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By Ben Penn
The Labor Department’s first batch of opinion letters in nearly a decade extended legal aid to a crane service company, a management law firm, and a trade association, according to agency documents obtained by Bloomberg Law.
The opinion letters provided clarity on fact-specific pay questions about whether and how to compensate workers for health breaks and travel time, and lump-sum payroll processing. In publishing the letters April 12, the DOL’s Wage and Hour Division concealed the names of the requesting parties, as is usual, citing federal privacy law.
But Bloomberg Law acquired the names from the WHD in response to Freedom of Information Act requests. The letters were directed to Hoist & Crane Service Group; Costangy, Brooks, Smith & Prophete; and the American Payroll Association, an analysis of the documents shows.
Opinion letters are highly coveted, particularly by management attorneys and trade groups. Not only do they represent the government’s official interpretation on whether a particular compensation policy is in compliance, but they can serve as a legal defense in court. As the agency continues to roll out more letters, the employer community is looking for insight on how to jump to the front of the line.
“You have an old statute and you have all kinds of changing employer practices,” Lee Schreter, who co-chairs Littler Mendelson’s national wage and hour practice group, told Bloomberg Law. “If an employer can contact the Department of Labor and say, ‘I don’t know what to do here; I need your help,’” the employer can avoid “having to make a crapshoot decision.”
Schreter was a frequent submitter of opinion letter requests back when they were last utilized under the George W. Bush administration. The letters are a compliance assistance tool that Labor Secretary Alexander Acosta reinstated last year. The practice was revoked early in the Obama administration, because DOL officials felt the letters were a drain on agency resources and had limited applicability.
Although the letters can be sent to individual workers or unions, businesses pine for them because the letters provide a good-faith defense for employers facing a future WHD investigation or lawsuit.
“As WHD discusses on its website, anyone can request an opinion letter,” a Labor Department spokesman told Bloomberg Law via email. “Stakeholders should continue to engage with the Department for opinion letter requests on issues that matter to them. In practice, opinion letter requests are evaluated to ensure they are not cases best handled by a local WHD office.”
Costangy, a national law firm with 200 workplace law attorneys, asked the WHD in December for assistance on an employee rest break issue that was perplexing two different clients. Four months later came a pleasant surprise: an opinion letter stating that the businesses aren’t required to pay workers for health-related intermittent breaks covered by the Family and Medical Leave Act.
“We followed the same process that we have in other situations” of seeking opinion letters, Meg Zabijaka, a partner in Costangy’s Jacksonville office, told Bloomberg Law. “I don’t know if it was just a perfect alignment of the sun, the moon, and the stars.”
Zabijaka’s co-counsel on the matter, Heather Owen, theorized that the firm may have gotten a fast response because the clients provided an ideal legal scenario for the agency to address. How to compensate workers for medical breaks presents a conflict between the two major laws--the Fair Labor Standards Act and the Family Medical and Leave Act--that the WHD enforces.
“The novelty of the question and that it addressed both of their subject matters may have been a reason that it got them interested,” Owen, who has since left Costangy, told Bloomberg Law.
Schreter told Bloomberg Law it would be a very positive development if the division starts reacting more swiftly to requests in this administration than it did back in the George W. Bush years. However, Schreter—who took advantage of the process in prior decades—suspected that in this case, the department may have been spurred into action after hearing similar demands for clarity on FMLA breaks from other employers.
Attorneys have advised clients that it wasn’t always efficient to seek opinion letters because the WHD could take years to produce a response, especially without a confirmed WHD administrator. Cheryl Stanton, President Donald Trump’s pick for the job, is still waiting for a Senate confirmation vote. Plus, the division is under no obligation to respond at all if the scenario isn’t deemed ripe for review.
The guidance Costangy received doesn’t necessarily apply to other employers who don’t fall into the exact same fact pattern described in the request. The letter is critical for the requesting clients because if they’re sued or investigated in the future, they can present the opinion to a judge or investigator as a good-faith defense.
The American Payroll Association, which represents about 20,000 payroll professionals, received a letter interpreting how states should factor in lump sum—or single-time—payments when determining employees’ child care withholdings. The trail of emails includes an APA message to the Labor Department on August 2017, but the dialogue actually originated under the Obama administration.
Alice Jacobsohn, the APA’s senior manager of government relations, told Bloomberg Law that the varying state interpretations of this issue compelled her association to raise the matter with the WHD during a June 2016 conference call. The discussion prompted the agency to release a fact sheet in late 2016, but Jacobsohn said it only partially clarified the lump sum ambiguity for the APA.
Jacobsohn continued communicating with the agency through the 2017 transition to the new administration.
Amid her correspondence with the agency last summer, she was informed that her request was being referred to the opinion letter process, which had been newly reinstated in June.
“It was a very open process in terms of the discussions,” Jacobsohn said. “I thought they were very fair in saying what resources they had, or not, and being honest about whether they were going to look at things or not. So even along the way I got an idea of which way the agency was leaning. You can’t rely on that until the final result, but I did find it to be a useful process.”
The opinion letter process has typically been associated with large management law firms reaching out to the DOL on behalf of businesses, while keeping their clients’ identities anonymous. But the third new letter was initiated by a human resources director at a crane service company employing hundreds of workers across the country.
Sandi Copus, with Jefferson, La.-based Hoist & Crane, didn’t reply to a Bloomberg Law request for comment. Her August 2017 message to the WHD detailed three scenarios, with multiple questions regarding whether technicians should be paid for travel time throughout the workday.
Copus sent a followup email in October, in response to a WHD request, confirming for the agency that the scenarios she described aren’t the subject of current investigations or litigation.
“It’s encouraging to me that one, employers are taking advantage of the program, because that’s the way that the program will remain, and two, that the department is responding to those kinds of questions in addition to those that are posed by law firms,” Littler Mendelson’s Schreter said.
That leaves unions, plaintiff lawyers, and individual employees as the only category of stakeholders the agency has yet to respond to after the initial set of letters.
It remains to be seen how frequently and to whom the WHD releases future letters. Costangy’s Zabijaka said after getting an interpretation, she is more likely to consider going after one in other cases.
Zabijaka said she may be revisiting advice she gave one of her clients shortly before getting the letter.
“A few days before it came out, I said to a client, ‘On your issue we could ask for an opinion letter but it takes a really long time to get the answers.’ And lo and behold, we get an answer on this one.”
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