$24 Million Payout at HUD

A settlement agreement between HUD and federal employee unions on the application of the Fair Labor Standards Act to agency employees will result in a payment of $24 million.

The Department of Housing and Urban Development (HUD) has agreed to a payment of $24 million in settlement of a Fair Labor Standards Act claim against the agency according to a law firm working with federal employee unions at the agency.

In 2003, AFGE filed a grievance alleging violations of the FLSA with respect to travel during non-duty hours. A few months later, the union filed a second grievance contending that the agency violated the FLSA when it failed to properly classify bargaining unit employees as "FLSA non-exempt." In 2005, NFFE filed a grievance also alleging that the agency violated the FLSA.

In a press release, the law offices of Snider and Associates says that "HUD has agreed to pay $24 million dollars to current and former HUD employees who were not compensated properly under the fair labor standards act." Lead counsel Michael J. Snider of Snider & Associates, LLC, said that "This settlement will ensure that the agency will comply with the regulations under the FLSA and will protect both current and future HUD employees."

The case covers as many as 7,000 current and former employees of the agency. The grievances alleged that employees were misclassified as exempt under the FLSA and that this adversely affected their ability to receive pay for overtime hours that were worked, denied them a choice of compensatory time off ("comp time"), and failed to compensate them for travel time and "off the clock" work, (sometimes referred to as "suffer or permit overtime"). According to the law firm, the case involved over 40 days of hearings and took nearly five years to resolve. Attorney Michael Snider estimates that the payment will amount to about $3400 per employee and involves about seven years of backpay.

Under the terms of the agreement, in return for the $24,000,000, the unions have agreed to withdraw their greivances against the agency on the matter and to "release and waive their right to file any complaint, claim, lawsuit, grievance, or appeal against the Agency…regarding any matter that was or could have been raised…."

The agency has also agreed that a number of positions will be retroactively reclassified as "FLSA non-exempt" and that during the reclassification process, the agency will treat those in the positions as "FLSA non-exempt" employees. The agreement covers various positions that will be considered "FLSA non-exempt" and includes all positions at grades GS-10 and below and GS 14 and 15 EEO specialists. The EEO specialist agreement also contains the added proviso that the agency could again review this classification after six months from the date the positions are classified in accordance with OPM regulations pertaining to determining FLSA status.

While the $24 million in this case is a large figure, it may get much larger. The law firm indicated in an email that similar cases are also pending against a number of other federal agencies including the Department of Labor, the Office of Personnel Management, Department of Agriculture, General Services Administration and the Department of Defense.

Employees with questions about the interpretation of the agreement or how it will impact an individual employee should contact the Snider law firm, the HUD human resources office at (202) 708-3946 or the appropriate union offices for more information.



About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47