Petition for Writ of Certiorari — Cleveland County, North Carolina, aka Cleveland County Emergency Medical Services, Petitioner v. Sara B. Conner, Individually and on Behalf of All Others Similarly Situated.

No. _______

In The

Supreme Court of the United States

-------------------------- ʕ ---------------------------

CLEVELAND COUNTY, NORTH

CAROLINA A/K/A CLEVELAND COUNTY

EMERGENCY MEDICAL SERVICES,

Petitioner,

v.

SARA B. CONNER, individually and on

behalf of all others similarly situated,

Respondent.

-------------------------- ʕ --------------------------

ON PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

-------------------------- ʕ --------------------------

PETITION FOR WRIT OF CERTIORARI

-------------------------- ʕ --------------------------

Alexander C. Dale

Counsel of Record

WARD & SMITH, PA

127 Racine Drive

Wilmington, North Carolina 28403

(910) 794-4806

acd@wardandsmith.com

Counsel for Petitioner

Dated: June 3, 2022

THE LEX GROUPDC i 1050 Connecticut Avenue, N.W. i Suite 500, #5190 i Washington, D.C. 20036

(202) 955-0001 i (800) 856-4419 i www.thelexgroup.com

i

QUESTIONS PRESENTED

1.

Whether the Fair Labor Standards Act

allows an employee, who has been paid at least the

required minimum wage and overtime pay at a rate

that is at least one and one-half times her regular

rate, to sue her employer for and recover unpaid

straight-time wages earned in weeks when she

worked overtime.

2.

Whether Skidmore v. Swift & Co., 323

U.S. 134 (1944), allows courts to independently

evaluate an agency’s nonbinding interpretation of a

statute.

ii

RELATED PROCEEDINGS

The proceedings directly related to this petition

under this Court’s Rule 14.1(b)(iii) are:

x

Conner v. Cleveland Cnty., No. 19-2012

(4th Cir. Jan. 5, 2022) (reversing district court’s

judgment granting Petitioner’s motion to dismiss);

and

x

Conner v. Cleveland Cnty., No. 18-CV-2

(W.D.N.C. Aug. 21, 2019) (dismissing Respondent’s

complaint for failure to state a claim upon which relief

can be granted).

iii

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ........................................ i

RELATED PROCEEDINGS ...................................... ii

TABLE OF CONTENTS............................................iii

TABLE OF AUTHORITIES ...................................... vi

PETITION FOR A WRIT OF CERTIORARI ............. 1

OPINIONS BELOW ................................................... 4

JURISDICTION ......................................................... 4

PERTINENT

STATUTORY

AND

REGULATORY PROVISIONS .................................. 4

STATEMENT OF THE CASE ................................... 6

I.

The Fair Labor Standards Act .............. 6

II.

The Gap-Time Problem ......................... 7

III.

Background.......................................... 10

REASONS FOR GRANTING THE PETITION ....... 13

I.

The Questions Presented raise

important issues about the scope

of the FLSA and the proper

application of Skidmore ...................... 13

iv

II.

The decision below is wrong ............... 19

III.

The Questions Presented are

exceptionally important ...................... 22

IV.

This Case is the ideal vehicle to

resolve the Questions Presented ........ 27

CONCLUSION ......................................................... 28

APPENDIX:

Published Opinion of

The United States Court of Appeals for

The Fourth Circuit

Re: Vacated and Remanded

entered January 5, 2022 ..................... 1a

Judgment of

The United States Court of Appeals for

The Fourth Circuit

entered January 5, 2022 ................... 35a

Memorandum of Decision and Order of

The United States District Court for

The Western District of North Carolina

Asheville Division

Re: Accepting the Magistrate Judge’s

Recommendation that the Motion to

Dismiss should be Granted

entered August 21, 2019 ................... 37a

v

Judgment of

The United States District Court for

The Western District of North Carolina

Asheville Division

entered August 21, 2019 ................... 46a

Memorandum and Recommendation of

The United States District Court for

The Western District of North Carolina

Asheville Division

Re: Granting Defendant’s Motion to Dismiss

entered June 27, 2019 ....................... 47a

29 C.F.R. § 778.315 ...................................... 63a

29 U.S.C.A. § 207 ........................................ 64a

vi

TABLE OF AUTHORITIES

Page(s)

CASES

Barnhart v. Sigmon Coal Co.,

534 U.S. 438 (2002) .................................. 19, 20

Barrentine v. Arkansas-Best Freight Sys., Inc.,

450 U.S. 728 (1981) .................................... 6, 21

Bay Ridge Operating Co. v. Aaron,

334 U.S. 446 (1948) .............................. 8, 19, 22

Carter v. City of Charleston,

995 F. Supp. 620 (D.S.C. 1997)...................... 24

Carter v. City of Phila.,

2022 WL 169868

(E.D. Pa. Jan. 19, 2002) ................................. 24

Chevron U.S.A. v.

Nat. Res. Def. Council,

467 U.S. 837 (1984) .......................................... 1

Christensen v. Harris Cnty.,

529 U.S. 576 (2000) ................................ 1, 7, 17

Conzo v. City of N.Y.,

667 F. Supp. 2d 279 (S.D.N.Y. 2009) ............. 24

Davis v. Abington Mem’l Hosp.,

765 F.3d 236 (3d Cir. 2014) ........................... 12

vii

Donovan v. Crisostomo,

689 F.2d 869 (9th Cir. 1982) ................ 1, 12, 14

E.I. Du Pont de Nemours & Co. v. Smiley,

138 S. Ct. 2563 (2018) ...................................... 3

Facebook, Inc. v. Windy City Innovations, LLC,

973 F.3d 1321 (Fed. Cir. 2020) ...................... 18

Fed. Express Corp. v. Holowecki,

552 U.S. 389 (2008) ........................................ 21

Gen. Dynamics Land Sys., Inc. v. Cline,

540 U.S. 581 (2004) ........................................ 20

Gould v. First Student Mgmt., LLC,

2017 WL 3731025

(D.N.H. Aug. 29, 2017) ................................... 23

Gun Owners of Am., Inc. v. Garland,

19 F.4th 890 (6th Cir. 2021) .................... 17, 18

Jackson v. First Student Mgmt., LLC,

2017 WL 10874175

(M.D. Fla. Apr. 20, 2017) ............................... 23

Kidd v. Thomson Reuters Corp.,

925 F.3d 99 (2d Cir. 2019) ....................... 18, 19

Larson v. Saul,

967 F.3d 914 (9th Cir. 2020) .......................... 17

Lundy v. Catholic Health Sys. of Long Island,

711 F.3d 106 (2d Cir. 2013) ........... 1, 12, 13, 15

viii

Mack v. Otis Elevator Co.,

326 F.3d 116 (2d Cir. 2003) ........................... 17

Mitchell v. Robert DeMario Jewelry, Inc.,

361 U.S. 288 (1960) .......................................... 6

Murphy v. First Student Mgmt., LLC,

2017 WL 346977

(N.D. Ohio Jan. 24, 2017) .............................. 23

Newton v. Schwarzenegger,

2011 WL 13261986

(N.D. Cal. Jan. 14, 2011) ......................... 23, 24

N. N. M. Stockman’s Ass’n v.

U.S. Fish & Wildlife Serv.,

30 F.4th 1210 (10th Cir. 2022) ...................... 18

Rafferty v. Denny’s, Inc.,

13 F.4th 1166 (11th Cir. 2021) ...................... 18

Rosario v. First Student Mgmt., LLC,

2016 WL 4367019

(E.D. Pa. Aug. 16, 2016)................................. 23

Silguero v. CSL Plasma, Inc.,

907 F.3d 323 (5th Cir. 2018) .......................... 18

Skidmore v. Swift & Co.,

323 U.S. 134 (1944) ................................ passim

Spencer v. First Student Mgmt., LLC,

2016 WL 693252

(N.D. Ill. Feb. 22, 2016) ................................. 23

ix

U.S. ex rel. Proctor v. Safeway, Inc.,

30 F.4th 649 (7th Cir. 2022) .......................... 17

United States v. Klinghoffer Bros. Realty Corp.,

285 F.2d 487 (2d Cir. 1960) ........................... 14

United States v. Mead Corp.,

533 U.S. 218 (2001) ............................ 16, 17, 21

Univ. of Tex. Sw. Med. Ctr. v. Nassar,

570 U.S. 338 (2013) ........................................ 21

FEDERAL REGISTER

69 Fed. Reg. 22122.................................................... 24

69 Fed. Reg. 22171.................................................... 24

84 Fed. Reg. 51230.................................................... 24

84 Fed. Reg. 51231.................................................... 25

STATUTES

28 U.S.C. § 1254(1) ..................................................... 4

29 U.S.C. § 202.................................................. passim

29 U.S.C. § 204............................................................ 7

29 U.S.C. § 206.......................................... 6, 11, 14, 20

29 U.S.C. § 207.................................................. passim

29 U.S.C. § 211........................................................ 6, 7

x

29 U.S.C. § 213.................................................. 3, 6, 25

29 U.S.C. § 215.......................................................... 20

35 U.S.C. § 315(c)...................................................... 18

REGULATIONS

29 C.F.R. § 541.100 ................................................... 24

29 C.F.R. § 541.200 ................................................... 24

29 C.F.R. § 541.300 ................................................... 24

29 C.F.R. § 553.230 ..................................................... 9

29 C.F.R. § 775.1 ......................................................... 7

29 C.F.R. § 778.310 ............................................. 11, 12

29 C.F.R. § 778.315 ........................................... passim

29 C.F.R. § 778.317 ................................................... 11

29 C.F.R. § 778.322 ................................................... 11

OTHER AUTHORITIES

Dep’t of Just., Acting Assistant Att’y Gen. Brian

M. Boynton Delivers Remarks at the Fed. Bar

Ass’n Qui Tam Conf. (Feb. 17, 2021) ....................... 27

Dep’t of Lab., Handy Reference Guide to the

Fair Lab. Standards Act (2016 ed.) ........................... 6

xi

Kristin E. Hickman & Matthew D. Krueger, In

Search of the Modern Skidmore Standard, 107

Colum. L. Rev. 1235 (2007) ........................................ 2

Kristin E. Hickman & Richard J. Pierce,

Admin. L. Treatise, § 3.7 .......................................... 16

Mem. from the Assoc. Att’y Gen., Limiting Use

of Agency Guidance Documents in Affirmative

Action Civil Enforcement Cases, 1 (Jan. 25,

2018),

https://www.justice.gov/file/1028756/

download ................................................................... 26

Mem. from the Office of the Att’y Gen.,

Prohibition on Improper Guidance Documents

(Nov. 16, 2017), https://www.justice.gov/opa/

press-release/file/1012271/download ....................... 25

Mem. from the Office of the Att’y Gen.,

Issuance and Use of Guidance Documents by

the Dep’t of Just. (July 1, 2021), https://www.

justice.gov/opa/page/file/1408606/download ............ 26

PETITION FOR A WRIT OF CERTIORARI

This case presents an acknowledged and

entrenched circuit split over the scope of the Fair

Labor Standards Act (FLSA, or the Act). 29 U.S.C.

§ 207. Below, the Fourth Circuit, acknowledging that

split, determined that the FLSA allows an employee

“to recover wages for uncompensated hours worked

that fall between the minimum wage and the

overtime provisions of the FLSA, otherwise known as

gap time,” in weeks that the employee works

overtime. App. 13a (cleaned up). The Ninth Circuit

has reached the same conclusion. See Donovan v.

Crisostomo, 689 F.2d 869, 876 (9th Cir. 1982). By

contrast, the Second Circuit has rejected this reading

of the Act as inconsistent with the FLSA’s text and

structure. See Lundy v. Catholic Health Sys. of Long

Island, 711 F.3d 106, 117 (2d Cir. 2013).

In addition to the FLSA-specific issue, this case

presents an important question of federal law that

divides the courts of appeals—how the courts should

apply non-binding agency interpretations under

Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944).

The Second, Fourth, and Ninth Circuits all

approached the question of whether to recognize

overtime-gap-time claims in light of an enforcement

guideline issued by the Administrator of the

Department of Labor’s Wage and Hour Division, 29

C.F.R. § 778.315. Guidelines like § 778.315 are not

issued after notice and comment and, as a result, are

not entitled to deference under Chevron U.S.A. v.

Natural Resources Defense Council, 467 U.S. 837

(1984). They are instead entitled only to “respect”

under Skidmore. See Christensen v. Harris Cnty., 529

2

U.S. 576, 587 (2000). The courts of appeals disagree

on what “respect” means. As scholars have noted—

and recent case law confirms—the courts of appeals’

decisions largely fall into two camps. See Kristin E.

Hickman & Matthew D. Krueger, In Search of the

Modern Skidmore Standard, 107 Colum. L. Rev.

1235, 1251–59 (2007). Some appellate courts presume

that they must accept the agency’s interpretation if it

is longstanding and consistent with past practice. By

contrast, other courts of appeals evaluate an agency’s

interpretation based solely on the force of its

reasoning.

The Fourth Circuit reached the wrong

conclusion on both issues. The text and structure of

the FLSA do not support the Administrator’s reading

of the Act, 29 C.F.R. § 778.315. To the contrary, the

Act allows an employee to sue her employer only if it

has failed to pay her at least the minimum wage and

overtime at one and one-half times her regular hourly

rate. Even if the Act were ambiguous, the Fourth

Circuit was still wrong to defer to § 778.315 under

Skidmore. The court failed to independently analyze

the Administrator’s interpretation and to evaluate

the force of its reasoning. Had the court properly

applied Skidmore, it would have rejected this

administrative guidance.

Review is warranted because both Questions

Presented are exceptionally important. The split over

the interpretation of the FLSA raises serious concerns

for employers. In both the Fourth and Ninth Circuits,

employers are now liable for double damages and the

employee’s attorneys’ fees if they fail—even

innocently—to pay an employee’s contract rate. This

3

problem will only grow more prevalent. The Labor

Department has recently expanded the universe of

overtime-pay-eligible employees by increasing the

salary required for an employee to qualify for the

executive, administrative, or professional (EAP)

exemption to § 207’s overtime mandate. 29 U.S.C.

§ 213(a)(1). With more than one million employees

newly eligible for overtime pay, it is time to clarify the

overtime-gap-time issue.

Moreover, the lower courts’ inconsistent

application of Skidmore will create problems in the

future. The Attorney General recently lifted a ban on

the use of informal guidance in enforcement

proceedings. Going forward, the lower courts are

likely to face recurring questions about the proper

application of Skidmore. What’s more, agencies have

increasingly insisted that courts defer to their

litigation positions. See E.I. Du Pont de Nemours &

Co. v. Smiley, 138 S. Ct. 2563, 2563 (2018) (Gorsuch,

J., respecting the denial of certiorari). As the lower

courts encounter agencies demanding deference,

clarification of Skidmore will provide a bulwark

against agency overreach.

The Questions Presented pose serious and

costly problems for millions of employers, both public

and private, and this case provides the ideal vehicle

for resolving them. Both issues were fully briefed

below, and both were essential components of the

court’s decision. If this Court reverses the Fourth

Circuit’s judgment, that decision will be casedispositive.

4

OPINIONS BELOW

The Fourth Circuit’s opinion is reported at 22

F.4th 412 and reproduced at App. 1a–34a. The district

court’s order is unreported and is reproduced at App.

37a–45a.

JURISDICTION

The Fourth Circuit rendered its decision and

judgment on January 5, 2022. App. 1a. On March 31,

2022, the Chief Justice extended the time to petition

for a writ of certiorari through June 3, 2022. This

Court has jurisdiction under 28 U.S.C. § 1254(1).

PERTINENT STATUTORY AND

REGULATORY PROVISIONS

29 U.S.C. § 207 provides in pertinent part:

(a)(1): Except as otherwise provided

in this section, no employer shall employ

any of his employees who in any

workweek is engaged in commerce or in

the production of goods for commerce, or

is employed in an enterprise engaged in

commerce or in the production of goods

for commerce, for a workweek longer

than forty hours unless such employee

receives

compensation

for

his

employment in excess of the hours above

specified at a rate not less than one and

one-half times the regular rate at which

he is employed.

5

***

(e): “Regular rate” defined

As used in this section the “regular rate”

at which an employee is employed shall

be deemed to include all remuneration

for

employment

paid

to . . . the

employee[.]

App. 64a, 68a.

29 C.F.R. § 778.315 provides:

In determining the number of hours for

which overtime compensation is due, all

hours worked (see § 778.223) by an

employee for an employer in a particular

workweek must be counted. Overtime

compensation, at a rate not less than one

and one-half times the regular rate of

pay, must be paid for each hour worked

in the workweek in excess of the

applicable maximum hours standard.

This extra compensation for the excess

hours of overtime work under the Act

cannot be said to have been paid to an

employee unless all the straight time

compensation due him for the

nonovertime hours under his contract

(express or implied) or under any

applicable statute has been paid.

App. 63a.

6

STATEMENT OF THE CASE

I.

The Fair Labor Standards Act

In 1938, Congress enacted the FLSA to combat

“labor conditions detrimental to the maintenance of

the minimum standard of living necessary for health,

efficiency, and general well-being of workers[.]” 29

U.S.C. § 202. The “central aim of the Act was to

achieve, in those industries within its scope, certain

minimum labor standards.” Mitchell v. Robert

DeMario Jewelry, Inc., 361 U.S. 288, 292 (1960). Put

differently, the FLSA provides covered employees

with “a fair day’s pay for a fair day’s work” and

protects them “from the evils of overwork as well as

underpay.” Barrentine v. Arkansas-Best Freight Sys.,

Inc., 450 U.S. 728, 739 (1981) (cleaned up).

The FLSA contains four primary protections,

establishing a minimum wage, mandating overtime

pay, requiring recordkeeping, and prohibiting child

labor. See 29 U.S.C. §§ 206–07, 211–12; see also Dep’t

of Lab., Handy Reference Guide to the Fair Lab.

Standards Act at 1 (2016 ed.). These protections

supplement the rights and remedies provided by state

law but are not meant to impose “continuing detailed

federal supervision” of labor practices. Mitchell, 361

U.S. at 292.

To enforce the Act, Congress authorized the

Labor Secretary to promulgate regulations

implementing its provisions. See, e.g., 29 U.S.C.

§§ 207(k)(1), 213(a)(1). Congress also created the

Wage and Hour Division of the Department of Labor

and authorized the Division’s Administrator to bring

7

suit “to restrain violations of” the Act. 29 U.S.C. § 211;

see also § 204. To that end, the Administrator has

promulgated several “[a]dvisory interpretations” that

“indicate the construction of the law which will guide

the Administrator in the performance of his

administrative duties[.]” 29 C.F.R. § 775.1. These

enforcement guidelines are entitled to “respect” under

Skidmore. See Christensen, 529 U.S. at 587.

II.

The Gap-Time Problem

Gap time “refers to time that is not [directly]

covered by the [FLSA’s] overtime provisions because

it does not exceed the overtime limit, and to time that

is not covered by the [FLSA’s] minimum wage

provisions because . . . the employees are still being

paid a minimum wage when their salaries are

averaged across their actual time worked.” App. 13a.

“There are two types of gap time—pure gap time and

overtime gap time.” App. 14a. “In pure gap time

claims, the employee seeks to recover for unpaid

straight time in a week in which they worked no

overtime.” App. 14a. By contrast, in overtime-gaptime claims, “the employee seeks to recover unpaid

straight time for a week in which they did work

overtime.” App. 14a. Courts uniformly reject “pure”

gap-time claims, but “they are divided on whether an

employee can bring an overtime gap time claim for

unpaid straight time worked in an overtime week.”

App. 14a.

To understand the overtime-gap-time concept,

consider two hypotheticals about an employee who

works 45 hours—a 40-hour week plus five overtime

hours—in a given workweek. In the first example, her

8

employer promises $400 for 40 hours of work, or $10

per hour. Her employer complies with the agreement,

so she is paid $475: $400 in straight time pay, plus

$75 in overtime pay. In this case, the $75 represents

five hours’ pay at one and one-half times the

employee’s $10 hourly rate.

In the second example, the agreement is the

same, but the employee is paid only $8 per hour, less

than the contract rate. As a result, she is paid $380

for 45 hours of work: $320 in straight time pay, plus

$60 in overtime pay. In this case, the $60 represents

five hours’ pay at one and one-half times the

employee’s $8 hourly rate. In this scenario, the

employer has breached the employment agreement.

But payment of $380—$320 in straight time pay, plus

$60 in overtime—satisfies the FLSA. Under the Act,

the required amount of overtime pay depends on the

employee’s regular rate—what she was actually paid

on a per-hour basis. See Bay Ridge Operating Co. v.

Aaron, 334 U.S. 446, 460–61 (1948); see also 29 U.S.C.

§ 207(e). In this example, the employee’s regular rate

is $8. Thus, under the Act, the employee is owed only

$60 for five hours’ overtime work. Without an

overtime-gap-time claim, the employee would have a

remedy in the form of a state-law breach of contract

claim but would not have a claim under the FLSA.

Overtime-gap-time claims often arise out of

good-faith disagreements about the terms of the

employment contract. These disagreements can easily

arise, for example, between municipalities and police

officers, who do not adhere to a strict 40-hour-perweek overtime threshold. Section 207(k) allows law

enforcement officers to work “tours” of up to 28 days.

9

If an officer works a 28-day tour, he is entitled to

overtime pay only if he works more than 171 hours

during that period. See generally 29 U.S.C. § 207(k);

29 C.F.R. § 553.230. An officer who works a 28-day

tour, and who usually works fewer than 171 hours,

may object to his paycheck if, in a given tour, he works

overtime. He may think that his base salary covers

only his typical schedule of fewer than 171 hours and

that he is entitled to more pay at his regular rate for

every hour worked that exceeds his typical schedule,

until he reaches the 171-hour overtime threshold. His

employer will likely disagree. From the employer’s

perspective, the officer’s base salary covers not the

officer’s typical schedule, but every hour worked up to

the 171-hour overtime threshold. The disagreement

over the officer’s employment contract may yield an

FLSA claim for overtime-gap time.

To combat overtime-gap-time claims, the

Administrator of the Department of Labor’s Wage and

Hour Division issued 29 C.F.R. § 778.315, a nonbinding administrative interpretation of the FLSA.

This interpretation reflects the Administrator’s view

that an employee must be paid all the straight-time

wages that she is due under her employment

agreement—meaning all the wages that she has been

promised for non-overtime hours—before the

employer can claim to have paid any overtime wages.

According to the Administrator, even if an employee’s

overtime rate satisfies § 207 of the Act, that

compliance is irrelevant; when an employee has not

been paid her promised straight-time wages, any

“overtime” pay received is really straight-time pay by

another name—at least until her employer satisfies

its contractual obligations. As a result, an employer

10

that mischaracterizes straight-time pay as overtime

pay can never satisfy § 207(a)(1)’s overtime mandate.

Even if the employee’s overtime pay is 150% of her

regular rate, the employer will always come up short.

III.

Background

A. County Emergency Medical Services (EMS)

personnel work 24-hour on/48-hour off shifts. Because

these employees do not qualify for the FLSA’s

modified overtime threshold for law enforcement and

firefighters, 29 U.S.C. § 207(k), they become overtimeeligible after 40 hours of work, § 207(a)(1). Under the

County’s 24-hour on/48-hour off schedule, each EMS

employee works at least eight overtime hours every

week.

The County pays its EMS employees twice per

month. Until January 2018, employees’ salary ranges

were set by ordinance, but employees did not receive

straight-time pay equal to 1/24th of their individual

salary. To determine each employee’s hourly rate, the

County divided the promised salary by the number of

hours—straight and overtime—they would work in a

given year (2,928), not by the number of straight-time

hours (2,080 hours). The County paid each employee

that hourly rate for each straight-time hour worked

in a workweek.

B. Respondent is a County EMS employee who

worked the 24-hour on/48-hour off schedule. She sued

the County in the Western District of North Carolina,

asserting a claim under the FLSA and seeking to

recover her underpaid straight-time wages—the

11

difference between Respondent’s salary and the

amount she was paid.

The County filed a motion for judgment on the

pleadings, and the district court dismissed

Respondent’s complaint. See App. 37a. The district

court concluded that the County had not violated the

FLSA because the County calculated Respondent’s

premium overtime rate in accordance with 29 U.S.C.

§ 207(a) and because, even if underpaid, her hourly

rate was substantially higher than the required

minimum wage, § 206.

C. Respondent appealed to the Fourth Circuit.

In an opinion by Judge Wynn, the court reversed,

concluding that Respondent had stated a plausible

claim under § 207(a). To start, the court observed that

the FLSA is “silen[t]” about whether it requires

employers to pay all bargained-for straight-time

wages, so the court could look to the Administrator’s

interpretations for “guidance.” App. 15a.

Reviewing § 778.315 for “the validity of its

reasoning, [as well as] its consistency with earlier and

later pronouncements,” the court concluded that the

Administrator’s interpretation is entitled to

“considerable deference” under Skidmore. App. 16a. It

focused its analysis on the FLSA’s remedial purpose

and the Administrator’s long-standing position,

rather than on the statutory text.

The court reasoned that § 778.315, along with

related

interpretations—such

as

29

C.F.R.

§§ 778.310, 778.317, and 778.322, which impose, for

12

example, limits on an employer’s ability to make

lump-sum payments for overtime work, § 778.310—

were “piece[s] in” the FLSA’s “remedial” “armor”

designed to provide “for the general well-being of

workers.” App. 19a. The Fourth Circuit did not

evaluate each interpretation’s strength and

consistency with the FLSA’s text. Instead, it grouped

them together and concluded that they generally fit

with the FLSA’s remedial purpose.

That court also concluded that § 778.315 is

entitled to respect under Skidmore because it is longstanding. App. 16a–17a. Without assessing the

strength of the Administrator’s reasoning, the Fourth

Circuit declared that the guideline “makes sense”

because it furthers “the policy objective of the FLSA

overtime provision by ensuring employers do not

mitigate or skirt the financial pressures of working

their employees above the forty-hour threshold.” App.

17a.

Finally, the court recognized that “many courts

acknowledge[d]” overtime-gap-time claims, App. 24a

(citing Davis v. Abington Mem’l Hosp., 765 F.3d 236

(3d Cir. 2014)), or had recognized the validity of those

claims, see App. 17a (citing Donovan v. Crisostomo,

689 F.2d 869 (9th Cir. 1982)). It contrasted these

cases with Lundy v. Catholic Health System of Long

Island, 711 F.3d 106 (2d Cir. 2013), summarily

rejecting the Second Circuit’s text-based conclusion:

“We respectfully disagree with the Second Circuit’s

decision in Lundy.” App. 24a.

13

REASONS FOR GRANTING THE PETITION

This Court should grant the County’s petition

and review the Fourth Circuit’s judgment. The

Questions Presented involve two issues of exceptional

importance. This case is also an ideal vehicle for

resolving them.

I.

The Questions Presented raise important

issues about the scope of the FLSA and

the proper application of Skidmore.

A. The decision below deepens a circuit split

over the scope of the FLSA. As the Fourth Circuit

recognized, courts are “divided on whether an

employee can bring an overtime gap time claim for

unpaid straight time worked in an overtime week.”

App. 14a. The Second Circuit has rejected the notion

that the FLSA allows employees to seek unpaid

straight-time wages for weeks in which they work

overtime. The Fourth and Ninth Circuits, by contrast,

have concluded that such a claim is viable.

1. The Second Circuit has determined that

overtime-gap-time claims conflict with the FLSA’s

text. In Lundy v. Catholic Health System of Long

Island, 711 F.3d 106 (2d Cir. 2013), the plaintiffs

asserted an overtime-gap-time claim, alleging that, in

weeks when they worked overtime, their employer

failed to compensate them for compensable meal

breaks and other off-duty work. Id. at 111. The Second

Circuit rejected the claim. The panel, which included

Justice O’Connor, unanimously concluded that the

“FLSA does not provide for” overtime-gap-time

claims. Id. at 116. The court reasoned that “the text

14

of [the] FLSA requires only payment of minimum

wages and overtime wages,” meaning the Act “simply

[did] not consider or afford a recovery for gap-time

hours.” Ibid. The FLSA merely “supplements the

hourly employment arrangement with features that

may not be guaranteed by state laws, without

creating a federal remedy for all wage disputes.” Id.

Thus, underpaid straight-time wages become a

problem only when an employee’s hourly rate falls

below the minimum wage threshold required by

§ 206. Id. at 115–17; see also United States v.

Klinghoffer Bros. Realty Corp., 285 F.2d 487, 494 (2d

Cir. 1960).

2. The Ninth Circuit, by contrast, has

determined that the FLSA allows overtime-gap-time

claims. In Donovan v. Crisostomo, the court allowed

the Labor Secretary to use the FLSA to “seek

restitution for kickbacks from straight time wages as

overtime compensation” in weeks when affected

employees worked overtime. 689 F.2d at 876. 1

The Crisostomos argued that the Secretary’s

reading of the statute would “expand the scope of the

FLSA to include claims Congress regarded as contract

disputes to be regulated by state law.” Ibid. They

reasoned that, even if they had underpaid their

employees’ contract wages, the employees’ wages

nevertheless complied with 29 U.S.C. §§ 206 and

207(a) because they were paid an hourly wage in

excess of the minimum wage and their overtime rate

was one and one-half times their regular hourly wage.

Ibid. Rejecting that argument, the court concluded

1 The Crisostomos routinely took a $0.38 “kickback” from each

of their employees’ hourly wage. Id. at 872.

15

that, to hold otherwise, “would allow employers to

frustrate the [FLSA’s] policy[.]” Ibid.; see also id. at

n.13.

3. Here, the Fourth Circuit joined the Ninth

Circuit in holding that the FLSA allows employees to

sue for underpaid contract wages in weeks when they

work overtime. The court acknowledged that the

“FLSA does not include language about overtime gap

time.” App. 14a. Still, it said the statute’s silence did

not “end [the court’s] inquiry.” App. 14a.

Like the Ninth Circuit, the Fourth Circuit

concluded that to hold otherwise would frustrate the

Act’s purpose. In that court’s view, “allowing any

amount other than the full amount of straight-time

wages to count as compliance would frustrate the

purposes of the FLSA just as surely as would

nonpayment for specified hours.” App. 23a. It

continued, “If we did not mandate that all straight

wages should be paid, we might encourage employers

to simply shift wages to the ‘overtime’ bucket and

reduce the wages for straight time promised by the

employment agreement[.]” App. 23a. The Fourth

Circuit acknowledged that its decision conflicted with

the Second Circuit’s in Lundy and said it “respectfully

disagree[d]” with that court’s conclusion. App. 24a.

B. Certiorari is also warranted to clarify the

proper application of Skidmore. In Skidmore v. Swift,

this Court held that lower courts may give an agency’s

non-binding interpretation of a statute—for example,

one issued without following notice-and-comment

rulemaking procedures—“respect” if it has the “power

to persuade.” Skidmore, 323 U.S. at 140.

16

1. Scholars have identified two primary

methods that courts of appeals use when applying

Skidmore. Hickman & Krueger, supra at 1251–52,

1270–71. The first is the “independent judgment”

model. Under this model, a court reviewing an

agency’s

non-binding

interpretation

using

independent judgment considers “the merits of the

agency’s interpretation” when determining whether it

is entitled to deference. Id. at 1251. The second is the

more deferential sliding scale approach. Courts

applying this model “consider whether to give weight

to the agency’s point of view, even if not required to

give such weight.” Ibid.

These two models demonstrate competing

understandings of Skidmore. On the one hand, courts

applying their own judgment ask whether the

agency’s interpretation makes sense, putting the

agency on equal footing with any other litigant. On

the other hand, courts applying the sliding scale

approach are predisposed to defer to agency decisions.

While these courts may ultimately reject the agency’s

position, they will not do so based only on their

independent evaluation of the position’s merits.

In the five years following United States v.

Mead Corp., 533 U.S. 218 (2001), the deference or

sliding scale model predominated, accounting for

nearly three out of every four Skidmore-based

decisions. Kristin E. Hickman & Richard J. Pierce,

Admin. L. Treatise, § 3.7; Hickman & Krueger, supra

at 1270–71.

Despite the prevalence of deferential analysis

during that period, a substantial minority of courts

17

independently evaluated the merits of the agencies’

positions, choosing not to defer under Skidmore

unless an agency’s position was, in the reviewing

court’s opinion, sound. Hickman & Krueger, supra at

1270–71. In these cases, which made up about 20% of

the 106 Skidmore cases, the courts did not analyze

any of the factors identified in Skidmore. Id. at 1267–

68. Instead, they construed the ambiguous statutes in

the first instance, considering the agency’s conclusion

only to say that it was, or was not, in line with the

courts’ own. Id. at 1268–69 (citing Mack v. Otis

Elevator Co., 326 F.3d 116 (2d Cir. 2003)).

C. The debate between deference and

independent judgment continues in the courts of

appeals. Even within the last five years, the lower

courts have still struggled with the proper application

of Skidmore deference following Christensen and

Mead Corp.

During that time, many courts of appeals have

continued to apply the deference model. For instance,

the Fourth, App. 15a–20a; Sixth, Gun Owners of Am.,

Inc. v. Garland, 19 F.4th 890, 908 (6th Cir. 2021) (en

banc); Seventh, U.S. ex rel. Proctor v. Safeway, Inc.,

30 F.4th 649, 662 (7th Cir. 2022); and Ninth Circuits,

Larson v. Saul, 967 F.3d 914, 925 (9th Cir. 2020),

have foregone independent evaluation of an agency’s

interpretation of an ambiguous statute and have

instead analyzed the agency interpretation only in

the context of the factors identified in Skidmore. In

Larson v. Saul, the Ninth Circuit concluded that,

despite its weak reasoning, the Social Security

Commissioner’s interpretation of the uniformedservice exception to the Social Security Act was

18

entitled to deference because the “provision concerns

an interstitial administrative matter, one in which

the agency’s expertise could have an important role to

play.” 967 F.3d at 926 (cleaned up). So, too, in the

Sixth Circuit, where, in Gun Owners of America, the

court concluded that the Bureau of Alcohol, Tobacco,

Firearms, and Explosive’s rule banning bump stocks

was entitled to Skidmore deference. The court

explained that ATF had “abundant experience in

determining which devices constitute machineguns.”

Gun Owners of Am., Inc., 19 F.4th at 908.

By contrast, other courts of appeals continue to

defer under Skidmore only after independently

concluding that deference is appropriate. Over the

last five years, for example, the Second, Kidd v.

Thomson Reuters Corp., 925 F.3d 99, 105–06 (2d Cir.

2019); Fifth, Silguero v. CSL Plasma, Inc., 907 F.3d

323, 327 n.9, 328 (5th Cir. 2018); Tenth, N. N.M.

Stockman’s Ass’n v. U.S. Fish & Wildlife Serv., 30

F.4th 1210, 1226–27 (10th Cir. 2022); Eleventh,

Rafferty v. Denny’s, Inc., 13 F.4th 1166, 1185 (11th

Cir. 2021); and Federal Circuits, Facebook, Inc. v.

Windy City Innovations, LLC, 973 F.3d 1321, 1354

(Fed. Cir. 2020), have continued to use their

independent judgment. In each of these circuits, the

courts evaluate the consistency of the agency’s

interpretation with the text of the controlling statute.

So, for example, in the Federal Circuit, the court

rejected the Director of the Patent and Trademark

Office’s non-binding interpretation of 35 U.S.C.

§ 315(c) because it was “inconsistent with the plain

language

of

the

statute

and

therefore

unpersuasive.” Facebook, Inc., 973 F.3d at 1354.

Likewise, the Second Circuit adopted the Federal

19

Trade Commission’s interpretation of the Fair Credit

Reporting Act, concluding that it was “helpful and, as

it tracks the language of the statute, persuasive.” Kidd,

925 F.3d at 106 (emphasis added).

II.

The decision below is wrong.

A. The Fourth Circuit’s decision contradicts

the FLSA’s text and context.

1. Overtime-gap-time claims have no basis in

the statutory text. The FLSA’s text does not allow

overtime-gap-time claims. The Act requires that

employers pay overtime only “at a rate not less than

one and one-half times [an employee’s] regular rate[.]”

29 U.S.C. § 207(a)(1).

An employee’s regular rate, the starting point

for any overtime calculation, is not set by her

employment contract. The FLSA defines the regular

rate as an actual fact; it stems from what the

employee has been paid on a per-hour basis. 29 U.S.C.

§ 207(e) (defining the “regular rate” to “include all

remuneration for employment paid to . . . the

employee” (emphasis added)); accord Bay Ridge

Operating Co., 334 U.S. at 460–61. To satisfy § 207,

an employer needs to pay at least one and one-half

times that amount, not one and one-half times the

employee’s promised, contractual wages. § 207(a)(1).

When a statute’s text is unambiguous and the

statutory scheme is coherent, courts enforce the

statute as written, Barnhart v. Sigmon Coal Co., 534

U.S. 438, 450 (2002). The Fourth Circuit should have

done so here.

20

2. The FLSA’s structure also counsels against

overtime-gap-time claims in two ways. First, the

decision below contradicts § 215. Congress imposed

liability only on employers who “violate . . . the

provisions of . . . section 207,” not on those who fail to

pay an employee her contract wages. 29 U.S.C.

§ 215(a)(2) (emphasis added). Even if an employer

fails to pay an employee her contractual wages, it has

not necessarily violated § 207; the employer still may

have paid the employee 150% of her regular rate.

Second, overtime-gap-time claims are in

tension with the FLSA’s minimum-wage provision.

The Act guarantees a minimum wage, not a minimum

agreed-upon wage, and the Administrator’s

interpretation is at odds with Congress’ choice to limit

§ 206. Congress could have expanded that provision

to guarantee either $7.25 per hour (the statutory rate)

or a negotiated contract rate. It did not. Congress

presumably made a conscious policy choice. See, e.g.,

Barnhart v. Sigmon Coal Co., 534 U.S. 438, 454

(2002) (observing that if Congress intended to create

broad liability, “it could have done so clearly and

explicitly.”). The Administrator’s interpretation

disregards that congressional judgment.

3. Judicial deference is appropriate “only

when the devices of judicial construction have been

tried and found to yield no clear sense of congressional

intent.” Gen. Dynamics Land Sys., Inc. v. Cline, 540

U.S. 581, 600 (2004). Because the FLSA’s text and

context are clear, the Fourth Circuit should have

rejected Respondent’s overtime-gap-time claim.

Further, because the FLSA’s text and context are

21

clear, the Fourth Circuit had no reason to ever

consider the Skidmore question.

4. Even

if Skidmore deference

were

warranted, the Fourth Circuit failed to evaluate

§ 778.315 independently. If it had done so, the court

would

have

rejected

the

Administrator’s

interpretation. Section 778.315 fails to track, or even

refer to, any part of the FLSA. Instead, it announces

a general policy statement untethered from the

statute’s text. The Administrator’s failure to identify

any word or phrase that § 778.315 interprets renders

it unpersuasive. Cf. Univ. of Tex. Sw. Med. Ctr. v.

Nassar, 570 U.S. 338 (2013) (interpreting the word

“because” to determine whether a Title VII retaliation

claim requires a showing of “but-for” causation); Fed.

Express Corp. v. Holowecki, 552 U.S. 389 (2008)

(considering the definition of “charge” under the Age

Discrimination in Employment Act); Gonzales v.

Oregon, 546 U.S. 243 (considering the Attorney

General’s interpretation of “currently accepted

medical use”); Mead Corp., 533 U.S. 218 (considering

whether a three-ring day planner was a bound

“diar[y]” subject to a tariff).

In addition, and contrary to the Fourth

Circuit’s

reasoning,

the

Administrator’s

interpretation does not advance the FLSA’s policy.

The FLSA’s principal purpose is “to protect all covered

workers from substandard wages and oppressive

working hours.” Barrentine, 450 U.S. at 739. The

overtime provision accomplishes this goal by

“inducing employers to shorten hours because of the

pressure of extra cost” associated with requiring

specific employees to work more than 40 hours in a

22

given workweek. Bay Ridge Operating Co., 334 U.S.

at 460. Section 778.315 does not further this goal.

Regardless of whether an employee is paid at her

contract rate or something lower, if an employer pays

the employee overtime at a rate that is at least one

and one-half times her regular rate of pay, the

employer still faces the “pressure of extra cost”

associated with requiring an employee to work

overtime.

III.

The

Questions

Presented

exceptionally important.

are

The FLSA question addresses an entrenched

circuit split concerning the proper application of the

Act’s overtime mandate, a matter of substantial

practical import to employers and employees

throughout the country. Further, this case provides

the Court with the opportunity to clarify another

nationally important issue: the proper method for

applying Skidmore deference.

A. The FLSA question is important to

employers, both public and private, who now doubt

the Act’s scope, and whose approach to the issue will

have significant effect on many of their employees.

1. Businesses in the Fourth and Ninth

Circuits have little choice but to comply with

§ 778.315 if their employees can plausibly assert they

have a contract promising straight-time pay at a fixed

rate. This conservative approach is a practical

necessity; otherwise, employers leave themselves

open to potential liability under the FLSA, which

23

could include liquidated damages, attorneys’ fees, and

the threat of a collective action.

Private employers operating both within and

without the Fourth Circuit or Ninth Circuit face a

particularly difficult choice. Consider the case of First

Student Management, LLC. First Student has been

sued for violation of 29 C.F.R. § 778.315 in district

courts across the country, including in the First,

Gould v. First Student Mgmt., LLC, 2017 WL 3731025

(D.N.H. Aug. 29, 2017); Third, Rosario v. First

Student Mgmt., LLC, 2016 WL 4367019 (E.D. Pa.

Aug. 16, 2016); Sixth, Murphy v. First Student Mgmt.,

LLC, 2017 WL 346977 (N.D. Ohio Jan. 24, 2017);

Seventh, Spencer v. First Student Mgmt., LLC, 2016

WL 693252 (N.D. Ill. Feb. 22, 2016), and Eleventh

Circuits, Jackson v. First Student Mgmt., LLC, 2017

WL 10874175 (M.D. Fla. Apr. 20, 2017). The circuit

split creates acute uncertainty for businesses like

these.

2. The FLSA question is also critical to public

sector state and local governments. Because they are

often severely constrained by fixed budgets, their

ability to litigate overtime-gap-time claims under the

FLSA is impaired. Claims arising under the approach

embraced by the Fourth and Ninth Circuits often

involve several potential claimants suing a state or

local

government.

Consider

Newton

v.

Schwarzenegger, 2011 WL 13261986 (N.D. Cal. Jan.

14, 2011). There, more than 11,000 correctional

officers joined a gap-time suit against the State of

California, alleging that the State had failed to

compensate them for more than 2,000,000 hours

worked. Id. at *1; see also Compl. Newton, No. C 09-

24

5887 (N.D. Cal. filed Dec.16, 2009) (ECF No. 1).

Similar defendants include the City of New York,

Conzo v. City of N.Y., 667 F. Supp. 2d 279 (S.D.N.Y.

2009) (class of nearly 1,500 paramedics and EMTs);

City of Philadelphia, Carter v. City of Phila., 2022 WL

169868 (E.D. Pa. Jan. 19, 2002); and City of

Charleston, South Carolina; Carter v. City of

Charleston, 995 F. Supp. 620 (D.S.C. 1997).

State and local governments have limited

resources; they need certainty and predictability in

the law governing their employment relations.

Without it, these entities must err on the side of

caution, spending taxpayer money on payroll that

they might instead spend in more productive ways. In

addition, in the Fourth and Ninth Circuits, state and

local governments must defer to § 778.315 or face

potentially significant financial consequences.

3. Recent rulemaking shows the profound

effect that increasing the number of overtime-eligible

EAP employees could have on the pool of potential

overtime-gap-time plaintiffs. The Department of

Labor recently expanded overtime eligibility effective

January 1, 2020. Compare 29 C.F.R. §§ 541.100

(executive),

.200

(administrative)

&

.300

(professional) (2020), with § 541.100, .200, & .300

(2012); see also 84 Fed. Reg. 51230. Before 2020, the

Department of Labor had set the salary level for

exempt employees at $455 per week ($23,660 per

year). 69 Fed. Reg. 22122, 22171. The 2020 changes

increased that level by about 50%, up to $684 per

week ($35,568 per year). E.g., 29 C.F.R. § 541.100

(2020).

25

The Department estimated that the 2020

change affected more than 3 million people. Most

significantly, the Department estimated that an

additional 1.2 million EAP employees—those earning

more than $455, but less than $684 per week and

performing EAP duties—would become eligible for

overtime compensation because they would fail the

required salary prong of the § 213 inquiry. 84 Fed.

Reg. 51231. In addition, the Department concluded

that the 2020 change would strengthen the overtime

claim of more than 2 million additional employees.

Ibid.

B. The Skidmore question presents an

important chance to clarify application of Skidmore

deference. Doing so will be important, given recent

changes at the Department of Justice.

The Department of Justice recently expanded

its attorneys’ power to use informal guidance

documents in enforcement litigation, such as suits

brought under the False Claims Act.

Beginning in 2017, the Attorney General

scaled back the Department of Justice’s power to

use guidance documents—publications usually

entitled to Skidmore deference in civil lawsuits.

In November 2017, the Attorney General issued

a memorandum on the “prohibition of improper

guidance documents.” Mem. from the Off. of

the

Att’y

Gen.,

Prohibition

on

Improper

Guidance Documents (Nov. 16, 2017), https://www.

justice.gov/opa/press-release/file/1012271/download.

The November 2017 memorandum suspended the

Department’s practice of issuing guidance documents,

26

“such as letters to regulated entities” that “effectively

bind private parties without undergoing the [noticeand-comment] rulemaking process.” Id. at 1. A

January 2018 memorandum from the Associate

Attorney General expanded the prohibition on

guidance documents to the “Department[’s] litigators

in determining the legal relevance of other agencies’

guidance documents in affirmative civil enforcement.”

Mem. from the Assoc. Att’y Gen., Limiting Use of

Agency Guidance Documents in Affirmative Action

Civil Enforcement Cases, 1 (Jan. 25, 2018), https://

www.justice.gov/file/1028756/download. Banning the

use of guidance documents in “affirmative civil

enforcement” affected sweeping change, preventing

the use of such documents in any lawsuit to “recover

government money lost to fraud or other misconduct

or to impose penalties for violations of Federal health,

safety, civil rights or environmental laws.” Id. at 1–2

n.1. In particular, the January 2018 memorandum

specifically prohibited the use of guidance documents

in False Claims Act cases. Ibid.

The Attorney General has recently rolled back

these limitations and will allow Department of

Justice attorneys to use guidance documents moving

forward. Mem. from the Off. of the Att’y Gen.,

Issuance and Use of Guidance Documents by the

Department of Justice (July 1, 2021), https://www.

justice.gov/opa/page/file/1408606/download. On July

1, 2021, the Attorney General issued a memorandum

retracting both the November 2017 and January 2018

memoranda. Under current Department policy, the

Department’s civil attorneys may now rely on

guidance documents and the deference given to them

to seek penalties on behalf of the United States.

27

The Department’s renewed focus on informal

agency guidance will surely shape future enforcement

proceedings. In public comments, the Assistant

Attorney General expressed the Department’s view

that “the False Claims Act will play a significant role

in the coming years as the government grapples with

the consequences of” the Covid-19 pandemic. Dep’t of

Just., Acting Assistant Att’y Gen. Brian M. Boynton

Delivers Remarks at the Fed. Bar Ass’n Qui Tam Conf.

(Feb. 17, 2021). With a renewed and “significant”

focus on the False Claims Act, Skidmore is likely to

play a role in the lower courts for years to come. As a

result, this Court should grant certiorari to clarify

how it should be applied.

IV.

This Case is the ideal vehicle to resolve

the Questions Presented.

This case presents a compelling vehicle to

resolve the Questions Presented. Both are pure legal

questions.

On the FLSA question, without § 778.315,

Respondent’s claim would fail. The County paid

Respondent one and one-half times her regular rate

for each overtime hour that she worked. Even if this

overtime rate were less than one and one-half times

the rate that the County had promised, it still

exceeded the statutory minimum wage and satisfied

the FLSA’s overtime provision.

Likewise, the Skidmore question was briefed

and decided below, and core to the parties’ dispute.

28

The parties briefed both issues below, and the

court passed upon them. The County argued that the

Fourth

Circuit

owed

the

Administrator’s

interpretation no deference because it conflicted with

the FLSA’s text and because it failed to further the

FLSA’s policy. Given the discrete nature of the issues

to be briefed, this case is the ideal vehicle to review

both Questions Presented.

CONCLUSION

This Court should grant the petition for a writ

of certiorari.

Respectfully submitted,

Martha R. Thompson

Chief Deputy County

Attorney

CLEVELAND COUNTY, NC

311 E Marion Street

Suite 121

Shelby NC 28150

Grant B. Osborne

WARD AND SMITH, P.A.

82 Patton Avenue

Suite 300

Asheville, NC 28801

Dated: June 3, 2022

/s/ Alex C. Dale

Alexander C. Dale

Counsel of Record

Christopher S. Edward

WARD AND SMITH, P.A.

127 Racine Drive

Wilmington, NC 28403

(910) 794-4800

acd@wardandsmith.com