Martin v. United States

117 Fed. Cl. 611, 23 Wage & Hour Cas.2d (BNA) 1903, 2014 U.S. Claims LEXIS 723, 2014 WL 3767032
United States Court of Federal Claims·Decided July 31, 2014·No. 1:13-cv-00834·Published·Cited by 18 cases

Opinion

Motion to Dismiss for Failure to State a Claim, RCFC 12(b)(6); Fair Labor Standards Act, 29 U.S.C. §§ 201-19; Violation of “On Time” Payment Requirement; FLSA Workweek Standard; FLSA Exempt Employees

OPINION AND ORDER

CAMPBELL-SMITH, Chief Judge

This case arises from the fall 2013 budget impasse and resulting partial government shutdown. Plaintiffs are government workers who were required to work during the shutdown but were not timely paid minimum wages and overtime wages on their regularly scheduled paydays for the work performed. Plaintiffs allege that the late payment of their wages violated the Fair Labor Standards Act (FLSA or the Act), 29 U.S.C. §§ 201-219 (2012), and for such violation they are entitled to statutory liquidated damages. Defendant moves to dismiss the action for failure to state a claim. For the reasons set forth below, defendant’s motion to dismiss as to Counts One and Two is DENIED, and its motion as to Count Three is GRANTED.

I. Background

When Congress failed to appropriate funds for government work to continue after the end of fiscal year 2013, the federal government experienced a partial shutdown. See Def.’s Mot. to Dismiss for Failure to State a Claim (Def.’s Mot.), March 11, 2014, ECF No. 23, at 3. The partial shutdown lasted from October 1 through October 16, 2013. 2d Am. Compl., June 2, 2014, ECF No. 29-1, at ¶ 16. To maintain essential government functions during the shutdown, defendant designated its employees as either “excepted employees” or “non-exeepted,” and required that excepted employees continue to work and perform their normal duties. Id. ¶ 1. Excepted employees were not compensated for work performed on or after October 1, 2013, until the partial shutdown ended and their next scheduled payday occurred. 1 Id. ¶ 18.

“For most or all [plaintiffs], the first pay period affected by the partial shutdown commenced Sunday, September 22, 2013 and ended Saturday, October 5, 2013 [(the Pay Period) ].” Id. ¶ 21. Had the shutdown not occurred, each of these individuals presumably would have been paid, in the ordinary *614 course, for all work he or she performed during the Pay Period on the employee’s next regularly scheduled payday (Scheduled Payday). See id. (noting that, depending on the employee, the Scheduled Payday was Friday, October 11, 2013; Tuesday, October 15, 2013; or Thursday, October 17, 2013). The shutdown, however, took place during the course of the Pay Period. When the Scheduled Payday arrived, paychecks reflected payment for work performed only through Monday, September 30, 2013 rather than for the full Pay Period (through October 5, 2013). Id. ¶¶ 21-22. Compensation for work performed by excepted employees commencing Tuesday, October 1, 2013 through Saturday, October 5, 2013 (the Five Days) was not included in each employee’s regular paycheck and thus, plaintiffs allege they were not paid minimum wage for the week of September 29, 2013 (the Week). Id. ¶ 1. The government did not issue wages for the Five Days until approximately two weeks after plaintiffs’ Scheduled Paydays, after the government shutdown had ended and Congress had allocated funds to pay the wage debts. See Pis.’ Opp’n to Def.’s Mot. to Dismiss (Pis.’ Opp’n), April 11, 2014, ECF No. 26, at 2-3; Def.’s Mot. 4.

There is no dispute that all plaintiffs eventually were paid for all work performed during the Five Days approximately two weeks after their Scheduled Paydays. Id. However, plaintiffs assert that the government’s failure to make payment in a timely manner — that is, on the regularly Scheduled Payday — was a violation of the FLSA. See 2d Am. Compl. ¶ 1.

Plaintiffs filed their initial Complaint with this court on October 24, 2013, ECF No. 1, a First Amended Complaint (Am.Compl.) on January 27, 2014, ECF No. 13, and a Second Amended Complaint (2d Am.Compl.) was deemed filed on June 2, 2014, ECF No. 29-1, see Order, June 2, 2014, ECF No. 37 (granting plaintiffs’ motion for leave to file their Second Amended Complaint). The five plaintiffs originally named in this lawsuit were excepted employees working for the Bureau of Prisons, within the Department of Justice, at various federal prisons throughout the United States over the course of the government shutdown. Id. ¶¶ 6-10; see Def.’s Mot. 3. Plaintiffs attached to their First Amended Complaint an Appendix listing 1023 opt-in plaintiffs who were employed by various governmental agencies during the relevant pay period. See Am Compl. ¶ 12. In their Second Amended Complaint, plaintiffs added 911 opt-in plaintiffs. 2 2d Am. Compl. 1. Each proposed opt-in plaintiff allegedly was classified as excepted during the government shutdown and performed work during that time for which he or she was not timely compensated. 3 2d Am. Compl. ¶¶ 12-13.

In Count One, plaintiffs complain that the government’s failure to timely pay excepted employees for the Five Days resulted in a minimum wage violation under the FLSA. 2d Am. Compl. ¶ 1. They reason that the late payment effected an underpayment and resulted in many potential plaintiffs receiving less than minimum wage for work performed during the Week in violation of the FLSA. Id. ¶¶ 55-58. The applicable minimum wage is $7.25 per hour or $290 for a forty hour workweek. Id. ¶ 1. Plaintiffs seek liquidated damages at a rate of $7.25 per horn’ multiplied by the number of hours worked during the Five Days, or alternatively, in an amount equal to the difference between $290 and the *615 amount paid on the Scheduled Payday for work performed during the Week. Id. ¶ 1.

In Count Two, plaintiffs claim that, in violation of the FLSA, potential plaintiffs — who were classified as FLSA non-exempt and therefore entitled to overtime under the FLSA — were not paid overtime compensation on time for work performed during the Five Days. Id. ¶¶ 59-63.

In Count Three, plaintiffs assert that potential plaintiffs who were classified as FLSA exempt are nonetheless entitled to compensation for overtime hours worked during the Five Days. 4 See id. ¶¶ 64-69. Plaintiffs contend that because the government chose not to compensate excepted employees on time and failed to pay them on a “salary basis” for the Week, even the exempt employees are entitled to FLSA damages at applicable rates for any overtime work performed during the Week. See Pis.’ Opp’n 33-36.

Pending now before the court are Defendant’s Motion to Dismiss for Failure to State a Claim 5

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Martin v. United States, 117 Fed. Cl. 611, 23 Wage & Hour Cas.2d (BNA) 1903, 2014 U.S. Claims LEXIS 723, 2014 WL 3767032 (uscfc 2014).

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