Christensen v. Harris County – Oral Argument – February 23, 2000

Media for Christensen v. Harris County

Audio Transcription for Opinion Announcement – May 01, 2000 in Christensen v. Harris County

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William H. Rehnquist:

We’ll hear argument next in Number 98-1167, Edward Christensen v. Harris County.

Spectators are admonished do not talk until you get out of the courtroom.

The Court remains in session.

Mr. Leibig.

Michael T. Leibig:

Mr. Chief Justice, and may it please the Court:

In July 1992 the county council, attorney for Harris County, Texas wrote to the Department of Labor and asked, while it is clear that the… I’m quoting from their letter to the county manager, to the Department of Labor, and they asked whether… while it was clear that the sheriff may authorize an employee to use comp time when he requests to use it, that the regulations and the statute did not make clear whether an employer could compel an employee to use compensatory time under the Fair Labor Standards Act when the employee did not want to use it, and they asked for an opinion from the Department of Labor as to whether, under the regulations and the statute, that would be allowed, and the Department of Labor answered that on September 14, 1992 that absent an agreement that was willingly accepted by the employees, an employer could not compel the use of comp time under the Fair Labor…

Antonin Scalia:

Agreement or understanding, is that it?

Michael T. Leibig:

I’m sorry… agree… yes.

Agreement…

Antonin Scalia:

Or understanding, in terms of our understanding come in there?

Michael T. Leibig:

It says agreement or understanding, and also…

Antonin Scalia:

And do we know whether this is the case?

How many of these people were hired after this policy was already in effect?

Michael T. Leibig:

Well, there’s… in the record in this case it’s not clear when the parties came in effect.

It came into effect sometime between 1992 and 1993.

Most of the plaintiffs were working then.

Antonin Scalia:

But certainly, as to any plaintiffs who were hired after 1992 or ’93, if the Department said this is going to be our program, and they took the job, would that qualify as an agreement or understanding?

Michael T. Leibig:

It might, and I’ll explain how, but it depends on whether or not that was a… clearly communicated to the employees and the employees accepted it when it was communicated.

William H. Rehnquist:

Well, if they…

Michael T. Leibig:

In this case…

David H. Souter:

All it has to be is…

Michael T. Leibig:

In this case the facts are…

Antonin Scalia:

clearly communicated when they accepted the job.

Michael T. Leibig:

Excuse me.

In this case the facts are that there was a county regulation saying that comp time would be used, but it did not include an agreement with regard to compelled use.

William H. Rehnquist:

Well, so far as an employee accepting… if you come to me looking for work and I say, you know, you work 40 hours a week, and you’ll be paid at $10 an hour, and you go to work, you’ve accepted my deal, have you not?

Michael T. Leibig:

Yes.

William H. Rehnquist:

I mean, you don’t have to say… it’s not a question of voluntary confession or something like that.

Michael T. Leibig:

Right, but under the regulations and the statute, and this is in section 207(o) itself, it says the… and in the regulation, it says that compensatory time off in lieu of cash may be used, and may be a condition of employment.

There’s a specific reference to the regulations that could make it a condition of employment, which I think is the question, but it says so long as the comp time agreement is pursuant… is with the individual employees and pursuant to their knowing and under… knowing and voluntary acceptance of it.

Michael T. Leibig:

So, for example, in your accept… in your example, I could come… you could say, I want you to come to work with me for $10, which you unilaterally decided, and I could accept that, and I would be knowingly, voluntarily accepting it.

On the other hand, you could offer me the job and I could say, no, I want $15, and you could say, well then, you’re not hired, but you could also say, then you are hired, and then we’d have a bilaterally determined condition of employment, and I think if you look at the regulations, while the regulations are clear that it could be a condition of employment, they’re also clear that it can only be a condition of employment so long as it is accepted by the employees knowing in advance what the rules on preservation…

William H. Rehnquist:

You’re not suggesting there has to be some sort of a written acceptance.

Michael T. Leibig:

No, but at least there has to be… which there’s not in this case… a clear enunciation first how the comp time will be preserved and used, and that the employer would have the authority to compel it, which didn’t exist in this case.

There would be comp time, but there was no… nothing in the record, and there wasn’t anything that said, we can compel use.

They adopted a… they… it says a practice in the stipulation, but it means a policy of compelling use, but that wasn’t in the regulation that estopped…

Stephen G. Breyer:

What are we supposed to do about that, because I thought that everybody agrees if the employee knowingly and voluntarily agreed to the understanding…

Michael T. Leibig:

I think…

Stephen G. Breyer:

at issue, then everybody agrees that then the county would win, and I think everybody… then the issue is here, though, on the assumption that they didn’t knowingly and voluntarily agree, and is there now a question in the case about that so that we should send it back, or…

Michael T. Leibig:

Well, the suggestion of Judge Dennis in the dissent…

Stephen G. Breyer:

Yes.

Michael T. Leibig:

in the Fifth Circuit was exactly that.

Stephen G. Breyer:

All right, so what are we supposed to do about that?

Michael T. Leibig:

What we ask the Court to do is send the case back for reconsideration in…

Stephen G. Breyer:

Of that point.

Michael T. Leibig:

consistent with the Department of Labor rules.

That’s what we’ve asked for in the complaint.

Obviously, we could have asked for, to overturn the court of appeals and uphold the trial court, but the trial court did not make findings with regard to whether or not an agreement existed and what the agreement was, therefore that’s not in the record, and if you want to make it a condition of employment, first of all you have to have exactly what the agreement was and, secondly, that the employees knowingly and willingly accepted it.

Ruth Bader Ginsburg:

Was there any allegation by the employer that there was anything other than an agreement that there would be comp time?

There wasn’t any allegation that any of this was fleshed out.

Michael T. Leibig:

No.

In fact, the employer, both in the answer to the amended complaint and the stipulation, it’s clear, and in their brief, they don’t claim that there was a specific provision on compelled use, and there wasn’t.

I mean, in fact there wasn’t, but… and neither the district court nor the court of appeals, nor the stipulation, includes that important factor…

Stephen G. Breyer:

Then why would it…

Michael T. Leibig:

which is why Judge Dennis suggested that the trial court would have to make such a determination in order to allow any court to apply the applicable regulations.

Ruth Bader Ginsburg:

Well, why would a trial court have to make such a determination if the employer is not alleging anything more than we had an understanding, they knew when they took the job that it was going to be comp time instead of overtime pay, and we didn’t… we’re not alleging that we spelled out the details of it.

We’re not alleging that they specifically consented to this…

Michael T. Leibig:

Compelled use.

Ruth Bader Ginsburg:

Compelled use.

Michael T. Leibig:

Well, I think the problem is in the record the way the district… the trial court did that, they didn’t get to the second point where they actually said we’re not alleging, the county is not… that’s why I would…

William H. Rehnquist:

In any event, you…

Antonin Scalia:

Even if they didn’t, do you think it is a reasonable interpretation… when the employer says, you’re not going to get overtime, you’re going to get comp time, do you think a reasonable interpretation of that is that I can sit on my comp time, refuse to use it until I finally retire, and then cash it in…

Michael T. Leibig:

Yes.

Antonin Scalia:

at time and a half?

You think that’s a reasonable interpretation…

Michael T. Leibig:

Well…

Antonin Scalia:

when the employer says, what you’re going to get is comp time, and my follow-up question is, do you think it’s a reasonable interpretation of a statute…

Michael T. Leibig:

Yes.

Antonin Scalia:

which says you can give an employee comp time instead of overtime, that it means the employee can sit on the comp time until he retires and then cash it in for overtime pay?

Michael T. Leibig:

Yes, I do, because the statue also says… first of all, yes, I think it’s reasonable.

Second of all, the statute itself also says that there’s a… expressly in the statute there’s a 480-hour cap on comp time banks, and that after the employees reach that cap, they then can use the comp time, and it has… it deals with how to use it, by making requests and so forth, and therefore it… the statute doesn’t give an employer a permanent right to use compensatory time.

Antonin Scalia:

Well, as I understood the statute, it was enacted in response to the complaint of the States that now that you’re applying the Fair Labor Standards Act to us we’re going to go bankrupt.

We cannot pay time and a half to firemen, policemen and so forth.

So Congress said, well, okay, if you want you can give them comp time instead of time and a half.

But what you’re urging here, to wit, that the policemen and firemen can simply refuse to use the comp time.

Michael T. Leibig:

Right.

That’s because…

Antonin Scalia:

And then get it in cash.

It just makes… it just makes nothing of the concession that Congress made to the States.

Michael T. Leibig:

Justice Scalia, I would argue that the Congress didn’t quite make as broad a concession as you indicated, because…

Stephen G. Breyer:

No, I…

Michael T. Leibig:

first of all the statute itself says that an employer may use comp time only pursuant to an agreement with the employees, and only pursuant to a number of other conditions.

The statute also says, delegates to the Department of Labor to make regulations about what that means, and the Department of Labor has made regulations that make precisely clear what those are.

In addition, while the legislative history indicates that Congress was trying to respond to Garcia and allow employers to operate more efficiently, the legislative history is also clear that the comp time provisions were meant to accommodate preexisting arrangements between employers and employees, and that they weren’t the major part of the cost saving.

They gave greater flexibility to the employer, but the statute and the legislative history repeatedly is also clear they gave a right to the employees to use it to control the comp time in the legislation.

William H. Rehnquist:

Mr. Leibig…

Within reason.

Mr. Leibig, let me get the procedural history of this case straight.

The district court granted summary judgment for your client.

It went to the Fifth Circuit, the Fifth Circuit granted summary judgment for the county and Judge Dennis said, really neither side should get summary judgment, and your position here is that Judge Dennis was correct?

Michael T. Leibig:

Our position, and what we asked for in both of our briefs, is that the case should be remanded for further hearing in terms of the Department of Labor regulations, which required the investigation of the extent and meaning of the agreement and how the agreement fit into the rules.

That’s basically correct, Your Honor, and the… I would…

Sandra Day O’Connor:

Could I ask you what Department regulation covers this exactly, and where we might find it in the material with this case?

Michael T. Leibig:

Yes, Your Honor.

Basically, that the… covers compels use exactly?

Sandra Day O’Connor:

Yes.

Michael T. Leibig:

Yes, Your Honor.

The regulation that deals with it is 553.23, and the…

Sandra Day O’Connor:

Where do I find that…

Michael T. Leibig:

Yes…

Stephen G. Breyer:

in these materials?

Michael T. Leibig:

In the appendix, the original appendix to the petition, which contained most of the appendix, at page 46…

Sandra Day O’Connor:

Just a minute.

Stephen G. Breyer:

I would look at the petition for…

Michael T. Leibig:

It’s the white… the white large…

Ruth Bader Ginsburg:

This?

Michael T. Leibig:

Yes, Your Honor.

Stephen G. Breyer:

And where would I…

Michael T. Leibig:

It’s 46a.

There’s a couple of things, but the first is 46a, and that is… 553.23(a)(1) describes how you get an agreement, and then (2) says the… it deals with the agreements, and this is a discussion of the kind of things that would be in an agreement, and…

Sandra Day O’Connor:

Where does… where do I find language here, on page 46a, that tells me the employee does not have to use it?

Michael T. Leibig:

No, you don’t.

I mean, I was… as I say, I have to go to a couple of places.

What it says there is that the agreements for comp time may include provisions governing preservation, use, and cashing out of comp time.

Sandra Day O’Connor:

Yes.

Michael T. Leibig:

And then in addition to that it says in… back on page 45, it says agreements of understanding may provide comp time off.

In addition to the agreement an understanding may be a combination… it goes through the various things that would be in a comp time agreement.

Sandra Day O’Connor:

Well, I think everyone agrees that there can be an agreement covering it.

Where do I find in the regulation a directive about what happens absent an agreement?

Michael T. Leibig:

As the letter that I cited from the county, in the regulations themselves there’s no express treatment of the compelled use question.

Sandra Day O’Connor:

That’s what I thought.

Michael T. Leibig:

Yes.

Sandra Day O’Connor:

So to what do we defer, then, in terms of the Labor Department?

Michael T. Leibig:

The Department of Labor’s interpretation of their own regulations, which is expressed… well, first of all, there’s three of them.

First of all, it’s expressed specifically in the letter… the specific letter, which in this case was actually a letter to Harris County saying compelled use, they interpret this regulation to prevent compelled use, and that relies on their interpretation of this regulation, plus I think it’s important…

Antonin Scalia:

Who is that letter from?

Stephen G. Breyer:

Who did that letter come from?

Michael T. Leibig:

It came from Harris County’s… specifically asking about the facts of this case.

Antonin Scalia:

To the Labor Department?

Michael T. Leibig:

Went to the Labor Department.

It was by the Administrator of the Wage & Hour Division.

Antonin Scalia:

The administrator…

Michael T. Leibig:

Right, and that was September, I think 14, 1992.

Sandra Day O’Connor:

And where is that?

Michael T. Leibig:

Of the letters… the letter itself is not reprinted in the record, but it’s cited in all the briefs in this…

Sandra Day O’Connor:

So that’s all we have, really.

Michael T. Leibig:

No.

Well, I wanted to… no.

And then in support of that, the question is, how did the Department of Labor get from the regulations to the thing, and there’s two things in support of it.

First of all, the legislative history itself, of the… the congressional legislative, both the House and the Senate report, refer to the right of employees to use comp time 10 times and they refer to, 14 times, that it’s a benefit of the employees, and that the employees can cash out comp time.

Sandra Day O’Connor:

Well, these are all statutory provisions.

Let me ask you this.

There’s no collective bargaining agreement here…

Michael T. Leibig:

No.

David H. Souter:

covering this…

Michael T. Leibig:

There’s an earlier case before the State.

In Texas and Harris County, collective bargaining is illegal.

Sandra Day O’Connor:

There is no collective bargaining agreement that we worry about here?

Michael T. Leibig:

No, that’s correct.

Sandra Day O’Connor:

Can the employer say, well, maybe it wasn’t clear in the past, but I want to make it clear from this date forward, if you want to continue to work here, you’re going to have to use your comp time, so if you want to stay a county employee, that’s the rule?

Sandra Day O’Connor:

Can they do that?

Michael T. Leibig:

Under the statute and regulations they can do that, and then the employees have the option of then either accepting it and continuing to work…

Sandra Day O’Connor:

Or leaving.

Michael T. Leibig:

Or… and by the way, under the regulations they not only could… the regulations both provide a condition of employment with those conditions.

They also provide, in 553.23(c)(1) at the bottom that you could just give notice, which… there may be… I’m not sure there’s a debate, but there may be a condition between making a condition of employment and giving notice, but it also says if they give notice that we will have compelled rules, and if the employee then works a day after that, it can be presumed that he accepted it, but then if…

Sandra Day O’Connor:

Well, has the county give notice here…

Michael T. Leibig:

No.

Stephen G. Breyer:

do you think?

Michael T. Leibig:

No, because it also says that if the employee…

Sandra Day O’Connor:

No.

Stephen G. Breyer:

These employees don’t know that the county thinks they have to use…

Michael T. Leibig:

Well, the regulation also says if the employees fail to express an unwillingness to accept it, it will be presumed, but in this case the employees did express an unwillingness to accept it, and therefore the opposite presumption I think would occur, and again you have to read the last two sentences of the section I cited, so that in this case, first of all…

Anthony M. Kennedy:

You mean, if the employee says nothing, then the county has to either fire them or assume that the deal’s off?

Michael T. Leibig:

No.

I think the rule is if an adequate notice is given and the employee says nothing and works, the presumption is that he accepted it, but if he expresses an unwillingness to accept it, then the presumption is that he did not accept it.

David H. Souter:

But then…

Michael T. Leibig:

Then if the employer lets him continue to work, he doesn’t… can’t compel him to use comp time, but he would have the option to terminate.

I mean, if they think it’s that serious a thing to do, why, that would happen.

In this specific case all those cases, facts haven’t been developed, but I think that’s the way it would go.

David H. Souter:

I presume they would also have the option to say, we’re not going to fire you, but if you won’t use the comp time, we’re simply going to reduce your weekly hours to 35 a week.

Michael T. Leibig:

Well, I think they could, 1) say we’re not going to let you work any more overtime.

Whether they could reduce their hours to a low, or below the statute…

William H. Rehnquist:

Why not?

Stephen G. Breyer:

Why not?

Michael T. Leibig:

Well…

David H. Souter:

They’re saying, look, we’re doing it because we’ve got this great overhanging liability out there, and the only way we’re going to be able to fund it is to save money in some other way.

Michael T. Leibig:

Well, first of all…

David H. Souter:

And the wage and hour law doesn’t tell us how many hours we have to let you work.

Michael T. Leibig:

The regulations say that the employee’s decision to accept comp time has to be made free of coercion or pressure, and that’s clear in the regulations and the legislative history.

Antonin Scalia:

But firing is not coercion?

Michael T. Leibig:

No, because…

Antonin Scalia:

You say you can fire him, but I can’t reduce your hours to 35?

Michael T. Leibig:

Well, the regulations say you can make it a condition of employment, so if you make it a condition of employment, the person is free whether to accept the job or not, but if they do accept the job, then it is the system covered by the regulations, and part of this is to make sense out of all the regulations and the legislative history.

If the legislative history, which is trying to…

Antonin Scalia:

If possible.

If it says that, I don’t call that making sense out of it.

You can fire him, but you can’t reduce his hours…

Michael T. Leibig:

No, no.

I think you can reduce his hours unless you’ve expressed to him the intent of your reducing his hours is in order to pressure him into accepting comp time.

Antonin Scalia:

No, I’m not…

Michael T. Leibig:

But other than that…

David H. Souter:

No, I’m not pressuring him.

He can keep his saved up time in the bank.

I’m not telling him he’s got to draw that down.

Michael T. Leibig:

Yes, Your Honor.

David H. Souter:

And he’ll get… if he keeps it till the end he’ll get paid time and a half.

I’m simply saying, I’ve got to provide for my liability, and therefore I’ve got to employ people less hours in order to put the money aside for a rainy day.

Is that coercion?

Michael T. Leibig:

No, I don’t think it is…

William H. Rehnquist:

Okay.

Michael T. Leibig:

in that context.

If the employee could demonstrate actual coercion they may have an argument in the case, but absent that…

David H. Souter:

But the example that I just gave you would not, as a matter of law, be coercion, you concede?

Michael T. Leibig:

I don’t think so.

Stephen G. Breyer:

Yes.

Michael T. Leibig:

Also I think that, along the same lines because I want to make it clear, the odd thing about this case is the burden between the employer imposing this without an agreement with the employees, and what he would have to do to get an agreement, is not a long road.

The facts in this case are, they imposed compelled use without either the notice, the condition of employment, or…

David H. Souter:

In fact, the road isn’t any longer than my hypothetical, is it?

Michael T. Leibig:

No.

David H. Souter:

We know it’s going to happen.

Michael T. Leibig:

Right.

In addition to that, though, one thing in your hypothetical, that you assumed that the county would save money by paying people in comp time rather than cash, and I don’t think Congress assumed that.

There’s a slight additional flexibility.

In fact…

David H. Souter:

I was assuming some fat there.

Michael T. Leibig:

Yes.

Stephen G. Breyer:

I must be…

Michael T. Leibig:

Comp time in fact would cost more than…

Stephen G. Breyer:

You have to… I may have to…

Michael T. Leibig:

so they may want to avoid it by paying it out later, but they…

John Paul Stevens:

Enlighten me about what you mean by saying paying in comp time instead of cash.

If they take comp time, don’t they get paid in cash for the time they don’t work?

Michael T. Leibig:

Yes, Your Honor.

That’s what I was trying to explain, but they do, but hypothetically there’s a slight way they can… it can cost the employer more, because if the employee is making $10 an hour in 1992, works for comp time and then banks it as Justice Scalia suggested, and then cashes it in 5 years later, probably he’ll be making $12, so that could cost… over the long haul that could cost the employer a little bit more money.

Now, the…

Stephen G. Breyer:

Yes, but that’s…

Michael T. Leibig:

In fact, you have a defense against that, because the employer is free at any time to cash out the contract, so they could avoid that, not only by cashing out the comp time, but I suggested in my brief three or four other ways that an employer can protect themselves from that happening, but in theory that’s the additional cost of comp time if it’s stored, and so…

John Paul Stevens:

But if he… of course, as the employer used his comp time a year later and the wage rate’s gone up, the time he uses the comp time he will stay home and get paid at the rate… then current rate, will he not?

Michael T. Leibig:

Yes, Your Honor.

Stephen G. Breyer:

Yes.

Michael T. Leibig:

If he waits till he retires, there’s another rule.

He either gets the regular rate or the higher…

John Paul Stevens:

Of course, in the meantime the employer’s had the use of the money, too.

Michael T. Leibig:

Yes, and inflation’s… but I’m just saying, other than that, and Congress is clear about this both in the regulations and the legislative history, Congress’ view was that you’re not supposed to use comp time… they meant comp time to be an equivalent of being paid in cash, because eventually you have to pay the money, and in fact in the real world it works out there would be areas I’ve described, and as we’ve described in our brief, there are methods by which the employer can save it.

William H. Rehnquist:

Thank you, Mr. Leibig.

Michael T. Leibig:

Thank you.

William H. Rehnquist:

Mr. Roberts, we’ll hear from you.

Matthew D. Roberts:

Mr. Chief Justice, and may it please the Court:

An employer may not require an employee to use his comp time against his wishes unless the employee has agreed to that arrangement in advance.

That conclusion follows from two features of the act.

Matthew D. Roberts:

First, the act gives the employee the absolute right to overtime pay in cash.

An employer cannot substitute comp time for overtime pay in cash unless he first secures the employees’ agreement.

Second, the act makes clear that comp time is a substitute for cash pay.

An employee has the absolute right to use that cash pay as he pleases.

The employer can’t tell the employee when or how it may be spent.

Just as the control over cash is a central aspect of its value, control over the use of comp time is central to its value, and therefore the Secretary has reasonably construed the act to permit the employee to use the comp time he has earned as he wishes, except to the extent he’s otherwise agreed…

Sandra Day O’Connor:

Now, where do we find some departmental regulation that spells out what happens…

Matthew D. Roberts:

Well, the Secretary has construed its… her regulations to provide that in reliance on three provisions in the regulations.

First, section 553.23(a)(1), which is on page 45a of the joint appendix, which provides, just as I explained that the statute did, that comp time is a substitute for overtime payment in cash, and that there must be an agreement with the employee.

Stephen G. Breyer:

Well, that doesn’t get you there.

Antonin Scalia:

That just says there has to be an agreement before you can use comp time.

It doesn’t say what the consequence of using comp time is.

I mean, it just says there has to be an agreement before you can use comp time.

Matthew D. Roberts:

Yes, Your Honor, and the Secretary is also relying on the provision in (a)(2) that says that the agreement may include provisions governing the use of comp time.

That’s on page 46a…

Stephen G. Breyer:

Right.

Matthew D. Roberts:

the first sentence, and also relying on (c)(1), which is on page 47.

Antonin Scalia:

Well, let’s do (a)(2) first.

An agreement may contain other things.

It doesn’t say it must contain other things.

Matthew D. Roberts:

That’s correct.

Antonin Scalia:

I mean, the regulation could have said that.

Any other things… you know, any other conditions on comp time must be included in an agreement.

It doesn’t say that.

Matthew D. Roberts:

The regulation doesn’t require that it address that, but the Secretary has construed the regulation as a whole to mean that if it doesn’t address that, then the employee retains the right to use comp time…

William H. Rehnquist:

Well, why on earth doesn’t the Secretary say that in a regulation, rather than having to construe something that’s ambiguous.

Matthew D. Roberts:

Well, the Secretary didn’t address it in the regulation, but did address it in the opinion letter, which provides clarification of the regulation…

Stephen G. Breyer:

Well, it still…

Matthew D. Roberts:

and the Secretary’s interpretations.

Stephen G. Breyer:

I just want to… I may be misremembering this, but I can’t… let’s just ask you that even if it’s not a formal interpretation of the regulation, which I could see how it would be, what it means to say you can put extra conditions there, in terms of the… a background rule where nobody says anything.

Stephen G. Breyer:

I could understand that, but even if not, isn’t there a famous administrative law case, Skidmore, which talks about this Court paying deference to a wage and hour administrator on the ground that even if he lacks… he possesses the power to persuade even though he lacks the power to control?

Matthew D. Roberts:

Yes, Your Honor.

We contend that the interpretation of the regulation is entitled to stronger deference that Skidmore.

Skidmore was decided…

Stephen G. Breyer:

I never knew there was a difference of deference.

I never was able to measure it.

Matthew D. Roberts:

Well, the courts of appeals, and I think this Court as well, recognized a difference between Chevron-type deference or the kind of deference in our, and what might be called Skidmore-type deference, which is that the… reasoned judgment is entitled to respect for its power to persuade and…

Stephen G. Breyer:

I mean, all we’re talking about is, what is the background rule if, in fact, nobody puts a condition in the agreement?

Now, they’re free to put it in or not, but what’s the background rule, which is a pretty sort of interstitial minor point, isn’t it?

Matthew D. Roberts:

Yes, Your Honor.

It imposes very little burden on the employer.

The employer is well-situated to obtain the employee’s agreement to that condition, and…

John Paul Stevens:

May I ask, Mr. Roberts, what’s the opposite rule?

If the employer can’t decide when it’s used, does the employee have the right to say, well, I’ve decided to take it whenever I choose?

Matthew D. Roberts:

The employee has the right to use comp time within a reasonable period when the employee requests it, unless it would unduly disrupt the employer’s operation.

Antonin Scalia:

No, excuse me.

I thought he doesn’t have to use it within a reasonable time.

I thought the position here is that he can sit on it and choose not to use it as he wishes, and cash it in at the end of his career?

Matthew D. Roberts:

The employee can accrue the comp time so that the employee can use it on request, as provided by 207(o)(5).

The employee also could accrue it up to the maximum provided by the statute.

Antonin Scalia:

He has no obligation to be reasonable in his use of it at all, isn’t that right?

I thought that’s what we’re arguing about here.

Matthew D. Roberts:

He has an obligation to not… he’s unable to use it on request if it would unduly disrupt the employer’s operation, but…

John Paul Stevens:

Doesn’t that cut against… I’m just trying to think it through.

Doesn’t that in a way cut against you, in the sense that there is a restraint on the ability of the employee to use it whenever he wants to.

He can’t just say on Friday I’m going to take off next Monday and Tuesday.

He must consider the employer’s wishes, but there’s no restraint on the employer’s imposing, under the regulation, his desires on how it should be used, no express restraint.

Matthew D. Roberts:

Because Congress did not expressly address the situation when the… if the employer could require the employee to use comp time.

I submit that that’s because Congress didn’t conceive that the employer would assert that authority, because Congress understood that the comp time belongs to the employee, and that the employee would ask when to use it and not be told when to use it, and that follows, as I said, from the features of the act that I described earlier, so Congress didn’t have a need…

John Paul Stevens:

But the Congress did impose a ceiling on how much comp time that could be accumulated.

Matthew D. Roberts:

Yes, but once that ceiling is reached, Congress specified that the employee would have to be paid in cash, which returns the employee to getting his basic rate under the act.

Antonin Scalia:

But what I don’t understand, Mr. Roberts, is what good it does for Congress to say, you don’t have to pay these people cash.

You can let them have comp time instead.

I don’t see what good that does if Congress also says, oh, and by the way, the employees don’t have to use this comp time.

They can just sit on it and bank it, and cash it in at the end of their careers.

What has Congress accomplished?

Matthew D. Roberts:

Congress doesn’t say you can pay these employees comp time.

It says, the employees have the right to overtime pay in cash, and the employees may agree with you when it’s mutually beneficial to get comp time, and those mutually beneficial arrangements may save the employer money, but Congress was very clear, the statute is absolutely clear, the employee has the right to overtime pay in cash.

Stephen G. Breyer:

If they decide to bank it and never spend it, and the employer would like them to, and eventually get cash for it, when do they get the cash, when they retire?

Matthew D. Roberts:

If they bank it, they get… they can accumulate under the 240 or 480 hours, and on termination of employment they have to…

Stephen G. Breyer:

On termination of employment, so it’s quite possible that… it would be an unusual case where they’d want to bank it.

I mean, if you refuse it you get paid time and a half next month, and if you decide to take the comp time and save it, you’re going to be paid when you retire.

Do you get paid more when you retire?

Matthew D. Roberts:

You get paid… you might get paid more, but I don’t think it would be worth more 20 years down the road.

You would get paid at the rate then.

It’s unlikely…

Antonin Scalia:

Well, at the rate for your rank then, to.

Matthew D. Roberts:

At the rate for your rank then, or the last 3 years.

Antonin Scalia:

If you’re a captain then you’d get a captain’s 240 hours, right?

Matthew D. Roberts:

Yes, Your Honor but…

Stephen G. Breyer:

They must not make decisions based on these prospective calculation of what it’s worth years down the road, or maybe they do, do they?

Matthew D. Roberts:

I don’t know whether they do.

There’s no indication in this case that these employees wanted to do that.

Another feature of their complaint, which wasn’t pursued on appeal, was that they were not being allowed to use comp time when they requested to do so, so it suggests that they did request to use comp time.

Ruth Bader Ginsburg:

Mr. Roberts, does it come down to whether the default rule is, you get overtime, or the default is, as Judge Hickinbotham said, the employer sets the work rules?

Matthew D. Roberts:

Yes.

You could look at it that way.

The reason that the default isn’t that the employer sets the work rules is that Congress has displaced that principle that the employer can set the rules in the act by making… by giving the employee the right to overtime and by providing that the employer can only have a comp time arrangement pursuant to the employee’s consent.

Ruth Bader Ginsburg:

The question is, how detailed the consent must be.

Matthew D. Roberts:

Right.

Ruth Bader Ginsburg:

Just the comp time, or the working out of it.

Matthew D. Roberts:

Yes.

That’s the issue, and it is simply a default rule.

The parties… everyone agrees the parties can contract out of that principle, so it’s not imposing an onerous burden on the employer, and what it is doing is furthering the underlying scheme in the act.

William H. Rehnquist:

Thank you, Mr. Roberts.

Mr. Fleming, we’ll hear from you.

Michael P. Fleming:

Mr. Chief Justice, and may it please the Court:

One reason, or the main reason on why there aren’t any regulations that address this issue, and there really aren’t, is because of the… what’s really taking place in this, what’s been termed a forced use of compensatory time.

The Fair Labor Standards Act basically provides for a minimum wage rate and maximum number of hours.

There’s no provision in there that guarantees a 40-hour week, work week.

An employer is always free to cut the work week short, to have an employee work 30 hours, 20 hours, 10 hours, 1 hour, and in the Fair Labor Standards Act there’s a very specific provision that allows employers to cash out accrued compensatory time at any time.

It’s in the statute and more specifically in the regulations.

Now, if they could do each of those two separately, there’s nothing that prevents a public employer from doing so simultaneously to achieve the objectives which were set out in the amendments following the Garcia decision, that is, to protect the county’s resources and budgets and really, in this situation, to protect against employees that do bank their comp time and hold it to the maximum.

Antonin Scalia:

You mean, the employee normally has a 40-hour week, say, you just come in 35 hours this week, I’ll pay you for 40, right, and the other 5 will be paying down your comp time, right?

Michael P. Fleming:

Yes, Justice Scalia, and in fact…

Antonin Scalia:

So what’s the big deal, then?

Why do we have this case in front of us?

Why don’t they just do that?

Michael P. Fleming:

That’s what we do.

What happens is that they’ll… after the supervisor tries to reach an agreeable time for the employee to start taking time off and getting paid in cash from their compensatory time that’s been accumulated, if the employee doesn’t do it, then he meets with him and orders him to do it, and still tries to get a reasonable period of time when they can do it, and if not, then issues an order for the employee to do it.

And what will happen is, for instance, if it’s a week the employee is going to take off, the employee doesn’t come in to work that week but he still gets his paycheck, 40 hours of pay, and mind you, that pay has been accumulated at time and a half, so they’re still getting the benefit of the time-and-a-half provisions of the Fair Labor Standards Act.

That’s what the practice is, and that’s what happens.

Stephen G. Breyer:

Well, why don’t you put it in an agreement?

I mean, you know… that’s what I don’t understand, is why is this case such a big deal, since everybody agrees you should be able to do that, but you have to get your employees’ agreement to it, just as you’d have to to get his agreement to comp time in the first place, and so you have to get that agreement anyway.

What’s the big deal?

Michael P. Fleming:

I think…

Stephen G. Breyer:

And if there are good arguments on both sides, which there are, you could have a background rule either way.

The reg, I agree with you, doesn’t say much about it.

Michael P. Fleming:

Sure.

Stephen G. Breyer:

And so why not just go with the agency?

Stephen G. Breyer:

I mean, that’s a… why… you know, trivial matter, interstitial, background agreement, they have the experience, et cetera, et cetera.

Michael P. Fleming:

Well…

Stephen G. Breyer:

So that’s sort of where I… what I’m thinking about it.

Michael P. Fleming:

Well…

William H. Rehnquist:

What is your response?

Michael P. Fleming:

That’s a good question, and in addition to the default rule, which Judge Hickinbotham of the Fifth Circuit said, where he sort of filled in the gaps of what he perceived the agreement would be, in addition to the fact that under the statute we don’t have to have an agreement, is our position, really how the case evolved, though, is up until we got to this Court the petitioner was saying that it’s completely prohibited by the act, agreement or no agreement, and it was our position that it’s… we’re allowed to do it by the act, and that’s still our position.

Ruth Bader Ginsburg:

Well, and now in this Court everybody agreed that there can be an understanding.

We’re talking about what notice the employees have to be given, so there’s no question that from now on Harris County can say, this is the deal, employees.

The only question is when they didn’t say that, when all they said was comp time, what should be the consequences?

Michael P. Fleming:

Well, we agreed that we could do it by agreement, but it’s our position we don’t have to do it by agreement, and whether we want to go back and issue a new…

Ruth Bader Ginsburg:

Well, what’s the it?

I mean, certainly you can’t substitute comp time for overtime pay except by agreement or understanding.

Michael P. Fleming:

Yes.

William H. Rehnquist:

Right?

Michael P. Fleming:

That’s…

Ruth Bader Ginsburg:

So you must have an agreement to comp time.

Michael P. Fleming:

Which we have.

Ruth Bader Ginsburg:

And the question is, what are the terms and conditions of that comp time?

One we know from the statute, that the employee can request it, and the employer has to accommodate unless the time that is being sought would unduly disrupt…

Michael P. Fleming:

Yes.

Ruth Bader Ginsburg:

operations.

Michael P. Fleming:

Yes.

Ruth Bader Ginsburg:

So we have that one condition on it directly out of the statute.

Michael P. Fleming:

Yes, Your Honor.

Ruth Bader Ginsburg:

But why, if Congress is trying to say, employees, it’s your option, or at least you have to be given notice, why shouldn’t that notice be, here it is, and at a certain point you’re going to have to take it?

Why shouldn’t that be spelled out, instead of the employee thinking, well, this is fine.

If I need it, I’ll use it, and if I don’t need it, I’ll bank it, and the statute says after X number of hours I get paid in cash.

Michael P. Fleming:

Justice Ginsburg, I agree that it can be in an agreement, certainly.

But just as the Fifth Circuit said, that there are workplace rules which the employee governs, in this case, this is something that is outside of the act.

They could be… setting the number of hours below 40 is not covered by the Fair Labor Standards Act, and the employer is not required to enter negotiations with the employees on when they’re going to set those hours or cut them back.

Antonin Scalia:

Is that what you did here?

I am in some perplexity.

I thought your opponent had acknowledged that it would be okay for the employer just to say, next week only come in 35 hours, and for the employer to take the money that it saves, the 5 hours, add a little bit more to it for the time and a half, and voluntarily, as it’s entitled to do, buy out 5 hours worth of the comp time.

Now, is it common ground that that is okay?

Michael P. Fleming:

I don’t know if… I don’t think that’s what the petitioners are maintaining.

That’s our position.

We’re telling them, don’t come in next week, or, you know, in a couple of weeks…

Antonin Scalia:

No, you’re doing something a little different.

You’re saying, don’t come in next week, take your comp time instead.

Michael P. Fleming:

Yes.

Stephen G. Breyer:

Right?

Michael P. Fleming:

That’s what… as we have maintained, we’re doing two things, and they…

Antonin Scalia:

That’s a little different from saying… you’re directing them to take their comp time.

Michael P. Fleming:

Yes.

Antonin Scalia:

Which means, you know, they won’t get any… well, they’ll get their regular pay, and they’ll have time and a half off, I guess, right?

Is that how it comes?

Michael P. Fleming:

Yes.

I mean, they’ve accrued the comp time for time and a half, and…

Antonin Scalia:

Well, that… it seems to me that’s a bit different from simply saying, look at… God, you’ve got 240 hours here.

I can’t afford that.

Don’t come in for 5 hours next week.

Say nothing else about the comp time, and then the employer just buys off 5 hours worth of comp time.

That’s a little different, and I’m not sure that the other side says that that’s bad.

That’s not what you’ve done here, though.

You’ve instructed them to take their comp time.

Isn’t that the facts of the case?

Michael P. Fleming:

Yes, but by doing it, it’s in two phases.

I agree that it’s a forced use, but as far as finding a statutory authority for doing it, it’s the way I explained.

There’s nothing that can stop us from shortening the work week, and we can cash out the comp time at any time without any restrictions.

Antonin Scalia:

Why don’t you do it the other way, and save us all this trouble?

[Laughter]

David H. Souter:

But I think that was the answer to my hypothetical.

I said, what if they… if they do nothing but say, we’ve got to make up some money somehow to pay for this overhanging liability, so we’re only going to employ you 35 hours a week, and I understood your friend on the other side to say that would not be coercive, and that would be okay.

In practical terms, that would get you exactly where you want to go.

Michael P. Fleming:

You mean… if I understand your question…

David H. Souter:

Because… excepting in one case.

If the employee says, all right, by Godfrey, I’ll work 35 hours a week, but nothing is going to induce me to touch my accrued comp time.

That nest egg is going to stay there until the day I retire.

The employee could do that.

In the real world, I presume that would not happen.

Antonin Scalia:

He can’t do that, can he?

Doesn’t the employer have a right to buy out the comp time?

Michael P. Fleming:

The employer has a right to buy out the comp time.

John Paul Stevens:

That’s right.

Sandra Day O’Connor:

That’s right.

John Paul Stevens:

That’s the issue.

You can make him work 30 hours a week, but the question is, can he refuse to be paid for 40?

Michael P. Fleming:

No, because we can cash it out.

John Paul Stevens:

That’s your position.

Michael P. Fleming:

That’s…

John Paul Stevens:

His position is, he can say I don’t want to take the 10 hours in cash, I want to keep it in the bank.

Michael P. Fleming:

I don’t think that they’re saying that they can refuse to take the payment, because the statute and the regulations are very clear about that, cash them out at any time, and so if we can do either of those separately, we can do them simultaneously.

Ruth Bader Ginsburg:

And that’s what protects the employer against excessive accumulations.

The employer can always say, well, the main rule is time-and-a-half pay.

Here’s your pay.

Michael P. Fleming:

Yes.

We can cash them out.

William H. Rehnquist:

That…

Michael P. Fleming:

The employer can cash out at any time.

Ruth Bader Ginsburg:

But then, if you look at it as the comp time being an exception to the overtime pay, then it would be logical to say the employer can go back to what is the main rule, what is the rule in workplaces that are not public.

Ruth Bader Ginsburg:

There’s no comp time option in the private sector, is there?

Michael P. Fleming:

No.

Ruth Bader Ginsburg:

So the underlying premise of the Fair Labor Standards Act is, you pay time and a half.

Then there’s an exception that operates only in the public sector, but Congress has provided that the employer can always do what employers all over the country must do.

That is, pay time and a half.

Michael P. Fleming:

Pay time and a half, or we can cash them out.

Ruth Bader Ginsburg:

Well, that’s what I mean by cashing them out, by… instead of letting them accumulate the time, giving them the money.

Michael P. Fleming:

Yes, as they… as they’re accumulating it, if we… when they reach the 240 hours, if they do, if we don’t cash them out they’re going to get time and a half.

John Paul Stevens:

May I confess to total stupidity here, because if you’ve got your 30-hour-a-week example, you say you have an absolute right, and they don’t contest the fact you can pay them for the extra 10 hours if you want to.

Michael P. Fleming:

That’s right.

John Paul Stevens:

Well, what exactly does…

Then why aren’t you doing that?

I don’t understand why that isn’t… what you’re fighting about, if everybody agrees you can do that.

Isn’t that just making them take 10 hours of comp time each week?

Michael P. Fleming:

If we did it each week, we could.

We don’t do it each week, though.

I mean, they wait till it gets up to near the maximum of 240 hours in our case, and then they try and get it to come down a little bit, so they’re not cutting back their time every week.

William H. Rehnquist:

Give me a specific example of what cashing out means.

Michael P. Fleming:

Cashing out is if an employee has some accrued compensatory hours, whether it’s 1 hour or 240 hours, that the employer can pay for those hours in… at the… whatever rate the employee has at that time, or… and they can also do it when the employee leaves or is terminated, and they pay it out dollar for dollar based on the number of hours.

Now, the hours have been accumulated at time and a half.

William H. Rehnquist:

Yes.

There is no such thing as comp time for regular… for not overtime, is there?

Michael P. Fleming:

No, there’s not.

David H. Souter:

I want to go back to your answer to Justice Stevens’ question.

If I understand it correctly, what this case boils down to is this.

If you reduce hours on a regular basis, and you also choose to cash out a portion of the accumulated time every week, no problem, no argument, but if you do it on an irregular basis, if you make a judgment that the fire department, sheriff’s department says, gee whiz, next week we haven’t got much process to serve, so I think we’ll make so-and-so take Wednesday afternoon off, not a regularly scheduled thing every week, an irregular judgment from time to time, that’s what we’re fighting about?

Michael P. Fleming:

I don’t want to state the petitioner’s position, but…

David H. Souter:

That’s what you think we’re fighting about?

Michael P. Fleming:

Yes.

Well…

Antonin Scalia:

It’s not even as substantial as that.

You could, on an irregular basis, say we have so many… so few processes to serve next week, you know, Jones, take next Wednesday off.

Michael P. Fleming:

Yes.

Antonin Scalia:

Right?

And then make the decision to pay Jones… pay Jones’ comp time down.

Michael P. Fleming:

If Jones didn’t have any accrued compensatory hours we could do that.

He gets nothing.

Antonin Scalia:

So you don’t… it really doesn’t… it doesn’t make any difference, and that leaves me in something of a quandary, whether the fact that it doesn’t make any difference means that we should find for your opponent, because you can do what you want to do anyway very easily, or the fact that it doesn’t make any difference should make me wonder why it should be prohibited to do it the more honest way by the Fair Labor Standards Act, why…

Michael P. Fleming:

Well…

Antonin Scalia:

I don’t know which resolution that leaves you with.

Michael P. Fleming:

See, Justice Scalia, in looking at the Fair Labor Standards Act, there’s nothing in there that prohibits us from doing this.

Stephen G. Breyer:

But it’s symmetry.

Michael P. Fleming:

Well, it’s symmetry…

Stephen G. Breyer:

You see, basically the statute says, we prefer money.

You work overtime, we’ll give you money.

Now, you work overtime, you get the money.

Now, if you agree to take the comp time, that’s fine, and that kind of idea, that it’s money or you get their agreement… it says its money and they get their agreement, they get the comp time.

It says it’s money, or you get the agreement if you want to force them to take the comp time rather than wait till the end and get the cash, all right.

I mean, it’s symmetry.

Michael P. Fleming:

It’s symmetry, but if you go back to what Justice Scalia said at the very beginning of the argument, was that the purpose of these amendments in the first place was to help out the governmental entities so they can manage their budgets and wouldn’t have to pay this overtime in cash, and it was expected that the employees would use the compensatory time, and not expected that they would bank it…

Stephen G. Breyer:

I don’t see why most of them don’t, to tell you the truth.

I mean, why are they going to wait around for 20 years and cashing it out, instead of… don’t most of them?

Michael P. Fleming:

Well, if they don’t do it…

William H. Rehnquist:

Yes.

Michael P. Fleming:

okay, and we get to the position where they’re reaching the maximum level and the Government’s going to have to start paying time and a half in cash, then a fair reading of the…

Stephen G. Breyer:

Do we know any facts here, by the way, what actually happens?

Michael P. Fleming:

There’s nothing in the stipulation, which is basically the record, as to exactly how many this occurred would amount to the…

Antonin Scalia:

It is not an unknown phenomenon in the Federal service for some people to save up sick time, which they’re entitled to be compensated for at the end of their service, and it was not an unheard-of practice for people to save up vacation time, which is why some employers require you to take your vacation, because people would work the whole year and then, you know, save up all their vacation time, retire a year earlier.

I don’t think it’s at all fanciful to think that people would bank this stuff.

Stephen G. Breyer:

What about the other… sorry.

Stephen G. Breyer:

Did you want to answer that?

David H. Souter:

Go ahead.

Michael P. Fleming:

Oh, I agree that… I mean, it’s easy to see that people will do it, but under the act and the ’85 amendments it was expected that people were going to use it, and that was their concern, is that the employees have the time, and the Fair Labor Standards Act makes sure that people aren’t overworked, without getting paid time and a half for it.

It’s not to make sure they get to work 40 hours.

John Paul Stevens:

Could you explain something else to me?

I think we understand now the 30-hour… you can make them work 30 hours a week, and pay them the extra 10 even if they don’t want that.

How is it that you are in fact compelling them to use their comp time if it’s not by that example?

What do you do to them when they get 220 hours, and they’re getting close to 240?

Michael P. Fleming:

That…

John Paul Stevens:

How do you… what is the arrangement which makes the expend their comp time?

Michael P. Fleming:

They’re told to do it.

Stephen G. Breyer:

They’re told…

Michael P. Fleming:

That is how we’re doing it.

Stephen G. Breyer:

Pardon me?

Michael P. Fleming:

That is how we were doing it.

John Paul Stevens:

You make them work 30 hours a week instead of 40?

Michael P. Fleming:

And 30’s just an example, but it’s, they’re going to take the time off…

Anthony M. Kennedy:

Short week.

Michael P. Fleming:

And then we’re going to cash you out under the act, some of your hours, to make sure you get a full paycheck.

John Paul Stevens:

I see.

William H. Rehnquist:

So they get the same paycheck that they would if they had worked the regular hours?

Michael P. Fleming:

They get the same paycheck, but they haven’t had… they’ve got… the hours that are cashed out they accumulated at time and a half anyway, so that it’s for a less amount of work, so they do get the same pay.

Antonin Scalia:

But you require… I mean, you require them to give you a slip of paper saying, I choose to take my comp time, or something like that?

No?

You just say, you are taking your comp time?

Michael P. Fleming:

They are asked to start reducing it voluntarily.

Antonin Scalia:

Right.

Michael P. Fleming:

Just under the stipulation.

If they… and within a reasonable time.

If they don’t do it…

Antonin Scalia:

If they don’t do it, then what?

Michael P. Fleming:

Then the supervisor can order them to do it, and try and… and still work with them to try to reach mutually agreeable times, but the effect is an order to do it.

William H. Rehnquist:

Well, to the extent you’re talking now beyond the stipulation the record simply isn’t developed, I suppose.

Do you feel you can speak for every division of the county government on this, that this is exactly how they do it?

Michael P. Fleming:

No, just as to the Sheriff’s Department, which is the defendant in the case.

William H. Rehnquist:

The Sheriff’s Department is the only defendant in the case?

Michael P. Fleming:

The county is a defendant as a result of the Sheriff’s Department.

William H. Rehnquist:

All that’s being challenged are the practices in the Sheriff’s Department?

Michael P. Fleming:

Yes.

David H. Souter:

If it’s proper for you to do what we have been assuming in these hypotheticals you could do, why does the statute place a cap on the amount of comp time that can be accumulated?

There’s absolutely no need to do that.

You and other employees can… employers can protect yourselves.

The cap implies to me that you don’t have the autonomy that we have been assuming here.

Michael P. Fleming:

The cap, I believe, is for those employers that just don’t… can’t or won’t let the employees take the time off, and I think the concerns when these enactments of ’85 went into effect was that the employees are able to use the time, are able to take the time off.

On the other side…

David H. Souter:

So they’re protective devices so that we do not build… the employee does not build up so much comp time that the employer in effect is not, at the end of the road, going to be able to pay it.

It’s for the protection of the employee, you’re saying.

Michael P. Fleming:

It’s a balancing.

An employee’s protection is this, is that in the statute, as was mentioned, the employee is allowed to use it within a reasonable time if there isn’t an undue disruption, and so the focus there is on the employee’s ability to use the time.

On the other side, the employer’s controls over this, since it is a balance, is the employer’s ability to cash them out.

And I might add that on the ability of the employers to cash them out, it’s an important distinction, because it is… that division gives the employers control, and the petitioners have maintained well, this comp time accumulation is under the sole control of the employees, and there certainly would be circumstances where the employers would choose to cash out the comp time, and it would be contrary to what the employees wished to do, such as if they wanted to stop them from using it at a certain time of the year, or if there had been an increase, county-wide budget increase in pay, the employer, the Department could cash them out before that goes into effect.

That hasn’t been done in this case, but in… that certainly reflects that the act provides the employer with a certain degree of control over these comp time hours, and it’s not within the sole discretion of…

Ruth Bader Ginsburg:

Well, why doesn’t that just underscore that the default rule should be, you pay them, not, you set the work rules any way you like?

I mean, the statute says, there’s an exception, but the main rule is time and a half.

If the main rule is time and a half, then it’s perfectly logical for the statute to say, you can… employer, you can always pay time and a half.

You can do the other if the employees agree to it, but you can always go down to the bedrock rule under the Fair Labor Standards Act, which is time and a half.

Michael P. Fleming:

Yes, they could, once they go over the 240.

Yes, Justice Ginsburg, that’s correct, you could do that.

Ruth Bader Ginsburg:

But you could cash out the credits at any time, right?

Michael P. Fleming:

Yes, that’s correct.

Ruth Bader Ginsburg:

And so it does suggest to me that this is a statute where the main rule is time and a half, but you have an exception.

Usually we construe exceptions narrowly, not broadly, and if Congress’ idea is, let the workers know what you’re doing, then it’s just a question of notice, and you didn’t give them notice of anything other than you were going to install comp time.

You didn’t give them any notice that, quite contrary to what the statute indicates, that is, they may request it and the employer has to give it to them if it won’t unduly disrupt.

It just doesn’t seem… the statute doesn’t seem to have space for a rule that says, and without prior notice you can require them to take it.

Michael P. Fleming:

It doesn’t, but I don’t think it’s necessary, because I don’t think that scheduling less than 40 hours a week is within the purview of the Fair Labor Standards Act.

Cashing them out at any time is, specifically, and so when we have the comp time agreement, which we have with the employees, it’s to use the comp time, and then it’s in accordance with the Fair Labor Standards Act, which it says, and so if we do that, though, within the Fair Labor Standards Act we can cash them out.

William H. Rehnquist:

Now, Mr. Fleming, your opponent says he agrees with Judge Dennis’ view that neither side was entitled to summary judgment, and that you go back to the district court for development of a factual record.

Do you disagree with that?

Michael P. Fleming:

No, I… yes, I disagree with that, Mr. Chief Justice.

William H. Rehnquist:

You think that your side was entitled to summary… that the county was entitled to summary judgment, as the Fifth Circuit said?

Michael P. Fleming:

Absolutely.

On the deference issue, which was raised briefly by the opposing counsel, I would just say this.

The main case, of course, is Chevron, and the standard is if Congress has not directly spoke on the precise question… excuse me.

If the intent of Congress is clear, it’s the end of the matter, and I think the intent is clear, if you look at what we’re doing.

Shortening the work week is not within the Fair Labor Standards Act.

Cashing them out is.

Clearly, we can do it.

And as far as whether you use Chevron or you use Skidmore, Skidmore certainly is a lesser standard, but you can see in the regulations promulgated by the Secretary it cites Skidmore as to… that the regulation…

John Paul Stevens:

Wouldn’t it be complicated… I understand you don’t have that, but supposing your employees all had a contract that we’ll work 40 hours a week.

Then what would you do?

Michael P. Fleming:

Then I think that they would be bound by contract law for that.

John Paul Stevens:

So they couldn’t… then you could not compel them to take the contract…

Michael P. Fleming:

But their right would not arise from the Fair Labor Standards Act.

It would be under the contract.

Antonin Scalia:

It would be based on the contract, okay.

Michael P. Fleming:

Yes, Your Honor.

Well…

William H. Rehnquist:

You don’t have to use all your time.

[Laughter]

Michael P. Fleming:

I was going to invite some more questions, but I will… if there aren’t any more questions, Mr. Chief Justice, I’ll just stop there.

Michael P. Fleming:

Thank you.

William H. Rehnquist:

Thank you, Mr. Fleming.

The case is submitted.

The Honorable Court is now adjourned until Monday next at ten o’clock.