DOL Employees to Split Millions From 2006 Overtime Claim

Daily Labor Report® is the objective resource the nation’s foremost labor and employment professionals read and rely on, providing reliable, analytical coverage of top labor and employment...

By Ben Penn

Aug. 15 — The Labor Department agreed to pay $7 million to settle a 2006 unpaid overtime grievance by its own employee union, the union's attorneys announced Aug. 12.

“The problems” of violating the Fair Labor Standards Act “were created and continued through both the Chao and Solis eras, and Secretary Perez was stuck fixing the problem as he has with a half dozen other issues,” Alex Bastani, president of the American Federation of Government Employees Local 12, told Bloomberg BNA Aug. 15.

The original grievance, which alleged that the DOL didn't compensate employees for off-the-clock work, covered 2003-2006—part of Elaine Chao's tenure as labor secretary. However, the violations continued after that time period, including during Hilda Solis’s 2009-2013 tenure in the department’s top position, Bastani said.

When the agency has “a case against it alleging that it's violating the same or similar laws that it's trying to enforce at private businesses, it’s not going to lay down,” Keith Kauffman, who represented the union throughout a lengthy arbitration process, told Bloomberg BNA Aug. 15. “It's going to fight tooth and nail, and they fought tooth and nail over every single facet.”

It's not yet clear exactly how many of the 3,100 current bargaining unit members plus former DOL workers will split the settlement, said Kauffman, a senior attorney at Snider & Associates LLC in Baltimore. He estimates there “will probably be 2,000 or 3,000” employees receiving back wages.

The workers who will receive back pay include many the union alleged were misclassified as overtime-exempt. Several years after the initial grievance, the DOL reclassified employees as nonexempt and eligible for time-and-a-half when working more than 40 hours per week, Bastani said.

A significant part of the grievance also pertained to off-the-clock work, such as during lunch breaks and weekends, the union local president said. “I think the employees were professionals and they really didn’t recognize it,” he said. “A lot of times they would work over lunch, weeks upon weeks, and not really be aware that they were entitled to that half-hour lunchtime and that was really nonnegotiable.”

DOL ‘Strives to Be a Model Employer.'

The DOL began investigating the allegations in 2006 and “has taken numerous steps to enhance our pay practices” even prior to the settlement, department spokesman Stephen Barr said in an Aug. 15 statement.

“We reviewed all job positions, directed agencies to make corrections, revised guidance to supervisors on overtime eligibility issues, and added internal controls on the Department’s timekeeping system,” Barr said.

“The Department’s employees are our greatest asset, and they have been critical to our success in developing flexible work schedules, training and mentoring programs, and other initiatives that improve our ability to better serve the nation,” he said. “The Department of Labor strives to be a model employer, and we are pleased with this agreement reached with our employees.”

Current Political Appointees Not Blamed

The settlement, which involved no admission of wrongdoing by the DOL, comes at a time when the agency's Wage and Hour Division is promoting its recent rule change to expand workers' access to overtime pay.

“I think it's something that they definitely wanted to clean up before the election,” Bastani said. “There's a real conflict between the political leadership and the bureaucratic leadership. I'm sure the political leadership probably wanted to settle the case around springtime and the civil service leadership probably wanted to drag it out forever.”

The past 10 years involved multiple hearings, employee testimony, remediations and partial settlement agreements, Kauffman said. “It really was 10 years of protracted litigation” and the settlement meant “avoiding another 10 years of protracted litigation.”

Asked if any of the issues under labor secretaries Chao and Solis are continuing in recent years, Kauffman said, “I can't attest that they completely righted the ship.”

“But I can tell you that along the way there were various partial settlements entered into rulings that would at least lead me to believe that the DOL is doing a much better job internally,” the union's attorney said.

The back wages haven't yet been distributed. AFGE Local 12 will be announcing updates for employees in September.

Attempts to reach Chao and Solis late Aug. 15 were unsuccessful. Chao is a distinguished fellow at the Hudson Institute in Washington, and Solis is a member of the Los Angeles County Board of Supervisors.

To contact the reporter on this story: Ben Penn in Washington at bpenn@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.