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O'CONNELL v. HOVE

May 17, 1993

JAMES P. O'CONNELL, ET AL., Plaintiffs,
v.
ANDREW C. HOVE, JR., in his capacity AS ACTING CHAIRMAN, FEDERAL DEPOSIT INSURANCE CORPORATION and FEDERAL DEPOSIT INSURANCE CORPORATION, Defendants.



The opinion of the court was delivered by: I. LEO GLASSER

 GLASSER, United States District Judge:

 Plaintiffs *fn1" -- employees of the Federal Deposit Insurance Corporation ("FDIC") -- bring this action for overtime pay under the Fair Labor Standards Act, 29 U.S.C. § 201 et. seq., ("FSLA"), and the Federal Employment Pay Act ("FEPA"), 5 U.S.C. 5542. They ground jurisdiction on 28 U.S.C. § 1331, federal question jurisdiction; 29 U.S.C. § 216(b), the jurisdictional grant of the FSLA; and 12 U.S.C. § 1819 (Fourth), the FDIC "sue and be sued" clause.

 FACTS

 Plaintiffs are employees of the FDIC who have worked a significant number of overtime hours over the past three years or who anticipate working overtime if this action is resolved in their favor. (Complaint P 11) *fn2" Section 7(a)(1) of the FLSA provides that employees covered by the terms of the statute must be paid one and one-half times their regular hourly rate of pay if they work more than forty hours during a workweek. 29 U.S.C. § 207(a)(1). Employees may be exempted from the overtime provisions of the FLSA if their work performed meets certain statutory criteria. See 29 U.S.C. § 213.

 When "exempt" federal employees work overtime, they are compensated at a rate established by the FEPA. 5 U.S.C. § 5542(a). For an exempt employee whose basic pay is at a rate which does not exceed the minimum basic pay for a GS-10, the overtime hourly rate of pay is an amount equal to one and one half times the hourly rate of basic pay. 5 U.S.C. § 5542 (a)(1). Where an exempt employee's basic rate of pay exceeds the minimum basic pay for a GS-10, the rate of overtime pay is capped at a rate one and one half times the hourly rate of the minimum basic pay for a GS-10. 5 U.S.C. § 5542(a)(2). Plaintiffs in this action are employees compensated at a rate that exceeds the level of pay for a GS-10. (Complaint P 11)

 The essence of plaintiffs' complaint is that the FDIC has improperly classified their positions as "exempt" for purposes of the FLSA, subjecting plaintiffs to the overtime cap set by the FEPA and thereby "illegally failing to pay [them] overtime pay at the rate required by the FLSA." (Complaint P 15) Plaintiffs also allege that the FDIC has permitted "certain of the plaintiffs to work overtime hours without compensation." (Complaint P 11) For the purposes of this motion, the parties have entered into stipulation concerning the following three points. First, as mentioned above, they agree that all plaintiffs are covered by the terms of a collective bargaining agreement between the NTEU and the FDIC that includes a negotiated grievance procedure. (Stipulation P 1) Second, the CBA at issue does not preclude or exclude from review employee grievances arising under the FDIC's application of the FLSA or FEPA (Stipulation P 2) Third, no plaintiff has yet grieved any dispute regarding the FDIC's application of the FLSA or the FEPA under the negotiated grievance procedure. (Stipulation P 3)

 DISCUSSION

 This case involves the interplay between two statutory schemes: the FLSA, which affords employees a right to invoke the judiciary to enforce various minimum wage and overtime provisions, and the Federal Service Labor Management Relations Statute, which is Chapter 71 of the Civil Service Reform Act of 1978 ("CSRA"), which requires that collective bargaining agreements for federal employees include dispute resolution procedures that govern all grievances not explicitly excluded. The Court of Appeals for the Federal Circuit, sitting en banc, has decided that Section 7121(a) of the CSRA deprives a district court of subject matter jurisdiction over FLSA disputes brought by unionized federal employees. Carter v. Gibbs, 909 F.2d 1452, 1458 (Fed. Cir.) (en banc), cert denied sub nom., Carter v. Goldberg, 498 U.S. 811, 112 L. Ed. 2d 22, 111 S. Ct. 46 (1990). Plaintiffs nevertheless ask this court to allow them to pursue this FLSA action. In considering the issue now presented, this court first examines the two statutes in question, then discusses the Carter opinion's holding and rationale, and finally evaluates plaintiffs' arguments as to why Carter was wrongly decided.

 I. The Statutory Scheme

 Congress enacted the FLSA in 1938 in order "to protect all covered workers from substandard wages and oppressive working hours, 'labor conditions 450 U.S. 728, 739, 67 L. Ed. 2d 641, 101 S. Ct. 1437 (1981) (quoting 29 U.S.C. 202(a)). Section 16(b) of the FLSA affords employees the right to enforce the Act's minimum wage and overtime provisions "in any Federal or State court of competent jurisdiction." 29 U.S.C. § 216(b). [868680002-opinionfn3" NAME="#sthat are detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well being of workers.'" Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 739, 67 L. Ed. 2d 641, 101 S. Ct. 1437 (1981) (quoting 29 U.S.C. 202(a)). Section 16(b) of the FLSA affords employees the right to enforce the Act's minimum wage and overtime provisions "in any Federal or State court of competent jurisdiction." 29 U.S.C. § 216(b). [868680002-opinionfn3">*fn3" In 1974, Congress amended the FLSA to extend coverage, including the right to judicial enforcement, to federal employees. Pub. L. No. 93-259, 88 Stat. 55 (codified at 29 U.S.C. 203(e)). The legislative history of the 1974 amendments indicates that Congress expected the FLSA to be administered in the federal sector in a manner consistent with the Act's administration in the private sector. See American Federation of Government Employees v. Office of Personnel Management, 261 U.S. App. D.C. 273, 821 F.2d 761, 769 (D.C. Cir. 1987) ("The House Report indicates . . . that in resolving any conflicts between [the civil service system and the FLSA, the Office of Personnel Management] 'will administer the provisions of the [FLSA] in such a manner as to assure consistency with the meaning scope and application established by the rulings, regulations, interpretations, and opinions of the Secretary of Labor which are applicable in other sectors of the economy.'") (quoting Fair Labor, Standards Amendments of 1974, H.R. Rep. 913, 93d Cong. 2d Sess. 28, 28 (1974), U.S. Code Cong. & Admin. News. 1974, p. 2811).

 Four years after extending the FLSA to federal employees, Congress enacted the Civil Service Reform Act. The CSRA "comprehensively overhauled the civil service system," Lindahl v. Office of Personnel Management, 470 U.S. 768, 773, 84 L. Ed. 2d 674, 105 S. Ct. 1620 (1985), by establishing an "elaborate remedial system . . . constructed step by step, with careful attention to conflicting policy considerations." Bush v. Lucas, 462 U.S. 367, 388, 76 L. Ed. 2d 648, 103 S. Ct. 2404 (1983). This scheme was intended to replace the "outdated patchwork of statutes and rules built up over almost a century." S. Rep. No. 969, 95th Cong., 2d Sess. 53 (1978), reprinted in 1978 U.S. Code Cong. & Admin. News 2723, 2725. The CSRA "prescribes in great detail the protections ...


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