United States, Department of Justice, Federal Bureau of Prisons, United States Penitentiary, Terre Haute, Indiana (Agency) and American Federation of Government Employees, Local 720, Council of Prison Locals, Council 33 (Union)
[ v60 p298 ]
60 FLRA No. 65
DEPARTMENT OF JUSTICE
FEDERAL BUREAU OF PRISONS
UNITED STATES PENITENTIARY
TERRE HAUTE, INDIANA
OF GOVERNMENT EMPLOYEES
COUNCIL OF PRISON LOCALS
(58 FLRA 327 (2003))
(58 FLRA 587 (2003))
September 30, 2004
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 two awards of Arbitrator John Joseph D'Eletto filed by the Union under § 7122 of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Agency filed an opposition.
For the following reasons, we conclude that the awards are contrary to 29 U.S.C. § 255(a), and we remand the awards for a determination as to whether the Agency's actions were willful.
II. Background and Arbitrator's Awards
As discussed in greater detail in United States DOJ, Fed. Bureau of Prisons, United States Penitentiary, Terre Haute, Ind., 58 FLRA 327 (2003) (USP Terre Haute I), recons. denied, 58 FLRA 587 (2003) (USP Terre Haute II), the Union filed a grievance alleging that the Agency failed to compensate certain employees for various pre- and post-shift activities. At arbitration, the Arbitrator found that the grievance was timely filed because it involved a continuing condition, [ v60 p299 ] but that the "scope of the grievance is limited to the filing date of [the grievance]" because the Union failed to file the grievance within forty days after becoming aware of the violations, as required by Article 31, Section d of the parties' agreement. [n1] Original Award at 36. The Arbitrator found that the Agency had required employees to engage in compensable pre- and post-shift activities, and he awarded backpay retroactive to the filing date of the grievance.
On review of the Agency's exceptions and the Union's cross-exceptions to the award, the Authority found that the award was deficient to the extent it included compensation for certain activities that, by law, are not compensable. See USP Terre Haute I, 58 FLRA at 330. The Authority also found it unclear whether the award also included compensation for certain activities that the parties conceded were compensable. See id. Accordingly, the Authority remanded the award for clarification of whether it included compensation for those compensable activities and, if it did, for a determination of the amount of such compensable work and whether the employees were entitled to liquidated damages. See id. The Authority determined that, in these circumstances, it was premature to address the Union's cross-exception alleging that the recovery period set forth in 29 U.S.C. § 255(a), for FLSA violations, applied. [n2] The Authority denied the Union's motion for reconsideration of the decision. See USP Terre Haute II, 58 FLRA 587.
Subsequently, the Arbitrator issued the award on remand, in which he concluded that employees engaged in compensable activities for fifteen minutes per day. The Arbitrator also concluded that the Agency failed to demonstrate that its actions were "in good faith, and that it had reasonable grounds for believing that its act or omission was not a violation of the [FLSA.]" Award on Remand at 57. Accordingly, the Arbitrator awarded backpay and liquidated damages retroactive to the filing date of the grievance.
III. Positions of the Parties
A. Union Exceptions
The Union argues that the Arbitrator's limitation of the recovery retroactive to the filing date of the grievance is contrary to 29 U.S.C. § 255(a), which permits recovery for a two- or three-year period. For support, the Union cites NTEU, 53 FLRA 1469 (1998) and United States Dep't of Commerce, Nat'l Oceanic & Atmospheric Admin., Office of NOAA Corps Operations, Atl. Marine Ctr., Norfolk, Va., 55 FLRA 816 (1999) (Chair Segal concurring and Member Wasserman dissenting in part) (NOAA), recons. denied, 55 FLRA 1107 (1999). The Union requests that the award be remanded to determine whether the two- or three-year recovery period should apply.
B. Agency Opposition
The Agency contends that the Arbitrator's decision to limit the remedy constitutes a procedural arbitrability determination that cannot be challenged on exceptions.
IV. 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. The awards are contrary to 29 U.S.C. § 255(a).
The Agency argues that the Union's exception challenges a procedural arbitrability determination. The Authority generally will not find an arbitrator's ruling on the procedural arbitrability of a grievance deficient on grounds that directly challenge the procedural arbitrability determination itself. See AFGE, Local 3882, 59 FLRA 469, 470 (2003). In this case, however, the Union is not challenging the Arbitrator's procedural arbitrability determination that the grievance was timely filed or any other finding concerning whether the grievance was arbitrable based on procedural requirements. Instead, the Union challenges only the recovery period for backpay. Thus, the Agency's argument is misplaced.
The Authority has held that, at least where there is no indication that parties have agreed contractually to backpay periods different from those in § 255(a), the statutory [ v60 p300 ] periods control. See NOAA, 55 FLRA at 821; NTEU, 53 FLRA 1469, 1494-95 (1998). In those circumstances, an arbitral award that limits FLSA backpay to the filing date of the grievance is contrary to 29 U.S.C. § 255(a). See NOAA, 55 FLRA at 821; NTEU, 53 FLRA at 1494-95.
As in NOAA and NTEU, there is no contention in this case that the parties have agreed contractually to a recovery period different from § 255(a). [n3] Therefore, consistent with NOAA and NTEU, the recovery periods set forth in § 255(a) control, and the Arbitrator's limitation of the recovery period retroactive to the filing date of the grievance is contrary to § 255(a). See NOAA, 55 FLRA at 821; NTEU, 53 FLRA at 1495. Accordingly, the awards are contrary to law.
B. The awards are remanded for a determination as to whether the FLSA violation was willful.
In order to determine whether a two or three-year recovery period should apply under the FLSA, it is necessary to determine whether the employer's actions were willful. See NOAA, 55 FLRA at 821. An FLSA violation is willful if the employer knew or showed reckless disregard for whether its conduct was prohibited by the FLSA. See McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988). If the employer acts unreasonably, but not recklessly, in determining its obligations under the FLSA, then the resulting actions are not willful. See id. at 135 n.13; Lopez v. Corporación Azucarera de P.R., 938 F.2d 1510, 1515 (1st Cir. 1991). An employer's violation is not willful if the employer made efforts to keep abreast of FLSA requirements but failed to do so because of mistaken interpretations of the law. See, e.g., Mireles v. Frio Foods, Inc., 899 F.2d 1407, 1416 (5th Cir. 1990) (employer discussed regulations with Texas Employment Commission and received pertinent brochures and pamphlets). See also United States Dep't of Commerce, Nat'l Oceanic & Atmospheric Admin., Office of Marine & Aviation Operations, Marine Operations Ctr., Norfolk, Va., 57 FLRA 559, 564 (2001), recons. denied, 57 FLRA 723 (2002) (employer directed experienced labor counsel to research issue and provide written report).
In this case, the Arbitrator did not make any factual findings regarding willfulness. As relevant here, the Arbitrator made no findings as to whether the Agency made efforts to ascertain the requirements of the FLSA and/or whether its violation of the FLSA resulted from mistaken interpretations of the law.
Moreover, the fact that the Arbitrator awarded liquidated damages does not demonstrate that a remand is unwarranted. In this regard, 29 U.S.C. §§ 216(b) and 260 establish a presumption that liquidated damages are warranted, unless the employer meets its "substantial burden" of proving that its actions were in good faith and were reasonable. [n4] United States Dep't of Commerce, Nat'l Oceanic & Atmospheric Admin., Office of Marine & Aviation Operations, Marine Operations Ctr., Va., 57 FLRA 430, 435 (2001) (Marine Operations Ctr.). By contrast, the party seeking backpay for a three-year period under § 255(a) has the burden of demonstrating willfulness. See Cox v. Brookshire Grocery Co., 919 F.2d 354, 356 (5th Cir. 1990) (Cox). The fact that an agency has not overcome the presumption in favor of liquidated damages does not establish that the violation was willful. See NTEU, 53 FLRA at 1496 & 1484 (Authority remanded for willfulness determination even though liquidated damages were warranted). Cf. Marine Operations Ctr., 57 FLRA at 435 (arbitrator found agency actions not willful but Authority remanded award to determine whether liquidated damages were appropriate). Cf. also Cox, 919 F.2d at 357 (finding violation not willful does not preclude award of liquidated damages).
The Authority has remanded awards where an arbitrator did not make factual findings regarding whether an agency's actions were willful, and the record did not permit the Authority to make that determination. See NOAA, 55 FLRA at 821; NTEU, 53 FLRA at 1495. As the Arbitrator in this case made no factual findings concerning whether the Agency's violation was willful, and the record does not permit the Authority to make that determination, we remand the awards for a determination as to whether the Agency's actions were willful.
The awards are contrary to 29 U.S.C. § 255(a) and are remanded to the parties for resubmission to the Arbitrator, absent settlement, for a determination as to whether the Agency's actions were willful.
Footnote # 1 for 60 FLRA No. 65 - Authority's Decision
Grievances must be filed within forty (40) calendar days of the date of the alleged grievable occurrence. . . . A grievance can be filed for violations within the life of this contract, however, where the statutes provide for a longer filing period, then the statutory filing period would control.
Original Award at 16.
Footnote # 2 for 60 FLRA No. 65 - Authority's Decision
29 U.S.C. § 255(a) provides, in pertinent part, that an action to enforce overtime pay provisions of 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 . . . ."
Footnote # 3 for 60 FLRA No. 65 - Authority's Decision
Footnote # 4 for 60 FLRA No. 65 - Authority's Decision
29 U.S.C. § 216(b) provides, in pertinent part, that an employer who violates the FLSA is liable for the amount of unpaid overtime and "an additional equal amount as liquidated damages." 29 U.S.C. § 260 provides, in pertinent part, that liquidated damages may be reduced or