Washington, DC

U.S. Office of Personnel Management
Fair Labor Standards Act Decision
Under section 204(f) of title 29, United States Code

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Ana A. Mazzi
Deputy Associate Director
Merit System Audit and Compliance


02/08/2011

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Date

As provided in section 551.708 of title 5, Code of Federal Regulations (CFR), this decision is binding on all administrative, certifying, payroll, disbursing, and accounting officials of agencies for which the U.S. Office of Personnel Management (OPM) administers the Fair Labor Standards Act (FLSA).  There is no right of further administrative appeal.  This decision is subject to discretionary review only under conditions and time limits specified in 5 CFR 551.708 (address provided in 5 CFR 551.710).  The claimant has the right to bring action in the appropriate Federal court if dissatisfied with the decision.  The agency should identify all similarly situated current and, to the extent possible, former employees, and ensure that they are treated in a manner consistent with this decision as provided for in 5 CFR 551.708.

The agency is to review whether the claimant has worked overtime in accordance with instructions on page 6 of this decision, and if entitled pay the claimant the amount owed him.  If the claimant believes the agency has incorrectly computed the amount owed him, he may file a new FLSA claim with this office.

Introduction

On September 10, 2009, OPM received an FLSA claim from Wardelle McClendon, an employee of the Department of Veterans Affairs (VA).  The claimant believes his work should be nonexempt (i.e., covered) under the FLSA and he should thus be entitled to FLSA overtime pay.  His position is classified as Equal Employment Specialist, GS-260-11, and is located in the Lyons Field Office, Northeastern Field Operations, Office of Resolution Management (ORM), VA, in Lyons, New Jersey.  We have accepted and decided this claim under section 4(f) of the FLSA of 1938, as amended, codified at section 204(f) of title 29, United States Code (U.S.C.).

In reaching our FLSA decision, we have carefully considered all information furnished by the claimant and his agency, including a copy of the agency’s administrative report which we received on December 24, 2009.  To help decide this claim, we conducted separate telephone interviews with the claimant on June 22, 2010, and his supervisor on July 20, 2010.                   

Background

From October 28, 2007 to the present, the claimant has been assigned to the GS-260-11 position description (PD) number 29218A, which the agency designated as exempt (i.e., not covered) from the overtime pay provisions of the FLSA.  He has been with VA since April 21, 2002, previously occupying the position of Equal Opportunity Specialist, GS-360-12.  Prior to his employment with VA, he worked as an equal employment counselor/investigator with the United States Postal Service.  He has a total of 22 years of experience working in the area of equal employment opportunity, and has attended extensive agency training in counseling, alternative dispute resolution (ADR), investigations, and conflict resolution techniques. 

The claimant states there are other employees in similar positions as his providing equal opportunity counseling in other agencies  (e.g., Equal Employment Opportunity Commission) that are designated FLSA nonexempt, so his should also be nonexempt.  However, because the designation of an employee as FLSA exempt or nonexempt ultimately rests on the duties actually performed by the employee, we cannot consider the exemption status of other employees or positions in making our decision.  See 5 CFR 551.202(e).  The claimant also makes various statements regarding his working conditions and the agency’s application of the performance standards for his position.  Such matters are not germane to the FLSA claims process and are therefore outside the scope of this decision.  The claimant mentions other FLSA exempt positions in ORM (i.e., Program Assistant, Equal Employment Opportunity (EEO) Investigator, EEO Intake Specialist) which he believes should be nonexempt, and requests that OPM review those positions as part of his claim.  As noted above, we cannot consider the exemption status of other employees in deciding the claimant’s case.

Position information

Both the claimant and his supervisor have certified to the accuracy of the claimant’s official PD number 29218A.  The claimant serves as an equal employment specialist spending all of his work time performing counseling to aggrieved persons who have filed a complaint against the VA because they believe they have been subjected to discriminatory employment practices based on their age, race, color, religion, disability, sex, national origin, or allege they have been the victim of reprisal by the agency for filing an equal employment complaint.  The claimant also performs related administrative tasks such as preparing and presenting required written notices to the aggrieved person (AP), preparing an EEO Counselor’s Report for the Regional EEO Officer when all counseling of the AP is completed, and inputting data into the ORM complaint tracking system.  The claimant counsels aggrieved persons as part of the informal equal opportunity complaint process.  He has 30 days (which may be extended) from the initial contact with the AP to furnish counseling and attempt to resolve the matter.  After that time, the AP may file a formal equal opportunity complaint with the agency. 

The claimant counsels agency employees working at any VA installation in the Northeastern Field Operations geographic area which covers the states of Ohio, Tennessee, New Jersey, New York, Pennsylvania, Connecticut, Michigan, Kentucky, Indiana, Wisconsin, Missouri, Minnesota, Illinois, Rhode    Island, Delaware, Maine, Massachusetts, and the District    of Columbia.  His primary counseling duties and responsibilities include identifying the bases of the complaint and probable causes; explaining to the AP the agency’s ADR program; assisting all parties in resolving the complaint at the lowest possible level including preparation of a settlement agreement if resolution is achieved; conducting in-depth fact-finding concerning the complaint including interviewing all relevant individuals and reviewing pertinent records; receiving, organizing and analyzing all information to develop the record for further processing; and explaining to the AP other available complaint processes and options depending upon the nature of the issue, e.g., union grievance, Merit Systems Protection Board, Office of Special Counsel, VA Office of the Inspector General.  The claimant’s caseload typically includes complaints regarding harassment, failure to accommodate, working conditions, promotions, disciplinary actions and/or retaliation. 

Evaluation of FLSA coverage

Sections 551.201 and 551.202 of title 5 of the Code of Federal Regulations require an employing agency designate an employee FLSA exempt only when the agency correctly determines the employee’s work meets one or more of the exemption criteria.  In all exemption determinations, the agency must observe the following principles:  (1) each employee is presumed to be FLSA nonexempt; (2) exemption criteria must be narrowly construed to apply only to those employees who are clearly within the terms and spirit of the exemption; (3) the burden of proof rests with the agency which asserts the exemption; and (4) if there is a reasonable doubt as to whether an employee meets the criteria for exemption, the employee should be designated FLSA nonexempt.  The designation of a person’s FLSA status ultimately rests on the duties actually performed by the employee.

There are three primary exemption categories applied to Federal employees:  executive, administrative, and professional.  Neither the claimant nor the agency asserts the claimant’s work is covered by the executive or professional exemption and, based on careful review of the record, we agree.  Therefore, our analysis is primarily limited to the administrative exemption criteria in effect during the claim period.  Because the claimant was assigned to the disputed position on October 28, 2007, the claim period is covered by the current FLSA regulations effected on October 17, 2007. 

Administrative Exemption Criteria

           FLSA Regulations (2007)

The criteria for determining the applicability of the administrative exemption is codified at 5 CFR 551.206 (2007). This regulation defines an administrative employee as one whose primary duty is the performance of office or non-manual work directly related to the management or general business operations, as distinguished from production functions, of the employer or the employer’s customers and whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.  The regulation states that (a) In general, the exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered.  The term “matters of significance” refers to the level of importance or consequence of the work performed.  (b) The phrase discretion and independent judgment must be applied in light of all the facts involved in the particular employment situation in which the question arises.  Factors to consider when determining whether an employee exercises discretion and independent judgment with respect to matters of significance include, but are not limited to, whether the employee:

(1)   Has authority to formulate, affect, interpret, or implement management policies or operating practices;

(2)   Carries out major assignments in conducting the operation of the organization;

(3)   Performs work that affects the organization’s operations to a substantial degree, even if the employee’s assignments are related to operation of a particular segment of the organization;

(4)   Has the authority to commit the employer in matters that have significant financial impact;

(5)   Has authority to waive or deviate from established policies and procedures without prior approval;

(6)   Has authority to negotiate and bind the organization on significant matters;

(7)   Provides consultation or expert advice to management;

(8)   Is involved in planning long-or short-term organizational objectives;

(9)   Investigates and resolves matters of significance on behalf of management;

(10)  Represents the organization in handling complaints, arbitrating disputes, or resolving grievances. 

The regulation explains that the exercise of discretion and independent judgment implies the employee has authority to make an independent decision, free from immediate direction or supervision.  However, an employee can exercise discretion and independent judgment even if the employee’s decisions or recommendations are reviewed at a higher level.  Thus, the term does not require the decisions made by an employee have a finality that goes with unlimited authority and a complete absence of review.  Decisions made may consist of recommendations for action rather than the actual taking of action.  The fact they are subject to review and sometimes revised or reversed after review, does not mean the employee is not exercising discretion and independent judgment.  The regulation notes that the exercise of discretion and independent judgment must be more than the use of skill in applying well-established techniques, procedures, or specific standards described in manuals or other sources. 

Under the regulations the claimant’s work does not meet the administrative exemption criteria.  Although he performs office non-manual work related to ORM operations, his primary duties do not include the exercise of discretion and independent judgment with respect to matters of significance.  As an equal employment specialist providing counseling in the pre-complaint process, the claimant’s role is to gather information from the AP and Responding Management Official (RMO) at the installation to attempt to informally resolve the EEO complaint.  If the AP has not selected mediation through the ADR process, the claimant makes an informal inquiry by interviewing the AP, RMO, witnesses, and reviewing relevant documents, to attempt to reach an informal resolution of the dispute at the lowest possible level.  Through interviews with the AP he determines the bases and nature of the claim, and resolution sought by the individual.  He interviews and informs the RMO of the complaint against him/her, and allows the RMO to (1) respond to the complaint; (2) suggest witnesses and documents; (3) offer underlying reasons why the AP may have filed the claim; and (4) suggest possible resolutions to the complaint.  If after informing both parties of the results of his inquiry he finds there is a possibility of resolution and settlement of the dispute, the AP and the facility negotiate and prepare a written settlement agreement with the claimant facilitating the process. 

Throughout the pre-complaint process the claimant’s role is to function as a neutral third party to gather and exchange information and facilitate discussion using well established counseling techniques to arrive at a possible settlement.  He neither represents agency management nor the AP in the pre-complaint stage, and unlike the administrative exemption his tasks and responsibilities are not viewed as an extension of the management process.  Additionally, in performing counseling he makes no findings of discrimination or decisions on the merits of the complaint.  Those matters are addressed during the formal complaint stage.  He makes decisions on the bases and timeliness of the complaint, determines whether the complaint is covered under the EEO process, and ensures the procedural aspects of the pre-complaint process are met.  While he independently makes those decisions, in contrast to the administrative exemption the claimant’s decisions do not involve the comparison and evaluation of possible courses of conduct nor does he make them after various possibilities have been considered.  He does not weigh various alternatives for the settlement of the complaint, and consequently he does not present/recommend the best choice to the AP and RMO for their consideration.  His decisions are straight-forward, concern procedural matters, and are primarily governed by ORM standard operating procedures which specifically address his counseling role, prescribe his tasks, and require little judgment or interpretation.  Given the preceding discussion and the limitations placed on his authority as a counselor, there is little opportunity for the claimant to exercise discretion and independent judgment with respect to matters of significance.  Unlike the administrative exemption the impact of his work is limited to that which he personally performs, rather than helping to manage or affecting the management of his organization. 

The claimant’s decisions do not meet the discretion and independent judgment threshold with respect to matters of significance as described in the ten factors of the regulation listed above.  For example, he has no authority to formulate, affect, interpret, or implement management policies at his level (his supervisor or headquarters ORM mangers have such authority); he carries out only very specific, time limited assignments (counseling from 8-10 APs simultaneously), rather than major ones, related to individual complaint resolution which do not affect the organization’s operations to a substantial degree; he has no authority to commit his employer in matters having significant financial impact or to waive or deviate from established agency policies or procedures; and he is not authorized to negotiate and bind his organization on significant matters (this can be done only in the formal complaint stage).  Other than occasionally clarifying procedural matters, he does not consult with or provide expert advice to management.  Unlike the administrative exemption criteria, the claimant is not involved in planning long-or short-term organizational objectives; and does not investigate and resolve matters of significance on behalf of management.  Indeed, as a counselor he does not act on behalf of or represent management, and does not conduct formal investigations.  Although he is authorized by his agency to provide informal pre-complaint EEO counseling, he does not arbitrate EEO disputes or represent the organization in attempting to resolve grievances. 

Conclusion 

The claimant’s work does not meet the executive, administrative, or professional exemption criteria.  Therefore, it is nonexempt and properly covered by the overtime pay provisions of the FLSA. 

Claim Period

Under the regulations applicable during the claim period, all FLSA pay claims filed after June 30, 1994, are subject to a two-year statute of limitations (and three years for willful violations).  See 5 CFR 551.702 (1998) and (2007).  A claimant must submit a written claim to either the employing agency or OPM in order to preserve the claim period.  The date the agency or OPM receives the claim is the date establishing the period of possible back pay entitlement.  The appropriate date for preserving the claim period is September 10, 2009, when OPM received the claimant’s request, thus the claim period would normally have begun on September 10, 2007.  However, because the claimant was not assigned to the disputed position until October 28, 2007, the claim period begins on that date. 

Willful violation

The claimant contends the agency willfully violated the Act, thus the claim period should be extended to three years.  “Willful violation” is defined as follows:

Willful violation means a violation in circumstances where the agency knew that its conduct was prohibited by the Act or showed reckless disregard of the requirements of the Act.  All of the facts and circumstances surrounding the violation are taken into account in determining whether a violation was willful.

5 CFR 551.104 (1998) and (2007)

Clearly not all violations of the FLSA are willful as this term is defined in the regulations.  There is no question that VA erred in the claimant’s exemption status determination.  However, to prove willful violation there must be evidence that VA showed reckless disregard of the Act’s requirements.  Instead, we find the agency simply erred in making the exemption determination by failing to fully consider and evaluate the limited nature of the claimant’s authority and responsibility in regards to his primary duties, particularly a lack of discretion and independent judgment with respect to matters of significance as defined in the FLSA regulations.  Therefore, we conclude the agency’s actions were not deliberate and do not meet the criteria for willful violation as defined in 5 CFR 551.104.  In addition, because the claim period is less than two years because of the date when the claimant was assigned to the disputed position, the claim period can not be extended back beyond his date of assignment. 

Decision

The claimant’s work is nonexempt (i.e., covered by FLSA overtime provisions), and he is entitled to compensation for all overtime hours worked at the FLSA overtime rate.  The claim was received by OPM on September 10, 2009, and the claimant can receive back pay only back to the date of his assignment to the disputed position.  We find no indication of willful violation by the agency.  The agency must follow the compliance requirements on page ii of this decision.

The claimant provided no payroll records but claims that he and other employees have taken work home after normal working hours, and that he has not received FLSA overtime pay for time spent traveling for the agency.  The agency must examine these allegations using the claimant’s attendance and payroll records, and any other sources of information including witnesses, and if valid determine if he is entitled to any back pay under the FLSA, and any interest as required under 5 CFR 550.805 and 550.806.  If the claimant believes the agency incorrectly computes the amount, he may file a new FLSA claim with this office. 

 

 

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