BRANDI BAILEY, ET AL. v. LOUDOUN COUNTY SHERIFF‘S OFFICE, ET. AL.
Record No. 131815
Supreme Court of Virginia
September 12, 2014
Present: Kinser, C.J., Lemons, Goodwyn, Millette, Mims, and McClanahan, JJ., and Russell, S.J. FROM THE CIRCUIT COURT OF LOUDOUN COUNTY, Alfred D. Swersky, Judge Designate
In this appeal we consider whether the Virginia Gap Pay Act,
I. Facts and Proceedings
The Loudoun County Sheriff‘s Office receives funds from Loudoun County, pursuant to a cooperative agreement, and from the Commonwealth. To receive funds from Loudoun County, the Sheriff‘s Office agrees to be treated “as any other department” under Loudoun County‘s authority. The consequences of this arrangement are significant. The Sheriff acts both in his county-affiliated capacity as a department head, and in his state-affiliated capacity as a constitutional officer. Also, Loudoun County approves the Sheriff‘s Office‘s budget and retains authority to dictate the Sheriff‘s Office‘s policies regarding its deputies’ salaries, benefits, and overtime.
Loudoun County‘s Board of Supervisors, compelled by budget concerns, focused on limiting overtime compensation to reduce expenditures. To address the Sheriff‘s Office‘s use of overtime, the Board required the Sheriff‘s Office to implement three employment practices to reduce the hours that would be considered overtime. The Board also raised the number of hours constituting the deputies’ regularly scheduled work hours.
These actions prompted the litigation giving rise to this appeal. The Sheriff‘s Office employed deputies who worked in the Adult Detention Center (“ADC Deputies“) and deputies who worked on patrol (“Patrol Deputies“). The ADC Deputies and Patrol Deputies1 brought an action under the Multiple Claimant Litigation Act,
After considering trial testimony and post-trial briefs, the circuit court issued a letter opinion resolving these claims. The circuit court (1) denied all requested injunctive relief, (2) awarded the ADC Deputies judgment in the amount of $107,451.00 together with prejudgment interest from February 1, 2011, and (3) denied the Patrol Deputies’ claims and entered judgment in favor of the defendants on those claims. After the court denied the Patrol Deputies’ motion for reconsideration, it entered a final order memorializing its letter opinion and also awarding costs and attorneys’ fees.
The Patrol Deputies timely filed a petition for appeal with this Court. We granted the following assignments of error, each of which identifies an allegedly impermissible employment practice brought before the circuit court at trial:
- The Court wrongly held that the Sheriff did not violate
Va. Code § 9.1-703 when he refused to pay [Patrol] Deputies overtime for all hours when the deput[ies were] in a “paid status,” which violates the express language of[Code §] 9.1-703 and the policy created for the Sheriff by the County. - The Court wrongly held that the Sheriff could refuse to credit hours at the overtime rate to [Patrol] Deputies as compensatory time for hours over 80 and below 86 even though
Va. Code § 9.1-701(A) expressly requires that the Sheriff do so. - The Court wrongly held that the Sheriff‘s practice of “force-flexing” hours (where the Sheriff forced [Patrol] Deputies without notice to go home and not work regularly scheduled hours that would put them past the overtime threshold) did not violate
Va. Code § 9.1-703 and the Deputies’ employment contracts.
II. Discussion
A. Standard of Review
Whether a statute prohibits employment practices is a mixed question of law and fact. See Smyth County Cmty. Hosp. v. Town of Marion, 259 Va. 328, 336, 527 S.E.2d 401, 405 (2000). “Therefore, while we give deference to the trial court‘s factual findings and view the facts in the light most favorable to the prevailing party, we review the trial court‘s application of the law to those facts de novo.” PS Business Parks, L.P. v. Deutsch & Gilden, Inc., 287 Va. 410, 417, 758 S.E.2d 508, 511 (2014) (internal quotation marks and alterations omitted). We review issues of contract interpretation de novo. Schuiling v. Harris, 286 Va. 187, 192, 747 S.E.2d 833, 836 (2013).
B. The Statutory Context of This Appeal
This appeal requires us to resolve issues of Virginia law. However, the relevant state law operates in tandem with federal law. Because “we do not read statutes in isolation,” and because “statutes dealing with a specific subject must be construed together in order to arrive at the object sought to be accomplished,” we first review the relevant statutory law to place the issues in this appeal within their appropriate legal context. Sheppard v. Junes, 287 Va. 397, 403, 756 S.E.2d 409, 411 (2014) (internal quotation marks omitted).
1. The Federal Fair Labor Standards Act
The United States Congress enacted the Fair Labor Standards Act (the “FLSA“),
However, this 40-hour overtime requirement is not absolute. For example, Congress provided numerous outright exemptions from the 40-hour overtime requirement.
The purpose of this partial exemption is well understood. “Congress incorporated [this] special provision[] concerning overtime pay for [law-enforcement employees] when it amended the FLSA in 1974 in order to take account of the special concerns of States and localities with respect to these positions.” Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 554 n.17 (1985). This partial exemption “eases the burden of the FLSA‘s overtime provisions on state and local employers two ways.” Calvao, 599 F.3d at 14. It not only “provides for higher hours standards before requiring the payment of overtime,” but it also “permits overtime hours to be computed over a workweek that may be longer than a forty-hour workweek and that the employer selects.” Id.; see also Avery v. City of Talladega, 24 F.3d 1337, 1344 (11th Cir. 1994) (“The work period concept was intended to ease the overtime burdens of certain public employers by allowing them to average their employees’ duty hours over the designated work period, from [7] to [28] days in length.“).
Congress established the following hours-to-days ratio for this partial exemption: 216 hours for a 28 day work period.
2. The Virginia Gap Pay Act
The Virginia Gap Pay Act (the “Act“),
It is clear that the General Assembly intended the Act to operate in conjunction with the FLSA. The Act permits an employer to “adopt any work period to compute overtime compensation for . . . law-enforcement employees,” so long as such a work period is “recurring and fixed” and “between [7] and 28 days.”
More specifically, the Act is designed to solve a problem unaddressed by the FLSA. The FLSA establishes a fixed number of pre-overtime hours that may be paid at a normal rate for any given work period. However, an employer may establish a lower number of hours of work per work period that constitute the basis of the employee‘s salary or the employee‘s hourly compensation — that is, those hours which constitute the employee‘s regularly scheduled work hours. See
The problem is that any hours of work accrued in the gap are “overtime,” in the sense that those hours are work in excess of the hours used to determine the law-enforcement employee‘s regular pay, but federal law would not require a one and one-half overtime rate of pay for those hours because they do not exceed the pre-overtime hours established by
Employers shall pay . . . law-enforcement employees overtime compensation or leave, as under the Fair Labor Standards Act,
29 U.S.C. § 207(o) , at a rate of not less than one and one-half times the employee‘s regular rate of pay for all hours of work between the statutory maximum permitted under29 U.S.C. § 207(k) and the hours for which an employee receives his salary, or if paid on an hourly basis, the hours for which the employee receives hourly compensation.
C. The Sheriff‘s Office‘s Employment Practices
The Sheriff‘s Office established a 14 day work period for its Patrol Deputies as permitted by
Pursuant to Loudoun County‘s direction, the Sheriff‘s Office implemented three employment practices to reduce overtime payments to the Patrol Deputies. We find that the Act prohibits two of these employment practices but permits the third practice. To the extent hours of work actually accrue in the gap, notwithstanding creative accounting practices, those hours must be paid at least at a one and one-half overtime rate. But the Act neither requires payment for hours of work never actually accrued in the gap, nor mandates that an employee work according to a specific work schedule.
1. The “Debiting Leave” Scheme
The “debiting leave” scheme is implicated when, within a single work period, a Patrol Deputy works overtime hours and takes sick leave. Instead of acknowledging the accrual of both overtime hours and sick leave, the Sheriff‘s Office reduces and offsets the sick leave hours taken by the overtime hours worked. Those offset sick leave hours are not “debited” from the Patrol Deputy‘s pool of accumulated sick leave, but instead remain on the books as sick leave not being taken. The effect of this policy makes it appear as if the Patrol Deputy did not actually work some or all of his overtime hours in a work period, as the overtime hours which offset the sick leave hours simply look like regularly scheduled work hours in light of the sick leave hours not being acknowledged.
As for the offset sick leave hours which are taken but not acknowledged, the Sheriff‘s Office does not outright refuse to pay for such hours. The Patrol Deputy can have those offset sick leave hours acknowledged in a subsequent work period, but only if such an acknowledgement would not put the Patrol Deputy over his regularly scheduled work hours for that subsequent work period. In other words, when those offset sick leave hours are acknowledged and compensated in a subsequent work period, they are paid at the Patrol Deputy‘s normal rate of pay, rather than at a one and one-half overtime rate.
We agree with the Patrol Deputies that the “debiting leave” scheme violates the Act. The Act requires at least a one and one-half overtime rate of pay for “all hours of work” that accrue within the gap.
“Hours of work” is a term of art that the General Assembly defined for purposes of the Act: “all hours that an employee works or is in a paid status during his regularly scheduled work hours shall be counted as hours of work.”
We hold that the Sheriff‘s Office was required to pay the Patrol Deputies’ offset sick leave hours at least at a one and one-half overtime rate because those offset sick leave hours were “hours of work” actually taken, and therefore accrued, within the gap.
The “exchange hours” scheme is implicated when a Patrol Deputy works overtime hours during a particular work period. The Patrol Deputy has the option to voluntarily “exchange” his overtime hours which accrued in the gap for leave hours to be taken and paid at any later date. However, when the exchanged overtime hours are paid out as leave, it is at a normal rate of pay rather than at a one and one-half overtime rate.
We agree with the Patrol Deputies that the “exchange hours” scheme violates the Act. As already stated, the Act requires at least a one and one-half overtime rate of pay for “all hours of work” that accrue within the gap.
This is true even though the “exchange hours” scheme paid overtime hours in the form of leave rather than overtime compensation. The Act specifically allows for hours of work accrued within the gap to be paid out as either “overtime compensation or leave.”
The term “overtime compensation” in
The term “leave” in
We hold that, although the Sheriff‘s Office could permissibly pay overtime hours as leave rather than as overtime compensation, the Sheriff‘s Office was required to pay the Patrol Deputies’ exchanged overtime hours at least at a one and one-half overtime rate because those exchanged overtime hours were “hours of work” actually worked, and therefore accrued, within the gap.
The “force flexing” scheme is implemented when a Patrol Deputy accrues hours in addition to his regularly scheduled work hours such as through overtime work or a holiday. Then, later in the same work period, to avoid paying overtime, the Sheriff‘s Office prohibits the Patrol Deputy from working his full scheduled shift and sends the Patrol Deputy home before the deputy can accrue sufficient hours to earn overtime.
a. The Patrol Deputies’ Statutory Challenge
The Patrol Deputies make three statutory arguments as to why the “force flexing” scheme violates the Act. None are persuasive, and we agree with the Sheriff‘s Office that the “force flexing” scheme is permissible under the Act. We note at the outset that the “force flexing” scheme does not implicate the problem the Act was enacted to address: hours of work being accrued within the gap, but paid out at less than a one and one-half overtime rate. The “force flexing” scheme merely stops the Patrol Deputies from accruing more hours than the number of their regularly scheduled work hours in a work period.
First, the Patrol Deputies argue that an employer cannot alter an employee‘s work schedule by not allowing that employee to work all of his “regularly scheduled work hours.” The General Assembly defines “[r]egularly scheduled work hours [as] those hours that are recurring and fixed within the work period and for which an employee receives a salary or hourly compensation.”
Second, the Patrol Deputies argue that the Act‘s prohibition against an employer changing a work period “for purposes of denying overtime compensation to [law-enforcement] employees to which they may be entitled under subsection A of [Code] § 9.1-701,”
Third, the Patrol Deputies invoke the purpose of the Act and argue that the Act was intended to prohibit employment practices, such as the “force flexing” scheme, whose “sole purpose [is] to perpetuate the pre-statutory wage scale.” Walling v. Helmerich & Payne, Inc., 323 U.S. 37, 41 (1944). In light of the Act‘s specialized operation in conjunction with the FLSA, we do not ascribe such a broad purpose to the Act. In any event, “the General Assembly‘s intent is usually self-evident from the
We hold that the Sheriff‘s Office was neither required to pay hours of work that did not accrue within the gap at least at a one and one-half overtime rate, nor prohibited from altering a Patrol Deputy‘s work schedule within a work period.
b. The Patrol Deputies’ Contract Challenge
The Patrol Deputies contend that the Loudoun County Human Resources Handbook of Personnel Policies and Procedures (the “Human Resources Handbook“) vested the Patrol Deputies with contractual rights as part of their employment with the Sheriff‘s Office, and that the “force flexing” scheme violated those rights. “In Virginia, an employment relationship is presumed to be at-will, which means that the employment term extends for an indefinite period and may be terminated by the employer or employee for any reason upon reasonable notice.” Cave Hill Corp. v. Hiers, 264 Va. 640, 645, 570 S.E.2d 790, 793 (2002). “Many of the provisions customarily included in an employee handbook are consistent with an at-will employment relationship such as policies regarding vacations, severance pay, or employee grievance procedures.” Progress Printing Co. v. Nichols, 244 Va. 337, 340, 421 S.E.2d 428, 430 (1992). “Normally, the employer retains the right to alter these policies at any time, although rights which have already vested in the employee are enforceable for the period of time during which those rights existed.” Id. at 340-41, 421 S.E.2d at 430.
We agree with the Sheriff‘s Office that the “force flexing” scheme did not violate the Patrol Deputies’ contractual employment rights. Reviewing the relevant provisions of the Human Resources Handbook makes this clear. Section 4.2.02 of the Human Resources Handbook, titled “Authorized Workweeks and Work Hours,” reads:
(B) Supervisors will schedule sufficient staff to provide services during County business hours or other designated service hours. To ensure that sufficient staff are available to meet service needs, supervisors have the authority to temporarily or permanently adjust employees’ work hours or locations, as long as the adjustment does not exceed the position‘s authorized workweek hours and a reasonable amount of time is afforded the employee to accommodate the adjustment.
In relevant part, this provision prohibits an adjustment in a Patrol Deputy‘s work hours if no “reasonable amount of time” is provided “to accommodate the adjustment.”
The Patrol Deputies failed to show at trial that the “force flexing” scheme violated this prohibition. The Patrol Deputies failed to present sufficient evidence that the “force flexing” scheme, as a general matter, involved unreasonable amounts of time for a Patrol Deputy to accommodate to a work hours adjustment. And the Patrol Deputies recounted only one specific instance of the “force flexing” scheme, when Deputy Anthony David Cooper was told upon arriving at work that he would “have to go home two hours after leaving roll call.” The circuit court did not err in finding that a two hour notice of being sent home early, although perhaps frustrating and inconvenient for the employee, is not a breach of contract by constituting an unreasonable amount of time for that employee to “accommodate” the truncated work shift.
(A) The County supports flexible scheduling arrangements when they can be accommodated as long as sufficient staff are available to meet service needs. Flexible scheduling of work hours is arranged between an employee and supervisor with the Department Head‘s approval[,] providing that:
(1) employees continue to work their authorized number of hours during their normal pay workweek (Thursday through Wednesday);
(2) each separate work period is structured below FLSA overtime levels; and
(3) all of the department or program‘s business hours are covered adequately and the provision of services to the public is not adversely affected.
In relevant part, this provision allows flexible scheduling of work hours when “arranged” between the employee and supervisor and with the “approval” of the department head.
The Patrol Deputies failed to show at trial that the “force flexing” scheme did not satisfy these requirements. Testimony established that the “force flexing” scheme involved a Patrol Deputy being told by his supervisor that his schedule was going to be shortened, and that such flexing of hours was done with the Sheriff‘s approval, who was the department head. Although such scheduling was mandatory, whereby a Patrol Deputy could not opt out of the altered work hours, the flexed schedule was nonetheless “arranged” between the Patrol Deputy and his supervisor and done with the “approval” of the Sheriff.
We hold that the Human Resources Handbook did not prohibit the Sheriff‘s Office from altering the Patrol Deputies’ work schedules in the manner testified to at trial. The “force flexing” scheme did not violate the Patrol Deputies’ contractual employment rights.
D. Damages for the Sheriff‘s Office‘s Violations of the Act
While preserving the sovereign immunity of the Commonwealth and any agency as defined in
On appeal, the parties dispute the amount of damages the Patrol Deputies should be awarded pursuant to the Sheriff‘s Office‘s violations of the Act. These arguments are premature. With respect to the Patrol Deputies, the circuit court ruled only on the Sheriff‘s Office‘s liability. Holding the Sheriff‘s Office not liable, the circuit court necessarily did not address damages, which is an issue logically and legally distinct from liability. See Ford Motor Co. v. Bartholomew, 224 Va. 421, 434, 297 S.E.2d 675, 681 (1982). Because “we are a court of review, not of first view,” the lower court must rule on this outstanding issue before we address the point. Cutter v. Wilkinson, 544 U.S. 709, 718 n.7 (2005); see Rule 5:25; see, e.g., Virginia Marine, 287 Va. at 390, 757 S.E.2d at 11. We will therefore remand this case to the circuit court for a disposition expressly resolving the outstanding issue of the Patrol Deputies’ damages. Ash v. All Star Lawn & Pest Control, Inc., 256 Va. 520, 526, 506 S.E.2d 540, 543 (1998).
III. Conclusion
For the aforementioned reasons, we hold that the “debiting leave” scheme and “exchange hours” scheme violated the Act. We further hold that the “force flexing” scheme neither violated the Act nor violated the Patrol Deputies’ contractual employment rights. We will reverse the circuit court‘s judgment to the extent it held otherwise, and remand the case back to that court for further proceedings in accordance with this opinion.
Affirmed in part, reversed in part, and remanded.