Amicus Curiae Brief — Auer v. Robbins

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No. 95-897

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Re tare wh erreterane |

In The debited

Supreme Court of the United States

October Term, 1995

——— PG cf,

FRANCIS BERNARD AUER, et al.,

Petitioners,

vs.

DAVID A. ROBBINS, et al.,

Respondents.

On Writ of Certiorari to the

| United States Court of Appeals

for the Eighth Circuit

[ o

BRIEF OF AMICUS CURIAE

BROWARD COUNTY, FLORIDA

IN SUPPORT OF RESPONDENTS

—_—_-_—_¢—-- pad

JOHN J. COPELAN, JR.

County Attorney

ANTHONY C. MUSTO*

Chief Appellate Counsel -

Governmental Center, Suite 423

115 South Andrews Avenue

Fort Lauderdale, Florida 33301

Telephone: (954) 357-7600

Telecopier:(954) 357-7641

*Counsel of Record

ar pene

—_—_-_—— —

a

BEST AVAILABLE COPY.

TABLE OF CONTENTS

TABLE OF CITATIONS

STATEMENT OF INTEREST OF AMICUS CURIAE.

SUMMARY OF ARGUMENT

ARGUMENT

THE SALARY BASIS TEST FOR DETERMINING WHICH

EMPLOYEES ARE EXEMPT FROM THE FAIR LABOR

STANDARDS ACT IS NOT VALID AS APPLIED TO THE

PUBLIC SECTOR.

CONCLUSION

TABLE OF CITATIONS

CASES PAGE

Abshire v. County of Kern,

GUS 26 SES COU Cie, TDI ccccecicccnecescnesiescntibavesbintndits 8,9, 13

American Meat Institute v. United States Department of Agriculture,

G46 F.2d 125 C4tha Cor, 1961) cnccccccccosssoscncestonneianstinsiananaties 11

Batterton v. Francis,

SSB U.S. GEG. COG T TP cocccccsccccsssccisobioncsteccsnesenanaeeaaas 10

Brennan v. Wilson Building, Inc.,

478 F.2d 1090 (Sth Cir) cert. denied, 414 U.S. 855 (1973) .... 3

Building and Construction Trades Department AFL-CIO v. Donovan,

712 F.2d 611 (D.C. Cir. 1983),

cert. denied, 464 U.S. 1069 (1984) .........cccccccrcccscsssoverscereens 10

Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc.,

4B7 US. BST CISCO cccoccecissonsccsciccnttiocssiaiaiaeane 11

Donovan v. Carls Drugs Co., Inc.,

FOS F265 GSO (26 Cie. IDES) .ceccccscesseconsesncsnteenncstenenisnnmentanen 5

Garcia v. San Antonio Metropolitan Transit Authority,

4GD 83S. FSB (IDES) ..2ccscrsecescseesevesseersesssinsivienminaanenmaaaa 6

Hilbert v. District of Columbia,

23 F.36 SED COL. CAR, SDE) ccccsscvcnctecteiienaaaaane 2, 12

Keller v. City of Columbus,

778 F.Supp. 1480 (S.D. Ind. 1991) occ cceeeeeseeseeneneeees ns

Manhattan General Equipment Co. v. Commissioners of Internal

Revenue,

297 U.S. 1FD (IDSG) ..nccacsecersorsscsseenscesessioscetenimuaneliiannannnan 12

TABLE OF CITATIONS CONTINUED

CASES PAGE

McGarth v. City of Philadelphia,

127 Lab.Cas. P 33,060, | Wage and Hour Cas.2d (BNA)

ET 2

National League of Cities v. Usery,

ti tarsssnrmmanpnensnnnnnnnnencenenantacets 6

Service Employees International Union, Local 102 v.

County of San Diego,

60 F.3d 1346 (9th Cir, 1994) ooo ccccceeeeene 2, 8, 11, 12, 13

Stewart v. City and County of San Francisco,

834 F.Supp. 1233 (N.D. Cal. 1993) .........cccccccccsccceseeeseeneeneeees 2

United States v. Darby,

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OTHER AUTHORITIES

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OTHER AUTHORITIES CONTINUED

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No. 95-897

—

In The

Supreme Court of the United States

OCTOBER TERM, 1995

——

FRANCES BERNARD AUER, et al.,

Petitioners,

vs.

DAVID A. ROBBINS, et al.,

- Respondents.

—

On Writ of Certiorari to the

BRIEF OF AMICUS CURIAE

BROWARD COUNTY, FLORIDA,

IN SUPPORT OF RESPONDENT

——

STATEMENT OF INTEREST OF AMICUS CURIAE

Broward County, Florida, a political subdivision of the state

of Florida, is a local government charged with the responsibility of

providing for the welfare of its citizens. This responsibility includes

the requirement that Broward County make appropriate determina-

tions as to the manner of compensating its employees. This case will

impact on Broward County’s determinations regarding that matter.

Because this brief is being submitted by the authorized law

officer of a political subdivision of a state, consent for its filing by

the parties is not necessary. Rules of the Supreme Court of the United

States, Rule 37.5

SUMMARY OF ARGUMENT

The salary basis test for determining which employees are

exempt from the Fair Labor Standards Act is not valid as applied to

the public sector. Such a conclusion is consistent with legislative

intent and accords the proper deference to the interpretation of the

FLSA adopted by the Department of Labor. Moreover, the applica-

tion of the test to the public sector would be inconsistent with the

principles of public accountability and with prevailing public sector

payroll practices that were developed in light of a historical backdrop

that demonstrates the inapplicability of the test.

ARGUMENT

THE SALARY BASIS TEST FOR DETERMINING

WHICH EMPLOYEES ARE EXEMPT FROM THE FAIR

LABOR STANDARDS ACT IS NOT VALID AS AP-

PLIED TO THE PUBLIC SECTOR.

This brief will address one aspect of the issues dealt with by

the present case. Specifically, it will argue that the salary basis test

for determining which employees are exempt from the Fair Labor

Standards Act (FLSA) is not valid as applied to the public sector.

Precisely such a conclusion was reached by the Ninth Circuit in its

decision in Service Employees International Union, Local 102 v.

County of San Diego, 60 F.3d 1346 (9th Cir. 1994). Agreeing with

San Diego's contention that the test “is contrary to the FLSA and

congressional intent,” id. at 1351, the court in that case found that the

test in existence prior to September 6, 1991, “was invalid in its en-

tirety as applied to the public sector”” /d. at 1353. Moreover, the

Ninth Circuit is not alone in reaching this conclusion. See Hilbert v.

District of Columbia, 23 F.3d 429, 434-436 (D.C. Cir. 1994),

Henderson, J., concurring in part and dissenting in part; McGarth v.

City of Philadelphia, 127 Lab.Cas. P 33,060, | Wage & Hour Cas.2d

(BNA) 1500 (E.D. Pa. 1994); Stewart v. City and County of San Fran-

cisco, 834 F.Supp. 1233, 1238 (N.D. Cal. 1993). A look to the his-

tory of the FLSA and to the applicable legal principles demonstrates

that the decision in Service Employees is well-founded.

A. The Origins of the Act. The FLSA was adopted in 1938 as a

2

remedial and humanitarian means of recovery from the Great De-

pression. It was “designed to provide a minimum standard of living

necessary for the health, efficiency, and general well-being of work-

ers, as well as to prescribe certain minimum standards of working

conditions.” Brennan v. Wilson Building, Inc., 478 F.2d 1090, 1094

(Sth Cir.), cert. denied, 414 U.S. 855 (1973).

The FLSA contains three core provisions. It establishes a

minimum wage, requires employers to pay overtime compensation

to employees working over a specified number of hours in a week

(usually 40), and contains provisions designed to eliminate child

labor. 29 U.S.C. §§ 206-213. At the time of its passage, the Act

explicitly excluded public employees from coverage. See 29 U.S.C.

§ 202; United States v. Darby, 312 U.S. 100 (1941).

From its inception, the FLSA has always exempted “execu-

tive, administrative and professional” employees from the overtime

and minimum wage provisions of the Act. Instead of defining these

terms, Congress delegated this role to the Secretary of Labor.'

The first regulations defining the section |3(a) (1) executive,

administrative and professional exemptions (the so-called “white col-

lar” exemption) were promulgated on October 20, 1938. 3 Fed. Reg.

2518. These regulations include a provision which survives in iden-

tical form today. It states as follows:

In determining such future regulations separate treatment

for different industries and for different classes of employ-

ees may be given consideration.

Thus, from its earliest pronouncements, the Department of La-

bor (“DOL” or “Department”’) recognized that proper implementa-

tion of the section 13(a)(1) exemptions might require it to draw dis-

' Section 13(ay(1), 29 U.S.C. § 213 a)(1), states:

The provisions of sections 206 [wages] and 207 [hours] shall not apply

with respect to... . |ajny employee employed in a bona fide executive,

administrative, or professional capacity . . . (as such terms are defined

and delimited from time to time by regulations of the Secretary . . . )

3

tinctions in the treatment accorded to employees working in differ-

ent employment settings.

B. The Creation of the Salary Basis Test. In the 1940s and

1950s, the DOL adopted further regulations defining the white col-

lar exemption. See 57 Fed. Reg. 37665 (August 19, 1992). These

regulations -- which remain essentially unchanged today -- provide

two different criteria to be used in determining whether an employee

is properly classified as an executive, administrator or professional.

The first criteria, the “duties” test, mandates that an exempt

employee must function in a supervisory role, or work in a field

requiring the exercise of discretion, judgment, or talent. See 29

C.FR. § 541.1(f, § 541.2(e) (2) and § 541.3(e).

The second criteria, the “salary test,” is less widely utilized.

It requires employees to receive more than $155 per week ($250 per

week using the so-called “short test”) and be paid “on a salary basis.”

See id.

Employees will be considered to be paid on a “salary basis”

if they receive a “predetermined amount” each pay period, 29 C.F.R.

§541.118, subject to certain criteria and exceptions.? “The aim of

these restrictions is to determine whether an employee actually re-

ceives all compensation in the form of a salary or whether the em-

ployee is in fact compensated on a variable quantitative or qualita-

tive basis.” Keller v. City of Columbus, 778 F.Supp. 1480, 1485-86

(S.D. Ind. 1991).

? In the relevant part, the § 541.118 (a) salary besis rule states as follows:

An employee will be considered to be paid “on a salary basis” within the

meaning of the regulations if under his employment agreement he regu-

larly receives each pay period on a weekly, or less frequent basis, a prede-

termined amount constituting all or part of his compensation, which

amount is not subject to reduction because of variations in the quality or

quantity of the work performed. Subject to the exceptions provided be-

low, the employee must receive his full salary of any week in which he

performs any work without regard to the number of days or hours worked.

This policy is also subject to the general rule that an employee need not

be paid for any workweek in which he performs no work.

4

Section 541.118 does not permit an employer to reduce --

on either a daily or hourly basis -- the wages of a “salary basis”

employee when there is no work available to be performed:

An employee will not be considered to be paid “on a salary

basis” if deductions from his predetermined compensation

are made for absences occasioned by the employer or by

the operating requirements of the business. Accordingly, if

the employee is ready, willing, and able to work, deduc-

tions may not be made for time when work is not available.

29 C.F.R. § 541.118(a) (1).

While the primary focus of § 541.118 is on deductions caused

by lack of work, the regulation also limits an employer’s right to

deduct pay from salaried employees who miss work for personal rea-

sons. Under § 541.118(a)(2-4), employers may generally make de-

ductions from an employee’s salary for personal reasons, including

sickness or disability, if these absences are “for a day or more.” Con-

versely, if these personal absences are for less than a day, the regula-

tions suggest (but do not state explicitly) that deductions are not per-

mitted. 29 C.FR. § 541.118(a); see also Donovan yv. Carls Drug

Co., Inc., 703 F.2d 650, 652 (2d Cir. 1983) (“salaried professional

employee may not be docked pay for fractions of a day of work

missed”).

C. Application of the Salary Test to Public Employment. The

above-quoted DOL “salary test,” first drafted in the 1940s, has re-

mained in its present form since 1954 -- long before the FLSA be-

came applicable to public employers. See 19 Fed. Reg. 4406 (July

17, 1954). The regulation was developed from 22 days of hearings

and record evidence gathered by the DOL in 1947 from private em-

ployers. A DOL review of this regulatory history stated:

These provisions were developed from extensive hearings

and record evidence showing that executive, administrative,

and professional employees employed in industries then-

subject to the FLSA, which excluded governmental employ-

ees, were nearly universally paid on a salary basis.

5

57 Fed. Reg. 37665, 37666 (August 19, 1992) (emphasis added).

Public employers did not participate in these hearings because the

FLSA did not apply to public employment at the time. /d.

In 1974, the FLSA was extended to federal, state and local

government employees. Pub. L. 93-259, 88 Stat. 55. This coverage

was sharply curtailed, however, by this Court’s 1976 decision de-

claring invalid the FLSA’s application to state and local public em-

ployees “performing traditional government functions.” National

League of Cities v. Usery, 426 U.S. 833 (1976).

Public employees were again covered by the FLSA in 1985,

when this court reversed National League of Cities in Garcia v. San

Antonio Metropolitan Transit Authority, 469 U.S. 528 (1985). In

Garcia, this court reasoned that sufficient authority existed under

the Commerce Clause to apply the FLSA to state and local govern-

ments and found that applying federal regulation based on a distinc-

tion between “traditional” and “nontraditional” governmental func-

tions was unsound and unworkable. /d.

In response to Garcia, Congress amended the FLSA in No-

vember, 1985, to address the particular concerns of state and local

governments and to provide relief from liability during a temporary

adjustment period. 29 U.S.C. §§ 203(e), 207(0), 207(p); see also 57

Fed. Reg. at 37667. In Congress’ rush to provide legislative relief,

however, one problem that was not recognized was the effect that the

DOL’s “salary basis” regulation could have on public employers. See

57 Fed. Reg. at 37667. For many years prior to Garcia, most public

employers had operated pay systems “premised on a concept derived

from principles of public accountability that governmental employees

should not be paid for time not worked due to the need to be account-

able to the taxpayers for the expenditure of public funds.” /d.

In the course of operating such payroll systems, local govern-

ments gave their employees accrued leave time, including sick and

vacation pay, which the employees were then expected to use to cover

various absences -- including absences of less than a day. Any em-

ployee, including high-ranking officials, who somehow managed to

exhaust his or her leave time, or was absent without leave, was there-

fore at least theoretically subject to actual reductions in pay. /d.

6

Such reductions made for partial-day absences, however, while con-

sistent with principles of public accountability, could arguably vio-

late a strict, literal construction of § 541.118.

In late 1985, the Department of Labor became aware of this

potential conflict between § 541.118 and prevailing public sector

payroll practices. In response to a request for public comments, the

DOL learned that the existing salary test had at least the potential to

jeopardize the availability of the section 13(a) ( 1) white collar ex-

emption in the public sector. 50 Fed. Reg. 47696 (November 19,

1985); see also 57 Fed. Reg. at 37667-68. However, while aware of

this theoretical problem, the Department apparently concluded that

other regulatory issues deserved more immediate attention. Accord-

ingly, DOL deferred consideration of revisions to the salary test,

noting instead that “the Department expects to publish a notice of

proposed rulemaking concerning Part 541 during 1987.” /d., quot-

ing 51 Fed. Reg. 13402 (April 18, 1996).

Unfortunately, the DOL never followed through on its prom-

ised rulemaking.’ Instead, the DOL simply published a letter ruling

in 1987 stating (57 Fed. Reg. at 37668 (emphasis added)) that it

would not enforce the salary test against public entities:

It has come to [DOL’s] attention that some State and local

government jurisdictions have statutory provisions which

prohibit any employee from being paid for time not actu-

ally worked, or not covered by annual, sick or other type of —

paid leave. Such statutory provisions conflict with the ba-

sis of payment described in § 541.118 of 29 CFR Part 541.

’ DOL’s inaction contrasts sharply with action taken by its counterpart --

the Office of Personnel Management (“OPM”, formerly known as the Civil Ser-

vice Commission) -- which is charged with administering the Act with respect to

ost federal employees. 29 U.S.C. § 204(f). After the FLSA was extended in

1974 to cover federal employment, OPM promptly issued white collar exemption

regulations focusing entirely on the duties test and including no salary basis re-

quirement. 40 Fed. Reg. 27640 (July 1, 1975); see also 57 Fed. Reg. at 37667. In

the preamble to its regulations, OPM stated that its rulemaking was based upon a

“policy of integrating exception criteria with Federal classification systems to the

extent possible, while maintaining results consistent with the exemption criteria

applied by the Department of Labor.” Id. OPM’s current regulations administer-

ing the FLSA similarly contain no salary basis test. 5 C_E.R. §§ 551.203; 551.204

7

... This practice is similar to the practice applicable to Fed-

eral employees. ... While consideration is given to proposed

changes in the regulations, a nonenforcement policy is being

adopted with regard to the salary basis of payment for oth-

erwise exempt public employees. ... This nonenforcement

policy is not intended to affect any employee's rights under

Section 16(b) of the FLSA [private enforcement provisions].

However, while the DOL’s statement precluded federal en-

forcement, it did nothing to stop “entrepreneurial” public employees

from bringing their own salary basis lawsuits against their employ-

ers. As a result, dozens of private actions were initiated across the

county to take advantage of this potential regulatory loophole. One

such action was Abshire v. County of Kern, 908 F.2d 483 (9th Cir.

1990), in which the Ninth Circuit severely penalized a public em-

ployer for not meeting its broad interpretation of the § 541.118 sal-

ary basis rule.

In announcing that all partial-day payroll deductions were

“antithetical to the concept of a salaried employee,” the Abshire Court

made no inquiry into whether its reading of the FLSA reflected the

congressional intent underlying the Act.* If it had, it would have found

that Congress expressly intended to preserve the white collar exemp-

tion for public sector employers when it extended coverage to the

FLSA in 1974. The committee report accompanying the bill that

became the 1974 FLSA amendments states:

Section 6 of the bill extends minimum wage and overtime

coverage to about 5 million non-supervisory employees in

the public sector not ... [then] covered by the Act. ... The bill

will provide that virtually all non-supervisory government

employees will be covered. ... By the same token, the com-

mittee intends to cover all employees (except professional,

executive, and administrative personnel who are exempted

under section 13 of the law) in all civilian branches of the

Federal Government. [H.R. Rep. No. 93-913, p. 27 (1974);

emphasis added. |

* Indeed, the court recognized as much in its subsequent discussion in

Service Employees. 60 F.3d at 1354.

8

57 Fed. Reg. at 37667. Thus, in extending the FLSA to the

public sector, Congress evidenced no desire to jeopardize the avail-

ability of the section 13(a)(1) white collar exemption to public em-

ployers, or to alter the compensations arrangements of public sector

executives and other supervisory personnel.

After Abshire, the Department of Labor quickly recognized

this underlying congressional intent and -- now facing a rulemaking

“emergency” -- moved quickly to close the “salary basis” loophole.

On September 6, 1991, the DOL promulgated an immediately ef-

fective Interim Final Rule, which provided that public sector em-

ployees would not lose their white collar exemption simply because

they were paid in accordance with a compensation system requiring

a payroll deduction for absences of less than one work day. 56 Fed.

Reg. 45822. In finding that “few public employers compensate

employees in a manner that meets the ‘on a salary basis’ require-

ment,” the Department criticized Abshire, noting that it had exposed

“government employers to potentially enormous and generally un-

expected back wage liabilities to employees, some of whom would

clearly be exempt if duties and amount of compensation alone were

examined.’ /d. at 45824-25. |

Following a formal notice and comment period, the DOL on

August 19, 1992 published its Final Rule on the public sector salary

test. 57 Fed. Reg. 37665 (to be codified at 29 C.F R. § 541.5d). Like

the Interim Final Rule, the Final Rule provides that public sector

employees who would otherwise be exempt from the FLSA’s over-

time requirements under section 13(a)(1) do not lose their exemp-

tion because their pay is subject to reduction for partial-day absences.

In issuing the Final Rule, the DOL emphasized that the

amendment of its regulations was “necessary in order to give effect

* At the time it promulgated the Interim Final Rule, the DOL also pro-

posed another regulation which would have “retroactively” restored the white col-

lar exemption to public sector employees whose employers had reimbursed them

for any partial-day pay deductions. (56 Fed. Reg. 45828) However, citing con-

cerns over its authority to engage in retroactive rulemaking, the DOL later with-

drew its proposed rule. 57 Fed. Reg. 37678. In withdrawing the proposal, the

DOL stated its intent to seek retroactive relief for public employers through the

legislative process. /d.

9

of the statutory exemption in the public sector as intended by Con-

gress under the 1974 Amendments.” /d. at 37673. In one of several

passages emphasizing this point, the DOL stated as follows:

[1}t is clear from a plain reading of FLSA’s legislative his-

tory in 1974 [quoted in the committee report above} that

Congress intended for the section 13(a) (1) exemption to be

available for public sector employees. Congress was pre-

sumably unaware that ... many public sector compensation

systems precluded payment for hours not worked .... In

light of the public accountability principles prevalent in

public sector pay systems, the regulatory requirements

adopted before Congress extended FLSA coverage to state

and local governments simply could not operate in a man-

ner that effectively distinguished exempt from non-exempt

public employees. The regulations were thus out of har-

mony with the intent of the statute because State and local

governments could not practically avail themselves of the

exemption intended by Congress, and thus were inappro-

priate as applied in the public sector.

Id. at 37672 (emphasis added).

D. 2

Given the broad discretion vested by Congress in the Secretary of

Labor to “define” and “delimit” the FLSA, the Department's regula-

tions are vested with “legislative effect.” 29 U.S.C. § 213(a) (1);

Batterton v. Francis, 432 U.S. 416, 428 (1977); Building & Con-

struction Trades Dept. AFL-CIO v. Donovan, 712 F.2d 611,616 (D.C.

Cir. 1983), cert. denied, 464 U.S. 1069 (1984). Accordingly, this

Court should not overrule DOL’s interpretation of the section 13(a)

(1) exemption unless the agency's definition is one “that bears no

relationship to any recognized concept of the [statutory] program.”

Id. .

The above-cited standard of review is very narrow: the

Department's interpretative regulations may only be set aside if they

are “arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law.” 5 U.S.C. § 706(2) (a). Moreover, a “review-

ing court is not entitled to substitute its judgment for that of the agency

10

... and must defer to the agency if its action has a rational basis in the

record.” American Meat Institute v. United State Department of

Agriculture, 646 F.2d 125, 127 (4th Cir. 1981). See also Chevron,

U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S.

837, 843 (1984) (courts must defer to agency's interpretation of stat-

ute unless that determination is unreasonable ).

The previously cited cases that have found the salary basis

test involved with regard to the public sector have applied this ap-

proach. In Service Employees, 60 F.3d at 1351, the court stated:

The Administrative Procedure Act (“APA”) reflects the famil-

unlawful and set aside agency action, findings, and conclu-

sions found to be ... arbitrary, capricious, an abuse of discre-

tion, or otherwise not in accordance with law.” 5 U.S.C. §

706(2) (A). In Chevron U.S.A., Ine. v. Natural Resources De-

fense Counsel, 467 U.S. 837, 842-43 (1984), the Supreme Court

further defined this test. It stated that if Congress has directly

spoken to a precise question and that intent of Congress is clear,

“the court, as well as the agency, must give effect to the unam-

biguously expressed intent of Congress.” /d. If the “statute is

silent or ambiguous with respect to the particular issue, the

question is whether the agency's answer is based on a permis-

sible construction of the statute.” /d. at 843.

Service Employees went on to find that Congress was silent

as to whether the salary test applies to the public sector and that the

question therefore became simply whether the agency's answer was

based on a permissible construction of the FLSA. 60 F.3d at 1351.

In this instance, given the careful efforts made by the De-

partment to document public sector payroll practices and examine

detailed findings concerning the legislative and regulatory intent be-

hind section 13 (a) (1) and section 541.118 -- it cannot be reason-

ably argued that the Department lacked a “rational basis” for enact-

ing the new public sector salary basis test codified in § 541 Sd. There-

fore, regardless of prior judicial interpretations of the which collar

exemption, this Court should now give full force and effect to the

i

Department's new salary basis regulation and adopt the same ratio-

nale employed by the Ninth Circuit in Service Employees.°

The same result is also called for by this Court's long-stand-

ing “statutory intent” doctrine set forth in Manhattan General Equip-

ment Co. v. Commissioner of Internal Revenue, 297 U.S. 129 (1936).

In that case, this Court dealt with a situation in which the IRS en-

acted a new regulation when it found that a previous regulation was

contrary to the intent of the underlying legislation. This Court ap-

plied the new regulation to a transaction that occurred during the

lifetime of the old one, finding that the new regulation “became the

primary and controlling rule” and that it “pointed the way, for the

first time, for correctly applying the antecedent statute to a situation

which arose under the statute.” Jd. at 135,

Here, as the Department has concluded, application of the

pre-existing private sector salary basis test to public employment

failed to take into consideration the special “public accountability”

interests and practices of government employers.’ Accordingly, this

Court should now defer to the Department of Labor's August 1992

salary basis rule.

* The fact that the Department offered a contrary interpretation as an amicus

cunae im support of a petition for rehearing in Service Employees should not change

this conclusion. As the Ninth Circuit concluded in rejecting the claim that deference

should be given to this belatedly asserted position, the Department's “pre-September,

1991 ‘position’ was not an engaged interpretation of the statute in light of Congres-

svonal intent” /d_ at 1356. Instead, the Department “simply defaulted on its mandate

to mterpret the Fair Labor Standards Act and to recast the relevant regulations in the

light of a sea change caused by the extension in 1985 and 1986 of the FLSA to

nonfederal public employees.” Jd As the court noted, the Department's nonenforce-

ment policy was “tantamount to an admission by the DOL that the regulation in place,

ie, the salary test, was unsuitable as applied to public employees.” /d_ at 1357. Thus,

the Department's position in Service Employees amounted to a request “to defer to

the DOL’s failure to discharge its responsibilities under the laws,” Jd. at 1359, an

invitation that was properly declined by the court of appeals.

"The concept of public accountability permeates both the DOL actions

and the cases discussed above. See Service Employees, 60 F.3d at 1352, n.2.,

citing to Hilbert, 23 F.3d at 435, Henderson, J., concurring in part and dissenting

im part (“Public accountability is the notion that ‘government employees should

not be paid for time not worked due to the need to be accountable to the taxpayers

for expenditure of public funds."”) 12

The salary basis test was never intended to apply to the pub-

lic sector. The concept that it did was fostered by the belief that

Abshire had reached such a conclusion. The decision in Service Em-

ployees, however, demonstrates both that the issue was never con-

sidered in Abshire and that the idea that the salary basis test does

apply to the pubic sector is without merit. Broward County respect-

fully submits that the Service Employees is correct in both of these

conclusions and that this Court should adopt the rationale of Service

Employees and apply it to the facts of the present case.

ANTHONY C. MUSTO*

Chief Appellate Counsel

Governmental Center, Suite 423

115 South Andrews Avenue

Fort Lauderdale, Florida 33301

Telephone: (954) 357-7600

Telecopier: (954) 357-7641

*Counsel of Record

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