O'Connell v. Hove, Jr.

22 F.3d 463, 1 Wage & Hour Cas.2d (BNA) 1645, 146 L.R.R.M. (BNA) 2296, 1994 U.S. App. LEXIS 8358, 1994 WL 143676
CourtCourt of Appeals for the Second Circuit
DecidedApril 19, 1994
Docket1079, Docket 93-6191
StatusPublished
Cited by20 cases

This text of 22 F.3d 463 (O'Connell v. Hove, Jr.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
O'Connell v. Hove, Jr., 22 F.3d 463, 1 Wage & Hour Cas.2d (BNA) 1645, 146 L.R.R.M. (BNA) 2296, 1994 U.S. App. LEXIS 8358, 1994 WL 143676 (2d Cir. 1994).

Opinion

JACOBS, Circuit Judge:

Plaintiffs are employees of the Federal Deposit Insurance Corporation (“FDIC”) who claim that the FDIC improperly classified their jobs as exempt from the overtime provisions of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-19 (1982). Upon motion by the FDIC, and after a hearing, the United States District Court for the Eastern District of New York (Glasser, J.) dismissed the complaint for lack of subject matter jurisdiction, finding that Title VII of the Civil Service Reform Act (“CSRA”), 5 U.S.C. §§ 7101-35 (1988) requires plaintiffs, all of whom are members of the National Treasury Employees Union (the “Union”), to follow the negotiated grievance procedures set out in the Union’s collective bargaining agreement with the FDIC. The employees appeal, and we affirm.

Background

Section 7(a)(1) of the FLSA requires that employees covered by that statute be paid one and one-half times their regular hourly rate of pay if they work more than forty hours during a work week. 29 U.S.C. § 207(a)(1). However, employees whose work meets certain statutory criteria are exempted from this provision. 29 U.S.C. § 213. When such exempt employees of the federal government do work overtime, they are compensated in accordance with the Federal Employment Pay Act (“FEPA”). 5 U.S.C. § 5542 (1982). Plaintiffs allege that the FDIC improperly classified them as exempt from the overtime provisions of the FLSA, that they are worse off under the FEPA compensation scheme than they would be under the FLSA, and that they have worked a significant number of overtime hours, or contemplate doing so if the FDIC were to pay the statutorily mandated overtime rates.

As members of the National Treasury Employees’ Union, plaintiffs are covered by a collective bargaining agreement with the FDIC. Although the agreement provides for comprehensive grievance procedures, none of the appellants have pursued grievance procedures in this case, having chosen instead to litigate their claims in federal district court. It is this choice which raises the jurisdictional issue that is the subject of this appeal.

In a well reasoned memorandum and order, the district court concluded that, under the CSRA, the grievance procedures contained in the collective bargaining agreement provide the exclusive remedy for their claims. O’Connell v. Hove, 821 F.Supp. 862 (E.D.N.Y.1993). Therefore, according to the district court, a federal court lacks subject matter jurisdiction to hear plaintiffs’ claims. We agree. Because this is a case of first impression in this Circuit we will outline and address the issues raised by plaintiffs in some detail. As the district court noted, the U.S. Court of Appeals for the Federal Circuit has on several occasions addressed the precise issue of this appeal. See Carter v. Gibbs, 909 F.2d 1452 (Fed.Cir.) (in banc), cert. denied, Carter v. Goldberg, 498 U.S. 811, 111 *467 S.Ct. 46, 112 L.Ed.2d 22 (1990); Adams v. United States, 979 F.2d 840 (Fed.Cir.1992), cert. denied, — U.S.-, 113 S.Ct. 2441, 124 L.Ed.2d 659 (1993); Aamodt v. United States, 976 F.2d 691 (Fed.Cir.1992); Muniz v. United States, 972 F.2d 1304 (Fed.Cir.1992).

Discussion

Plaintiffs’ claim is rooted in the overtime provision of the FLSA:

Except as otherwise provided ... no employer shall employ any of his employees who in any workweek ... [works] longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.

29 U.S.C. § 207(a)(1). A1974 amendment to the FLSA made it applicable to federal employees. Pub.L. 93-259, § 6, codified at 29 U.S.C. § 203(e)(2). Section 16 of the FLSA provides that employees aggrieved by a failure to pay the overtime mandated in the statute may maintain an action for unpaid compensation plus an equal amount as liquidated damages “in any Federal or State court of competent jurisdiction ...” 29 U.S.C. § 216(b).

The FLSA contains numerous listed exemptions to its overtime mandate provision, such as people employed in executive or administrative capacities and people who sell automobiles, boats, and aircraft. 29 U.S.C. § 213. Federal employees who are properly classified as exempt from the FLSA overtime provision are compensated for overtime under the FEPA, 5 U.S.C. § 5542, which provides two rate calculations, depending on the employee’s basic pay rate. An employee whose basic pay does not exceed the minimum basic pay for a GS-10 is compensated for overtime work at one and one-half times that employee’s basic pay rate. 5 U.S.C. § 5542(a)(1). All of the plaintiffs have a basic pay that exceeds the minimum basic pay at GS-10. Under FEPA, their overtime compensation is limited to one and one-half times the minimum basic hourly rate at GS-10. 5 U.S.C. § 5542(a)(2). Plaintiffs invoke federal jurisdiction under § 16(b) of the FLSA, 29 U.S.C. § 216(b), to redress their claim that the FDIC wrongfully classified their work as falling within the exceptions to the FLSA.

The question presented is whether the CSRA treats the FLSA overtime claims of unionized federal employees as subject exclusively to the negotiated grievance procedures set forth in the collective bargaining agreement absent a provision to the contrary in the agreement, and thereby limits their access to the courts under FLSA section 16. In other words, does the CSRA require that federal employees who wish to preserve their right to enforce FLSA claims in the courts negotiate through their unions for the inclusion of an express statement to that effect in the collective bargaining agreement?

A. The CSRA

The Supreme Court has “recognized that the CSRA ‘comprehensively overhauled the civil service system,’ ...

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22 F.3d 463, 1 Wage & Hour Cas.2d (BNA) 1645, 146 L.R.R.M. (BNA) 2296, 1994 U.S. App. LEXIS 8358, 1994 WL 143676, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oconnell-v-hove-jr-ca2-1994.