AARON MCLAUGHLIN and ANITHA WILLIAMS v. THE UNITED STATES
No. 21-1775
In the United States Court of Federal Claims
(Filed: May 19, 2025)
DIETZ, Judge.
Elinor J. Kim, U.S. Department of Justice, Civil Division, Washington, DC, counsel for Defendant.
OPINION AND ORDER
DIETZ, Judge.
On behalf of themselves and those similarly situated, Aaron McLaughlin and Anitha Williams, Senior Watch Officers at the Office of the Director of National Intelligence (“ODNI“), seek backpay and other damages arising from the government‘s alleged failure to properly compensate them for overtime under the Fair Labor Standards Act of 1938 (“FLSA“) and
I. BACKGROUND
Mr. McLaughlin and Ms. Williams were employed as Senior Watch Officers at the ODNI from October 2019 to October 2021.1 Compl. [ECF 1] ¶¶ 7-8; Def.‘s Mot. Summ. J. [ECF 35] at 3; Pls.’ Mot. Summ. J. [ECF 38] at 9.2 The mission of ODNI is to “[l]ead and support Intelligence Community integration; delivering insights, driving capabilities, and investing in the future.” [ECF 35-1] at 48. “The DNI Watch provides 24/7 global intelligence situational awareness in support of ODNI‘s mission.” Id. at 123. “One of the Watch‘s primary responsibilities is to provide ODNI customers, including the DNI [Director of National Intelligence] and PDDNI [Principal Deputy Director of National Intelligence], all-source reporting that is strategic, credible, and timely to assist in the performance of their duties.” Id. ODNI Watch customers also include “National Intelligence Managers (NIMs), National Intelligence Officers, ODNI Centers (National Counterterrorism Center, National Counterintelligence and Security Center, National Counterproliferation and Biosecurity Center, Cyber Threat Intelligence Integration Center, and the Foreign Malign Influence Center), ODNI senior leaders and their counterparts at various intelligence agencies, the White House, cabinet-level agencies, and other government organizations.” [ECF 35] at 3-4.
The parties completed discovery and filed cross-motions for summary judgment pursuant tо Rule 56 of the Rules of the United States Court of Federal Claims (“RCFC“) as to whether the plaintiffs are exempt from the overtime provisions of the FLSA and whether the plaintiffs were properly placed on an AWS for the purpose of determining overtime pay. See [ECF 35] at 2; [ECF 38] at 7. The cross-motions are fully briefed, [ECF 35]; [ECF 38]; Def.‘s Reply & Resp. [ECF 39]; Pls.’ Reply [ECF 40], and the Court held oral argument on November 13, 2024, [ECF 43].
II. STANDARD OF REVIEW
Summary judgment may be entered on part of a claim or defense if there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law.
III. DISCUSSION
The government argues that the plaintiffs are not entitled to FLSA overtime pay because their work “was properly classified as FLSA exempt” under the administrative exemption. [ECF 35] at 16. The government also argues that the plaintiffs “are not entitled to overtime pay based on a standard work schedule . . . because their basic work requirement was a non-standard shift schedule.” Id. at 27 (capitalization omitted). The plaintiffs counter that “the [g]overnment has failed to meet its burden to establish that Plaintiffs were exempt from the FLSA‘s overtime requirement,” [ECF 38] at 22, and that the plaintiffs are entitled to overtime pay based on a standard work schedule because they “were not properly placed” on a nonstandard schedule, id. at 39. As explained below, the Court finds that there are genuine issues of material fact regarding the plaintiffs’ duties that preclude granting summary judgment on whether the plaintiffs are exempt from the FLSA overtime requirement under the administrative exemption. With respect to the plaintiffs’ work schedule, the Court finds that they are entitled to judgmеnt as a matter of law. The plaintiffs’ work schedule does not constitute either an authorized flexible or compressed work schedule.
A. The Plaintiffs’ Exemption Status Under the FLSA
“The FLSA empowers [the United States Office of Personnel Management (“OPM“)] to promulgate regulations implementing the Act‘s provisions as they apply to employees of the federal government . . . and OPM has invoked this authority to adopt regulations located at
An administrative employee is an employee whose primary duty is
1. The Primary Duty of Senior Watch Officers
Under
Here, the plaintiffs’ primary duty was to “maintain[] 24/7 glоbal situational awareness.” [ECF 35] at 16; [ECF 38] at 22. Indeed, the government states that this duty “was plaintiffs’ entire job and a full-time one at that,” [ECF 35] at 16, and the plaintiffs agree, [ECF 38] at 22. Further, this determination is supported by the undisputed evidence. The Senior Watch Officer position description states that a major duty and responsibility was to “maintain 24/7 global situational awareness by independently researching and analyzing raw intelligence reporting and maintaining awareness of current intelligence issues.” [ECF 35-1] at 260, 262. The deposition testimony indicates that the plaintiffs spent “the whole 12-hour shift” gathering information and researching, id. at 384 (quoting Ms. Williams’ deposition), that “tak[ing] information in and disseminat[ing] it out” comprised “ninety-nine” percent of the plaintiffs’ job, id. at 361 (quoting Mr. McLaughlin‘s deposition), and that “probably half of every hour” or more, was spent at the three information stations, [ECF 38-1] at 23-28 (quoting Seth T.‘s deposition). It further indicates that the plaintiffs’ duty to monitor and alert others of high-profile intelligence
Nevertheless, the government contends that the plaintiffs’ primary duty “also included serving as a team lead.” [ECF 39] at 8. The government argues that “the team lead function of a Senior Watch Officer may be credited as a primary duty even if it constituted less than 50 percent of their work.” Id. at 9. In essence, the government asserts that serving as team lead is an alternative primary duty. See id. at 8. For the plaintiffs’ team lead function to qualify as an alternative primary duty, the government must demonstrate that it satisfies the requirements of
A duty constituting less than 50 percent of an employee‘s work (alternative primary duty) may be credited as the primary duty for exemption purposes provided that duty:
(1) Constitutes a substantial, regular part of the work assigned and performed;
(2) Is the reason for the existence of the position; and
(3) Is clearly exempt work in terms of the basic nature of the work, the frequency with which the employee must exercise discretion and independent judgment as discussed in
§ 551.206 , and the significance of the decisions made.
With respect to the first requirement of the alternative primary duty test, the government argues that the “plaintiffs’ team lead function was a substantial and regular part of their work, which was performed each 12-hour shift workday and covered the entire shift period.” [ECF 39] at 9. The government relies on self-evaluations and deposition testimony to show that the plaintiffs performed the team lead function throughout their watch shift. Id. (citing [ECF 35-1] at 277, 281; [ECF 39-1] at 4-6, 10-11). The plaintiffs, on the other hand, argue that the team lead function is not detailed in the position description and that the Sеnior Watch Officers spent little time on the team lead function. See [ECF 40] at 9-10. The plaintiffs similarly rely on deposition testimony to support their argument. Id. (citing [ECF 38-1] at 26-27, 31, 73). Furthermore, the parties disagree about the percentage of time the Senior Watch Officers spent on the team lead function. Compare [ECF 35-1] at 402-03 (Seth T. testifying that the Senior Watch Officers spent
Next, regarding the second requirement, the government argues that “the Senior Watch Officer position existed because ODNI did not want to entrust [team lead] responsibilities to contractors.” [ECF 39] at 10. In support of its position, the government points to the DNI Watch Standard Operating Procedure, [ECF 35-1] at 98; a document detailing the responsibilities of Senior Watch Officers, id. at 264-65; and dеposition testimony, [ECF 39-1] at 8-9. The plaintiffs dispute this evidence, arguing that it “says nothing about the reason the position exists.” [ECF 40] at 9. The plaintiffs also argue that the deposition testimony indicates that “the contractor and employee Watch Officers performed essentially all the same duties,” and that, therefore, the team lead duties are not the reason for the existence of the position. Id. (citing [ECF 39-1] at 8-9). As with the first requirement, the Court finds that there is a factual dispute over whether the team lead function is the reason for the existence of the plaintiffs’ Senior Watch Officer position.
Finally, as to the third requirement—whether the plaintiffs’ team lead function is clearly exempt work—the government argues that “the basic nature of Senior Watch Officers’ work as team leads was to ensure that their respective team members (comprised of 1-2 contractors) followed the proper procedures, policies, methods, and priorities of the ODNI and its customers, and thereby clearly involved exempt work.” [ECF 39] at 11. The government also argues that the plaintiffs “exercised discretion and independent judgment on how they would carry out their team lead activities” and that “the work plaintiffs performed as team lead involved matters of significance.” Id. The government relies on deposition testimony to show that the plaintiffs apportioned the work of the other watch officers, trained them, and directed and monitored their work. Id. (citing [ECF 35-1] at 395-96; [ECF 38-1] at 25-26; [ECF 39-1] at 5-6, 10-11, 26). In contrast, the plaintiffs assert that “[t]he record contains no evidence that the team lead duty involved any substantial responsibility,” and that the team lead function “appears to have primarily consisted of dividing up work between employee and contractor Watch Officers each shift.” [ECF 40] at 10. The plaintiffs rely on deposition testimony to show that this apportionment process was informal and not representative of a management duty. Id. at 11 (citing [ECF 38-1] at 25-26, 116-17). The plaintiffs also assert that the deposition testimony reflects that the “team leads were generally peers of contractor Watch Officers,” as opposed to “any kind of manager.” Id. (citing [ECF 38-1] at 116-17, 120). Further, the plaintiffs dispute the government‘s contention that they exercised discretion and judgement on matters of significance. [ECF 40] at 12. They argue that “[t]here is no evidence that Plaintiffs’ nominal role in dividing work involved any actual discretion or was a matter of significance,” or that there was any “discretion or independent judgment involved in the occasional job-shadowing training . . . or in any other purported ‘team lead’ duty.” Id. (citing [ECF 38-1] at 25-26, 116-17, 139-40). Thus, the parties also raise factual disputes regarding whether the team lead function satisfies the third requirement of the alternative primary duty test.
As result of these factual disputes and the extent of the record on the nature and scope of the team lead function, the Court does not have an adequate basis upon which to conclude that
2. The Plaintiffs’ Primary Duty of “Watch” Does not Qualify for an Administrative Exemption.
The Court next analyzes whether the primary duty of “maintaining 24/7 global situational awareness” or “watch” qualifies for the administrative exemption. To qualify for the administrative exemption, the watch function must “directly relate[] to the management or general business operations” of the ODNI, “as distinguished from [its] production functions.”
With regards to “whether the primary duty is directly related to the employer‘s management or business operations, as distinguished from production functions,” Shea, 136 Fed. Cl. at 103, OPM regulations provide the following definition of management:
Management means performing activities such as interviewing, selecting, and training of employees; setting and adjusting their rates of pay and hours of work; directing the work of employees; maintaining production or financial records for use in supervision or control; appraising employees’ productivity and efficiency for the purpose of recommending promotions or other changes in status; handling employee complaints and grievances; disciplining employees; planning the work; determining the techniques to be used; apportioning the work among the employees; determining the type of materials, supplies, machinery, equipment, or tools to be used or merchandise to be bought, stocked and sold; controlling the flow and distribution of materials or merchandise and supplies; providing for the safety and security of the employees or the
The phrase “directly related to the management or general business operations” refers to the type of work performed by the employee. To meet this requirement, an employee must perform work directly related to assisting with the running or servicing of the business, as distinguished, for example, from working on a manufacturing production line or selling a product in a retail or service establishment.
Because the plaintiffs’ watch function—researching, analyzing, and disseminating intelligence information—is a production function, the Court finds that it is not directly related to the management or general businеss operations of the ODNI. In analyzing whether the watch function performed by the plaintiffs relates to ODNI management or general business operations, the Court views United States Department of Labor (“DOL“) guidance on an analogous position—public-sector inspectors or investigators—as instructive. See Grandits, 66 Fed. Cl. at 550 (analyzing whether plaintiffs’ positions are sufficiently analogous to position descriptions in DOL materials to justify an FLSA exemption).7 The DOL Field Operations Handbook provides:
U.S. Dep‘t of Labor, Wage & Hour Div., Field Operations Handbook § 22j21 (2021) (“DOL Handbook“) (emphasis added). Thus, where an employee‘s primary duty involves the use of skills and technical abilities to gather information and the application of known standards or prescribed procedures, their primary duty is typically a production function unrelated to management or general business operations and is generally non-exempt. Id. Additionally, the DOL distinguishes “between those employees whose primary duty is administering the business affairs of the enterprise from those whose primary duty is producing the commodity or commodities, whether goods or services, that the enterprise exists to produce and market.” U.S. Dep‘t of Labor, Wage & Hour Div., Opinion Letter No. FLSA2005-21, at 4 (Aug. 19, 2005) (“DOL Opinion Letter“) (quoting Dalheim v. KDFW-TV, 918 F.2d 1220, 1230 (5th Cir. 1990)); see also DOL Handbook § 22c01(b). In doing so, the DOL concludes that where “the primary duty of the [employee] is diligent and accurate fact-finding, according to [agency] guidelines, the results of which are turned over to [the agency] . . . [the employee‘s] activities, while important, do not directly relate to the management or general business operations оf the employer within the meaning of the regulations.” DOL Opinion Letter, at 4.
Here, the plaintiffs’ primary duty to “watch,” like the primary duty of public-sector investigators, was to conduct diligent and accurate fact finding according to prescribed agency guidelines. During each shift, the plaintiffs monitored one of three stations and provided relevant information to ODNI customers. See [ECF 35] at 3, 5; [ECF 38] at 10. Such information was gathered and reported according to agency guidelines. See [ECF 35-1] at 53-76 (DNI training manual specifying priorities); id. at 112-46 (DNI training manual “Standard Operating Procedure” for Watch Officers, including email templates, intelligence production instructions, watch report templates, telephone procedures with scripted statements, conference call procedures, intelligence cable procedures with recording and citation guidelines, and open source/press reporting procedures); [ECF 38-1] at 170-87 (email and reporting templates, intelligence production instructions, watch report templates, telephone procedures with scripted statements, and conference call procedures). The plaintiffs performed the services that the agency exists to perform to “provide[] 24/7 global intelligence situational awareness in support of ODNI‘s mission,” [ECF 35-1] at 123; see also id. at 48 (stating that ODNI‘s mission is to “[l]ead and support Intelligence Community integration; delivering insights, driving capabilities, and investing in the future.“). In sum, the plaintiffs’ watch function directly relates to the production of the ODNI commodity—the gathering and reporting intelligence information—
Regarding the requiremеnt that the primary duty “include the exercise of discretion and independent judgment with respect to matters of significance,” the regulations provide:
(a) In general, the exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered. The term “matters of significance” refers to the level of importance or consequence of the work performed.
(b) The phrase discretion and independent judgment must be applied in light of all the facts involved in the particular employment situation in which the question arises.
* * *
(f) . . . [E]mployees who simply apply well-established techniques or procedures described in manuals or other sources within closely prescribed limits to determine the correct response to an inquiry or set of circumstances will be nonexempt.
B. The Plaintiffs’ Work Schedule
The parties also disagree as to the method for calculating overtime pay. Most federal government agencies “establish a basic administrative workweek of 40 hours for each full-time employee,”
Notwithstanding section 6101 of this title, each agency may establish, in accordance with this subchapter, programs which allow the use of flexible schedules, which include—
(1) designated hours and days during which an employee on such a schedule must be present for work; and
(2) designated hours during which an employee on such a schedule may elect the time of such employee‘s arrival at and departure from work, solely for such purpose or, if and to the extent permitted, for the purpose of accumulating credit hours to reduce the length of the workweek or another workday.
An election by an employee referred to in paragraph (2) shall be subject to limitations generally prescribed to ensure that the duties and requirements of the employee‘s position are fulfilled.
Several years after the Work Schedules Act became law, the President issued two executive memoranda “direct[ing] the [OPM] . . . to take all necessary steps to support and encourage the expanded implementation of flexible work arrangements.” Expanding Family-Friendly Work Arrangements in the Executive Branch, 59 Fed. Reg. 36017, 36017 (July 11, 1994); see also Memorandum on Family Friendly Work Arrangements, 1 Pub. Papers 962 (June 21, 1996). In connection with this direction, the OPM issued guidance “to provide a framework for Federal agencies to consult in establishing alternative work schedules and to provide additional information to assist agencies in administering such programs.” See U.S. Off. of Pers. Mgmt., Handbook on Alternative Work Schedules (1996) (“OPM AWS Handbook“). The AWS programs aimed to “enable managers and supervisors to meet their program goals while, at the same time, allowing emрloyees to be more flexible in scheduling their personal activities.” Id. In addition to the memoranda, OPM cites the Work Schedules Act—specifically
Unlike flexible and compressed work schedules, “maxiflex” schedules are not defined by statute. However, relying on the authority it was granted by the Work Schedules Act, OPM provides the following definition for a “maxiflex” schedule:
A type of flexible work schedule that contains core hours on fewer than 10 workdays in the biweekly pay period and in which a full-time employee has a basic work requirement of 80 hours for the biweekly pay period, but in which an employee may vary the number of hours worked on a given workday or the number of hours each week within the limits established for the organization.
OPM AWS Handbook; see also U.S. Off. of Pers. Mgmt., Fact Sheet: Maxiflex Work Schedules (2024) (“OPM Maxiflex Factsheet“). Under a “maxiflex” work schedule, a full-time employee “must have a basic work requirement of 80 hours in a biweekly pay period,” and the agency “must establish flexible hours and core hours.” OPM Maxiflex Factsheet. “Core hours refer to the designated period(s) on specified days when all employees covered by the approved [flexible work schedule] must be working.” Id. “Agencies may designate the number of core hours each week to meet their mission needs and are not required to have corе hours on every workday.” Id. “[A]gencies may choose not to establish core hours on each workday, thus providing maximum flexibility for employees.” Id. “Because of the absence of core hours on one (or more) of the normal workdays, an employee may work fewer than 10 days in a biweekly pay period under a maxiflex work schedule.” Id. Flexible hours are those “hours during which an employee may choose to vary their starting or stopping times (or times of arrival to and departure from the work site) consistent with the duties and requirements of the position.” Id. “An agency may establish limitations on when basic work requirement hours may be performed—for example, the days of the week on which an employee may perform such hours and limits on the number of such hours on a given day.” Id.
The government initially contends that the “plaintiffs are not entitled to overtime pay based on a standard work schedule (8-hour day or 40-hour week) because their basic work requirement was a non-standard shift schedule (12-hour shift, 80-hour bi-weekly) that only entitled them to overtime pay for hours performed above their non-standard shift schedule.” [ECF 35] at 27 (emphasis and capitalization removed). Specifically, the government argues that the ODNI correctly classified the plaintiffs’ “non-standard shift schedule as a ‘compressed schedule.‘” Id. In its reply, however, the government states that “[i]t is undisputed that plaintiffs’ work schedule did not entirely consist of a fixed schedule and therefore ODNI did not implement plaintiffs’ work schedule under a [compressed work schedule] program.” [ECF 39] at 27. Further, the government contends in its reply that “plaintiffs worked a . . . ‘maxiflex schedule’
The parties do not dispute the plaintiffs’ work schedule. Their basic work requirement consisted of twelve-hour shifts that satisfied an eighty-hour biweekly requirement. See [ECF 35] at 10; [ECF 38] at 13. The plaintiffs were on a five-week work cycle that consisted of two weeks of twelve-hour day shifts, two weeks of twelve-hour night shifts, and one administrative week. [ECF 35] at 10; [ECF 38] at 13. During the shift weeks, the plaintiffs “were required to perform 36 hours or 48 hours of work, which was scheduled for three or four days respectively.” [ECF 35] at 28. The twelve-hour shifts “began and ended at the same time each day at 0400 and 1600.” [ECF 35] at 10; see also [ECF 40] at 20. Also, the plaintiffs wеre scheduled for specific shift days, were required to be present for the entire shift, and could not vary their arrival and departure times. [ECF 35] at 10; [ECF 38] at 13-14. During their non-shift week, the plaintiffs were afforded flexibility with respect to the days and hours worked. [ECF 35] at 10; [ECF 38] at 14. Although the plaintiffs were required to work their hours during weekdays, [ECF 35] at 10, they were free to select their workdays, as well as their arrival and departure times, id.; [ECF 38] at 14.
The Court finds that the plaintiffs’ work schedule does not constitute a flexible or compressed work schedule. As the government concedes, the plaintiffs’ work schedule is not a compressed schedule because it is not entirely fixed. See [ECF 39] at 6 (“It is undisputed that plaintiffs’ work schedule did not fall under a compressed work schedule (CWS) program because it was not entirely fixed.“). As noted above, an agency is authorized to “establish [a work schedule] which use[s] a 4-day workweek or other compressed schedule” to satisfy an eighty-hour biweekly basic work requirement.
Additionally, the plaintiffs’ work sсhedule does not constitute a flexible schedule. Under the Work Schedules Act, an agency is authorized to establish a flexible work schedule that includes both “designated hours and days during which an employee on such a schedule must be present for work” and “designated hours during which an employee on such a schedule may elect the time of such employee‘s arrival at and departure from work.”
In sum, the Court finds that the plaintiffs were not properly placed on a compressed or a flexible schedule for the purposes of calculating overtime pay. Rather, the record shows that the plaintiffs’ work schedule consisted of a compressed schedule for the four shift weeks and a flexible schedule for the administrative week. This type of hybrid work schedule is not authorized under the Work Schedules Act. See OPM AWS Manual (stating that “[t]here is no authority to establish hybrid work schedules“); see also Gen. Servs. Admin., 50 F.L.R.A. at 138-39 (adopting OPM‘s interpretation of the Work Schedules Act as prohibiting the combination of flexible and compressed schedules).11
IV. CONCLUSION
For the reasons stated above, the government‘s motion for summary judgment, [ECF 35], is DENIED, and the plaintiffs’ motion for summary judgment is GRANTED-IN-PART and DENIED-IN-PART. The plaintiffs’ motion is GRANTED with respect to whether the plaintiffs were properly placed on an AWS and DENIED with respect to whether the plaintiffs are exempt under the FLSA. Further proceedings are required to determine whether the team lead function performed by the plaintiffs constitutes an alternative primary duty for the purposes of the administrative exemption under the FLSA and whether the plaintiffs are entitled to overtime pay under the FLSA.12
The parties SHALL CONFER and FILE a joint status report on or before June 9, 2025, proposing a schedule for further proceedings in this case.
IT IS SO ORDERED.
s/ Thompson M. Dietz
Thompson M. Dietz, Judge