Amicus Curiae Brief — County of Kern v. Abshire

No. 90-839 DEC 27 BS

IN THE CLERK

Supreme Court of the United

OcTOBER TERM. 1990

COUNTY OF KERN,

Petitioner,

VS.

DAN ABSHIRE, DENNIS CARROLL, KARRY FRANK,

BILL RICKMAN, TOM BLACKMON, RICHARD PELLERIN,

BILLIE McKENZIE, BOB TEMPLE, BARRY SHULZ,

JIM CHAPMAN, BOB TURNER, and STEVE McLEMORE,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF OF THE LEAGUE OF CALIFORNIA

CITIES, COUNTY SUPERVISORS ASSOCIATION

OF CALIFORNIA, CITY AND COUNTY OF

SAN FRANCISCO, CITY OF LOS ANGELES,

CITY OF SAN DIEGO and 77 ADDITIONAL

CITIES, COUNTIES AND TOWNS OF THE

STATE OF CALIFORNIA AS AMICI CURIAE

IN SUPPORT OF PETITIONER

JOHN LIEBERT

Counsel of Record

PAUL M. OSTROFF

PETER J. BROWN

LIEBERT, CASSIDY & FRIERSON

6033 West Century Boulevard, Suite 900

Los Angeles, California 90045

(213) 645-6492

Attorneys for Amici Curiae

Lawyers Brief Service / Legal Printers / (213) 383-3457 7 (714) 720-1510

ss

ADDITIONAL AMICI CURIAE:

CITIES: ALAMEDA, ANTIOCH, BURLINGAME,

CAPITOLA, CHICO, CLEARLAKE,

CLOVERDALE, DALY CITY, DEL REY OAKS,

EL CERRITO, EXETER, FARMERSVILLE,

FREMONT, GILROY, GLENDALE, GROVER

CITY, HAYWARD, HEALDSBURG,

HERCULES, HUNTINGTON, INDIO,

LAFAYETTE, LINDSAY, MARINA,

McFARLAND, MORGAN HILL, NAPA,

NEWPORT BEACH, NOVATO, ORINDA,

PACIFIC GROVE, PACIFICA, PALM DESERT,

PITTSBURG, PLEASANT HILL,

PORTERVILLE, REDWOOD CITY,

RIVERSIDE, ROSEVILLE, SAN

BUENAVENTURA, SAN LUIS OBISPO,

SAN MATEO, SAN PABLO, SANTA CLARA,

SANTA CRUZ, SANTA PAULA, SANTA

ROSA, SEASIDE, SONOMA, SOUTH

SAN FRANCISCO, SUNNYVALE,

TEHACHAPI, TULARE, TUSTIN,

VACAVILLE, VISALIA, WALNUT CREEK,

WATERFORD, WATSONVILLE, WOODLAKE

COUNTIES: BUTTE, CONTRA COSTA, GLENN,

LAKE, LASSEN, MARIN, PLACER,

PLUMAS, RIVERSIDE, SACRAMENTO,

SAN LUIS OBISPO, SAN MATEO, YOLO

TOWNS: FAIRFAX, MILL VALLEY, MORAGA,

TIBURON

QUESTIONS PRESENTED

1. Does that portion of the “salary

basis test” set forth in 29 C.F.R. §

541.118 which states that an employee

cannot be considered salaried if his pay

may be reduced for an absence of less

than one day, and, therefore, on that

basis, cannot meet the executive,

administrative, or professional overtime

exemption, validly apply to public

sector employment?

2. Does the application of this

aspect of the salary basis test to

executive, administrative or

professional employees of public

agencies violate the Tenth Amendment by

destroying the accountability of public

sector managers to public agencies and

the public, or by denying local

governments the safeguards of the

political process as contemplated in

: — ’

Transit Authority, 469 U.S. 528 (1985)

(Garcia)?

a ih

PAGE

TABLE OF AUTHORITIES .....-.. + wi

INTEREST OF AMICI CURIAE .....-. 1

STATEMENT OF THE CASE. - +--+ +++. 6

REASONS FOR GRANTING A WRIT OF

CERTIORARI, OR IN THE ALTERNATIVE,

FOR VACATING THE DECISION OF THE

ety. Tee 6 =) & ae a er ee

BRBGUNEEL 2c ec ec ec eo eo te we we wo wo ow ew ow 1G

I.

II.

APPLICATION OF THIS ASPECT OF

THE SALARY BASIS TEST TO

EXECUTIVE, ADMINISTRATIVE AND

PROFESSIONAL EMPLOYEES

EMPLOYED BY PUBLIC ENTITIES IS

INCONSISTENT WITH THE

REGULATORY POLICY AND HISTORY

OF tae eum. 6s « 6 © @ @ @ © -e

APPLICATION OF THIS ASPECT

OF THE SALARY BASIS TEST

TO EXECUTIVE,

ADMINISTRATIVE AND

PROFESSIONAL EMPLOYEES IN

THE PUBLIC SECTOR IS

INCONSISTENT WITH

CONGRESSIONAL INTENT .... .

- iii -

16

29

III. APPLICATION OF THIS ASPECT OF

THE SALARY BASIS TEST TO

EXECUTIVE, ADMINISTRATIVE AND

PROFESSIONAL EMPLOYEES OF

PUBLIC AGENCIES VIOLATES THE

TENTH AMENDMENT ... + «+ « -«

IV. APPLICATION OF THE SALARY TEST

WOULD IMPAIR OPERATION OF THE

POLITICAL PROCESS AND THEREBY

DEFEAT THE VIEW OF THE

CONSTITUTION ESPOUSED BY THE

COURT IN GARCIA ...-+-«« -«

V. CERTIORARI SHOULD BE GRANTED

BECAUSE OF THE SIGNIFICANCE OF

SORE Ge. eta cken le tke «4

A. This Issue Effects Hundreds

of Thousands of Public

Employees and Hundreds of

APPENDIX A .

APPENDIX B.

CASES

Abshire v. County of Kern

908 F.2d 483 (9th Cir. 1990)

358 U.S. 224 (1959) o — 7 7 - . . * e 41

Barrentine v. Arkansas-Best Freight

Systems

450 U.S. 728 (1981) « e « « . . * 7. + 26

Commissioner of Internal Revenue v.

Standard Life & Accident Insurance

Company

og 8 ee eee |

Federal Deposit Insurance Corp. v.

Philadelphia Gear Corp.

oe ee lO >

Garcia v. San Antonio Metropolitan

469 U.S. 528 (1985)

ii, 10, 13, 14, 18, 34-357 36-37, 37-38,

39, 41

Griggs v. Duke Power

eS & SF 3 : ee

Laing v. United States

EE * Ee

Miller v. Youakim

Se alee ee ee 5 so Soe se ee

- vi -

Overnight Motor Transportation Co. v.

Missel

Ee eee ee ||

Patterson v. Lamb

See gl! Ee

Skidmore v. Swift & Co.

323 U.S. 134 (1944) ° e Py . Py « . 24-25

United States v. Mitchell

463 U.S. 206 (1983) .. 2-1 +2 2 oo 4

United States v. Powell

S00 See ee ee oe 6 2 et ee SB

United States v. Standard Oil

eg? e e: . are |

Zenith Radio Corp. v. United States

437 U.S. 443 (1978) — « 7 . - « « . o 24

STATUTES

Federal

29 BemeGe § 201 e 7 . - - _ o 2 « 7 - 6

29 BeteCe § 202 (a) 7 - 7 « _ - « + « 26

ee is eee 4s de + oe Se ee

oe eee ee eee Se.

ee he eng a ae ee et ee

State

California Government Code § 6250... 18

REGULATIONS

29 C.F.R. Part 541 8, 10, 18, 19, 20, 21

29 C.F.R. § 541.118 . « « ¢ « « « o * i

29 C.F.R. § 541.118(8€) «.«. «© « « « « « 42

- vii -

29 C.F.R. § 541.118(a)(2)-(3) .... 8

ae ees oe ee ee

LAW REVIEW ARTICLES

Barrante, States Rights and Personal

Freedom: _Preathing Life into the Tenth

Amendment, 63 Connecticutt Bar Journal

262 (1989) + ° +. e . s e s e . ° se sd 35

Lipner, Imposi iness on

Officers of the State: What the Tenth

Amendment Might Mean, 57 George

Washington Law Review 907 (1989) .. 35

Van Alstyne, The Second Death of

Federalism, 38 Mich. Law Review 1709

(1985) sd e e s 2 . s aa e . . . . * . 35

OTHER PUBLICATIONS

50 Fed.Reg. 47696-01 (1987) . .. 19, 21

52 Fed.Reg. 2012-01 (1987) oe « © 19, 20

House Report No. 93-913 .. . 32, 33, 34

Senate Report No. 1487 ....... 31

Senate Report No. 93-300 ...... 32

- viii -

INTEREST OF AMICI CURIAE

This brief amici curiae is filed on

behalf of 518 local governments of the

State of California.

Amicus League of California Cities

(League) is a non-partisan, non-politi-

cal organization composed of all 460

cities and towns within the State of

California. The League operates through

its Board of Directors and Policy

Committees, which are composed of mem-

bers of city councils and mayors of all

cities in the State of California.

Amicus County Supervisors Association

of California (CSAC) is a non-partisan,

non-political organization which is

composed of more than 250 County

Supervisors. The members of CSAC in

turn represent all 58 Counties which

comprise the State of California.

Amici the City and County of San

Francisco, the City of Los Angeles, and

the City of San Diego are each incor-

porated cities in the State of

California. Los Angeles is the largest

city in the State of California and the

second largest city in the United

States. San Diego and San Francisco are

respectively the second and fourth lar-

gest cities in California. Also appear-

ing as individual Amici are over seventy

(70) California cities, towns and

counties.

The Amici are responsible for

providing nearly all of the local gov-

ernment services to the citizens of the

State of California. The decision below

has a dramatic and adverse fiscal impact

upon Amici, on Amici's delivery of local

governmental services, and upon local

governmental accountability to all

citizens of the State of California.

Collectively, Amici employ in excess

of 500,000 employees.* Approximately

25 percent of these employees [125,000],

have been designated by the cities or

counties which employ them under the

Fair Labor Standards Act's executive,

administrative or professional overtime

exemptions contained in 29 U.S.C. §

213(a)(1). These exempt employees

include mid-level and senior managers

such as chiefs of police, directors of

public works, directors of social ser-

vices, and directors of finance, as well

as the highest administrative officials

of local government such as city mana-

gers, county executives, and their man-

agement staff. The great majority of

these employees earn over $50,000 per

1 California counties employ approxi-

mately 274,000 employees; California

cities employ approximately 236,000

employees.

year. Virtually all of the local gov-

ernments represented in this brief have

for many years had in place rules, ordi-

nances or regulations which require that

public employees account for all working

time and which limits payment of compen-

sation for time not worked in accordance

with specific paid leave policies. By

virtue of the application of the rule

enunciated by the Court below, all of

these employees who had heretofore been

considered exempt may now be entitled to

hourly time and one-half overtime com-

pensation under the Fair Labor Standards

Act (FLSA or Act).

If the decision below is permitted to

stand, the fiscal consequences for local

government are enormous. Amici have

conducted internal studies as to the

potential cost for past overtime lia-

bility which may be due to executive,

administrative, and professional employ-

ees if the manner of applying the salary

basis test is sustained. These past

liabilities for two years are alone

estimated to exceed $2 billion for

California cities and counties.’

In addition to this fiscal impact,

the decision below will adversely affect

the administration of local public agen-

cies pursuant to policies established by

local legislative bodies. The rules and

ordinances adopted by Amici, which re-

quire that public officials account for

the time which they are absent from work

go to the central core of the account-

ability of state and local government to

2 The Abshire decision has fiscal rami-

fications which go beyond its impact on

cities and counties. The State of

California employs over 60,000 employees

whose exempt status may be effected by

Abshire. Special districts in

California (exclusive of school

districts) employ 115,000 persons.

- 5 -

the public.

A number of the cities and counties

appearing as Amici are parties to liti-

gation in which the application of the

saiary basis: test is pivotal to the

claims of the litigants. These cases,

which were filed shortly after the

Abshire decision was issued, involve

thousands of employees, and millions of

dollars in past compensation and

liquidated damages.

Pursuant to Rule 37.3, the parties

have consented to the filing of this

Amicus Brief. The letters of consent

have been filed with the Clerk of the

Court.

STATEMENT OF THE CASE

Salaried executive, administrative

and professional employees are expressly

excluded from the provisions of the

FLSA, 29 U.S.C. § 201 et seqg., that re-

- 6 -

quire time and one-half premium pay for

overtime. In Abshire v. County of Kern,

908 F.2d 483 (9th Cir. 1990), the Ninth

Circuit held that Kern County Fire

Battalion Chiefs were not bona fide exe-

cutive® exempt employees pursuant to 29

U.S.C. § 213(a)(1) because such employ-

ees' salary was subject to a potential

deduction for absences from work of less

than one day's duration.

Eligibility for exemption from the

overtime provisions of the Act is based

on both a “duties test” and a “salary

test.” These tests are addressed in

detail in the regulations adopted by the

Department of Labor (Department or

3 Although the Court did not speci-

fically address the other two FLSA

exemptions - the administrative and

professional exemptions - the basis of

the decision would extend to employees

exempt from the Act pursuant to these

“white-collar” exemptions as well.

= 7-«

DOL),* the agency charged with enforc-

ing the FLSA. If an employee performs

the specified types of discretionary

managerial, administrative or profes-

sional duties, and is paid a salary

above $250 per week, the employee is

exempted from the hourly premium over-

time provisions of the Act.

The Court in Abshire did not address

the duties aspect of the exemptions, but

focused solely on the salary test under

the Department's regulations. In par-

ticular, the Court focused on two sub-

paragraphs of one salary test regu-

lation, which provides:

“Deductions (from predetermined

compensation) may be made ... when

the employee absents:' himself from

work for a day or more for per-

sonal reasons ... or absences of a

day or more occasioned by sickness

or disability ... .” 29 C.F.R. §

541.118(a)(2) and (a) (3).

“ See 29 C.F.R. Part 541.

- 8 -

Abshire held that, therefore, in order

to satisfy the salary test, an employ-

ee's pay cannot be subject to deductions

for absences of less than a day.

Since under County policy the salary

of Kern County Fire Battalion Chiefs was

subject to deductions for absences of

less than one day (though such deduc-

tions had never been made), the Court

held that the Battalion Chiefs were not

exempt from the premium overtime provi-

sions of the FLSA. Thus, the decision

requires the County to pay retroactive

premium overtime compensation to these

employees for a period of two years. 29

U.S.C. § 255. The reasoning and holding

of the decision applies equally to all

other bona fide County managers, admini-

strators and professional staff paid in

excess of the requisite salaries.

Regulations issued by the DOL after

- 9 «-

Congress' enactment of the “Fair Labor

Standards Amendments of 1985*° did not

address the exemptions. However, in a

January 9, 1987, Administrative Letter

Ruling, the DOL indicated that changes

in 29 C.F.R. Part 541,° including that

aspect of the salary test considered in

Abshire, have been under consideration,

and thus, the Department was taking a

nonenforcement position with respect to

that aspect of the salary basis test for

otherwise bona fide exempt executive,

administrative and professional

° Enacted in response to this Court's

decision in Garcia, applying the Act

generally to the public sector.

* 29 C.F.R. Part 541 was first enacted

in 1949, long before the FLSA ever

became applicable to the public sector.

In enacting t>ese regulations, the DOL,

therefore, had no occasion to consider

the unique aspects of public sector

employment, including government's

accountability to the public it serves.

- 10 =

employees employed by public entities.’

Although not an affirmative interpre-

tation, the Administrative Letter Ruling

is a strong indication of DOL's inten-

tion to amend the salary test.

The “Fair Labor Standards Amendments

of 1985” and the DOL's regulations

adopted thereafter recognized distinc-

tions in labor standards between the

public and private sector. Kern

County's contention, shared by Amici, is

that application of this aspect of the

salary test--which was originally

enacted for and uniquely applicable to

private sector employment--cannot, con-

sistent with Congressional intent and in

conformance with Constitutional stan-

dards, be made applicable to state and

’ This Administrative Letter Ruling is

set out at pp. 21-22 infra.

- ll-

local government employment.

REASONS FOR GRANTING A WRIT OF

CERTIORARI, OR IN THE ALTERNATIVE,

FOR VACATING THE DECISION OF THE

NINTH CIRCUIT

This litigation is one of numerous

cases currently pending in the lower

courts which presents the question of

whether this aspect of the “salary basis

test” set forth in the Code of Federal

Regulations must be strictly complied

with in order for executive, administra-

tive and professional employees of pub-

lic agencies to qualify to be exempt

from the premium pay overtime provisions

of the FLSA. The Ninth Circuit's deci-

sion is the first appellate ruling which

has concluded that this aspect of the

salary basis test is properly applied to

public sector employment, thereby

precluding overtime exemption of public

sector managers.

- 12 =

In summary, the reasons why a writ

should issue, or that the decision of

the Ninth Circuit should be vacated, are

these:

1. The decision in Abshire is erre-

neous because the Court rejected the

DOL's administrative application of the

statute, the DOL being the agency

charged with enforcing the Act. DOL's

application of the exemption, i.e. that

this aspect of the salary basis test is

not to be applied to public employees,

is a valid administrative interpretation

of the FLSA. The Ninth Circuit's unjus-

tified departure from this application

of the exemption exceeds the limits of

judicial authority established by the

Court in Garcia;

2. Application of this aspect of the

salary basis test to public employees

who perform bona fide executive, profes-

= 13 =

sional or administrative duties is in-

consistent with the intent of Congress;

3. This Court's decision in Garcia

indicated that there were as yet unde-

fined limits imposed by the Tenth

Amendment upon Congressional actions

which may unduly burden the states.

Application of this aspect of the salary

basis test to otherwise bona fide execu-

tive, professional and administrative

employees involves a direct impairment

of the sovereignty of local governments.

Public entities and the public they

serve are entitled to determine the

degree to which they can expect account-

ability from their public officials.

Application of the salary basis test

will inherently impair that accounta-

bility.

4. Certiorari should be granted

because of the importance of the issues

- 14 -

to public employees, public agencies and

the public at large. Billions of dol-

lars are potentially at stake. There

are numerous cases pending in the lower

federal courts which involve the appli-

cation of this aspect of the salary

basis test to public employees. There

are inconsistencies and conflicts among

the lower federal courts in their treat-

ment of this aspect of the salary basis

test to public sector employees. Inter-

vention by this Court through issuance

of a writ of certiorari will promote

judicial economy and bring an early,

definitive ruling.

- 15 -

ARGUMENT

I. APPLICATION OF THIS ASPECT OF THE

SALARY BASIS TEST TO EXECUTIVE,

ADMINISTRATIVE AND PROFESSIONAL

EMPLOYEES EMPLOYED BY PUBLIC ENTITIES

IS INCONSISTENT WITH THE REGULATORY

POLICY AND HISTORY OF THE FLSA

The Act exempts from its overtime and

minimum wage provisions “any employee

employed in a bona fide executive, ad-

ministrative or professional capacity.”

See 29 U.S.C. § 213(a) (1). The Act con-

tains no further definition of who is

deemed an executive, administrative or

professional employee. As relevant to

executive, administrative or profes-

sional employees, the statute has re-

mained unchanged since its enactment.

See 29 U.S.C. § 213, Historical Note.

The Secretary of Labor is expressly

authorized to “define and delimit” these

exempt categories. 29 U.S.C. §

213(a)(1). Left with little congres-

- 16-

sional guidance, the DOL adopted regu-

lations in 1949 which first defined the

so-called salary basis test for deter-

mining which employees would come within

the executive, administrative and pro-

fessional exemption.

Central to an understanding of the

error below is that these regulations

were adopted at a time the FLSA did not

cover public employers; indeed, years

before the FLSA was ever amended to

cover the public sector employment

situation.

Consequently, the Secretary of Labor,

in discharging his statutory obligation

to define the exemption, could not and

did not take into account the critical

differences which exist in employment

conditions between the public and pri-

vate sectors. The regulations could

only have been intended to cover private

»= 17 «

sector employment. The concept of gov-

ernmental accountability in response to

“the people's right to know,” as reflec-

ted in such laws as public records

acts,® is, of course, uniquely appli-

cable to public sector employment. Fur-

thermore, the direct relationship that

commonly exists in private employment

whereby managerial, administrative and

professional employees are traditionally

paid on a salary basis and other employ-

ees are paid on an hourly basis simply

does not exist in the public secter.

This inapplicability of the salary basis

test to public employment is borne out

by the subsequent regulatory history of

the salary basis test.

The Garcia decision became final in

®* For example, the California Public

Records Act, Government Code § 6250 et

seq.

- 18 -

April 1985. In November 1985, the DOL

published an advance notice of proposed

rulemaking concerning 29 C.F.R. Part

541. Among the numerous questions which

the Department posed was a request for

comments with respect to whether local

civil service system classifications

should apply in determining exempt sta-

tus under 29 U.S.C. § 213. See 50

Fed.Reg. 47696-01 (1987).

On January 16, 1987, the Department

published its final rules for applica-

tion of the FLSA to employees of state

and local governments with respect to 29

C.F.R. Part 553. See 52 Fed.Reg. 2012-

01 (1987). These regulations in part

addressed certain of the issues raised

by the 1986 amendments to the FLSA. DOL

did not, however, issue regulations

pertaining to the executive, admini-

strative, and professional exemption.

- 19 -

It noted that it had received several

comments that the salary basis test

contained in 29 C.F.R. Part 541 should

be modified to permit public agencies to

make deductions from an exempt employ-

ee's salary for absences of less than a

day in deference to local governmental

policies mandating such accountability

by all levels of public employees. The

DOL indicated that since proposed rule-

making was then in progress, that it

“would not be appropriate for the

Department to address this issue in

developing a final rule for Part 553."

52 Fed.Reg. 2012-01, p. 39.

The DOL has not as yet issued new

regulations concerning 29 C.F.R. Part

541. Instead, it adopted a nonenforce-

ment policy with respect to the salary

basis test as it applied to executive,

administrative and professional

- 20 -

employees employed by public entities.

The DOL issued an Administrative Letter

Ruling on January 9, 1987. It states:

“It has come to our attention

that some State and local govern-

ment jurisdictions have statutory

provisions which prohibit any

employee from being paid for time

not actually worked, or not

covered by annual, sick, or other

type of paid leave. Such statu-

tory provisions conflict with the

salary basis of payment as dis-

cussed in section 541.118 or 29

CFR Part 541. For example, where

an otherwise exempt public

employee is absent from work for

personal reasons, or is unable to

work because of illness or acci-

dent, and the employee has not

accrued, or has exhausted, paid

leave time, such employee is paid

only for hours actually worked in

accordance with applicable State

or local law. This practice is

similar to the practice applicable

to Federal employees. Conse-

quently, a public employer may

make deductions from pay for

absence(s) on an hourly basis

which is contrary to the position

in section 541.118 that deductions

may be made only for absence(s) of

a day or longer.

“Revisions to the provisions of

29 CFR Part 541, including the

Salary tests, have been under con-

sideration as indicated in the

- 21-

Advance Notice of Proposed

Rulemaking (ANPR) published in the

Federal Register on November 19,

1985 (50 FR 47696). The ANPR was

published in order to obtain the

views of the public on needed

changes in the regulations. A

commentor representing public

employers has pointed out the

problem described above and has

proposed changes in section

541.118 that would allow deduc-

tions to be made for absence(s) of

less that (sic) a day, or to elim-

inate the salary test entirely.

“While consideration is being

given to proposed changes in the

regulations, a nonenforcement

policy is being adopted with

regard to the salary basis of pay-

ment for otherwise exempt public

employees. Wage-Hour will not

deny an exemption under section

13(a)(1) to an otherwise exempt

public employee whose pay is

reduced by deductions for

absence(s) of less than a day for

personal reasons, or because of

illness or accident, because the

employee does not have, or has

exhausted available paid leave for

such absence(s).

“This nonenforcement policy will

be followed only where the public

employer can show that a provision

contained in applicable State or

local law in effect prior to April

15, 1986, prohibits payments to an

employee for absence(s) of the

type described above which are not

covered by available paid leave.”

- 22 -

The Ninth Circuit's disregard of the

DOL's Administrative Letter Ruling

departs from the regulatory history of

the Act and Congressional intent.

The DOL has a statutory obligation to

define the scope of exemptions under 29

U.S.C. § 213. An administrative inter-

pretation of a statute by its enforcing

agency, here the DOL, is entitled to

great deference. j Vv wer,

401 U.S. 424, 433-434 (1971). Further,

the interpretation need not itself be

reduced to regulation form. The inter-

pretation need only be enunciated and

reasonable in its application. Federal

eposi s

Gear Corp., 476 U.S. 426, 438-440

(1986). Indeed, the construction of a

statute by those charged with its

execution should be followed unless

there are compelling indications that it

- 23-

is wrong. Miller v. Youakim, 440 U.S.

125, 144 (1979).

The DOL, having set forth its inter-

pretation of the salary basis test as

applied to public agencies, cannot be

lightly disregarded. It is manifest

that the salary basis test, which was

first described in regulations adopted

in 1949, was intended and indeed could

have only been intended for the private

sector employment situation. Great

deference is to be accorded to the DOL

in its interpretation of its own regu-

lations. Zenith Radio Corp. v. United

States, 437 U.S. 443, 450-451 (1978).

The Abshire decision also conflicts

with the policy adopted by this Court

that the standards of enforcement of the

FLSA by DOL and enforcement in private

actions should not be at variance.

mo s. Swi , (1944) 323

- 24 -

U.S. 134. There the Court stated:

“The Administrator's policies

are made in pursuance of official

duty, based upon more specialized

experience and broader investiga-

tions and information than is

likely to come to a judge ina

particular case. They do deter-

mine the policy which will guide

applications for enforcement by

injunction on behalf of the

Government. Good administration

reasons.” (Emphasis added.) Id. at

139, 140.

There is no reason for the variance

between enforcement of rights by private

litigants (such as the Plaintiffs in

Abshire) and enforcement by DOL, which

results from the Abshire decision.

The DOL's policy of not enforcing

this aspect of the salary basis test

with respect to public sector employees

is wholly consistent with the

Congressional intent of the FLSA. The

- 25 =-

Act expressly exempts bona fide execu-

tive, administrative and professional

employees. Furthermore, the principal

Congressional purpose in enacting the

FLSA was to protect all covered workers

from substandard wages and oppressive

working conditions, *"labor conditions

that are detrimental to the maintenance

of the minimum standards of living

necessary for health, efficiency and

general well being of workers.” 29

U.S.C. § 202(a). See also Barrentine v.

Arkansas-Best Freight Systems, 450 U.S.

728, 739 (1981). This Congressional

policy is not ill served if hourly pre-

mium overtime compensation is denied to

public agency managers, most of whom

earn salaries of over $50,000 per year,

and, in a number of cases, over $100,000

= 26 -

per year.’

The decision below also fails to give

appropriate deference to the administra-

tive interpretation of the DOL because

it misapplies the Administrative Letter

Ruling. The Ruling stated that the non-

enforcement policy would be followed

where the public employer could show

that provisions contained in the appli-

cable state or loca] Jaw in effect prior

to April 15, 1986, prohibited payments

to an employee for absences of less than

one day for personal reasons or because

of illness or accident which are not

covered by available paid leave. The

* For example, in Amici City and County

of San Francisco, employees designated

as exempt earn salaries ranging from

$28,000 to over $100,000 annually.

Their average annual salary is approxi-

mately $55,000. The City of Los Angeles

employs some 3,000 employees which are

exempt, most of whom earn over $55,000

per year.

= 27 «-

Ninth Circuit failed to give appropriate

deference to the interpretation of DOL

because the Ninth Circuit focused exclu-

sively, and erroneously, on only one as-

pect of State law, i.e., the prohibition

on gifts of public funds contained in

the California Constitution. See

Abshire at p. 489. However, the Ninth

Circuit failed to consider the existence

of local ordinances or regulations which

fit within the standard established by

DOL. Virtually all Amici have adopted

provisions by charter, local ordinance

c. regulation, whereby public employees

of the respective agency shall not be

compensated for absences of less than a

day when not covered by available leave

time.

- 28 -

II. APPLICATION OF THIS ASPECT OF THE

SALARY BASIS TEST TO EXECUTIVE,

ADMINISTRATIVE AND PROFESSIONAL

EMPLOYEES IN THE PUBLIC SECTOR IS

INCONSISTENT WITH CONGRESSIONAL

INTENT

Application of this aspect of the

salary basis test to executive, admini-

strative and professional employees of

local government is inconsistent with

Congressional intent for several rea-

sons. First, the Legislation itself

expressly exempts executive, ‘'administra-

tive and professional employees, and the

holding in Abshire would to a substan-

tial extent frustrate such Congressional

intent. Second, the Congressional

intent which underlies the FLSA is the

removal of the social evils associated

with oppressive and inhuman working

conditions--a legislative intent clearly

not at issue with respect to highly com-

pensated managerial and professional

- 29 -

personnel. Third, testimony before the

Congress and statements from the commit-

tee reports indicate that the 1974

amendments were intended to authorize

application of the FLSA only to non-

supervisory municipal employees. The

legislative record reflects an under-

standing on the part of Congress that

executive, administrative and profes-

sional employees of public agencies

would not be the beneficiaries of the

premium pay overtime provisions of the

Act. Last, it is apparent from review-

ing the legislative history behind the

1974 amendments that Congress did not

intend that application of the FLSA to

local government would have the dramatic

fiscal impact which application of this

aspect of the salary basis test will

have upon state and local government.

- 30 -

a!

A. Application of This Aspect of the

Salary Basis Test Is Inconsistent

with the Congressional Policy

Which Underlies the 1938 Act

The Fair Labor Standards Act was en-

acted in 1938 while this nation remained

in the throes of the most serious eco-

nomic depression in its history. Low

wages, long working hours and high unen-

ployment plagued the nation. The stated

purpose of the Act was to correct, and,

as rapidly as practicable, to eliminate

labor conditions detrimental to the

maintenance of the minimum standard of

living necessary for health, efficiency

and general well-being of workers. See

Senate Report No. 1487, Fair Labor

Standards Amendments of 1966, pp. 3002-

3003. The Act was designed to give

specific minimum protection to

individual workers and to ensure that

employees other than highly compensated

- 31-

ta) ‘ ; : ;

employees would receive “a fair day's

pay for a fair day's work” and would be

protected from the "evil of overwork as

well as underpay.” Qvernight Motor

Transportation Co. v. Missel, 316 U.S.

572, 578 (1942).

Certainly exempting highly paid mana-

gerial and professional employees, such

as those employed by Amici, is not in-

consistent with the purposes of the Act.

The majority of these employees earn

well in excess of $50,000 annually.

B. Congressional sto a ent

Behind the 1974 Amendments to the

Act

Several aspects of the legislative

history of the 1974 amendments to the

Act lead to the conclusion that Congress

did not intend to confer a right to pre-

mium pay overtime on otherwise exempt

public agency managers. The report of

- 32 -

the Senate Subcommittee on Labor expres-

sed its concerns about wholesale exten-

sion of the overtime provisions of the

FLSA to public employees. Senate Report

No. 93-300, pp. 502-504, 600-601.

The House Report on the 1974 amend-

ments to-the Act clearly show a

Congressional intent that supervisory

employees were not intended to be the

beneficiaries of the Act's provisions.

Thus, the House Report states:

“The bill extends the minimum

wage and overtime coverage to

about 5,000,000 non-supervisory

employees in the public sector not

now covered by the Act ... the

bill will provide that virtually

all non-supervisory government

employees will be covered.” House

Report No. 93-913 at p. 2837.

The House Report commented extensively

on Department studies concerning over-

time in the public sector. Signifi-

cantly, these DOL studies focused on

non-supervisory employees employed in

- 33-

state and local governments. The House

Report quoted extensively from this

Department report which was focused on

non-supervisory man-hours worked in

state and local governments. The DOL's

report indicates that only 2.3 of non-

supervisory employee man-hours in state

and local government exceeded 40 hours.

The Department report, upon which the

Congress relied, went on to conclude

that the “actual impact on state and

local governments of a 40-hour standard

will be virtually non-existent.” See

House Report No. 93-913, pp. 2837-2838.

Iit. APPLICATION OF THIS ASPECT OF THE

SALARY BASIS TEST TO EXECUTIVE,

ADMINISTRATIVE AND PROFESSIONAL

EMPLOYEES OF PUBLIC AGENCIES

VIOLATES THE TENTH AMENDMENT

In Garcia, this Court did not rule

out judicial review of Congressional

action which might impinge on state

sovereignty under the Tenth Amendment.

- 34 -

The Court left open for future clarifi-

cation consideration of circumstances

wherein the political process resulted

in legislation which impinged on state

sovereignty. As the Court stated:

“The political process ensures

that laws that unduly burden the

states will not be promulgated.

In the factual setting of these

cases, the internal safeguards of

the political process have per-

formed as intended. These cases

do not require us to identify or

define what affirmative limits the

constitutional structure might

impose on federal action affecting

the states under the Commerce

Clause.” 469 U.S. at 556.

The Garcia decision spawned a flood of

commentaries in the legal journals.

Several of these noted that the Court's

decision in Garcia did not foreclose

subsequent judicial review if the bor-

ders of the Tenth Amendment were crossed

- 35 -

by application of a federal law.?°

Amici respectfully submit that applica-

tion of this aspect of the salary test

crosses the borders of state sovereignty

established by the Tenth Amendment.

Local agencies represented by Amici

have traditionally required all of its

employees, including its most senior

executive staff, to account for all time

intended to be compensated by their sal-

ary. It is this accountability to the

agency, and to the public it serves,

which is central to the Amici's argument

that application of this aspect of the

Salary test crosses the border of the

‘© See e.g. Lipner, Imposing Federal

Business on Officers of the State: What

the Tenth Amendment Might Mean, 57

George Washington Law Review 907 (1989);

Van Alstyne, The Second Death of

Federalism, 83 Mich. Law Review 1709,

1722-1725 (1985); Barrante, States

Rights and Personal Freedom: Breathing

Life into the Tenth Amendment, 63

Connecticut Bar Journal 262 (1989).

=- 36 <

Tenth Amendment's limitations on intru-

sions into state sovereignty. Such ap-

plication of the salary test would pro-

hibit state and local government from

enacting policies that define the degree

of control they are legislatively

entitled to exercise over their mana-

gerial and professional staff.

It was perhaps this very concern

which prompted the dissenters in Garcia

to state:

“By usurping functions tradi-

tionally performed by the states,

federal overreaching under the

Commerce Clause undermines the

constitutionally mandated balance

of power between the states and

the federal government, a balance

designed to protect our fundamen-

tal liberties.” 469 U.S. at 572.

The Tenth Amendment by its terms speaks

not only of rights reserved to the

states, but rights reserved to the

people. Certainly, this accountability

is fundamental to the operation of local

- 37 -

government and to the people it serves.

IV. APPLICATION OF THE SALARY TEST

WOULD IMPAIR OPERATION OF THE

POLITICAL PROCESS AND THEREBY

DEFEAT THE VIEW OF THE

CONSTITUTION ESPOUSED BY THE

COURT IN GARCIA

In Garcia, this Court stated:

“But the principal and basic

limit on the federal commerce

power is that inherent in all con-

gressional action - the built-in

restraints that our system pro-

vides through state participation

in federal governmental action.

The political process ensures that

laws that unduly burden the state

will not be promulgated. In the

factual setting of this case, the

internal safe-guards of the polit-

ical process have performed as

intended.” Id. at 556.

Here, if the aspect of the salary

test in issue is permitted to be applied

to public employees when the regulatory

process has not as yet run its course,

the political process will not “have

performed as intended.” It is the DOL

which has the authority to implement and

administer the exemption provisions of

- 38 -

the Act. If the decision below is per-

mitted to stand, then the political pro-

cess, and the view of federalism

espoused by the Court in Garcia, will

itself have been frustrated. It is the

regulatory mechanism, a part of the

political process in which the states

and their political subdivisions may

participate, which should be permitted

to define how the FLSA will be applied

and implemented. The decision below is

at odds with this aspect of Garcia. For

this reason alone, the decision below

should be vacated or a writ of

certiorari should issue.

V. CERTIORARI SHOULD BE GRANTED BECAUSE

OF THE SIGNIFICANCE OF THIS CASE

A. This Issue Effects Hundreds of

Thousands of Public Employees and

Hundreds of Public Agencies

A vast majority of the 518 counties

and cities represented by Amici have

- 39 -

aie ceseamtinmenel

local laws, policies or regulations pro-

viding for deductions in pay for absen-

ces of less than one day under specified

circumstances. Thus, each employee

classified as exempt has the potential

to receive retroactive premium overtime

compensation for a period of at least

two years plus an equal amount of liqui-

dated damages plus interest and attor-

neys' fees based on the outcome of this

decision. In addition, the policies of

public agencies for governmental ac-

countability to the public will be im-

paired by the Federal Government. Given

the broad ranging significance of this

case, and its impact on local government

and on public employees, certiorari

should be granted.”

4. Patterson v. Lamb, 329 U.S. 539

(1947).

- 40 -

B. The Fiscal Impact of This

Enormous

The fiscal consequences of the deci-

sion below on the public agencies repre-

sented by Amici are enormous. As indi-

cated, supra, internal studies conducted

by Amici as to the potential cost of

past overtime liability indicate that as

to California cities and counties alone,

the cost would exceed $2 billion. These

financial implications should be given

substantial weight, and, therefore,

certiorari should be granted.’

“@ See United States v. Mitchell, 463

U.S. 206, 211 n.7 (1983); Commissioner

of Internal Revenue v. Standard Life &

, 433 U.S.

148, 151 n.5 (1977);

, 358 U.S. 224 (1959)

(certiorari granted in view of the fis-

cal importance of the question to

Alaska).

= 41 -

Since this Court's decision in

Garcia, supra, the issue as to whether

deductions in a salaried employee's sal-

ary for absences of less than a day

defeats the administrative or executive

exemption has been the subject of

numerous federal district court deci-

Sions. Federal district court decisions

have been inconsistent so as to leave

the law, as it applies in the public

sector, in a state of confusion.”

The inconsistency in the federal dis-

trict courts, and the numerous lawsuits

which are currently pending, counsel for

an early resolution and clarification of

this issue by the Court.

13 See Appendix A for listed cases.

- 42 -

The issue as to whether certain pub-

lic employees are paid on a “salary

basis,” as that term is defined in 29

C.F.R. § 541.118(a), where deductions

are made from employees' salary for

absences of less than a day's duration,

is the subject of numerous federal dis-

trict court cases which are currently

pending.** The conflicts in the

federal courts and the numerous cases

which are pending point to the wisdom of

granting certiorari.»

14 See Appendix B for listed cases.

1S Laing v. United States, 423 U.S.

161, 167 (1976); United States v.

Standard Oil, 332 U.S. 301, 302 n.2

(1947); United States v. Powell, 330

U.S. 238 (1947).

- 43 -

CONCLUSION

It is respectfully requested that a

Writ of Certiorari be granted, or in the

alternative the decision below be

vacated, because that decision:

* Is contrary to that of the

administrative agency designated by law

to implement the Act, and

* Is contrary to Congressional

intent, and

* Is contrary to the dictates of the

Tenth Amendment of the Constitution, and

* Has enormously significant fiscal

and policy impact on state and local

government.

Granting a writ will bring an early,

definitive ruling to an issue which has

been the source of conflicting decisions

and considerable litigation in the lower

courts.

- 44 -

Dated: December 26, 1990

Respectfully submitted,

LAA

John Liebert

LIEBHRT, CASSIDY & FRIERSON

Co > eu (La) —

- Jo i/

Paul M. Ostroff

ix

OY tes oo

- 45 -

APPENDIX A

7 u bP ye NY a aes Ce aary ee hee Re free tahoe Eis Ea eo oe a Pts ae jess 1% wy oss" ‘ aa ;

a a a ee

i = - é 4 eh + « ‘ aah ; , q ’ > 4 Ape beh P

eee A eS Ce SP ee hey ee Oe, ee Tee AEA Na od. ae Poon) A mre

APPENDIX A

See ver v

Virginia, 29 Wage & Hour Cas. (BNA) 1442

(W.D.Va. 1990);

Wright v. City of

Jackson, Mississippi, 727 F.Supp. 1520

(S.D. 1989); D'Camera v. District of

Columbia, 722 F.Supp. 799 (D.D.C. 1989);

. Tea

F.Supp. 1383 (D.D.C. 1989);

Vv.

, 720

F.Supp. 1230 (E.D.Va. 1989); York v

City of Wichita Falls, Texas, 727 F.

Supp. 1076 (N.D. Tex. (1989); Wilson v.

City of Charlotte, ae F.Supp. 408

(W.D.N.C. 1989); is v. District of

Columbia, 709 F. aan. 238 (D.D.C. 1989);

awks v ity o ° ews, Virginia,

707 F.Supp. 212 (E.D.Va. 1988); Banks v.

City of North Little Rock, 708 F.Supp.

1023 (E.D.Ark. 1988); District of

Olumbia Nurses Association v istrict

of Columbia, 29 Wage & Hour Cas. (BNA)

868 (D.C.D.C. 1988); Knec v. City of

Redwood City, 683 F.Supp. 1307

(N.D.Cal. 1987).

APPENDIX B

APPENDIX B

, C-90-3206-Cal,

N.D.CA, (This case is a class action

with a class size of potentially 4400

employees) ;

j , CV-N-90-583-ECR, D.C.

Nev.;

Benjamin Fletcher v. District of

Columbia, 90-2949 D.D.C.; Shepard et al.

v. State of California [California

Department of Forestry and Fire

Protection], CIVS-90-221-LKK--EM,

E.D.Cal.; Phillips et al. v. State of

California, CIVS-90-167 LKK--EM,

E.D.Cal.; Nadeau et al. v. State of

California, Department of Justice, CIVS-

89-0119-LKK--EM, E.D.Cal.; Alex et al.

stat . C lit : ~alif

Department of Forestry and Fire

Protection, CIVS-89-0032-LKK--EM,

E.D.Cal.;

Jerline Baker et al.v.

District of Columbia, 89-2050, D.D.C.

Angeles, Cv-88- 6982 HLH C.D.CA.

AMICUS CURIAE

BRIEF

a7 ; pupreme VLOUrl, U.o.

EILE D

In The DEC 27 1990

Supreme Court of the Unity dntentesrwven,

October Term, 1990 CLERK

y%

wv

a

COUNTY OF KERN,

Petitioner,

VS.

DAN ABSHIRE, DENNIS CARROLL, LARRY FRANK,

BILL RICKMAN, TOM BLACKMON, RICHARD

PELLERIN, BILLIE McKENZIE, BOB TEMPLE, BARRY

SCHULZ, JIM CHAPMAN, BOB TURNER,

and STEVE McLEMORE,

Respondents.

y%

od

On Writ Of Certiorari To The

United States Court Of Appeals For The

Ninth Circuit

»

vw

BRIEF OF STATE OF CALIFORNIA

AS AMICUS CURIAE IN SUPPORT OF

PETITION FOR WRIT OF CERTIORARI

7%

vy

Counsel of Record

for Amicus Curiae

M. JEFFREY FINE”

Deputy Chief Counsel

CHRISTOPHER W. WADDELL

Chief Counsel

EDMUND K. BREHL

TAMARA J. PIERSON

Department of Personnel

Administration

1515 “S” Street

North Building

Suite 400

Sacramento, CA 95814-7243

Telephone: (916) 324-0512

*Counsel of Record

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

1. Does the so-called “salary basis” test set forth in

29 C.F.R. §541.118(a), which states that when an

employee’s pay may be reduced for absences of less than

one day that employee is not truly salaried and, there-

fore, cannot meet the bona fide executive, administrative,

or professional employee exemption constitute an uncon-

stitutional application of the Fair Labor Standards Act

(FLSA) to public employers?

2. Have the protections of the political process,

which constitutes the basis for the rationale set forth in

Garcia v. San Antonio Metropolitan Transit Authority, 469

U.S. 528 (1985), failed to function, thereby undermining

state sovereignty because Congress did not address the

salary test issue and the Department of Labor (DOL) has

avoided addressing the issue?

3. Should there be a return to the traditional versus

non-traditional governmental functional analysis aban-

doned under Garcia v. SAMTA in order to prevent federal

regulation of essential governmental functions usurping

states’ rights under the Tenth Amendment?

ii

TABLE OF CONTENTS

QUESTIONS PRESENTED ...........- eee ceee cones i

ARGUMENTS

I. THE 1974 AMENDMENTS TO THE FLSA, AS

MADE APPLICABLE TO THE STATES AFTER

GARCIA V. SAMTA, HAVE AN ENORMOUS

ADVERSE ECONOMIC EFFECT ON THE

STATE OF CALIFORNIA AND ITS POLITICAL

SUBDIVISIONS SO AS TO EFFECTIVELY DENY

THE PROPER FUNCTIONING OF STATE GOV-

ERNMENT

II. THE DEPARTMENT OF LABOR HAS BEEN

IRRESPONSIBLE AND MISLEADING WITH

RESPECT TO THE APPLICATION OF 29 C.E.R.

§541.118(a) TO PUBLIC JURISDICTIONS. AS A

CONSEQUENCE PUBLIC JURISDICTIONS

HAVE HAD NO OPPORTUNITY TO RESOLVE

THEIR CONCERNS THROUGH THE POLITI-

CAL PROCESS ;

A. LEGISLATIVE HISTORY

B. REGULATORY HISTORY..........-5.....- >

C. THE DEPARTMENT OF LABOR’S NON-

ENFORCEMENT POLICY................. 7

Ill. APPLICATION OF THE FLSA TO ESSENTIAL

PUBLIC ;SERVICES NOT IN COMPETITION

WITH THE PUBLIC SECTOR SUCH AS FIRE-

FIGHTING UNDULY INTERFERES WITH THE

STATE’S SOVEREIGN FUNCTIONS ........... 8

COCA os onc eee cake hearer eee een eetasencees 11

ili

TABLE OF AUTHORITIES

Page

Cases

Abshire, et al. v. County of Kern, 908 F.2d 483 (1990)

Sg SRA a ee saree eee eee eee 1, & 3 4

Bratt, et al. v. County of Los Angeles, 912 F.2d 1066

ERE U ECL Tua hG deus vA eens euneecaduce esses 9

Garcia v. San Antonio Metropolitan Transit Authority,

RD so sc kins caeeccevsenvess 4, 5, 8, 9

National League of Cities v. Usery, 426 U.S. 833

ECSU e Chee NexWA Wy Gb evnes é<desevasesavks 9

State of California v. Brennan, (October Term, 1974, |

SERS say cae eee ned 660004 6s sts owe ans 9

STATUTES

United States Code |

RO Ns... c acs ocescscecceeuesds 7

29 USC. Section 213 ........00..ccceeeeeeeeeeeeee. 1

OP We, TOTEM SIDI)... occ ccs veccvccenes 1

ADMINISTRATIVE RULEs

Code of Federal Regulations

Ee 5, 6, 7

EDS 5 sas bcvesvccescesovnnsensveess 1

ss ced ceccesccernccsvrsevanseonse 1

re hese kbs cnncaenss ¥amE we RaeD 1

Section 541.1166) (1975) ..........ccccwcces 1, 4, 5, 10

iv

TABLE OF AUTHORITIES - Continued

Page

Federal Register

Sipe Li cee ae a OT ne ny eee 6

NT CENG ork SG5s wk ve kd ade cease eheeveneeens 6

MISCELLANEOUS

Weekly Compilation of Presidential Documents

POW. BG, Times Fei, Zi, POO. GB. cock ccc ncccccccccs 4,5

ARGUMENTS

I. THE 1974 AMENDMENTS TO THE FLSA, AS

MADE APPLICABLE TO THE STATES AFTER

GARCIA v. SAMTA, HAVE AN ENORMOUS

ADVERSE ECONOMIC EFFECT ON THE STATE

OF CALIFORNIA AND ITS POLITICAL SUBDIVI-

SIONS SO AS TO EFFECTIVELY DENY THE

PROPER FUNCTIONING OF STATE GOVERN-

MENT.

In Abshire, et al. v. County of Kern 908 F.2d 483 (1990)

the Ninth Circuit concluded that plaintiffs were covered

by the FLSA because their pay was subject to deduction

for absences of less than one day. The FLSA provides that

bona fide executive, administrative, or professional

employees are exempt from the Act. (29 U.S.C.

§213(a)(1).) Congress left it to the DOL to develop the

criteria for the application of these exemptions. (29

U.S.C., § 213.) At the time DOL adopted regulations for

this purpose, the Act was applicable only to the private

sector. In addition to establishing a duties test for each

exemption, DOL also required that for any exemption to

apply an employee must meet a salary test. (29 C.FR.

§§541.1, 541.2, 541.3.) The Abshire decision held that

plaintiffs were not salaried and hence were not exempt.

In applying 29 C.F.R. §541.118(a) (the salary basis test)

literally, the Court found it irrelevant that no deductions

had actually been made to plaintiffs’ pay.

This literal application of the salary basis test to civil

service employees of the State of California is devastat-

ing. California, like most public employers, views itself as

accountable to the taxpayer and therefore generally

prohibits payment for hours not worked. This unremark-

able similarity between California’s salary regulations

and practices and the County of Kern’s salary regulations

and practices means that most State employees will be

deemed hourly employees and hence covered by the

FLSA, under the rationale of the Abshire decision, should

it remain undisturbed. This is not mere speculation: the

State of California is currently litigating four FLSA cases

brought by groups of consenting plaintiffs in which the

“salary basis” test is central to plaintiffs’ claims.

The first, Nadeau, et al. v. State of California, Depart-

ment of Justice, CIVS-89-0119-LKK - EM, concerns 278

special agents of the State of California, Department of

Justice. In a partial summary judgment dated May 7,

1990, the trial court concluded that plaintiffs were not

salaried employees since their salaries were subject to

reduction for absences of less than a day. The Court also

concluded that liquidated damages were appropriate. The

state faces a trial on the issue of whether the liability

period should be extended another year. Although this

decision preceded the Ninth Circuit’s decision in Abshire,

as will be seen, the Abshire decision preordains a similar

conclusion in the other pending cases. The State’s expo-

sure in the Nadeau case alone is approximately 4.2 million

dollars not including the possibility of an extended lia-

bility period.

The State is also a defendant in Alex, et al. v. State of

California, California Department of Forestry and Fire Protec-

tion, CIVS-89-0032-LKK - EM. On December 17, 1990, the

Court, citing Abshire, granted partial summary judgment

to plaintiffs on issues of liability and liquidated damages

on the grounds that the plaintiffs, 32 Fire Prevention

Officers, are not paid on a salary basis because their pay

is subject to reduction for absences of less than one day.

Thus, regardless of their duties, they have been deemed

covered by the FLSA. The potential liability is large

because like many fire prevention personnel, they have

duty weeks in excess of 40 hours during the fire season.

The State is currently a defendant in Shepard, et al. v.

State of California (California Department of Forestry and Fire

Protection) CIVS-90-221-LKK = EM. This case involves 250

Forest Rangers who, under the holding in Abshire will be

found covered by the FLSA, regardless of their actual

duties.

Finally, but not least of all, the State is currently

defending itself in Phillips, et al. v. State of California

CIVS-90-167-LKK - EM. This case seeks to gather many

remaining State employees (approximately 35,000) who

may have a claim under the FLSA based on the assertion

that they are not compensated on a salary basis. Cur-

rently, over 2,000 employees have consented to join in

this action. It is impossible to estimate the potential lia-

bility in this case since the number of consenters is not

fixed at this point in time, they work for a variety of

different state departments, and their overtime experi-

ences are highly individual. Liability will undoubtedly

exceed that of the other cases.

Of the 180,000 civil service employees in California,

approximately 35,000 employees who have been consid-

ered exempt from the FLSA by the State of California are

the focus of these lawsuits. The State may also be vulner-

able with respect to another 25,000 employees considered

exempt, although to date there are no lawsuits filed with

(

respect to this group. The State is, thus, liable for many

millions of dollars in unpaid overtime and liquidated

damages, as well as prospective future costs whenever

overtime is necessary to carry out vital State functions. In

addition, State monies remitted to localities will in part

be used to cover increased local costs as a result of

Abshire. This liability attaches under Abshire because of

the mere potential that such employees can have their

pay reduced and would apply even though actual

instances of such reductions are rare or nonexistent. The

application of the salary basis test to the State of Califor-

nia is, thus, of great magnitude and budget-breaking

consequence. Given the State’s current projected deficit of

one billion dollars in Fiscal Year 90-91 and approximated

deficit of six billion dollars in Fiscal Year 91-92, the cost

of applying the salary basis test exacerbates an already

bleak financial crisis.

Il. THE DEPARTMENT OF LABOR HAS BEEN IRRE-

SPONSIBLE AND MISLEADING WITH RESPECT

TO THE APPLICATION OF 29 C.ER. §541.118(a)

TO PUBLIC JURISDICTIONS. AS A CONSE-

QUENCE PUBLIC JURISDICTIONS HAVE HAD

NO OPPORTUNITY TO RESOLVE THEIR CON-

CERNS THROUGH THE POLITICAL PROCESS.

A. LEGISLATIVE HISTORY

Following the Court’s decision in Garcia v. San An-

tonio Metropolitan Transit Authority, 479 U.S. 528 (1985),

Congress enacted amendments to the FLSA which tempo-

rarily delayed the implementation of the FLSA on state

arid local governments. (Weekly compilation of Presiden-

tial documents, Nov. 18, 1985; Fall, 21, No. 46 pp.

1390-1391.) During the one year while implementation

was delayed, Congress sought to amend the FLSA to

make it more suitable for application to the public sector.

After joint conference, the measure passed as Public Law

99-150.

B. REGULATORY HISTORY

On November 19, 1985, after the Garcia decision, the

DOL published in the Federal Register advance notice of

proposed rulemaking concerning 29 C.F.R. Part 541. (50

FR 47696). The DOL posed a number of questions focus-

ing on the salary test as used in the administrative, execu-

tive, and professional exemptions. (50 FR 47696-47697). In

particular, DOL asked:

Should the department recognize individual

state and local government civil service systems

for classifying EPA (executive, professional, and

administrative) employees in applying the

exemption to employees of such governments?

This and other questions posed by the Department

would provide a forum for discussion of the appropriate-

ness of applying the salary test to public jurisdictions.

As a result of the Garcia decision, attention naturally

focused on application of the FLSA to hitherto exempt

public functions. The Congressional hearings preceding

passage of P.L. 99-150 explored the financial conse-

quences of Garcia, but nowhere was the issue of the

application of 29 C.F.R. §541.118(a) discussed or even

presented.

DOL took no action on its advance notice of pro-

posed rulemaking regarding 29 C.F.R. §541 but rather,

prior to acting on these proposals, published in the Fed-

eral Register its final rule regarding 29 C.F.R. part 553 —

“Application of the Fair Labor Standards Act to

Employees of State and Local Governments; Final Rule.”

At 52 FR 2019, DOL noted:

Finally, several commentators requested

various forms of special treatment for state and

local governments with respect to the section

13(a)(1) exemption for bona fide executive,

administrative, and professional employees,

particularly with respect to the requirement in

29 C.F.R. part 541 that such employees be paid

on a salary basis.

The commentators argued that state and

local governments should be permitted to make

deductions from an exempt employee's salary

for absences of less than a day. They argued that

this change is necessary to recognize current

payroll practices, as well as state and local gov-

ernmental laws which preclude the payment of

wages for hours not worked (except by earned

leave).

On November 19, 1985, the DOL published

in the Federal Register (50 Fed.Reg. 47696) an

advance notice of proposed rulemaking request-

ing the views of the public on any changes they

felt were necessary in 29 C.F.R. part 541. The

comment period ended on March 22, 1986. How-

ever, the department expects to publish a notice

of proposed rulemaking concerning part 541

during 1987. Interested parties will have an

opportunity to offer comments on the subject

matter of that regulation at that time.

In light of the separate rulemaking process

with respect to part 541, it would not be appro-

priate for the department to address this issue in

developing the final rule for part 553.

Thus, in finalizing rules pertaining to state and local

governments, DOL was put on notice of objections to the

salary basis test. However, it deferred action to the pend-

ing consideration of amendments to 29 C.F.R. §541. Inex-

cusably, DOL has not reconsidered 29 C.F.R. §541 and

contrary to its express indication, did not publish a notice

of proposed rulemaking concerning section 541 during

1987, or any time since. Thus, the department has never

acted formally to permit consideration of alternatives to

the salary basis test for state and local governments.

By denying public jurisdictions an opportunity to

comment on regulations which affect them, DOL has

effectively circumvented the notice and comment provi-

sions of 5 U.S.C. §553. Thus, a fundamental safeguard of

the federal rulemaking system has been denied.

C. THE DEPARTMENT OF LABOR’S NON-

ENFORCEMENT POLICY.

To compound the problem, DOL issued an unnum-

bered letter ruling on January 9, 1987, stating in effect

that while the department was considering revisions to

the provision of 29 C.F.R. §541, including the salary test,

“a non-enforcement policy is being adopted with regard

to the salary basis of payment for otherwise exempt

public employees.” The letter ruling went on to say that

the non-enforcement policy would be followed only

where the public employer could show that provisions

contained in the applicable state law in effect prior to

April 15, 1986, prohibited payments to an employee for

absences of less than one day for personal reasons or

because of illness or accident which are not covered by

available paid leave. The letter ruling made it clear that

“this non-enforcement policy is not intended to affect any

employee’s rights under section 16(b) of FLSA.”

The DOL obviously recognizes the inappropriateness

of the salary basis test when applied to state and local

government employees. However, while DOL will not

itself prosecute and will not act to change the test,

enforcement is, nevertheless, left to private citizens who

frequently seek liquidated damages in excess of those

sought by the department itself in areas where it chooses

to litigate. The oppressive paradox to government is that

when private enforcement occurs, it is more expensive to

the governmental employer even though DOL’s own pol-

icy has suggested that application of the salary test to the

public sector is not appropriate.

It is, therefore, apparent that the political process (the

approved avenue of recourse discussed in Garcia for

ensuring that laws and regulations implementing such

laws do not unduly burden the states) has utterly failed

to function responsibly. It is time to revisit the serious

issues raised in Garcia in light of the fact the regulatory

process operates slowly and imperfectly while public

jurisdictions are exposed to enormous liability and forced

to focus their limited energies and economic resources on

compliance pending political resolution.

Ill. APPLICATION OF THE FLSA TO ESSENTIAL

PUBLIC SERVICES NOT IN COMPETITION

WITH THE PUBLIC SECTOR SUCH AS FIRE-

FIGHTING UNDULY INTERFERES WITH THE

STATE’S SOVEREIGN FUNCTIONS

The State of California believes, for its part, that the

proper balance of state versus federal power was carried

out under the rationale set forth in National League of

Cities v. Usery, 426 U.S. 833 (1976) and its companion case,

State of California v. Brennan, (October Term, 1974, Case

74-879), in which the Court found the FLSA to be inappli-

cable to state and local government employees as the

amendments to the FLSA displaced the freedom of states

to structure integral operations in areas of traditional

governmental functions including firefighting.

The doctrine of federalism embodied in the Tenth

Amendment to the United States Constitution is one

intended to assure that local concerns will be adminis-

tered, superintended, and regulated by the states as those

are the governmental affairs with which the people are

“more familiar and minutely conversant.” (The Federal-

ist, No. 46, p. 316.) As the dissent noted in Garcia, it is

precisely in the true areas of traditional governmental

functions that the paramount interest of state and local

accountability is disserved by ‘<ceral intervention under

the guise of the Commerce Clause (Garcia v. SAMTA, 469

U.S. at 572 (POWELL, J., dissenting)).

Certainly, no areas of local concern can be better

articulated than functions not carried out at all in the

private sector, such as the local firefighting efforts at

issue in Abshire, and state firefighting and drug enforce-

ment functions at issue in California’s current FLSA liti-

gation described above.’ An impact of the magnitude of

1 Similarly, in the case of Bratt, et al. v. County of Los

Angeles, 912 F.2d 1066 (1990), the Ninth Circuit, finding itself

compelled to act under the Garcia rationale, decided that pro-

bation and child protection activities at the county level were

(Continued on following page)

10

the FLSA’s provisions, especially when states such as

California are in an era of financial crisis for the foresee-

able future, does much to undermine the quality and

contained cost of such vital services. In this manner, the

FLSA’s effect is too significant an infringement on gov-

ernmental aspects of state sovereignty to survive consti-

tutional muster under a Tenth Amendment analysis.

There simply are no demonstrably greater federal inter-

ests at stake here which would legitimately override state

and local governments’ rights to see to their own most

efficacious providing of services.

sa.

vv

(Continued from previous page)

subject to the provisions of the FLSA. These services are like-

wise unique to being carried out by governmental entities. Los

Angeles County has filed a petition for writ of certiorari with

your Court. The State of California believes that the writ

should also be granted for the reasons set forth therein.

11

CONCLUSION

The State of California respectfully prays that a Writ

of Certiorari be granted. The literal application of 29

C.F.R. §541.118(a) to County of Kern and by extension the

State of California is both economically devastating and

wrong.

*Counsel of Record

Respectfully submitted,

Counsel of Record

for Amicus Curiae

M. Jerrrey Fine”

Deputy Chief Counsel

CuristorpHerR W. WADDELL

Chief Counsel

EDMUND K. BreHL

TAMARA J. PIERSON

Department of Personnel

Administration

1515 “S” Street

North Building

Suite 400

Sacramento, CA 95814-7243

Telephone: (916) 324-0512

AMICUS CURIAE

BRIEF

TO THE (NITED STATES COURT OF APPEALS

POR THE NINTH CIRCUIT

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TABLE OF CONTENTS

TABLE, OF AUTHORITIES .ceiccccccocccocscsosssssecscssscsssososososenees

INTERESTS OF AMICI CURIAE IN SUPPORT OF THE

PETITION FOR CERTIORARI —

REASONS FOR GRANTING THE PETITION ......

il

GARCIA SHOULD BE OVERRULED BECAUSE IT

UNCONSTITUTIONALLY VITIATES TENTH

AMENDMENT IMMUNITY AND MAKES THE

NONJUDICIAL BRANCHES OF THE FEDERAL

GOVERNMENT THE FINAL ARBITERS OF

INTERGOVERENMENTAL IMMUNITY DISPUTES

GARCIA SHOULD BE OVERRULED BECAUSE

IMPOSITION OF THE FLSA MINIMUM WAGE

AND OVERTIME REQUIREMENTS HAVE IN

FACT UNCONSTITUTIONALLY DIMINISHED

THE SOVEREIGN RIGHTS OF STATE, COUNTY

AND LOCAL GOVERNMENTS

CONCLUSION

:

1}

TABLE OF AUTHORITIES

Cases Page

Abood v. Detroit Bd. of Education, 431 U.S. 209 (1977) ....------0-» 6

EEOC v. Boeing Co., 843 F.2d 1213 (9th Cir.), cert. denied,

488 US. BBD (19BB) ....00-ccccecceccncecencesscsssscscssvscsscsrsscsvsossssoosnsscssoes 5

EEOC v. Wyoming, 460 U.S. 226 (1983) .....0.c.ccccenceerennenennnnnnnns 4,6

FERC v. Mississippi, 456 US. 742 (1982) ....2..-.cccccvenenervenonnennenes 6

Fry v. United States, 421 U.S. 542 (1975) ....2..-ccccncnnenerornereenenenens 4

Garcia v. San Antonio Metropolitan Tran: st Authority,

4BD U.S. GBB (1GBBD nncccccocacececcccecsccsccccsccececsscsccncccscsonooneceees passim

Hodel v. Virginia Surface Mining & Recl. Assn., 452 US.

BBE CAGBAD ccccccccccccccccccsscccssccccccsssesnsssssssesssssssssesstseseseeseseeeeeseesCCeeeee 4

Lane County v. Oregon, 74 Wall. 71 (1868) .....0-.-..0---0-eeverveenernnene 4

Marbury v. Madison, 1 Cranch 137 (1803) ........0.0-0---vernenerernenens 5

Marchetti v. U.S., 390 US. 39 (1968) ..2.-.ccccnccceneneronsnennnnnnnenennnnanen 5

National League of Cities v. Usery, 426 US. 833 (1976)... passim

South Carolina v. Baker, 485 US. S05 (1988) -.....--------e-veevee 4,5

State Bd. of Insurance v. Todd Shipyard Corp., 370 US.

GBB CRB BID ccccccccccessccecensssstsssensssncsenssmnanmnsetanssscsnassnsttessiaitescaseseeenet 5

Transportation Union v. Long Island R. Co., 455 US.

TD GI cccccsccseresscstsinssssscininnsatatmsesssitiammnsininianicimvaninnemmescannneses 4

Younger v. Harris, 401 US. 37 (1971) necccccccnennennonenenennenennnnanens 4

Statutes

29 USC. § 201 of 00g. (19BD) occnccccnccccneenrncenecernesscernensrnensnsensnvensnees @

CRG, Comat. Mamata, & ccccncassnscsnsssenscscsssssecessntsssstanepecnsenssscss passim

Page

Miscellaneous

L. Tribe American Constitutional Law 302 (1978)...................... 6

International City Management Assn., The Municipal

Yearbook 1988 139 (1988)..0.0..0.0ccccsssssoceeeeeersesseseseeseeseeeeecc....., 7

No. 90-839

In The

Supreme Court of the United States

October Term, 1990

COUNTY OF KERN,

Petitioner,

vs.

DAN ABSHIRE, DENNIS CARROLL,

LARRY FRANK, BILL RICKMAN, TOM BLACKMON,

RICHARD PELLERIN, BILLIE McKENZIE, BOB

TEMPLE, BARRY SCHULTZ, JIM CHAPMAN,

BOB TURNER, and STEVE McLEMORE,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF OF NATIONAL PUBLIC EMPLOYER

LABOR RELATIONS ASSOCIATION,

AND 13 OF ITS STATE AFFILIATES

AS AMICI CURIAE IN SUPPORT OF

THE PETITION FOR CERTIORARI

INTERESTS OF AMICI CURIAE IN SUPPORT OF

THE PETITION FOR CERTIORARI

The Amici hereinafter described file this Brief because of

their ongoing concern with one of the issues presented herein:

2

Whether Garcia v. San Antonio Metropolitan Transit Authority,

469 U.S. 528 (1985) should be overruled.!

Garcia eliminated the Tenth Amendment immunity of state,

county and local governments (hereinafter the “‘States’’),

previously outlined in National League of Cities v. Usery, 426

U.S. 833 (1976), from overreaching federal legislation enacted

under the Commerce Power. In the process, it authorized for the

first time full-scale application of the minimum wage and

overtime requirements of the federal Fair Labor Standards Act,

as Amended, 29 U.S.C. § 201 et seq. (1989) (“FLSA”) to the States.

Amici are all organizations whose members are responsible for

developing and implementing employment and labor relations

policies, including those pertaining to FLSA requirements, in

public jurisdictions at all levels of state, county and local

government nationwide. Since Garcia, Amici and their respective

member jurisdictions have experienced severe erosion of their

sovereign right to structure employer-employee relationships, to

determine what government services are to be provided to their

citizens, and to determine how those services are to be provided.

The National Public Employer Labor Relations Association

(NPELRA) is a national organization composed of more than

2,400 members who are predominantly full-time city, county, and

state government professionals charged with the responsibility

for implementing employment and labor relations policies

affecting over four million public employees. NPELRA members

reside in all 50 states and are employed by jurisdictions with

as few as 25 employees and as many as 200,000-plus employees.

These include New York City, the City of Chicago and the State

of California.

! The Amici generally support the position of Petitioner County of Kern

3

(

The 13 state affiliates of NPELRA? are separately incorpo-

rated organizations whose members are also NPELRA members

or are eligible for NPELRA membership. The state affiliates’

members likewise are management and labor relations profes-

sionals at all levels of state, county, and local government.

Whereas the focus of NPELRA is national in scope, the focus

of the state affiliates is on issues germane to their respective

jurisdictions as well as on national issues.

Written consent of all parties to the filing of this Brief has

been obtained, and said consents are on file with the Clerk of

this Court. Pursuant to Rule 29 of the Rules of this Court, Amici

note further that 28 U.S.C § 2403(a) may be applicable.

REASONS FOR GRANTING THE PETITION

I GARCIA SHOULD BE OVERRULED

BECAUSE IT UNCONSTITUTIONALLY

VITIATES TENTH AMENDMENT IMMUNITY

AND MAKES THE NON-JUDICIAL

BRANCHES OF THE FEDERAL GOVERN-

MENT THE FINAL ARBITERS OF INTERGO-

VERNMENTAL IMMUNITY DISPUTES

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

this Court held that the FLSA could not constitutionally be

applied to the States pursuant to the federal government’s

Commerce Power, because to do so would “directly displace the

States’ freedom to structure integral operations in areas of

traditional governmental functions,” in violation of the Tenth

Amendment. Id. at 852. Consistent with a long line of prior and

2 California Public Employer Labor Relations Association,

Connecticut Public Employer Labor Relations Association,

Florida Public Employer Labor Relations Association,

Illinois Public Employer Labor Relations Association, fowa

Public Employer Labor Relations Association, Minnesota

Public Employer Labor Relations Association, Missouri

Public Employer Labor Relations Association, New York State

Public Em er Labor Relations Association, —

Employer Relations Association,

Employer Labor Relations Association, Rocky eal Public

Employer Labor Relations Association, Washington Council of

Public Personnel Administrators and Wisconsin Public

Employer Labor Relations Association.

4

subsequent decisions,? the Court recognized that the States as

States occupy a unique status in the constitutional scheme and

are not necessarily subject to federal regulation in the same way

that private entities are. More specificallly, “there are attributes

of sovereignty attaching to every state government which may

not be impaired by Congress, not because Congress may lack-

an affirmative grant of legislative authority to reach the matter,

but because the Constitution prohibits it from exercising the

authority in that manner.” National League of Cities, 426 US.

at 845. In cases of alleged conflict between federal regulation

pursuant to the Commerce Power and state autonomy, the Court

performed a balancing analysis to determine whether state or

federal interests would prevail. Jd. at 856 (Blackmun, J.,

concurring). See also EEOC v. Wyoming, 460 U.S. 226, 239 (1983);

Hodel, 452 U.S. at 287-288.

In Garcia v. San Antonio Metropolitan Transit Authority,

469 U.S. 528 (1985), this Court overruled National League of Cities,

id. at 557, m a way which all but eliminates considerations of

state sovereignty in determining the constitutionality of federal

enactments regulating state and local government activities.

Under Garcia, the only Tenth Amendment limits on Congress’

authority to regulate state activities are structural or procedural,

not substantive. Id. at 554. See also South Carolina v. Baker,

- 485 U.S. 505, 512 (1988). In other words, “. . . States must find

their protection from congressional regulation through the

3 See, e.g. Trans tion Union v. Long Island R. Co., 455 US. 678,

684 (1982) and "Hode ‘odel v. Virginia Surface Mining & Recl. Assn., 452

U.S. 264, 288 (1981) (key inquiry is “whether the States’ compliance

with the federal law would directly impair their ability to structure

integral operations in areas of traditional governmental functions”), Fry

v. United States, 421 U.S. 542, 547, n.7 (1975) (Tenth Amendment

“expressly declares the constitutional policy that Congress may not

exercise power in a fashion that impairs the States’ integrity or their

ability to function effectively in a federal system”); Younger v. Harris,

401 U.S. 37, 4445 (1971) (federalism means a system in which national

government exercises power in ways that “will not unduly interfere

with the legitimate activities of the states”), Lane County v. Oregon,

74 Wail. 71, 76 (1868) (“{IJm many articles of the Constitution the

necessary existence of the States, and, within their proper es, the

independent authority of the States, is distinctl . See also

Garcia v. San Antonio Metropolitan Transit hatha, 469 US. 528,

588 (1985) (“As far as the Constitution is concerned, a@ State should

not be equated with any private litigant.”) (O’Connor, J. dissenting).

5

national political process, not through judicially defined spheres

of unregulable state activity.” South Carolina v. Baker, id., citing

Garcia, 469 U.S. at 537-554.

Not only is this a hollow protection in its own right, but

the Court has virtually abdicated its role as the final arbiter

of constitutional questions concerning the rights of state

governmeits in our federal system. The Court made clear in Baker

that neither Garcia nor the Tenth Amendment authorizes courts

to “second-guess” the substantive basis for federal legislation.

In order to establish a Tenth Amendment violation under Garcia,

therefore, a State would have to show that the national political

process operated in a “defective manner,” i.e., that the State was

“deprived of . . . [a] right to participate in the national political

process or that it was singled out in a way that left it politically

isolated and powerless.” Id. at 513. In short, as long as the State

sends legislators to Congress, and the federal enactment in

question has general application to the States, it is not subject

to constitutional scrutiny by the Court.

This Garcia test leaves virtually no role for the Court, much

less one to consider state autonomy in reviewing the federal

government’s exercise of its enumerated powers. Id. at 533-34

(O’Connor, J., dissenting); Garcia, 469 U.S. at 567 and n.12

(Powell, J., dissenting) and 469 U.S. at 588 (O'Connor, J.,

dissenting). But since the States’ role in ow federal syetem is

itself a constitutional question, the Court cannot constitutionally

delegate either to Congress or to the Executive the role of policing

the constitutionality of their own enactments. Marchetti v. U.S.,

390 U.S. 39, 58 (1968); State Bd. of Insurance v. Todd Shipyard

Corp., 370 U.S. 451, 456-57 (1962). See also EEOC v. Boeing Co.,

843 F.2d 1213, 1217 (9th Cir), cert. denied, 488 U.S. 889 (1988).

That role is itself reserved by the Constitution to the federal courts.

Marbury v. Madison, 1 Cranch 137, 177 (1803).

The Court's retreat in Garcia from its mandated judicial role

is reason enough to reconsider and overrule Garcia. A return

to the National League of Cities doctrine — in which the court

must play a role in striking the proper balance between state

6

sovereignty and federal power — is in order. The Court should

grant the writ of certiorari herein to permit reconsideration of

Garcia at the earliest possible date.

Il. GARCIA SHOULD BE OVERRULED

BECAUSE IMPOSITION OF THE FLSA MIN-

IMUM WAGE AND OVERTIME REQUIRE-

MENTS HAVE IN FACT UNCONSTITUTION-

ALLY DIMINISHED THE SOVEREIGN

RIGHTS OF STATE, COUNTY AND LOCAL

GOVERNMENTS

Even Garcia acknowledges that the States must retain some

measure of sovereign authority under our federal system. Garcia,

469 U.S. at 549. State sovereignty is self-governance, i.e., “having

the power to make decisions and to set policy.” FERC uv.

Mississippi, 456 U.S. 742, 761 (1982). At least until Garcia, it

was acknowledged that employment decisions, including those

pertaining to compensation and hours of work for government

employees, were the very types of decisions that epitomized the

exercise of state autonomy. EEOC v. Wyoming, 460 U.S. 226,

238, n.11 (1983); National League of Cities, 426 U.S. at 845 (1976).

See also Abood v. Detroit Bd. of Education, 431 U.S. 209, 228

(1977) (decisions of public employers are necessarily political

decisions).

In National League of Cities, Justice Rehnquist predicted

that imposition of FLSA requirements on the States would

severely diminish the sovereign rights of state, county and

municipal governments, by forcing a “relinquishment of impor-

tant governmental activities,” displacing state policies regarding

how to structure delivery of required government services, and

penalizing states “for choosing to hire governmental employees

on terms different from those which Congress has sought to

impose.” 426 U.S. at 847, 849. In the wake of Garcia, the predicted

erosion of state sovereignty has been dramatic, a testament to

the “tyranny of small decisions” that with time can obliterate

substantial rights. See L. Tribe, American Constitutional Law

302 (1978); FERC v. Mississippi, 456 U.S. 742, 774-75 (Powell,

J., concurring in part and dissenting in part).

7

Since the late 1980's (i.e., since Garcia), the States have been

under ever-increasing pressure to deliver more services, more

efficiently, with fewer revenue dollars, and without raising taxes.

Reports are legion of the decaying infrastructures of our major

cites and counties. State, county and municipal governments are

under constant pressure to keep up with technological advances

in the delivery of public health care services, police and fire

protection services, and sanitation services. They are under

constant pressure to at least maintain, if not improve, existing

service levels in all service areas. They are under constant

pressure to expand welfare services to cope with old and new

social ills, e.g., the reported increases of homeless persons all

over the country.

In this same period of the late 1980’s and early 1990’s, federal

subsidies to the states and their political subdivisions have been

on a steady decline. One tax accountability referendum after

another has appeared on the ballot in state and local elections.

Politcial pressures have increased to hold the line on taxes at

all levels of government. This has placed additional financial

pressures on state and municipal entities in view of their declining

federal revenues.

The superimposition of FLSA minimum wage and overtime

requirements has severely restricted the options available to state

governments and their political subdivisions to set policy,

particularly against the foregoing background. In short, com-

pliance with the FLSA has severeiy diminished their discretion

to select, structure and prioritize delivery of government services.

On the effective date of the FLSA requirements in April, 1986,

the majority of state, county, and municipal governments around

the country were automatically faced with significant cost

increases simply to deliver the same level of services they had

been providing prior to that date. One reason is that many

goverment departments, fire departments in particular, employed

shift schedules which exceeded the FLSA’s statutory maximum

for hours that could be worked without incurring time and one-

half overtime pay obligations. International City Management

Assn., The Municipal Yearbook 1988 139 (1988).

8

The city of Phoenix, Arizona‘ reports, for example, that FLSA

overtime requirements resulting from its 56-hour weekly work

schedule accounted for more than $1M per annum in increased

wage costs in the Fire Department alone. The City of Yonkers,

New York5 similarly reports that it has incurred additional costs

of $.5M per annum in statutorily required overtime payments

in its Police Department. Fullerton, California,® with a population

of approximately 112,000, reports that the FLSA resulted in

immediate payroll cost increases of up to $200,000 per annum

in its 85-person Fire Department. This was approximately 4.5%

of its total payroll cost in the Department. And the three hospitals

run by the State University of New York’ report that collectively

they incurred $405,000 in “new” overtime costs per annum directly

as a result of the FLSA.

FLSA requirements have been directly responsible for

additional types of cost increases. The instant case is a prime

example. If the lower court’s reading of the FLSA’s “salary basis”

test is permitted to stand, highly-paid supervisors in the County

of Kern fire service will now be subject to FLSA overtime

requirements, at 2 cost to the County of several hundred thousand

dollars per annum.

Amici’s members repeatedly cite other examples. Under the

FLSA, various common functions that were either previously

uncompensated or compensated through use of compensatory

time, now must be counted, and therefore compensated, as “hours

worked”’ within the meaning of the FLSA. Prior to 1986,

employees called out on emergencies usually were compensated

from the time they reached their work site and commenced work;

under the FLSA, these employees must be compensated starting

4 The City of Phoenix as a member of Amicus Rocky Mountain Public

Employer Labor Relations Association.

5 The City of Yonkers is a member of Amicus New York State Public

Employer Labor Relations Association.

6 Fullerton, California is a member of Amicus California Public

Employer Labor Relations Association.

7 One such hospital, the Health Science Center at Syracuse, New York

is a member of Amicus New York State Public Employer Labor Relations

Association.

eae |

9

from when they leave home. Those hours, in turn, count toward

reaching the weekly maximum after which time and one-half

premiums must be paid. In Phoenix, this change alone has

increased payroll costs by an additional $60,000 per annum.

Police canine units perform myriad functions in fighting

drug-related crimes, in kidnapping cases, and in locating all types

of criminal suspects. Police officers in canine units traditionally

have cared for their dogs at home to facilitate bonding between

dog and handler. Under the FLSA, time spent caring for such

dogs at home is in many cases compensable “hours worked.”

Again, these additional hours worked are not only direct costs,

but further increase overtime costs by increasing the speed with

which employees surpass the “overtime threshold.” The City of

Newburgh, New York® reports that the FLSA-induced overtime

costs attributable to its canine police unit are forcing a deter-

mination whether to continue the unit at all. Other New York

municipalities are considering the same choice.

FLSA requirements have also resulted in substantial

ancillary costs. The FLSA requires that premium payments, e.g.,

hourly bonuses paid for working undesirable shifts, be counted

in computing the rate at which time and one-half overtime

payments must be paid. These calculations represent a change

from prior practice in many jurisdictions, which often compen-

sated overtime at straight time and/or at the base rate. This

change has cost Phoenix, Arizona an additional $450,000 per

annum above the costs previously described, directly as a result

of FLSA application to the States. Fullerton, California has

incurred up to an additional $10,000 per annum simply to comply

with FLSA record-keeping and payroll processing requirements

in its 85-person Fire Department. The City of Phoenix expends

up to $150,000 per annum for this purpose.

These very substantial additional costs, directly attributable

to FLSA requirements, are restrictive of state sovereignty in their

own right. Money required by federal law to be spent to comply

with federal minimum wage and overtime requirements cannot

be spent to repair roads or open a shelter for homeless families.

8 Newburgh, New York is a member of Amicus New York State Public

Employer Labor Relations Association.

10

It cannot be spent to hire more police officers or to buy new

equipment for a public hospital. And it cannot be used to initiate

an on-the-job training program for inner-city teenagers at training

wages below the statutory minimum. In order to provide those

services and comply with FLSA requirements, the government

entity either must reduce, eliminate, or restructure other services,

or raise additional revenues.

The FLSA’s substantive requirements further limit the

discretion of state, county and local officials to structure service

delivery as their citizens may desire. For example, during winter

months municipalities and county governments will have truck

drivers on standby to be called out to operate extra snowplows,

if needed because of weather conditions. Under the FLSA, the

period such drivers are on standby often must be compensated

as “time worked,” even though such drivers may be sitting at

home watching television with their families. The costs of this

federally-imposed standby rule may require the municipality to

reduce or eliminate standby drivers altogether, to change crew

sizes, or to manipulate shift scheduling. These decisions, in turn,

can affect the amount of available service, and the speed with

which it is delivered. For example, if a municipality must

eliminate standby time for expense reasons, response time in

snow emergencies may diminish.

Undoubtedly, even without FLSA requirements, state and

local governments would continue to have difficult choices to

make concerning employee compensation, manning, scheduling

and hours of work. But those choices would be their own, based

on political decisions controlled by their own constitutencies, not

by Congress and not by federal regulators. At least until Garcia,

those types of decisions were the very essence of recognized state

sovereignty, protected by the Constitution. As Justice Rehnquist

predicted, imposition of FLSA requirements on the States has

forced them to abandon services, has forced them to change

service delivery methods, and has penalized them for policy

choices different from the federal government’s. This represents

a substantial and indentifiable diminution in their ability to

govern their own affairs. The States’ constitutional autonomy

now can only be restored with the reversal of Garcia.

11

CONCLUSION

The Petition for Writ of Certiorari should be granted to

reconsider and overrule Garcia.

Respectfully submitted,

R. THEODORE CLARK, JR*

JAMES BAIRD

JILL A. GOLDY

SEYFARTH, SHAW, FAIRWEATHER

& GERALDSON

Suite 4200

55 East Monroe Street

Chicago, Illinois 60603

(312) 346-8000

Attorneys for Amici CURIAE

NATIONAL PuBLic EMPLOYER LABOR

RELATIONS ASSOCIATION, ET AL.

*Counsel of Record