[00:00:00] Speaker 03:
The case for argument this morning is 5149, Alamo versus the United States.

[00:00:32] Speaker 03:
Mr. Weisbrot, whenever you're ready.

[00:00:57] Speaker 02:
Good morning, Your Honors.

[00:00:58] Speaker 02:
May it please the Court, Jason Weisbrot and with me is Jacob Statman for Appellants.

[00:01:02] Speaker 02:
Appellants request that this court reverse the decision of the trial court and grant them their legal and regulatory entitlement to the FLSA overtime pay they are rightfully due.

[00:01:11] Speaker 02:
The trial court erred because appellants are entitled to an additional payment for the straight-time portion of overtime pay for regularly scheduled overtime hours.

[00:01:20] Speaker 03:
So that's a pretty global proposition, that the government generally gives you premium pay

[00:01:27] Speaker 03:
if there's standby time or whatever built into the hours.

[00:01:31] Speaker 03:
And you're suggesting, your position is, that with respect to instances where the government has accounted for standby by giving people premium pay, that all of the hours in over eight hours a day and over 40 hours a week should be paid in straight FLSA overtime?

[00:01:48] Speaker 02:
Well, Your Honor, not for all of those hours.

[00:01:50] Speaker 02:
There are certain categories of the regulations that restrict entitlement to overtime pay for regularly scheduled overtime hours

[00:01:57] Speaker 02:
in excess of eight in a day when employees receive standby duty premium pay.

[00:02:02] Speaker 02:
That's per 551-501-A1.

[00:02:06] Speaker 02:
We're not asking for all overtime hours in excess of eight hours in a day.

[00:02:11] Speaker 02:
If we were, we'd be asking for 16 hours per work day.

[00:02:15] Speaker 02:
What we're asking for is for all hours in excess of 40 in a work week or 80 in a paid period because our employees work on a compressed work schedule.

[00:02:24] Speaker 03:
But wait, these employees are working 24-hour shifts.

[00:02:27] Speaker 02:
Correct.

[00:02:27] Speaker 03:
So you're saying, I don't understand, you're saying if you're not asking for over eight hours a day, then you're not asking for the additional 16 hours in those shifts, right?

[00:02:37] Speaker 02:
Correct.

[00:02:38] Speaker 02:
We're not asking for overtime for all 16 hours for each shift.

[00:02:42] Speaker 02:
What we are asking for is for the hours over 80 in each pay period.

[00:02:47] Speaker 02:
So the work entails either a 96 hour pay period, regularly scheduled, or a 120 hour pay period.

[00:02:56] Speaker 02:
So we're asking for 16 hours of regularly scheduled overtime in the 96 hour pay periods and 40 hours of regularly scheduled overtime in the 120 hour pay periods.

[00:03:07] Speaker 02:
And the regulations and the statutes, they allow standby duty premium pay to substitute or preclude entitlement to regularly scheduled overtime only for employees who are entitled to Title V overtime.

[00:03:22] Speaker 02:
Appellants are

[00:03:23] Speaker 02:
FLSA non-exempt employees, meaning their entitlement to overtime pay accrues from Title 29 or the FLSA, not Title 5.

[00:03:33] Speaker 02:
So the preclusion, and the court gets this wrong, the trial court gets this wrong by stating that OPM's pay regulations also appropriately recognize Congress's intent for standby duty premium pay to compensate for regularly scheduled overtime hours spent largely in standby duty status.

[00:03:52] Speaker 02:
That would be correct for exempt employees.

[00:03:55] Speaker 02:
This is precisely the reason why appellants withdrew their claims as to the exempt FLSA.

[00:04:02] Speaker 03:
Can you tell us what you're referring to?

[00:04:03] Speaker 03:
Are you referring to 5 USC 5545C1?

[00:04:07] Speaker 02:
Correct.

[00:04:08] Speaker 02:
That is the statute that is referred to.

[00:04:10] Speaker 02:
And that statute provides that the receipt of standby duty premium pay can substitute for regularly scheduled overtime pay under

[00:04:20] Speaker 02:
that subpart, which is Title V. But if you read 5542C of the US Code, you see that none of those overtime rules, none of that overtime entitlement that's created under Title V applies to employees who are entitled to FLSA overtime.

[00:04:40] Speaker 02:
And there is no dispute here that our employees, appellants, are entitled to FLSA overtime.

[00:04:46] Speaker 02:
In fact, this was an area that

[00:04:48] Speaker 02:
that appellee initially argued before the trial court that the employees' appellants were not entitled to the regularly scheduled overtime, but then seeded that argument here.

[00:05:00] Speaker 02:
Now they say the employees are entitled to the regularly scheduled overtime, because that's in line with 501A1 and the other provisions of the regulations that OPM put forth, as well as the statute.

[00:05:12] Speaker 02:
But now they argue that the receipt of basic pay and standby duty premium pay

[00:05:18] Speaker 02:
already compensates for the straight time portion of overtime?

[00:05:22] Speaker 01:
What is the standby premium pay compensating for if it's not compensating for the irregular work, not irregular, there's a lot of terminology here that I'm going to get wrong, but the essentially alternative work schedules of the longer than 40 hour weeks, given that most of it, or a significant portion of it's standby.

[00:05:43] Speaker 02:
So standby duty premium pay compensates for several things, including hours worked in excess of eight hours in a day, which our employees are not entitled to as overtime pay by virtue of 501A1.

[00:05:56] Speaker 02:
It also compensates for nighttime differentials, weekends, holiday work.

[00:06:00] Speaker 02:
So there's various categories of pay that the standby duty premium pay compensates for.

[00:06:04] Speaker 01:
But I want to be clear that- Standby pay at issue here, we're not talking about night differentials and all that stuff.

[00:06:09] Speaker 01:
We're talking about the standby pay you get when you work these

[00:06:14] Speaker 01:
whole day on, whole day off schedules, right?

[00:06:16] Speaker 02:
Correct.

[00:06:17] Speaker 02:
And some of that is nighttime.

[00:06:18] Speaker 02:
And again, that substitutes for the nighttime differential that the employees would be entitled to.

[00:06:23] Speaker 02:
But there's a distinction made here.

[00:06:25] Speaker 02:
And we highlight it, particularly by this court's decision in Laforte, more aptly, the dissent analysis, which provides guidance here.

[00:06:35] Speaker 02:
Because Laforte dealt with Section 7K employees who also receive standby duty premium pay.

[00:06:40] Speaker 02:
So do the other cases cited by Appellee.

[00:06:42] Speaker 02:
And that's a key distinction.

[00:06:43] Speaker 02:
because those employees covered by these other cases, Zimmerling, Abreu, Lafort, they're not entitled to overtime pay for regularly scheduled overtime in excess of 40 hours in a week or 80 hours in a pay period.

[00:06:56] Speaker 02:
That's by virtue of 501A5.

[00:06:59] Speaker 02:
That explicitly says in the regulations that if you're a Section 7K employee and you receive standby duty premium pay, you're not entitled to regularly scheduled overtime for hours in excess of 40 in a work week or 80 in a pay period if you work a compressed work schedule.

[00:07:13] Speaker 02:
Our appellants are not Section 7K employees.

[00:07:16] Speaker 02:
So they do not get covered by that.

[00:07:20] Speaker 02:
But the Laforte dissent highlights that the premium pay is actually intended for a specific set of time, those hours in excess of the 40-hour basic work week or the 80-hour basic pay period.

[00:07:37] Speaker 02:
It kind of differs with the Zumerling holding, because in Zumerling they say,

[00:07:41] Speaker 02:
premium pay doesn't really apply to any hours.

[00:07:43] Speaker 02:
It sort of just covers some unknown set of hours.

[00:07:47] Speaker 02:
And Laforte Dissent says, no, really it does cover a set number of hours.

[00:07:52] Speaker 02:
It's those hours in excess of the 40-hour basic work week or 80-hour pay.

[00:07:56] Speaker 01:
Let me just step back here.

[00:07:57] Speaker 01:
I want to make sure I understand the big picture that's going on here.

[00:08:00] Speaker 01:
These are all

[00:08:02] Speaker 01:
they're not hourly workers, right?

[00:08:03] Speaker 01:
They're all on an annual salary.

[00:08:06] Speaker 01:
And then in addition to that annual salary, because they work a different work schedule, they get a premium pay to encompass that different work schedule, which in these people's cases is one day on, two days off, which in some weeks gets you to 48 and in some weeks gets you to, I guess,

[00:08:28] Speaker 01:
72 hours of work, is that right?

[00:08:31] Speaker 02:
Yes, depending on the given... Yeah, just how it rolls out.

[00:08:36] Speaker 01:
And so, why doesn't that already contemplate giving them an annual salary plus the premium pay for that schedule?

[00:08:46] Speaker 02:
Well, because the regulations in the statute did not provide any authority for that payment to substitute for FLSA overtime.

[00:08:53] Speaker 02:
FLSA overtime has to be paid

[00:08:56] Speaker 02:
separate and apart from all other forms of payment.

[00:08:59] Speaker 01:
Well, I mean, here's the problem.

[00:09:00] Speaker 01:
We recognize time and again that Title V and FLSA don't work together very well.

[00:09:06] Speaker 01:
And OPM's job and our job is to make sure that they work together so that people aren't paid more or less than they're entitled to.

[00:09:14] Speaker 01:
And isn't really kind of the gist of your argument going to be that these people are going to get time and a half

[00:09:20] Speaker 01:
for hours that are probably indisputably standby hours versus actual hours.

[00:09:26] Speaker 01:
And doesn't that conflict with the whole purpose of the standby pay premium pay?

[00:09:31] Speaker 02:
Well, Your Honor, respectfully, I don't think it does conflict.

[00:09:33] Speaker 01:
And I think that the entitlement created... Well, let me back up to the factual predicate for that because I want to make sure there's no disagreement about this.

[00:09:40] Speaker 01:
In a typical, and I know there can be differences, but in a typical 48-hour workweek,

[00:09:46] Speaker 01:
Do these people ever actually work more than 40 hours, or is the hours that take them in excess always going to be standby hours?

[00:09:56] Speaker 02:
Well, Your Honor, to answer that simply, there is no dispute that these are hours of work.

[00:10:00] Speaker 01:
Every hour... Without answering my question, let's assume that there's a difference between

[00:10:06] Speaker 01:
hours actually work performing duties like going out on calls, cleaning their trucks, stocking their trucks, doing paperwork, whatever, and standby hours when their only restriction is they have to be on site, but they can watch TV, they can sleep, they can do whatever.

[00:10:21] Speaker 01:
I mean, I think you have to admit that there's a difference between those hours contemplated by the standby premium pay.

[00:10:29] Speaker 02:
Well, yes, Your Honor, and I can certainly appreciate the difference between going out and performing

[00:10:34] Speaker 01:
So, assuming that there's that distinction, do they ever work more than 40 hours of actual work in a typical work week, or is it always that they're working somewhat less than 40 and then they're on standby some things that take them up to the 48?

[00:10:50] Speaker 02:
Your Honor, I can answer that best by saying the record is not clear on whether or not there are ever weeks that they actually do work more than 40 hours in that week.

[00:10:59] Speaker 01:
If they actually work more than 40 hours in that week,

[00:11:03] Speaker 01:
Hasn't the government already agreed they would be entitled to overtime if they actually worked in excess of 40 hours?

[00:11:11] Speaker 02:
No, Your Honor.

[00:11:11] Speaker 02:
The appellee pays the basic pay and standby duty premium pay for all regularly scheduled hours, regardless of whether the employees are sitting... But then employees on occasion get actually paid overtime, time and a half under FLSA.

[00:11:26] Speaker 03:
So isn't that calculated under the guise that Judge Hughes was referring to?

[00:11:31] Speaker 03:
When they actually work more than 40 hours, they actually get overtime.

[00:11:34] Speaker 03:
These employees that are otherwise getting premium pay also get overtime for those additional hours of work, right?

[00:11:41] Speaker 02:
Well, no, Your Honor.

[00:11:41] Speaker 02:
What they do is when they work more than the regularly scheduled tour, so if they work more than 96 hours in the pay period, they call that irregularly scheduled overtime hours, they do get paid time and a half.

[00:11:53] Speaker 02:
for irregularly scheduled overtime hours.

[00:11:54] Speaker 02:
So there's no dispute with regard to that payment, though they are getting paid a deflated halftime rate because they're not including the additional straight time portion of overtime pay in the total remuneration calculation, which goes into the hourly regular rate for the halftime part.

[00:12:12] Speaker 02:
But again, I want to urge this court to, under the regulatory conditions, work

[00:12:20] Speaker 02:
includes being on standby duty, being on the duty status.

[00:12:25] Speaker 02:
So there's no issue here that these employees are not entitled to the FLSA overtime pay for the hours in excess of 40 in a work week, but that make up the regularly scheduled tour of duty hours.

[00:12:38] Speaker 03:
But all of the requirements that are inert to when you're on duty and what you do and what's required of you are different when you're on standby, correct?

[00:12:47] Speaker 02:
Your Honor, the record's not clear on that, but they're on standby.

[00:12:50] Speaker 02:
So if an emergency call comes, they have to respond.

[00:12:53] Speaker 02:
They're providing that benefit to the agency of being on standby and being available to respond at any given moment.

[00:13:02] Speaker 03:
Let me hear from the government.

[00:13:03] Speaker 02:
OK, I'll reserve the rest of my time.

[00:13:14] Speaker 00:
May it please the court.

[00:13:16] Speaker 00:
In their reply, the plaintiffs now concede that the government correctly calculates the straight time rate as $19.92 for the sample employee discussed in the brief.

[00:13:27] Speaker 00:
From our perspective, that effectively concedes the case because the employees receive that straight time rate for every hour in the regularly scheduled work week.

[00:13:36] Speaker 00:
And so in the words of this court's president.

[00:13:38] Speaker 01:
Wait, let me, because this case is very, these regulations are very difficult.

[00:13:43] Speaker 01:
And I've been struggling with these issues for 20 years, not just here, on your side too.

[00:13:49] Speaker 01:
But when you say that they receive that 19 whatever for every hour, do you mean in a regularly scheduled 48 hour work week that that's multiplied by 48 and not 40?

[00:14:00] Speaker 00:
Yes, it's multiplied by 48.

[00:14:03] Speaker 01:
One way to think of this is... So again, backing up big picture, they get an annual salary, they get the premium pay, that's divided by a flat hour or a flat hour per year, and then it's remultiplied by the 48.

[00:14:21] Speaker 01:
Is that roughly right?

[00:14:24] Speaker 00:
That's one way of thinking.

[00:14:26] Speaker 01:
I think the way... Better you explain to me what you think is a better way of looking at it.

[00:14:32] Speaker 00:
To go to the big picture, I think the best way of looking at it is that these employees work a position that's not a typical federal position.

[00:14:40] Speaker 00:
They don't have the typical 40-hour week.

[00:14:44] Speaker 00:
Instead, they are regularly scheduled for either a 48-hour week or a 72-hour week, and so their basic pay and their

[00:14:53] Speaker 00:
annual premium pay, the standby pay, these are annual types of pay that compensate them for that position.

[00:14:59] Speaker 01:
And that's supposed to compensate them for all hours worked.

[00:15:03] Speaker 00:
At the 100%.

[00:15:04] Speaker 01:
In the words of Zumerling... For the straight hours, is your view, that compensation for the straight hours.

[00:15:10] Speaker 01:
Yes.

[00:15:10] Speaker 00:
And that's what the court held in Zumerling, where that was a similar situation.

[00:15:14] Speaker 00:
It did involve 7K employees, but I'll explain in just a moment why that's not a material distinguishing factor here.

[00:15:19] Speaker 00:
In Zumerling, there were plaintiffs that worked, they were standby employees as well.

[00:15:27] Speaker 00:
They received basic pay and standby pay, and they had both hours of non-overtime and hours of regularly scheduled overtime.

[00:15:36] Speaker 00:
And the court there said that the total remuneration, and that compensates at 100%

[00:15:45] Speaker 00:
for all of the hours in the tour of duty.

[00:15:48] Speaker 00:
So then adding the additional one-half the regular rate for each regularly scheduled overtime hour, that accomplishes the full FLSA overtime entitlement.

[00:15:59] Speaker 00:
And the same is true here.

[00:16:00] Speaker 00:
And the real insight in Zoomer Lang is discussed throughout the opinion, but including they do cite to numerous Department of Labor regulations that have a similar insight, especially for employees that receive an annual salary.

[00:16:12] Speaker 00:
The goal is to figure out what is the typical wage paid for this position and what the position requires.

[00:16:21] Speaker 00:
And then that's the wage that you want to make sure the employee is getting time and a half.

[00:16:26] Speaker 00:
And so in this case, and in Zoomerling, the combination of the basic pay and the standby pay compensates at a typical hourly wage for each hour in the regularly scheduled work week.

[00:16:39] Speaker 00:
And we know that if we look at the applicable regulation here,

[00:16:42] Speaker 00:
And really, this court's decision could begin and end with 5 CFR 551.512b, which has a special definition of the straight time rate for employees that receive annual premium pay.

[00:16:56] Speaker 00:
And there it says that the basic pay plus the annual premium.

[00:17:02] Speaker 03:
I just want to make sure I'm right.

[00:17:04] Speaker 03:
551.512b.

[00:17:06] Speaker 03:
Is that what you said?

[00:17:08] Speaker 00:
Yes.

[00:17:09] Speaker 00:
Correct.

[00:17:09] Speaker 00:
Yes.

[00:17:10] Speaker 00:
And it's in the second.

[00:17:12] Speaker 00:
sentence of that provision.

[00:17:14] Speaker 00:
For an employee who was authorized annual premium pay, there's this special definition of straight time that is basic pay plus here standby pay divided by all hours for which those pays are intended.

[00:17:27] Speaker 01:
I read this and I wish it was as clear as you were assuring us it is, but I'm not kidding.

[00:17:34] Speaker 01:
This is talking about a rate of pay.

[00:17:37] Speaker 01:
How does that

[00:17:39] Speaker 01:
get us to the conclusion that this compensates for all the hours in excess of 40 hours?

[00:17:46] Speaker 00:
Well, we get that from the divisor, the divided by the hours for which the basic pay plus annual premium pay are intended.

[00:17:55] Speaker 00:
So because that is used to calculate the rate, it's almost a tautology.

[00:18:01] Speaker 01:
It is a tautology that... Is the answer what you said to me earlier, that what this calculates is then multiplied by either

[00:18:09] Speaker 01:
the 48 or the, if it's an extraordinary week, the 72?

[00:18:16] Speaker 00:
Well, yes, it's divided by the 48.

[00:18:17] Speaker 00:
And so I suppose there you could multiply it again by the 48.

[00:18:20] Speaker 00:
And that's how you know that the straight time has been paid for all 48 hours.

[00:18:23] Speaker 00:
But importantly, in the plaintiff's reply brief at page 13, they concede that the combination, the proper denominator here, the combination of the basic pay and the standby pay is intended for the full

[00:18:37] Speaker 00:
regularly scheduled work weeks.

[00:18:38] Speaker 00:
So that's all 48 hours.

[00:18:40] Speaker 00:
So at this point in the case, the parties now agree that the proper number to divide by is the full number of hours in the regularly scheduled work week.

[00:18:49] Speaker 00:
And so that's the straight time rate.

[00:18:50] Speaker 00:
And so in the example we used, for example, the sample employee receives $956 rounding in a regularly scheduled work week for 48 hours.

[00:19:03] Speaker 00:
You divide that by

[00:19:04] Speaker 00:
48 and you get 1992 and that's the value that both parties agree is the correct straight time rate.

[00:19:11] Speaker 00:
It might help to make it a little more concrete with these numbers.

[00:19:14] Speaker 00:
The sample employee is receiving $19.92 for each hour and then the additional half of the regular rate completes the compensation

[00:19:28] Speaker 03:
Can I ask you to go back to where your friend started, I think, which is the statutory regime and the distinction he drew between more than eight hours a day and more than 40 hours a week.

[00:19:38] Speaker 03:
Can you address that?

[00:19:40] Speaker 00:
Yes.

[00:19:40] Speaker 00:
And that goes a bit to Zoomerling as well on the 7K issue.

[00:19:45] Speaker 00:
In the opening brief, the plaintiffs tried to make this into an issue of, is there FLSA compensation or not?

[00:19:56] Speaker 00:
And that's really not the question here.

[00:19:58] Speaker 00:
The government has always agreed that this is a case where they are entitled to FLSA compensation for hours in excess of 80 in the compressed work schedule.

[00:20:07] Speaker 00:
And in a 96-hour pay period, 48-hour work week, that amounts to eight hours in each week of overtime.

[00:20:17] Speaker 00:
So I'll turn to the specific regulation that the plaintiffs are discussing, 551.501.

[00:20:26] Speaker 00:
So certainly, the FLSA normally requires time and a half for hours in excess of eight in a day or 40 in a work week.

[00:20:33] Speaker 00:
There are three exceptions that are relevant here.

[00:20:35] Speaker 00:
Provision A1, which applies to standby employees, says that if you work over eight hours in a day, those specific hours may not be over time so long as, presumably, over 40 in a week still would be.

[00:20:49] Speaker 00:
But also applicable here that the plaintiffs don't mention is subsection six.

[00:20:55] Speaker 00:
which refers to for hours that are not overtime hours, as described in the compressed work schedule statute.

[00:21:01] Speaker 00:
Those are also not overtime.

[00:21:03] Speaker 00:
So there too, for these compressed, for these employees, hours over 8 and over 40 are not FLSA overtime unless they are also in excess of the compressed work schedule.

[00:21:16] Speaker 00:
So this is, this demonstrates why the 7K exemption is not

[00:21:24] Speaker 00:
different, just like the 7K employees.

[00:21:27] Speaker 00:
The plaintiffs here don't receive FLSA in excess of eight hours in a day or FLSA in excess of 40 hours in a week, unless it's over the compressed work schedule.

[00:21:37] Speaker 00:
But the point is that 551.501 and the 7K issue, these all address the issue of which hours are overtime hours.

[00:21:45] Speaker 00:
That's not the issue in this case.

[00:21:46] Speaker 00:
So that's why it's really a side issue that we don't want to focus on.

[00:21:51] Speaker 00:
Just like in Zumerling, Laforte, and Abreu,

[00:21:53] Speaker 00:
The issue is, we know these hours are overtime hours.

[00:21:57] Speaker 00:
How do we properly compensate for them under the FLSA?

[00:22:00] Speaker 00:
And OPM says that the entitlement is straight time plus half of the regular rate.

[00:22:06] Speaker 01:
And the applicable regulation... And that's the 551 regulation.

[00:22:09] Speaker 00:
That's the 551.512, exactly.

[00:22:11] Speaker 03:
And importantly... Well, the conclusion in A of 512 is that we're talking about an employee's overtime entitlement.

[00:22:21] Speaker 03:
And the overtime that you refer to at the

[00:22:23] Speaker 03:
the end of the sentence, under your reading, those are different, right?

[00:22:30] Speaker 03:
Employees' overtime entitlement under this subpart includes the straight rate plus one-half times of the employees' hourly rate of pay times all overtime hours worked.

[00:22:46] Speaker 03:
So that's something different than the overtime entitlement that is referred to at the beginning of the sentence, right?

[00:22:54] Speaker 00:
Well, if I understand the question, A1 is referring to the straight time rate, and A2 is referring to the regular rate, here they're the same.

[00:23:02] Speaker 00:
For example, the straight time rate is 1992, and the regular rate is also 1992.

[00:23:09] Speaker 00:
And that may be often the case.

[00:23:11] Speaker 00:
It depends on the specific types of pay at issue.

[00:23:15] Speaker 03:
But what's confusing isn't that the use of the phrase, the employee's overtime entitlement includes

[00:23:21] Speaker 03:
And then you say straight time rate of pay times all overtime hours work.

[00:23:27] Speaker 03:
And they do receive that because if you, like I said... But then it says later the overtime hours worked is then used in two to say you're going to get one half times the hourly regular rate of pay.

[00:23:42] Speaker 03:
Maybe it's just me that's confused by this.

[00:23:46] Speaker 00:
Are you referring to the fact that it says

[00:23:48] Speaker 00:
It looks like all... It's a very confusing regulation.

[00:23:51] Speaker 00:
Yes.

[00:23:52] Speaker 01:
OPM might take a look at making this clearer.

[00:23:55] Speaker 01:
Yes, but there's no dispute that this formula... A1, I mean, honestly, if you read A1 and 2 without looking at B, which I understand using B somehow further defines and qualifies this for these special work schedules, seems to suggest that they would get the straight time rate of pay for the additional eight hours and a half a

[00:24:18] Speaker 01:
also for the additional eight hours.

[00:24:20] Speaker 01:
They do receive the additional half.

[00:24:22] Speaker 00:
Well, they don't receive the additional one and a half.

[00:24:25] Speaker 01:
Right.

[00:24:25] Speaker 01:
But if you ignore part B, it seems like a one and two would get you the one and a half.

[00:24:31] Speaker 00:
And I'll explain why that's not so, because what they're asking for is an additional $19.92 on top of the $19.92 they're already getting.

[00:24:41] Speaker 01:
And that's because you paid them the $19.92 for the 48 hours.

[00:24:46] Speaker 01:
Not just for 48 hours.

[00:24:49] Speaker 00:
Yes, precisely.

[00:24:50] Speaker 00:
And that's why the 48 is the divisor here in the regulation.

[00:24:53] Speaker 01:
And that comes from how OPM interprets B?

[00:24:57] Speaker 00:
That comes from OPM's definition of B, and it comes from even the plaintiffs themselves have conceded that the 48 hours is the proper number to divide by.

[00:25:04] Speaker 00:
And that's how we get the $19.92.

[00:25:09] Speaker 01:
If they're essentially saying that they... Can I take you back to my other, kind of more, I think, practical questions about, are these, because, I mean, I get all these calculations and stuff, but I do worry that

[00:25:21] Speaker 01:
It seems like the point of these are they never actually perform duties even close to the 40 hours that a lot of this is standby.

[00:25:30] Speaker 01:
That's contemplated by the regulations that talk about which percentage of premium pay they get has different things depending upon how many they're on standby and not.

[00:25:41] Speaker 01:
Is there any allegation here to your knowledge that these people are working more than 40 hours in a pay period?

[00:25:50] Speaker 00:
No, I'm not aware of any.

[00:25:52] Speaker 00:
And you're exactly right that there are... And by working, I mean not standby hours, yes.

[00:25:58] Speaker 00:
Yes.

[00:25:58] Speaker 00:
And it might help the court in the Title V regulations at 550.143e, it defines standby as saying, you know, these are hours that the employee may have to be on location, but they can be sleeping, eating, listening to radio, doing whatever they want.

[00:26:14] Speaker 00:
They don't have to be doing actual work.

[00:26:16] Speaker 00:
And in the FLSA, understanding at five, that's a different regulation.

[00:26:20] Speaker 01:
Which is presumably why they get a premium pay that's not equivalent to the full FLSA one and a half.

[00:26:27] Speaker 00:
Exactly, exactly.

[00:26:29] Speaker 00:
And that's the whole difficulty that OPM was faced with, is that they're faced with a scheme, a long-standing scheme in Title V that compensates longer than ordinary work weeks, i.e.

[00:26:41] Speaker 00:
over 40, and the Title V side

[00:26:43] Speaker 00:
using this special type of premium pay, and they have to reconcile that with the FLSA understanding that if you're required to be on site, that's effectively an hour of work for the FLSA.

[00:26:55] Speaker 00:
And we agree that these are hours of work for the FLSA.

[00:26:58] Speaker 00:
But the question is, in the understanding of Sumerling, what really is the typical hourly rate paid?

[00:27:04] Speaker 00:
And the typical hourly rate is the basic pay and the standby pay divided by all of the regularly scheduled hours in the work week.

[00:27:13] Speaker 00:
And I'd like to briefly address the La Forte argument that's made in the plaintiff's reply brief.

[00:27:19] Speaker 00:
And that's based primarily on the statutory provision 5 USC 5504, which is cited at page 7 of the reply brief.

[00:27:29] Speaker 00:
That's actually the wrong version of the statute that's cited there.

[00:27:32] Speaker 00:
The statute has materially changed since the version that was at issue in La Forte.

[00:27:38] Speaker 00:
In La Forte, there actually was a sentence in the statute saying,

[00:27:43] Speaker 00:
And I paraphrased that the basic pay is intended to compensate for only 40 hours in the work week, 52 hours in the year.

[00:27:53] Speaker 00:
And that language has been deleted and the 5504 now is merely a tool of conversion to convert an annual rate to an hourly or monthly rate.

[00:28:05] Speaker 00:
So the argument was rejected in La Forte and it should again be rejected here with even

[00:28:11] Speaker 00:
weaker statutory basis.

[00:28:13] Speaker 03:
The language you're saying has changed is 5504B?

[00:28:16] Speaker 03:
Yes.

[00:28:17] Speaker 03:
And that's what was referred to?

[00:28:19] Speaker 03:
Your friend referred to the dissent in that case and that's what the dissent was talking about?

[00:28:23] Speaker 03:
Yes.

[00:28:23] Speaker 00:
And even under that stronger language, the majority still rejected that argument and sustained OPM's methodology.

[00:28:31] Speaker 00:
And just as the Court of Federal Claims did here, we respectfully request that the Court sustain the OPM's methodology again in this case.

[00:28:39] Speaker ?:
Thank you.

[00:28:49] Speaker 02:
Thank you, Your Honors.

[00:28:50] Speaker 02:
There's no deference, though, to OPM here.

[00:28:52] Speaker 02:
And if you follow OPM's regulations, the plain reading, you would have to find in favor of appellants.

[00:28:58] Speaker 02:
512 sets up a calculation for the straight time rate of pay in B, and then instructs that you multiply that straight time rate of pay times all overtime hours in A1, 512A1.

[00:29:10] Speaker 02:
Appellate does not do that.

[00:29:12] Speaker 02:
Appellate does not multiply the straight time rate of pay.

[00:29:14] Speaker 01:
Can I ask you this?

[00:29:15] Speaker 01:
Because I'm still confused.

[00:29:19] Speaker 01:
hourly rate.

[00:29:20] Speaker 01:
This comes from combining the annual salary and the 10% premium pay and doing the math, and then over the 48-hour work week, not the 40-hour work week.

[00:29:35] Speaker 01:
So you're getting that $19 for all 48 hours.

[00:29:38] Speaker 01:
Is that right?

[00:29:40] Speaker 02:
You are... Appellee's method of calculation dilutes the basic pay to cover all 48 hours when in actuality the statute only allows

[00:29:49] Speaker 02:
the basic pay to compensate for four?

[00:29:51] Speaker 01:
I think the annual salary plus the premium pay is intended to compensate for this special work schedule, right?

[00:30:03] Speaker 01:
And so it covers all 48 hours.

[00:30:09] Speaker 01:
I'm not talking, well, I'm going to have to say that.

[00:30:13] Speaker 01:
You get that for 48 hours.

[00:30:16] Speaker 01:
Correct, Your Honor.

[00:30:17] Speaker 01:
Because you get an annual salary.

[00:30:19] Speaker 01:
that's divided out over each work week, and then in a recognition of the fact that you're on standby and that you work these 48-hour work weeks, or sometimes more, you get the premium pay.

[00:30:35] Speaker 02:
Correct, Your Honor.

[00:30:36] Speaker 02:
But the distinction is that while those are intended for the 96 hours or 48-hour week in the calculation of the straight-time rate of pay in 512b,

[00:30:46] Speaker 02:
The Laforte Decent advises that the basic pay only actually compensates you for 40 hours.

[00:30:53] Speaker 02:
And the standby duty premium pay does not substitute for FLSA overtime pay.

[00:30:59] Speaker 02:
So again, even though they're intended for that in that calculation, you still have to take the affirmative step of multiplying that rate by the regularly scheduled overtime hours.

[00:31:12] Speaker 02:
This court has never approved the method of pay that appellee supports.

[00:31:16] Speaker 02:
The Zumerling case, the Abreu case, because they're section 7K and receive standby duty premium pay, they're not entitled to the FLSA overtime for regularly scheduled overtime.

[00:31:27] Speaker 02:
That's why Lafort held what it did.

[00:31:28] Speaker 02:
Lafort never rejected the argument that appellants are making here.

[00:31:32] Speaker 02:
Lafort never rejected per se the dicta that the dissent advises in Lafort because the dissent was addressing really appellants.

[00:31:42] Speaker 02:
non-section 7K employees who receive standby duty premium pay.

[00:31:46] Speaker 02:
I see I'm out of time.

[00:31:50] Speaker 02:
Thank you.

[00:31:51] Speaker 03:
Thank you, Your Honor.

[00:31:52] Speaker 03:
And the case is submitted.

[00:31:53] Speaker 03:
That concludes our proceedings for this morning.