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Before the UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT Washington, D.C.
W444444444444444444444444447 5

In the Matter of: STEPHEN S. ADAMS, et al.,

5 5 5 5

Plaintiffs-Appellants 5 v. UNITED STATES, Defendant-Appellee.
W444444444444444444444444448 5 5 5 5 5 5

Case Nos. 06-5040, 06-5041

Courtroom 203 Panel K United States Court of Appeals 717 Madison Place, NW Washington, D.C. 20439 Wednesday, November 8, 2006

The above-entitled matter came on for oral argument, pursuant to notice, at 10:00 a.m. BEFORE: JUDGE ALAN D. LOURIE JUDGE ALVIN A. SCHALL JUDGE ARTHUR J. GAJARSA

This transcript produced from an audio cassette tape provided by Bernstein & Lipsett, P.C.
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APPEARANCES: On Behalf of the PlaintiffsAppellants: JULES BERNSTEIN, Esq. LINDA LIPSETT, Esq. Bernstein & Lipsett, P.C. Suite 303 1920 L Street, N.W. Washington, D.C. 20036-5004 (202) 296-1798 (202) 296-7220 (fax) EDWARD JAMES, Esq. James & Hoffman, P.C. 1101 17th Street, N.W. Suite 510 Washington, D.C. 20036 (202) 496-0500 (202) 496-0555 (fax) On Behalf of the Defendant-Appellee: SHALOM BRILLIANT, Esq. Senior Trial Counsel Commercial Litigation Branch, Civil Division U.S. Department of Justice 1100 L Street, N.W. Washington, D.C. 20530

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 you. Honors. today.

P-R-O-C-E-E-D-I-N-G-S THE COURT: morning, rather. Good afternoon. Good

We are sometimes sitting in

the afternoon these days, but good morning. We have five cases on the calendar A claims case, a veteran's appeal and The last

three government employee cases.

three are being submitted on the briefs and not argued. So our first case is Adams, et al. v. United States, 06-5040. Mr. Bernstein. MR. BERNSTEIN: Good morning, Your I am

My name is Jules Bernstein.

accompanied by my co-counsel, Linda Lipsett and Edgar James at counsel table. We are here actually on appeal for consolidated cases 5040 and 5041, and it is the position of the Appellants in these

cases... THE COURT: Let me just interrupt

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MR. BERNSTEIN: THE COURT:

Surely. you begin on Do you have

Before

You say Appellants.

one Appellant or a long list of Appellants so that we know what the issue is? MR. BERNSTEIN: There are some

6,000 Appellants, Your Honor. THE COURT: They weren't all

MR. BERNSTEIN:

They were named,

Your Honor, and the government raised the issue in its brief of our requirement to put all 6,000 names in. We said that Rule 3 had

been amended and that we were permitted to state that we and were we representing all

Appellants,

listed them in the

attachment to my Notice of Appearance. THE COURT: to certify as a class? MR. BERNSTEIN: This is a Fair Well, aren't you going

Labor Standards Act case, Your Honor, and the certification is not required under Rule 23 or

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otherwise. THE COURT: easier? MR. BERNSTEIN: THE COURT: Pardon? Doesn't it make it

Doesn't it make it

easier if it's certified as a class? MR. BERNSTEIN: Well, Your Honor,

that's a moot question because there is no provision generally for certification of Fair Labor Standards Act cases. must file in court a Each plaintiff

consent form to be

represented by counsel, and we did, indeed, file such in the Claims Court, a consent form on behalf of these Plaintiffs. Our position here is that the

Claims Court's decision contained several clear procedural and substantive conflicts with square holdings of the decisions of the United States Supreme Court, this Court, the unambiguous language of Section 254(b) of the Portal to Portal Act, as well as the rules and regulations of those agencies entrusted by

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Congress

to

administer

the

Fair

Labor

Standards Act and the Portal to Portal Act. Now, the first error here is that the government's summary judgment motions were utterly unaccompanied by any showing under Rule 56 and the appropriate cases, such as Celotex, Berg versus Newman, and, indeed, in the first appeal in this case to this court, the case was sent back because there were no facts. THE COURT: Pardon me. Why isn't

this case governed by our BOBO decision? MR. BERNSTEIN: Your Honor, for a

variety of reasons, and let me, if Your Honor so desires, let me get precisely to those, and that is that these cases are decided on their facts, and in this case, the facts are very different from those in BOBO, and one of the problems with the Court's decision where the government -- and here the government put in no facts. So you have to begin with the idea

that in order to win under BOBO, there are

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certain facts that have to be proven, namely, that the work was required in order to -- that it was not required; that it was not in the interest of the employer; and that it was in the interest of the employees. The government put in no facts. And you don't, really get past Celotex or Berg or Rule 56 because the government didn't put in a case. It thought that it could use as a

silver bullet, if you will, BOBO, but there are a number of distinguishing facts here that did not appear in BOBO. So, for example, Section 31 USC Sec 1344(a)(2) declares that the government can only expend funds for cause for -THE COURT: ask you. Mr. Bernstein, let me

The issue here is driving, correct? MR. BERNSTEIN: THE COURT: Yes.

Between home and

office and office to home. MR. BERNSTEIN: THE COURT: Yes.

And nobody disputes

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that it was an agreed fact; it's

undisputed,

isn't it that these individuals, your clients, were using the government vehicles for that purpose? MR. BERNSTEIN: THE COURT: That is true.

And as I read the

decision of the Court of Federal Claims, the court decided it agreeing to that fact. MR. BERNSTEIN: There's no dispute

that these employees drove to and from work in a government vehicle. THE COURT: Well, what other facts

do you need to decide the case? MR. BERNSTEIN: Well, the other

facts you need are to prove under even BOBO that the work was required; that it was not in the interest of the employees as a matter of fact; and that it was for the purpose of achieving a purpose that the government needed to perform the work of the agency. Now, here under 1344, the statute says that such driving is essential for the

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safe

and efficient performance of

intelligence, counterintelligence, protective services or criminal law enforcement duties, and constitutes an official purpose. THE COURT: Well, doesn't that

provision simply authorize the expenditure of funds for these purposes? Isn't the Portal to

Portal Act what governs here? And that states that certain

activities are not compensable, and that, and that includes traveling to and from the place of work. MR. Honor. BERNSTEIN: Not so, Your

The Portal to Portal -THE COURT: Which is not so? Well, all of the

MR. BERNSTEIN: above. THE COURT: Oh?

All right.

MR. BERNSTEIN: First the Portal to Portal Act says that what must be postliminary or preliminary to the work of the employees to be exempt. The burden to prove the exemption

under the Portal Act is on the employer.
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Exemptions

are

to

be

read

narrowly.

Inclusions are to be read broadly. The government did not prove that -- the government proved nothing -- that it was postliminary or preliminary. We proved

that under the statute that was integral and indispensable to performance of the duties of these employees. Now, if these cars had been driven every day to the homes of these employees so they could respond to emergencies from home, which was the purposes of their driving these cars home, there's no question that the

employees who drove those cars to the homes of the employees would be entitled to be paid. There is no reason why these employees would not similarly be entitled to be paid. And indeed, Your Honors, for 20 years the Office of Personnel Management under FPM Letter 551-10 and 5 CFR 401 held and took the position that this kind of driving was compensable. There was a custom and practice

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to

pay

for this for non-exempt federal

criminal investigators. The difference with these

employees is that the government wrongfully treated them as exempt. That's the reason

they weren't paid for their driving, but we have a stipulation in our settlement of the non-driving aspects of the case that they were non-exempt during the relevant time period. THE COURT: No, no. I'm having a

hard time following where there's a fact issue. Leaving aside for a moment the legal

argument, I have a hard time understanding where there's a fact issue. I mean I would

think the argument here is that the judge either got it right or got it wrong based on facts that don't seem to be in dispute. MR. BERNSTEIN: No, the facts That

aren't even in the record, Your Honor.

is to say the burden is on the government; the burden is on the government to prove that this was postliminary and preliminary.

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The government didn't submit what it was required to -THE COURT: But it's clear if

you're driving to your office -MR. BERNSTEIN: THE COURT: But, Your Honor --

-- and you're driving

home, it's pre and post. MR. BERNSTEIN: No, it isn't, Your

THE COURT:

It may be compensated. At the --

MR. BERNSTEIN: THE COURT:

Excuse me. Sure.

MR. BERNSTEIN: THE COURT:

Didn't the judge say

that they would be compensated if they got emergency calls on the way? MR. BERNSTEIN: The judge did say

that, and frankly, the judge didn't say that, but there's no question that we settled that part of the case. But OPM said that mere driving was compensable regardless of whether it was in

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connection with an emergency.

For 20 years

this was the position of both OPM ­ THE COURT: to BOBO? MR. BERNSTEIN: That is not Wasn't that contrary

contrary to BOBO, and indeed, the employees involved in BOBO did not drive their cars to and from work in order to respond to

emergencies.

They were hauling dogs, and 551-

10 only applied to employees who brought their cars home so they could respond to emergencies from home. Indeed, beyond that, if you are commuting, Your Honor, you may take your child or your spouse to work or do anything else. These employees were restricted as to their movements. They couldn't stop anywhere on a So they were utterly in the

personal matter.

employ of the United States while they were in those cars. ordinary They were not free like the to stop and engage in

commuter

personal business, cash a check, go to the

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cleaner, do all of the other things that ordinary commuters do. So there is no question but that they were in the employ of the government. Indeed we cite a case where some DEA agent was in an accident and the court said, look, obviously this in the course of the employee's employment going back and forth to work. This

person was driving his car at the government's behest, and this was work. Now, there's another point. The

court below -- I beg your pardon -- the Claims Court, said that there was no exertion

involved.

That was one of the decisions, one no exertion in

of the bases for the decision: driving.

We all know there was exertion in driving. And the Supreme Court says that

exertion is not required for there to be work. You may pay for -- not "may" -- but you must pay for idle time or time spent waiting. So I think that's another basis

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for a direct conflict with the Supreme Court's decision in the FLSA area. But let me say -THE COURT: Mr. Bernstein. Yes, sir.

MR. BERNSTEIN: THE COURT:

With respect to the

551-10 letter, does that apply to both cases or just one? There seems to be an implication

that it only applies, to one of the two cases. MR. BERNSTEIN: Frankly, the We said

government didn't put in any facts.

it was there, that it was present, and that it was a fact which demonstrated that such work would be compensable, that traveling was -THE COURT: But is that applicable

to both cases or just one? MR. BERNSTEIN: No, it is -- well,

when you say "applicable," we do not contend that the employees in the non-criminal

investigator case were expressly covered by that provision. THE COURT: So only the ­

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MR. BERNSTEIN:

Only the criminal

investigators, and indeed, as I say, for 20 years FLSA non-exempt criminal investigators, who were GS-5s and 7s were paid. Now, the second string to our bow is that there was a -THE COURT: Mr. Bernstein, let me

point out to you you wanted to save five minutes rebuttal. time. wish. MR. BERNSTEIN: I will reserve, You are well into that

You can use it now or save it, as you

THE COURT:

All right. Thank you.

MR. BERNSTEIN: THE COURT:

Mr. Brilliant. May it please the

MR. BRILLIANT:

THE COURT:

Mr. Brilliant, who has

the burden of proof in this particular case? MR. BRILLIANT: The plaintiffs do. This is not an exemption issue. This is a

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question simply of whether certain time was spent by the Plaintiffs doing what constitutes work under the FLSA, and the law is clear that the employees have the burden of proving that they work and that they worked overtime. The question here is whether the home to work driving that they undisputedly did, constituted work or not. THE COURT: So if it was a case of

exemption then the burden would be on the government to prove the exemption. MR. BRILLIANT: That's right.

That's the substantive issue of, for example, whether the category of the employees are employed and whether they're covered by the administrative exemption, for example, and therefore not covered by the FLSA at all. That would be the employee's burden to prove, that they meet the requirements of that

exemption. But the burden of proving how much work was done is the employee's work, and here

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it's not really a burden of proof.

In this

case I think it's not a burden of proof issue anyway in that the factual issues were all assumed by the trial court below essentially in favor of the Plaintiffs. Mr. Bernstein mentioned it among the things that had to be proved were issues concerning whether the time spent was the activity engaged in, in this case driving, was required by the employer, whether it was in a government vehicle, whether it was for the good of the employer. But those are all things that are prerequisites to the employee's recovery.

It's only if those things are established that the driving can be considered work. In this case the court below

assumed and we didn't dispute those things, and the court decided as a matter of law that this driving did not rise to the level of compensable work. THE COURT: What about ­

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THE COURT:

Was this more of a

Rule 12(b) instead of 56 ­ failure to state a claim? MR. BRILLIANT: Essentially, yes.

If it weren't for the fact that this issue arose as the kind of an appendage of some of the substantive issues, if the suit was only to begin with about home-to-work driving, it would have been a Rule 12(b) motion or it probably would have been. I think that the BOBO case arose in that way and, of course, the BOBO case was decided on summary judgement, and I guess there wasn't the same kind of legal precedent, clear legal precedent, before BOBO as there is now, BOBO being that precedent. So failure to

state a claim would have been an appropriate (inaudible) in this case. THE COURT: What about the

assertion that there's been a 20 year custom or practice in effect? MR. BRILLIANT: Our contention is

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that, well, first of all this is not a custom and practice in our view. First of all, it

reflected agency's compliance with guidelines given by originally the Civil Service

Commission and then OPM in FPM Letter 551-10 based on what that agency understood the FLSA to require. The reasoning underlying that

interpretation is simply inconsistent with the reasoning underlying BOBO, and OPM no longer gives those guidelines. THE COURT: You're saying BOBO changed the law in effect. MR. BRILLIANT: No, I would say

that BOBO interpreted what the law was, but it was what the law was all the time. THE COURT: It changed the

understanding of what the law was. MR. BRILLIANT: Well, yes. I mean

in the sense that when the FPM letter was issued, the people that issued it didn't know this court was going to decide BOBO as it did.

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As between the interpretation in the FPM letter and the interpretation of this court, I think there's no dispute that the

interpretation of this court is the one to be followed. OPM doesn't disagree with that, and

I don't think anyone does. THE COURT: Does the difference in

facts make a difference between this case and BOBO? BOBO dealt with dogs. They had to

take the dog home. MR. BRILLIANT: That's a In both

distinction without a difference.

cases, this case and that case, the employees were required to drive government vehicles, and it serves a government interest for the employees to do that. The particular reason is not

identical, but there would be no sense in saying, well, if the reason is because you're caring for the dogs, then we won't call it work, but if the reason is so you'll have the car available to respond to an emergency later

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on, we will call it work. I mean if anything, I think the argument for treating it as work, treating driving as work is somewhat weaker in this case because the driving itself in the case of the dog handlers, the employees were handling dogs, taking care of dogs, and they were doing so during their drive. THE COURT: One question. It's

not in -- who pays for the gas. MR. BRILLIANT: I'm not sure. I

think the employees get reimbursed for the gas. THE vehicle. MR. BRILLIANT: In the case of the government vehicle. case. THE COURT: Aren't these all I believe that's the COURT: In the government

government vehicles that were being driven? I mean, they're not personal vehicles. MR. BRILLIANT: That's right.

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That's true in BOBO. THE COURT:

That's true here. The government would

have to pay for the gas because they can't use the vehicle outside of driving to and from home or for work purposes. MR. BRILLIANT: THE COURT: That's right.

It makes no sense for

them to be buying gas for the government vehicle. MR. BRILLIANT: That sounds right. Now, the -THE COURT: Why would this claim

be de minimis even under the requirements of BOBO and the previous case, Lindow v. U.S.? MR. BRILLIANT: minimis or not? THE COURT: minimis? MR. BRILLIANT: The principal Why would it be de Why would it be de

reason is that, as Mr. Bernstein correctly noted, there was a settlement in this case that covered both the overtime over work that

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the plaintiffs performed, except time solely spent driving home to work in a government vehicle. So the whole point of reserving that was while we agreed that work after hours was to be compensated under the settlement, the parties disagreed as to whether merely driving between home and work was to be

compensated. So the only thing that this appeal covers is driving time per se. But in

addition, the kinds of things that the Appellants described that they have to do during the driving are essentially the same as those described in BOBO. They contact. have to remain in radio

They are subject to certain There is really no

restrictions, and so on. distinction. THE COURT:

But they are for the

benefit of the government, not for the benefit of the employee.

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MR. BRILLIANT: That's right. no more so here than BOBO. THE COURT: Well, in BOBO the

But

rationale that was used is the fact that they were taking the dogs back and forth, right? But here there's no dog involved. They are

just riding back and forth to their homes, but being on call at any time during that time period. So if they get a call when they go from Point A to Point B, B being their home, and they have to go to Point C during that time period, are they compensated? MR. BRILLIANT: would be compensated. THE COURT: They would be Well, then they

available for call during that time period. They would be compensated from the time they left Point A? MR. BRILLIANT: Well, they're

available for call 24 hours a day, and whether they're compensated or not, I mean, again,

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there are rules. If you look back at the -THE COURT: question. No, no. Answer my

Would they be compensated for going

from Point A to Point C at that point? MR. BRILLIANT: that would depend. The driving time,

In fact, the same FPM

Letter that we're talking about in giving examples of what kind of driving is compensable or not says that if you do respond to an emergency in the middle of the night, the time it takes to drive to the place of the emergency may or may not be compensated

depending on whether it's closer than or further from your home than the regular place of business. THE COURT: my question. No, but that was not

My question was driving from

Point A from their office to their home, Point B, they're called to go to Point C during that drive. Point C? Will they be compensated going to

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MR. BRILLIANT: THE COURT: time they left Point A. MR. BRILLIANT:

I believe --

Relating back to the

I believe

that it But if

would depend on where the point is.

they just got home or almost home and then they had to go to a point ten minutes away, which is less than to their work place, I believe they would not be compensated, whereas if it's under the regulations, whereas if it is a longer distance, further than back to the work place, they would be compensated. THE COURT: Are they compensated

for the time spent at the emergency call ­ MR. BRILLIANT: call they'd be compensated. I'm not hedging. At the emergency What I'm doing,

I'm just trying to say the

question, the less simple question is whether they'd be compensated for the time driving from Point A to Point B. It might depend on

where Point A and Point B are. THE COURT: But if they have to

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spend two hours at the emergency call, they are compensated for that. MR. BRILLIANT: THE COURT: Yes.

Mr. Brilliant, do you

think there's any problem with the naming of the various Plaintiffs? MR. BRILLIANT: There is a problem

because you can't -- when you look at the notice of appeal, and maybe it's a technical problem, but when you look at the notice of appeal other than, I guess, Stephen Adams and, one other Plaintiff not named, you can't tell who's in and who's out. It wouldn't be a

problem if Plaintiffs had said they were appealing on behalf of Stephen Adams and all other plaintiffs. They wouldn't have to name

all of the plaintiffs. The problem is they're saying

they're appealing on behalf of 6,000 some odd Plaintiffs out of 14,000, and you can't look at any given name on the list of 14,000

Plaintiffs and tell whether they're Appellants

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or whether they're not. THE COURT: I understood there was

a list that's been submitted. MR. BRILLIANT: Subsequently I

think with the docketing statements it was submitted, but the appealing Plaintiffs were not identified in a notice of appeal, and that is the problem that we see with the notice of appeal. Is there a remedy, technical

remedy for this technical problem that you see? MR. BRILLIANT: It's

jurisdictional, and I think that if a timely notice of appeal is defective, then it's defective. THE COURT: But you would say

whatever we decide should pertain to Mr. Adams and/or one other person. MR. BRILLIANT: I think that's the

way it comes out based on the defect in the notice of appeal. The legal issue would be

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the same either way. I really don't have much to add. I just wanted to address a couple of points that Mr. Bernstein made, well one of them I actually addressed already, and I want to focus on this custom and practice issue

because that really is the only hook that Appellants even colorably have for

distinguishing this case from BOBO. As I already indicated, I think the reason underlying the FPM Letter 551 is inconsistent with the reasoning in this case, and the so-called custom and practice was nothing more than some agencies adhering to the guidance in that FPM letter. Even assuming you call that a

custom and practice within the meaning of the Portal to Portal Act, that would constitute a distinction here. First of all, it's not a -- the custom or practice exception isn't really

applicable here anyway because what that's an

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(202) 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-4433

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exemption to is a provision in the Portal to Portal Act that essentially says if you're engaged in preliminary or postliminary

activities, that customarily had been, or that in the past had been considered by the

Department of Labor, by certain Supreme Court decisions as constituting work. excluded from work. THE COURT: How would you That will be

concisely state the holding of BOBO? MR. BRILLIANT: I would say the

holding in BOBO is that home to work driving in a government vehicle as a requirement of the employer does not constitute work unless it's accompanied by more than de minimis activities beyond mere driving that would fall under the definition of work. THE COURT: the dogs was not And if transporting than de minimis

more

activity, then transporting yourself and being on call isn't either. MR. BRILLIANT: That's right.

NEAL R. GROSS
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THE COURT: of failing

Is that because of the to be able to keep

administrative records on something like that? MR. BRILLIANT: THE COURT: failure of I'm --

Was that because of able to maintain

being

administrative records? Because there were three elements de minimis: difficulty the the practical the of

administrative additional

recording amount

time,

aggregate

compensable time, and the regularity of the additional work. That's the de minimis rule. Well, yes, that

MR. BRILLIANT:

would go to -- those would be factors in determining whether you know the additional activities we're looking at are de minimis or more than de minimis. In this case, as I indicated, I because of the scope of the

settlement and what was reserved for appeal, we're really not looking at additional

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activities. itself.

We're looking at the driving

But even if you were looking at additional activities, I don't see any

activities that the Appellants described that are different from the activities involved in BOBO. THE COURT: What if Mr. Adams had

hypothetically have said to his agency, I don't want to drive the car home. drive my own car. I want to

I want to be able to be my

free to pick up the laundry, pick up

children at school and otherwise without being in violation of the regulations. that? MR. BRILLIANT: No. We agreed Could he do

that we're talking about cases where using the vehicle for commuting is required. THE COURT: It's mandatory. The use of the I mean, that's

MR. BRILLIANT: vehicle.

Going home and back.

not what's required.

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THE

COURT:

So why is that?

What's the underlying rationale for that? MR. BRILLIANT: So that in the

case of criminal investigators it's so that if at any time of the day or night the agency needs to call this agent to respond to an emergency, the agent won't have to come back to the office, pick up a car and then go, to be able to go, straight there. THE COURT: Couldn't he drive his

own car to the investigative site? MR. BRILLIANT: In theory he

could, but if he uses the government vehicle on the job, if he uses it, in some respects the government vehicle is more suitable to the job. THE COURT: So this is for the

sole and unique benefit of the government. MR. BRILLIANT: The fact that the

government vehicle is used rather than his own vehicle, I don't know if that's a sole and unique benefit. It's for the benefit of the

NEAL R. GROSS
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government.

It may benefit the employee, too. He may

He doesn't have to use his own car. not have a car.

It may benefit the employee

in a lot of ways, but we don't dispute that the reason it's required is because the

government gets enough of a benefit from it that the government chooses to require it, as in the case of BOBO. THE Brilliant. MR. BRILLIANT: THE COURT: and a half minutes Thank you. COURT: Thank you, Mr.

Mr. Bernstein has two left, but since Mr.

Brilliant went over, we'll give you four minutes rebuttal. MR. reserved five. THE COURT: than half that. MR. BERNSTEIN: THE COURT: than you had remaining. In any event -Yes, but you used more BERNSTEIN: Your Honor, I

I'm giving you more

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MR. BERNSTEIN: that, Your Honor. But let me

I was not aware of

first

begin,

Your

Honor, by saying that on page 1 of our reply brief, there was this terrible problem of naming all of the Plaintiffs, and the rule was changed as a result of the Supreme Court's decision in Torres in 1988. So you will see

at Footnote 3 an Advisory Committee note saying you can do exactly what we did. We

responded directly to Mr. Brilliant's point about naming all of the Plaintiffs. And it's quite clear in our

For Judge Gajarsa, let me say as to the de minimis point you were asking about, in BOBO they were talking about the de minimis time that they took the dogs outside of the cars. In this case for 20 years, the record were filed by

is replete with forms that

criminal investigators recording their driving time. So there was no question but that

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driving was compensable, was compensated, and was simply, if you look at the record, a matter that was recorded and paid. de minimus. THE COURT: Mr. Brilliant's So its not

response to the 20 years point is that BOBO overrode that interpretation. MR. BERNSTEIN: The issue, Your

Honor, are 254(b) of the Portal Act was not in BOBO. The issue of 254(b) relates to the fact

that under the Portal to Portal Act enacted in 1947, Congress reserved the right of employees to be paid for work which constituted work prior to the enactment of the Portal to Portal Act and as to which there was a custom and practice. If you look at our briefs, the point of the Portal to Portal Act was to take away compensation for work where the employer did not anticipate he would have to pay. That

was the whole point of the Portal to Portal Act.

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And since the employer knew that there was custom and practice to pay, Congress carved out an exception and said that continued to be compensable. And indeed, the flat language of 254(b) says the employer shall not be relieved of liability under the Portal Act if such activity practice is compensable by a custom or

in effect at the time of such

activity at the place where such employee is employed covering such activity in effect at the time of such activity. That means that if it was

compensable, you're entitled to be paid if there was a custom and practice. Here there was a custom and

This point was not in BOBO at all

because there was no custom and practice to pay those employees in BOBO, ever. And so here we have a perfect

illustration of the application of 254(b), and indeed, that's what the Labor Department

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regulations say, and that's 29 CFR 790.2. Now, in addition to that Mr.

Brilliant says that the exemptions are not -the burden to prove the exemptions are not the employer's. However, if you look at Corning

Glassworks v. Brennan, at 417 US 188, at 196, and cases cited in our brief at pages 36 to 38, the general rule is that the application of exemption under FLSA is a matter of

affirmative defense, which the employer has the burden of proof, and that was the law in 1974, and it's the law today. It's the employer's burden, but it wasn't proved here. So that goes to the issue

of exemptions and the burden of proof. There is another important point raised -- it will be my last point, Your Honor. THE COURT: Mr. Bernstein, this

argument has come portal to portal, and I think we understand the case. Do you have one question?

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THE COURT:

Do you think all of

the Appellants will be bound by this decision? MR. BERNSTEIN: When you say all

THE COURT:

All of the Appellants

that are listed are bound by this decision? MR. BERNSTEIN: it, Your Honor. THE COURT: THE COURT: Thank you. Thank you, Mr. No question about

This

case

will

be

taken

under

(Whereupon, the oral argument in the above-entitled matter was concluded.)

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