Court Opinion

ID: 8991738
Source: CourtListenerOpinion
Date Created: 2022-11-27 12:19:51.946988+00
Date Added: 2024-06-11T17:10:57.549186
License: Public Domain

LOKEN, Circuit Judge.
In this Fair Labor Standards Act (“FLSA”) case, defendant Region V Mental Retardation Services (“Region V”), a political subdivision of Nebraska, appeals from a judgment awarding over $300,000 in unpaid overtime compensation and attorneys fees to twenty present and former Life Skill Trainers (“LSTs”) employed at residential facilities for the mentally retarded in Fair-bury, Nebraska. Plaintiffs cross appeal from the district court’s refusal to award liquidated damages equal to the amount of the unpaid compensation. In rejecting Region Y’s defense that it relied in good faith upon written interpretations of the FLSA by the Wage and Hour Division of the U.S. Department of Labor (the “Department”), see 29 U.S.C. § 259, the district court applied a legal standard subsequently rejected by this court in Hultgren v. County of Lancaster, 913 F.2d 498 (8th Cir.1990). Accordingly, we reverse the judgment in favor of all plaintiffs except Gary Sexton.
Plaintiffs brought this action under the private remedies section of the FLSA, 29 U.S.C. § 216(b), alleging they were entitled to be compensated for all “sleep time” spent on the premises of Region V facilities *1326from April 15, 1986, when the FLSA became applicable to public agencies, see Pub.L. 99-150, 99 Stat. 787 (1985), until November 1989, when Region V adopted a new compensation schedule that eliminated this issue. The district court held that all disputed sleep time was compensable under the Department’s applicable regulations, an issue that, for the most part, we need not reach on appeal given our disposition of the § 259 defense.
The district court further rejected Region Y’s defense under § 259, concluding that the defense may not be based upon letter rulings issued by “lesser officials” of the Department. For the reasons explained below, we disagree and hold that, except as to Gary Sexton, the § 259 defense was proved. Finally, the district court held that plaintiffs were not entitled to liquidated damages because Region V had proved the good faith defense to such damages under 29 U.S.C. § 260. Our resolution of the § 259 issue makes it unnecessary to address separately the § 260 defense.
I.
During the relevant period, Region Y’s residential facilities each housed from two to four mentally retarded adults in private homes or apartments in the Fairbury community. One or two LSTs resided in each group home when the mentally retarded clients were present. LSTs instructed the clients in social skills necessary for independent living; they also prepared meals, administered medication, reported on each client’s needs and progress, and were generally responsible for the clients’ safety and well-being at the group home.
The plaintiff LSTs fell into three categories. Weekday LSTs worked at the group homes from Monday afternoon until Friday morning or, later in the damage period, early Friday afternoon. They left the premises only when the clients attended workshops elsewhere. Weekend LSTs were at the group homes with their clients continuously from Friday afternoon until Monday morning. Substitute LSTs replaced either weekday or weekend LSTs and worked the same schedule as the LSTs being replaced. Because of the intricacies of the FLSA sleep time issue, each category of plaintiffs was separately analyzed by the district court and by the parties on appeal.
Prior to 1985, Region V LSTs were paid on a salary basis. In February 1985, the Supreme Court held that the FLSA is generally applicable to state and local governmental units such as Region V. Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016. Following Garcia, Region V concluded that its LSTs must be converted to hourly employees subject to the minimum wage and maximum hour (overtime) requirements of the FLSA, 29 U.S.C. §§ 206, 207.
Accordingly, Region V administrators obtained wage and hour publications from the Department and received other interpretive materials from the National Association of Private Residential Resources (“NAPRR”), an association of agencies that provide community-based residential support services to some 40,000 mentally retarded and developmentally disabled persons.1 After reviewing these materials, Region V developed a compensation schedule for the LSTs and prepared a standard Employment Agreement adapted from a form of agreement obtained from NAPRR. Region V counsel approved this form of agreement, and in mid-1985 a copy of the agreement was presented to and signed by each Region V LST. In October 1988, responding to an Enforcement Policy issued by the Department, Region V prepared, with counsel’s approval, a revised Employment Agreement containing somewhat modified LST work schedules. The revised agreement was again presented to and signed by each LST. In this lawsuit, plaintiffs claim that Region V violated FLSA because the *1327work schedules in the Employment Agreements provided (with exceptions explained below) that LSTs must spend eight hours of uncompensated sleep time on the premises of the group home each night.
II.
The FLSA requires that covered employees be paid at least the prescribed minimum hourly wage and receive at least IV2 times their regular hourly wage for overtime hours. 29 U.S.C. §§ 206, 207. The amount of money an employee must be paid under FLSA cannot be determined without knowing the number of hours worked. In two of its early landmark FLSA decisions, the Supreme Court considered when an employer must compensate for sleep time and other on-premises waiting time that the employer would prefer to designate as “off duty.” In Armour & Co. v. Wantock, 323 U.S. 126, 65 S.Ct. 165, 89 L.Ed. 118 (1944), the Supreme Court held that on-premises “time spent in playing cards and other amusements, or in idleness” must be compensated because the employer’s fire guards had been hired “to do nothing but wait for something to happen,” 323 U.S. at 132, 133, 65 S.Ct. at 168. However, the district court’s decision to exclude the employees’ on-premises time “for sleep and for eating” from the FLSA computation was not at issue, 323 U.S. at 129, 65 S.Ct. at 166.
In Skidmore v. Swift & Co., 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944), decided the same day as Armour, sleep time was included in the waiting time at issue. In reversing a decision that no waiting time was compensable, the Supreme Court held that whether waiting time and sleep time must be compensated in a particular case is a question of fact which:
involves scrutiny and construction of the agreements between the particular parties, appraisal of their practical construction of the working agreement by conduct, consideration of the nature of the service, and its relation to the waiting time, and all of the surrounding circumstances .... The law does not impose an arrangement upon the parties. It imposes upon the courts the task of finding what the arrangement was.
323 U.S. at 137, 65 S.Ct. at 163. The Court noted that the Department had filed an amicus brief urging “the exclusion of sleeping and eating time ... and the inclusion of all other on-call time,” 323 U.S. at 139, 65 S.Ct. at 164. Without accepting or rejecting this conclusion, the Court stated, “We consider that the rulings, interpretations and opinions of the Administrator under this Act, while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.” 323 U.S. at 140, 65 S.Ct. at 164.
An employer charged with violating the minimum wage or maximum hour provisions of FLSA is given an affirmative defense in § 259, which provides that,
no employer shall be subject to any liability ... for ... failure ... to pay minimum wages or overtime compensation ... if he pleads and proves that the act or omission complained of was in good faith in conformity with and in reliance on any written administrative regulation, order, ruling, approval, or interpretation, of [the Department] ... or any administrative practice or enforcement policy....
Section 259 was enacted in 1947 in response to Congress’ perception that the FLSA “has been interpreted judicially in disregard of long-established customs, practices, and contracts between employers and employees, thereby creating wholly unexpected liabilities, immense in amount and retroactive in operation,” 29 U.S.C. § 251(a). Thus, the deference to employment agreements mandated by the Supreme Court in Skidmore is particularly appropriate in the context of the § 259 good faith defense.
In 1961, the Department issued an interpretive bulletin that is now Part 785 of the Wage and Hour Division Regulations, 29 C.F.R. Part 785, discussing what constitutes compensable work time for FLSA purposes. Several provisions deal with sleep time issues. 29 C.F.R. §§ 785.20-.23. *1328Beginning in 1980, in response to inquiries from trade associations such as NAPRR, the Department issued a series of letter rulings applying its regulations to the sleep time of “houseparents” at “community residences for the mentally retarded.” In January 1988, the Department suspended its numerous compliance investigations of group homes around the country2 to develop a consistent enforcement policy. On June 30, 1988, the Department promulgated an Enforcement Policy “refining and restating” the interpretations set forth in its earlier letter rulings. This Enforcement Policy expressly stated that the Department “will not initiate any new investigations of residential care facilities which involve only an assertion that improper sleep time deductions are being made by a group home employer until 90 days from the date of this enforcement policy statement.”
Under the FLSA, this moratorium on public enforcement did not preclude § 216(b) private actions such as this. However, it reflected the agency’s judgment that the difficult compliance questions facing this industry should be resolved by prospective enforcement. Therefore, the district court’s decision to award substantial retroactive overtime liability against this public agency defendant must be “justified by very good reasons,” Skidmore, 323 U.S. at 140, 65 S.Ct. at 164.
III.
In 1985, when Region V obtained interpretive materials from the NAPRR, developed the hours-worked schedules for LSTs and prepared the standard Employment Agreement signed by each LST, it relied upon three letter rulings issued by the Department that dealt with this industry. In rejecting the § 259 defense, the district court held that Region V was not entitled to rely upon these rulings because they were signed by a Deputy and an Assistant Administrator who were “lesser officials within the agency.” The district court then concluded that Region V had not acted “in good faith in conformity with” the regulations, based upon the court’s own interpretation of the regulations rather than the Department’s interpretation as reflected in the letter rulings.
This court’s subsequent decision in Hultgren held that the Deputy and Assistant Administrator’s letter rulings, including two of the same letters at issue here, “may properly be characterized as the position of the agency for purposes of section 259,” 913 F.2d at 507. Thus, the district court erred in limiting its § 259 inquiry to the regulations alone. We must consider whether Region V met the good faith reliance standards under § 259, taking into account both the Department’s regulations and the agency’s letter rulings. The good faith test under § 259 is an objective one. Hultgren, supra, 913 F.2d at 507. We conclude that Region V proved the § 259 defense with respect to each of the three categories of LSTs.
Weekday LSTs. These full-time employees remained at Region V premises from Monday afternoon until Friday. Pursuant to the compensation schedule in the Employment Agreements, they were paid for approximately 40 Duty Hours. Unpaid time included “Off Duty Hours,” from 8:00 a.m. to 3:30 p.m. each day, when the clients were away from the group homes, and “Evening Hours,” defined as the period from 10:00 p.m. to 6:00 a.m. when the LSTs were expected to sleep in private quarters at the group home.
Sleep time was not compensated except in two situations: first, if a client needed attention for at least 5-8 minutes during sleep time, the LST would be compensated for the time actually spent on duty; second, on any night when client interruptions totaled three hours or more, the LST would be paid for the entire eight hour sleep time period. LSTs were required to record all such compensable sleep time interruptions on their time cards. They were paid IV2 times their hourly rates for hours worked *1329over 40 per week, including compensable sleep time.
Section 785.22 of the Department’s sleep time regulations provides that, if an employee is required to be on duty for 24 hours or more, the employer and the employee may agree to exclude “a bona fide regularly scheduled sleeping period of not more than 8 hours” from hours worked. The employer must furnish “adequate sleeping facilities,” and sleep time conditions must be such that the employee “can usually enjoy an uninterrupted night’s sleep.” Sleep time interruptions must be compensated, and the entire. sleep period must be compensated “if the employee cannot get at least 5 hours’ sleep during the scheduled period.” This regulation is based upon decisions such as Skidmore and Rokey v. Day & Zimmermann, Inc., 157 F.2d 734 (8th Cir.1946), cert. denied, 330 U.S. 842, 67 S.Ct. 1082, 91 L.Ed. 1288 (1947).
Section 785.23 of the regulations broadens the sleep time exception for an employee who resides on the employer’s premises for “extended periods of time.” Consistent with the Supreme Court’s admonition in Skidmore, this regulation states, “It is, of course, difficult to determine the exact hours worked under these circumstances and any reasonable agreement of the parties which takes into consideration all of the pertinent facts will be accepted.” This general guideline was clarified with respect to “houseparents sleeping at community residences for the mentally retarded” in a letter ruling of the Deputy Administrator dated February 3, 1981:
In general, we take the position that employees who reside on their employer’s premises five days a week are considered to reside there “for extended periods of time.” Where the facilities offered by the employer provide a homelike environment with private quarters separate from the residents of the group home, we would regard such employees as residing there, even though they may have another residence which they may regard as their principal residence.... [Wjhere employees are on duty for less than 120 hours in a week, they can be considered as residing on the employer’s premises, provided that they spend five consecutive days or five consecutive nights on the premises.
Region V argues that it was not required to compensate Weekday LSTs for their sleep time (except when interrupted) because these employees resided on the employer’s premises for extended periods of time within the meaning of § 785.23, as interpreted in the February 3, 1981 letter ruling, and because they were properly compensated for sleep time interruptions in accordance with § 785.22.
It is apparent that the work schedules for Weekday LSTs reflected in Region V’s Employment Agreements were based upon and were in concept consistent with the Department’s regulations, as clarified by the Deputy Administrator’s letter ruling. Weekday LSTs resided at the Region V group homes for consecutive five day and four night periods.3 They were provided private sleeping rooms, and the group homes were intended to provide a “homelike environment.” The LSTs were compensated for recorded sleep time interruptions and were paid for any eight hour sleep period in which client interruptions totaled three hours or more.
The district court nonetheless concluded that § 785.23 was not applicable to the Weekday LSTs because they were on the premises at night to protect the clients, to *1330the employer’s benefit, and thus were “engaged to wait” within the meaning of Skid-more. The district court further reasoned that Region V knew that LSTs’ sleep time was frequently interrupted by client needs and therefore that the LSTs were engaged to wait within the meaning of § 785.14 of the regulations, thereby precluding a § 259 good faith defense. We disagree.
Region V relied upon written agency interpretations specifically addressing working conditions in the group home industry. After considerable study of the industry, the Department issued letter rulings that houseparents who work five day-four night schedules comparable to those of the Weekday LSTs do reside on the employer’s premises for extended periods of time within the meaning of § 785.23 and therefore may be afforded, pursuant to a written employment agreement, up to eight hours of unpaid sleep time per day in private quarters on the employer’s premises. The Department’s interpretation of its own regulation is reasonable on its face and is entitled to deference by the courts and contracting parties. Region V could reasonably assume that the Department was familiar with the nighttime duties of houseparents for the mentally retarded; thus, Region V’s reliance upon the February 3, 1981 letter ruling in developing the work schedules contained in its Employment Agreements with the Weekday LSTs was plainly reasonable.
The district court’s reliance upon § 785.14 of the regulations was misplaced. Section 785.14 deals generally with “Waiting Time.” As the Supreme Court decisions in Armour and Skidmore and the position of the Department in those cases make clear, sleep time raises different compensation questions under the FLSA than do other types of waiting time. See also Halferty v. Pulse Drug Co., 864 F.2d 1185, 1189-1191 (5th Cir.1989). Section 785.23 of the regulations specifically addressed the question of sleep time, and the Department’s letter rulings clarified the application of the regulation to this industry. None of these letter rulings, including the June 1988 Enforcement Policy, even referred to § 785.14. Under these circumstances, Region V’s good faith defense may not be rejected on the basis of a general conclusion that its sleeping employees were engaged to wait within the meaning of § 785.14. Accord, Beaston v. Scotland School for Veterans’ Children, 693 F.Supp. 234 (M.D.Pa.1988), aff'd, 869 F.2d 587 (3d Cir.1989). Given Congress’ statement of purpose in enacting § 259, “in close cases we should consider the expectations of the contracting parties and the reasonableness of the employer’s actions in light of the administrative interpretation in question.” Marshall v. Baptist Hosp., 668 F.2d 234, 238 (6th Cir.1981) (where the administrative interpretation was ambiguous, employer that reasonably relied on the Department’s specific rule, rather than its indefinite standard, was entitled to the § 259 defense).
Appellees argue that the Weekday LSTs never resided on Region V’s premises for an extended period of time because they “worked a series of sixteen or seventeen hour shifts.” However, the fact that LSTs left the premises during their off duty daytime hours, when the clients were off the premises, did not render § 785.23 of the regulations inapplicable. Region V had to allow the LSTs to use this time effectively for their own purposes, or it would have been compensable hours worked. See 29 C.F.R. § 785.16. Section 785.23 expressly states that an employee who resides on the employer’s premises for an extended period of time may have “periods of complete freedom from all duties when he may leave the premises for purposes of his own.” Therefore, the fact that Region V’s Employment Agreement expressly granted Weekday LSTs such periods of off-duty time is consistent with § 785.23 and does not undermine the § 259 good faith defense.
Appellees and the dissent further contend that Region V must be denied the good faith defense because it unilaterally drafted the Employment Agreement and “forced it on” the LSTs. We disagree. The 1985 Employment Agreement essentially codified the parties’ prior employ*1331ment relationship under work schedules adapted to comply with FLSA. It did not obligate LSTs to accept either reduced total compensation, longer hours, or increased responsibilities than they had agreed to work prior to the Garcia decision. The Employment Agreement served the purpose of advising the LSTs in advance of the circumstances under which their sleep time would be compensated. See Ariens v. Olin Mathieson Chem. Corp., 382 F.2d 192, 197 (6th Cir.1967). Region V permitted minor schedule variations for the convenience of individual LSTs, and it obtained the views of LSTs before implementing the revised work schedules contained in the 1988 Employment Agreement.
The LSTs had no collective bargaining representative. Region V circulated its proposed Employment Agreements to each LST, and there is no evidence that any LST refused to sign either agreement. In the context of the § 259 defense, we conclude that the Employment Agreements in this case satisfy the standard, under Skidmore, that “ ‘any reasonable agreement of the parties which takes into consideration all of the pertinent facts will be accepted.’ ” Halferty v. Pulse Drug Co., 821 F.2d 261, 269 (5th Cir.1987) (quoting Skidmore, 323 U.S. at 137, 65 S.Ct. at 163), appeal after remand, 864 F.2d 1185 (5th Cir.1989). Accord, General Elec. Co. v. Porter, 208 F.2d 805, 814 (9th Cir.), cert. denied, 347 U.S. 951, 74 S.Ct. 676, 98 L.Ed. 1097 (1954). Any other decision would violate Congress’ stated purpose not to award employees “windfall payments ... of sums for activities performed by them without any expectation of reward beyond that included in their agreed rates of pay,” 29 U.S.C. § 251(a)(4).
Finally, the dissent argues that Region V must be denied the § 259 defense because it did not provide the LSTs a “home-like environment.” The dissent bases its definition of home-like environment on the Department’s June 30, 1988 Enforcement Policy. However, Region V had to comply with FLSA after Garcia in 1985. Thus, the Department’s February 1981 letter ruling, upon which Region V’s compliance program was based, is far more relevant to the § 259 defense. On the homelike environment question, the February 1981 letter ruling stated:
The houseparents and relief staff sleep in private quarters separate from the mentally retarded residents of the group home. The actual facts differ somewhat from facility to facility, but the above despcription sets forth the typical situation as it has been explained to us. ******
Where the facilities offered by the employer provide a home-like environment with private quarters separate from the residents of the group home, we would regard such employees as residing there, even though they may have another residence which they may regard as their principal residence. In light of the amount of time they spend at the group home, it is in effect a second residence. ******
We have reached this conclusion [regarding relief employees], which represents a departure from the general rule under 29 CFR 785.21, because of the home-like environment afforded to these employees in community residences, with private quarters and other amenities. Even where employees sleep over for only one or two nights, there are ample facilities to enable them to get a full night’s sleep_ [B]ecause of the home-like environment, an exception can be made where employees do in fact get a reasonable night’s sleep.
It is apparent that the Department’s rulings on this subject changed over the 1981-1988 period, from a general pronouncement in 1981 that the home-like environment inherently available in these group homes must include private quarters where LSTs could get a reasonable night’s sleep, to detailed specifications in 1988 as to the furniture and the cooking, eating, and bath facilities that had to be provided separately to these employees.
The issue here is whether sleep time must be compensated. Where an employee is furnished reasonable sleep facilities under conditions that satisfy Skidmore and *1332the regulations, the Department may not deny the exclusion of sleep time because the employer did not provide employees with other “amenities” unrelated to their 'sleep time. See Van Dyke v. Bluefield Gas Co., 210 F.2d 620 (4th Cir.1954). Thus, it is clear to us that Region V acted in good faith conformity with the regulations and the Department’s February 1981 letter ruling so long as it provided LSTs with a separate sleeping room and the LSTs got at least five hours sleep per night, which § 785.22(b) of the regulations defines as “an uninterrupted night’s sleep.”
Weekend LSTs. These full-time employees were on Region V premises continuously from Friday afternoon to Monday morning. The Employment Agreements provided that all hours between 3:30 p.m. Friday and 8:00 a.m. Monday would be compensated except for sleep time from 10:00 p.m. to 6:00 a.m. each night. Interrupted sleep time was compensable under the same circumstances as for Weekday LSTs.
Region V contends that the Weekend LSTs’ work schedules were intended to and did in fact meet the § 785.22 standards for unpaid sleep time for employees “required to be on duty for 24 hours or more,” as construed in the February 3, 1981 letter ruling. Appellees and the district court concede that Region V’s work schedule for the Weekend LSTs was, in concept, consistent with § 785.22 as clarified by this letter ruling. Nevertheless, the district court held that the Weekend LSTs did not fall within this exception because they rarely had a night where they received “at least five hours of uninterrupted sleep.” However, this is not a basis for rejecting Region V’s § 259 defense because it misconstrues the regulation.
Section 785.22 allows unpaid sleep time for employees who “can usually enjoy an uninterrupted night’s sleep.” The regulation defines “uninterrupted” as meaning, “that if the employee cannot get at least 5 hours' sleep during the scheduled period the entire time is working time.” Here, the LSTs testified that their sleep time was frequently interrupted for short periods (which they usually did not record on their time cards); their time cards reflected that they typically did get at least five hours sleep in total each night. The regulation plainly states that the required five hours’ sleep need not be consecutive hours. This was confirmed by the Department’s letter ruling of August 20, 1985, which stated:
[I]f an employee’s sleeping time is interrupted to such an extent that the employee cannot get at least five hours’ sleep during the scheduled period, then all hours of the sleeping period are compen-sable hours of work.
The Department’s view on this issue was even more clearly stated in its May 1985 WH Publication 1459, entitled “State and Local Government Employees Under the Fair Labor Standards Act”:
The 5 hours of sleep need not be 5 continuous uninterrupted hours of sleep. However, if interruptions during the sleep period are so frequent as to prevent reasonable periods of sleep totalling at least 5 hours, the entire period would be considered hours worked.
In sum, Region V and the LSTs entered into Employment Agreements providing for sleep time compensation consistent with § 785.22, and requiring the LSTs to record compensable sleep time on their time cards. Region V paid the LSTs for all recorded compensable sleep time. Under these circumstances, Region V’s § 259 defense may not be defeated by the LSTs’ general testimony that their sleep time was frequently interrupted for uncertain lengths of time which they chose not to reflect on their time cards. See Davis v. Food Lion, 792 F.2d 1274, 1276-1277 (4th Cir.1986).
We note that this factor distinguishes this case from Hultgren. In Hultgren, which did not involve full-time employees such as the Weekday LSTs and the Weekend LSTs, this court rejected the employer’s good faith defense, despite holding that it was entitled to rely upon the Department’s letter rulings, because the district court had specifically found “that relief employees averaged from zero to four hours of sleep during the nighttime hours,” 913 F.2d at 508. This essential fact made *1333the employer’s sleep time conditions obviously inconsistent with the Department’s regulations and its letter rulings, and thus compelled the conclusion that the employer’s § 259 good faith defense must be rejected.
Substitute LSTs. These employees replaced both Weekday LSTs and Weekend LSTs when needed. Each worked the same schedule as the LST being replaced. The Employment Agreements defined the paid work day for substitute LSTs as 3:30 p.m. to 10:00 p.m. and 6:00 a.m. to 8:00 a.m. during each shift worked, with the Evening Hours again being unpaid.
The issue of when sleep time must be paid to substitute or relief houseparents in community homes was specifically addressed in two of the Deputy Administrator’s letter rulings. The February 3, 1981 letter stated:
Your third and final question related to employees who do not reside at the community residences but who, as relief employees, remain there for at least 24 hours, and often as long as two or three days.... [Although] such employees ... are arguably on duty for less than 24 hours ... we believe that such sleep time can be deducted from hours worked, provided that the employer and employees agree in advance to do so, and that no more than 8 hours per night (or actual, uninterrupted sleeptime, if that is less than 8 hours) is deducted.
By letter dated August 20, 1985, the Deputy Administrator responded to a request for further clarification of the Department’s position regarding houseparent sleep time:
We have reviewed all available information, including that furnished by you and that obtained from a review of a large number of case files involving investigations of community residences under FLSA. As a result of this comprehensive review, we have concluded that, because of the special circumstances that prevail in community residences, and because relief employees perform essentially the same duties as regular full-time employees, the same “hours worked” principles should be applied to both categories of employees.... Therefore, it is our opinion that, in situations where a community residence employs one or more full-time employees who reside on the employer’s premises on a permanent basis or for extended periods of time, the employer and a relief employee who performs essentially the same duties as such full-time employees may agree, in advance of the performance of any work, that sleeping time of up to eight hours can be excluded from compensable hours of work, regardless of the length of the tour of duty involved.
In Hultgren, the issue was whether FLSA required the employer to compensate the sleep time of relief assistants who replaced resident managers one or two days a week at residential facilities for the mentally retarded in another county of Nebraska. However, because the resident managers were exempt, the relief employees in Hultgren were not entitled to the “departure” from the regulations explained in the above letter rulings. Here, on the other hand, Region V’s full-time employees — the Weekday LSTs and the Weekend LSTs— were allowed uncompensated sleep time, and thus Region V acted consistently with the letter rulings in providing uncompensated sleep time for the Substitute LSTs on the same basis. Accordingly, Region V has established its § 259 good faith defense with respect to this category of employees as well.
Gary Sexton. This former Weekend LST testified that he was never afforded a private sleeping room at the group home at which he worked, which Region V stopped using in early 1989. Although the record included photographs of the private sleeping rooms that Region V provided at each of the group homes operating at the time of trial, Region V did not rebut Sexton’s testimony that he was never afforded a private room during his employment as a Weekend LST. Region V’s § 259 good faith defense was based upon Department letter rulings that uniformly required that LSTs be furnished private sleeping quar*1334ters. Region V knew of this requirement and failed to comply with it at the group home where Sexton worked. Therefore, as to Sexton, we affirm the district court’s decision that all sleep time was compensa-ble under FLSA, that Region V failed to prove the § 259 defense, but that liquidated damages should not be awarded.
IV.
The § 259 defense is “jurisdictional in nature.” Marshall v. Baptist Hosp., supra, 668 F.2d at 239. Thus, our conclusion that Region V established the defense as to each category of LSTs ends our inquiry. Accordingly, the judgment of the district court is reversed as to all plaintiffs except Gary Sexton, as to whom it is affirmed. The award of attorneys’ fees is vacated and remanded to the district court for further proceedings consistent with this decision.

. NAPRR has been the primary organization with which the Department has communicated since the early 1970’s on FLSA issues concerning employees of community-based residential facilities. NAPRR filed an amicus curiae brief supporting Region V’s § 259 defense in this case.

. Unlike the defendant in Hultgren, Region V had not been the subject of any investigation or enforcement litigation by the Department.

. The Department’s June 1988 Enforcement Policy provided that, to reside on the employer’s premises for an extended period of time under § 785.23, an employee must be compensated "for at least eight hours in each of five consecutive 24-hour periods." As a result of this change — described by the Department as a refinement — Region V revised its work schedule for Weekday LSTs to provide for eight compensated hours each day, Monday through Friday, and reflected this new schedule in the October 1988 Employment Agreement. We consider this aspect of the Department’s Enforcement Policy an unreasonable attempt to dictate the precise nature of relationships that Skidmore and the regulation acknowledge will vary. But in any event, Region V’s prior schedule was in reasonable conformity with the regulation and with the February 3, 1981 letter ruling.