Government Shutdown Lawsuit
CASE UPDATE - RULING DISMISSING GOVERNMENT'S MOTION
Last evening Chief Judge Patricia Campbell-Smith of the United States Court of Federal Claims issued a ruling on the Government’s motion to dismiss your claims that the Government violated the Fair Labor Standards Act (“FLSA”) when it did not pay you on your regularly scheduled payday for work you performed on October 1-5 during the partial government shutdown last year. The decision contains four rulings. We won the most important ruling, as we explain below, which makes it likely that we ultimately will win the case. If you want to read the decision, it will be posted by Monday on the website that we created about the case, www.shutdownlawsuit.com.
Before we describe the four rulings, we want to extend our thanks to all of you who have chosen to participate in the case. But we especially want to thank the original five plaintiffs: Donald Martin, Pati Manbeck, Jeff Roberts, Joey Rojas and Randy Sumner. We also should mention Martina Copeland and Jeremy Rowell, who appeared at the original press conference. Without the willingness of people like them to stick their necks out, this case could never have been filed.
In the most important part of the decision, Judge Campbell-Smith rejected the government’s arguments that it had not violated the FLSA. Instead, the Court ruled that (a) the FLSA protected non-exempt government workers who had to work during the partial shutdown against late payments of minimum and overtime wages and (b) the FLSA required that payments be made on employee’s regularly scheduled paydays. Because employees were not paid on their regularly scheduled paydays for work performed October 1-5, 2013, this ruling means that the Government violated the FLSA as to each of you who is non-exempt under the Act. (Exempt employees are addressed in the third ruling, discussed below.)
In reaching this ruling, the judge showed sympathy for the plight of people who had to work while not knowing when they would be paid. She wrote:
Defendant also suggested at oral argument that the financial damage some plaintiffs might have suffered—in the manner of being unable to pay bills or medical expenses, and incurring fees—may have occurred not because the government failed to pay the employees on time as required under the law, but because plaintiffs may have made “poor financial management decisions.” While not relevant to the court’s inquiry into whether plaintiffs have stated a claim for relief, the court notes that at least some government employees, who may be plaintiffs herein, were working at the GS-04 or GS-05 levels, and had annual salaries starting around $28,000 in 2013. Such salaries leave families a narrow margin, particularly when—as plaintiffs in this action have described—child care expenses continue and unexpected health-related expenses arise.
Second, the judge rejected the Government’s argument that, in evaluating whether employees were paid minimum wage, she should look to how much they were paid on their regular payday for the entire pay period from September 22 through October 5. If she had accepted the Government’s position, she would have concluded that the Government paid virtually every one of you the minimum wage. As you know, the minimum wage is $7.25 per hour. Most of you worked at least 80 hours during the pay period. Thus, the government argued that if you were paid on your regular payday more than $580 for the two-week period, you were paid minimum wage, even if you weren’t paid a dime for part of the period (October 1-5). The judge instead decided that whether you were paid minimum wage on your regular payday would be judged on the one-week period from September 29 through October 5. You were paid on your regular payday only for any work done on September 29 (Sunday) and September 30 (Monday). If on your regularly scheduled payday you were paid less than $290 ($7.25 x 40 hours) for work on those two days, you have a claim that you were not paid minimum wage. For example, if your salary is $50,000 per year, you are paid about $24 per hour. If you worked eight hours on Monday, September 30, you were paid about $192, which is $98 less than minimum wage. If you were paid $290 or more on your regularly scheduled payday, you do not have a minimum wage claim, but you still will have an overtime claim if you worked any overtime between September 29 and October 5 and were not paid for it on your regularly scheduled payday.
Incidentally, we argued that you were entitled to minimum wages of $7.25 per hour for all work performed between October 1 and October 5, regardless how much you may have been paid for work on September 29 and 30. The judge rejected that argument, but it is preserved if the case ever goes to the appeal court.
Third, in the only part of the decision that we lost, Judge Campbell-Smith rejected our novel argument that in this case employees who are classified as exempt under the FLSA (such as teachers, registered nurses and high-level managers) should also be permitted to recover because the Government did not treat them as exempt when it failed to pay them on their regularly scheduled paydays. Thus, we regret to inform you that she dismissed the claims of those of you who are classified as exempt.
Finally, the judge did not rule on whether employees with minimum wage or overtime claims are entitled to “liquidated damages,” which is equal to the amount of minimum wages and overtime wages that were not paid on the regularly scheduled payday. But we are cautiously optimistic that she will rule in our favor on this issue. She said that she was offering “defendant an opportunity to meet its burden [of proving that it is not liable for liquidated damages], before the court makes a determination regarding the applicability of liquidated damages.” This may indicate that she did not think the Government’s legal arguments were sufficient, and we do not think that the Government will be able to point to any facts that establish that it is not liable for liquidated damages.
For these reasons, we are very encouraged by the judge’s decision, except for employees classified as exempt under the FLSA. We hope that you are pleased as well.
The next step is for notice to be sent to all members of the proposed action of their right to join. If you know of co-workers who worked during the shutdown and have not joined the case, please don’t wait for the notice to be sent – tell them that they can join the case by going to the “Join the Case” page on www.shutdownlawsuit.com and following the directions there. More important, ask the president of your local union to let members know of their ability to join. The more people who join the lawsuit, the stronger we will be when we have to negotiate with the Government’s lawyers.
Again, thank you for your support. Feel free to contact us if you have any questions or concerns.