Court Awards Back Pay to Federal Employees Over 2013 Government Shutdown

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By on February 17, 2017 in Court Cases, Pay & Benefits with 0 Comments

Court gavel on $100 bills

A class action lawsuit challenging the failure of the federal government to pay wages to non-exempt employees during the brief 2013 government shutdown has led to a win for the class of 20,000 plus federal employees. (Martin v. The United States (U.S. Court of Federal Claims No. 13-834C, 2/13/17)

Two claims were before the Claims Court: (1) the government failed to pay required minimum wages under the Fair Labor Standards Act (FLSA), notwithstanding that any payments made without appropriations would violate the Anti-Deficiency Act (ADA); and (2) overtime was required to be paid under FLSA to those non-exempt employees required to work during the furlough, again notwithstanding the ADA.

Many readers recall the 2013 shutdown. Essentially the Obama White House and the Congress had a disagreement over efforts in Congress to reduce government spending. Many agencies did not have appropriations by the beginning of the fiscal year on October 1, forcing a shutdown in those agencies. Shutdown means furlough of all but essential employees who were required to work in order to “protect safety of human life or property.” (Opinion p. 2) On the other hand, non-essential services were required to stop because there were no appropriations to pay for them and to do so would violate the ADA.

After the dust settled and all employees were eventually paid (as far as was reported), a class of employees came together to sue for redress. They argued that the ADA does not trump the Fair Labor Standards Act. Just because the agencies would be liable under the ADA should they pay out appropriations they do not have, is no excuse to violate the FLSA for the non-exempt employees required to work during a furlough. Further, these employees are required to receive overtime for their work. And, the agencies failed to make the regular payday that fell within the furlough period.

There is the nub of this case—when the ADA dictates a shutdown, does the FLSA nevertheless continue to apply? The court’s short answer is “yes.” “The Anti-Deficiency Act does not operate to cancel defendant’s [government’s] obligations under the Fair Labor Standards Act.” (p. 5)

While the government fully admitted it did not make the regularly scheduled payroll during the first week of the furlough, it argued that it should have no liability under FLSA because it was literally barred by law (ADA) from making payments. The government underscores the “Catch-22” situation–the FLSA requires that agencies “shall pay” a minimum wage while the ADA requires a U.S. government officer or employee “may not” spend money it does not have appropriations for. Which statute controls? (p. 6)

The court indicated it “understands why defendant frames the problem in this way…” but since the ADA requirements apply to officials and employees and not the government itself, it cannot affect “the rights…of the citizens honestly contracting with the [g]overnment.” (p. 6)

Calling this a “superficial conflict between these statutes,” the court goes on to “harmonize” them. First, the government clearly violated the FLSA. (p.7) Since the FLSA spells out remedies for violations, it is simply a matter of applying those remedies in this case. As the court explains, it “will proceed to analyze this case under the construct of the FLSA, and evaluate the existence and operation of the ADA as part of determining whether defendant met the statutory requirements to avoid liability for liquidated damages.” (p.7)

Without going into the court’s slap down of all of the government’s arguments as to why liquidated damages are not appropriate in this case, the court answers “yes,” the government is liable for liquidated damages, even though the court acknowledges it has the discretion to award no such damages. The court even refused to apply Department of Labor exceptions for some 38 employees of BBG, NSA, and the Peace Corps. (12)

Citing with approval a 9th Circuit Court of Appeals case, dealing with a similar budget impasse in California, which it found “instructive,” the court refused to distinguish the actions of the legislature from that of the executive in order to excuse late payment of overtime, finding the DOIL bulletin’s exception “is unavailable in this case.” (12)

All that remained left for this court to do was total up exactly what the taxpayers have to pay out in liquidated damages. The court set a schedule for this purpose. Plaintiff class will submit by March 17 its draft calculation to the government; the parties will confab by March 31; the parties will file a joint statement to the court by April 7th.

Martin v. United States (13-834C)

© 2019 Susan McGuire Smith. All rights reserved. This article may not be reproduced without express written consent from Susan McGuire Smith.

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About the Author

Susan McGuire Smith spent most of her federal legal career with NASA, serving as Chief Counsel at Marshall Space Flight Center for 14 years. Her expertise is in government contracts, ethics, and personnel law.

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