As expected, the Department of Labor (“DOL”) under the direction of trump appointee Alexander Acosta has continued to remake the DOL into a Department of Employee Protection.
The latest attack on workers has been to re-institute “Opinion Letters” which were written and implemented in the waning days of the Bush Administration in January, 2009 and were rescinded in March, 2009 by the Obama DOL. Opinion Letters are essentially the agency giving an “opinion” about a how a particular regulation applies to a specific factual scenario. Usually it is an employer writing to the DOL asking how a regulation will apply to a situation at their workplace. The agency then gives its Opinion in a letter posted on the DOL website. The letters aren’t legally binding. Courts can and will disagree with the Agency’s interpretation if the issue addressed in the Opinion Letter, or one very similar is litigated in court.
In addition, the trump DOL has said it will begin to issue new Opinion Letters in the future, a practice which was stopped under the Obama administration.
These actions are important for two main reasons. One, the Bush administration letters are because of the political nature of the agencies, more management friendly than the broader “Administrative Interpretations” disseminated by the Obama DOL. The second and more important impact re-instituting these Bush era Opinion Letters and the new policy of giving Opinion Letters in the future is the way Opinion Letters can be used by employers to evade liability for violating the Fair Labor Standards Act (“FLSA”) or limiting the amount of liability the employer may have if found to have violated the FLSA.
The Port to Portal Act, an amendment to the FLSA from 1947 gives employers “safe harbors” to violations of the FLSA. 29 U.S.C. § 259(a), provides a complete bar to an FLSA minimum wage or overtime claim if the employer “pleads and proves that the act or omission complained of was in good faith in conformity with and in reliance on any written administrative regulation, order, ruling, approval, or interpretation, of the [DOL], or any [relevant] administrative practice or enforcement policy of such agency.” In addition, the employer may be able to avoid liability for violating the FLSA even if the administrative regulation, order, ruling, approval, or interpretation was later determined by a court to be invalid. So following a pro-employer Opinion Letter may allow an employer to avoid liability even if the DOL’s opinion is found to be wrong as long as the employer is found to have a “good faith” reason to believe conforming with the Opinion Letter made the employer’s practice compliant with the requirements of the FLSA.
However, the bar for “good faith conformity” is probably rather high. Because the Opinion Letters address very specific factual scenarios an employer would have to show they had a good reason to believe the scenario at their workplace was the same or very similar to the one addressed by the Opinion Letter at issue.
There is another way employers can use Opinion Letters to reduce their liability for violations of the FLSA even if they can’t escape liability entirely.
The FLSA has a “standard” statute of limitations of two (2) years. But an employer can be held liable for three (3) years of violations if a court believes the violation was “willful”. The FLSA also allows for a court to enforce a penalty for violating the FLSA of double the amount owed for the violation. This is called “liquidated damages”. Like the three year statute of limitations, liquidated damages are only assessed when a court finds the employer’s violation was “willful”.
The new Opinion Letters, and the issuing of more Opinion Letters in the future, will give employers a tool to help prove their violations were no willful and thus only subject to the regular two year statute of limitations and not liable for the liquidated damages penalty. An employer may only need to show an Opinion Letter could be reasonably interpreted to apply to the scenario at issue in their workplace, not even that it is essentially exactly the same, to convince a court the employer was acting in good faith and that it had reasonable grounds for believing that the act or omission was not a violation of the FLSA.
So other than tipping the scales to the side of the employer and making it easier for employers to get away with not following the FLSA, how does this change in DOL policy impact workers? The main takeaway for workers is that now it is more important than ever to speak to an attorney immediately if one believes their employer has not properly followed the FLSA by not paying overtime or the required minimum wage. It might become much harder to get a court to agree the proper statute of limitations for a violation is three years instead of two years so workers can’t afford to wait. Otherwise they risk being unable to hold their employer to account for stealing the wages they are legally owed because more violations may fall outside of the statute of limitations.
If you are in Atlanta or greater Georgia and you believe your employer is not paying you your proper overtime or minimum wage, please contact attorney Benjamin Kandy at The Law Office of Benjamin B. Kandy via phone, email, or the Contact button on the side of this page.