Source: http://www2.bloomberglaw.com/public/desktop/document/Auer_v_Robbins_519_US_452_117_S_Ct_905_137_L_Ed_2d_79_1997_Court_
Timestamp: 2013-05-19 11:17:33
Document Index: 59601248

Matched Legal Cases: ['§ 213', '§ 541', '§ 541', '§ 213', '§ 541', '§ 213', '§ 541', '§ 541', '§ 203', '§ 6', '§ 553', '§ 541']

Auer v. Robbins, 519 U.S. 452, 117 S. Ct. 905, 137 L. Ed. 2d 79, 3 WH Cases2d 1249 (1997), Court Opinion
Auer v. Robbins, 519 U.S. 452, 117 S. Ct. 905, 137 L. Ed. 2d 79, 3 WH Cases2d 1249 (1997)
Decided February 19, 1997[***85] [**907] Hide Headnotes
FAIR LABOR STANDARDS ACT [1] Jurisdiction of court -- Action against city police commissioners -- 11th Amendment ►104.21 ►122.01 ►510.12 [Show Topic Path]
Federal district court has jurisdiction over city police officers’ FLSA action against city board of police commissioners, since board does not share state's 11th Amendment immunity. Although governor appoints four of board's five members, city is responsible for board's financial liabilities, and board is not subject to state's direction or control in any other respect. [2] Salary basis test -- ‘No disciplinary deductions’ element -- Public sector employees ►113.0321 ►122.0501 [Show Topic Path]
“No disciplinary deductions“ element of Department of Labor's salary basis test is valid as applied to public sector employees, despite contention that such application reflects unreasonable interpretation of white-collar exemption in that ability to adjust public employees’ pay as means of enforcing compliance with work rules is necessary component of effective government; labor secretary's view that public employers are not so differently situated from private sector employers with regard to disciplining their employees as to require wholesale revision of test is not unreasonable. [3] Salary basis test -- ‘No disciplinary deductions’ element -- Law enforcement personnel ►113.0321 ►122.0501 [Show Topic Path]
“No disciplinary deductions“ element of Department of Labor's salary basis test is valid as applied to law enforcement personnel, despite contention that ability to use full range of disciplinary tools against even relatively senior law enforcement personnel is essential to maintaining control and discipline in “quasi military“ organizations in which human lives are on the line, where it is far from clear that only pay deduction, and not some other form of discipline, will have necessary effect. [4] Salary basis test -- ‘No disciplinary deductions’ element ►113.0321 ►122.0501 ►142.07 [Show Topic Path]
Argument that labor secretary acted arbitrarily and capriciously in failing to revisit “no disciplinary deductions“ element of salary basis test after FLSA became applicable to state and local government employees cannot be raised for first time in lawsuit challenging application of test to public sector, but must be set forth in petition to Department of Labor for rulemaking, denial of which must be justified by statement of reasons, and can then be appealed to courts. Court lacks basis to set aside agency's action prior to any application for relief addressed to agency itself. [5] Salary basis test -- ‘Subject to’ deductions ►113.0321 ►142.07 [Show Topic Path]
Secretary of labor reasonably interprets salary basis test to deny exempt status when employees are covered by policy that permits disciplinary or other deductions in pay “as a practical matter,“ with standard being met if there is either actual practice of making such deductions or employment policy that creates “significant likelihood“ of such deductions; such approach requires clear and particularized policy that effectively communicates that deductions will be made in specified circumstances and avoids imposition of massive and unanticipated overtime liability in situations in which vague or broadly worded policy is nominally applicable to whole range of personnel but is not “significantly likely“ to be invoked against salaried employees. [6] Salary basis test -- ‘Subject to’ deductions ►113.0321 ►122.01 [Show Topic Path]
Police manual that lists 58 possible rule violations and specifies range of penalties, some of which involve disciplinary pay deductions, is not enough to render police officers’ pay “subject to“ deduction within meaning of Department of Labor's salary basis test, where manual does not effectively communicate that pay deductions are anticipated form of punishment for employees in officers’ category. [7] Salary basis test -- ‘Subject to’ deductions -- Secretary of labor's interpretation ►113.0321 ►142.07 ►510.03 [Show Topic Path]
Fact that secretary of labor's interpretation of salary basis test so as to deny exempt status when employees are covered by policy that permits disciplinary or other deductions in pay “as a practical matter“ comes in form of legal brief does not make it unworthy of deference, where there is no reason to suspect that interpretation does not reflect agency's fair and considered judgment on matter, and rule requiring that FLSA exemptions be narrowly construed against employers governs judicial interpretation of statutes and regulations, and is not limitation on secretary's power to resolve ambiguities in his own regulations. [8] Salary basis test -- Window of correction ►113.0321 ►142.07 [Show Topic Path]
Under regulations promulgated by the Secretary, one requirement for exempt status under § 213(a)(1) is that the employee earn a specified minimum amount on a "salary basis." 29 CFR §§ 541.1(f), 541.2(e), 541.3(e) (1996). According to the regulations, "[a]n employee will be considered to be paid 'on a salary basis' . . . if under his employment agreement he regularly receives each pay period on a weekly, or less frequent basis, a predetermined 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 [***87] performed." § 541.118(a). Petitioners contended that the salary-basis test was not met in their case because, under the terms of the St. Louis Metropolitan Police Department Manual, their compensation could be reduced for a variety of disciplinary infractions related to the "quality or quantity" of work performed. Petitioners also claimed that they did not meet the other requirement for exempt status under § 213(a)(1): that their duties be of an executive, administrative, or professional nature. See §§ 541.1(a)-(e), 541.2(a)-(d), 541.3(a)-(d).
[1] The FLSA grants the Secretary broad authority to "defin[e] and delimi[t]" the scope of the exemption for executive, administrative, and professional employees. § 213(a)(1). Under the Secretary's chosen approach, exempt status requires that the employee be paid on a salary basis, which in turn requires that his compensation not be subject to reduction because of variations in the "quality or quantity of the work performed," 29 CFR § 541.118(a) (1996). Because the regulation goes on to carve out an exception from this rule for "[p]enalties imposed . . . for infractions of safety rules of major significance," § 541.118(a)(5), it is clear that the rule embraces reductions in pay for disciplinary violations. The Secretary is of the view that employees whose pay is adjusted for disciplinary reasons do not deserve exempt status because as a general matter true "executive, administrative, or professional" employees are not "disciplined" by piecemeal deductions from their pay, but are terminated, demoted, or given restricted assignments.[*457] A
The FLSA did not apply to state and local employees when the salary-basis test was adopted in 1940. See 29 U. S. C. § 203(d) (1940 ed.); 5 Fed. Reg. 4077 (1940) (salary-basis test). In 1974 Congress extended FLSA coverage to virtually all public-sector employees, Pub. L. 93-259, § 6, 88 Stat. 58-62, and in 1985 we held that this exercise of power was consistent with the Tenth Amendment, Garcia v. San Antonio Metropolitan Transit Authority, 469 U. S. 528 (1985) (overruling National League of Cities v. Usery, 426 U. S. 833 (1976)). The salary-basis test has existed largely in its present form since 1954, see 19 Fed. Reg. 4405 (1954), and is [***88] expressly applicable to public-sector employees, see 29 CFR §§ 553.2(b), 553.32(c) (1996).
[*461] [2] [5] The Secretary of Labor, in an amicus brief filed at the request of the Court, interprets the salary-basis test to deny exempt status when employees are covered by a policy that permits disciplinary or other deductions in pay "as a practical matter." [3] That standard is met, the Secretary says, if there is either an actual practice of making such deductions or an employment policy that creates a "significant likelihood" of such deductions. [4] The Secretary's approach rejects a wooden requirement of actual deductions, but in their absence it requires a clear and particularized policy--one which "effectively communicates" that deductions will be made in specified circumstances. This avoids the imposition of massive and unanticipated overtime liability (including the possibility of substantial liquidated damages, see, e. g., Kinney v. District of Columbia, supra, at 12) in situations in which a vague or broadly worded policy is nominally applicable to a whole range of personnel but is not "significantly likely" to be invoked against salaried employees.
[5] [6] Because the salary-basis test is a creature of the Secretary's own regulations, his interpretation of it is, under our jurisprudence, controlling unless "'plainly erroneous or inconsistent with the regulation.'" Robertson v. Methow Valley Citizens Council, 490 U. S. 332, 359 (1989) (quoting Bowles v. Seminole Rock & Sand Co., 325 U. S. 410, 414 (1945)). That deferential standard is easily met here. The critical phrase "subject to" comfortably bears the meaning the Secretary assigns. See American Heritage Dictionary 1788 (3d ed. 1992) (def. 2: defining "subject to" to mean "prone; disposed"; giving as an example "a child who is subject to colds"); Webster's New International Dictionary 2509 (2d ed. 1950) (def. 3: defining "subject to" to mean "[e]xposed; liable; prone; disposed"; giving as an example "a country subject to extreme heat").
[7] [7] Petitioners complain that the Secretary's interpretation comes to us in the form of a legal brief; but that does not, in the circumstances of this case, make it unworthy of deference. The Secretary's position is in no sense a "post hoc rationalizatio[n]" advanced by an agency seeking to defend past agency action against attack, Bowen v. Georgetown Univ. Hospital, 488 U. S. 204, 212 (1988). [8] There is simply no reason to suspect that the interpretation does not reflect the agency's fair and considered judgment on the matter in question. Petitioners also suggest that the Secretary's approach contravenes the rule that FLSA exemptions are to be "narrowly construed against . . . employers" and are to be withheld except as to persons "plainly and unmistakably within their terms and spirit." Arnold v. Ben Kanowsky, Inc., 361 U. S. 388, 392 (1960). But that is a rule governing [*463] judicial interpretation of statutes and regulations, not a limitation on the Secretary's power to resolve ambiguities in his own regulations. A rule requiring the Secretary to construe his own regulations narrowly would make little sense, since he is free to write the regulations as broadly as he wishes, subject only to the limits imposed by the statute.
Petitioners contend that the initial condition in the latter provision (which enables the employer to take corrective action) is not satisfied here because the deduction from Guzy's pay was not inadvertent. That it was not inadvertent is true enough, but the plain language of the regulation sets out "inadverten[ce]" and "made for reasons other than lack of work" as alternative grounds permitting corrective action. Petitioners also contend that the corrective provision is unavailable to respondents because Guzy has yet to be reimbursed for the residency-based deduction; in petitioners' [***92] view, reimbursement must be made immediately upon the discovery that an improper deduction was made. The language of the regulation, however, does not address the timing [*464] of reimbursement, and the Secretary's amicus brief informs us that he does not interpret it to require immediate payment. Respondents are entitled to preserve Guzy's exempt status by complying with the corrective provision in § 541.118(a)(6).
Table of CasesGarcia v. San Antonio Metropolitan Transit Authority, 469 U. S. 528 (1985)National League of Cities v. Usery, 426 U. S. 833 (1976)Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 842-843 (1984)Mueller v. Reich, 54 F. 3d 438, 442 (1995), cert. pending, No. 95-586Carpenter v. Denver, 82 F. 3d 353 (CA10 1996), cert. pending, No. 95-2088Bankston v. Illinois, 60 F. 3d 1249 (CA7 1995)Shockley v. Newport News, 997 F. 2d 18 (CA4 1993)Atlanta Professional Firefighters Union, Local 134 v. Atlanta, 920 F. 2d 800 (CA11 1991)McDonnell v. Omaha, 999 F. 2d 293, 296-297 (1993), cert. denied, 510 U. S. 1163 (1994)Yourman v. Dinkins, 84 F. 3d 655, 656 (CA2 1996), cert. pending, No. 96-152Kinney v. District of Columbia, 994 F. 2d 6, 10-11 (CADC 1993)Abshire v. County of Kern, 908 F. 2d 483, 486-488 (CA9 1990), cert. denied, 498 U. S. 1068 (1991)Michigan Assn. of Governmental Employees v. Michigan Dept. of Corrections, 992 F. 2d 82, 86 (CA6 1993)Robertson v. Methow Valley Citizens Council, 490 U. S. 332, 359 (1989)Bowles v. Seminole Rock & Sand Co., 325 U. S. 410, 414 (1945)Bowen v. Georgetown Univ. Hospital, 488 U. S. 204, 212 (1988)Arnold v. Ben Kanowsky, Inc., 361 U. S. 388, 392 (1960)Adickes v. S. H. Kress & Co., 398 U. S. 144, 147, n. 2 (1970)Hess v. Port Authority Trans-Hudson Corporation, 513 U. S. 30, 47-51 (1994)Lake Country Estates, Inc. v. Tahoe Regional Planning Agency, 440 U. S. 391, 401-402 (1979)