Shea v. United States, No. 19-2130 (Fed. Cir. 2020)
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The Fair Labor Standards Act (FLSA) exempts from overtime requirements those employed in an executive, administrative, or professional capacity, 29 U.S.C. 213(a)(1). If an employer violates the overtime requirement, it is liable for unpaid overtime compensation plus an equal amount as liquidated damages. If the employer shows “good faith and that [it] had reasonable grounds for believing that [its] act or omission was not a violation," the court may award no liquidated damages. The FLSA applies to civilian employees of the federal government. In 2007, the Naval Criminal Investigative Service (NCIS) classified Shea’s position, Investigations Specialist, as exempt from the overtime requirements.
The Claims Court held that NCIS that it had not willfully misclassified Shea, so that the relevant period started in 2014, and found that Shea’s team leader duty was optional and comprised a minority of the Investigations Specialist position’s duties so that Shea’s primary duty was not management but was “conducting surveillance,” which would not qualify for the administrative exemption. The court awarded Shea compensatory damages and back pay but denied liquidated damages, finding NCIS’s classification decision objectively reasonable and in good faith. The Federal Circuit affirmed. The statute does not require documentation of the original classification decision and requiring frequent classification review would be untenable. Between the position description and the testimony of Shea, his supervisor, and NCIS’s classification witness, the evidence supports the holding that NCIS reasonably believed that Shea’s position had substantial managerial duties.
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