EEOC and Labor Department Get Tastes of Their Own Medicine

Like a bald man inheriting a box of combs, the irony was almost too perfect when we read that both the Equal Employment Opportunity Commission (EEOC) and the U.S. Department of Labor (DOL) have recently settled claims for millions of dollars over alleged violations of employment laws.

The EEOC Refused to Pay Indiscriminately

The EEOC’s problems began when their unionized personnel filed a grievance seeking unpaid overtime that the agency refused to pay.  EEOC claimed that the employees were instructed to avoid overtime if possible, and that any overtime they needed to work would be subject to compensatory time off (“comp time”) because they did not have the money to pay overtime.

The matter eventually was submitted to an arbitrator who ruled in 2009 that notwithstanding the availability of comp time, EEOC was liable for overtime payments.  The arbitrator determined that the collective bargaining agreement permitted employees to elect overtime (which is legally permissible for public sector employees) but did not permit the employer to impose comp time unilaterally.  Therefore since EEOC was aware of the overtime and allowed it to occur, they were liable to pay for it in all instances where comp time was not requested by employees.

The ruling urged the parties to try to negotiate the resolution but the settlement discussions took seven years until the sides finally agreed on a remedy of $1.53 million and other non-monetary relief.

The DOL’s Wages of Sin

In the DOL matter, the agency agreed after 10 years of litigation to pay employees $7 million for various off-the-clock violations.  It is estimated that between 2,000 or 3,000 will eventually receive some amount of back pay, including many who were misclassified as exempt from overtime by the very agency that enforces that particular legal issue.

Other payments will be made for those employees who worked over lunch or after hours with the knowledge and at least tacit approval from the DOL, yet were not paid overtime.

Not surprisingly, this settlement did not appear on the DOL’s web site where the agency’s victories are often trumpeted.

Bottom Line

These agencies are vested with authority to interpret these laws, and courts rely upon their expertise in deciding lawsuits.  If these experts can slip up like this, it is easy to imagine the rest of us making some mistakes as well.

As a result, it is always advisable for employers to audit and reevaluate their positions on various wage and hour issues, particularly those where the exempt versus non-exempt determination was in the gray area, as well as those matters where the DOL has been active recently.