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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Linda Kazinetz
Classification Appeals and FLSA Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance


02/14/2017

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Date

On June 4, 2012, the U.S. Office of Personnel Management (OPM) received a letter dated June 4, 2012, from the Law Offices of Bernstein & Lipsett, P.C. (B & L), the claimant’s duly appointed representative, concerning a Fair Labor Standards Act (FLSA) claim they had initially filed on the claimant's behalf with the General Accounting Office (GAO), now the U.S. Government Accountability Office, on May 6, 1994, requesting a review of his exemption status under the FLSA when he was employed as a Criminal Investigator, GS-1811-12, from July 2, 1989, to May 2, 1992, with the San Jose Field Office, Domestic Investigations West Division (DIWD), Office of Export Enforcement (OEE), Bureau of Export Administration (BEA), U.S. Department of Commerce (DOC), in San Jose, California.  On or about September 9, 1999, the claimant’s representative filed the claim with OPM.  The claimant was a plaintiff in a lawsuit filed in the U.S. Court of Federal Claims at approximately the same time the administrative claim was filed with GAO.  Based on information provided by B & L, the claimant was awarded back pay under a settlement agreement for the pay period ending March 7, 1992, to the pay period ending October 29, 1994, subject to the two-year statute of limitations for FLSA claims under 29 U.S.C. § 255(a).

B & L has requested OPM adjudicate the administrative claim filed with OPM and asserts that, because the claimant served in the military during the Gulf War, the statute of limitations applicable to this claim is the five-year statute of limitations under 31 U.S.C. § 3702(b)(2) rather than the two-year statute of limitations (three years for willful violations) applicable to FLSA administrative claims filed under the Barring Act.  See 73 Comp. Gen 157 (May 23, 1994); 31 U.S.C. 3702(b); 29 U.S.C. § 255(a).  In their letter to OPM dated June 4, 2012, B & L states:  “During the Gulf War, Mr. Garrison served on active duty with the United States Army Reserve for multiple non-consecutive periods beginning in August 1990.”  B&L’s claim includes a list of dates showing the claimant performed a total of thirty-five multiple non-consecutive days of active duty from August 16, 1990, to December 13, 1991, and the claimant provided copies of official military orders confirming all of the dates of active duty.  B & L cites provisions of 31 U.S.C. § 3702(2) and states:  “[H]e is entitled to retroactive back pay and interest under the FLSA and the Back Pay Act for the period he was employed prior to the commencement of the Gulf War on August 2, 1990, in addition to the period he was employed by Commerce after the commencement of the Gulf War, up to the date he recovered under previous FLSA settlements.  This period includes August 2, 1985 to May 2, 1992, less Mr. Garrison’s active duty military service time, for which he does not seek recovery.” 

In reaching our FLSA claim decision, we have carefully reviewed all information furnished by the claimant’s representative and the agency, including information obtained from a telephonic interview with the claimant, who retired from DOC on April 3, 2004.  We also interviewed by telephone his former supervisor (now retired) who supervised the claimant as a Supervisory Case Agent and Special Agent-in-Charge (SAC) from 1991 to 1999. 

Background

We previously accepted and decided six similar claims under section 4(f) of the FLSA, as amended, codified at section 204(f) of title 29, United States Code (U.S.C.), which we denied as time barred.  Subsequently, claimant’s representative brought suit under the Administrative Procedure Act (5 U.S.C. § 706(2)(A)) in the United States District Court for the District of Columbia, alleging that OPM wrongfully applied a two-year statute of limitations in denying their administrative claims for unpaid FLSA overtime pay.  Armstrong v. Archuleta, 77 F.Supp.3d 9 (December 30, 2014).  In relevant part, the court stated in its opinion:  

All Plaintiffs are deemed to have timely filed their claims as of the date of their filings with the Claims Court.  As a result, Plaintiffs can recover for the entire claim period under the five-year statute of limitations-that is, for all claims that accrued within five years before the Gulf War commenced on August 2, 1990-minus monies paid under their DOJ Settlements.

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Consistent with the holding in the Armstrong case, we will apply the five-year statute of limitations and corrective methodology (subtracting monies already received under prior settlements or judgments) to the claims of similarly-situated claimants we find to be FLSA non-exempt and potentially due FLSA overtime pay. 

Evaluation

Period of the Claim

As discussed above, B & L filed a claim with GAO on the claimant’s behalf on May 6, 1994.  Although this is the official date for preserving the claim, B & L indicates that given the settlement agreement previously discussed covering the pay period ending March 7, 1992, to the pay period ending October 29, 1994, and the findings in the Armstrong case, the actual claim period covers July 2, 1989, to May 2, 1992, which B & L states includes “the period he was employed by Commerce after the commencement of the Gulf War, up to the date he recovered under previous FLSA settlements.”  Therefore, we have limited our review to that period. 

Position Information

During the claim period, the claimant was assigned to a position classified as Criminal Investigator, GS-1811-12, which is the full performance level.[1]  The claimant performed investigations, throughout the West Coast states of the United States, of actual or alleged violations of the Export Administration Act of 1979, as amended, from the point of suspicion or receipt of substantive allegations of violations to the conclusion of the criminal judicial process or administrative proceeding.  Depending on the nature and extent of the violation, investigations were divided into civil or criminal cases.  Civil cases concerned exporters of controlled items who “self-disclose” to OEE that they had shipped those items in error to denied parties including foreign countries.  In such cases, the claimant conducted interviews, reviewed shipping records, and prepared an investigative report which was sent to agency attorneys for review and determination of penalty.  Criminal cases concerned deliberate violations of the law governing the export of controlled items manufactured in the United States and exported abroad.  These items included mainframe computers, nuclear triggers, oscilloscopes, commercial aircraft that could potentially be converted and used for military purposes, infrared cameras, and dual purpose manufacturing equipment such as filament winding machines.  Such items at the time were prohibited for security reasons from being directly exported or diverted to countries such as the Union of Soviet Socialist Republics (USSR), Eastern Block European countries, Peoples Republic of China, North Korea, Cuba, Iran, etc. 

In carrying out his cases, the claimant independently applied the full scope of criminal investigative knowledge and techniques including requesting subpoenas; interviewing witnesses and suspects; conducting searches and seizures; securing and serving search warrants; making arrests; inspecting records and documents; developing evidence for presentation to the U.S. Attorney; testifying in court, etc.  Knowledge required by the position included that of the laws, statutes, and regulations on which enforcement authorities are based, and specific case law regarding arrests, seizures, civil rights, and preservation of evidence.  The position also required knowledge of export and customs brokerage house documents, freight forwarders and shipping manifests, and customs regulations.  The claimant worked under the general direction and guidance of the SAC who reviewed the status and progress of the claimant’s cases quarterly, and checked his reports of investigation for completeness and whether they fully established and supported the violation.  The claimant exercised a high level of initiative and judgment in doing his case work. 

In performing criminal investigations, the claimant described a typical case in which he participated during the claim period involving the export of highly sensitive computer mainframes manufactured in the United States.  Identified as a “diversion” case, the investigation involved a DOC-licensed export broker in Washington State who purchased five state-of-the-art computer mainframes made by a firm in Oregon supposedly for shipment and use to a customer in Canada.  The agency was initially alerted of the case by the manufacturer’s export administrator who suspected suspicious activity given the quantity and high cost of the items purchased.  Upon conducting a lengthy investigation in conjunction with two other OEE investigators, the claimant established that the broker first shipped the equipment to New York, then intended it be moved to Canada, transshipped to other parties via Australia to Singapore, from there to a person (later identified as a USSR intelligence agent) in New Delhi, India, who intended to ship the cargo to its final destination in the USSR.  When the export broker was confronted with evidence of his illegal activity, the claimant was able to “turn” the broker into an informant who cooperated fully in the case, resulting in the arrest in New York of most of the perpetrators and the seizure of the computers before they left the United States.  The individuals were later charged by the U.S. Attorney with criminal violations of the Export Administration Act, and subsequently sentenced to prison in a Federal facility.  In performing major aspects of this lengthy case, the claimant applied the full scope of criminal investigative knowledge and techniques including conducting extensive record searches and requesting and executing search warrants; interviewing the subject, witnesses, and taking sworn testimony; piecing together lead information from a variety of sources and performing liaison with other Federal agencies (e.g., FBI, U.S. Customs Service, U.S. State Department); lawfully gathering evidence, making seizures, and performing surveillance; and writing a thorough report of investigation for review and acceptance by the U.S. Attorney who pursued prosecution.  The claimant noted that in preparing investigative reports, he presented only factual and supportable information and findings from his investigations and proposed no recommendations or resolutions. 

Evaluation of FLSA Coverage

Under the provisions of 5 CFR 551.706, OPM determines the facts necessary to adjudicate a claim.  To determine whether the claimant is owed overtime pay under the FLSA, we must first determine whether the work performed during the claim period is exempt or nonexempt from the overtime pay provisions of the FLSA.  Sections 551.201 and 551.202 of 5 CFR require an employing agency to designate an employee FLSA exempt only when the agency correctly determines that the employee meets one or more of the exemption criteria.  In all exemption determinations, the agency must observe the following principles:  (a) Each employee is presumed to be FLSA nonexempt. (b) Exemption criteria must be narrowly construed to apply only to those employees who are clearly within the terms and spirit of the exemption. (c) The burden of proof rests with the agency that asserts the exemption. (d) If there is a reasonable doubt as to whether an employee meets the criteria for exemption, the employee should be designated FLSA nonexempt. (e) The designation of a position’s FLSA status ultimately rests on the duties actually performed by the employee.  Our analysis of the claimant’s duties follows.  

Because the claim period covers 1989 to 1992, we must apply the FLSA regulations of 5 CFR Part 551 in effect during the period of the claim.  Neither the claimant nor the agency asserts the claimant’s work was covered by the professional or executive exemptions as detailed in 5 CFR 551.204 and 5 CFR 551.206 of those regulations.  Based on careful review of the record, we agree.  Citing a “Senior” Criminal Investigator, GS-1811-13, position description to which, as previously noted, the claimant was not assigned during the claim period, the agency believes the claimant’s position meets the administrative exemption criteria.  In supporting exemption under the administrative criteria, the agency cites OPM’s FLSA regulations from 1984 in 5 CFR 551.203(c) which states “any employee properly classified at GS-11 or above (or the equivalent level in other white collar pay systems) shall be presumed to be exempt under this subpart.  An agency that properly classifies an employee at GS-11 or above shall be deemed to have satisfied the burden of proof for asserting exemption.”  However, in order to bring OPM’s FLSA regulations into conformity with a court decision, OPM eliminated the section concerning the presumption that employees in positions classified at GS-11 and above were exempt.  See 53 Fed. Reg., 1739-01 (January 22, 1988).  The agency also contends that similar to the administrative exemption criteria, the claimant’s work was directly related to the management or general business operations of the agency, and that he exercised discretion and independent judgment in performing investigations.  Therefore, we address solely the administrative exemption criteria below.

Administrative Exemption Criteria

The regulation under 5 CFR 551.205 (1987) describes the administrative exemption criteria as follows: 

An administrative employee is an advisor, assistant, or representative of management, or a specialist in a management or general business function or supporting service who meets all of the following criteria: 

(a) The employee’s primary duty consists of work that:  (1) Significantly affects the formulation or execution of management policies or programs; or (2) Involves general management or business functions or supporting services of substantial importance to the organization serviced; or (3) Involves substantial participation in the executive or administrative functions of a management official.

(b) The employee performs office or other predominantly non-manual work which is:  (1) Intellectual and varied in nature; or (2) Of a specialized or technical nature that requires considerable special training, experience, and knowledge. 

(c) The employee must frequently exercise discretion and independent judgment, under only general supervision, in performing the normal day-to-day work.

(d) In addition to the primary duty criterion that applies to all employees, General Schedule employees classified at GS-5 or GS-6 (or the equivalent in other white collar systems) must spend 80 percent or more of the worktime in a representative workweek on administrative functions and work that is an essential part of those functions.

Although no longer in effect, the definitions of terms used in the FLSA exemption criteria as contained in the Attachment to Federal Personnel Manual (FPM) Letter 551-7, dated July 1, 1975, provide useful guidance in applying the administrative exemption criteria in 5 CFR 551.205 discussed above.  The meaning of terms relevant to the criteria follows.

(a) Primary duty.  As a general rule, the primary duty is that which constitutes the major part (over 50%) of the employee’s work. 

(b) Formulation or execution of management policies or programs.  Management policies and programs range from broad national goals that are expressed in statutes or Executive Orders to specific objectives of a small field office.  Employees may actually make policy decisions or participate indirectly, through developing proposals that are acted on by others.  Employees who significantly affect the execution of management policies or programs typically are those whose work involves obtaining compliance with such policies by other individuals or organizations, within or outside of the Federal Government, or making significant determinations in furtherance of the operation of programs and accomplishment of program objectives.  Administrative employees engaged in formulation or execution of management policies or programs typically perform one or more phases of program management (i.e., planning, developing, promoting, coordinating, controlling, or evaluating operating programs of the employing organization or of other organizations subject to regulation or other controls).  Some of these employees are classified in occupations that reflect these functions (e.g., program analyst) but many are classified in subject matter occupations. 

(c) General management, business, or supporting services.  This element brings into the administrative category a wide variety of specialists who provide general management, business, or other supporting services as distinguished from production functions.  Administrative employees in this category provide support to line managers by:  (1) Providing expert advice in specialized subject matter fields, such as that provided by management consultants or systems analysts; (2) Assuming facets of the overall management function, such as safety management, personnel management, or budgeting and financial management; (3) Representing management in such business functions as negotiating and administering contracts, determining acceptability of goods or services, or authorizing payments; or (4) Providing supporting services, such as automated data processing, communications, or procurement and distribution of supplies.  To warrant exemption, each employee’s work must involve substantial discretion on matters of enough importance that the employee’s actions and decisions have a noticeable impact on the effectiveness of the organization advised, represented, or serviced. 

(d) Participation in the functions of a management official.  This element includes those employees (variously identified as secretaries, administrative or executive assistants, aids, etc.) who participate in portions of the managerial or administrative functions of a supervisor whose scope of responsibility precludes personally attending to all aspects of the work.  To support exemption, such assistants must be delegated and exercise substantial authority to act for the supervisor in the absence of specific instructions or procedures.  Typically these employees do not have technical knowledge of the substantive work under the supervisor’s jurisdiction.  Their primary knowledge is of administrative procedures, organizational relationships, and the policies, plans, interests and views of the supervisor.

(e) Work of an intellectual nature.  Work requiring general intellectual abilities, such as perceptiveness, analytical reasoning, perspective and judgment applied to a variety of subject matter fields, or work involving mental processes which involve substantial judgment based on considering, selecting, adapting, and applying principles to numerous variables.  The employee cannot rely on standardized application of established procedures or precedents, but must recognize and evaluate the effect of a continual variety of conditions or requirements in selecting, adapting, or innovating techniques and procedures, interpreting findings, and selecting and recommending the “best” alternative from among a broad range of possible actions. 

(f) Work of a specialized or technical nature.  Work which requires substantial specialized knowledge of a complex subject matter and of the principles, techniques, practices, and procedures associated with that subject matter field.  This knowledge characteristically is acquired through considerable on-the-job training and experience in the specialized subject matter field, as distinguished from professional knowledge characteristically acquired through specialized academic education. 

(g) Discretion and independent judgment.  The exercise of discretion and independent judgment involves:  (1) comparing and evaluating possible courses of conduct, and (2) interpreting results or implications, and independently taking action or making a decision after considering the various possibilities.  However, firm commitments or final decisions are not necessary to support exemption.  The “decisions” made as a result of the exercise of independent judgment may consist of recommendations for action rather than the actual taking of action.  The fact that an employee’s decisions are subject to review, and that on occasion the decisions are revised or reversed after review, does not mean that the employee is not exercising discretion and independent judgment of the level required for exemption. 

The FPM letter lists three elements involved in the evaluation of discretion and independent judgment:  (1) The work must involve sufficient variables as to regularly require discretion and judgment in determining the approaches and techniques to be used, and in evaluating results.  This precludes exempting employees who perform work primarily requiring skill and applying standardized techniques or knowledge of established procedures, precedents, or other guidelines which specifically govern the employee’s action.  (2) The employee must have authority to make such considerations during the course of assignment.  This precludes exempting trainees who are in a line of work which requires discretion but who have not been given authority to decide discretionary matters independently.  (3) The decisions made independently must be significant.  Although this term is not so restrictive as to include only the kinds of decisions made by employees who formulate policies or exercise broad commitment authority, it does not extend to the kinds of decisions that affect only the procedural details of the employee’s own work, or to such matters as deciding whether a situation does or does not conform to clearly applicable criteria. 

Claimant’s work doing criminal investigations did not meet paragraph (a) of the administrative exemption criteria.  His primary duty was not to serve as an advisor, assistant, or representative of agency management, or as a specialist in a management or general business function or supporting service.  As a criminal investigator covering several West Coast states, the claimant spent all of his time investigating criminal violations of various laws governing the export of United States origin commodities and technology controlled under the Export Administration Act. 

The record shows the claimant did not meet the requirements of paragraph (a)(1) of the administrative exemption criteria, his primary duties did not significantly affect the formulation or execution of management policies or programs.  As a DIWD employee assigned to a field location performing the line investigative work of the agency, he did not make policy decisions or participate indirectly through developing proposals that were acted on by others.  In addition, unlike administrative employees, he did not perform any phases of program management such as planning, controlling, or evaluating operating programs. 

Claimant did not meet the requirements of paragraph (a)(2) of the administrative exemption criteria.  The claimant’s primary duties did not involve general management or business functions or supporting services of substantial importance to the organization serviced.  The claimant performed the line law enforcement work of OEE, BEA.  His tasks did not include providing general management, business, or other supporting services to line managers.  He was not involved in systems analysis and general management support functions, e.g., safety and personnel management, budgeting and financial management.  The claimant did not represent agency management in negotiating and administering contracts for goods or services, and did not provide support services, e.g., automated data processing, communications, procurement and distribution of supplies. 

Claimant did not meet the requirements of paragraph (a)(3) of the administrative exemption criteria.  The claimant’s assignments did not involve substantial participation in the executive or administrative functions of a management official.  He did not act as a secretary or administrative assistant participating in portions of the managerial or administrative functions of a supervisor, with no requirement for technical knowledge of the substantive work under the supervisor’s jurisdiction.  Unlike such employees, the claimant independently performed the line work of the agency’s OEE requiring technical knowledge of substantive law enforcement and criminal investigative work relating to the illegal export and diversion of controlled items manufactured in the United States. 

Under paragraph (b)(1) of the administrative exemption criteria, the claimant performed office non-manual work which was intellectual and varied in nature.[2]  In carrying out a variety of criminal investigations concerning violations of the Export Administration Act, the claimant applied perceptiveness, analytical reasoning, and judgment based on considering, selecting, adapting, and applying criminal investigative principles to numerous variables.  In doing so, he determined the best approach to the case and investigative techniques needed to substantiate it (e.g., interviews of subjects and witnesses, review of manufacturing, shipping, and export records, developing and gathering the most supportable evidence for presentation to the U.S. Attorney), in order to identify the violation and assess the scope of the illegal activity.  While as a law enforcement agent he was required to abide by specific laws and OEE procedures governing the methods and collection of evidence, and circumstances supporting seizures and arrest of subjects, in doing so he considered the effect of alternative investigative methods, adapting techniques and procedures as appropriate to the nature of the violation. 

Under paragraph (b)(2) of the administrative exemption criteria, as a GS-12 full performance Criminal Investigator, the claimant’s work was highly specialized and technical in nature, requiring considerable special training, experience, and knowledge.  He possessed and regularly applied specialized knowledge of the complex subject matter field of Federal criminal investigation, including the principles, techniques, practices, and investigative procedures associated with that field.  This knowledge was acquired through extensive formal agency criminal investigative training including attendance in the three-month course at the Federal Law Enforcement Training Center, DOC’s Basic Agent Course, continuing agency in-service training, and extensive on-the-job training and experience with the OEE and his previous employer, the U.S. Customs Service. 

Under paragraph (c) of the administrative exemption criteria, under only general supervision the claimant exercised discretion and independent judgment in performing assignments throughout the West Coast states of the United States.  In doing so, he developed and expanded investigations, comparing and evaluating possible courses of action and necessary investigative techniques to efficiently utilize resources and achieve the goals of each investigation.  He interpreted results gathered from investigative lead information (e.g., company export administrators, witnesses, informers, shipping records), and made decisions on subsequent investigative steps after considering the various possibilities.  Since many of his cases involved numerous variables in terms of the investigative procedures needed because of the scope and complexity of the violation, he regularly applied discretion and judgment in determining approaches, techniques, and in evaluating results.  As a GS-12 Criminal Investigator, the claimant had full authority to make such determinations during the course of investigations, consulting with his supervisor only on the progress and status of a case or need for additional resources.  His investigative decisions were more significant than just making decisions on procedural details, or deciding whether a situation conformed to clearly applicable criteria.  Although he had to follow specific legal requirements for gathering and admitting evidence, requesting search warrants and arresting suspects, and for criminal cases worked closely with the U.S. Attorney in preparing evidence for prosecution, he independently made decisions on significant matters affecting the development of cases, including identifying the most effective investigative techniques and processes to build a thorough and comprehensive investigation supportable in an administrative proceeding before an Administrative Law Judge,  or a criminal prosecution in a Federal court. 

The final administrative exemption criterion in paragraph (d) summarized above, regarding GS-5 or GS-6 employees who must spend 80 percent or more of their work time performing administrative functions does not apply to the claimant’s position. 

Although the claimant’s position meets paragraphs (b) and (c) of the administrative exemption criteria, it fails to meet all of the required exemption criteria because it does not meet paragraph (a) of the criteria.  Therefore, we conclude the claimant did not meet the administrative exemption.

Decision on FLSA Coverage

The claimant’s work did not meet the executive, administrative, or professional exemption criteria.  Therefore, his work was nonexempt and covered by the overtime pay provisions of the FLSA.  The claim was originally received by GAO on May 6, 1994, but due to a settlement agreement covering the pay period ending March 7, 1992 to the pay period ending October 29, 1994, the actual claim period while employed by DOC extends from July 2, 1989 to May 2, 1992.  As previously discussed, due to the claimant’s listed multiple non-consecutive periods of active duty with the U.S. Army Reserve during the Gulf War from August, 1990 to December, 1991, he is entitled to retroactive back pay and interest under the FLSA and the Back Pay Act for the period he was employed prior to the commencement of the Gulf War on August 2, 1990, in addition to the period he was employed by DOC up to the date he recovered under a previous FLSA settlement noted above.  The agency must follow the compliance requirements on page ii of this decision.[3] 

The claimant must submit evidence showing the amount and extent of overtime that was performed as provided for in 5 CFR 551.706(a).  The agency will have the opportunity to review this evidence using any other sources of information available, including witnesses, before a determination is made as to whether the claimant is entitled to any back pay under the FLSA and any interest as required under 5 CFR Part 550, subpart H.  Any petition for attorney’s fees and expenses must be submitted to the agency out of which this claim arose.  Should the claimant be determined to be entitled to back pay which the claimant believes to be incorrectly computed, the claimant may file a new FLSA claim with this office.  

 

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