award, Which Disregards the Statute of Limitations in 29 U.S.C. § 255(a), is Contrary to that Section
Congress established in 29 U.S.C. § 255(a) that any action brought 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[.]" However, the Authority has previously held that arbitrators are not required to apply this statute of limitations when awarding backpay for a violation of the FLSA. See U.S. Department of Health and Human Services, Social Security Administration, Baltimore, Maryland and American Federation of Government Employees, 49 FLRA 483, 488-89 (1994) (award granting recovery for 6 years under the Back Pay Act not deficient) (SSA III); American Federation of Government Employees, Local 22 and U.S. Department of the Navy, Naval Base, Norfolk, Virginia, 48 FLRA 708, 713-14 (1993) (award granting recovery for 6 years "under pertinent laws and regulations, including the Barring Act" not deficient) (Naval Base); SSA II, 47 FLRA at 829 (award granting recovery for 6 years under the Back Pay Act not deficient). The Authority based this conclusion, first reached in SSA II, on four expressed reasons: (1) a remedy for a violation of the FLSA is awarded under the Back Pay Act, 5 U.S.C. § 5596; (2) nothing in the Back Pay Act limits the period of recovery; (3) no law requires application of the statute of limitations set forth in the FLSA; and (4) arbitrators are given wide latitude to fashion remedies. See SSA II, 47 FLRA at 828-829.(11)
The Union asks us to reverse this Authority precedent, and apply the statute of limitations set forth in 29 U.S.C. § 255(a) to the award of backpay in this case. Exceptions at 50-58. Our re-examination of the reasoning in SSA II, and the parties' arguments here, lead us to conclude that this precedent was wrongly decided. Accordingly, for the reasons explained below, we will no longer follow SSA II and its progeny to the extent this precedent holds that an arbitrator, resolving a claim brought under the FLSA, is not bound to apply 29 U.S.C. § 255(a) to an award of backpay. See SSA III, 49 FLRA at 483; Naval Base, 48 FLRA at 708; and SSA II, 47 FLRA at 819.
1. A Violation of the FLSA is Remedied Under the FLSA, Not the Back Pay Act
The Authority first stated that a violation of the FLSA is remedied under the Back Pay Act in SSA I, 44 FLRA at 797-98. However, the exceptions in that case did not question whether the Back Pay Act was the appropriate statutory scheme under which a grievant was entitled to backpay for a violation of the FLSA. This question was squarely presented for the first time in SSA II.(12) In concluding that the Back Pay Act applies, the Authority found that "consistent with Carter v. Gibbs, [the arbitrator properly] resolved the dispute . . . in accordance with the Back Pay Act and the negotiated grievance procedure contained in the parties' collective bargaining agreement." SSA II, 47 FLRA at 828 (citing Carter v. Gibbs, 909 F.2d at 1452). Other than this statement, however, the determination that remedies for violations of the FLSA are appropriately resolved under the Back Pay Act was not explained.
On re-examination, we conclude that the Authority's reliance in SSA II on Carter v. Gibbs, for finding that the Back Pay Act provides the authority for remedying FLSA violations, was misplaced. Nothing in Carter v. Gibbs indicates that the Back Pay Act, and not the FLSA, applies to remedies for violations of the FLSA. Specifically, there is no mention of the Back Pay Act in Carter v. Gibbs. Rather, the court resolved only the issue of its jurisdiction, holding that it lacked subject matter jurisdiction to address FLSA claims brought by Federal employees who had access to a negotiated grievance procedure.(13)
In a slightly different context, however, the Authority has determined that awards of backpay are not properly granted under the Back Pay Act where there is an independent statutory basis for such an award. Specifically, in U.S. Department of Defense, Army and Air Force Exchange Service and American Federation of Government Employees, 45 FLRA 674, 685-90 (1992) (Army Air Force Exchange), the Authority rejected an agency's contention that the sole source of an arbitrator's authority to award backpay is derived from the Back Pay Act. The Authority held that because there was an independent statutory right to recover money damages against the Government under the Prevailing Rate Systems Act and the Tucker Act, the Arbitrator's award was not inconsistent with the Back Pay Act, which did not authorize backpay to the grievants in that case.
Here, the FLSA, like the laws at issue in Army Air Force Exchange, provides an independent statutory basis for an award of backpay. Compare FLSA, 29 U.S.C. § 201 et seq., with Tucker Act, 28 U.S.C. §§ 1346(a)(2) and 1491, and Prevailing Rate Systems Act of 1972, 5 U.S.C. §§ 5341-5349. The Authority has already implicitly recognized this in decisions applying the liquidated damages requirement in 29 U.S.C. § 216(b). See SSA III, 49 FLRA at 489-90; IRS, 46 FLRA at 1074. Arbitration awards granting liquidated damages are lawful because the FLSA independently provides entitlement to money damages against a Government employer. Specifically, an award of liquidated damages is proper because the FLSA constitutes a waiver of sovereign immunity.(14)
For example, in IRS, the agency contended that the arbitrator could not properly award liquidated damages under section 216(b) for a violation of the FLSA because the FLSA does not waive the government's sovereign immunity. 46 FLRA at 1073. The Authority rejected that contention and found that 29 U.S.C. § 216(b) applies not only to suits brought in Federal or state court, but also to arbitration proceedings. Id. at 1072-73. The Authority, relying on Carter v. Gibbs, 909 F.2d at 1452 and Army Air Force Exchange, 45 FLRA at 685-90, found that the United States Government, including the agency in that case, could be held liable for the payment of liquidated damages under the FLSA to remedy a violation of that Act despite the fact that an award of liquidated damages is not authorized under the Back Pay Act. IRS, 46 FLRA at 1073. Thus, the Authority found that liquidated damages are properly awarded in arbitration proceedings pursuant to the authority set forth in the FLSA.
Because the FLSA itself is a waiver of sovereign immunity, and independently provides a statutory right to money damages, we find that application of the Back Pay Act is not necessary to award backpay for violations of the FLSA.
2. Although Nothing In the Back Pay Act Limits the Period of Recovery, it is Expressly Limited Under the FLSA
The second premise relied on by the Authority in reaching its conclusion in SSA II was that nothing in the Back Pay Act limits the period of recovery for an award of backpay authorized under that Act. This description of the Back Pay Act is not questioned. However, it is not relevant in this case since, as explained in the preceding section, the backpay at issue here is not awarded based on an "unjustified and unwarranted personnel action" under the Back Pay Act, but rather, is properly awarded under the FLSA itself.(15)
As relevant here, 29 U.S.C. § 255(a) specifically provides that an action brought 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[.]" Section 255(a) both limits an employee's ability to bring a cause of action for a violation of the FLSA and limits the period that an employee can recover backpay for such a violation. See McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988) (section 255(a) encompasses the standards subjecting an employer to either two or three years of liability) (McLaughlin). See also Ellison v. United States, 25 Cl. Ct. 481, 488 (1992) ("[I]f the [employer's] actions are found to be 'willful' within the meaning of this statutory provision, the plaintiff will be entitled to back pay for a three-year period.").
3. Law and Precedent Requires Application of the FLSA Statute of Limitations to Awards of Backpay for Violations of the FLSA
The third premise relied on by the Authority in SSA II was that there is no "law or precedent that requires arbitrators in deciding backpay cases for Federal employees under the FLSA to use the FLSA statute of limitations in 29 U.S.C. § 255(a) instead of the Back Pay Act in determining appropriate remedies for agency violations." SSA II, 47 FLRA at 829. For the following reasons, we find that this premise is erroneous.
Initially, we note that the Authority did not explain its statement in SSA II that arbitrators are not required by law to apply the FLSA statute of limitations for violations of that Act. This finding was subsequently challenged, however, in the agency's exception ruled on in Naval Base. The agency claimed that the award of backpay for a violation of the FLSA was deficient because it was not limited in accordance with the FLSA statute of limitations in 29 U.S.C. § 255(a). Naval Base, 48 FLRA at 711. In particular, the agency argued that awarding backpay without regard to section 255(a) was inconsistent with Acton v. United States, 932 F.2d 1464, 1466 (Fed. Cir. 1991) (Acton). According to the agency, Acton, which held that the "Claims Court must use the statutory source of entitlement to the payment [of backpay] to determine the correct statute of limitations[,]" was similarly applicable in the context of the negotiated grievance procedure. 932 F.2d at 1466. Specifically, the agency claimed that arbitrators, like the claims court, must use the FLSA statute of limitations because the statutory source of entitlement to backpay is the FLSA.
The agency also argued that in IRS, the Authority established that the FLSA provides a basis for a remedy without regard to the Back Pay Act and recognized that the FLSA contained provisions concerning entitlement to backpay that are different from the backpay provisions in Title 5. Specifically, the agency argued that if arbitrators can apply provisions of the FLSA that provide benefits beyond those authorized by Title 5, then the more restrictive provisions of the FLSA, such as the statute of limitations, must also be applied by arbitrators. Naval Base, 48 FLRA at 712. In resolving the agency's exception, however, the Authority neither addressed these arguments nor reconciled this conflict in its precedent.
We also note that 29 U.S.C. § 255(a) is an integral part of the FLSA that operates as a substantive right under that Act. Generally, substantive rights afforded in a statute differ from procedural rights because substantive rights are incorporated into the negotiated grievance procedure. Cf. American Federation of Government Employees, Local 940 and U.S. Department of Veterans Affairs, Philadelphia, Pennsylvania, 52 FLRA 1429, 1438-40 (1997) (finding that standards and burdens of proof are substantive and are therefore, applicable in the context of the negotiated grievance procedure). In this respect, statutes of limitations are considered an integral part of the substantive rights afforded by a statute because time limitations on enforcing a statutory right not only bar recovery but extinguish the underlying rights and liabilities of the parties. See, e.g., William v. Danzer Co. v. Gulf Rail Road, 268 U.S. 633, 635-37 (1925); Kalmich v. Bruno, 553 F.2d 549, 552 (7th Cir. 1977) ("State law barring an action because of a statute of limitations is sufficiently 'substantive' in the Erie, sense that a federal court in that state exercising diversity jurisdiction must respect it."). Cf. Guaranty Trust Co. of New York v. York, 326 U.S. 99, 108 (state statutes of limitations are not of "a mere remedial character" that a Federal court can disregard); Moser v. Universal Engineering Corp., 11 F.3d 720, 724 n.6 (7th Cir. 1993).
The conclusion that section 255(a) establishes a substantive right that should be applied in negotiated grievance procedures finds support in the policies and Congressional intent underlying the FLSA's statute of limitations. In particular, civil actions brought under the FLSA were originally governed by state statutes of limitations. McLaughlin, 486 U.S. at 131. Congress, responding to the Supreme Court's expansive reading of the FLSA, enacted a 2-year statute of limitations. Id. at 131-32. The Supreme Court interprets this history as evidencing Congress' intent both to limit the employer's liability and to ensure that employees are adequately compensated. Id. Congress also amended 29 U.S.C. § 255(a) "to draw a significant distinction" between willful and nonwillful violations. Id. at 132. This distinction in section 255(a) establishes standards by which violations of the FLSA are to be judged, and supports a finding that Congress viewed this section as a substantive part of the FLSA.
Congress did not amend section 255(a) when it extended the FLSA to Federal employees. This supports the view that Congress intended that such claims be resolved under the same standards and statute of limitations applicable to private sector employees. The failure to apply 29 U.S.C. § 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.
Consistent with this, courts award backpay to Federal employees under the FLSA without regard to the Back Pay Act. See, e.g., Amshey v. United States, 26 Cl. Ct. 582 (Cl. Ct. 1992); Beebe v. United States, 640 F.2d 1283 (Ct. Cl. 1981). In addition, OPM, which has statutory responsibility to administer the FLSA pursuant to 29 U.S.C. § 204(f), views application of section 255(a) as a substantive part of the FLSA. See Matter of Ford, 73 Comp. Gen. 157, 160 (1994) (where the Comptroller General discussed OPM's support for applying FLSA statutory time limitations to administrative claims brought by Federal employees) (Ford).
In Ford, the Comptroller General, who is charged with resolving claims under the FLSA, reversing his prior position, applied section 255(a) to claims brought by government employees. The Comptroller General had previously declined to apply section 255(a), and instead applied the 6-year statute of limitations set forth in 31 U.S.C. § 3702(b) for claims filed against the Government Accounting Office (GAO). See id. OPM urged the Comptroller General to change its practice and "point[ed] out that in the Federal Employees Pay Comparability (FEPCA) Act of 1990, Congress recognized the distinct and separate overtime entitlements of those [F]ederal employees covered by [the] FLSA and those FLSA-exempt [F]ederal employees covered by various title 5 pay provisions whose claims remain subject to a 6-year statute of limitations." Id. OPM also pointed out that the courts apply section 255(a) to Federal employee overtime pay claims arising under that Act. Id. The Comptroller General, after reviewing these arguments and other policy considerations, found that the "premise underlying [its] earlier decisions--that a limitation on claims expressed in terms of judicial actions should be distinguished from administrative proceedings to adjudicate the same claims--runs counter to general principles of law." Id. Accordingly, the Comptroller General held that "a time limitation imposed on a statutorily created judicial cause of action will apply to administrative proceedings to adjudicate the same claims absent a specific provision to the contrary." Id. at 161.
Ford involved a claim brought before GAO and the position taken by OPM was persuasive in that context. We find that it is similarly compelling when applied to claims brought under the FLSA in a negotiated grievance procedure. Specifically, such claims are also brought by Federal employees pursuant to the same statutory structure. Thus, the positions of the Comptroller General and OPM support a conclusion that 29 U.S.C. § 255(a) is a substantive right under the FLSA and is applicable to claims brought in the negotiated grievance procedure.
Finally, we note that any inconsistent statutory provisions of the FLSA and the Back Pay Act must be resolved in favor of applying the terms of the FLSA. This is consistent with the well-established principle of statutory construction that "[w]here one statute deals with a subject in general terms, and another deals with a part of the same subject in a more detailed way, the two should be harmonized if possible; but if there is a conflict, the latter will prevail." Norman J. Singer, Sutherland Statutory Construction § 51.05 (5th ed. 1992). Because the FLSA deals specifically with the narrow and precise subject of employee compensation and overtime entitlements, it is a "special act." See id. In contrast, the Back Pay Act is a "general act," governing the universe of "unjustified and unwarranted personnel actions." As such, any conflicts between the remedial provisions of these two laws requires us to apply the FLSA and not the Back Pay Act, as controlling.(16)
For the reasons explained here, we now find, contrary to the view previously stated in SSA II, 47 FLRA at 828-29, that there is substantial law and precedent requiring that 29 U.S.C. § 255(a) be applied in a negotiated grievance procedure. This provision is an integral part of the substantive statute giving rise to the award of backpay, and cannot be disregarded.
4. The FLSA Limits the Latitude Afforded Arbitrators to Fashion Remedies for Violations of the FLSA
The fourth and final premise underlying the Authority's ruling in SSA II was the general proposition that arbitrators have "great latitude and discretion in fashioning remedies." SSA II, 47 FLRA at 829. This principle derives from private sector cases involving the resolution of violations of contract provisions. See United Steel Workers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597 (1960); Lodge No. 12, District No. 37, International Association of Machinists v. Cameron Iron Works, Inc., 292 F.2d 112, 119 (5th Cir. 1961). In applying this principle to arbitration awards involving enforcement of a statutory right, the Authority has not previously addressed whether a statutory basis for a grievance places any limits on an arbitrator's remedial latitude. Specifically, it is necessary to reconcile the premise that arbitrators have wide remedial latitude with the central principle that when arbitrators substitute for other adjudicators, they are bound by the same substantive standards as those other adjudicators.
In this regard, the purpose of arbitration in the Federal sector labor context is "not only to ensure compliance with collective bargaining agreements, but also 'to review or police compliance with controlling laws, rules, and regulations by [F]ederal agency employers and employees alike.'" Devine v. White, 697 F.2d 421, 438 (D.C. Cir. 1983).
The Supreme Court has held in the context of private sector arbitration "that '[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial, forum.'" Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991) (Gilmer) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985) (Mitsubishi)). Additionally, the Court found that as "'long as the prospective litigant effectively may vindicate [his or her] statutory cause of action in the arbitral forum, the statute will continue to serve both its remedial and deterrent function.'" Id. at 28 (quoting Mitsubishi, 473 U.S. at 637) (discussing the Age Discrimination in Employment Act). Consistent with Gilmer, the court in Carter v. Gibbs also ruled that a party does not forgo the substantive rights afforded by a statute by agreeing to arbitrate a claim brought under the FLSA. Specifically, the court acknowledged that "'the collective bargaining mechanisms created by Title VII [5 U.S.C. § 7101-7904] do not deprive employees of recourse to any of the remedies otherwise provided by statute or regulation[.]'" Carter v. Gibbs, 909 F.2d at 1455 (quoting Karahalios v. National Federation of Federal Employees, Local 1263, 489 U.S. 527, 536 (1989)).
Disregarding the FLSA statute of limitations by reducing the period of recovery would deprive the grievants of their statutory right to recover for either a full 2 or 3 year period. Conversely, disregarding the statute of limitations by lengthening the period of recovery expands an employer's exposure to liability for violating the FLSA. When the employer is a government entity, the FLSA operates as a limited waiver of sovereign immunity--specifically providing a limit on the length of recovery. In United States v. Kubrick, 444 U.S. 111 (1979) (Kubrick), the Supreme Court, addressing another law that similarly waives sovereign immunity, recognized that "[w]e should also have in mind that the Act waives the immunity of the United States and that in construing the statute of limitations, which is a condition of that waiver, we should not take it upon ourselves to extend the waiver beyond that which Congress intended." Id. at 117-18. Moreover, disregarding section 255(a) when claims are pursued in negotiated grievance procedures would undermine the deterrent and remedial function of the FLSA's two-tiered statute of limitations, and thereby defeat part of the function of the FLSA based only on the fact that an arbitrator was resolving the claim rather than a court.
5. The Award is Deficient Because It is Contrary to 29 U.S.C. § 255(a)
The foregoing analysis leads us to find that 29 U.S.C. § 255(a) applies to grievances claiming violations of the FLSA, and thus, arbitrators are bound to apply that section. Accord Acton, 932 F.2d at 1466 (finding that in determining the appropriate statute of limitations period the statutory source of backpay entitlement should be utilized). Consistent with this finding, we will no longer follow SSA II and its progeny to the extent this precedent holds that an arbitrator, resolving a claim brought under the FLSA, is not bound to apply 29 U.S.C. § 255(a) to an award of backpay. See SSA III, 49 FLRA at 483; Naval Base, 48 FLRA at 708; and SSA II, 47 FLRA at 819.(17)
Applying section 255(a) to this case, we conclude that the time limit on the Arbitrator's award of backpay, which does not extend to the full period of recovery required in 29 U.S.C. § 255(a), is deficient. Because the Arbitrator did not determine whether the Agency's violation of the FLSA was willful under section 255(a), we are unable to determine whether the 2-year or the 3-year statute of limitations applies. Therefore, we remand the award to the parties for submission to the Arbitrator, absent settlement, for a determination as to the appropriate statute of limitations under 29 U.S.C. § 255(a) to be applied in computing the amount of backpay awarded to those liquidators and examiners who were wrongfully classified as exempt from the FLSA.
The Union's exception that the award is contrary to 5 C.F.R. § 551.206 is denied. The Arbitrator's award is modified to include the payment of liquidated damages under 29 U.S.C. § 260. With regard to the appropriate statute of limitations, the award is remanded to the parties for further action consistent with this decision.(18)
5 C.F.R. § 551.206 pertinently provides:
A professional employee is an employee who meets all of the following criteria . . . .
(a) The employee's primary duty consists of-
(1) Work that requires knowledge in a field of science or learning customarily and characteristically acquired through education or training that meets the requirements for a bachelor's or higher degree, with major study in or pertinent to the specialized field as distinguished from general education; or is performing work, comparable to that performed by professional employees, on the basis of specialized education or training and experience which has provided both theoretical and practical knowledge of the specialty, including knowledge of related disciplines and of new developments in the field;
. . .
(b) The employee's work is predominantly intellectual and varied in nature, requiring creative, analytical, evaluative, or interpretative thought process for satisfactory performance.
(c) The employee frequently exercises discretion and independent judgment, under only general supervision, in performing the normal day-to-day work.
(If blank, the decision does not have footnotes.)
1. Member Cabaniss did not participate in this decision.
2. The Fair Labor Standards Act of 1938, as amended, 29 U.S.C. 201 et seq. and its implementing regulations issued by the Office of Personnel Management (OPM), codified at 5 C.F.R. pt. 551, provide minimum standards for both wages and overtime entitlements, and delineate administrative procedures by which covered work time must be compensated. As relevant here, the FLSA provides that an agency must compensate an employee for all hours of work in excess of 40 hours a week at a rate equal to one and one-half times the employee's hourly regular rate of pay. See 5 C.F.R. § 551.501. However, the FLSA also provides that specific employees are exempt from the application of certain of its provisions. Specifically, it provides that any employee or group of employees meeting the "professional exemption criteria" are exempt from the overtime provisions of the FLSA. See 5 C.F.R. §§ 551.201 and 551.206.
3. The pertinent text of 5 C.F.R. § 551.206 is set forth in the Appendix to this decision.
4. 29 U.S.C. § 216(b) provides that any employer that violates the FLSA "shall be liable to the employee or employees affected in the amount of their minimum unpaid wages, or their unpaid overtime compensation . . . and in an additional equal amount as liquidated damages."
5. 29 U.S.C. § 260 provides, in relevant part, that:
In any action commenced . . . to recover . . . liquidated damages, under the [FLSA] . . . if the employer shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the [FLSA], the court may, in its sound discretion, award no liquidated damages or award any amount thereof not to exceed the amount specified in [29 U.S.C. § 216].
6. In American Federation of Government Employees v. Office of Personnel Management, 821 F.2d 761 (D.C. Cir. 1987) (AFGE v. OPM), the United States Court of Appeals for the District of Columbia Circuit vacated 5 C.F.R. § 551.203(c), which provided for a presumption that any employee in a position classified at a GS-11 level and above was exempt from the overtime provisions of the FLSA, and that any agency that properly classified a position in that grade range had satisfied the burden of proof that the employee was exempt. In response, OPM eliminated 5 C.F.R. § 551.203(c). See 53 Fed. Reg. 1739 (1988).
7. 5 C.F.R. § 551.102 defines "suffered or permitted" work as:
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 work from being performed.
8. 29 U.S.C. § 255, entitled "Statute of limitations," provides that any action commenced 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[.]"
9. The Union concedes that GG-11 examiners meet the additional criteria, set forth in 5 C.F.R. § 551.206(b) and (c), that must be satisfied for the professional exemption. Exceptions at 28.
10. The DOL regulation relied on by the Union, 29 C.F.R. § 541.3(a)(1), provides that an employee employed in a bona fide professional capacity means any employee whose primary duties consist of the performance of work that:
requir[es] knowledge of an advance type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual, or physical processes . . . .
11. In the two cases where the Authority followed the rule established in SSA II, no additional reasons were provided for finding that section 255(a) does not apply to FLSA-based claims brought under the negotiated grievance procedure. See SSA III, 49 FLRA 488-89; Naval Base, 48 FLRA at 713-14.
12. As relevant here, the Authority addressed two exceptions in SSA II: first, whether the arbitrator properly applied the applicable OPM regulations and second, whether the Agency had in fact committed an unjustified and unwarranted personnel action under the Back Pay Act. As to the former, the Authority concluded that the arbitrator applied the appropriate regulatory scheme. SSA II, 47 FLRA at 829-30. As to the latter, without discussing whether the FLSA itself provided authority for the remedy, the Authority held that the arbitrator's Back Pay Act award was appropriate because the FLSA violation constituted an unjustified and unwarranted personnel action, and but for that action, the grievants would have been entitled to overtime compensation. Id. at 828-30.
13. The Carter v. Gibbs court based its ruling on section 7121(a) of the Statute, which provides that contractual grievance procedures are the exclusive procedures for resolving grievances. The court rejected the employees' reliance on section 216(b) of the FLSA, which expressly confers jurisdiction on the district court. The court did not address whether remedies for FLSA violations adjudicated in a negotiated grievance procedure are authorized under a statute other than the FLSA itself.
The Union notes that, in October 1994, 5 U.S.C. § 7121(a)(1) was amended to provide that the negotiated grievance procedure "shall be the exclusive administrative procedure for resolving grievances which fall within its coverage." Pub. L. No. 103-424, § 9(c), 108 Stat. 4361, 4366 (Oct. 29, 1994) (emphasis added). According to the Union, this amendment effectively overruled Carter v. Gibbs. As this issue is not relevant to deciding this case, we do not address it.
14. It is well established that the United States, as sovereign, is immune from suit unless it consents to be sued and that "'the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit.'" Department of the Army v. FLRA, 56 F.3d 273, 275 (D.C. Cir. 1995) (quoting United States v. Sherwood, 312 U.S. 584, 586 (1941)). In order to waive sovereign immunity, "Congress must 'unequivocally express' its desire to do so." Id. at 277 (quoting Irwin v. Veterans Affairs, 498 U.S. 89, 95 (1990)). It is also well established that the statutory waiver provision must unambiguously establish that it extends to and authorizes the award of money damages. Id.
15. We note that the cases relied on in SSA II for the premise that the Back Pay Act does not limit a grievant's recovery period, with the exception of International Association of Firefighters, Local 13 and Panama Canal Commission, General Services Bureau, Balboa, Republic of Panama, 43 FLRA 1012 (1992) (Panama Canal), involved only a violation of the collective bargaining agreement, not an independent statutory scheme. In each of these cases, the violations of the collective bargaining agreement were the unjustified and unwarranted personnel actions that gave rise to awards of backpay under the Back Pay Act. See, e.g., U.S. Department of the Army, New Cumberland Army Depot, New Cumberland, Pennsylvania and American Federation of Government Employees, Local 2004, 40 FLRA 186 (1991); U.S. Department of the Navy, Naval Avionics Center, Indianapolis, Indiana and American Federation of Government Employees, Local 1744, 37 FLRA 406 (1990). In such circumstances, without the Back Pay Act, the grievants would not have been entitled to an award of backpay or attorney fees. In Panama Canal, which involved application of the Barring Act to a backpay award for a violation of the FLSA, the Authority simply assumed that the Back Pay Act authorized the award, and did not address application of the FLSA itself.
16. We note that the D.C. Circuit has held that the Back Pay Act can be viewed as an "auxiliary measure" in connection with Title VII of the Civil Rights Act. Brown v. Secretary of the Army, 918 F.2d 214, 217 (D.C. Cir. 1990). We do not reach the question of whether the Back Pay Act could ever provide "auxiliary" rights or obligations in a grievance arbitration regarding the FLSA, and herein address only the question of the statute of limitations.
17. We note that the Authority has also held, relying on SSA II, that an award is not deficient where an arbitrator followed the period limiting the filing of grievances that the parties set in their collective bargaining agreement, rather than the statute of limitations established in section 255(a). U.S. Department of the Navy, Naval Surface Warfare Center, Crane Division, Crane, Indiana and American Federation of Government Employees, Local 1415, 49 FLRA 27, 31 (1994) (recovery for FLSA violation limited to 20 days based on the parties' agreement) (Naval Surface); National Gallery of Art, Washington, D.C. and American Federation of Government Employees, Local 1831, 48 FLRA 841, 845 (1993) (recovery for FLSA violation limited to 30 days based on the parties' agreement, and claim for FLSA violation is barred unless brought within that period) (National Gallery). See also U.S. Department of the Army, Aviation Center, Fort Rucker, Alabama and American Federation of Government Employees, Local 1815, 39 FLRA 1113, 1115 (1991) (although not relying on SSA II, Authority held that award, finding that claim for FLSA violation is barred unless brought within period set forth in the parties' agreement, was not deficient) (Fort Rucker).
The analysis here points to the likelihood that this precedent was also wrongly decided. However, as the Arbitrator in this case did not rely on, or even consider, the parties' agreement in limiting the grievants' recovery, the issue of whether, in a collective bargaining agreement, parties can agree to a recovery period different from that set forth in section 255(a) is not necessarily before us. Since we need not address this Authority precedent in order to resolve this case, we do not do so here.
18. In light of our conclusion that the award is contrary to 29 U.S.C. § 255(a), we need not address the Union's additional contention that the award is deficient under Section 7122(a)(2) of the Statute because it is based on a nonfact.