MICHAEL HORVATH, INDIVIDUALLY, AND ON BEHALF OF THE CLASSES OF FEDERAL SECRET SERVICE AGENTS SIMILARLY SITUATED TO HIM, Plaintiff-Appellant v. UNITED STATES, Defendant-Appellee
2017-1801
United States Court of Appeals for the Federal Circuit
July 20, 2018
Appeal from the United States Court of Federal Claims in No. 1:16-cv-00688-LKG, Judge Lydia Kay Griggsby.
NICHOLAS WIECZOREK, Clark Hill PLLC, Las Vegas, NV, argued for plaintiff-appellant. Also represented by DAVID JAMES VENDLER, Law Offices of David J. Vendler, San Marino, CA.
SOSUN BAE, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellee. Also represented by CHAD A. READLER, ROBERT E. KIRSCHMAN, JR., CLAUDIA BURKE.
Before DYK, CHEN, and STOLL, Circuit Judges.
Michael Horvath brought this putative class-action lawsuit in the Court of Federal Claims (“Claims Court”) seeking overtime and related compensation on behalf of himself and similarly situated special agents of the U.S. Secret Service. Among his theories of recovery, Mr. Horvath asserted that regulations promulgated by the Office of Personnel Management (“OPM”) improperly required that certain overtime hours be worked consecutively in order to trigger compensation. See
BACKGROUND
Mr. Horvath has been employed as a special agent of the Secret Service since 2010. As such, he is a law-enforcement officer entitled to certain enhancements to his pay to compensate for his availability and overtime hours.
First, Mr. Horvath receives a 25% enhancement to his base salary under a provision known as Law Enforcement Availability Pay or “LEAP.” See
Second, Mr. Horvath is additionally entitled to overtime compensation for some—but not all—of the overtime hours he works. For employees receiving LEAP pay, the overtime-pay statute makes an important distinction between unscheduled
(A) in excess of 10 hours on a day during such investigator‘s basic 40 hour workweek; or
(B) on a day outside such investigator‘s basic 40 hour workweek . . . .
However, there is an exception when performing certain duties, including the protective services performed by the Secret Service.
Mr. Horvath filed suit in the Claims Court on June 10, 2016, claiming that he is entitled to back pay on a variety of theories. The government moved to dismiss for want of subject-matter jurisdiction and for failure to state a claim. See RCFC 12(b)(1), (6). The Claims Court found that it lacked jurisdiction to consider some of Mr. Horvath‘s claims and that others, over which it had jurisdiction, failed to state a claim. Horvath v. United States, 130 Fed. Cl. 273, 281–86 (2017).
Mr. Horvath timely appealed. We have jurisdiction under
DISCUSSION
We review de novo the Claims Court‘s dismissal both for want of subject-matter jurisdiction and for failure to state a claim. E.g., Abbas v. United States, 842 F.3d 1371, 1375 (Fed. Cir. 2016).
I
We agree that dismissal was proper with respect to three of Mr. Horvath‘s four asserted claims.
First, Mr. Horvath alleged that the government implemented a so-called flexing policy, pursuant to which agents were required to substitute their regularly scheduled work days with days originally scheduled to be off, without additional compensation. The Claims Court determined it lacked subject-matter jurisdiction over this claim for want of a money-mandating statute. Horvath, 130 Fed. Cl. at 284. In particular, the Claims Court found that Mr. Horvath‘s complaint stated at most a violation of
Second, and relatedly, Mr. Horvath contends that when forced to work a flex day, he was granted a day off that could only be taken within the same pay period, in violation of regulations that allowed compensatory time off to be used for up to 26 pay periods. The Claims Court regarded this as a claim brought under
Finally, Mr. Horvath contends that he was improperly denied overtime compensation for two of the 12 hours he worked on the typical working day. Under this so-called 8-2-2 policy, agents are paid at regular rates for the first eight hours, are compensated by LEAP pay for the next two hours, and are paid at overtime rates for the final two hours. While Mr. Horvath claims that he was improperly denied overtime compensation for all the hours worked in excess of eight, this is precisely how the statute is written. The statute directs overtime compensation for scheduled work “in excess of 10 hours.”
II
Mr. Horvath‘s final claim is that OPM‘s consecutive-hours requirement is contrary to the plain meaning of
The government argues that “the statute is silent as to how the two hours should be calculated” and that OPM‘s regulations are a reasonable interpretation of the statute. Appellee Br. 17. The Claims Court agreed with the government, finding the statute silent on the matter and affording
We review Mr. Horvath‘s challenge to OPM‘s interpretation of the statute under the two-step analysis announced in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842–45 (1984). First, we ask “whether Congress has directly spoken to the precise question at issue,” id. at 842; if so, we “must give effect to the unambiguously expressed intent of Congress,” id. at 843. If, however, “the statute is silent or ambiguous with respect to the specific issue,” we ask whether the agency‘s interpretation “is based on a permissible construction of the statute.” Id.
Thus, at the first step, the question is whether § 5542(e) is ambiguous or silent with respect to whether the required two hours must be consecutive. We agree with the government that looking at the text of the statute in isolation, it is silent in this respect. But “this does not lead us immediately to step two”: instead, “we must first use all ‘traditional tools of statutory construction’ to determine whether ‘Congress had an intention on the precise question at issue’ before we consider deference to an agency interpretation.” Candle Corp. of Am. v. U.S. Int‘l Trade Comm‘n, 374 F.3d 1087, 1093 (Fed. Cir. 2004) (quoting Chevron, 467 U.S. at 843 n.9); accord Gen. Dynamics Land Sys., Inc. v. Cline, 540 U.S. 581, 600 (2004) (“Even for an agency able to claim all the authority possible under Chevron, deference to its statutory interpretation is called for only when the devices of judicial construction have been tried and found to yield no clear sense of congressional intent.”); Star-Glo Assocs., LP v. United States, 414 F.3d 1349, 1356 (Fed. Cir. 2005).
While the text of § 5542(e) is silent, the rest of § 5542 suggests that the consecutive-hours requirement is not appropriate. When the statute refers to periods of hours, it consistently does so in a manner that clearly refers to a cumulative tally of hours, which are not always consecutive. See, e.g.,
Moreover, the consecutive-hours requirement is not consistent with the history and purpose of the statute. The LEAP statute was enacted in 1994 without the subsection (e) exception to the general rule that no additional hourly compensation is paid for the first two hours of scheduled overtime work performed by LEAP-compensated employees. See
This aligns with the statute‘s purpose, as evidenced by the interplay between subsections (d) and (e). Subsection (d) provides that the first two hours of scheduled overtime are compensated by LEAP pay, but subsection (e) overrides that rule when an investigator also works two hours of unscheduled overtime. This is because, for those days, Congress concluded that the LEAP pay covers only two of the four hours in question (the unscheduled overtime), leaving the scheduled overtime uncompensated. This history and purpose suggest to us that it was Congress‘s clear intent for the subsection (e) benefit to be triggered by any two hours of unscheduled overtime, without regard to whether they were performed consecutively.
At oral argument, the government for the first time asserted that the approach of the OPM regulation serves the statutory purpose of discouraging overtime abuse. See Oral Arg. 14:34–25:15. But the government has identified nothing in the structure, purpose, or history of the statute that suggests its purpose is abuse deterrence. And the government has offered no logical nexus between abuse and whether overtime hours are worked consecutively. See
At Chevron‘s step one, using the traditional tools of statutory construction, we find that § 5542(e) unambiguously applies without regard to whether the two hours of unscheduled overtime are consecutive. We therefore need not reach step two.2 With this understanding, we conclude that the Claims Court erred in dismissing Mr. Horvath‘s complaint for failure to state a claim concerning § 5542(e).
CONCLUSION
With respect to Mr. Horvath‘s claim for overtime compensation denied under OPM‘s consecutive-hours requirement, we reverse the Claims Court‘s dismissal and remand for further proceedings. On remand, the Claims Court should consider whether class certification is appropriate in this action. See RCFC 23. As to the remaining claims, we affirm the dismissal.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED
COSTS
Costs to Mr. Horvath.