It’s What I Said Before: DOL’s Opinion Reversal Does Not Sway Arkansas Federal CourtWhen the Department of Labor (DOL) withdraws one of its previous opinion letters and issues a new interpretation, should a court change its ruling? No — not according to a federal judge in Arkansas.

DOL Opinion Letters

As background, the DOL issues opinion letters as a means to provide guidance for Fair Labor Standards Act (FLSA) interpretation. Under the Obama Administration, the DOL dispensed with opinion letters for many years, instead issuing administrative interpretations, but under the Trump Administration, opinion letters came back in 2018. The DOL opinion letters are not binding legal authority, but they can serve as support for a company’s good faith defense of alleged FLSA violations for similar situations. As the Supreme Court declared: “[i]nterpretations such as those in opinion letters—like interpretations contained in policy statements, agency manuals, and enforcement guidelines, all of which lack the force of law—do not warrant Chevron-style deference. They are ‘entitled to respect,’ but only to the extent that they are persuasive[.]”

At Issue: Truck Driver Sleeper Berth Time

In Browne v. P.A.M. Transport, Inc, et al., truck drivers argued that the time they spent in a sleeper birth should be counted as hours worked under the FLSA. The Arkansas district court certified a class under both the FLSA’s collective action standard and the federal rules for a class action. In October 2018 the court ruled that the federal regulations at 29 CFR 785.22(a) required that sleeper berth time over eight hours must be compensated during shifts of 24 hours or longer. The court determined the regulation to be unambiguous and, thus, did not need to defer to the DOL interpretation. But it was nonetheless “comfort[ed] to see that DOL’s interpretation accords with this Court’s own.”

P.A.M. filed a motion to try and decertify the class based on, among other things, an opinion letter published in July 2019 that reversed the DOL’s previous position.

New Opinion Letter

The DOL’s previous interpretation – which went back to the 1970s – related to sleeper berth time said that sleeping time may be excluded from hours worked where “adequate facilities” were furnished, but only up to eight hours of sleeping time may be excluded in a trip 24 hours or longer, and no sleeping time may be excluded for trips under 24 hours. On July 22, 2019, the Wage and Hour Division published an opinion letter withdrawing its previous opinion on the topic and declaring that 29 CFR 785.22 refers to on-duty sleeping time and another section, 785.41, refers to non-compensable sleeping time. Thus, under the new interpretation, truck drivers would not be entitled to compensation for sleeper berth time during which they are permitted to sleep, no matter how long.  According to the current DOL’s view, requiring sleeper berth time to be compensable would be “unnecessarily burdensome for employers.”

What Does the Court Do with the New Opinion Letter? 

The court, however, did not see this change by the DOL as cause to reverse its previous rulings.  The judge detailed that deference to agency interpretation of a regulation is appropriate only when the regulation is “genuinely ambiguous after the application of standard tools of interpretation, and even then, only if the agency’s interpretation is ‘authoritative, expertise-based, fair, or considered judgment.’” The court then reiterated its previous reasoning that the regulation in question was unambiguous so it was never necessary to reach the DOL’s interpretation.

Similarly, the court was not swayed by the defendants’ argument that a new opinion letter received from the Arkansas Department of Labor (ADOL) should change the court’s mind. ADOL issued a letter in September 2019 setting forth that the state agency would follow the DOL’s interpretation on the issue. Defendants argued that even if the court would not give deference to the federal DOL’s updated interpretation under the federal standard for deference to agency interpretations, it should give deference to the state agency’s interpretation under the state standard for deference. The court carefully scrutinized the September 2019 ADOL letter and found that ADOL intended it not as an agency interpretation of the state regulations, but only to set out its enforcement policy to follow the DOL’s interpretations in an effort to provide consistency between the federal and state levels.

In the end, the court stuck to its previous ruling that sleeper berth time over eight hours must be compensated during shifts of 24 hours or longer – a position that would be inconsistent with the current DOL interpretation of the issue.

Takeaway: DOL Opinion Letters Are Important, but Not Absolute

The P.A.M. case is an interesting study in how federal courts’ treat DOL opinion letters, especially where there is a change in the middle of a case. Employers should pay attention to the DOL opinion letters for useful guidance in how the current department interprets thorny FLSA issues. However, employers should not assume a court will agree with the guidance. As this case clearly demonstrates, the letters will not serve as absolute authority as they are very fact-specific and do not carry the force of law.

diverse business peopleThe EEOC has released its annual report on the number of discrimination charges filed across the country. As has been seen over the last few years, the total number of charges continued to decline –72,675 in 2019 as opposed to 76,418 in 2018. While sex and race continue to be popular choices for charges, the largest category is retaliation. The reason for this strong showing may be that people are including it as additional grounds in charges focused on some other protected category. Disability discrimination continues to be the subject of a large amount of charges, but even those slightly decreased in 2019. The smallest category continues to be the Equal Pay Act.

WHAT DOES THIS MEAN FOR ME?

The continued reduction in charges does not necessarily mean that there has been an overall reduction in employees who think they are being discriminated against. Nor should it give any employer reason to loosen its rules on preventing discriminatory acts occurring in the workplace. It is interesting that although the EEOC has made major changes to make it easier for an employee to file a charge (primarily that it can now be done online), the total number is declining. It would be fascinating to see if major employers’ statistics reflect a drop-off in internal discrimination complaints to match the trend in the EEOC stats.

“OK, Boomer” – What Amounts to Actionable Age Discrimination?What does an age discrimination plaintiff have to prove to succeed? Federal employees may have an easier path for proving an age discrimination claim, if we are reading the tea leaves correctly on the Supreme Court’s oral argument in the Babb v. Wilkie case.

Currently, because of the Supreme Court’s Gross v. FBL Financial Services decision, age discrimination plaintiffs have to prove that age was the “but-for” causation of the adverse employment action, which is a more stringent causation standard than other discrimination claims, such as those based on race or sex under Title VII. The Babb v. Wilkie case is on review from the Eleventh Circuit, and the highest court is considering whether the federal-sector provision of the Age Discrimination in Employment Act (prohibiting age-based discrimination for any agency employees age 40 or older) requires a plaintiff to prove that age was a but-for cause of the challenged employment decision.

The Facts and Oral Argument

Plaintiff Noris Babb worked as a pharmacist at a VA Medical Center in Bay Pines, Florida. Following the VA’s implementation of a nationwide program affecting its pharmacies, Babb and other pharmacists were not permitted to transition to the new program (with an accompanying promotion and raise), but two pharmacists who were under 40 years of age were transitioned. Babb disagreed with the decision and filed suit in the Middle District of Florida alleging miscellaneous claims, including age and gender discrimination. The district court granted summary judgment to the VA. On appeal, the Eleventh Circuit overturned summary judgment as to Babb’s gender discrimination claim but affirmed summary judgment on the age discrimination claim. Babb then petitioned the U.S. Supreme Court for review, arguing that the but-for causation standard applicable to ADEA claims disadvantaged federal employees.

The Supreme Court heard oral argument on Wednesday, January 15, 2020. During oral argument, Chief Justice Roberts and Justices Gorsuch and Kavanaugh indicated their skepticism that the standard needed to be relaxed. Chief Justice Roberts, for example, asked whether a one-off statement such as “Okay, Boomer” to a job applicant would amount to actionable age discrimination. He further expressed concern that a relaxed causation standard would amount to regulated speech in the workplace. The other justices, however, suggested that they were more inclined to relax the but-for causation standard.

Takeaways

Employers should remember that while a change in the age discrimination causation standard would be significant from an academic standpoint, the standard is a legal rather than a practical concern. The standard does not really come into play unless an age discrimination claim gets to a jury. The applicable summary judgment standard remains the McDonnell-Douglas burden shifting framework to determine whether a claim should be dismissed as a matter of law or reach a jury.  Most importantly, when you are making a decision about how to treat an employee in the protected age group, you want to focus on business needs and what is (and appears) fair rather on whether the employee could prove “but-for” causation rather than merely a preponderance of the evidence.

Stay tuned for the results on the ADEA causation standard as we await a ruling in Babb v. Wilkie.