Supreme Court: Public Employers Can Dictate Comp Time Use

May 1, 2000 (PLANSPONSOR.com) - The Supreme Court ruled Monday that public employees who agree to take time off instead of overtime pay can be forced to take the time at their employer's convenience.

The 6-3 decision in ‘Christensen vs. Harris County, Texas’ found “nothing in the FLSA or its implementing regulations prohibits an employer from compelling the use of compensatory time.”

Setting Standard

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The Fair Labor Standards Act requires that hourly employees be paid time-and-a-half when they work more than 40 hours/week. The law was amended in 1985 to allow public employers to substitute up to 480 hours of “comp time” for overtime pay, provided the employees agree to the substitution.

The 1994 case involved a county’s mandate requiring sheriff’s deputies who reached the cap to use some of their comp time – even if they didn’t want to. The deputies accused the sheriff’s department of violating federal labor law by forcing them to use the overtime credits.

Decisions, decisions

The trial court agreed with the deputies, concluding that “the time off must be consumable by the worker on the worker’s terms.”

However, the Fifth District court reversed the lower court’s decision. Its ruling in favor of the employer county was “merely an application of the general principle that the employer can set workplace rules in the absence of a negotiated agreement to the contrary.”

Dissenters on the Supreme Court felt that an employer had no right to impose the use of compensatory time, in the absence of specific terms outlining that requirement.

The Clinton administration had urged the court to overturn the Fifth Circuit ruling, and the Justice Department had argued that accumulated time off belongs to employees and should be under their control.

The decision does not affect private industry employees.

Justice Clarence Thomas was joined by Chief Justice William H. Rehnquist and Justices Sandra Day O’Connor, Anthony M. Kennedy, David H. Souter and Antonin Scalia in the decision.

Justices John Paul Stevens, Ruth Bader Ginsburg and Stephen G. Breyer dissented.

You can read the opinion at http://www.supremecourtus.gov/opinions/99oplist.html

Time Running Out for US West Retirees

April 30, 2000 (PLANSPONSOR.com) - Once again pension plan retirees are standing up to management - and the fate of a multi-billion dollar merger may hang in the balance, as some 45,000 US West retirees try to make sure that a $5.7 billion pension surplus doesn't disappear in the wake of a pending merger with Quest Communications. But they may be running out of time - and options.

The Association of US WEST Retirees has accused the company of planning to use the surplus to improve the company’s bottom line, characterizing the practice as “misuse of ratepayer money.” The protest coincides with participant actions against IBM’s cash balance plan and various pending participant lawsuits.

Misuse of funds?

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Retirees claim US West stockpiled the surplus for years, instead of passing along cost-of-living increases – and will now use it to benefit executives and shareholders rather than the intended beneficiaries. The takeover agreement with Quest allows use of US West pension funds to cover 8,700 employees of Quest – which does not have a pension fund.

Hearings are due to conclude Monday at the Arizona Corporation Commission, and are scheduled to begin on June 5 in Minnesota. Five states already have ruled that they lack jurisdiction over retiree matters, or the retirees have withdrawn their objections. The remaining states in the 14-state US West service area do not require state approval.

Last stand?

But Arizona, where more than 10% of the retirees live, may bring a different result. “We feel the commissioners in Arizona are listening,” Mary Hull, executive director of the Association of US West Retirees, told Dow Jones last week. And a Quest executive told Dow Jones that Arizona commission staffers have not been as willing to negotiate as other states. Still, ‘Arizona is our last chance,’ Phil Graham, president of the Telephone Retirees Association of Arizona, told the Arizona Republic last week.

Meanwhile, last week the Minnesota Public Utilities Commission reversed an earlier decision, and has now decided that it is ready to review the case. Ominously for the retirees, the Minnesota PUC says it now believes enough information is available to consider the merger, since the majority of companies, organizations and government agencies have resolved their issues, and support the deal. Minnesota has said it will support an “expeditious” approval.

The merger has been cleared by all federal agencies, pending approval of long-distance divestiture, as well as Colorado and Iowa. In addition to Arizona and Minnesota, regulators in Montana, Washington, Wyoming and Utah still have to weigh in on the $45 billion merger.

Promises, promises

As a condition of approving the merger, US West retirees want guarantees that:

Current pension and healthcare levels will be maintained,

  • Regular cost of living increases be instituted
  • Funds will not be used for other corporate purposes, such as early retirement
  • packages for Quest executives
  • The allocation of the surplus will be dealt with at a US West rate case later this year.

Hull said that maintaining all existing benefits at current levels was most critical.

US West and Qwest have not committed to any use of the surplus, just saying they would follow federal laws governing pension plans. US West general manager Jim Smiley affirmed that “retirees will get the pension benefits they earned. That’s protected by law. That’s what they’re entitled to and will get.”

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