Moreau v. Klevenhagen

United States Court of Appeals,

Fifth Circuit.

No. 90–2833.

Lynwood MOREAU, Individually, as President of the Harris County
Deputy Sheriff's Union, Local 154, IUPA, AFL–CIO, and as FLSA
Representative of 37 Similarly Situated consenting Harris County
Law Enforcement Officers, et al., Plaintiffs–Appellants,

v.

Johnny KLEVENHAGEN, et al., Defendants–Appellees.

March 31, 1992.

Appeal from the United States District Court For the Southern
District of Texas.

Before WILLIAMS, WIENER, Circuit Judges, and LITTLE, District Judge
*
.

WIENER, Circuit Judge:

A deputy sheriffs' union appeals the district court's grant of

summary judgment in favor of Harris County, Texas on all three of

the union's claims under the Fair Labor Standards Act (FLSA). We

affirm the grant of summary judgment on two of those claims. But

finding that the union was misled by the district court's

bifurcation of the case and was thereby prevented from presenting

adequate summary judgment proof on the third claim, we reverse and

remand to the district court for further proceedings with respect

to that claim.

I.

*
District Judge of the Western District of Louisiana,
sitting by designation.
 FACTS

On April 15, 1988, Eugene T. Merritt, Jr. brought suit

individually and as President of the Harris County Deputy Sheriffs
1
Union (the Union), together with approximately 400 other Harris

County Deputy Sheriffs, against Harris County and Sheriff Johnny

Klevenhagen (collectively, the "County"). The complaint alleged

that the County violated the FLSA by (1) failing to pay cash in

lieu of compensatory time for overtime work in the absence of an

agreement with the plaintiffs' designated representative (the comp

time claim); (2) failing to include longevity pay in the

plaintiffs' "regular rate of pay" for overtime payment calculations

(the longevity claim); and (3) excluding non-mandated firearms

qualification time from the calculation of number of hours worked

(the firearms qualification claim). The district court denied the

Union's motion for partial summary judgment and granted summary

judgment in favor of the County on all three claims.

II.

ANALYSIS

A. The Comp Time Claim.

Under the Harris County pay system, deputy sheriffs receive

1
At the time of appeal, Lynwood Moreau served as president
of the Union.
compensatory time as overtime compensation at 1–1/2 times the

normal pay rate. When a deputy's bank of comp time reaches 240

hours, the deputy receives compensation in cash for overtime at the

hourly rate, based on the deputy's "base pay rate." Each of the

deputies in this action designated the Union as his or her

representative. The County instituted its pay system without an

agreement with the Union.

The Union's claim alleges that the County's pay system

violates Section 7(o ) of FLSA, which provides in part:

(2) A public agency may provide compensatory time under
paragraph (1) only—

(A) Pursuant to—

(i) applicable provisions of a collective bargaining
agreement, memorandum of understanding or any other
agreement between the public agency and representatives
of such employees; or

(ii) in the case of such employees not covered by
subclause (i), an agreement or understanding arrived at
between the employer and employee before the performance
of work....

* * * * * *

(B)

* * * * * *

In the case of employees described in clause (A)(ii) hired
prior to April 15, 1986, the regular practice in effect on
April 15, 1986, with respect to compensatory time off for such
employees in lieu of the receipt of overtime compensation,
shall constitute an agreement or understanding under such
clause (A)(ii).2

The County's current pay system was the "regular practice in

2
29 U.S.C. § 207(o ).
effect" on April 15, 1986. Each deputy signed a payroll

compensation form that stated that the deputy understood and

accepted the County's personnel regulations, which set forth the

terms of the pay system.

The Union asserts that as the deputies in this case have

designated the Union as their representative, under Section 207(o

)(2)(A)(i) the County has no authority to pay deputies for overtime

in comp time, even if the deputies elect to be paid in comp time,

unless the County has entered into an agreement with the Union to

that effect. The Union relies on the Tenth Circuit's decision in

International Ass'n of Fire Fighters, Local 2203 v. West Adams

County Fire Protection Dist.3 In that case, the Tenth Circuit

analyzed the Department of Labor regulations interpreting Section

207(o ) and held that (1) if employees have a representative, an

employer may pay comp time in lieu of cash only pursuant to an

agreement between the employer and the representative, and (2)

employees are deemed to have a representative by merely designating

a representative, whether or not the employer recognizes the

representative. The Union argues that under West Adams, as the

deputies had designated the Union as their representative, the

County could not pay comp time in the absence of an agreement with

the Union.

We find the Union's argument unpersuasive.

TEX.REV.CIV.STAT.ANN. art. 5154c prohibits any political subdivision

3
877 F.2d 814 (10th Cir.1989).
from entering into a collective bargaining agreement with a labor

organization unless the political subdivision has adopted the Fire

and Police Employee Relations Act. Harris County has not adopted

that Act; thus, under article 5154c the County has no authority to

bargain with the Union. In light of that Texas statute, it is not

West Adams but two other circuit court decisions, one from the
4
Fourth Circuit and another from the Eleventh Circuit,5 that are

instructional in the disposition of this case.

In Abbott v. City of Virginia Beach,6 the Fourth Circuit held

that neither FLSA nor the regulations implementing it showed any

intent to preempt state laws prohibiting cities from entering into

collective bargaining agreements.7 As Virginia law had such a

prohibition, and as the pay system in Virginia Beach gave

individual police officers an absolute choice of receiving either

comp time or cash for overtime work, the Fourth Circuit held that

the pay system, which was not the result of an agreement between

the city and the officers' designated representative, did not

violate FLSA.8

4
Abbott v. City of Virginia Beach, 879 F.2d 132 (4th
Cir.1989), cert. denied, 493 U.S. 1051, 110 S.Ct. 854, 107
L.Ed.2d 848 (1990).
5
Dillard v. Harris, 885 F.2d 1549 (11th Cir.1989), cert.
denied, ––– U.S. ––––, 111 S.Ct. 210, 112 L.Ed.2d 170 (1990).
6
Note 4, supra.
7
Id. at 136.
8
Id. at 137.
 In Dillard v. Harris,9 the Eleventh Circuit agreed with the

analysis in Abbott and went on to discuss an alternative approach

that led to the same result. In Dillard, as in Abbott and the

instant case, (1) the employees had designated a representative,

(2) state law prohibited the city from entering into a collective

bargaining agreement, and (3) the city, without an agreement with

the employees' representative, had established a pay system

providing for comp time. The city employees argued that, as they

had designated a representative, the city could not pay them in

comp time in the absence of an agreement with their representative.

The Dillard court held that under the plain language of Section

207(o )(2)(A), the prerequisite for coverage under subclause (i)

was the existence of an agreement between the city and the

representative, rather than the existence of the representative.10

Thus, held the court, even though the employees had designated a

representative, subclause (ii) rather than subclause (i) applied

because there was no agreement between the city and the

representative under subclause (i).11 The court held that as the

employees were hired before April 15, 1986, and as the city's

practice before that date was to give comp time in lieu of cash,

that practice constituted an agreement under subclause (ii), and

was permissible under Section 207(o )(2)(B).12

9
Note 5, supra.
10
Id. at 1552–54.
11
Id. at 1552–53.
12
Id. at 1553.
 Joining our colleagues of the Fourth and Eleventh Circuits, we

hold that, because Texas law prohibits the County from entering

into a collective bargaining agreement with the Union—and thus

there is no such agreement—the deputies are not covered by

subclause (i) of Section 207(o )(2)(A). Rather, subclause (ii) of

that section applies. Under Section 207(o )(2)(B), the County's

pay system, which was in effect on April 15, 1986, constituted an

agreement between the County and deputies hired prior to that date.

For deputies hired after April 15, 1986, the individual

compensation form signed by each deputy constituted individual

agreements of the type contemplated by Section 207(o )(2)(A)(ii).

Thus, the County has complied with Section 207(o ) and the payment

of comp time in lieu of cash is proper.

Nevertheless, the Union argues that, even in light of the

Texas law that prohibits political subdivisions from entering into

collective bargaining agreements, the County was still required to

enter into an agreement with the Union before it could pay deputies

in comp time. The Union contends that under Section 207(o ) comp

time may be authorized pursuant to agreements that are not

classified as collective bargaining agreements, thus not violating

Texas law. Section 207(o )(2)(A)(i) provides that a public agency

may provide comp time pursuant to:

[A]pplicable provisions of a collective bargaining agreement,
memorandum of understanding, or any other agreement between
the public agency and representatives of such employees
(emphasis added).

The Union asserts that it represents the deputies in a
non-collective bargaining capacity and that any agreement between

the Union and the County would be classified as "any other

agreement" under Section 207(o ), not in violation of Texas law.

The Union also cites TEX.REV.CIV.STAT.ANN., art. 5154c Section 6,

which recognizes the right of public employees to present

grievances through a "representative" such as the Union, and argues

that under that statute, the Union is allowed to deal with the

County in a non-collective bargaining capacity.

We reject this argument. Presentation of grievances is

acceptable under Texas law because it is a unilateral procedure

under which the employee can be represented by anyone he or she

chooses, be it a lawyer, clergyman, union or some other person or

organization. Texas law prohibits any bilateral agreement between

a city and a bargaining agent, whether the agreement is labeled a

collective bargaining agreement or something else. Under Texas

law, the County could not enter into any agreement with the Union.

B. The Longevity Claim.

The County pays its deputy sheriffs "longevity pay" each year.

Those payments are calculated by multiplying a fixed dollar amount,

which the County Commissioners Court determines annually, by the

number of years an individual employee has been employed by the

County. That total is paid to the employee in monthly installments

throughout the year.
 The "regular rate of pay" is the rate which is multiplied by

one and one-half to arrive at the rate of overtime pay pursuant to

Section 7(a) of FLSA.13 The County does not include longevity pay

in its determination of the "regular rate of pay" for purposes of

calculating the rate of overtime pay. The Union contends that this

violates FLSA. Section 7(e) of FLSA provides in part:

(e) As used in this section the "regular rate" at which an
employee is employed shall be deemed to include all
remuneration for employment paid to, or on behalf of, the
employee, but shall not be deemed to include—

(1) sums paid as gifts; payments in the nature of gifts
made at Christmas time or on other special occasions, as
a reward for service, the amounts of which are not
measured by or dependent on hours worked, production, or
efficiency (emphasis added).14

The regulation interpreting Section 207(e) provides that if a

payment "is measured by hours worked, production, or efficiency,

the payment is geared to wages and hours during the bonus period
15
and is no longer to be considered as in the nature of a gift."

The district court concluded that the longevity payments were not

geared to wages, efficiency or production and held that they were

a "reward for service." Thus, held the court, the payments

qualified as "sums paid as gifts" under Section 207(e)(1) and were

properly excluded from the determination of "regular rate of pay."

The Union cites three administrative letter rulings by the

Department of Labor for its argument that longevity payments must

13
29 U.S.C. § 207(a).
14
29 U.S.C. § 207(e).
15
29 C.F.R. § 778.212 (1989).
be included in "regular rate of pay" for purposes of calculating

overtime pay. Those letters are easily distinguishable, however.

One letter concerns incentive payments made to employees following

the completion of educational or career development programs and is

clearly not applicable to the instant case. The other two letters

state that longevity payments made pursuant to a city ordinance or

a collective bargaining agreement between the employer and

employees must be included in "regular rate of pay." In the

instant case, no such ordinance or bargaining agreement binds the

County to make longevity payments.

The deputies receive the longevity payments regardless of the

number of hours worked or wages earned. The payments serve no

purpose other than to reward the deputies for their tenure as

County employees. The Union cites no authority in support of its

argument other than the administrative letter rulings which we have

distinguished. As the payments are not measured by or dependent on

hours worked, production or efficiency, we hold that the longevity

payments qualify as "sums paid as gifts." As such, the County

properly excludes the longevity payments from "regular rate of

pay."

C. The Firearms Qualification Claim.

The Union's complaint alleged that the County wrongfully

excluded certain time spent in firearms qualification from the

calculation of the number of hours worked by the deputy
sheriffs—thereby depriving deputies of compensation for that time.

Texas law requires law enforcement officers to meet firearms

proficiency qualifications once each year. The Union and the

County agree that training time spent to meet that qualification,

as well as time spent training for requalification—as distinguished

from time spent in a second actual qualification—is not compensable

under FLSA, even if such time exceeds a deputy's normal working

hours. From 1986 until August 1991, however, the County required

its law enforcement officers to meet the proficiency qualifications

twice each year.16 The Union argues that, as the second

qualification requirement each year exceeded the state requirement

of one qualification per year, any overtime spent by the deputies

in qualifying a second time during each of those years was

compensable.

Job-related training activities are generally compensable

under FLSA,17 but the FLSA regulations provide that required

training is not compensable in the following situations:

(1) Attendance outside of regular working hours at specialized
or follow-up training, which is required by law for
certification of public and private sector employees within a
particular governmental jurisdiction (e.g., certification of
public and private emergency rescue workers), does not
constitute compensable hours of work for public employees
within that jurisdiction and subordinate jurisdictions.

(2) Attendance outside of regular working hours at specialized
or follow-up training, which is required for certification of
employees of a governmental jurisdiction by law of a higher
level of government (e.g., where a State or county law imposes

16
The County now requires its officers to qualify only once
each year.
17
29 C.F.R. 785.27 (1989).
 a training obligation on city employees), does not constitute
compensable hours of work.18

The Union argues that, although overtime related to the first

qualification during a year is excluded from compensability

pursuant to the regulations, as the second qualification during a

year is required by county policy only—not by state or county

law—any overtime spent meeting the second qualification requirement

is not an exception to the general rule of compensability.

Central to our determination here is the fact that the

district court bifurcated this case into two stages—the first stage

was supposed to address only liability and the second stage was

supposed to address damages. The Union argues that, despite the

bifurcation, the district court's holding in fact addressed the

issue of damages during the first, or liability stage, at a time

when the parties had not yet conducted discovery. The Union

asserts that the sole purpose of the liability stage of the

proceedings was to determine whether in fact the County maintained

a policy of not compensating deputies for any overtime spent

training to meet either of the semi-annual qualification

requirements and, if so, whether implementation of that policy

would violate the overtime provision of FLSA. Thus, the Union

contends, it should not have been required in the liability stage

to produce proof that any deputies had actually trained twice

without being compensated for overtime on either occasion, and the

district court erred in ruling on the damages stage before the

18
29 C.F.R. 553.226(b) (1989) (emphasis added).
Union had an opportunity to present summary judgment proof on that

issue. The Union urges that, inasmuch as the twice-a-year

qualification policy, if applied, would entitle deputies to

overtime, we should remand this case to the district court with

instructions to allow the Union to adduce its evidence of actual

damages suffered, on a deputy by deputy basis, whether by summary

judgment proof, in an evidentiary hearing, or in a full-blown

trial. We agree.

In our de novo review of this case, we hold that the district

court erred in two respects. First, the district court erred in

its determination of the factual circumstances under which a deputy

would be entitled to overtime compensation. The district court

stated that if a deputy met the State-required annual qualification

but failed to meet the County's semi-annual qualification

requirements within the same year, and as a result that deputy was

required to participate in remedial training which caused him to

work more than forty hours during a week, the deputy would be

entitled to overtime compensation. The district court held that

the Union's claim did not survive the County's motion for summary

judgment, however, because the Union had failed to demonstrate by

summary judgment proof that one or more of the deputies had not in

fact been compensated in such a situation.

In the situation discussed by the district court, an officer

who twice tries but fails even once to meet the certification

requirements must make additional attempts until he or she
succeeds. But the Union concedes that time spent by an officer in

training for such "make-up" qualification tests is not compensable

overtime under FLSA because the County allows participation in such

remedial activities to take place during normal working hours. The

situation actually being contested, though, is different. It

questions overtime entitlement of a deputy who passes his shooting

test twice a year on his own time without being paid overtime for

either event. Thus, contrary to the district court's conclusion,

deputies are claiming entitlement to overtime compensation only if

they spend time in excess of normal working hours to meet the

requirements for the second shooting qualification during a year

after having already worked on their own time to meet the

requirement once that year.

The district court's second error was in granting summary

judgment in favor of the County on the firearms qualification

issue. A memorandum dated February 16, 1987 from Sheriff

Klevenhagen to all Sheriff's Office personnel provided:

Firearms requalification for peace officers is required by the
State of Texas as a condition of maintaining the Peace Officer
License. A thorough search of applicable law by the office of
the County Attorney has determined that under this condition
the time spent in demonstrating firearms proficiency is not
compensable time when occurring outside normal duty hours.
Therefore, effective immediately, no overtime compensation
will be granted for time spent on firearms requalification
(emphasis added).

That summary judgment proof clearly showed that the County did in

fact have a policy under which deputies would receive no

compensation for any overtime spent meeting either of the

semi-annual qualification requirements. Whether any deputies were
actually deprived of overtime compensation because of the County's

firearm qualification policy should have been addressed only at the

damages stage of the proceedings. Thus, the district court "jumped

the gun" when it granted summary judgment in favor of the County

before the Union had an opportunity to conduct discovery and

present proof of damages.

We therefore reverse the district court's grant of summary

judgment on this issue and remand for further proceedings. As we

have concluded that the County had a policy which potentially could

deprive deputies of their just compensation, the Union must be

allowed to discover and present proof, if there be any, of which

deputies suffered damages as a result of that policy, and to what

extent. To establish that its members actually incurred damages,

the Union must show that one or more deputies (1) trained on their

own time to meet both semi-annual qualification requirements during

a year, and (2) received no overtime compensation for either

occasion. Obviously, each deputy will be limited to recovery of

overtime for only one such qualification per year because the other

is required by state law and therefore is not compensable.

III.

CONCLUSION

As Texas law prohibits the County from entering into an

agreement with the Union, the County's pay system constitutes an
agreement between the County and the individual deputies in

compliance with Section 7(o ) of FLSA. Therefore, the district

court did not err in granting summary judgment in favor of the

County on the Union's comp time claim. Neither did the district

court err in granting summary judgment in favor of the County on

the Union's longevity payments claim because the payments were not

measured by or dependent on hours worked, production or efficiency

but qualified as gifts. The district court did err, however, in

granting summary judgment in favor of the County on the Union's

firearms qualification claim. We therefore REVERSE the district

court's grant of summary judgment in favor of the County on that

claim and REMAND to the district court for the sole purpose of

determining whether any deputies suffered damages and, if so, to

what extent. In all other respects, we AFFIRM the judgment of the

district court.