Brinkman v. United States

In the United States Court of Federal Claims
No. 21-1376C
Filed: February 17, 2022
KOREY BRINKMAN, et al.,
Plaintiffs,
v.
THE UNITED STATES,
Defendant.
Gregory Keith McGillivary, McGillivary Steele Elkin LLP, Washington, D.C., for Plaintiffs.
Tanya B. Koenig, Trial Attorney, Elizabeth M. Hosford, Assistant Director, Martin F. Hockeny,
Jr., Acting Director, Brian M. Boynton, Acting Assistant Attorney General, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice, Washington, D.C., with Leonard
H. DePasquale, Chief Counsel, FHFA-OIG, for Defendant.
MEMORANDUM OPINION AND ORDER
TAPP, Judge.
Generally speaking, uncodified agency policies are not enforceable by the United States
Court of Federal Claims. In this civilian pay case, the United States moves to dismiss Plaintiffs’
claims that the Federal Housing Finance Agency deprived them of overtime benefits to which
they are entitled under Title V and the agency’s premium pay policy or, alternatively, the Fair
Labor Standards Act. Specifically, the United States argues that agency policies are not money-
mandating sources of law and therefore this Court lacks jurisdiction. The Court agrees with that
contention. However, the United States also bears the burden at this stage to establish that
Plaintiffs are not afforded similar statutory protections. The United States has failed to do so.
Therefore, the United States’ Motion is denied.
I. Background 1
Plaintiffs are sixteen current and former criminal investigators of the United States Federal
Housing Finance Agency (“FHFA”), in its Office of Inspector General (“FHFA-OIG”). (Am.
1In considering the pending Motion to Dismiss, the Court assumes the facts alleged in Plaintiffs’
Amended Complaint, (ECF No. 6), to be true. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56
(2007).
Compl. at 2, ECF No. 6). Because the structure of that agency is relevant to the facts of this
case, a synopsis of its objective and inception are provided for illustrative purposes.
A. History and Structure of the Federal Housing Finance Agency
In the aftermath of the 2008 housing crisis, mortgage companies suffered significant
losses that carried the potential to jeopardize the national economy. See generally Collins v.
Yellen, 141 S. Ct. 1761 (2021) (providing a history of the FHFA). To combat the nation’s
concerns, Congress established the FHFA by enacting the Housing and Economic Recovery Act
of 2008 (“HERA”), Pub. L. 110-289, 122 Stat. 2654, 12 U.S.C. § 4501 et seq. The FHFA is
responsible for the supervision, regulation, and housing mission oversight of mortgage
companies such as the Federal National Mortgage Association (“Fannie Mae”) and the Federal
Home Loan Mortgage Corporation (“Freddie Mac”). 12 U.S.C. § 4511; see also National
Housing Act Amendments of 1938, Pub. L. 75-424, 52 Stat. 8, 23; Federal Home Loan Mortgage
Corporation Act, Pub. L. 91-351, 84 Stat. 451.
Relevant here, HERA delegates the FHFA the power to act as “an independent agency”
tasked with regulating the mortgage companies and, if necessary, acting as their conservator or
receiver. §§ 4511, 4617. Given that status, the FHFA is not funded through the ordinary
appropriations process that funds many other government agencies. §§ 4516(a). It is thus
classified as a non-appropriated fund instrumentality, which is defined as a federal government
entity whose “monies do not come from congressional appropriation but rather primarily from
[their] own activities, services, and product sales.” El–Sheikh v. United States, 177 F.3d 1321,
1322 (Fed. Cir. 1999) (internal quotations omitted). The FHFA is funded by assessments on its
regulated financial institutions: Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. §
4516(a). The FHFA-OIG is an independent component of the FHFA funded from those same
assessments. (Am. Compl. at 2).
Congress installed a single Director as head of the FHFA to set salaries and payments of
FHFA employees. §§ 4512(a), (b)(2). Regarding employee compensation, HERA provides that:
[T]he FHFA Director may appoint and fix the compensation of such officers
and employees of the Agency as the Director considers necessary to carry out
the functions of the Director and the Agency. Officers and employees may be
paid without regard to the provisions of Chapter 51 and subchapter III of
Chapter 53 of Title V relating to classification and General Schedule Pay
rates.
12 U.S.C. § 4515(a). Stated plainly, this provision allows the FHFA to pay its employees at rates
with near indifference to the General Schedule (GS) pay rates that apply to most other federal
agencies. See Office of Personnel Management, General Schedule Classification and Pay,
available at https://www.opm.gov/policy-data-oversight/pay-leave/pay-systems/general-
schedule/ (last visited Feb. 11, 2022). Similarly, under 12 U.S.C. § 1833b, the FHFA has
independent authority to “establish and adjust” employees’ compensation and benefits in a
manner determined solely by the FHFA in accordance with applicable provisions of the law. §
1833b(a).
2
The FHFA is in a cast of financial institution regulators that Congress exempts from
limitations of the GS pay scale. Similar exemptions exist for the Federal Deposit Insurance
Corporation, the Comptroller of the Currency, the National Credit Union Administration Board,
the Office of Financial Research, the Bureau of Consumer Financial Protection, and the Farm
Credit Administration. § 1833b. Like those regulatory agencies, the FHFA and its component,
the FHFA-OIG, offer enhanced pay and benefits to its employees.
B. Law Enforcement Availability Pay and the Fair Labor and Standards Act
Plaintiffs initiated this litigation in an effort to recover payments allegedly owed to them
either by the Law Enforcement Availability Pay Act (“LEAPA”) as it is codified in Title V or,
alternatively, overtime pay afforded to them under the Fair Labor Standards Act (“FLSA”). The
Court thus provides a cursory overview of those statutory schemes.
Congress passed LEAPA to benefit criminal investigators who routinely worked more
than eight hours each day. Pub. L. No. 103–329, 108 Stat. 2425 (1994) (codified at 5 U.S.C. §
5545(a); see also Floyd v. District of Columbia, 129 F.3d 152, 154 (D.C. Cir. 1997) (providing a
history of LEAPA). On its face, LEAPA increased the average workday of federal criminal
investigators by two hours and awarded all investigators Law Enforcement Availability Pay
(“LEAP”) at the rate of 25 percent of their basic pay, ostensibly eliminating uncontrollable
overtime. 5 U.S.C. § 5545a(c), (d). In practice, LEAPA requires criminal investigators to be
available for two more hours each workday; in return, those employees automatically receive an
additional 25 percent of basic pay instead of the overtime pay they would have otherwise
received. See Floyd, 129 F.3d at 154.
Under Title V, LEAP does not come without limitation; it is subject to a statutory cap. 5
U.S.C. § 5547(a). Title V’s premium pay provisions, including § 5545a, apply “only to
employees in Grade [GS] 15 or below, and an employee may not receive overtime if such
payment would increase the employee’s aggregate compensation in excess of the maximum
allowable rate for Grade 15 employees.”2 Doe v. United States, 463 F.3d 1314, 1351 (Fed. Cir.
2006) (citing 5 U.S.C. § 5547); see also Adams v. United States, 141 Fed. Cl. 428, 431 (2019);
Aletta v. United States, 70 Fed. Cl. 600, 604 (2006).
Relatedly, the FLSA, 29 U.S.C. § 201 et seq., imposes minimum wage, overtime, and
record-keeping requirements for the protection of employees. See 29 U.S.C. §§ 206(a) (minimum
wage), 207 (overtime), 211(c) (record-keeping). Congress enacted the FLSA “to protect all
covered workers from substandard wages and oppressive working hours, ‘labor conditions [that
are] detrimental to the maintenance of the minimum standard of living necessary for health,
efficiency and general well-being of workers.’” Barrentine v. Ark.-Best Freight Sys. Inc., 450
U.S. 728, 739 (1981) (quoting 29 U.S.C. § 202(a)). Employers who violate the FLSA are liable
to covered employees for their unpaid overtime compensation. 29 U.S.C. § 216(b).
2Per 5 U.S.C. § 5547(a)(2), LEAP is also limited to “the rate payable for level V of the
Executive Schedule.” That provision is not at issue in this case.
3
II. Discussion
Plaintiffs allege that the FHFA-OIG has failed to correctly provide premium pay in
accordance with the agency’s Premium Pay Policy and Title V (Count I). Should that claim fail,
Plaintiffs alternatively allege that they are entitled to recover unpaid overtime pay pursuant to the
FLSA (Count II). (See Am. Compl.). The United States moves to dismiss both counts. (See Mot.
to Dism., ECF No. 9).
As to Count I, the United States argues that the Court lacks subject matter jurisdiction
because HERA, the statutory scheme Plaintiffs are paid under, is not a money-mandating statute
and because the agency’s Premium Pay Policy lacks the force of law. (Id. at 7–8). In the
alternative, the Government also asserts that Count I should be dismissed for failure to state a
claim upon which relief can be granted because their requested relief is barred by Title V’s
statutory cap. (Id. at 9–13). As to Count II, the United States argues it should be dismissed
because Plaintiffs are classified as FLSA exempt or, alternatively, that Plaintiffs should be
ordered to amend their pleadings to reflect “which of the 16 plaintiffs are asserting that claim.”
(Id. at 13–15).
As explained below, the Court finds that Plaintiffs have stated a plausible claim entitling
them to LEAP under Title V, but that the statutory cap prescribed by § 5547(a) would also apply.
Admittedly, the FMHA-OIG Premium Pay Policy does not incorporate a statutory cap. That
exclusion, an uncodified policy, lacks the force of law, and cannot waive a pre-existing statutory
requirement. Therefore, to the extent Count I requests relief in excess of the allowable amount
under Title V’s statutory cap, it would fail to state a claim upon which relief can be granted. As
provided below, Plaintiffs are granted limited discovery in order to support or withdraw Count I.
Resolution of Count II, which requires the Court to determine whether overtime provisions of the
FLSA apply, also involves determinations inappropriate for this prefatory stage of litigation.
Therefore, the United States’ Motion to Dismiss as to Count II is also denied.
A. Count I: Failure to Provide LEAP Benefits
Count I alleges that the FHFA-OIG failed to pay Plaintiffs LEAP as required by 5 U.S.C.
§ 5545(a) since May 20, 2015. (Am. Compl. at 6). The United States moves to dismiss that claim
alleging that since Plaintiffs’ claims are based solely on Title V and they are paid under HERA,
their claims must also be based on HERA. The United States contends that this argument, should
the Court view Plaintiffs’ claims through a HERA lens, strips the Court of jurisdiction because
HERA is not a money-mandating statute. (Mot. to Dism. at 7–8). To the extent Plaintiffs argue
that the violation of HERA is through the FHFA’s Premium Pay Policy, the United States argues
that it must also fail because internal policies lack the force of law. (Id. at 9).
Under RCFC 12(b)(1), the plaintiff bears the burden of establishing subject matter
jurisdiction by a preponderance of the evidence. Lujan v. Defenders of Wildlife, 504 U.S. 555,
561 (1992); Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988). This
Court’s jurisdiction to entertain claims and grant relief depends on the extent to which the United
States has waived sovereign immunity. United States v. Testan, 424 U.S. 392, 399 (1976). When
faced with a motion to dismiss for lack of subject matter jurisdiction pursuant to the RCFC
12(b)(1), the Court must assume that all undisputed facts alleged in the complaint are true and
4
draw all reasonable inferences in the plaintiff’s favor. Scheuer v. Rhodes, 416 U.S. 232, 236
(1974); see also Henke v. United States, 60 F.3d 795, 797 (Fed. Cir. 1995). Moreover, the Court
may look to evidence outside of the pleadings to ascertain the propriety of its exercise of
jurisdiction over a case. Rocovich v. United States, 933 F.2d 991, 994 (Fed. Cir. 1991).
The Tucker Act provides the Court of Federal Claims with jurisdiction over claims
“against the United States founded either upon the Constitution, or any Act of Congress or any
regulation of an executive department, or upon any express or implied contract with the United
States, or for liquidated or unliquidated damages in cases not sounding in tort.” 28 U.S.C. §
1491(a)(1). The Tucker Act is itself “only a jurisdictional statute; it does not create any
substantive right enforceable against the United States for money damages.” Testan, 424 U.S.at
398. Therefore, claimants “must look beyond the Tucker Act to discover and plead a money-
mandating predicate upon which to complete jurisdiction.” Westech Corp. v. United States, 20
Cl. Ct. 745, 748 (1990) (citing United States v. Connolly, 716 F.2d 882, 885 (Fed. Cir. 1983));
see also Dehne v. United States, 970 F.2d 890, 893 (Fed. Cir. 1992); Ashgar v. United States, 23
Cl. Ct. 226, 230–31 (1991).
It follows then that to establish jurisdiction in a statutory suit, plaintiffs must effectively
plead that the statute or regulation grants the plaintiff a cause of action. It is presumed that a
statute ordinarily provides a cause of action “only to plaintiffs whose interests ‘fall within the
zone of interests protected by the law invoked.’” Lexmark Int’l, Inc. v. Static Control
Components, Inc., 572 U.S. 118, 126 (2014). The Supreme Court has held that “[w]hether a
plaintiff comes within ‘the zone of interests’ is an issue that requires [the Court] to determine,
using traditional tools of statutory interpretation, whether a legislatively conferred cause of
action encompasses a particular plaintiff’s claim.” Id. at 127 (some internal quotation marks
omitted). Similarly, employees of a non-appropriated fund instrumentality can maintain statutory
actions against their employer in this Court if the statute is money-mandating and contains an
express waiver of sovereign immunity. Taylor v. United States, 49 Fed. Cl. 598 (2001), aff’d,
303 F.3d 1357 (Fed. Cir. 2002).
The United States Court of Claims has also held that, even though the plaintiff may not
ultimately prevail, “a claimant who says he is entitled to money from the United States because a
statute or a regulation grants him that right, in terms or by implication, can properly come to the
Court of Claims, at least if his claim is not frivolous, but arguable.” Ralston Steel Corp. v. United
States, 169 Ct. Cl. 119, 125, cert. denied, 381 U.S. 950 (1965); accord Sanders v. United States,
219 Ct. Cl. 285, 295 (1979); Eastport S.S. Corp., 178 Ct. Cl. at 606. All that is required is a
“determination that the claim is founded upon a money-mandating source [of law] and the
plaintiff has made a nonfrivolous allegation that it is within the class of plaintiffs entitled to
recover under the money-mandating source.” Perry v. United States, 149 Fed. Cl. 1, 12–13
(2020) (quoting Jan’s Helicopter Service, Inc. v. F.A.A., 525 F.3d 1299, 1309 (Fed. Cir. 2008)).
Thus, the jurisdictional pleading requirement is satisfied “when a plaintiff makes a non-frivolous
assertion that [plaintiffs] are entitled to relief under the statute.” Jan’s Helicopter, 525 F.3d at1307 n.8 (quoting Brodowy v. United States, 482 F.3d 1380, 1375 (Fed. Cir. 2007)). Whether a
“claimant actually falls within the terms of the statute or regulation is a merits issue.” Perry, 149
Fed. Cl. at 13 (emphasis in original).
5
The United States maintains that, because Plaintiffs have not identified violations of a
specific HERA provision, Plaintiffs’ claims are not within the Court’s jurisdiction. The Court
need not address this argument. As Plaintiffs note, however, their “claims are specifically
grounded in 5 U.S.C. § 5545(a) and 5 C.F.R. § 550.181, et seq, and the Agency’s own pay
system . . ..” (Pl.’s Resp. at 9, ECF No. 10). Thus, the United States’ Motion as it relates to
Count I turns on whether Plaintiffs have asserted a plausible claim under Title V. At this stage,
the Plaintiffs have done so.
The United States seems to argue that Plaintiffs are excluded from Title V protections
because the director of the FHFA has independent authority to “establish and adjust” its
employees’ compensation and benefits in a manner “determined solely” by the FHFA in
accordance with “applicable provisions of law.” 12 U.S.C. § 1833b(a). Further, HERA
empowers the FHFA to set its pay scale “without regard to the . . . General Schedule Pay rates.”
§ 4515. Although the director of the FHFA is armed with a wide breadth of discretion (which has
been a separate subject of litigation 3), the statute instructs that FHFA employees “may be paid
without regard” to certain provisions of Title V. § 4515(a) (emphasis added). It does not mandate
that Title V be entirely ignored nor does it expressly bar FHFA employees from protection under
related statutory schemes. Even if it did, the statutory language permits the FHFA Director to fix
employees’ pay “without regard to the provisions of Chapter 51 and subchapter III of Chapter 53
of Title V . . ..” § 4515(a). This does not include Subchapter V of Chapter 55, the provision
delineating standards for premium pay.
Title V applies to employees of executive agencies. For purposes of Title V, “executive
agency” means an Executive department, a Government corporation, and an independent
establishment. § 105. “Independent establishments” are defined as those “in the executive branch
(other than the United States Postal Service or the Postal Regulatory Commission) which [are]
not an Executive department, military department, Government corporation, or part thereof, or
part of an independent establishment.” § 104. By the United States’ admission, the FHFA is an
independent agency. (Mot. to Dism. at 3 (“FHFA is an independent federal agency. . . FHFA-
OIG is an independent component of FHFA and is funded from those same assessments.”)); see
also 12 U.S.C. § 4511.
Finding of factual frivolousness are appropriate where facts alleged rise to the level of the
irrational or wholly incredible. McCullogh v. United States, 76 Fed. Cl. 1, 3 (2006) (citing
Denton v. Hernandez, 504 U.S. 25, 33 (1992)). That is not the case here. It is plausible that
Plaintiffs are afforded some protection by virtue of being employees of an independent agency
whose organic statute does not explicitly preclude them from the relevant provisions of Title V.
The United States does not effectively show that Title V is foreclosed to Plaintiffs, nor does it
argue that the Court lacks jurisdiction because the subject provision of Title V is not money-
mandating. While it is not readily discernable at this stage whether Plaintiffs’ claim would
3See Collins, 141 S. Ct. 1761 (holding that the FHFA structure was unconstitutional because the
Director could be removed by the President only for cause).
6
succeed under Title V, an action brought under Title V is not frivolous. Whether Plaintiffs here
are protected under Title V is a merits question that cannot be determined at this stage.
It is noteworthy that some non-appropriated agency employees are explicitly excluded
from other provisions of Title V. For instance, pursuant to 5 U.S.C. § 2015, employees paid from
non-appropriated funds of the armed forces are not employees for various purposes under Title V
with limited exceptions. Under § 5102(c)(14), Employee Classification guidelines do not apply
to “employees whose pay is not wholly from appropriated funds of the United States.” No such
exclusion exists in the definitions for who is covered under Title V’s premium pay provisions. §
5541. It is also significant that the FHFA’s Premium Pay Policy directs employees to 5 U.S.C.
Chapter 55 as an Authority/Reference. (Def.’s Reply Ex. B, (“Premium Pay Policy”), at 3, ECF
No. 15-1).
The United States’ next argument is that, if Plaintiffs are entitled to LEAP under Title V,
they would also be subject to the cap established by § 5547(a). (Mot. to Dism. at 10). This
argument is more compelling. Under § 5547(a), once a criminal investigator reaches the
maximum rate of basic pay payable for GS-15, they are no longer eligible to receive LEAP. As
stated above, HERA empowers the FHFA to set its pay scale “without regard to the . . . General
Schedule Pay rates.” 12 U.S.C. § 4515. Plaintiffs counter that this cap does not apply because the
FHFA employees are paid pursuant to an agency-specific pay scale—the EL pay scale—rather
than the GS pay scale that applies to most other federal employees. (Pl.’s Resp. at 14). To the
extent Plaintiffs are protected under Title V’s premium pay provisions, the Court finds that the
statutory cap as it is set forth in § 5547(a) would apply to Plaintiffs.
Title V’s premium pay provisions, including LEAP, apply “only to employees in [GS-15]
or below, and an employee may not receive overtime if such payment would increase the
employee’s aggregate compensation in excess of the maximum allowable rate for [GS-15]
employees.” Doe, 463 F.3d at 1351 (citing 5 U.S.C. § 5547). Stated differently, LEAP is subject
to a statutory cap. See Lubow v. United States Dep’t of State, 923 F. Supp. 2d 28, 35–36 (D.D.C.
2013) (finding that Section 5547 unambiguously provides an annual cap on total pay). The
annual cap applies despite any perceived unfairness in its application because “[a] cap on
premium pay, by definition, prevents individuals from earning premium pay for certain hours
that would have otherwise qualified. At some point, then, no additional premium pay can be
earned.” Lubow, 923 F. Supp. 2d at 36–37.
Pay under LEAP is capped so that “the payment does not cause the aggregate of basic
pay and such premium pay for any pay period . . . to exceed the greater of” the rate of basic pay
“for GS-15[,] including any applicable locality-based comparability payment under section 5304
or a similar provision of law and any applicable special rate of pay under section 5305 or similar
provision of law[.]” 5 U.S.C. § 5547. Section 5304 pertains to “locality-based comparability
payments” and an aimed reduction of pay disparities. Section 5305 on the other hand, references
“special pay authority,” specifically some with “higher minimum rates of pay for 1 or more
grades or levels, occupational groups, series, classes, or subdivisions thereof.” § 5305(a). Thus,
the plain language of the annual cap statutory limitation indicates that Congress intended the
provision’s reach to extend in cases where the agency provides higher maximum rates of pay
than other agencies. Further, § 5547 reaches “similar provisions of law.” It does not take a
cognitive leap to conclude GS-15 pay scale is intended to serve as a hard line for employees
7
entitled to premium pay under that statute. Thus, the Court finds that only those investigators
who earn less than the § 5547(a) cap would be eligible to receive LEAP under the statute.
Admittedly, the pay policy does not explicitly implement a pay cap parroting § 5547.
Plaintiffs thus allege that the FHFA’s Pay System incorporates the LEAP but intentionally omits
mention of a statutory cap, meaning the Agency is obligated to pay pursuant to its Premium Pay
Policy without regard to the statutory cap of Title V. (Pl.’s Resp. at 15). Along with its preceding
arguments, to the extent Plaintiffs cite a violation of the FHFA’s pay policy as being enforceable
to pay benefits beyond that statutory cap, the United States argues that the Court lacks
jurisdiction because internal policies lack the force of law. (Mot. to Dism. at 9 (citing Acevedo v.
United States, 824 F.3d 1365, 1370 (Fed. Cir. 2016) (finding that the agency’s practice of
providing danger pay to employees did not constitute a money-mandating source because it was
not an “agency-wide policy or directive” and was “not akin to formal agency rules or binding
written directives”))).
Helpfully, the United States attached the FHFA-OIG Premium Pay Policy as an exhibit to
its Reply in Support of its Motion to Dismiss. The purpose of the policy is to “establish the
[FHFA-OIG] policy for administering premium pay rule for (EL) employees.” (Premium Pay
Policy at 3). The policy incorporates LEAP in Section XIV, stating: “[b]ased on FHFA-OIG’s
needs, an employee shall receive LEAP for unscheduled duty in excess of the 40-hour
workweek, if he/she occupies a position that meets the definition of a criminal investigator and
includes primary duties classified in the GS-1811 occupational series.” (Premium Pay Policy,
Section XIIV at 14). However, Plaintiffs do not present meaningful support that this Court could
enforce such an obligation.
Plaintiffs first cite Ft. Stewart Schools v. FLRA, 495 U.S. 641, 654 (1990) to show that
administrative law mandates that “an agency must abide by its own regulations.” (Pl.’s Resp. at
12). Plaintiffs next cite Voge v. United States, 844 F.2d 776 (Fed. Cir. 1988) to suggest that this
Court has jurisdiction to review agency action “for compliance with established procedures”
because “[i]t has long been established that government officials must follow their own
regulations, even if they were not compelled to have them at all.” (Id.). Neither of these cases
support Plaintiffs’ position because they are both specifically relevant to agency regulations.
During oral argument for the motion at bar, the United States asserted, and it was not
controverted, that “[the policy is] not a regulation that was promulgated by the agency. It didn’t
go through notice and comment and the typical regulation procedures and, therefore, can’t be a
“money-mandating source” for purposes of this Court’s jurisdiction.” (Tr. of Oral Arg. at 12:8–
12, ECF No. 18). 4 There is no indication in the record or otherwise that the FHFA followed
applicable procedural requirements to give the premium pay policy regulatory effect. Absence of
that fact is determinative. Finally, Plaintiffs’ reliance on Judge O’Malley’s dissent in Braun v.
Dep't of Health & Human Servs., 998 F.3d 1312 (Fed. Cir. 2021), is likewise misplaced because
4Procedural requirements for promulgating regulations can be found in the Administrative
Procedure Act in Title V. See 5 U.S.C. § 552(a). The Court notes the apparent disparity in
arguing that Title V protects the agency but could not simultaneously offer protections to its
employees.
8
a dissenting opinion is not precedential or otherwise binding on this Court. No case cited by
Plaintiffs suggests that the Court of Federal Claims has jurisdiction to adjudicate claims based on
misapplication of an internal agency’s pay policy.
As a general rule, a policy statement or interpretative regulation does not have the force
of law. See Batterton v. Francis, 432 U.S. 416, 425 n.9 (1977). The Supreme Court has observed
“opinion letters—like . . . policy statements, agency manuals, and enforcement guidelines . . .
lack the force of law.” Christensen v. Harris Cty., 529 U.S. 576, 587 (2000); see also
Butterbaugh v. Dep’t of Justice, 336 F.3d 1332, 1340 (Fed. Cir. 2003) (quoting Christensen, 529
U.S. at 587); Hamlet v. United States, 63 F.3d 1097, 1103 (Fed. Cir. 1995) (“Obviously, not
every piece of paper released by an agency can be considered a regulation entitled to the force
and effect of law.”). Because of this, even if it applied to the facts of this case, informal policies
cannot be used as a money-mandating source of law to confer jurisdiction on this Court.
Anderson v. United States, 85 Fed. Cl. 532, 543 (2009).
Plaintiffs’ belief that the statutory cap may not apply is understandable. First, because
the Policy does not implicate the GS-15 cap on earnings. And second, because the Policy states
“[a]n FLSA-exempt employee may be paid premium pay only to the extent the payment does not
cause the total of his/her pay and premium pay for the current year to exceed the maximum of
the EL-15 pay grade.” (Premium Pay Policy, Section XIII, at 11). Agencies should take care to
not only follow their own policies but word them so that employees understand the extent of
their benefits. Even so, agencies cannot use administrative rules to expand the scope of
legislation beyond what was originally intended by Congress. Austasia Intermodal Lines, Ltd. v.
Fed. Mar. Comm’n, 580 F.2d 642, 647 (D.C. Cir. 1978). Thus, even if the Court could
implement the FHFA-OIG’s Premium Pay Policy, it could not extend that application beyond the
statute.
Based on this analysis, the United States’ Motion to Dismiss Count I is denied. The
United States has not shown at this stage that Plaintiffs are exempt from Title V. However, the
United States has shown that Plaintiffs’ LEAP benefits would be subject to the cap established
by § 5547(a). Therefore, the parties are directed to engage in 90 days of phased discovery to
ensure that LEAP benefit requirements were complied with for each salaried year identified in
the Amended Complaint. At the conclusion of that period, the parties will submit a joint status
report indicating the results of discovery and whether it necessitates leave to amend the operative
pleading.
B. Count II: Failure to Provide FLSA Overtime Pay
Should the Court dispose of Count I, Plaintiffs alternatively claim that they are entitled to
recovery under overtime provisions of the FLSA (Count II). The FLSA imposes liability in three
circumstances: (1) when employers fail to pay a minimum wage; (2) when less than the specified
amount of overtime pay is received; and (3) when employers retaliate against employees due to
certain activities. Fair Labor Standards Act of 1938 §§ 6, 7, 15; 29 U.S.C. §§ 206, 215(a)(3),
216(b). In each scenario, the employee must be non-exempt from the FLSA. The United States
moves to dismiss that claim or grant summary judgment, arguing that Plaintiffs are explicitly
labeled as exempt from the FLSA. (Mot. to Dism. at 13–14). The Court cannot summarily rule
on the accuracy of such an exemption.
9
A motion to dismiss for “failure to state a claim upon which relief can be granted” is
appropriate under RCFC 12(b)(6) only “when the facts asserted by the claimant do not entitle [it]
to a legal remedy.” Lindsay v. United States, 295 F.3d 1252, 1257 (Fed. Cir. 2002). For a claim
to be properly stated, the pleading “must contain sufficient factual matter, accepted as true, to
state a claim for relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678, (2009).
However, “[t]hreadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555). Therefore, only a
[pleading] that states a plausible claim for relief survives a motion to dismiss.” Ashcroft, 556
U.S. at 678. “Determining whether a complaint states a plausible claim for relief [is] a context-
specific task that requires the reviewing court to draw on its judicial experience and common
sense.” Id. at 679.
FLSA overtime provisions presumptively apply to federal employees unless a specific
exemption applies. See Nigg v. U.S. Postal Serv., 555 F.3d 781 (9th Cir. 2009) (citing Fair Labor
Standards Act of 1938, § 7(a)(1), 29 U.S.C. § 207(a)(1); 5 C.F.R. § 551.202(a)). Generally,
employees engaged in production work or manual labor are classified as “non-exempt” and are
eligible for overtime under the FLSA. 29 U.S.C. § 207(a), see also Aamold v. United States, 39
Fed. Cl. 735, 744–46 (1997). Conversely, executive, administrative, or professional employees
are “exempt” from the FLSA and not eligible for overtime. 29 U.S.C. § 213(a)(1). The general
rule is that the “application of an exemption under the [FLSA] is a matter of affirmative defense
on which the employer has the burden of proof.” Abou-el-Seoud v. United States, 136 Fed. Cl.
537, 562 (2018) (citing Corning Glass Works v. Brennan, 417 U.S. 188, 196 (1974)).
Office of Personnel Management regulations specifically state that, in determining
agency exemptions, the burden of proof rests with the agency that asserts the exemption. 5
C.F.R. § 551.202. However, the United States moves to dismiss solely based on what it perceives
to be deficiencies in Plaintiffs’ Amended Complaint, not based on the factors of exemption.
To survive a motion to dismiss for failure to state a claim upon which relief can be
granted, factual allegations must be enough to raise a right to relief above the speculative level,
on the assumption that all the allegations in the complaint are true even if doubtful in fact.
Twombly, 550 U.S. at 544. Thus, to sustain an FLSA claim, Plaintiffs do not have to use magic
language to plead that they were incorrectly classified as exempt from FLSA but instead must
allege that they worked overtime and were not compensated for it. Indeed, the Amended
Complaint does not specifically allege that Plaintiffs were incorrectly classified as non-exempt,
but it can be reasonably inferred. (See Am. Compl. at 7–8 (“Since May 20, 2018, and continuing
and ongoing, Plaintiffs have worked unscheduled duty hours in excess of eight (8) hours in a day
and/or 40 hours in a workweek, so Plaintiffs have been entitled to receive overtime
compensation for such work hours. . ..”; “Defendant has failed to pay Plaintiffs overtime . . . in
violation of 29 U.S.C. § 207 and 5 C.F.R. § 551.501.”)). These allegations amount to “more than
labels and conclusions, [or] a formulaic recitation of the elements of a cause of action.”
Twombly, 550 U.S. 544 (2007).
Plaintiffs adequately plead that the FHFA-OIG policies required them to work without
uniform compensation. While each Plaintiff will need to prove the specifics of those overtime
hours and applicability of the FLSA to their claims to ultimately prevail, they do not need to
plead these claims with such specificity. Therefore, Plaintiffs’ Amended Complaint cannot be
10
dismissed at this point in litigation because the United States has not shown that, as a legal
matter, Plaintiffs are properly exempt from FLSA overtime provisions.
Should the Court deny the United States’ Motion to Dismiss, the United States
alternatively argues that it should be granted summary judgment. “The court shall grant summary
judgment if the movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” RCFC 56(a). A “genuine dispute” exists
where a reasonable factfinder “could return a verdict for the nonmoving party.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “Material facts” are those which might
significantly alter the outcome of the case; factual disputes which are not outcome-determinative
will not preclude summary judgment. Id. In determining whether summary judgment is
appropriate, the court should not weigh the credibility of the evidence, but simply “determine
whether there is a genuine issue for trial.” Id. at 249. In so deciding, the Court must draw all
inferences in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 578–88 (1986).
Attached to the United States’ Motion are Plaintiffs’ employment contracts, explicitly
classifying them as FLSA-exempt. (Mot. to Dism. Ex. A, ECF No. 9-1). However, those exhibits
are unavailing to combat Plaintiffs’ FLSA claims as they do not show specificities of that
exemption. Further, the Court cannot arbitrarily conclude that those exemptions are appropriately
applied, particularly when it has not been presented with an argument that they are.
The United States summarily argues that “several plaintiffs retired from the agency more
than three years prior to the filing of the initial complaint and their FLSA claims appear barred
by the statute of limitations. Similarly, several plaintiffs are former or current regional managers
who cannot plausibly challenge their exempt classification.” (Def.’s Reply at 9). The United
States goes on to state that “[it] is entitled to know[,] from the complaint[,] which plaintiffs are
asserting an FLSA claim.” (Id.). This lack of specificity is particularly vexing because the
Government possesses the relevant records. (See Am. Compl. at 8 (“[t]he employment and work
records for each Plaintiff are in the exclusive possession, custody, and control of Defendant and
its public agencies.”)). The Court is not in a position to know which of the sixteen Plaintiffs the
United States’ grievances apply to.
Alternatively, the United States requests the Court order Plaintiffs to identify which of
the sixteen Plaintiffs are asserting that claim. Insomuch as the United States is requesting the
Court order a more definite statement, the Court declines to do so. RCFC 12(e) provides that “[a]
party may move for a more definite statement of a pleading to which a responsive pleading is
allowed but which is so vague or ambiguous that the party cannot reasonably prepare a
response.” Motions under RCFC 12(e) “must point out the defects complained of and the details
desired.” RCFC 12(e). Such a motion under RCFC 12(e) is “designed to remedy unintelligible
pleadings, not to correct for lack of detail.” Adams v. United States, 151 Fed. Cl. 522, 529 (2020)
(quoting Goodeagle v. United States, 111 Fed. Cl. 716, 722 (2013)). The remedy for lack of
detail in pleadings is discovery, not a more definite statement. Adegbite v. United States, 156
Fed. Cl. 495, 511–12 (2021) (citing Whalen v. United States, 80 Fed. Cl. 685, 693–94 (2008)).
The United States should go forth assuming that each Plaintiff is asserting a claim under Count
II.
11
Based on the foregoing, the United States’ Motion to Dismiss Count II of Plaintiffs’
Amended Complaint is denied. Likewise, the United States’ Motion for Summary Judgment as it
pertains to Count II is also denied.
III. Conclusion
The Court hereby ORDERS as follows:
(1) The United States’ Motion, (ECF No. 9), is DENIED as it relates to Plaintiffs’
claims grounded in Title V and not HERA. To the extent Plaintiffs are eligible to
receive LEAP benefits, those benefits are subject to the cap established by 5
U.S.C. § 5547(a).
(2) The United States’ Motion to Dismiss, or alternatively a Motion for Summary
Judgment, as to Plaintiffs’ FLSA claim is DENIED.
(3) The United States is directed to file a responsive pleading on or by March 4,
2022.
(4) Any deadline generated for a Joint Preliminary Status Report in accordance with
RCFC Appendix A, Section III, is STAYED.
(5) After a responsive pleading has been filed, the parties are directed to engage in 90
days of discovery to ensure that LEAPA was complied with for each salaried year
identified in the Amended Complaint.
(6) Within the 90 days allotted for discovery, the parties should also conduct
discovery as it relates to Plaintiffs’ FLSA claim.
(7) On or before June 3, 2022, the parties shall submit a joint status report indicating
the results of that limited discovery, whether it necessitates leave to amend the
operative pleading.
(8) A telephonic Status Conference is scheduled for June 16, 2022 at 11:00 a.m. ET
where the parties should be prepared to propose a schedule going forward.
IT IS SO ORDERED.
s/ David A. Tapp
DAVID A. TAPP, Judge
12