It’s not easy to write a statute.  A statute can’t list every conceivable scenario that might arise, or every way that someone might try to evade the obligations the law imposes.  Congress used to solve this problem by empowering administrative agencies to fill in any gaps or resolve any ambiguities in a statute.  But, as a recent Third Circuit decision interpreting the Fair Labor Standards Act (FLSA) demonstrates, when courts ignore longstanding agency interpretations, it’s easy for judges to strip away worker protections that are only written in broad strokes.

In Secretary, U.S. Dept. of Labor v. Comprehensive Healthcare Management Services, LLC, Judges Michael Chagares and David Porter, appointees of George W. Bush and Donald Trump, respectively, set aside a $35.8 million judgment against a nursing home operator for failing to pay workers for all their hours worked.  Disregarding Department of Labor interpretive guidance that has been on the books for almost sixty years, these two judges held that the FLSA provides no remedy for workers for “overtime gap time” — uncompensated non-overtime hours during weeks when an individual also works overtime hours.

Congress addressed two issues in the FLSA — minimum wages and maximum hours.  Unfortunately, because the minimum wage has not risen with inflation, it has become largely irrelevant, remaining stuck at $7.25 an hour since 2009.  Instead of imposing a maximum hour cap, Congress attempted to discourage employers from imposing long hours by providing that for any hours above forty in a week, workers are entitled to one and a half times their “regular rate.”  Somewhat surprisingly, while the FLSA requires payment of the minimum wage, if someone does not work more than 40 hours per week, the FLSA does not require an employer to pay for every hour worked as long as the total wage divided by the total number of hours is higher than the minimum wage.  In Comprehensive Healthcare Management, the employer failed to pay for some of the hours that its employees worked, and workers were often paid for less than 40 hours in a week.  For instance, workers may have worked 43 hours in a week, while being paid for 38 hours.  The issue in the case was whether the workers could recover for all the time they weren’t paid, or only for overtime hours.  A Department of Labor (DOL) interpretative regulation that dates back to 1968 states that extra compensation for overtime work “cannot be said to have been paid to an employee unless all the straight time compensation due him for the nonovertime hours … has been paid.”  Thus, in my example, if a worker’s regular wage rate was $20 an hour, the DOL would have sought two hours of pay at $20, and three hours of pay at $30, for a total of $130.  But, under the Third Circuit’s ruling, workers cannot recover for unpaid “gap time” for their non-overtime hours.  As a result, the employer would only have to pay for the three overtime hours, meaning that the worker would recover just $90, or $18 an hour for the five unpaid hours.  The dissenting judge, Jane Roth, pointed out that by reducing the price the employer pays for imposing overtime hours, the majority’s ruling ignores the statute’s remedial purposes, which were “to ensure that all covered employees receive a fair day’s pay for a fair day’s work,” and to place financial pressure on employers to discourage them from imposing excessive hours on their employees.    

The two Third Circuit judges took the position that because the statute does not explicitly state that workers must be paid for all their non-overtime hours, the Labor Department’s longstanding interpretation is not persuasive.  But, as illustrated above, failure to pay for “gap time” is just another way of circumventing the obligation to pay workers a premium for overtime hours.  Consider a different scheme to deprive workers of additional pay for overtime hours: a worker is regularly paid $20 an hour, but in weeks when they work overtime, the employer reduces their non-overtime wage rate to $16.25 an hour, while paying $30 an hour for overtime hours.  If the worker regularly works 40 hours in a week, they would typically earn $800 a week.  And if they work 45 hours in a week, they would also be paid $800.  The statute is silent on that scenario too, but it’s hard to see how that doesn’t violate the FLSA even though the worker is nominally receiving one and a half times their regular rate for overtime hours.

This isn’t a case where the statute’s silence might have led the employer to think that its conduct was lawful.  Even Judges Chagares and Porter acknowledged that the employer had an obligation to pay workers for all hours worked.  They just thought that the workers would have to bring a separate claim for the non-overtime hours under state law.

Until relatively recently, judges across the ideological spectrum generally agreed that statutes should be construed to accomplish their purpose.  In 1930, back in the Lochner era, in Jamison v. Encarnacion, a very conservative Supreme Court took this approach in interpreting a statute that made railroad employers liable to their workers for injuries “resulting in whole or in part from the negligence of any of the [employer’s] officers, agents, or employees.”  The issue in Jamison was whether the statute imposed liability when a foreman assaulted a worker.  The Court didn’t look to the dictionary to define “negligence.”  Instead, the Court considered Congress’s intent in passing the law.  The Court noted that the law was “intended to stimulate carriers to greater diligence for the safety of their employees,”  In light of that finding, the Court reasoned that “as unquestionably the employer would be liable if plaintiff’s injuries had been caused by mere inadvertence or carelessness on the part of the offending foreman, it would be unreasonable and in conflict with the purpose of Congress to hold that the assault, a much graver breach of duty, was not negligence within the meaning of the act.”   Congress enacted the FLSA in 1938, against the backdrop of decisions like Jamison, with the understanding that the statute would be interpreted in light of Congress’s goals in enacting the law.  

Worker protection legislation is popular with voters, so it’s hard for corporate lobbyists to convince Congress to weaken laws like the FLSA.  But, thanks to judges appointed by Republican Presidents, they don’t need Congress to rewrite laws because judges will do it for them.