Free Order on Cross Motion [Dispositive] - District Court of Federal Claims - federal

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In the United States Court of Federal Claims
No. 07-272 C (E-Filed: July 31, 2008) ) ) ) ) ) ) ) ) ) ) ) Motion for Partial Summary Judgment; RCFC 56; Motion to Dismiss; RCFC 12(b)(6); FLSA; 29 U.S.C. §§ 201-219; Federal Aviation Administration; Air Traffic Control Specialists; Traffic Management Coordinators; Staff Specialists

MARK G. ABBEY, ET AL., Plaintiff, v. THE UNITED STATES, Defendant.

Gregory K. McGillivary, Washington, DC, for plaintiff. Lauren E. Schwartzreich, Washington, DC, of counsel. Hillary A. Stern, with whom were Peter D. Keisler, Assistant Attorney General, and Jeanne M. Davidson, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, for defendant. Eden Brown Gaines, Elizabeth Head, and Michael Doherty, Federal Aviation Administration, Washington, DC, of counsel. OPINION HEWITT, Judge This is an action concerning overtime pay as provided for by the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201-219 (2006). Plaintiffs are 7,438 current and former employees of the Federal Aviation Administration (FAA), an organization within the United States Department of Transportation (DOT), 49 U.S.C. § 106(a), classified as Air Traffic Control Specialists (ATCS), Traffic Management Coordinators (TMC) and Staff Specialists. Plaintiffs' Third Amended Complaint1 (plaintiffs' Complaint or

1

When plaintiffs' Complaint was initially filed there were 6,458 plaintiffs. Complaint 1. (continued...)

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Compl.) ¶¶ 1, 4. Plaintiffs filed a complaint with this court, alleging that the United States violated the FLSA "[b]y failing to pay plaintiffs at the rate of one and one half times their regular rate of pay for each overtime hour worked." Id. at ¶ 29. Plaintiffs seek "declaratory judgment, backpay and other relief," id. at ¶ 1, for defendant's failure properly to compensate plaintiffs for hours worked "in excess of forty (40) hours per week," id. at ¶ 8. Plaintiffs rely on the FLSA to support their claims. Id. at ¶¶ 5-7; see 29 U.S.C. §§ 201-19. Under the FLSA "no employer shall employ any of his employees . . . for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and onehalf times the regular rate at which he is employed." 29 U.S.C. § 207(a)(1). Plaintiffs' Complaint contains four separate counts. Id. at ¶¶ 13-40. Count I of plaintiffs' Complaint alleges that defendant "failed to properly calculate the `regular rate of pay' used to calculate FLSA overtime pay." Id. at ¶ 14. Count II alleges that defendant violated the FLSA by compensating plaintiffs with compensatory time or credit hours at a rate of one hour for each hour of overtime worked instead of paying them at a rate of one and one-half times an employee's regular rate of pay as required by the FLSA. Id. at ¶ 21. Count III alleges that "[a]t all times material herein, the defendant has suffered or permitted plaintiffs to work before and after the official starting times of their shifts without compensating plaintiffs with compensation for such work time." Id. at ¶ 11. Count IV alleges that "defendant has conducted the schedule and vacation leave bidding process for plaintiffs during time periods in which plaintiffs are `off-duty' (time periods defendant does not schedule plaintiffs to be on-duty), such as conducting this process by telephone while plaintiffs are at home or at the facility after plaintiffs have been clocked out[,] . . . [yet] defendant has not provided plaintiffs with any compensation for this work time." Id. at ¶ 12. Plaintiffs claim that "[p]ursuant to 29 U.S.C. § 216(b), [they] are entitled to recover liquidated damages in an amount equal to their back pay damages for the [d]efendant's failure to pay overtime compensation." Id. at ¶¶ 31, 38. Plaintiffs also contend that they are entitled to "interest on their back pay damages" and to "attorneys' fees and costs." Id. at ¶¶ 32-33, 39-40.

(...continued) Plaintiffs amended their Complaint on November 1, 2007, to include 7,210 plaintiffs. First Amended Complaint 33-34. Plaintiffs filed a Second Amended Complaint on June 6, 2008 to include 7,438 plaintiffs. Second Amended Complaint 11. Plaintiffs filed a Third Amended Complaint on July 3, 2008 to correct a typographical error in plaintiffs' Second Amended Complaint. See Order of July 1, 2008; Third Amended Complaint (plaintiffs' Complaint or Compl.). The Complaint, First Amended Complaint, Second Amended Complaint, and Third Amended Complaint are substantially identical except for the number of plaintiffs. 2

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This case is now before the court on Defendant's Partial Motion to Dismiss and Partial Motion For Summary Judgment (defendant's Motion or Def.'s Mot.). Pursuant to Rule 12(b)(6) of the Rules of the United States Court of Federal Claims (RCFC), defendant seeks dismissal of Count II of plaintiffs' complaint for failure to state a claim upon which relief can be granted. Def.'s Mot. 1. Defendant also moves for summary judgment pursuant to RCFC 56(b) as to Count III "because the material facts pertaining to [C]ount III are undisputable and the [g]overnment is entitled to prevail as a matter of law," id. 12, and to Count IV because the "time spent by plaintiffs bidding on vacation and work schedules amounts to no more than five or ten minutes a year" and is "de minimis," id. at 13. Plaintiffs filed a motion for summary judgment as to Count II of plaintiffs' complaint and opposed defendant's motion for summary judgment as to Counts III and IV. Plaintiffs' Motion for Partial Summary Judgment and Opposition to Defendant's Motion for Summary Judgment and Motion to Dismiss (plaintiffs' Motion or Pls.' Mot.). Now before the court are defendant's Motion, Defendant's Proposed Findings of Uncontroverted Facts (defendant's Facts or Def.'s Facts), plaintiffs' Motion, Plaintiffs' Response to Defendant's Proposed Findings of Uncontroverted Facts (plaintiffs' Response to defendant's Facts or Pls.' Resp. to Def.'s Facts), Plaintiffs' Proposed Findings of Uncontroverted Facts (plaintiffs' Facts or Pls.' Facts), Defendant's Reply to Plaintiffs' Opposition to Defendant's Partial Motion to Dismiss and Partial Motion For Summary Judgment and Opposition to Plaintiffs' Motion For Summary Judgment (defendant's Reply or Def.'s Reply), Defendant's Response to Plaintiffs' Proposed Findings of Uncontroverted Facts (defendant's Response to plaintiffs' Facts or Def.'s Resp. to Pls.' Facts), Defendant's Reply to Plaintiffs' Response to Defendant's Proposed Findings of Uncontroverted Facts (defendant's Reply to plaintiffs' Response to defendant's Facts or Def.'s Reply to Pls.' Resp. to Def.'s Facts), Plaintiffs' Reply to Defendant's Response to Plaintiffs' Proposed Findings of Uncontroverted Facts (plaintiffs' Reply to defendant's Response to plaintiffs' Facts or Pls.' Reply to Def.'s Resp. to Pls.' Facts), and Plaintiffs' Reply in Support of Their Motion For Partial Summary Judgment (plaintiffs' Reply or Pls.' Reply). The court held an oral argument on the parties' motions on July 29, 2008. For the following reasons, with regard to Count II of plaintiffs' Complaint, defendant's motion to dismiss, treated as a motion for summary judgment, is DENIED. Plaintiffs' motion for summary judgment as to Count II is GRANTED. With regard to Counts III and IV of plaintiffs' Complaint, because the court concludes that genuine issues of material fact still remain, defendant's Motion is DENIED. I. Legal Standards 3

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A.

Failure to State a Claim

A motion to dismiss for failure to state a claim is brought pursuant to RCFC 12(b)(6). See RCFC 12(b)(6). "When reviewing a dismissal for failure to state a claim upon which relief can be granted . . . , we must accept as true all the factual allegations in the complaint, and . . . we must indulge all reasonable inferences in favor of the [plaintiff]. . . ." Sommers Oil Co. v. United States, 241 F.3d 1375, 1378 (Fed. Cir. 2001) (citations omitted). The consequence of a plaintiff's failing to establish all the elements of its claim is that "plaintiff loses on the merits for failing to state a claim on which relief can be granted." Fisher v. United States (Fisher), 402 F.3d 1167, 1175-76 (Fed. Cir. 2005). If, on a 12(b)(6) motion, "matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in RCFC 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by RCFC 56." RCFC 12(b). B. Summary Judgment

The grounds for summary judgment are set forth in RCFC 56. See RCFC 56. RCFC 56(c) provides: [Summary] judgment . . . shall be rendered . . . if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. RCFC 56(c); see also Mann v. United States, 334 F.3d 1048, 1050 (Fed. Cir. 2003) ("Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." (citing RCFC 56(c))). The moving party has the initial burden of demonstrating "the absence of any genuine issue of material fact and entitlement to judgment as a matter of law." Crater Corp. v. Lucent Techs., Inc., 255 F.3d 1361,1366 (Fed. Cir. 2001) (citing Celotex Corp. v. Catrett (Celotex), 477 U.S. 317, 322-24 (1986)).2 This burden may be discharged by "pointing

The Rules of the United States Court of Federal Claims (RCFC) generally mirror the Federal Rules of Civil Procedure (FRCP). RCFC 56 Rules Committee Notes ("The subdivision structure of RCFC 56 was reordered to more closely conform to FRCP 56."); see Flowers v. United States, 75 Fed. Cl. 615, 624 (2007) ("RCFC 56 is patterned on Rule 56 of the [FRCP] and is similar in language and effect."); Champagne v. United States, 35 Fed. Cl. 198, 205 n.5 (1996) ("In general, the rules of this court are closely pattered on the [FRCP]. Therefore, precedent under the [FRCP] is relevant to interpreting the rules of this court, including Rule 56."); see also (continued...) 4

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out . . . that there is an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 325. There is "no express or implied requirement in Rule 56 that the moving party support its motion with affidavits or other similar materials negating the opponent's claim." Id. at 323 (emphasis omitted). However, the moving party must file with the court documentary evidence, such as declarations, that support its assertions that material facts are beyond genuine dispute, see RCFC 56(h), unless it is basing its motion for summary judgment on the "absence of evidence to support the nonmoving party's case," Celotex Corp., 477 U.S. at 325; see also Anchor Sav. Bank, FSB v. United States, 59 Fed. Cl. 126, 139-40 (2003). The adverse party then "must set forth specific facts showing that there is a genuine issue for trial." RCFC 56(e). RCFC 56(e) provides: When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party. RCFC 56(e). "Rule 56(e) permits a proper summary judgment motion to be opposed by any of the kinds of evidentiary materials listed in Rule 56(c), except the mere pleadings themselves, and it is from this list that one would normally expect the nonmoving party to make the showing to which we have referred." Celotex, 477 U.S. at 324. "The party opposing the motion must point to an evidentiary conflict created on the record; mere denials or conclusory statements are insufficient." SRI Int'l v. Matsushita Elec. Corp. of Am., 775 F.2d 1107, 1116 (Fed. Cir. 1985) (citing Barmag Barmer Maschinenfabrik AG v. Murata Mach., Ltd., 731 F.2d 831, 836 (Fed. Cir. 1984)). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). A fact is material if it "might affect the outcome of the suit under the governing law." Id. at 248. An issue is genuine if it "may reasonably be resolved in favor of either party." Id. at 250; see Matsushita Elec. Ind. Co. v. Zenith Radio Corp. (Matsushita), 475 U.S. 574, 587 (1986) (stating that there is no genuine issue "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party"). To demonstrate a genuine dispute over a material fact, the nonmoving party need not "produce evidence in (...continued) C. Sanchez & Son, Inc. v. United States, 6 F.3d 1539, 1541 n.2 (Fed. Cir. 1993) ("The [RCFC] generally follow the [FRCP]. [RCFC] 56(c) is, in pertinent part, identical to [FRCP] 56(c)."). Therefore, this court relies on cases interpreting FRCP 56 as well as those interpreting RCFC 56. 5
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a form that would be admissible at trial." Celotex Corp., 477 U.S. at 324. However, the non-movant must establish the existence of a material element on which the party will bear the burden of proof at trial. Id. at 322-23. Under RCFC 56, the court must draw all inferences from the underlying facts in the light most favorable to the nonmoving party. Matsushita, 475 U.S. at 587; Mann v. United States, 334 F.3d 1048, 1050 (Fed. Cir. 2003) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. at 255). "Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322.

C.

Claims For Overtime Compensation Under the FLSA

To prevail on a FLSA claim for an overtime activity suffered or permitted to be performed, plaintiffs must carry their burden of proof on all of the elements of the particular claim. See Anderson v. Mt. Clemens Pottery Co. (Anderson), 328 U.S. 680, 686-87 (1946). "First, plaintiffs must establish that each activity for which overtime compensation is sought constitutes `work.' For an activity to constitute work, plaintiffs must prove that the activity was (1) undertaken for the benefit of the employer; (2) known or reasonably should have been known by the employer to have been performed; and (3) controlled or required by the employer." Bull v. United States (Bull I), 68 Fed. Cl. 212, 220 (2005) (citations omitted). "To benefit the employer, an activity need not be `productive'­rather, it must be necessary" to the employee's ability to accomplish the principal duties owed to the employer. Id. at 223 (citation omitted). "Compensable work under the FLSA includes work that is `suffer[ed] or permit[ted].'" Id. at 220 (quoting 29 U.S.C. § 203(g)) (alterations in original). "Suffered or permitted work means any work performed by an employee for the benefit of an agency, whether requested or not, provided the employee's supervisor knows or has reason to believe that the work is being performed and has an opportunity to prevent the work from being performed." 5 C.F.R. § 551.104 (2006). Work not requested but suffered or permitted is work time. For example, an employee may voluntarily continue to work at the end of the shift. He may be a pieceworker, he may desire to finish an assigned task or he may wish to correct errors, paste work tickets, prepare time reports or other records. The reason is immaterial. The employer knows or has reason to believe that he is continuing to work and the time is working time.

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29 C.F.R. § 785.11 (2006). "This actual or constructive knowledge must be attributable to someone with the authority to bind the government." Bull I, 68 Fed. Cl. at 224 (citation omitted). Under OPM (Office of Personnel Management) regulations, "An agency is responsible for exercising appropriate controls to assure that only that work for which it intends to make payment is performed." 5 C.F.R. § 551.402(a) (2006). Furthermore, under Department of Labor regulations: In all such cases it is the duty of the management to exercise its control and see that the work is not performed if it does not want it to be performed. It cannot sit back and accept the benefits without compensating for them. The mere promulgation of a rule against such work is not enough. Management has the power to enforce the rule and must make every effort to do so. 29 C.F.R. § 785.13 (2006). Plaintiffs must also establish that the hours of work performed are not de minimis, Bull I, 68 Fed. Cl. at 220-21 (citing Anderson, 328 U.S. at 693; Bobo v. United States (Bobo), 136 F.3d 1465, 1468 (Fed. Cir. 1998); Adams v. United States, 65 Fed. Cl. 217, 222 (2005)), and that the work performed is "reasonable in relation to the principal activity," Bull I, 68 Fed. Cl. at 220-21 (citing Anderson, 328 U.S. at 688; Amos v. United States, 13 Cl. Ct. 442, 449 (1987)). "To establish that preliminary or postliminary work is compensable, plaintiffs first must show that the time spent engaged in the activity was not so `insubstantial and insignificant' as to bar recovery under the `de minimis doctrine.'" Bull I, 68 Fed. Cl. at 225 (quoting Anderson, 328 U.S. at 693). "The de minimis doctrine limits FLSA liability for overtime activities that consume negligible amounts of time." Id. "It is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved." Anderson, 328 U.S. at 692. "The factors that trial courts must examine when assessing whether the work underlying a compensation claim is de minimis" are "`(1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work.'" Bobo, 136 F.3d at 1468 (quoting Lindow v. United States, 738 F.2d 1057, 1063 (9th Cir. 1984)). "OPM limits the application of the de minimis doctrine to periods of 10 minutes or less per day." Bull I, 68 Fed. Cl. at 226 (citing 5 C.F.R. § 551.412(a)(1)). If an agency reasonably determines that a preparatory or concluding activity is closely related to an employee's principal activities, and is indispensable to the performance of the principal activities, and that the total time spent in that activity is more than 10 minutes per workday, the agency shall credit all of the time spent in that activity, including the 10 minutes, as hours of work. 7

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5 C.F.R. § 551.412(a)(1). "When the pleadings and submissions, viewed in the light most favorable to the claimant and analyzed according to these factors, indicate that the claim is for work that is merely de minimis, summary judgment is entirely appropriate. Bobo, 136 F.3d at 1468. II. Discussion A. Count II

Count II of plaintiffs' Complaint alleges that "during the work weeks in which plaintiffs have worked in excess of forty (40) hours per week, defendant United States has violated the FLSA by paying plaintiffs in the form of compensatory time or `credit hours' at the rate of one hour for each hour of overtime hour worked." Compl. ¶ 21. Count II is the subject of cross motions for summary judgment. See Def.'s Mot. passim; Pls.' Mot. passim. Defendant moved under Rule 12(b)(6) for dismissal on the grounds of failure to state a claim. Def.'s Mot. 1. Defendant argues that "plaintiffs' claims lack merit because the FAA has regulatory authority to grant compensatory time off in lieu of FLSA overtime pay as well as authority to grant credit hours for hours worked in a flexible work schedule." Id. at 2. Furthermore, defendant asserts that "credit hours granted by the agency do not . . . constitute overtime hours." Id. Because "matters outside the pleadings [were] presented to and not excluded by the court [see, e.g., Appendix to defendant's Motion (defendant's Appendix or Def.'s App.) 13-26], the [court treats the 12(b)(6)] motion . . . as one for summary judgment," RCFC 12(b), and notes that plaintiffs were "given reasonable opportunity to present all material made pertinent to such a motion by RCFC 56," id. Along with plaintiffs' response to defendant's motion to dismiss, plaintiffs themselves moved "for partial summary judgment regarding defendant's liability with respect to Count II of plaintiffs' [C]omplaint." Pls.' Mot. 1. The differing views of the parties arise as a result of their different views of the laws governing pay applicable to FAA employees. See Compl. ¶¶ 21-22; Def.'s Mot. 2. The major dispute is whether the FLSA, enacted in 1938, which generally provides that overtime shall be paid for time worked in excess of forty hours a week "at a rate not less than one and one-half times the regular rate at which [the employee] is employed," 29 U.S.C. § 207(a)(1), is applicable to the calculation of plaintiffs' pay. Pls.' Mot. 8, 15; Def.'s Mot. 2. The dispute centers on whether the specific compensation scheme for the FAA that became effective on April 1, 1996, as implemented by the FAA in its personnel management system, leaves intact the FLSA regime applicable to overtime, Compl. ¶ 21, or covers the overtime for which plaintiffs' claim is made, Def.'s Mot. 2. To prevail on its Motion with respect to Count II, defendant must demonstrate that there is no "genuine issue of material fact," see Celotex, 477 U.S. at 323, as to whether 8

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"the FAA has regulatory authority to grant compensatory time off in lieu of FLSA overtime pay as well as authority to grant credit hours for hours worked in a flexible work schedule," Def.'s Mot. 2. To prevail on its motion for summary judgment with respect to Count II, plaintiffs must demonstrate that there is no "genuine issue of material fact," see Celotex, 477 U.S. at 323, as to whether "defendant's payment of hour-for-hour compensatory time or `credit hours' plainly violates the statutory requirement, under § 207 of the FLSA, that overtime compensation be paid at `one and one-half times' the employee's regular rate of pay," Pls.' Mot. 3. Except for factual issues related to the terms of a collective bargaining agreement discussed below in Part II.A.4, the disputed issues are legal in nature. 1. Whether Existing Statutory Exceptions to the Time-and-a-Half Requirement For Pay For Overtime Work in the FLSA Apply to Plaintiffs

The FLSA requires employers, to provide compensation to employees who engage in work "for a workweek longer than forty hours . . . at a rate not less than one and onehalf times the regular rate at which [the employee] is employed." 29 U.S.C. § 207(a)(1). In 1974, Congress extended application of the FLSA to federal employees. Pub. L. No. 93-259, 88 Stat. 55 (1974) (codified at 29 U.S.C. § 203(e)(2)) (defining individuals covered by the FLSA to include "[a]ny individual employed by the Government of the United States"). As individuals "employed by the Government of the United States," 29 U.S.C. § 203(e)(2); see Compl. ¶¶ 1, 4, plaintiffs are covered by the FLSA, see 29 U.S.C. § 203(e)(2), unless excepted by law. In addition to the FLSA, various compensation laws have been enacted that pertain to overtime compensation. The Federal Employees Pay Act (FEPA) was enacted in 1945. Federal Employees Pay Act of 1945, ch. 212, 59 Stat. 295 (initially codified at 5 U.S.C. §§ 911-41; re-codified as amended at 5 U.S.C. §§ 5541-50b). FEPA provides for overtime compensation when overtime has been "officially ordered or approved." 5 U.S.C. § 5542(a); see also Doe v. United States, 372 F.3d 1347, 1349 (Fed. Cir. 2004). In 1990, Congress amended FEPA by enacting the Federal Employees Pay Comparability Act of 1990 (FEPCA). FEPCA, Pub. L. No. 101-509, § 529, 104 Stat. 1389 (1990). FECPA amended 5 U.S.C. § 5542 by adding subsection (c), which provides for coordination between FEPCA and the FLSA and states: Subsection (a) [which requires that federal employees be paid overtime pay for work in excess of eight hours in a day or 40 hours in a week] shall not apply to an employee who is subject to the overtime pay provisions of section 7 of the Fair Labor Standards Act of 1938. In the case of an employee who would, were it not for the preceding sentence, be subject to this section, the Office of Personnel Management shall by regulation prescribe what hours shall be deemed to be hours 9

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of work and what hours of work shall be deemed to be overtime hours for the purpose of such section 7 so as to ensure that no employee receives less pay by reason of the preceding sentence. 5 U.S.C. § 5542(c). FEPCA eliminated the need to compute overtime compensation under both FEPA and the FLSA. See id. Plaintiffs argue that they should receive monetary compensation for overtime because "absent [the] existence of an express statutory exception, employers, including the federal government, are prohibited from providing their employees with compensatory time in lieu of cash for overtime hours covered by the FLSA." Pls.' Mot. 18. The FLSA itself contains exceptions to the requirement that overtime compensation be paid "at a rate not less than one and one-half times the regular rate." See 29 U.S.C. § 207(a)(1). Specifically, there are statutory exceptions to the prohibition against compensatory time for commissioned sales persons, id.. § 207(i), and for firefighters and police, id. § 207(k). None of these exceptions applies to plaintiffs. Section 207(o) of the FLSA also provides for the granting of compensatory time to state, local, and interstate agency employees. Id. § 207(o). Section 207(o), however, omits any reference to federal employees. See id. Plaintiffs argue that Congress's omission of federal employees from 29 U.S.C. § 207(o) shows that Congress "did not intend for the § 207(o) exemption to apply to plaintiffs." Pls.' Mot. 10. Plaintiffs rely on Doe v. United States (Doe I), 74 Fed. Cl. 592 (2007) for the applicability to this dispute of the principle of statutory interpretation, expressio unius est exclusio alterius: "where a statute expressly designates entities within its coverage, there is an inference that all omissions should be understood as exclusions." Doe I, 74 Fed. Cl. at 597; see Pls.' Reply 9. In Doe I, federal employees brought an action alleging that the Social Security Administration violated the FLSA by granting credit hours and compensatory time for overtime work. Doe I, 74 Fed. Cl. at 593-94. In deciding a motion to dismiss, the court reviewed whether the FLSA or FEPCA provides an exception to the FLSA or FEPCA requirements to pay overtime pay to the Doe plaintiffs. Id. at 597-600. The court noted that the FLSA contains an explicit exemption for state, local, and interstate agency employees in 29 U.S.C. § 207(o)(1), id. at 597, and that "[u]nder the maxim of statutory interpretation expressio unius est exclusio alterius, where a statute expressly designates entities within its coverage, there is an inference that all omissions should be understood as exclusions," id. The court stated, "As such, the exclusion of federal employees from Section 207(o) means this category of employees cannot receive comp time off at a rate of one and one-half hours for each hour of 10

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overtime worked." Id. at 597-98. Unlike plaintiffs in this case 3 , however, the Doe plaintiffs were subject to both FLSA and FEPCA. Id. at 597. The court read the FLSA and FEPCA together and determined that "an agency may grant an employee comp time on an hour-for-hour basis in lieu of overtime pay under the FLSA for occasional or irregular overtime work." Id. at 598. The court dismissed the Doe I plaintiffs' claim for failure to state a claim upon which relief could be granted. Id. at 600. The Court of Appeals for the Federal Circuit upheld the trial court's finding regarding the Doe I plaintiffs' FLSA claim. Doe v. United States (Doe II), 513 F.3d 1348, 1358 (Fed. Cir. 2008) ("Because Title 5 authorizes the SSA to grant compensatory time and credit hours to non-exempt federal employees, and because section 5542(c) does not limit that authority, the trial court correctly dismissed the appellants' FLSA claims for failure to state a claim."). In its motion, defendant anticipates plaintiffs' reliance on Doe I and argues that "[a]ny attempt by plaintiffs to present this argument [is] without merit" because "the conclusion drawn in Doe [I] from its application to section 207(o) is inconsistent with the decision of the United States Court of Appeals for the Federal Circuit in Billings v. United States (Billings), 322 F.3d 1328, 1332-33 (Fed. Cir. 2003)." Def.'s Mot. 15. The Billings plaintiffs sought overtime pay under the FLSA. Billings, 322 F.3d at 1330. At issue in Billings was whether the plaintiffs were exempt from the overtime provisions as "executives." Id. The Billings plaintiffs argued that the OPM definition of "executive" employee conflicted with the Department of Labor definition and that the Department of Labor definition should prevail. Id. The Billings court noted that the FLSA is silent on the definition of "executive" employee and acknowledged that the OPM could fill that gap by implementing regulations produced through notice-and-comment rulemaking. Id. at 1333. In contrast to the silence of the FLSA as to the definition of "executive" employee addressed in Billings, the FLSA is not silent as to the acceptable form of compensation for overtime hours or as to which employees will be exempt from its requirements. See 29 U.S.C. § 207(a)-(o). Section 207(o) contains no "gap" to fill because Congress specifically omitted federal employees from 29 U.S.C. § 207(o). The exceptions to the FLSA's requirement of time and a half monetary compensation found in 29 U.S.C. § 207 do not apply to plaintiffs.

As discussed below in this Part II.A.1, plaintiffs are exempted from the Federal Employees Pay Comparability Act of 1990 (FEPCA) pursuant to 49 U.S.C. § 40122(g)(2) (2000). 11

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Additional exceptions to the FLSA's requirement that overtime compensation be paid "at a rate not less than one and one-half times the regular rate," 29 U.S.C. § 207(a)(1), are contained in title 5 of the United States Code, see 5 U.S.C. §§ 5543, 612223. Under § 5543: The head of an agency may ­ (1) on request of an employee, grant the employee compensatory time off from his scheduled tour of duty instead of payment under section 5542 or section 7 of the [FLSA] for an equal amount of time spent in irregular or occasional overtime work[.] . . . 5 U.S.C. § 5543(a). In 1982 Congress amended title 5 of the United States Code "to provide permanent authorization for Federal agencies to use flexible and compressed employee work schedules. Federal Employees Flexible and Compressed Work Schedule Act of 1982 (FEFCWSA), Pub. L. No. 97-221, 96 Stat. 227 (1982) (codified as amended at §§ 6120-6133 (2000)). Under § 6123: [T]he head of an agency may, on request of the employee, grant the employee compensatory time off in lieu of payment for such overtime hours, whether or not irregular or occasional in nature and notwithstanding the provisions of sections 5542(a), 5543(a)(1) and section 5544(a) of this title, section 7453(e) of title 38, section 7 of the [FLSA] (29 U.S.C. [§] 207), or any other provision of law[.] . . . 5 U.S.C. § 6123(a)(1). FEFCWSA also allowed agencies to grant credit hours for work in certain circumstances. See 5 U.S.C. §§ 6121(4), 6122. The exceptions contained in sections 5543, 6121, 6122, and 6123 do not, however, apply to plaintiffs under the provisions of the Department of Transportation and Related Agencies Appropriation Act of 1996, Pub. L. No. 104-50, § 347, 109 Stat. 436 (1995) (codified as amended at 49 U.S.C. § 40122(g) (2000)), which granted the FAA the authority to develop a personnel management system: In consultation with the employees of the [FAA] and such non-governmental experts in personnel management systems as he may employ, and notwithstanding the provisions of title 5 and other Federal personnel laws, the [FAA] shall develop and implement, not later than January 1, 1996, a personnel management system for the [FAA] that addresses the unique demands on the agency's workforce. Such a new system shall, at a minimum, provide for greater flexibility in the hiring, training, compensation, and location of personnel.

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49 U.S.C. § 40122(g)(1). The 1996 FAA personnel management system (PMS), effective on April 1, 1996, id. § 40122(g)(4), is exempt from most of the provisions of title 5, see id. § 40122(g)(2). Section 40122(g)(2) of title 49 states: The provisions of title 5 shall not apply to the new personnel management system developed and implemented pursuant to paragraph (1), with the exception of ­ (A) section 2302(b), relating to whistleblower protection, including the provisions for investigation and enforcement as provided in chapter 12 of title 5; (B) sections 3308-3320, relating to veteran's preference; (C) chapter 71, relating to labor-management relations; (D) section 7204, relating to antidiscrimination (E) chapter 73, relating to suitability, security, and conduct; (F) chapter 81, relating to compensation for work injury; (G) chapters 83-85, 87, and 89, relating to retirement, unemployment compensation, and insurance coverage; and (H) sections 1204, 1211-1218, 1221, and 7701-7703, relating to the Merit Systems Protection Board. 49 U.S.C. § 40122(g)(2). In particular, section 40122(g)(2) excludes plaintiffs from the operation of the provisions of 5 U.S.C. §§ 5543 and 6123, which authorize granting compensatory time in lieu of FLSA overtime pay. See 49 U.S.C. § 40122(g)(2). While it is true that § 5543 of title 5 of the United States Code authorizes the payment of compensatory time at a straight time rate for irregular or unscheduled overtime worked by certain federal employees, 5 U.S.C. § 5543, and 5 U.S.C. §§ 6120-33 allows compensatory time to be granted for hours worked beyond an employee's flextime schedule, id. §§ 6120-33, none of these provisions applies to plaintiffs because none of these provisions is listed among the exceptions to the express provision of 49 U.S.C. § 40122(g)(2) that "[t]he provisions of title 5 shall not apply to [the FAA's] new personnel management system." 49 U.S.C. § 40122(g)(2). 2. Whether the FAA Has Authority Pursuant to 49 U.S.C. §§ 40122(g)(1) and 106(l) to Grant Plaintiffs Compensatory Time in Lieu of FLSA Overtime Pay and to Provide Credit Hours

Defendant acknowledges that the new PMS is not covered by 5 U.S.C. §§ 5543 and 6121, which allow for compensatory time in lieu of FLSA compensatory pay. Def.'s Reply 6; Def.'s Mot. 14; see 49 U.S.C. § 40122(g)(2). According to defendant, however, "section 5543 is not the only source of authority for agencies of the Federal Government to grant compensatory time as compensation pursuant to the FLSA for excess hours of work." Def.'s Mot. 14. Defendant argues, notwithstanding the unavailability of 5 U.S.C. 13

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§ 5543, that the FAA "has authority pursuant to 49 U.S.C. §§ 40122(g)(1) and 106(l) and the FAA's implementing regulations, to grant plaintiffs compensatory time in lieu of [FLSA] overtime pay and to provide credit hours as part of a flexible work schedule." Def.'s Reply 1. In 1996, Congress passed the Air Traffic Management System Performance Improvement Act (Improvement Act). Pub. L. No. 104-264, §§ 201-30, 110 Stat. 3213 (Oct. 9, 1996) (codified at 49 U.S.C. § 106(l)). Congress noted in § 221 of the Improvement Act that the FAA "is a unique agency, being one of the few non-defense government agencies that operates 24 hours a day, 365 days a year, while continuing to rely on outdated technology to carry out its responsibilities for a state-of-the-art industry." Improvement Act § 221(1). The Improvement Act "authorized [the FAA] to change the Federal procurement and personnel systems to ensure that the [FAA] has the ability to keep pace with new technology and is able to match resources with the real personnel needs of the [FAA]." Id. § 221(14). Relevant to the FAA's personnel management system compensation provisions, § 225 of the Improvement Act authorizes the FAA to set compensation guidelines for FAA employees. Id. § 225 (codified at 49 U.S.C. § 106(l)(1)). Section 106(l)(1) of title 49 of the United States Code states: Except as provided in subsections (a) and (g) of section 40122, the Administrator is authorized, in the performance of the functions of the Administrator, to appoint, transfer, and fix the compensation of such officers and employees, including attorneys, as may be necessary to carry out the functions of the Administrator and the [FAA]. In fixing compensation and benefits of officers and employees, the Administrator shall not engage in any type of bargaining, except to the extent provided for in section 40122(a)4 , nor shall the Administrator be bound by any requirement to establish such compensation or benefits at particular levels. 49 U.S.C. § 106(l)(1) (footnote added) (emphasis added).

Section 40122(a) of title 49 of the United States Code provides general information about consultation and negotiation, mediation, cost savings and productivity goals, and annual budget discussions. In particular, § 40122(a)(1) states: (1) Consultation and negotiation. In developing and making changes to the personnel management system initially implemented by the Administrator of the Federal Aviation Administration on April 1, 1996, the Administrator shall negotiate with the exclusive bargaining representatives of employees of the Administration certified under section 7111 of title 5 and consult with other employees of the Administration. 49 U.S.C. § 40122(a)(1). 14

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The parties contest the meaning of §§ 106(l)(1) and 40122(g)(1), especially the phrases emphasized in the quotations above and below. Def.'s Reply 6; Pls.' Reply 2. Section 40122(g)(1) states: In consultation with the employees of the Administration and such nongovernmental experts in personnel management systems as he may employ, and notwithstanding the provisions of title 5 and other Federal personnel laws, the Administration shall develop and implement, not later than January 1, 1996, a personnel management system for the Administration that addresses the unique demands on the agency's workforce. Such a new system shall, at a minimum, provide for greater flexibility in the hiring, training, compensation, and location of personnel. 49 U.S.C. § 40122(g)(1) (emphasis added). Defendant argues that "the FAA Administrator [had] broad authority to fashion a new personnel management system that would grant increased flexibility in personnel matters, including the authority to set pay for employees" because of language in the Improvement Act. Def.'s Reply 7; see 49 U.S.C. § 106(l)(1). According to defendant, §§ 40122(g)(1) and 106(l) "authorized the FAA to create a personnel system for its employees in place of the title 5 statutes formerly applicable to them." Def.'s Reply 1. Defendant argues: "As the statutory language makes clear, when Congress excluded the FAA from most of the personnel rules in title 5, it intended for the Agency to replace them with regulations promulgated as part of its newly created personal management system." Id. at 8; see id. at 11-12 (arguing that the FAA has properly interpreted title 49 as a grant to the FAA of "authority to promulgate regulations providing for the granting of compensatory time in lieu of FLSA overtime pay as well as credit hours for employees who work a FWS as indicated by the adoption of policies permitting both in the FAA PMS"); id. at 13 (arguing that "when Congress authorized an overhaul of the FAA personnel system, it charged the FAA with developing and administering its own PMS," and that "[t]he language of these statutes clearly and unambiguously gave FAA the authority to `fix compensation'"). According to defendant, "Congress did not expressly or implicitly indicate any intention to limit the FAA's authority to pay compensatory time in lieu of FLSA overtime or to issue credit hours, authorities the FAA had possessed since 1990 and 1982 respectively." Id. at 8. Defendant asserts that "[i]nstead, Congress expressed its intention to give the FAA more flexibility in administering its personnel management system," including "the ability to continue flexible compensation practices the FAA had enjoyed prior to 1996." Id. Defendant argues that "[I]n light of: 1) Congress's intent to grant the FAA greater flexibility; 2) the FAA's long-standing prior ability to grant compensatory time and issue credit hours; and 3) the absence of any indication that Congress intended to take away the FAA's ability to do either, it is clear 15

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that the FAA's interpretation of title 49 as permitting it to continue both of these practices in the context of its new PMS is reasonable." Id. at 13. Plaintiffs argue, however, that because "the FAA is free to provide and negotiate pay and benefits unrestricted by the provisions of title 5[,] . . . the presumption should be that Congress intended the FAA to adhere to the floor-level FLSA overtime requirements applicable to other non-title 5 employers." Pls.' Reply 10. According to plaintiffs, the flexibility given to the FAA pursuant to 49 U.S.C. § 40122 and 49 U.S.C. § 106(l)(1) did not enable the FAA to disregard the provisions of the FLSA: In truth, in granting the FAA the flexibility to design a personnel management system untethered to the pay and benefits requirements of title 5, Congress intended to permit the FAA the freedoms of a private sector employer ­ but with those freedoms comes the obligation to follow the FLSA's basic overtime pay requirements, just as private sector employers must do. Id. at 2. The court now examines the extent to which these conflicting contentions ­ defendant's view that title 5 may in effect be continued by regulation or plaintiffs' view that with the freedoms of the private sector come FLSA's basic overtime pay requirements ­ are supported by the texts on which the parties rely and their legislative histories. Defendant relies on general propositions regarding statutory construction and the discernment of legislative intent in support of its assertion that the FAA properly interpreted the Improvement Act as authority to grant compensatory time. Def.'s Reply 12-13 (citing Chevron, U.S.A. Inc. v. Natural Res. Def. Council (Chevron), 467 U.S. 837, 843 n.9 (1984) ("If a court, employing traditional tools of statutory construction ascertains that Congress had an intention on the precise question at issue, that intention is the law and must be given effect."); Haggar Co. v. Helvering, 308 U.S. 389, 394 (1940) ("All statutes must be construed in light of their purpose.")). The court agrees with defendant that the starting point for statutory interpretation is the language of the statute. Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 438 (1999) (citations omitted) (stating that analysis "in any case of statutory construction . . . begins with `the language of the statute'"); Ventas, Inc. v. United States, 381 F.3d 1156, 1160 (Fed. Cir. 2004) (citing Hughes Aircraft Co., 525 U.S. at 438) ("Statutory interpretation necessarily begins with the text of the statute."); Norman J. Singer, 2A Sutherland Statutory Construction, § 47:1 (7th ed. 2007) ("The starting point in statutory construction 16

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is to read and examine the text of the act and draw inferences concerning the meaning from its composition and structure." (footnote omitted)). However, it is not clear to the court that either plaintiffs' or defendant's construction is required by the text of the statute, nor does it appear that the court can ascertain Congress's intention with respect to the "precise question at issue," Chevron, 467 U.S. at 843 n.9, namely the applicability of the FLSA to the FAA compensation system, from the text alone. Defendant's textual argument relies principally on the last sentence in § 40122(g)(1). Def.'s Reply 6. The last sentence of § 40122(g)(1) provides that the new PMS "shall, at a minimum, provide for greater flexibility in the hiring, training, compensation and location of personnel." 49 U.S.C. § 40122(g)(1). However, the apparently applicable words "flexibility in . . . compensation," 49 U.S.C. § 40122(g)(1), are far from requiring an interpretation that they eliminate the FLSA standard of pay for overtime work. Moreover, the very next subsection, 49 U.S.C. § 40122(g)(2), states that "[t]he provisions of title 5 shall not apply to the new personnel management system," with certain exceptions, none of which addresses overtime compensation. 49 U.S.C. § 40122(g)(2). This language not only does not clearly support defendant's argument that "Congress did not expressly or implicitly indicate any intention to limit the FAA's authority to pay compensatory time in lieu of FLSA overtime or to issue credit hours," Def.'s Reply 8, but in fact removed the FAA's authority, then existing under the provisions of title 5, to grant compensatory time in lieu of FLSA overtime pay, 49 U.S.C. § 40122(g)(2). The view that Congress intended to remove the FAA's authority to grant compensatory time is consistent with the legislative history5 of § 40122(g).6
5

Use of legislative history may be permissible regardless of whether the statute is clear on

its face: Source materials other than intrinsic aids are considered relevant in construing statutes. Sources outside the text are known as extrinsic aids. Extrinsic aids consist of background information about circumstances which led to the enactment of a statute, events surrounding enactment, and developments pertinent to subsequent operation. These facts comprise the history of a statute. . . . .... It is said that extrinsic aids may be considered only when a statute is ambiguous and unclear. However, ambiguity is not always considered a prerequisite to the use of extrinsic aids. (continued...) 17

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Section 106(l)(1) specifies that the Administrator may set compensation and benefits for FAA employees, but the Administrator's authority is limited by subsections (a) and (g) of § 40122. 49 U.S.C. § 106(l)(1). Section 40122(g)(2) specifically states that

(...continued) Norman J. Singer, 2A Sutherland Statutory Construction, § 48:1 (7th ed. 2007) (footnotes omitted); see also United States v. Am. Trucking Ass'ns, 310 U.S. 534, 543-44 (1940) ("When aid to construction of meaning of words, as used in the statute, is available, there certainly can be no `rule of law' which forbids its use, however clear the words may appear on `superficial examination.'" (footnotes omitted)). An April 10, 1996 senate report including a proposal for 49 U.S.C. § 40122 included the following language under subsection (f), language which mandates that FAA follow certain provisions of title 5 but is silent on the impact of the proposed act on the provisions relating to compensatory time and credit hours: EMPLOYEE RIGHTS AND BENEFITS.-- The enactment of this section shall not result in the exemption of employees of the Administration from any of the following provisions of title 5: (1) Section 2302(b) (relating to whistleblower protection). (2) Section 3308-3320 (relating to veterans' preference). (3) Section 7116(b)(7) (relating to prohibition of the right to strike). (4) Section 7204 (relating to antidiscrimination). (5) Chapter 63 (relating to leave). (6) Chapter 71 (relating to labor-management relations). (7) Chapter 73 (relating to suitability, security, and conduct). (8) Chapter 81 (relating to compensation for work injuries). (9) Chapter 83 (relating to retirement). (10) Chapter 84 (relating to the Federal Employees' Retirement System). (11) Chapter 85 (relating to unemployment compensation). (12) Chapter 87 (relating to life insurance). (13) Chapter 89 (relating to health insurance). (14) Subchapter II of chapter 53 (with respect to the pay of the Administrator). S. Rep. No. 104-251, at 59 (1996). Similar language was contained in a House Report from March 7, 1996. H.R. Rep. No. 104-475, at 4 (1996). The final text of § 40122, however, states: "The provisions of title 5 shall not apply to the new personnel management system developed and implemented pursuant to paragraph (1), with the exception of [certain provisions]." 49 U.S.C. § 40122(g)(2) (emphasis added). Instead of listing provisions of title 5 from which the FAA must not deviate ­ while apparently allowing the continued applicability of certain provisions of title 5 ­ Congress instead chose specifically to remove from the FAA the majority of the provisions of title 5, including those that authorized payment for overtime by compensatory time and credit hours. 18
6

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most title 5 provisions, including 5 U.S.C. § 5543, do not apply to the PMS. 49 U.S.C. § 40122(g)(2). As with the legislative history of § 40122(g), see supra note 6, the legislative history of § 106(l)(1) shows a clear intent to eliminate most provisions of title 5 from the PMS. Legislative proposals in the Senate contemplated that the PMS would apply the compensation provisions of title 5. The proposals for 49 U.S.C. § 106(l)(1) in the Senate on April 10, 1996 and July 26, 1996 included the following language: Upon development of a personnel management system under section 40122(c), the Administrator is authorized, in the performance of the functions of the Administrator, to appoint, transfer, and fix the compensation of such officers and employees, including attorneys, as may be necessary to carry out the functions of the Administrator and the Administration. Except as otherwise provided by law, such officers and employees shall be appointed in accordance with civil service laws and compensated in accordance with title 5. In fixing compensation and benefits of officers and employees, the Administrator shall not engage in any type of bargaining, except to the extent provided for in section 40122(c), nor shall the Administrator be bound by any requirement to establish such compensation or benefits at particular levels. S. Rep. No. 104-251, at 50 (1996) (emphasis added); S. Rep. No. 104-333, at 52 (1996). A July 26, 1996 House Report proposed amending § 106(l)(1) with the following language which eliminated the application of the title 5 compensation provisions: Except as provided in section 40122(a) of this title and section 347 of Public Law 104-50 [49 U.S.C. § 40122(g)], the Administrator is authorized, in the performance of the functions of the Administrator, to appoint, transfer, and fix the compensation of such officers and employees, including attorneys, as may be necessary to carry out the functions of the Administrator and the Administration. In fixing compensation and benefits of officers and employees, the Administrator shall not engage in any type of bargaining, except to the extent provided for in section 40122(a), nor shall the Administrator be bound by any requirement to establish such compensation or benefits at particular levels. H.R. Rep. No. 104-848, at 21 (1996) (emphasis added). This language from the House Report was adopted by Congress on October 9, 1996. Pub. L. No. 104-264, § 225, 110 Stat. 3213 (Oct. 9, 1996) (codified at 49 U.S.C. § 106(l)). Congress chose to exclude the language from the Senate bill requiring compensation "in accordance with title 5," S. Rep. No. 104-251, at 50, and chose instead to retain the language from the House bill that 19

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most provisions of title 5 shall not apply to the PMS. See Pub. L. No. 104-264, § 225, 110 Stat. 3213 (Oct. 9, 1996) (codified at 49 U.S.C. § 106(l)); 49 U.S.C. § 40122(g). Furthermore, the provision that the Administrator shall not "be bound by any requirement to establish such compensation or benefits at particular levels," 49 U.S.C. § 106(l)(1), does not require an interpretation that the Administrator is free from the constraints of all other laws and regulations relating to pay, including the FLSA. In particular, the concept of "establish[ing] . . . compensation or benefits at particular levels" does not appear to address the particular issue in this case, which is not "compensation . . . levels" but rather the calculation of overtime pay, regardless of the underlying "compensation . . . levels." There is an absence in either the text of the legislation or in the legislative history of § 106(l)(1) of a clearly discernable indication of congressional intent to abrogate the protections of the FLSA. The statute lacks a phrase such as "[n]otwithstanding any other provision of law," a phrase which has been interpreted to "connote[] a legislative intent to displace any other provision of law that is contrary to the Act." Shoshone Indian Tribe of the Wind River Reservation v. United States, 364 F.3d 1339, 1346 (Fed. Cir. 2004). In the absence of such a direct statement, a repeal must be found by implication. Town of Red Rock v. Henry (Town of Red Rock), 106 U.S. 596, 601 (1883) (stating that where an act, contains no express repeal of an earlier act, "[t]he question is . . . whether the [later] act repeals the [earlier act] by implication"). The Supreme Court has stated that as a "cardinal rule . . . repeals by implication are not favored." Posadas v. Nat'l City Bank of New York (Posadas), 296 U.S. 497, 503 (1936); see Town of Red Rock, 106 U.S. at 601. Of particular relevance is the guidance that the court should give effect to two statutes upon the same subject "if possible:" "Where there are two acts upon the same subject, effect should be given to both if possible." Posadas, 296 U.S. at 503. "The courts are not at liberty to pick and choose among congressional enactments, and when two statutes are capable of coexistence, it is the duty of the courts, absent a clearly expressed congressional intention to the contrary, to regard each as effective." Morton v. Mancari (Morton), 417 U.S. 535, 551 (1974). Some aspects of the legislative history of the Improvement Act indicate that, through 49 U.S.C. § 106(l)(1), Congress intended to remove some legal requirements that applied to the FAA, S. Rep. No. 104-251, at 11 (1996) (speaking of "giving the FAA much more autonomy" and waiving "many federal laws and regulations in the areas of personnel and procurement that inhibit the effectiveness of FAA"), but neither the text nor the legislative history contains any indication of an intention to diminish the protections of the FLSA.

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The goals of the Senate bill to allow innovation by the FAA by waiving "many federal laws and regulations" do not address the FLSA specifically: The bill as reported would provide for a comprehensive overhaul of the entire FAA by giving the FAA much more autonomy, while at the same time keeping it within the DOT. The FAA would have authority to develop new, innovative personnel and procurement systems, and be able to waive many federal laws and regulations in the areas of personnel and procurement that inhibit the effectiveness of FAA. S. Rep. No. 104-251, at 11 (1996). Moreover, the overtime provisions of the FLSA do not appear to fall under "federal laws and regulations . . . that inhibit the effectiveness of FAA." See id. Senate and House Reports discussing the effectiveness of the FAA indicate that the FAA's effectiveness was inhibited by a heavily bureaucratic system. Id. at 2-3 (stating that "a complex [Air Traffic Control (ATC)] system, however, tends to function much less efficiently than it should in the heavily bureaucratic environment of the existing FAA"); id. at 8 ("The substantial number of federal requirements governing personnel also place a significant burden on FAA's ability to effectively manage its workforce."); S. Rep. No. 104-333, at 5, 9 (1996); H.R. Rep. No. 104-475, at 30 (1996) (stating that because "FAA managers and employees must deal with 47,200 pages of personnel laws and regulations . . . it is impossible to recruit, pay, and reward employees properly"). Instead, the legislative history of the Improvement Act appears to the court to be focused on safety, management reform, and administrative flexibility. A Senate Report from April 10, 1996 discussing the new personnel management system stated that "[t]he overriding goal of FAA reform is the enhancement of aviation safety." S. Rep. No. 104251, at 29 (1996). The April 10, 1996 Senate Report focused on the inefficiencies in the ATC system. In effect, the FAA, which operates the ATC system 365 days per year, 24 hours per day, is running the production line for commercial airlines and all other segments of the aviation system. Such a complex ATC system, however, tends to function much less efficiently than it should in the heavily bureaucratic environment of the existing FAA. Id. at 2-3. A Senate Report from July 26, 1996 reiterated the same concern. See S. Rep. No. 104-333, at 5 (1996). The April 10, 1996 Senate Report stated: "This bill will put the FAA on the path of being better able to address all ATC system inefficiencies in a coordinated and comprehensive manner." S. Rep. No. 104-251, at 3 (1996). Relating to personnel issues, the Senate Report stated: 21

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The substantial number of federal requirements governing personnel also place a significant burden on FAA's ability to effectively manage its workforce. FAA managers and employees must work with 47,200 pages of federal personnel laws and regulations. According to the DOT, the restrictions contained in these laws and regulations create an environment lacking flexible recruiting, flexible salary setting, and performance-based rewards. A more flexible and innovative personnel program or structure, such as that envisioned by this bill, could provide incentives for increased productivity, compensate employees based on performance, facilitate moving employees based on changes in the demand for ATC services, and improve overall management of FAA's workforce. Id. at 8. The July 26, 1996 Senate Report restated the same goals. See S. Rep. No. 104333, at 9 (1996). A March 7, 1996 House Report discussed similar issues, stating: FAA managers and employees must deal with 47,200 pages of personnel laws and regulations. The restrictions contained therein create an environment [where] it is impossible to recruit, pay, and reward employees properly. H.R. Rep. No. 104-475, at 30 (1996). The July 26, 1996 Senate Report stated a purpose "to reform the [FAA] and make it a more efficient and effective organization by significantly improving how the FAA operates in the following areas: governance, funding, rulemaking, procurement management, and personnel management." S. Rep. No. 104-333, at 1 (1996). The legislative history of § 106(l)(1) also indicates an intention to attract employees and to increase morale. See S. Rep. No. 104-251, at 29; H.R. Rep. No. 104475, at 31. The April 10, 1996 Senate Report stated: "Although the new system would be exempt from many Federal personnel laws and regulations, certain key Federal laws protecting workers' rights and benefits would still apply to the FAA and its employees, including retirement, health and life insurance benefits, and veterans preference." S. Rep. No. 104-251, at 29. The House Report stated: Attempts have been made to deal with these problems by creating pay demonstration programs or providing incentives to employees through pay differentials. However, these programs are often too small. Those that have been adequate have either been eliminated or are threatened with elimination. Morale and productivity suffer as the pay demonstrations and differentials come under attack. 22

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The reported bill would deal with these problems by giving the agency the flexibility to develop its own procurement and personnel systems best suited to its unique mission. It would do this by exempting the agency from current procurement and personnel laws that hinder its flexibility. H.R. Rep. 104-475, at 31. In Morton the Supreme Court noted that the Civil Rights Act of 1964 contained provisions that exempted private employers located on or near Indian Reservations from its anti-discrimination provisions. Morton, 417 U.S. at 547-48. The Court found that "[i]t would be anomalous to conclude that Congress intended to eliminate the longstanding statutory preferences in BIA employment, as being racially discriminatory, at the very same time it was reaffirming the right of tribal and reservation-related private employers to provide Indian preference." Id. at 548. In this case the legislative history of § 106(l)(1) indicates an intention to attract employees and to increase morale. See S. Rep. No. 104-251, at 29; H.R. Rep. No. 104-475 at 31. It would be anomalous to conclude that Congress intended to eliminate the protections of the FLSA at the same time it was trying to attract employees and increase morale. See S. Rep. No. 104-251, at 29; H.R. Rep. No. 104-475, at 31. Furthermore, the March 7, 1996 House Report indicates an intention to provide flexibility similar to that in the private sector through the enactment of § 106(l)(1): The Committee envisions FAA setting up systems that will allow it to operate in a more efficient and business-like manner. It should have the flexibility to hire and fire as in the private sector, to provide incentives for personnel to move to where they are most needed, and to provide them with the equipment they need to do the job. There should no longer be a need to separate statutory pay differentials that stand out as a target for budget cutters. Rather FAA should be able to pay employees in accordance with the job they do and the cost of living in the area that they do it. H.R. Rep. 104-475, at 31. The April 10, 1996 Senate Report also indicates that Congress considered treating FAA employees like private sector employees when it notes: "exempting the FAA from personnel requirements and allowing the agency to offer wages that are competitive in the private market, in order to retain its most qualified employees, could significantly increase the FAA's personnel costs." S. Rep. No. 104251, at 17 (1996). The Senate Report contemplated that despite the exemptions from personnel requirements, the bill "could reduce the FAA's costs by streamlining the agency's acquisition process through procurement reform." Id. The court notes that overtime is standard in the private sector under the FLSA. If, as it appears, Congress 23

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sought to enable the FAA to operate in a more businesslike manner analogous to the private sector, abrogating the overtime provisions of the FLSA does not appear consistent with that goal. Because effect should be given to both the FLSA and the Improvement Act "if possible," see Posadas, 296 U.S. at 503, the court does not view the Improvement Act as having displaced the FLSA. The court therefore concludes that the FLSA applies to FAA employees and that regulations promulgated by the PMS must be consistent with the FLSA. Defendant asserts, however, that the "PMS is a binding regulatory scheme." Def.'s Mot. 17-18 (citing Brodowy v. United States (Brodowy), 482 F.3d 1370 (Fed. Cir. 2007)). Defendant argues that "[t]he United States Court of Appeals for the Federal Circuit has endorsed the FAA's retention of personnel rules in existence prior to its conversion to the PMS in 1996." Def.'s Reply 11. In Brodowy, FAA employees filed a claim for pay lost when they transferred to higher-level air