Doe No. 1 v. United States

In the United States Court of Federal Claims
No. 19-1747C
(Filed: January 9, 2023)
FOR PUBLICATION
***************************************
DOE NO. 1, *
*
Plaintiff, *
*
v. *
*
THE UNITED STATES, *
*
Defendant. *
*
***************************************
Daniel M. Rosenthal, James & Hoffman, P.C., Washington, D.C., for Plaintiff.
With him on briefs was Michael Ellement, James & Hoffman, P.C., Washington, D.C.,
as well as Linda Lipsett and Jules Bernstein, Bernstein & Lipsett, P.C., Washington,
D.C.
Sarah E. Kramer, Trial Attorney, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washington, D.C., for Defendant,
United States. With her on briefs were Brian M. Boynton, Principal Deputy Assistant
Attorney General, Patricia M. McCarthy, Director, and Reginald T. Blades, Jr.,
Assistant Director, Commercial Litigation Branch, Civil Division, United States
Department of Justice, Washington, D.C.
OPINION AND ORDER
Plaintiff1 — an intelligence analyst with the Federal Bureau of Investigation
(“FBI”) — alleges that the government failed to pay him for all the time he spent
outside regular working hours completing the FBI Basic Field Training Course
(“BFTC”). He seeks backpay and related forms of relief under the Fair Labor
Standards Act (“FLSA”) and other statutes.
Two motions are ripe for decision. First, the government moves to certify this
Court’s order denying summary judgment for interlocutory appeal under 28 U.S.C.
1This case is subject to a protective order to avoid disclosing Plaintiff’s identity. See Protective Order
(ECF 30); Amended Protective Order (ECF 53).
§ 1292(d)(2), and to stay the case during appellate proceedings.2 Second, Plaintiff has
filed an unopposed motion for notice to similarly situated individuals under Section
16(b) of FLSA, 29 U.S.C. § 216(b).3
The former motion is GRANTED IN PART and DENIED IN PART, for while
the requirements for an interlocutory appeal are met, there is no reason to stay the
case unless the Court of Appeals for the Federal Circuit grants an interlocutory
appeal. The latter motion is GRANTED.
BACKGROUND
The facts of the case are set out more fully in the Opinion & Order denying
summary judgment. Briefly, when Plaintiff began his role as an intelligence analyst,
he had to meet certain standards and requirements, one of which was completing the
BFTC. Doe No. 1 Decl. ¶¶ 5–7, 19–20 (ECF 54-1); Def.’s Appendix at 32–33 (ECF 48-
1). Some of the activities required to complete the BFTC were scheduled outside
working hours or had to be completed on Plaintiff’s own time. Doe No. 1 Decl. ¶ 21.
Plaintiff claims that although he worked more than 8 hours per day and 40 hours per
week during the BFTC, he was not compensated for all overtime hours. Id. The
parties have stipulated that “there have been no material differences in the
graduation requirements, the instructions given, or … the compensation” for
intelligence analysts in the BFTC since Plaintiff completed the course in 2018. See
Stipulations of Fact (ECF 83-2).
The government moved for summary judgment on the ground that the BFTC
is “entry-level training.” Def.’s Mot. for Summ. J. at 10–13 (ECF 48); Def.’s Reply to
Resp. to Mot. for Summ. J. at 11–16 (ECF 59). A FLSA regulation promulgated by
the Office of Personnel Management (“OPM”) provides that, with certain exceptions
not relevant here, “[t]ime spent in apprenticeship or other entry level training …
outside regular working hours shall not be considered hours of work, provided no
productive work is performed during such periods[.]” See 5 C.F.R. § 551.423(a)(3). If
Section 551.423(a)(3) applies, and if the BFTC is “entry-level training,” Plaintiff’s
overtime would not be compensable.4
2 See Op. & Order Denying Mot. for Summ. J. (“Op. & Order”) (ECF 68); Def.’s Mot. to Certify
Interlocutory Appeal & to Stay Proceedings Pending Appeal (“Def.’s Mot.”) (ECF 81); Pl.’s Resp. to
Mot. to Certify Interlocutory Appeal & to Stay Proceedings Pending Appeal (“Pl.’s Resp.”) (ECF 82);
Def.’s Reply to Resp. to Mot. to Certify Interlocutory Appeal & to Stay Proceedings Pending Appeal
(“Def.’s Reply”) (ECF 84).
3 See Pl.’s Mot. for Notice (“Pl.’s Notice Mot.”) (ECF 83); Pl.’s Corrected Proposed Notice & Consent
Form (“Pl.’s Corrected Notice”) (ECF 85-1).
4 The parties appear to agree that the time in question was outside working hours and did not involve
productive work. Op. & Order at 6 n.6.
-2-
I denied summary judgment, however, because Section 551.423(a)(3) is
invalid. OPM’s regulations implementing FLSA must be “consisten[t] with the
meaning, scope, and application established by the rulings, regulations,
interpretations, and opinions of the Secretary of Labor which are applicable in other
sectors of the economy.” Billings v. United States, 322 F.3d 1328, 1333 (Fed. Cir. 2003)
(quoting H.R. Rep. No. 93-913, at 28 (1974), reprinted in 1974 U.S.C.C.A.N. 2811,
2837–38); Zumerling v. Devine, 769 F.2d 745, 750 (Fed. Cir. 1985); Am. Fed’n of Gov’t
Emps., AFL-CIO v. Off. of Pers. Mgmt., 821 F.2d 761, 769, 770 (D.C. Cir. 1987); see
also 5 C.F.R. § 551.101(c). When OPM’s regulations are inconsistent with those of the
Department of Labor (“DOL”), a court must “determine whether the OPM
interpretation of the statute is reasonable, as well as whether any difference between
OPM’s interpretation and the Labor Department standard is required to effectuate
the consistency of application of the provision to both federal and non-federal
employees.” Billings, 322 F.3d at 1334. If the government cannot justify a deviation
from DOL’s regulations, then the OPM regulation is invalid. See Am. Fed’n of Gov’t
Emps., 821 F.2d at 771.
Section 551.423(a)(3), I concluded, fails that test: The regulation “creates a
categorical rule against overtime for entry-level training outside working hours that
is not consistent with DOL’s regulations, and Defendant has not justified the
departure with any difference between federal and private employment.” Op. & Order
at 9. The government therefore “cannot rely on Section 551.423(a)(3) to obtain
dismissal of this case or to refuse to pay overtime to trainees.” Id.
DISCUSSION
I. Interlocutory Appeal
When this Court certifies, “in issuing an interlocutory order,” that “[1] a
controlling question of law is involved [2] with respect to which there is a substantial
ground for difference of opinion and that [3] an immediate appeal from that order
may materially advance the ultimate termination of the litigation,” the Court of
Appeals for the Federal Circuit may accept an appeal from the order upon a party’s
timely application. 28 U.S.C. § 1292(d)(2); see, e.g., Coast Fed. Bank, FSB v. United
States, 49 Fed. Cl. 11, 13 (2001). The government argues that the validity of Section
551.423(a)(3) justifies such a certification. Although the question is close, I agree.
First, the validity of the regulation is a “controlling question of law,” as this
Court has understood that term. 28 U.S.C. § 1292(d)(2). A question of law is
“controlling” when resolving it would “materially affect issues remaining to be
decided in the trial court.” Coast Fed. Bank, 49 Fed. Cl. at 13 (quoting Pikes Peak
Fam. Hous. LLC v. United States, 40 Fed. Cl. 673, 686 (1998)); see also, e.g., Northrop
-3-
Corp., Northrop Elecs. Sys. Div. v. United States, 27 Fed. Cl. 795, 799 (1993);
Fairholme Funds, Inc. v. United States, 147 Fed. Cl. 126, 130 (2020).5 That is plainly
the case here. If Section 551.423(a)(3) is valid, the next important question before the
Court would be whether the BFTC is “entry-level training,” an issue that consumed
much of the parties’ original summary judgment briefing. See Def.’s Mot. for Summ.
J. at 11–13; Pl.’s Opp. to the Govt.’s Mot. for Summ. J. at 10–17 (ECF 54); Def.’s Reply
in Supp. of Mot. for Summ. J. at 11–14. But because I held that Section 551.423(a)(3)
is not valid, I did not need to reach that question (or related issues) at summary
judgment. See Op. & Order at 4 n.3.6 The parties would have to contest different
issues if they litigate the case further. See Coast Fed. Bank, 49 Fed. Cl. at 13 (deeming
a question “controlling” because it determines the parties’ subsequent litigation
conduct). This case’s decisional path — including the factual and legal issues that
would need to be developed and resolved before judgment — thus depends in large
part on the validity of Section 551.423(a)(3). The validity of Section 551.423(a)(3) is
“controlling” in the sense that it dictates which direction the litigation will take.
Fairholme Funds, 147 Fed. Cl. at 130 (finding an issue controlling because it “could
significantly affect the issues to be tried”).
Second, resolution of that question “may materially advance the ultimate
termination of the litigation.” 28 U.S.C. § 1292(d)(2). Even assuming the invalidity of
Section 551.423(a)(3) resolves liability against the government, see Pl.’s Resp. at 4,
there may still be other contested issues to address before final judgment — at a
minimum, the computation of damages. If the Federal Circuit concludes after a final
judgment that Section 551.423(a)(3) is in fact valid, the case would have to be
remanded for additional proceedings, and possibly more discovery, on the question
whether the BFTC is entry-level training. If the government prevails on that
question, this Court’s proceedings in the meantime may end up largely wasted. A
definitive answer on Section 551.423(a)(3) could therefore lead to a faster and more
efficient resolution of the case. Fairholme Funds, 147 Fed. Cl. at 130–31.
5 Contrary to Plaintiff’s suggestion, a question of law can be controlling even if resolving it leaves
factual issues for resolution in the lower court. See, e.g., Telectronics Proprietary, Ltd. v. Medtronic,
Inc., 836 F.2d 1332, 1339 (Fed. Cir. 1988) (deciding interlocutory appeal of lower court denial of motion
to disqualify); Stephenson v. United States, 33 Fed. Cl. 63, 80 (1994) (allowing interlocutory appeal
from denial of summary judgment when resolution of question of law “might significantly shorten the
litigation”); see also Coast Fed. Bank, 49 Fed. Cl. at 13. None of Plaintiff’s cases stands for the
proposition that a controlling question must obviate resolution of factual questions altogether.
6 The government is flatly wrong to speculate that holding Section 551.423(a)(3) invalid “implicitly
recognizes” that the BFTC is an entry-level course. Def.’s Reply at 2 n.2. When this Court can decide
a motion on different grounds, it has discretion to choose certain grounds over others. Making that
choice does not “implicitly” decide anything in the losing party’s favor, nor does it render the Court’s
decision an “advisory opinion.” Id.-4-
Third — although the issue is close — I conclude that “there is a substantial
ground for difference of opinion” on the validity of Section 551.423(a)(3). 28 U.S.C.
§ 1292(d)(2).
The government’s arguments for a difference of opinion largely resemble its
arguments for summary judgment, which I of course have already rejected. As
mentioned, OPM’s regulations are supposed to be consistent with DOL’s, all things
being equal, Billings, 322 F.3d at 1333, and the government still cannot identify
anything in DOL interpretations of FLSA that categorically excludes overtime for
entry-level training. Even if the BFTC were entry-level training, excluding overtime
from compensation on that ground alone would not be consistent with DOL’s
regulations.
OPM’s regulations may depart from DOL’s when “required to effectuate the
consistency of application of the provision to both federal and non-federal employees.”
Id. at 1334. The government, though, has never had a convincing theory that
depriving federal entry-level employees of overtime, but not entry-level employees in
“other sectors of the economy,” would make FLSA more “consisten[t].” Id. at 1333–34.
The government cites the Government Employees Training Act (“GETA”), a statute
that (when it applies) bars federal employees from receiving overtime for training. 5
U.S.C. § 4109. But the government does not explain why GETA matters when FLSA
applies instead. Op. & Order at 8; see Def.’s Mot. at 12, 14. The government agrees,
rather, that “GETA and the FLSA are different statutes with the ‘border’ between
them determined by regulation.” Id. at 14; see Op. & Order at 8. The government does
not disagree that FLSA applies here, and given OPM’s decision to allow FLSA
overtime compensation for some training, 5 C.F.R. § 551.423, GETA is beside the
point. The government also refers to OPM’s authority to define “work,” 5 U.S.C.
§ 5542(c), but concedes that “OPM did not change the FLSA hours of work rules.”
Def.’s Mot. at 13 (citing 5 C.F.R. § 551.401).
The government does not identify any specific error in the reasoning of my
summary judgment order. The government’s only new argument is that Billings at
most binds OPM to consistency with DOL’s “legislative rules,” and that the “principle
should not be stretched further to allow DOL’s interpretive rule to invalidate a
regulation that OPM issued pursuant to notice-and-comment rulemaking.” Def.’s
Mot. at 10–11. Yet Billings itself described its rule as including all “rulings,
regulations, interpretations, and opinions of the Secretary of Labor which are
applicable in other sectors of the economy,” 322 F.3d at 1333, and the government
cites no authority for a narrow reading. This Court should apply Billings as written,
not constrict it by hacking off pieces of the Federal Circuit’s reasoning.
-5-
But although I find the government’s arguments unconvincing on the merits,
I nonetheless see substantial grounds for a difference of opinion. The most common
way to establish such a difference is through the actual disagreements of federal
courts, see United Launch Servs., LLC v. United States, 139 Fed. Cl. 721, 724 (2018),
yet certification is also appropriate where the law is subject to “two different, but
plausible, interpretations,” id. (quoting Klamath Irr. Dist. v. United States, 69 Fed.
Cl. 160, 163 (2005) (itself citing Vereda, Ltda. v. United States, 271 F.3d 1367, 1374
(Fed. Cir. 2001))), or where an issue is simply “thorny,” see Fairholme Funds, 147
Fed. Cl. at 130; see also Coast Fed. Bank, 49 Fed. Cl. at 14. Here, moreover, the
government is obviously correct that federal employees’ right to overtime
compensation for training involves a complex set of statutes and regulations that
differ from those applicable in other employment settings. The relationship between
FLSA and statutes specific to federal employees has often been ambiguous. See, e.g.,
Alamo v. United States, 850 F.3d 1349, 1353 (Fed. Cir. 2017) (observing that
“Congress created a ‘flotsam of incomplete legislation’ when it extended the FLSA to
cover federal employees already covered by [U.S.C.] Title 5,” and that the resulting
statutory provisions “do not mesh with the machined precision of the gears in a Swiss
watch”) (quoting Abreu v. United States, 948 F.2d 1229, 1236 (Fed. Cir. 1991)). I
therefore conclude that this Court’s order satisfies the three elements necessary for
certification under 28 U.S.C. § 1292(d)(2).
The government has requested that the case be stayed pending the
interlocutory appeal. See 28 U.S.C. § 1292(d)(3). This Court has discretion to stay its
cases for the sake of judicial economy. UnionBanCal Corp. & Subsidiaries v. United
States, 93 Fed. Cl. 166, 167 (2010) (quoting Landis v. N. Am. Co., 299 U.S. 248, 254
(1936)). Because I am skeptical that the government could prevail on the question at
issue, and because the Federal Circuit has complete discretion to decline an
interlocutory appeal even when it could be proper to accept it, Coast Fed. Bank, FSB
v. United States, 6 F. App’x 882, 883 (Fed. Cir. 2001), staying the case now would
serve no purpose. The stay is therefore denied without prejudice. If the Federal
Circuit accepts an appeal, the parties may revisit the propriety of a stay.
II. FLSA Notice
Plaintiff has moved for court-issued notice “to past and present employees of
the [FBI] who occupied non-supervisory [intelligence analyst] positions in
occupational series GS-0132 and attended the [BFTC] within three years prior to the
-6-
date of sending the notice.” Pl.’s Notice Mot. at 1.7 The government does not oppose,
see id.; Def.’s Reply at 8 n.7, and I agree that notice is appropriate.
Section 16(b) of FLSA entitles employees to bring claims on behalf of
themselves and those who are “similarly situated.” 29 U.S.C. § 216(b). Similarly
situated individuals can choose to opt in to a FLSA case by submitting joinder notices.
The statute also authorizes courts to facilitate joinder by issuing notice to similarly
situated third parties. See Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 170–71
(1989). But as this Court explained in Valte v. United States, the standards for
determining whether to issue notice are unsettled. 155 Fed. Cl. 561, 566–73 (2021).
Contrary to cases that have approached FLSA notice with inaccurate analogies to
class action procedures, see, e.g., Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987),
mandamus granted on other grounds sub nom. Lusardi v. Lechner, 855 F.2d 1062 (3d
Cir. 1988), notice is a case-management device for ensuring orderly, voluntary joinder
of individuals likely to be “similarly situated” to the original plaintiff. Valte, 155 Fed.
Cl. at 573; see also Swales v. KLLM Transp. Servs., L.L.C., 985 F.3d 430, 443 (5th
Cir. 2021). “When a similarly situated group exists, early notice is likely to be
consistent with FLSA and good case management practices — subject of course to the
Court’s discretion.” Valte, 155 Fed. Cl. at 574 (citing RCFC 83(b) & 16(b)).
For the Court to issue notice, Plaintiff must first show that he is likely to be
“similarly situated” to the people who would receive the proposed notice. Id. at 574–
75. In other words, it must be likely that Plaintiff’s experience with the BFTC in 2018
was similar to that of individuals with similar FBI roles who participated more
recently.
Plaintiff has made that showing. The parties have not undertaken to define
what it means to be “similarly situated” for purposes of FLSA notice. Id. at 571
(suggesting avenues for developing a test consistent with the statute’s text). But
whatever the niceties of the standard might be, they are surely satisfied by
stipulations (or evidentiary proof) establishing that a plaintiff and absent third
parties were in a materially similar work environment and subject to the same time
expectations and payment policies. See Hoffmann-La Roche Inc., 493 U.S. at 170
(explaining that notice enables “efficient resolution in one proceeding of common
issues of law and fact arising from the same alleged … activity”). As mentioned, the
parties have stipulated that “there have been no material differences in the
graduation requirements, the instructions given, or … the compensation” for
7The notice form has been provided to the Court, see Notice of Corrected Proposed Notice & Consent
Form (ECF 85), and appears to be substantively adequate. See Hoffmann-La Roche Inc. v. Sperling,
493 U.S. 165, 174 (1989) (notice should avoid the appearance of judicial endorsement or “solicitation
of claims”).
-7-
intelligence analysts in the BFTC since Plaintiff completed the course in 2018. See
Stipulations of Fact (ECF 83-2). Those individuals are therefore similarly situated to
Plaintiff.
Plaintiff must also justify notice as an exercise of judicial discretion that
furthers case management interests such as “timely opt-in by people entitled to
proceed collectively, maintenance of orderly case deadlines, and supervision of
communications about the case with potentially interested non-parties.” Valte, 155
Fed. Cl. at 573 (citing Hoffmann-La Roche Inc., 493 U.S. at 171–72, and Briggs v.
United States, 54 Fed. Cl. 205, 206–07 (2002)). That standard is met here too. Based
on the parties’ stipulations, it appears that the individuals who would receive notice
have claims much like Plaintiff’s. An orderly process for notifying and joining
similarly situated FBI employees who wish to participate would likely further FLSA’s
aim of “efficient resolution in one proceeding of common issues of law and fact[.]” See
Hoffmann-La Roche Inc., 493 U.S. at 170.
CONCLUSION
For the foregoing reasons, the government’s motion for certification for
interlocutory appeal under 28 U.S.C. § 1292(d)(2) (ECF 81) is GRANTED IN PART
and DENIED IN PART. The Court’s order denying summary judgment shall be
certified for interlocutory appeal, but the case shall not be stayed at present.
The motion for court-issued notice (ECF 83) is GRANTED. The parties shall
follow the procedure for notice proposed in the motion:
Subject to the protective order in this case, Defendant will provide
Plaintiff’s counsel the names, email, and postal addresses of potential
plaintiffs within 20 days of the date the Court enters an order granting
this motion. Plaintiff’s counsel will then promptly send the notice by
email and first-class mail along with an enclosed self-addressed
stamped envelope to potential plaintiffs for return by no later than 90
days from the date the notice is mailed. Plaintiff’s counsel will advise
the Court and Defendant’s counsel when the notice has been sent and
the deadline for returning consent forms.
The email will contain only the Court-approved notice and no other
language. The subject line of the email will be “Legal Notice and
Opportunity to Join Lawsuit.” The envelope sending the notice to postal
addresses will contain only the Court approved notice, and will have
printed on the outside “Legal Notice and Opportunity to Join Lawsuit.”
To the extent the notice is undeliverable to potential plaintiffs’ email or
postal addresses, if necessary, the parties will confer within no more
than five business days of plaintiffs’ counsel so notifying Government
counsel.
-8-
After notice is sent once by email and first-class mail, Plaintiff’s counsel
may send a second notice. The second notice will be identical to the first
notice, except that Plaintiff’s counsel may update the number of
plaintiffs in the case at the time the second notice is sent. The second
notice will be sent by first-class mail to potential plaintiffs from whom
they have not received a consent form approximately 20 days before the
deadline for receipt of consent forms. Likewise, for plaintiffs whose
mailed notices were returned as undeliverable and who have not
returned a consent form, Plaintiff’s counsel may send a second identical
notice by email if efforts to obtain a correct mailing address are
unsuccessful. Plaintiff will bear the cost of sending a second postal
mailing or email, which will not be reimbursed by the United States.
IT IS SO ORDERED.
s/ Stephen S. Schwartz
STEPHEN S. SCHWARTZ
Judge
-9-