Employers Can End Cash For Comp Time, Court Rules

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Public employers may require workers to use their compensatory time instead of stockpiling it for eventual payment in cash, the U.S. Supreme Court ruled last week.

The court's 6-3 ruling will affect many employees of state and local governments, including wage earners employed by school districts.

Teachers and other professionals are exempt from federal wage and hour rules, but districts "employ lots of people who aren't certified," said Julie Underwood, the general counsel of the National School Boards Association.

"There are whole categories of [school] workers who will be affected by this," such as janitors and cafeteria workers, she added.

The ruling in Christensen v. Harris County (Case No. 98-1167) concerns the Fair Labor Standards Act of 1938, the federal statute that established many basic workplace wage and hour rules, such as requiring private employers to pay time-and-a-half to employees who work overtime.

The FSLA's requirements did not initially apply to public-sector employers, but Congress has amended it to bring state and local government employment under its purview. The amended law allows state and local governments to compensate for overtime by granting compensatory time—paid time off from work—at a rate of 11/2 hours for each overtime hour worked. It also limits the amount of such time workers can accrue before employers must pay them in cash. And it provides that employees are entitled to receive cash for their accrued time upon the termination of their employment.

The question before the Supreme Court was whether a government agency could force workers to use their accrued time so the agency could minimize the fiscal impact of paying workers with large accruals of such time when they leave their jobs.

The federal Department of Labor told Harris County, Texas, in a 1992 guidance letter that unless there was a labor agreement providing for it, a public employer could not force its workers to use up their compensatory time.

The county began mandatory use of accrued time anyway, and a group of deputy sheriffs sued over the policy. They won in federal district court but lost in the U.S. Court of Appeals for the 5th Circuit, based in New Orleans.

No Special Deference

The deputy sheriffs and the Clinton administration argued that the Labor Department's interpretation of the statute deserved deference and that a government agency could not require employees to use compensatory time without consenting to such a policy in a labor agreement.

But in its May 1 ruling, the high court rejected those arguments.

"Nothing in the FSLA or its implementing regulations prohibits an employer from compelling the use of compensatory time," Justice Clarence Thomas said for the majority. Chief Justice William H. Rehnquist and Justices Sandra Day O'Connor, Antonin Scalia, Anthony M. Kennedy, and David H. Souter joined the opinion.

In dissent, Justice John Paul Stevens, joined by Justices Ruth Bader Ginsburg and Stephen G. Breyer, said the Labor Department's interpretation deserved greater weight by the courts. But Justice Thomas said that an opinion letter from a department does not merit the same legal deference as a formal regulation.

Ms. Underwood said that section of the ruling could have implications for education law. For example, the Department of Education issues numerous opinion letters interpreting the Individuals with Disabilities Education Act without going through the regular rule-making process.

Now, she added, there is doubt whether such informal guidance will receive the same level of deference in the courts as formal regulations.

Vol. 19, Issue 35, Page 35

Published in Print: May 10, 2000, as Employers Can End Cash For Comp Time, Court Rules
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