Appeal from the United States Court of Federal Claims in No. 1:12-cv-00920-EDK, Judge Elaine Kaplan.
REVERSED IN PART AND REMANDED.
DAVID M. COOK, Cook & Logothetis, LLC, Cincinnati, OH, argued for plaintiffs-appellants. Also represented by CLEMENT L. TSAO, CLAIRE W. BUSHORN.
JESSICA R. TOPLIN, Commercial Litigation Branch, Civil Division, United States Department of Justice. Washington, DC, argued for defendant-appellee. Also represented by SHELLEY D. WEGER, JOYCE R. BRANDA, ROBERT E. KIRSCHMAN, JR., REGINALD T. BLADES, JR.; GIA M. CHEMSIAN, Office of General Counsel, United States Department of Veterans Affairs, Washington, DC.
Before WALLACH and CLEVENGER, Circuit Judges, and FOGEL, District Judge.[*]
Clevenger, Circuit Judge.
In a final decision dated February 27, 2014, the United States Court of Federal Claims dismissed the complaint of certain nurses employed by the Department of Veterans Affairs (" the agency" ). The nurses claimed entitlement to overtime pay under a statutory provision which requires the agency to compensate " officially ordered or approved" overtime work. 38 U.S.C. § 7453(e)(1). The trial court dismissed the nurses' claim because they did not allege that the agency " expressly directed" their overtime. Mercier v. United States, 114 Fed.Cl. 795, 802 (2014). Because the court erred in requiring that the nurses' overtime be officially ordered or approved by express direction to be compensable, we reverse and remand the case for further proceedings. That result renders moot the nurses' separate claim that they are entitled to at least basic pay for overtime hours worked.
This case turns on the interpretation of the words " officially ordered or approved" in 38 U.S.C. § 7453(e)(1), the statute which provides overtime pay for nurses employed by the Department of Veterans Affairs. The statute does not require the official order or approval to be in any particular form, and the agency has not enacted any regulation interpreting the statute as mandating any particular procedure that must be followed to qualify for overtime pay.
The agency asserts, and we agree as a matter of statutory interpretation, that the words " officially ordered or approved" in § 7453(e)(1) should have the same meaning as the same words which appear in the Federal Employee Pay Act (FEPA), 5 U.S.C. § 5542(a), which authorizes overtime pay generally for federal employees not covered by other specific statutes, such as § 7453(e)(1). Appellee's Br. at 14.
Substantially the same regulation has applied to FEPA's overtime provision since shortly following its enactment in 1945. In its present form, the regulation requires that overtime work " may be ordered or approved only in writing by an officer or employee to whom this authority has been specifically delegated." 5 C.F.R. § 550.111(c); see also 10 Fed. Reg. 8191, 8194 (July 4, 1945) (original regulation). We refer to this as the " writing regulation" or the " OPM regulation" after the agency that most recently enacted it. See 5 U.S.C. § 5548.
The words " officially ordered or approved" in FEPA have long been interpreted by the Court of Claims, one of our predecessor courts, the decisions of which bind panels of this court. South Corp. v. United States, 690 F.2d 1368, 1370 (Fed. Cir. 1982) (en banc).
For the first decade after the enactment of FEPA, the Court of Claims enforced the regulation's requirement that approval be " in writing." Thus, Gaines v. United States, 131 F.Supp. 925, 132 Ct.Cl. 408 (1955) held that overtime had to be " ordered or approved" in compliance with the regulation to be compensable: " any claim must be based upon the performance of overtime services which were expressly authorized or approved in writing" by an authorized official. Id. at 412-13. Prior to Gaines, the court twice approved of the requirement in dicta. In Post v. United States, 121 Ct.Cl. 94 (1951), the court called the writing regulation " a necessary safeguard against subjecting the Government to improper expense." Id. at 99. In Tabbutt v. United States, 121 Ct.Cl. 495 (1952), it remarked that a supervisor's signature approving daily time reports " could hardly be said to take the place of an order for these men to work overtime, or of an approval of their claim to compensation for having done so." Id. at 498, 505.
The Court of Claims' treatment of the regulation changed in Anderson v. United States, 136 Ct.Cl. 365 (1956). The agency in Anderson had " induced" employees to work overtime but, in order to escape compensating them for that time, had not ordered or approved the overtime in writing. Id. at 370-71.
Anderson held that overtime that is " induced," but not explicitly required, is nonetheless " ordered or approved" under FEPA. Id. at 370. Further, the court held, the writing regulation could not limit the scope of that substantive right to overtime pay. " The writing was required by the regulations, not by the statute," it explained. " The withholding of written orders or approval reflected observance of the letter of the regulation but denial of
the substance of the statute." Id. at 370-71. The court concluded that the statutory " mandate to pay additional compensation for overtime hours, when the work was . . . officially ordered or approved," including by inducement, was " overriding," and compensation for such work was therefore " mandatory." Id. at 371.
For more than forty years following Anderson, the Court of Claims and its successor courts applied Anderson 's holdings that " induced" overtime is " ordered or approved" under FEPA, and that the writing regulation does not limit the statutory right to compensation for such time.
Two early leading cases applying Anderson were Adams v. United States, 162 Ct.Cl. 766 (1963) and Byrnes v. United States, 330 F.2d 986, 163 Ct.Cl. 167 (Ct. Cl. 1963). Adams compensated overtime that was " induce[d]" by an agency whose supervisors " knew and approved of this overtime, and in effect authorized it," but withheld written authorization. 162 Ct.Cl. at 768-69. Byrnes explained that regulations requiring written authorization of overtime " cannot avoid the plain requirements of the statute for overtime pay when the performance of this overtime is induced by the Government, as it was in Anderson, . . . and in this case." 330 F.2d at 989-90.
Later cases in the Anderson line considered the boundaries of what constituted " order or approval" by inducement. Thus, the court held that an employer's " mere knowledge" that an employee is working overtime, without inducement or written approval, is not enough to order or approve that work. Bilello v. United States, 174 Ct.Cl. 1253, 1258 (1966). Likewise, a " tacit expectation" that employees show up five minutes earlier than ordered did not show that employees were induced to work overtime. Albright v. United States, 161 Ct.Cl. 356, 361 (1963). Where there was " more than only a 'tacit expectation'" but less than an express directive to work overtime, the court asked whether the overtime was " induced." Baylor v. United States, 198 Ct.Cl. 331, 359-60 (1972).
By the early 1970s, in the Court of Claims' words, Anderson and its progeny had " firmly established" that employees could recover under FEPA for overtime their employers had induced but not expressly ordered. McQuown v. United States, 199 Ct.Cl. 858, 866 (1972); see Baylor, 198 Ct.Cl. at 359-60 (applying Anderson and holding that employer had induced overtime); Fix v. United States, 368 F.2d 609, 613, 177 Ct.Cl. 369 (Ct. Cl. 1966) (applying Anderson and holding that an agency could not prohibit compensating overtime that was " required or induced by responsible officials" ); Bantom v. United States, 165 Ct.Cl. 312, 318 (1964) (applying Anderson and finding that overtime was not induced where employees " voluntarily came to work earlier than required" in order to get ready there rather than at home); Rapp v. United States, 340 F.2d 635, 644-45, 167 Ct.Cl. 852 (Ct. Cl. 1964) (applying Anderson and compensating induced overtime because the agency " could not--by arbitrarily characterizing the [overtime] as 'voluntary'--abrogate plaintiffs' rights under the statute" ); Gaines v. United States, 158 Ct.Cl. 497 (1962), cert. denied, 371 U.S. 936, 83 S.Ct. 309, 9 L.Ed.2d 271, 159 Ct.Cl. 614 (1962) (explaining that Anderson " allow[s] recovery [for overtime] even though there may have been no express order, authorization, or approval, and the administrative officials have refused to characterize the work as 'overtime" ); Gray v. United States, 136 Ct.Cl. 312, 313 (1956) (in a case decided the same day as Anderson, denying an overtime claim because plaintiff was not " induced or directed by his superiors directly or indirectly by writing or otherwise to work overtime" ). Judge Skelton twice
dissented on the basis that the overtime was not ordered or approved in writing by an authorized official as the regulation required, but his view never gained a majority. Baylor, 198 Ct.Cl. at 371 (Skelton, J., dissenting); Anderson v. United States, 201 Ct.Cl. 660, 671-72 (1973) (Skelton, J., dissenting).
Then, the Supreme Court decided Schweiker v. Hansen, 450 U.S. 785, 101 S.Ct. 1468, 67 L.Ed.2d 685 (1981) (per curiam) ( Hansen ) and Office of Pers. Mgmt. v. Richmond, 496 U.S. 414, 110 S.Ct. 2465, 110 L.Ed.2d 387 (1990) ( Richmond ), neither of which dealt with FEPA. As we discuss below, this court later held that the rationale of these cases overruled Anderson 's holding that the writing regulation was invalid.
Plaintiff in Hansen sought certain benefits under the Social Security Act. The Act extended benefits only to one who " has filed application," 42 U.S.C. § 402(g)(1)(D), and a regulation required the application to be in writing, 20 C.F.R. § 404.602 (1974). When plaintiff asked a Social Security Administration field representative if she was eligible for a certain benefit, the representative erroneously told her that she was not, and she delayed in filing her application in reliance on that advice. Upon later learning she was eligible, plaintiff filed an application, and sought back payments based on the date of her oral application to the field representative. 450 U.S. at 786-87.
The Second Circuit held that the government was estopped from denying plaintiff benefits retroactive to her oral application. It reasoned that she was " substantively eligible" for benefits and had simply failed to fulfill a " procedural requirement," and held that under such circumstances the field representative's conduct estopped the government from applying the writing requirement. Hansen v. Harris, 619 F.2d 942, 948 (2d Cir. 1980), rev'd sub nom. Schweiker, 450 U.S. 785, 101 S.Ct. 1468, 67 L.Ed.2d 685.
The Supreme Court reversed. It reasoned that the field representative's error did not remove " the duty of all courts to observe the conditions defined by Congress for charging the public treasury." Hansen, 450 U.S. at 788-89 (quoting Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 385, 68 S.Ct. 1, 92 L.Ed. 10 (1947)). The Court therefore rejected the Second Circuit's conclusion that plaintiff could show estoppel against the government because ...