|August 13, 2014|
Previously published on August 11, 2014
Remember last fall when all we could talk about was the government shutdown? The 16-day government shutdown captured the attention of a nation once again gripped by seemingly-manufactured political crisis. Last week, two news items reminded me that while the shutdown is now long behind us, its effects are still being felt. The first was an article in the Washington Post, which reported about the existence of a shutdown baby boom.
Apparently, DC-area hospitals noticed a sizable increase in deliveries in July - yes, you guessed it, 9 months after the shutdown. One hospital even reported a 50% jump, which proves that the shutdown wasn’t all bad for some of the 800,000 affected federal employees. Don’t be surprised if “Furlough” makes the most popular name list next year in D.C.
The second news item which caught my eye was the release of Martin v. U.S. - a decision out of the little-known Court of Federal Claims - a court that is empowered to adjudicate, among other claims, claims for money against the federal government.
In Martin, several employees that the government required to work during the shutdown sued the government for, among other things, failing to timely pay them (and other potential class members) the minimum wages and overtime they were due - the government didn’t do so until after the shutdown concluded. The government asked the court to throw the case out, but it refused.
The court acknowledged that while the Fair Labor Standards Act and its interpreting regulations do not include a specific payment timing requirement, the Supreme Court’s Brooklyn Savings case did import an “on time” payment requirement into the Act. Thus, the court found, the workers properly stated a claim for a FLSA violation when the government failed to pay them by their next regularly-scheduled payday.
Further of note, the court also refused to rule out the possibility of liquidated or double damages award to employees at this early stage of the litigation even though, the government argued, a federal law prohibited it from paying the wages during the shutdown and it paid them as soon as possible after the shutdown concluded. The court preferred instead for the parties to develop an evidentiary record on whether the government acted in good faith and had a reasonable basis for believing it was complying with the FLSA, and then it would be happy to rule on the issue on summary judgment or trial.
A potential class could include thousands or even hundreds of thousands of federal workers and a ruling against the government would leave us, the taxpayers, once again on the hook, for this sordid shutdown affair. We don’t know how the case will turn out just yet, but if anything, it shows the government how difficult it can be to navigate, understand and fully comply with the (seemingly-endless and often hyper-technical) wage and hour laws and regulations — even for the most well-intentioned of employers — something we hope the government will consider as it continues to pursue an aggressive regulatory and enforcement agenda.