Wilson v. City of Charlotte

964 F.2d 1391, 30 Wage & Hour Cas. (BNA) 1497, 1992 U.S. App. LEXIS 10091

• Court: Court of Appeals for the Fourth Circuit
• Decided: May 8, 1992
• Docket: No. 89-2388
• Status: Published

Opinions

OPINION

WILKINS, Circuit Judge:

The City of Charlotte appeals the order of the district court granting summary judgment in favor of 156 individual Charlotte fire fighters (collectively, the “Fire Fighters”) on their claim that the City violated section 7(o) of the Fair Labor Standards Act, 29 U.S.C.A. § 207(o) (West Supp.1991). After oral argument before a panel, rehearing was ordered before this court sitting en banc. We now reverse the grant of summary judgment.

I.

Appellee Marvin O. Wilson, Jr., president of the Charlotte Fire Fighters Association Local 660, dispatched a letter dated December 3, 1985 to Fire Chief R.L. Blackwelder challenging the City’s practice of awarding Fire Fighters compensatory time instead of cash payment for overtime hours worked. In his letter, Wilson referred to recently enacted amendments to the Fair Labor Standards Act and asserted that under newly added section 7(o) the City could not provide compensatory time in lieu of cash payment for overtime without first reaching an agreement with the representative of the Fire Fighters. He notified Chief Blackwelder that he and 155 other Fire Fighters had selected Local 660 of the International Association of Fire Fighters as their representative under subsection 7(o)(2)(A)(i) and that, absent an appropriate agreement under this section, the City was required to pay cash for all overtime work. Chief Blackwelder refused to bargain with Local 660 because North Carolina law prohibited contracts between governmental units and labor unions. The Fire Fighters instituted this action in February 1988, claiming that the compensatory time policy violated section 7(o) of the Act because the City refused to recognize and negotiate with Local 660 as the Fire Fighters’ designated representative. They sought a monetary award in the form of liquidated damages equal to their accrued unpaid compensation for overtime. Granting the Fire Fighters’ motion for partial summary judgment, the district court held that the City was obligated to enter into an agreement with the Fire Fighters’ designated representative in order to provide compensatory time.

II.

As originally enacted, the Fair Labor Standards Act was not applicable to state or local public employers. Although Congress attempted to subject state and local governmental employers to the minimum wage and overtime requirements of the Act, the Supreme Court held that these requirements were not enforceable against public employers when traditional governmental functions were involved. National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976). In Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985), the Court overruled National League of Cities and held that employees of a municipal transit authority were entitled to the protection afforded by the minimum wage and overtime requirements of the Act. Id. at 554-57, 105 S.Ct. at 1019-21.

In response to the Garcia decision, Congress amended provisions of the Act applicable to state and local public agencies in order to align the statutory scheme with the recent decision and to prevent undue hardship to public employers resulting from the financial burden of paying cash overtime compensation to public employees. See S.Rep. No. 159, 99th Cong., 1st Sess. 7-8 (1985), reprinted in 1985 U.S.C.C.A.N. 651, 655. These amendments included the addition of section 7(o) that provides in pertinent part:

(1) Employees of a public agency which is a State, a political subdivision of a State, or an interstate governmental agency may receive, in accordance with this subsection and in lieu of overtime compensation, compensatory time off at a rate not less than one and one-half hours for each hour of employment for which overtime compensation is required by this section.

(2) A public agency may provide compensatory time under paragraph (1) only—

(A) pursuant to—

(i) applicable provisions of a collective bargaining agreement, memorandum of understanding, or any other agreement between the public agency and representatives of such employees; or

(ii) in the case of employees not covered by subclause (i), an agreement or understanding arrived at between the employer and employee before the performance of the work ...

(B) ....

In the case of employees described in clause (A)(ii) hired prior to April 15,1986, the regular practice in effect on April 15, 1986, with respect to compensatory time off for such employees in lieu of the receipt of overtime compensation, shall constitute an agreement or understanding under such clause (A)(ii). Except as provided in the previous sentence, the provision of compensatory time off to such employees for hours worked after April 14, 1986, shall be in accordance with this subsection.

29 U.S.C.A. § 207(o).

Following the addition of section 7(o) to the Act, a public employer who wishes to provide compensatory time off in lieu of monetary compensation for overtime work to its employees has several courses of action available. Pursuant to subsection 7(o)(2)(A)(i), it may reach an agreement with a representative of its employees. 29 U.S.C.A. § 207(o )(2)(A)(i). If an agreement is not reached with the employees’ representative, a public employer may enter into an agreement with individual employees. 29 U.S.C.A. § 207(o )(2)(A)(ii); Dillard v. Harris, 885 F.2d 1549, 1552 (11th Cir.1989) (finding that, within the meaning of subsection (ii), employees are not “covered by” subsection (i) unless an agreement has been reached with the employees’ representative), cert. denied, — U.S. -, 111 S.Ct. 210, 112 L.Ed.2d 170 (1990); but see International Ass’n of Fire Fighters, Local 2203 v. West Adams County Fire Protection Dist., 877 F.2d 814 (10th Cir.1989) (holding public agency may not reach agreement with individual employees if those employees have designated a representative). In the absence of an agreement, and subject to the exception for employees hired prior to April 15, 1986, the Act mandates that a public employer compensate its employees for overtime work with monetary payments. 29 U.S.C.A. § 207(o); Dillard, 885 F.2d at 1556.

As noted above, the Act affords an exception to its general provision that the public agency must compensate its employees with cash for overtime work unless an agreement for compensatory time has been reached. See 29 U.S.C.A. § 207(o )(2)(B). For “employees not covered by subclause (i),” 29 U.S.C.A. § 207(o )(2)(A)(ii), who were “hired prior to April 15, 1986, the regular practice in effect on April 15, 1986, with respect to compensatory time off for such employees in lieu of the receipt of overtime compensation, shall constitute an agreement or understanding under such clause (A)(ii),” 29 U.S.C.A. § 207(o )(2)(B). Thus, in the absence of an agreement under subsection 7(o )(2)(A)(i), with regard to employees hired prior to April 15, 1986, the regular practice with respect to overtime compensation in effect on that date is deemed to be an agreement under subsection 7(o )(2)(A)(ii).

Turning to the present controversy, it is undisputed that no agreement was reached between the City and the Fire Fighters or their representative and that the Fire Fighters were hired prior to April 15, 1986.¹ Additionally, it is clear that the regular practice in effect on that date was for the City to award and the employees to accept compensatory time in lieu of cash payment for overtime work. While Wilson’s letter to Chief Blackwelder may have expressed the employees’ dissatisfaction with the practice, it did not negate the existence of the regular practice, one that continued after the letter was written. We conclude, therefore, that this regular practice “constitute^] an agreement or understanding under such clause (A)(ii).” 29 U.S.C.A. § 207(o )(2)(B); see also Dillard, 885 F.2d at 1553.

III.

Noting that the letter from Wilson to Chief Blackwelder was written prior to April 15, 1986, the Fire Fighters contend that because a representative had been designated prior to this date the City may not unilaterally elect to continue the regular practice of providing compensatory time in lieu of cash. The Fire Fighters first suggest that Abbott v. City of Virginia Beach, 879 F.2d 132 (4th Cir.1989), cert. denied, 493 U.S. 1051, 110 S.Ct. 854, 107 L.Ed.2d 848 (1990), is controlling and assert that it holds that if a public employer refuses to recognize the employees’ designated representative the employer is required to allow each employee the choice of compensatory time or cash. Second, the Fire Fighters contend that a Department of Labor regulation precludes reliance by the City on the practice in place prior to April 15, 1986.

The Fire Fighters misread Abbott. In Abbott, as in this case, the city refused to entertain negotiations with the union representative on the basis that state law prohibited a public entity from engaging in collecfive bargaining. We held that subsection 7(o )(2)(A)(ii) permitted a public employer to offer its employees a choice between compensatory time or cash for overtime. 879 F.2d at 137. Abbott, however, does not mandate that when a subsection 7(o )(2)(A)(i) agreement is not reached, a subsection (ii) agreement with individual employees must be reached. Indeed, nothing in Abbott, or in section 7(o), can be read to require that the parties reach an agreement.

The Department of Labor regulation on which the Fire Fighters rely provides in part:

No agreement or understanding is required with respect to employees hired prior to April 15, 1986, who do not have a representative, if the employer had a regular practice in effect on April 15, 1986, of granting compensatory time off in lieu of overtime pay.

29 C.F.R. § 553.23(a)(1) (1991) (emphasis added). The Fire Fighters contend that because they had designated Local 660 as their representative prior to April 15, 1986, the City may not rely upon the regular practice in effect on that date. We assume, without deciding, that this regulation is a proper exercise of the Secretary’s authority because on the facts presented by this appeal, the regulation does not mandate that the Fire Fighters prevail.²

In adopting this regulation, the Department of Labor acknowledged that public employers in some states would be prohibited from recognizing and negotiating with certain employee representatives. See Dillard, 885 F.2d at 1556. Consequently, the Department expressed its “ ‘intention that the question of whether employees have a representative ... shall be determined in accordance with State or local law and practices.’ ” Abbott, 879 F.2d at 136 (quoting 52 Fed.Reg. 2012, 2014-15 (Jan. 16, 1987)). Because Local 660 was not a representative whom the City could recognize consistently with state law, see N.C.Gen.Stat. § 95-98 (1989), the Fire Fighters did not have a representative within the meaning of the regulation and, therefore, are not assisted by 29 C.F.R. § 553.23(a)(1).³ See Dillard, 885 F.2d at 1556.

IV.

In sum, in order to determine if the City properly continued to provide compensatory time off in lieu of monetary compensation for the Fire Fighters, we are first called upon to decide whether the Fire Fighters have entered into an agreement with the City under either subsection (i) or (ii). No “collective bargaining agreement, memorandum of understanding, or any other agreement” was reached, nor have individual agreements with the employees been struck. However, because the Fire Fighters are not covered by subsection (i); because they were hired prior to April 15, 1986; and because the regular practice pri- or to that date was to award compensatory time for overtime work, that practice is deemed to constitute.an agreement under subsection (ii). Consequently, by virtue of this statutorily imposed agreement, the City may continue to provide compensatory time for overtime work.

REVERSED AND REMANDED.

1 . After April 15, 1986, the City has required all new employees to read and sign a statement acceding to its policy of granting compensatory time instead of cash for overtime.

2 . Because we find that the Fire Fighters did not have a representative within the meaning of the regulation, we need not, indeed should not, resolve the hypothetical question of the proper interpretation of the regulations if they had had a representative. Similarly, our disposition of this question negates the necessity of considering whether the regulation constitutes a valid exercise of the authority of the Secretary. We, therefore, decline to express an opinion on these issues. Contrary to the suggestion of the concurring opinion, our decision to decline to resolve these issues is driven by a desire to adhere to our view of the proper scope of appellate review.

3 . The Fire Fighters' reliance on other portions of 29 C.F.R. § 553.23 is similarly foreclosed because they did not have a representative within the meaning of the regulation.