Case3:09-cv-05887-VRW Document95 Filed12/30/10 Page1 of 15

1 DAVID W. TYRA, SBN 116218

KRISTIANNE T. SEARGEANT, SBN 245489
2 KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD
A Law Corporation
3 400 Capitol Mall, 27th Floor
Sacramento, California 95814
4 Telephone: (916) 321-4500
Facsimile: (916) 321-4555
5 E-mail: dtyra@kmtg.com

6 LINDA A. MAYHEW, Chief Counsel(A), SBN 155049

WARREN C. STRACENER, Dep. Chief Counsel, SBN 127921
7 WILL M. YAMADA, Labor Relations Counsel, SBN 226669
DEPARTMENT OF PERSONNEL ADMINISTRATION
8 1515 S Street, North Building, Suite 400
Sacramento, CA 95811-7258
9 Telephone: (916) 324-0512
Facsimile: (916) 323-4723
10 E-mail: willyamada@dpa.ca.gov

11 Attorneys for Defendants/Respondents

Governor ARNOLD SCHWARZENEGGER
12 DEBBIE ENDSLEY, MATTHEW CATE, BERNARD Exempted from Fees
WARNER and STEPHEN MAYBERG (Gov. Code § 6103)
13

14
UNITED STATES DISTRICT COURT
15
NORTHERN DISTRICT OF CALIFORNIA
16
SAN FRANCISCO DIVISION
17

18 RICHARD T. NEWTON; FRANK M. CASE NO. 3:09-cv-05887-VRW

MCNEAL; and SEAN A. BEATON,
19
Plaintiffs/Petitioners, DEFENDANTS’ REPLY TO
20 PLAINTIFFS’ OPPOSITION TO
v. MOTION FOR SUMMARY JUDGMENT
21 AND/OR PARTIAL SUMMARY
ARNOLD SCHWARZENEGGER, et al., JUDGMENT
22
Defendants/Respondents. Date: January 13, 2011
23 Time: 10:00 a.m.
Ctrm: 6, 17th Floor
24 Chief Judge Vaughn R. Walker

25
Complaint Filed: December 16, 2009
26

27 ///

28 ///
K RONICK , 959402.1 Case No. 3:09-cv-09-05887-VRW
M OSKOVITZ ,
T IEDEMANN & DEFENDANTS’ REPLY TO PLAINTIFFS’ OPPOSITION TO MOTION FOR SUMMARY JUDGMENT AND/OR PARTIAL SUMMARY JUDGMENT
G IRARD
ATTORNEYS AT LAW
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1 TABLE OF CONTENTS
2 Page
3 TABLE OF AUTHORITIES .......................................................................................................... ii
I. INTRODUCTION ...............................................................................................................1
4
II. ANALYSIS..........................................................................................................................2
5 A. Defendants’ Motion For Summary Judgment Should Be Granted Because
There Is No Dispute Of Material Fact Establishing The Court’s Lack Of
6 Jurisdiction Over This Matter ..................................................................................2
7 1. In their Complaint, Plaintiffs expressly limited their challenge to
the now expired furlough programs implemented after issuance of
8 Executive Orders S-16-08 and S-13-09 .......................................................2
2. Defendants have not waived their immunity from suit................................3
9
B. Defendants’ Motion For Summary Judgment Should Be Granted Because
10 There Is No Genuine Dispute of Material Fact Establishing Plaintiffs Were
Not Compensated For All Hours Worked ...............................................................4
11 1. In addition to fully compensating employees for all hours worked,
the State’s monthly assignment of furlough leave hours is another
12 allowable form of compensation under the FLSA.......................................6
13 C. Defendants Motion For Summary Judgment Should Be Granted Because
There Is No Genuine Dispute Of Material Fact Establishing Plaintiffs
14 Standing To File Suit For FLSA Record Keeping Violations .................................9
III. CONCLUSION..................................................................................................................11
15

16

17

18

19

20

21

22

23

24

25

26

27

28
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1 TABLE OF AUTHORITIES
2 Page
3 FEDERAL CASES
4 Anderson v. Mt. Clemens Pottery Co.,
328 U.S. 680 (1946).............................................................................................................9, 10
5

6 Chevron U.S.A., Inc., v. Natural Resources Defense Council, Inc.,

467 U.S. 837 (1984)...................................................................................................................8
7
Christensen v. Harris County,
8 529 U.S. 576 (2000)...............................................................................................................8, 9

9 Coleman v. Quaker Oats Co., 232 F.3d 1271 (9th Cir. 2000).........................................................3
10 EEOC v. Arabian American Oil Co.,
499 U.S. 244 (1991)...................................................................................................................8
11

12 Elwell v. Univ. Hosps. Home Care Servs.,

276 F.3d 832 (6th Cir. 2002) ...................................................................................................10
13
Hill v. Blind Industries and Services of Maryland,
14 179 F.3d 754 (9th Cir. 1999) .....................................................................................................3
15 IBP, Inc. v. Alvarez,
546 U.S. 21 (2005)...................................................................................................................10
16
Johns v. Stewart,
17
57 F.3d 1544 (10th Cir. 1995) ...................................................................................................3
18
Johnson v. Mammoth Recreations, Inc.,
19 975 F.2d 604 (9th Cir. 1992) .....................................................................................................3

20 Martin v. Occupational Safety and Health Review Comm'n,

499 U.S. 144 (1991)...................................................................................................................8
21
Parker v. City of New York,
22
2008 WL 2066443 (S.D.N.Y. 2008)..................................................................................7, 8, 9
23
Pennhurst State School & Hosp. Halderman, 465 U.S. 89 (1984) .............................................3, 4
24
Powell v. Florida,
25 132 F.3d 677 (11th Cir. 1998), cert. denied, 524 U.S. 916 (1998)..........................................10

26 Reno v. Koray,
515 U.S. 50, 132 L. Ed. 2d 46, 115 S. Ct. 2021 (1995).............................................................8
27

28
K RONICK , - ii - Case No. 3:09-cv-09-05887-VRW
M OSKOVITZ ,
T IEDEMANN & DEFENDANTS’ REPLY TO PLAINTIFFS’ OPPOSITION TO MOTION FOR SUMMARY JUDGMENT AND/OR PARTIAL SUMMARY JUDGMENT
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ATTORNEYS AT LAW
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1 TABLE OF AUTHORITIES
(continued)
2 Page
3 S&W Enterprises, L.L.C. v. South Trust Bank of Alabama, NA,
315 F.3d 533 (5th Cir. 2003) .....................................................................................................3
4
Skidmore v. Swift & Co.,
5
323 U.S. 134, 89 L. Ed. 124, 65 S. Ct. 161 (1944)....................................................................8
6
Verizon Maryland Inc., v. Public Service Commn of Maryland, et al.,
7 535 U.S. 635 (2002)...................................................................................................................2

9 STATE CASES
10 Professional Engineers in California Government v. Schwarzenegger,
50 Cal.4th 989 (2010) ....................................................................................................1, 4, 5, 6
11

12

13 FEDERAL STATUTES

14 29 U.S.C. § 211........................................................................................................................10, 11

15 29 U.S.C. § 215..............................................................................................................................10
16

17 RULES
18 Federal Rule of Civil Procedure § 16(b)..........................................................................................3
19

20
REGULATIONS
21
29 Code of Federal Regulations § 553.28 ...........................................................................6, 7, 8, 9
22
29 Code of Federal Regulations § 778.315 .................................................................................5, 6
23

24

25

26

27

28
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1 I.

2 INTRODUCTION

3 Plaintiffs’ opposition fails to establish genuine issues of material fact sufficient to

4 defeat Defendants’ motion for summary judgment and/or partial summary judgment. The

5 Eleventh Amendment prevents Plaintiffs from seeking retroactive declaratory relief against the

6 State of California or its officers. Plaintiffs’ disingenuous argument that the Defendants are being

7 “hyper technical” when refusing to combine three separate and distinct furlough programs,

8 implemented after the issuance of separate and distinct Executive Orders and implemented by the

9 Department of Personnel Administration (“DPA”) and State Controller’s Office (“SCO”) in

10 varying manners, ignores the fact that Plaintiffs’ complaint identified the furlough programs that

11 resulted after issuance of Executive Orders S-16-08 and S-13-09. By Plaintiffs’ own admissions,

12 those furlough programs have expired. Plaintiffs took no steps to amend their complaint to

13 include the current furlough program, implemented after issuance of Executive Order S-12-10.

14 In addition to Plaintiffs’ failure to overcome the protections afforded the State by

15 the Eleventh Amendment, Plaintiffs’ arguments also fail to establish genuine issues of disputed

16 material facts to support their claims that Plaintiffs were not paid for all hours worked. In their

17 motion for summary judgment filed contemporaneously with Defendants’ motion, Plaintiffs

18 admit that the relevant furlough programs resulted in a salary reduction, not a refusal to pay for

19 specific hours worked. Only now, in their opposition, do Plaintiffs try to backtrack and claim that

20 there was no salary reduction. Plaintiffs’ newly minted argument, however, is contrary to the

21 documentary evidence, testimony, Plaintiffs’ earlier admissions and California Supreme Court’s

22 holding in Professional Engineers in California Government v. Schwarzenegger, 50 Cal.4th 989

23 (2010). Furthermore, Plaintiffs fail to provide legal support for their allegation that providing

24 furlough leave as an alternate form of compensation is not authorized under the FLSA.

25 Lastly, Plaintiffs’ claim for recordkeeping violations fails because the FLSA only

26 authorizes the Secretary of Labor to make such claims. Plaintiffs lack standing and, on that basis

27 alone, this claim must be summarily adjudicated in Defendants’ favor. Even if the Court were to

28 find standing, Defendants have complied with the FLSA requirements and Plaintiffs’ claims that
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1 a heightened standard should be applied to furlough leave, as opposed to other types of leave like

2 vacation and compensatory time off, has no basis in the law.

3 Based on these arguments, as detailed below and in the papers already on file with

4 this Court, Defendants respectfully request that this Court grant summary judgment in this action

5 in favor of Defendants. Alternatively, Defendants request that this Court summarily adjudicate

6 each and every claim alleged by Plaintiffs in their complaint in this action.

7 II.
8 ANALYSIS
9 A. Defendants’ Motion For Summary Judgment Should Be Granted Because There Is
No Dispute Of Material Fact Establishing The Court’s Lack Of Jurisdiction Over
10 This Matter.
11 1. In their Complaint, Plaintiffs expressly limited their challenge to the now
expired furlough programs implemented after issuance of Executive Orders
12 S-16-08 and S-13-09.
13
Plaintiffs concede this Court can only issue declaratory relief against a State
14
defendant for “ongoing and continuous” harm. See Pls’ Opp., Doc # 89 at 13-14. Plaintiffs
15
further concede that in order to determine whether relief is prospective, the court should conduct
16
a “‘straightforward inquiry into whether [the] complaint alleges an ongoing violation of federal
17
law … .’” Pls’ Opp., Doc # 89 at 14 (quoting Verizon Maryland Inc., v. Public Service Commn of
18
Maryland, et al., 535 U.S. 635, 645 (2002)). Here, a straightforward inquiry of Plaintiffs’
19
complaint finds Plaintiffs alleged that the two-day a month furlough program implemented
20
pursuant to Executive Order S-16-08 expired by its own terms on June 30, 2010. See Pls’
21
Complaint, Doc # 1 at 5. In paragraph 10 of their complaint, Plaintiffs allege that the three-day a
22
month furlough program implemented pursuant to Executive Order S-13-09 also expired by its
23
own terms on June 30, 2010. Nowhere in Plaintiffs’ complaint do Plaintiffs allege any violation
24
of law for the current furlough program implemented after pursuant to Executive Order S-12-10,
25
nor did Plaintiffs amend their Complaint to include a challenge to the most recent furlough
26
program.1
27
1
Defendants would be prejudiced if this Court allows Plaintiffs to amend their complaint at
28 this stage of the proceedings. On April 1, 2010, pursuant to FRCP 26(f), the parties filed with
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1 2. Defendants have not waived their immunity from suit.

2 Contrary to Plaintiffs’ disingenuous claims that Defendants have acted in a way

3 that is “incompatible with an intent to preserve that immunity,” (see Pls’ Opp., at 10) Defendants

4 asserted “Eleventh Amendment Sovereign Immunity” as an affirmative defense in its answer.

5 Ds’ Answer, Doc # 10 at 7. In paragraphs 1 and 11 of the parties’ initial joint case management

6 conference statement, Defendants again asserted its affirmative defenses with respect to the

7 court’s jurisdiction and relief requested in this matter. Doc # 19 at 2, 5. Quite unlike the facts of

8 the case relied on by Plaintiffs, Hill v. Blind Industries and Services of Maryland, 179 F.3d 754,

9 758 (9th Cir. 1999), Defendants have made no attempt to “litigate the case on the merits” and

10 then assert its immunity. Here, Defendants placed Plaintiffs on notice of their intent to challenge

11 the court’s jurisdiction from the beginning of this suit.

12 As for Plaintiffs’ claims that Defendants’ “participation” in discovery, by way of

13 defending deponents and producing requested discovery somehow waived Defendants’ immunity

14 ignores the legal principles that defendants generally are not at liberty simply to refuse to

15 participate in discovery and more importantly that the law requires waiver of immunity to be

16 express. See Johns v. Stewart, 57 F.3d 1544, 1553 (10th Cir. 1995) citing Pennhurst State School

17 & Hosp. Halderman, 465 U.S. 89 (1984) (“Thus, any waiver by the state of its Eleventh

18 Amendment immunity must be unequivocal [citations omitted] a state may waive its Eleventh

19 Amendment immunity ‘only where stated ‘by the most express language or by such

20 overwhelming implication from the text [of a state statutory or constitutional provision] as [will]

21 leave no room for any other reasonable construction.’ ”). No such express waiver occurred here.

22

23
this Court a joint scheduling report and case management conference statement wherein the
24 parties agreed that no further amendments to pleadings would be filed. Doc # 19 at 3. Pursuant
to Federal Rule of Civil Procedure section 16(b), once a deadline in a scheduling order has passed
25 to amend pleadings, no party is permitted to amend its pleadings absent a showing of good cause
and a modification of the scheduling order. FRCP 16(b)(4); Johnson v. Mammoth Recreations,
26 Inc., 975 F.2d 604, 609 (9th Cir. 1992); Coleman v. Quaker Oats Co., 232 F.3d 1271, 1294 (9th
Cir. 2000). In order to satisfy the “good cause” standard, the moving party must demonstrate
27 compelling reasons why an amendment could not have been made earlier. S&W Enterprises,
L.L.C. v. South Trust Bank of Alabama, NA, 315 F.3d 533, 536 (5th Cir. 2003).
28
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T IEDEMANN & DEFENDANTS’ REPLY TO PLAINTIFFS’ OPPOSITION TO MOTION FOR SUMMARY JUDGMENT AND/OR PARTIAL SUMMARY JUDGMENT
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1 B. Defendants’ Motion For Summary Judgment Should Be Granted Because There Is

No Genuine Dispute of Material Fact Establishing Plaintiffs Were Not Compensated
2 For All Hours Worked.

3 In their motion for summary judgment filed contemporaneously with Defendants’

4 motion, Plaintiffs admit that the complained of furlough programs were implemented as a salary

5 reduction. See Pls’ MSJ at 7:12-14, Doc # 77 at 11 (“Although the furlough program is actually a

6 reduction to time worked, it is functionally administered as a reduction to the salary rate used in

7 the calculation of the pay made to employees.” (emphasis added)); see also id. at 7:16-20, Doc #

8 77 at 11 (“To accomplish the functional reduction of the salary rate, and to continue to reflect the

9 actual appointment or base salary rate for employees, Defendant Department of Personnel

10 Administration (‘DPA’) established a negative furlough pay differential to be applied to the base

11 salary rate … The furlough pay differential reduces the employee’s base salary rate to achieve the

12 furlough pay reduction.” (emphasis added)). Plaintiffs also admit in their motion for summary

13 judgment that compensation reduced by the negative salary differential still yields pay well in

14 excess of the federal minimum wage. See Pls’ MSJ at 8:5-11, Doc # 77 at 12. Only in their

15 opposition to Defendants’ motion do Plaintiffs belatedly argue that furloughs are not a salary

16 reduction. Plaintiffs make no attempt to explain their diametrically opposed shift in argument.

17 Rather, Plaintiffs attempt to distinguish the California Supreme Court’s holding in Professional

18 Engineers in California Government v. Schwarzenegger, supra, 50 Cal.4th 989 by arguing that

19 Plaintiffs here, unlike those in Professional Engineers, are unable to utilize furlough leave

20 because of the 24-hour nature of the correctional facilities and therefore it cannot be interpreted as

21 a salary reduction. Plaintiffs’ argument ignores the Court’s reasoning.

22 In Professional Engineers, the Supreme Court found that through the budget

23 process, the Legislature approved an across the board salary reduction for State employees.

24 Professional Engineers in California Government v. Schwarzenegger, supra, 50 Cal.4th 989.

25 The Court did not distinguish between employees who took self-directed furloughs or those

26 whose offices were closed on specific days. The Court in Professional Engineers held that in

27 enacting the Revised Budget Act of 2008, the Legislature validated the “then-existing furlough

28 program.” Professional Engineers, 50 Cal.4th at 1047-1048. The Supreme Court stated that the
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1 legislative history of the Budget Act of 2008 “makes it abundantly clear the Legislature

2 contemplated that the reduction in appropriations for employee compensation … could be

3 achieved through the furlough plan that was then in existence.” Id. at 1047. The “then-existing”

4 furlough program was the furlough program that existed on February 19, 2009. The furlough

5 program that existed on February 19, 2009, was the program implemented by the DPA pursuant

6 to Executive Order S-16-08. Thus, the “then-existing” furlough plan at the time that the

7 Legislature passed the Revised Budget Act of 2008, and validated the furlough program, included

8 employees at all state agencies and departments, regardless of whether the employees took self-

9 directed furlough leave or had assigned office closures.

10 Plaintiffs go to great lengths to argue that the FLSA requires payment of straight

11 time wages before payment of overtime wages. Defendants do not dispute that contention. That

12 contention, however, is not relevant to this suit. Plaintiffs offer no evidence they were not

13 compensated for “straight time” hours worked. By reducing the employees’ salary across the

14 board, all hours worked were compensated, just at a reduced rate. Plaintiffs’ convoluted

15 argument that specific “straight-time” hours worked were not compensated in violation of 29

16 Code of Federal Regulations section 778.315 is belied by the evidence submitted by Plaintiffs in

17 support of their motion for summary judgment. Linda Matsuda, Bureau Chief for the State

18 Controller’s Office, testified that the furlough program resulted in a “negative percentage-based

19 differential” being applied to employees’ base pay. See Ex. 7 to Decl. of Jim Harrison, Doc # 78-

20 7 at 10. Ms. Matsuda also testified that with respect to the class of Plaintiffs, “a lower pay rate

21 was used as a basis for calculating employees’ compensation.” Id. at 14. She testified that the

22 “rate that the payroll system uses to calculate an employee’s compensation was changed.” Id. at

23 16. PML 2009-007, issued by the Department of Personnel Administration on February 3, 2009,

24 also described the administration of the furlough program as an “adjustment” to the employee’s

25 base salary. See Ex. 14 to Decl. of Jim Harrison, Doc # 78-14 at 3. In a February 5, 2009

26 memorandum from the State Controller’s Office, the department tasked with operating the State’s

27 payroll, the SCO explains that a “pay differential will be added to the employee employment

28 history (EH) records to reduce the base rate by an average percentage equivalent to the two
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1 furlough days.” See Ex. 15 to Harrison Decl., Doc # 78-15 at 2.

2 Defendants’ implementation of the relevant furlough programs was administered

3 as an across the board salary reduction for State employees. Plaintiffs’ pay for straight time hours

4 is controlled exclusively by the California Legislature. The California Legislature through the

5 Revised Budget Act of 2008 passed in February 2009 and the Revised Budget Act of 2009 passed

6 in July 2009 reduced the straight time pay for all state employees including those employees who

7 participate in self-directed furloughs. Professional Engineers in California Government v.

8 Schwarzenegger, supra, 50 Cal.4th 989. These reductions enacted by the Legislature modified

9 the pay provided to Plaintiffs for straight time hours and constitutes the new applicable statute
10 referenced in 29 Code of Federal Regulations section 778.315. Plaintiffs offer no evidence that

11 specific hours worked went uncompensated. Defendants’ motion for summary judgment should

12 be granted because there are no disputed material facts establishing Plaintiffs were not paid for all

13 hours worked.

14 1. In addition to fully compensating employees for all hours worked, the State’s
monthly assignment of furlough leave hours is another allowable form of
15 compensation under the FLSA.
16 Plaintiffs’ err in contending 29 Code of Federal Regulations section 553.28 is

17 limited only to non-statutory or contractual overtime or only for hours “outside their regular work

18 schedule.” Pls’ Opp. at 13:11-16; 14:5-10, Doc # 89 at 17-18. Such an interpretation ignores the

19 plain language of the regulation and is unsupported by any authority limiting the section in such a

20 manner. Section 553.28(c) provides “other compensatory time” may be paid for hours “earned

21 and accrued … in excess of a standard established by the personnel policy or practice of any

22 employer, or by custom[.]” Nowhere in subsection (c) does the regulation limit such hours

23 worked to “overtime” hours or hours in excess of a regular work schedule. The fact that Plaintiffs

24 illustrated its argument with a single mere example drawn from a secondary source, while failing

25 to provide any case or statutory authority to support its argument, demonstrates that Plaintiffs’

26 argument lacks legal support. Pls’ Opp. at 13, fn. 6, Doc # 89 at 17.

27 Section 553.28’s plain meaning cannot be interpreted as narrowly as Plaintiffs

28 contend. To the contrary, the hours Plaintiffs spent working their allegedly unpaid “straight time”
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1 hours falls squarely within section 553.28, subdivision (c) because those hours were worked in

2 excess of the furlough policy’s reduced work schedule. Plaintiffs contend that section 553.28

3 does not apply because Plaintiffs’ work schedules did not change from the schedule they worked

4 prior to the furlough policy’s implementation. Pls’ Opp. at 14:26-28, Doc # 89 at 14. While the

5 schedule may not have changed, the fact remains that Plaintiffs worked in excess of the reduced

6 work schedule implemented by Defendants’ furlough policy. Plaintiffs themselves acknowledge

7 Plaintiffs “worked full schedules during the furlough program,” despite the fact the furlough

8 program implemented a “reduction in work hours.” Pls’ MSJ at 9:1-2, 17:9, Doc # 77 at 13, 21.

9 In evidence submitted by Plaintiffs in support of their motion for summary judgment, Plaintiffs
10 rely on a series of documents produced by DPA and the SCO regarding the implementation of

11 furlough programs. PML 2009-007, issued on February 3, 2009, explains that “[f]or posted

12 positions in 24/7 facilities: management will work with employees to determine which two days

13 in the month will be taken off. When this is not operationally feasible and would jeopardize

14 security, health or safety, management will work with employees to select time off in the future.

15 However, deferring furlough days for future use shall only be done after all other options have

16 been evaluated and proven unworkable.” See Ex. 14 to Harrison Decl., Doc # 78-14 at 2.

17 Whether or not the hours at issue are deemed “overtime” or are hours worked outside of a regular

18 schedule, no dispute exists that the hours at issue in this case were worked in excess of

19 Defendants’ personnel policy or practice. Accordingly, section 553.28 authorizes providing for

20 such hours in the form of “other compensatory time.”

21 Second, contrary to Plaintiffs’ contention, section 553.28 applies even when

22 overtime is worked in the same work period. Pls’ Opp. at 16:1, Doc # 89 at 20. Plaintiffs offer

23 no authority to support its contention that section 553.28 is inapplicable during work periods

24 where overtime was worked. Pls’ Opp. at 4:15-18, Doc # 89 at 8. In Parker v. City of New York,

25 the Southern District Court of New York determined that the defendant appropriately paid

26 plaintiffs in the form of “other compensatory time” for non-overtime hours between 35 and 40 per

27 workweek, even in workweeks where statutory overtime was worked. Parker v. City of New

28 York, 2008 WL 2066443, *2-6 (S.D.N.Y. 2008). The plaintiffs in Parker alleged that non-
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1 overtime hours worked should have been paid in the form of cash when overtime was worked in

2 the same workweek. Id. at 1. The Parker court found that payment of “other compensatory time”

3 for the plaintiffs’ non-overtime hours worked was permissible, even when overtime was worked

4 in the same workweek, stating, “… the Court finds that [29 C.F.R.] Section 553.28, read in its

5 entirety, supports the position that the FLSA permits but does not require the use of compensatory

6 time as compensation for gap-time hours in overtime workweeks.” Id. at 4

7 Plaintiffs’ reliance upon DOL Opinion Letter FLSA 2004-10 is also unavailing

8 because the Opinion Letter, ostensibly discussing a minimum wage matter, made mere

9 conclusory statements about the form of compensation for non-overtime hours worked. The
10 Opinion Letter’s main focus discussed an employer’s obligation to comply with the FLSA’s

11 minimum wage requirements for non-overtime hours worked, and merely concluded, in dicta and

12 without any analysis, that straight time compensation should be paid in cash. Furthermore, the

13 Opinion Letter contains no discussion of the effect of section 553.28.

14 The DOL’s interpretation of its own federal regulations is not entitled Chevron-

15 style deference. Chevron U.S.A., Inc., v. Natural Resources Defense Council, Inc., 467 U.S. 837

16 (1984); see Christensen v. Harris County, 529 U.S. 576, 587 (2000) (“Here, however, we

17 confront an interpretation contained in an [DOL] opinion letter, not one arrived at after, for

18 example, a formal adjudication or notice-and-comment rulemaking. Interpretations such as those

19 in opinion letters … do not warrant Chevron-style deference…Instead, interpretations contained

20 in formats such as opinion letters are ‘entitled to respect’ under our decision in Skidmore v. Swift

21 & Co., 323 U.S. 134, 140, 89 L. Ed. 124, 65 S. Ct. 161 (1944), but only to the extent that those

22 interpretations have the ‘power to persuade,’ ibid.” (citing Reno v. Koray, 515 U.S. 50, 61, 132 L.

23 Ed. 2d 46, 115 S. Ct. 2021 (1995); EEOC v. Arabian American Oil Co., 499 U.S. 244, 256-258,

24 (1991); Martin v. Occupational Safety and Health Review Comm'n, 499 U.S. 144, 157 (1991); 1

25 K. Davis & R. Pierce, Administrative Law Treatise § 3.5 (3d ed. 1994))). In fact, addressing the

26 same opinion letter cited by Plaintiffs here, and indeed, the same language quoted in Plaintiffs’

27 Opposition, the Parker court expressly declined to defer to the DOL’s interpretation, finding the

28 opinion letter’s “conclusory statements” related to the form of compensation for non-overtime
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1 hours worked were unpersuasive because section 553.28 is “unmistakably and unambiguously

2 permissive rather than mandatory. See Christensen, 529 U.S. at 587-88 (declining to defer to

3 DOL's interpretation of a regulation contained in an opinion letter where DOL interpreted a

4 permissive regulation as prohibiting a mandatory compensatory time usage policy).” Parker,

5 2008 WL 2066443 at *5.

6 Finally, Plaintiffs cite no authority in support of its proposition that section 553.28

7 is limited only to contractual overtime hours. Plaintiffs’ near-verbatim recitation of a single

8 example of “other compensatory time” from a non-current edition of a privately published book

9 on the Fair Labor Standards Act cannot substitute for the plain wording of the regulation, or be
10 interpreted as a mandatory, blanket limitation upon the compensation permitted by section

11 553.28. Pls’ Opp. at 13 n. 6, Doc # 89 at 17 (citing The FLSA User’s Manual, 3d Ed. by Will

12 Aitchison (2002) at 161-64).

13 Neither Plaintiffs nor Defendants dispute that some Plaintiffs worked overtime

14 hours during the time the furlough policy was in effect. Neither Plaintiffs nor Defendants dispute

15 that the furlough policy implemented a reduced work schedule program, and, in some instances,

16 Plaintiffs worked hours in excess of the standard established by that program. However,

17 Plaintiffs err in contending they were deprived straight time compensation for those excess hours

18 worked because each hour was compensated, just at a reduce rate, and additionally, Plaintiffs

19 received compensation for those excess hours in the form of paid time off or “other compensatory

20 time” as allowed under section 553.28.

21 C. Defendants Motion For Summary Judgment Should Be Granted Because There Is

No Genuine Dispute Of Material Fact Establishing Plaintiffs Standing To File Suit
22 For FLSA Record Keeping Violations.
23 Plaintiffs’ Opposition fails to address Defendants’ underlying contention that

24 Plaintiffs lack standing to bring an action alleging violation of the FLSA’s recordkeeping

25 requirements. Instead, Plaintiffs merely assert this Court “is not precluded from recognizing the

26 violation” if the Court views the instant case from the “perspective” of Anderson v. Mt. Clemens

27 Pottery Co., 328 U.S. 680 (1946). Pls’ Opp. at 12:25-27, Doc # 89 at 16. Plaintiffs’ failure to

28 address the standing argument, while simultaneously relying on a case that has since been
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1 superseded by statute, confirms Plaintiffs’ inability to seek relief upon its third cause of action.

2 That Plaintiffs are barred from alleging a violation of the recordkeeping provisions

3 of 29 United States Code section 211, subdivision (c) is undisputed. The FLSA expressly vests

4 the Secretary of Labor with the exclusive authority to enforce any alleged violations of the

5 recordkeeping requirements. Elwell v. Univ. Hosps. Home Care Servs., 276 F.3d 832, 843 (6th

6 Cir. 2002). Under section 217, the Secretary of Labor is empowered to initiate injunction

7 proceedings to restrain any violation of 29 United States Code section 215, including section 215,

8 subdivision (a)(5). Powell v. Florida, 132 F.3d 677, 678 (11th Cir. 1998), cert. denied, 524 U.S.

9 916 (1998). Section 215(a)(5) makes it unlawful for an employer to fail to comply with the
10 recordkeeping requirements contained in Section 211, subdivision (c). Id.

11 Plaintiffs’ reliance on Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946),

12 to support its recordkeeping argument is inapposite. Notwithstanding that Anderson has been

13 superseded by statute 2, the Court in Anderson did not discuss the FLSA’s recordkeeping

14 violations as a separate cause of action. Instead, as Plaintiffs’ Opposition points out, the

15 Anderson Court merely stated that where the employer failed to maintain accurate records, the

16 employer cannot object to the lack of precision inherent in the calculation of damages for unpaid

17 overtime. Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 688 (1946). Plaintiffs’ action for

18 prospective declaratory relief in the instant case precludes the calculation or award of back-pay.

19 Moreover, the instant action seeks separate and independent declaratory relief on the FLSA’s

20 recordkeeping statutes. Plaintiffs’ argument fails because Plaintiffs erroneously conflate a

21 separate, independent cause of action seeking declaratory relief upon a violation of the FLSA’s

22 recordkeeping provisions with unrelated case authority describing how to calculate back-pay

23 damages.

24 Even if Plaintiffs had the right to enforce the FLSA recordkeeping requirements, a

25 claim Defendants deny, Defendants have not violated any of the requirements under section 211,

26 subdivision (c). The FLSA requires the following information be maintained as part of an

27 employees’ basic records, which include: (1) full name and social security number; (2) address

28 2
See IBP, Inc. v. Alvarez, 546 U.S. 21, 41 (2005)
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1 with zip code; (3) birth date if employer is younger than 19; (4) sex and occupation; (5) time and

2 day of week when employee’s workweek begins; (6) hours worked each day; (7) total hours

3 worked each workweek; (8) basis on which employee’s wages are paid; (9) regular hourly pay

4 rate; (10) total daily or weekly straight time earning; (11) total overtime earnings for the

5 workweek; (12) all additions to or deductions from the employee’s wages; (13) total wages paid

6 each pay period; and (14) date of payment and the pay period covered by the payment. 29 U.S.C.

7 § 211, subd. (c). There is nothing in the statute or case law, which requires the Defendants to

8 demarcate the corresponding pay period. Accordingly, Defendants’ motion for summary

9 judgment and/or partial summary judgment should be granted because Plaintiffs lack standing to
10 bring this claim

11 III.
12 CONCLUSION
13 For the foregoing reasons, State Defendants motion for summary judgment be

14 granted in its entirety.

15 Dated: December 30, 2010 KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD

A Law Corporation
16

17
By: /s/ David W. Tyra
18 David W. Tyra
Kristianne T. Seargeant
19 Attorneys for Defendants/Respondents
Governor ARNOLD SCHWARZENEGGER,
20 DEBBIE ENDSLEY, MATTHEW CATE,
BERNARD WARNER and STEPHEN MAYBERG
21

22 Dated: December 30, 2010 DEPARTMENT OF PERSONNEL ADMINISTRATION

23

24 By: /s/ Will M. Yamada

Will M. Yamada
25 Attorneys for Defendants/Respondents
Governor ARNOLD SCHWARZENEGGER,
26 DEBBIE ENDSLEY, MATTHEW CATE,
BERNARD WARNER and STEPHEN MAYBERG
27

28
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