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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Robert D. Hendler
Classification and Pay Claims
Program Manager
Merit System Audit and Compliance


06/07/2012

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Date

Introduction

The claimant contests his exemption status under the Fair Labor Standards Act (FLSA), stating he is improperly classified as exempt under the administrative exemption and is due overtime for a three-year period “due to what was a clear misapplication of the OPM guidelines by our Human Resources Department and senior managers.”  During the claim period, he was employed as a Production Superintendent, GS-1601-12, with the Hampton Roads Integrated Product Team (IPT), Public Works Business Line, Naval Facilities Engineering Command, Mid-Atlantic (NAVFAC MIDLANT), Norfolk Naval Base, Department of the Navy, in Norfolk, VA.  We have accepted and decided this claim under section 4(f) of the FLSA, as amended, codified at section 204(f) of title 29, United States Code (U.S.C.).

We received the claim on May 8, 2011, and the agency administrative report on August 2, 2011.  In reaching our decision, we have carefully reviewed all material of record, including information furnished by the claimant and his agency, and conducted independent fact-finding through telephone and e-mail interviews with the claimant and other individuals employed at NAVFAC MIDLANT, including the following:

Robert Whitehorne – claimant

Sterling Costin – co-worker

Jenny Harris – the claimant’s first-level supervisor

Lieutenant Commander Debra King – a higher-level manager

General Issues

The claimant provided a list of “white collar positions at MIDLANT that are non-exempt from FLSA standards.”  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). 

In addition, the claimant makes various statements relating to his agency and its report on his FLSA case.  In adjudicating this claim, our responsibility is to make our own independent decision on the exemption status of his work and how much FLSA overtime pay he is owed, if any.  We must make that decision by comparing the facts in the case to criteria in Federal regulations and other Federal guidelines.  Therefore, we have considered the claimant’s statements only insofar as they are relevant to making that comparison.

Position Information

NAVFAC MIDLANT provides public works services to customers on five military installations, which contain such major structures as hospitals, supply depots, barracks, sewage disposal plants, and large heater systems.  The claimant serves as the Production Superintendent, often referred to as a Duty General Foreman (DGF), for the Hampton Roads Integrated Production Team of MIDLANT.  His primary duties are to resolve a variety of complex public works issues during nights, weekends, and holidays.  These issues usually involve coordinating repairs for after-hours emergencies, such as broken pipes; power outages; heating, ventilation, and air conditioning (HVAC) outages; and oil spills.  The claimant is also responsible for performing rounds to secure and inspect buildings for safety.

The claimant usually receives notification of emergencies from the NAVFAC Utilities Operations Center (NUOC), although he may occasionally receive a call directly from the person reporting the emergency.  For lower-level issues, such as a broken toilet or an air conditioning disruption in an office building after regular duty hours, the NUOC will forgo calling the claimant and instead will directly recall the appropriate employee to fix the problem.  However, if the NUOC is unable to contact the on-call or “duty” trade specialist, they will call the claimant, because he has more contact numbers for other trade specialists and can bring in a contractor, using a government purchase card (GPC) if necessary.  The claimant has a $3,000 limit for the purchase of supplies and a $2,500 limit for the purchase of contractor work per event. 

The NUOC will also call the claimant if the emergency is of a less routine or more serious nature, such as an air conditioning unit which breaks down in a room that houses computer servers or the barricades at a gate stop functioning.  In these situations, the claimant often needs to go on-site to assess the problem in order to determine the proper specialist to recall. While a broken toilet would usually just require a pipefitter, in situations where it has caused flooding and water damage, the claimant may also need to bring in an electrician and/or a biohazard removal specialist.  While it is not the claimant’s responsibility to determine the exact nature and fix for the emergency, he must diagnosis the problem enough to determine the proper specialist or specialists to recall.  The claimant also occasionally performs minor repairs himself, such as turning off a water valve in order to mitigate water damage from a broken pipe.  Both the claimant and his supervisor stated he does occasionally perform such repairs himself, but is not required to do so as a regularly assigned duty.  The claimant did state, however, that in many situations, it would reflect unfavorably on him if he did not at least attempt to perform minor fixes himself.

For more serious repairs, the claimant is responsible for contacting the Command Duty Officer (CDO).  The CDO is a junior graded military officer (O-2 or O-3) who is on phone recall in the event of a serious emergency.  The claimant must notify the CDO of serious issues, and the CDO, in turn, is responsible for notifying leadership within the chain of command as appropriate.  If the claimant is unable to contact the CDO, he will contact higher-level management as appropriate.  Additionally, on a few occasions, the higher-level management will directly contact the claimant for an update on a situation.  However, these instances are rare, as it is the CDO’s responsibility to update management per the MIDLANT CDO Instructions.  The claimant would also contact the CDO if he needed authorization for a purchase greater than the previously stated GPC limits or guidance on how to handle a particular emergency.  While there are no guidelines specifically for the claimant’s duties, there are numerous standard operating procedures (SOP) for the entire gamut of situations and safety procedures.  These SOPs cover the vast majority of situations, and the claimant, like all other NAVFAC personnel, is not allowed to deviate from them. 

The claimant’s first-level supervisor certified to the accuracy of the claimant’s Position Description (PD) (number 5H018.)  However, the claimant states it is not accurate because it primarily focuses on the administrative duties he performs and does not describe the day-to-day “hands on” production work, which is the majority of what he does.  Based on our fact-finding, we find the PD is inaccurate because the claimant does not perform many of the duties described.  For example, the claimant does not assist the organization in meeting any long-range workload requirements and does not coordinate any special projects.  The claimant, his first-level supervisor, and his higher-level manager state he does not plan any larger scope projects beyond emergency repairs and, therefore, does not develop long-range schedules and work requirements.  While the claimant is responsible for the recall and direction of trade specialists to perform emergency repairs, he does not supervise these specialists and is not responsible for the overall direction and coordination of technical support and functions carried out by subordinate managers, nor does he develop long-range schedules and work requirements as described in the PD under Factor 1 – Knowledge Required.  In addition, per statements made by the claimant and his higher-level manager, the claimant does not develop any policies or procedures.  His first-level supervisor stated he occasionally (approximately every two years) participates in work groups to develop new SOPs.  However, the claimant stated it was his co-worker who did this, not him.  In contrast to duties stated in the PD and under Factor 5 – Scope and Effect, recommendations made by the claimant do not set precedents for the business line.  The claimant also does not regularly provide feedback to commanding officers and flag officers.  In contrast to duties stated in the PD and under Factors 6 and 7 – Personal Contact and Purpose of Contacts, the claimant is not required to have contact with commanding officers to negotiate support of policies.  Rather, the CDO is responsible for informing commanding officers of situations, as is stated in the MIDLANT CDO Instructions.  Negotiating support for policies with commanding officers is beyond the scope of even the CDO’s duties.  Finally, the claimant does not directly supervise anyone and, therefore, does not recommend anyone for awards or disciplinary action.

Evaluation of FLSA coverage

Sections 551.201 and 551.202 of 5 CFR require that 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 an employee’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 exemptions 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.  Given the claim period in this case, the claim is covered by the current FLSA regulations, effective October 17, 2007. 

Administrative Exemption Criteria

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:  

(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 that 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. 

The claimant’s work does not meet the administrative exemption criteria.  Although he resolves after-hours emergencies, his primary duties do not include the exercise of discretion and independent judgment with respect to matters of significance.  While he does determine the trade specialists and supplies necessary to resolve an emergency, this does not meet the discretion and independent judgment threshold with respect to matters of significance as described in the ten factors of the regulation, summarized above.  For example, he has no authority to formulate, affect, interpret, or implement management policies; he carries out only very specific, short-term, emergency repair assignments, which are not related to long-term organizational objectives and do not affect the organization’s operations to a substantial degree.  While the claimant’s command stated the claimant’s duties “affect the well being of the NAVFAC MIDLANT customer,” and his PD states his work “impacts the products and services provided by the business line or IPT which impacts the ability of the commands serviced to complete their assigned missions,” these statements only imply that if the claimant did not successfully perform his duties (i.e., coordinate emergency repairs), the command’s ability to do business would suffer.  It is always assumed employees will successfully perform their duties.  The consequences of the failure of an employee to successfully perform duties do not necessarily constitute discretion and independent judgment in matters of significance.  For example, 5 CFR 551.206 (g) states, “an employee does not exercise discretion and independent judgment with respect to matters of significance merely because the employer will experience financial losses if the employee fails to perform the job properly.” 

In addition, the claimant has no authority to commit his employer in matters having significant financial impact (the claimant is limited to $3,000 for the purchase of supplies and $2,500 for the purchase of contractor work per event); has no authority to waive or deviate from established agency policies or procedures; and is not authorized to negotiate and bind his organization on significant matters.  Although, given his extensive experience, the claimant could be called upon to provide advice to the CDO or even higher-level management on the resolution of certain emergencies, this advice typically involves the application of trades knowledge in that the claimant would recommend the type of trades specialist needed to resolve the emergency and the supplies he or she might need to perform the repair.  His decisions are straightforward, concern procedural matters, and are primarily governed by SOPs which prescribe the actions he must take and limit the judgment he may apply.  Unlike the administrative exemption criteria, the claimant is not involved in planning long- or short-term organizational objectives; does not investigate and resolve matters of significance on behalf of management; and is not authorized to represent the organization in handling complaints, arbitrating disputes, or resolving grievances. 

Conclusion

The claimant’s work does not meet the executive, administrative, or professional exemption criteria.  Therefore, it is FLSA 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 (or three years for willful violations).  See 5 CFR 551.702.  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 in this case is May 8, 2011, when OPM received the claimant’s request.  Thus, the claim period began on May 8, 2009.

Willful violation

The claimant alludes to willful violation by requesting in his claim "the reach back period be extended to 3 years vs. 2 years, due to what was a clear misapplication of OPM guidelines by our HR Dept & senior managers."  “Willful violation” is defined in 5 CFR 551.104 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.

Clearly not all violations of the FLSA are willful as this term is defined in the regulations.  There is no question NAVFAC MIDLANT erred in the claimant’s exemption status determination.  However, to prove willful violation, there must be evidence that NAVFAC MIDLANT showed reckless disregard of the Act’s requirements.  Instead, we find the command erred in making the exemption determination by relying on a PD we found to be inaccurate (but that agency line management certified as accurate) which described planning long-range workload requirements and formulating policy and precedents for IPT’s activities and 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.  As addressed in our preceding discussion, this is not the case.  The above discussion causes us to conclude the agency’s actions were not deliberate and do not meet the criteria for willful violation as defined in 5 CFR 551.104.

Decision

The claimant’s work is FLSA 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 May 8, 2011, and the claimant can receive back pay only for two years prior to that date.  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 records of the number of overtime hours worked in every pay period during the claim period.  The agency must reconstruct the claimant’s pay records for the period of the claim and compute back pay for the difference between the FLSA overtime pay owed and any title 5 overtime pay already paid, and interest on back pay, as required under 5 CFR 550.805 and 550.806.  If he believes the agency incorrectly computes the amount, the claimant may file a new FLSA claim with this office.

 

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