Hans Heitmann v. City of Chicago ( 2009 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 08-1555
H ANS G. H EITMANN, et al.,
Plaintiffs-Appellees,
v.
C ITY OF C HICAGO, ILLINOIS,
Defendant-Appellant.
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
Nos. 04 C 3304 & 04 C 5712—Sidney I. Schenkier, Magistrate Judge.
A RGUED S EPTEMBER 22, 2008—D ECIDED M ARCH 25, 2009
Before E ASTERBROOK , Chief Judge, and R OVNER and
W ILLIAMS, Circuit Judges.
E ASTERBROOK, Chief Judge. State and local governments
are entitled to offer compensatory time off in lieu of
overtime pay, if employees agree to this procedure. 29
U.S.C. §207(o). See Christensen v. Harris County, 529 U.S.
576 (2000). With the assent of the police officers’ union,
Chicago has implemented a comp-time program. In this
suit, some of the officers who have accumulated credits
under the program contend that Chicago has made the
2 No. 08-1555
leave too hard to use. A magistrate judge, presiding by the
parties’ consent, agreed with plaintiffs and entered a
detailed injunction specifying how Chicago must handle
all future applications for compensatory leave. 2007
U.S. Dist. L EXIS 67684 (N.D. Ill. Sept. 11, 2007) (decision
on merits); 2008 U.S. Dist. L EXIS 12983 (N.D. Ill. Feb. 21,
2008) (injunction).
The parties’ dispute concerns the effect of §207(o)(5):
An employee of a public agency which is a State,
political subdivision of a State, or an interstate
governmental agency—
(A) who has accrued compensatory time off
authorized to be provided under paragraph
(1), and
(B) who has requested the use of such compen-
satory time,
shall be permitted by the employee’s employer to
use such time within a reasonable period after
making the request if the use of the compensatory
time does not unduly disrupt the operations of the
public agency.
Plaintiffs say that a need to consider “undue disruption”
supposes a particular time, so that employees are entitled
to leave on a date and time of their own choosing, unless
this would mean that too few police officers remained
available for service. Chicago reads the language to
mean that the Police Department, rather than the officer,
gets to name the date and time for leave. Officers may
submit requests; all the Department need do is offer
No. 08-1555 3
some leave within a “reasonable time” of the request. The
only effective restraint, in the City’s view, is that officers
may not accumulate more than 480 hours of leave.
Compensatory time is granted whenever an officer
works more than 171 hours in any 28-day period. (Ninety
minutes of comp time are awarded for each extra hour
worked.) Once any given officer accumulates more than
480 hours, future overtime must be paid in cash. As long
as it keeps the balance below 480 hours per officer, the
City submits, it gets to call the shots about when the
leave may be used.
After the parties collected extensive evidence, the
magistrate judge found it undisputed that the Police
Department does not have any policy about how and
when leave may be used; decisions are left to each
watch commander or shift supervisor. Most commanders
or supervisors, most of the time, grant or reject applica-
tions for leave on a specific day without giving reasons.
They do not attempt to get a substitute for a person
who wants time off; instead they ask whether the shift or
unit still would have enough personnel if leave were
granted and no other change were made. If an ap-
plication is granted, the supervisor or commander may
or may not give the officer the date and time requested.
If the application is denied, it is not put in a queue for
use at the next time when leave would not “unduly
disrupt” operations; instead the application is returned
to the officer, who is told to apply again—but without
any guidance about when leave could be made avail-
able without undue disruption. The Department
does not keep records of requests for compensatory
4 No. 08-1555
leave, so we do not know how often officers get to take
time off on the dates they request, or even how many
times they must apply (on average) to have any leave
granted.
The magistrate judge concluded that these informal
procedures fail to ensure that each worker gets to use
leave within a reasonable time, and do not ensure that
officers get their choice of dates for leave unless undue
disruption would ensue. He issued an injunction to
supply the rules he thought needed. Choosing that
remedy was a misstep.
The Fair Labor Standards Act allows injunctions, 29
U.S.C. §217, but equitable relief is appropriate only when
the remedy at law is inadequate. See Sampson v. Murray,
415 U.S. 61 (1974). Comp time is a substitute for over-
time pay. If an employer fails to honor the statutory
conditions for using compensatory leave in lieu of over-
time pay, then it must pay time-and-a-half for most
overtime hours (and double time for some). Any injury
is compensable by money; a larger paycheck is the
normal remedy under the Fair Labor Standards Act, and
it is hard to see why money damages would be inade-
quate for an employer’s violation of §207(o)(5).
That’s not all. Injunctive relief under §217 is permissible
only in suits by the Secretary of Labor. 29 U.S.C. §211(a)
(“Except as provided in section 212 of this title, the Ad-
ministrator shall bring all actions under section 217 of
this title to restrain violations of this chapter.”). See Howard
v. Springfield, 274 F.3d 1141, 1145 (7th Cir. 2001). (The
exception in §212 deals with child labor and does not
No. 08-1555 5
affect this suit.) Injunctions can cause major disruptions
to an employer’s practices, even though most employees
are satisfied with them, and can be impossible to bargain
around. The statute leaves the heavy artillery to public
officials—or to unions through collective bargaining. The
police union could bargain for the sort of changes that
these plaintiffs want to see made; so far, however, most
officers seem willing to accept the City’s practices. (Plain-
tiffs in this representative action are a small fraction of
all police officers in Chicago.) A regulatory injunction
is hard to administer, and although Congress was
willing to involve the judiciary in this process when the
Secretary serves as the principal monitor, allowing a
handful of disgruntled employees (and their lawyer)
to serve as monitors, displacing their representative in
collective bargaining, would be unfortunate.
We stayed the injunction and asked the parties how it
could be sustained, given §211(a) and the irreparable-
injury requirement; they agree that it cannot be. The
City goes further and contends that §211(a) deprives the
district court of subject-matter jurisdiction, so that the
suit must be dismissed even though Chicago did not
call §211(a) to the district court’s attention. But juris-
diction depends not on §217, which just specifies one
potential remedy, but on 28 U.S.C. §1331, for plaintiffs’
claim arises under federal law. There is a further grant of
subject-matter jurisdiction in 29 U.S.C. §216(b) for suits
alleging violations of §207. The Supreme Court requires
us to distinguish between true jurisdictional limits and
mandatory case-processing rules. See Arbaugh v. Y&H
Corp., 546 U.S. 500 (2006); Eberhart v. United States, 546
6 No. 08-1555
U.S. 12 (2005); Kontrick v. Ryan, 540 U.S. 443 (2004). Section
211(a) is on the claim-processing side of this line. It is
mandatory, and having been invoked will be enforced,
but this does not require us to throw the suit out of court
and compel plaintiffs to start from scratch.
If plaintiffs have a good claim, then they are entitled
to some relief—whether damages, a declaratory jud-
gment (a simple one, shorn of all the regulatory ap-
paratus of the magistrate judge’s injunction), or a combi-
nation of the two is a question best addressed in the
district court. Prevailing parties get the relief to which
they are entitled, no matter what they ask for. Fed. R. Civ.
P. 54(c). So we turn to the merits.
Chicago’s position that the employer may disregard an
employee’s request for a particular date off has the sup-
port of Houston Police Officers’ Union v. Houston, 330 F.3d
298 (5th Cir. 2003), and Mortensen v. Sacramento, 368 F.3d
1082 (9th Cir. 2004). Plaintiffs’ view that the “undue
disruption” criterion supposes that employees may
designate when they will go on leave, unless that date
or time would be too disruptive, has the support of Beck
v. Cleveland, 390 F.3d 912 (6th Cir. 2004), plus 29 C.F.R.
§553.25. And plaintiffs say that their position also has
the Supreme Court’s support.
Christensen holds that an employer may compel workers
to use compensatory leave, even though the workers
would prefer to accumulate more (so that it could be used
for long vacations). The Court summed up what it under-
stood to be the effect of §207(o)(5) this way: “the better
reading of § 207(o)(5) is that it imposes a restriction upon
No. 08-1555 7
an employer’s efforts to prohibit the use of compensatory
time when employees request to do so; that provision
says nothing about restricting an employer’s efforts to
require employees to use compensatory time.” 529 U.S. at
585 (emphasis in original). Plaintiffs read this language
as an endorsement of their position. We don’t think
that’s right. The passage “when they request to do so” does
not (at least, need not) imply that the Justices were think-
ing “request to do so at a particular date and time”; the
point of the passage was to say that §207(o)(5) deals
with employers’ responses to employees’ requests, not
with employers’ insistence that leave be used promptly.
Nothing in the Supreme Court’s language addresses
whether employees’ requests may designate a date and
time for leave—or how employers must respond if they do.
But 29 C.F.R. §553.25 does cover those subjects. It pro-
vides:
(a) Section 7(o)(5) of the FLSA provides that any
employee of a public agency who has accrued
compensatory time and requested use of this
compensatory time, shall be permitted to use such
time off within a “reasonable period” after making
the request, if such use does not “unduly disrupt”
the operations of the agency. This provision,
however, does not apply to “other compensatory
time” (as defined below in §553.28), including
compensatory time accrued for overtime worked
prior to April 15, 1986.
(b) Compensatory time cannot be used as a means
to avoid statutory overtime compensation. An
8 No. 08-1555
employee has the right to use compensatory time
earned and must not be coerced to accept more
compensatory time than an employer can realisti-
cally and in good faith expect to be able to grant
within a reasonable period of his or her making
a request for use of such time.
(c) Reasonable period. (1) Whether a request to use
compensatory time has been granted within a
“reasonable period” will be determined by consid-
ering the customary work practices within the
agency based on the facts and circumstances in
each case. Such practices include, but are not
limited to (a) the normal schedule of work,
(b) anticipated peak workloads based on past
experience, (c) emergency requirements for staff
and services, and (d) the availability of qualified
substitute staff. (2) The use of compensatory time
in lieu of cash payment for overtime must be
pursuant to some form of agreement or under-
standing between the employer and the employee
(or the representative of the employee) reached
prior to the performance of the work. (See §553.23.)
To the extent that the conditions under which an
employee can take compensatory time off are
contained in an agreement or understanding as
defined in §553.23, the terms of such agreement or
understanding will govern the meaning of “rea-
sonable period”.
(d) Unduly disrupt. When an employer receives
a request for compensatory time off, it shall be
No. 08-1555 9
honored unless to do so would be “unduly disrup-
tive” to the agency’s operations. Mere inconve-
nience to the employer is an insufficient basis for
denial of a request for compensatory time off. (See
H. Rep. 99-331, p. 23.) For an agency to turn down
a request from an employee for compensatory
time off requires that it should reasonably and in
good faith anticipate that it would impose an
unreasonable burden on the agency’s ability to
provide services of acceptable quality and quantity
for the public during the time requested without
the use of the employee’s services.
Subsection (c) says that the terms of an agreement or
understanding between employer and employees
govern the conditions under which an employee may
use compensatory leave. The collective bargaining agree-
ment between Chicago and the police officers’ union does
not contain those terms. That makes subsection (d) con-
trolling.
Subsection (d) reads “unduly disrupt” just as plaintiffs
do. The Secretary of Labor has determined that an em-
ployer must approve leave “during the time requested”
by the employee, unless that “would impose an unrea-
sonable burden on the [employer’s] ability to provide
services of acceptable quality and quantity for the public”.
And the Secretary added that inconvenience to an em-
ployer is an insufficient basis to deny a request.
Chicago asks us to disregard this regulation as incon-
sistent with the statute, which the City deems “clear.”
Section 207(o)(5) is anything but clear. Words such as
10 No. 08-1555
“reasonable” and “undue” are open-ended. They need
elaboration, and the relation between these requirements
needs explication. Here the agency has added vital details,
and its work prevails under Chevron U.S.A. Inc. v. Natural
Resources Defense Council, Inc., 467 U.S. 837 (1984), unless
it represents an implausible resolution. There’s nothing
unreasonable about the agency’s approach, which
makes compensatory leave more attractive to workers
and hence a more adequate substitute for money, the
Fair Labor Standards Act’s principal response to over-
time work.
Under §553.25(d), a worker proposes a date and time
for leave. The employer decides whether time off then
would cause undue disruption, and if it would the em-
ployer has a reasonable time to grant leave on some other
date. On Chicago’s view, the employee cannot ask for a
particular date or time, but only for some leave; and if
any time off within a reasonable time after the request
would cause undue disruption, then the employee must
wait longer—must wait, by definition, for an unreasonable
time. That can’t be right. Chicago’s view produces an
implausible relation between the “reasonable time” and
“undue disruption” clauses. The regulation makes sense
when specifying that the employer must ask whether
leave on the date and time requested would produce
undue disruption, and only if the answer is yes may
the employer defer the leave—and then only for a “reason-
able time.”
As it happens, Chicago could not prevail on this appeal
even if we had agreed with its reading of §207(o)(5),
No. 08-1555 11
because the City does not treat a police officer’s request as
beginning a reasonable time within which the Police
Department must provide compensatory time off. Chicago
receives written requests that it either grants or denies;
if a request is not granted immediately then the form
is returned—without reasons, without recourse, and
without any effort to schedule leave within a “reasonable
time.” Now it may be that, by submitting one request
after another, most officers can secure some leave within
a reasonable time of the initial request. But Chicago
does not keep records to show that this occurs, and the
evidence in this suit did not permit the magistrate judge
to determine the mean, median, and standard deviation
in the length of delay between an initial request and the
eventual grant of compensatory leave. It is therefore not
possible to say, on this record, that Chicago is com-
plying with the “reasonable time” requirement, no
matter how §207(o)(5) is understood.
Because §207(o)(5) is ambiguous, the agency enjoys
leeway in crafting regulations. Last year the Department
of Labor proposed to amend 29 C.F.R. §553.25(c) and (d)
so that employees could no longer designate the date
and time for leave. 73 Fed. Reg. 43654, 43660–62, 43668
(July 28, 2008). That rulemaking remains open, however.
As long as the current version of §553.25 remains in
force, the plaintiffs are entitled to prevail.
The injunction is vacated, and the case is remanded
for an award of appropriate non-injunctive relief.
3-25-09