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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Linda Kazinetz
Classification Appeals and FLSA Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance


06/05/2017

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Date

Introduction

On May 9, 2012, the U.S. Office of Personnel Management (OPM) received a letter dated May 9, 2012, from the Law Offices of Bernstein & Lipsett, P.C. (B & L), the claimant’s duly appointed representative, concerning a Fair Labor Standards Act (FLSA) claim they had initially filed on the claimant’s behalf with the General Accounting Office (GAO), now the U.S. Government Accountability Office, on April 28, 1994, and subsequently with OPM on October 21, 1999, challenging his exemption status under the FLSA when he was employed as a Criminal Investigator, GS-1811, at the GS-11 through GS-13 levels with the U.S. Customs Service (USCS), now integrated into the Department of Homeland Security (DHS).  The claimant was a plaintiff in a lawsuit filed in the U.S. Court of Federal Claims at approximately the same time the administrative claim was filed with GAO.  Based on information provided by B & L, the claimant was awarded back pay under a settlement agreement for the pay period ending May 2, 1992, to the pay period ending October 29, 1994, subject to the two-year statute of limitations for FLSA claims under 29 United States Code (U.S.C.) 255(a).

B & L has requested OPM adjudicate the administrative claim filed with OPM and asserts that, because the claimant served in the military during the Gulf War, the statute of limitations applicable to this claim is the five-year statute of limitations under 31 U.S.C. 3702(b)(2) rather than the two-year statute of limitations (three years for willful violations) applicable to FLSA administrative claims filed under the Barring Act.  See 73 Comp. Gen 157 (May 23, 1994); 31 U.S.C. 3702(b); 29 U.S.C. 255(a).  B & L states the claimant was called to active duty with the United States Army Reserve “from approximately February 25, 1991 to July 18, 1991” in connection with Operation Desert Shield/Storm and, citing the provisions of 31 U.S.C. 3702(b)(2), asserts: “[H]e is entitled to retroactive back pay and interest… for the period he was employed prior to the commencement of the Gulf War on August 2, 1990 in addition to the period he was employed by Customs after the commencement of the Gulf War, up to the date he recovered under previous FLSA settlements.  This period includes August 2, 1985, to April 18, 1992, less Mr. Walsh’s active duty military service time, for which he does not seek recovery.”[1]

In reaching our FLSA claim decision, we have carefully reviewed all information furnished by the claimant’s representative and the agency, including information obtained from a telephonic interview with the claimant.

Background

We previously accepted and decided six similar claims under section 4(f) of the FLSA, as amended, codified at section 204(f) of title 29, U.S.C., which we denied as time barred.  Subsequently, the claimant’s representative brought suit under the Administrative Procedure Act (5 U.S.C. 551 et seq., and 701 et seq.) in the United States District Court for the District of Columbia, alleging that OPM wrongfully applied a two-year statute of limitations in denying their administrative claims for unpaid FLSA overtime pay.  Armstrong v. Archuleta, 77 F.Supp.3d 9 (December 30, 2014).  In relevant part, the court stated in its opinion:

All Plaintiffs are deemed to have timely filed their claims as of the date of their filings with the Claims Court. As a result, Plaintiffs . . . can recover for the entire claim period under the five-year statute of limitations- that is, for all claims that accrued within five years before the Gulf War commenced on August 2, 1990—minus monies paid under their DOJ Settlements.

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[T]he case is remanded to OPM to adjudicate and process damages in accordance with FLSA and other applicable laws, and Plaintiffs’ respective employing agencies are directed to compensate them in accordance with OPM’s determinations.

Consistent with the holding in the Armstrong case, we will apply the five-year statute of limitations and corrective methodology (subtracting monies already received under prior settlements or judgments) to the claims of similarly-situated claimants we find to be FLSA nonexempt and potentially due FLSA overtime pay. 

Analysis

Under the provisions of 5 CFR 551.706, OPM determines the facts necessary to adjudicate a claim.  Applying the court’s mandate to determine whether the claimant is owed overtime pay under the FLSA, we must first determine whether the work he performed is exempt or nonexempt from the overtime pay provisions of the FLSA.  On September 29, 2015, in response to the aforementioned court decision, OPM requested an agency administrative report (AAR) from DHS regarding this FLSA claim.  By letter dated October 28, 2016, DHS advised OPM that although GS-1811 criminal investigators at the GS-9, 11, and 12 levels were designated exempt, based on their fact finding they should be considered nonexempt.  Based on careful review of the record, we concur with the agency’s determination and have not separately addressed the claimant’s GS-11 and GS-12 work in this decision. 

The claimant is requesting compensation, less his active duty military service time,[2] for criminal investigator work performed while he was a GS-11 with the Office of Enforcement’s Houston Aviation Branch from March 15, 1987, to February 13, 1988; as a GS-12 with the Office of Enforcement’s Houston Aviation Branch from February 14, 1988, to January 13, 1990; and as a GS-12 with the Internal Security Division of the Office of Internal Affairs (IA) in Houston, Texas, from January 14, 1990, to August 10, 1991.[3]  Therefore, USCS would have been required to compensate the claimant under the overtime provisions of Subpart E of Part 551 of 5 CFR for this work performed within the claim period.

Regarding the exemption status of criminal investigators at the GS-13 level, the agency references a standard GS-13 position description (PD)(#T046034) used at the time of this claim to describe the work of Senior Special Agents.[4]  The GS-13 criminal investigators “were expected to take on a leadership role in coordinating and directing investigations, providing training, and advising and representing USCS management on critical law enforcement programs involving highly important functions that influence accomplishment of objectives of the entire Customs Service.”  The agency states that “[i]f the Senior Special Agents’ position description is accurate, they could potentially qualify as exempt administrative employees.”  However, the agency indicates that “[a]lthough the duties described above would likely qualify as exempt work, the GS-1811-13 position description also includes a number of non-exempt duties.”  The agency notes these nonexempt duties include conducting “highly complex and sensitive criminal investigations.”  Given their assessment of the PD and the need to clarify the actual duties performed by GS-13 Senior Special Agent claimants, the agency defers to OPM to resolve their exemption status.  Therefore, our analysis only addresses the period he served as a GS-13 criminal investigator.

Position information

From August 11, 1991, to April 18, 1992, the claimant occupied a GS-13 criminal investigator position with IA in Houston, Texas.  The function of IA was to investigate allegations of criminal or administrative misconduct or violations committed by USCS employees within the Southwest Region.

The claimant developed and investigated cases from complaints initially reported by citizens, victims, and USCS and other Government employees.  Once an investigation was assigned, he identified relevant issues, decided the course of the investigation, pursued the facts, and collected information.  He conducted interviews with individuals who filed the complaint, the employees alleged to be involved in the violations, eyewitnesses, and other individuals relevant to or part of the investigation.  In performing investigations, the claimant’s work also involved reviewing personnel, financial, and other records; conducting lawful searches and seizures of illicit materials; securing and serving summons and search warrants; carrying out surveillance and wire-tapping; and arresting alleged violators.  He developed suspect profiles and gathered evidence to demonstrate to the local U.S. Attorney that the elements of a crime had been committed.  The claimant was sometimes called upon to testify in a U.S. court.  Knowledge required by his position included that of the laws, statutes, and regulations on which USCS enforcement authorities are based, and specific case law regarding seizures, civil rights, and preservation of evidence.  The claimant worked under the general direction and policy guidance of the IA’s Group Supervisor.

Evaluation of FLSA Coverage

Sections 551.201 and 551.202 of title 5, CFR, require an employing agency to designate an employee FLSA exempt only when the agency correctly determines that the employee meets one or more of the exemption criteria.  In all exemption determinations, the agency must observe the following principles:  (a) Each employee is presumed to be FLSA nonexempt.  (b) Exemption criteria must be narrowly construed to apply only to those employees who are clearly within the terms and spirit of the exemption.  (c) The designation of a position’s FLSA status ultimately rests on the duties actually performed by the employee.

Because the claim period when the claimant occupied his GS-13 position covers 1991 to 1992, we must apply the FLSA regulations of 5 CFR Part 551 (1990) in effect during the period of the claim.  The claimant believes his position should have been designated as nonexempt from the overtime pay provisions of the FLSA and thus not covered by the executive, administrative, or professional exemptions as detailed in 5 CFR 551.204, 5 CFR 551.205, and 5 CFR 551.206 of those regulations.

The agency indicates that due to the age of the claim, it could provide only limited information regarding the claimant’s employment with USCS during the claim period.  In its letter of October 28, 2016, to OPM, the agency made no final determination on whether the claimant’s GS-13 criminal investigator position met the exemption criteria.  Based on careful review of the record and the claimant’s assigned duties and responsibilities, we conclude the claimant’s position did not meet the executive or professional exemption criteria, and the claimant does not disagree.  However, we have evaluated his GS-13 criminal investigator position against the administrative exemption criteria in effect during the time of the claim.

GS-1811-13 position occupied from August 11, 1991, to April 18, 1992

The regulation under 5 CFR 551.205 describes the administrative exemption criteria as follows:

An administrative employee is an advisor, assistant, or representative of management, or a specialist in a management or general business function or supporting service who meets all of the following criteria:

(a) The employee’s primary duty consists of work that:  (1) significantly affects the formulation or execution of management policies or programs; or (2) involves general management or business functions or supporting services of substantial importance to the organization serviced; or (3) involves substantial participation in the executive or administrative functions of a management official.

(b) The employee performs office or other predominantly non-manual work which is:  (1) intellectual and varied in nature; or (2) of a specialized or technical nature that requires considerable special training, experience, and knowledge.

(c) The employee must frequently exercise discretion and independent judgment, under only general supervision, in performing the normal day-to-day work.

Although no longer in effect, the definitions of terms used in the FLSA exemption criteria as contained in the Attachment to Federal Personnel Manual (FPM) Letter 551-7, dated July 1, 1975, provide useful guidance in applying the administrative exemption criteria in 5 CFR 551.205 discussed above.  The meaning of terms relevant to the criteria follows.

(a) Primary duty.  As a general rule, the primary duty is that which constitutes the major part (over 50%) of the employee’s work.

(b) Formulation or execution of management policies or programs.  Management policies and programs range from broad national goals that are expressed in statutes or Executive Orders to specific objectives of a small field office.  Employees may actually make policy decisions or participate indirectly, through developing proposals that are acted on by others.  Employees who significantly affect the execution of management policies or programs typically are those whose work involves obtaining compliance with such policies by other individuals or organizations, within or outside of the Federal Government, or making significant determinations in furtherance of the operation of programs and accomplishment of program objectives.  Administrative employees engaged in formulation or execution of management policies or programs typically perform one or more phases of program management (i.e., planning, developing, promoting, coordinating, controlling, or evaluating operating programs of the employing organization or of other organizations subject to regulation or other controls).  Some of these employees are classified in occupations that reflect these functions (e.g., program analyst) but many are classified in subject matter occupations.

(c) General management, business, or supporting services.  This element brings into the administrative category a wide variety of specialists who provide general management, business, or other supporting services as distinguished from production functions.  Administrative employees in this category provide support to line managers by:  (1) providing expert advice in specialized subject matter fields, such as that provided by management consultants or systems analysts; (2) assuming facets of the overall management function, such as safety management, personnel management, or budgeting and financial management; (3) representing management in such business functions as negotiating and administering contracts, determining acceptability of goods or services, or authorizing payments; or (4) providing supporting services, such as automated data processing, communications, or procurement and distribution of supplies.  To warrant exemption, each employee’s work must involve substantial discretion on matters of enough importance that the employee’s actions and decisions have a noticeable impact on the effectiveness of the organization advised, represented, or serviced.

(d) Participation in the functions of a management official.  This element includes those employees (variously identified as secretaries, administrative or executive assistants, aids, etc.) who participate in portions of the managerial or administrative functions of a supervisor whose scope of responsibility precludes personally attending to all aspects of the work.  To support exemption, such assistants must be delegated and exercise substantial authority to act for the supervisor in the absence of specific instructions or procedures.  Typically these employees do not have technical knowledge of the substantive work under the supervisor’s jurisdiction.  Their primary knowledge is of administrative procedures, organizational relationships, and the policies, plans, interests and views of the supervisor.

The FPM letter lists three elements involved in the evaluation of discretion and independent judgment:  (1) The work must involve sufficient variables as to regularly require discretion and judgment in determining the approaches and techniques to be used, and in evaluating results.  This precludes exempting employees who perform work primarily requiring skill and applying standardized techniques or knowledge of established procedures, precedents, or other guidelines which specifically govern the employee’s action.  (2) The employee must have authority to make such considerations during the course of assignment.  This precludes exempting trainees who are in a line of work which requires discretion but who have not been given authority to decide discretionary matters independently.  (3) The decisions made independently must be significant.  Although this term is not so restrictive as to include only the kinds of decisions made by employees who formulate policies or exercise broad commitment authority, it does not extend to the kinds of decisions that affect only the procedural details of the employee’s own work, or to such matters as deciding whether a situation does or does not conform to clearly applicable criteria.

The claimant’s investigative work did not meet paragraph (a) of the administrative exemption criteria.  His primary duty was not to serve as an advisor, assistant, or representative of agency management, or as a specialist in a management or general business function or supporting service.  As a GS-13 investigator for an IA office, he spent all of his time conducting investigations of allegations of criminal and administrative misconduct or violations committed by USCS employees for the Southwest Region.  Allegations included bribery, fraud, corruption, embezzlement, theft or misuse of funds or Government property, unauthorized release of classified information, drug use or possession, and smuggling of drugs, aliens, and other contraband.  The claimant provided the name of his previous supervisor (i.e., the IA’s Group Supervisor), but none of the voicemail and other messages sent through the contact information we identified were answered.  Because the claimant was unable to provide names and/or contact information for coworkers, we were unable to confirm his primary duties during this period from other sources.  However, the burden of proof lies with the agency to show that a position is FLSA exempt, and the USCS has failed to provide any information indicating the claimant’s primary duty was to serve as an advisor, assistant, or representative of agency management, or as a specialist in a management or general business function or support service.

The claimant did not meet the requirements of (a)(1) of the administrative exemption criteria. Contrary to the agency’s assertion that GS-13 Special Agents advised management officials on “critical law enforcement programs involving highly important functions that influence accomplishment of objectives of the entire Customs Service,” we found the claimant’s primary duties did not significantly affect the formulation or execution of management policies or programs.  The claimant carried out individual investigations rather than major assignments associated with conducting the operations of the organization.  As an IA employee at a field office performing investigative work, he did not make policy decisions or participate indirectly through developing proposals that were acted on by others.  Rather than affecting the organization’s operations to a substantial degree, the claimant’s work products tracked an individual investigation to determine whether a crime or misconduct had occurred.  For example, when the IA office received a report of theft at the airport, he conducted the investigation by verifying a theft occurred, conducting interviews, identifying the employees or other individuals with opportunity and motive, and gathering sufficient evidence to support conclusions.  He forwarded cases requiring legal action to the U.S. Attorney for prosecution of the facts meeting a criminal offense.  His reports with findings of administrative misconduct were forwarded to the Group Supervisor and others, who issued letters to the supervisor of the employee (i.e., the subject of the investigation) with recommendations of actions to be taken including oral admonishment, suspension, termination, and demotion.  The claimant’s investigative work did not involve making significant determinations in furtherance of the operation of programs and accomplishment of program objectives.  In addition, unlike administrative employees, he did not perform any phases of program management such as planning, controlling, or evaluating operating programs.

The claimant did not meet the requirements of (a)(2) of the administrative exemption criteria.  His primary duties did not involve general management or business functions or supporting services of substantial importance to the organization serviced.  Although he performed a staff support function by providing factual investigative information to assist his agency management in making recommendations on individual allegations of employee misconduct, the claimant did not perform a support function of substantial importance to the organizations serviced as expected by (a)(2).  He independently investigated allegations and submitted investigative reports at the conclusion of a case.  If his findings revealed, for example, that a crime occurred due to insufficient personnel at the Mexican border, IA management may have recommended staffing or scheduling changes.  However, the claimant’s investigative responsibilities are not viewed as an extension of the management process, and the impact of his work was limited to that which he personally performed relating to the subject individual investigation, rather than helping to manage or affecting the management of significant matters within the claimant’s agency.  Furthermore, he was not involved in systems analysis and general management support functions, e.g., safety and personnel management, budgeting, and financial management.  The claimant did not represent agency management in negotiating and administering contracts for goods or services, and did not provide support services, e.g., automated data processing, communications, procurement, and distribution of supplies.

The claimant did not meet the requirements of (a)(3) of the administrative exemption criteria.  His assignments did not involve substantial participation in the executive or administrative functions of a management official.  He did not act as a secretary or administrative assistant participating in portions of the managerial or administrative functions of a supervisor, with no requirement for technical knowledge of the substantive work under the supervisor’s jurisdiction.  Unlike such employees, the claimant independently performed the IA work in a field office requiring technical knowledge of substantive law enforcement and investigative work relating to violations of laws.

The claimant does not meet the administrative exemption because he does not meet paragraph (a) of the criteria.  Although we conclude he met paragraphs (b) and (c) of the exemption criteria, we will not discuss them since an administrative employee must meet (a), (b), and (c) in its entirety.

Decision

The claimant's work was nonexempt (i.e., covered by the overtime pay provisions of the FLSA), and he is entitled to compensation for all ovetime hours worked at the FLSA overtime rate for the period of the claim he was improperly designated as FLSA exempt; i.e., from March 15, 1987, to April 18, 1992, less his active duty military service time from February 25, 1991, to July 18, 1991. Since his FLSA settlement was for a time period susbequent to April 18, 1992, it is not germane to the overtime pay calculation for the period of the claim covered by this decision. The agency must follow the compliance requiremetns on page ii of this decision.

The claimant must submit evidence showing the amount and extent of overtime that was performed as provided for in 5 CFR 551.706(a) as informed by the agency payroll records submitted to OPM and the claimant.  The agency will have the opportunity to review this evidence using any sources of information available, including witnesses, before a determination is made as to whether the claimant is entitled to any back pay under the FLSA and any interest as required under 5 CFR part 550, subpart H.[5]  Any petition for attorney’s fees and expenses must be submitted to the agency out of which this claim arose.  Should the claimant be determined to be entitled to back pay which the claimant believes to be incorrectly computed, the claimant may file a new FLSA claim with this office.

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