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SCOTUS Argument Preview: Sandifer Interpretation, not Auer Deference

Posted in Agency Authority, Judicial Review & Remedies, Regulatory Process

The United States Supreme Court will hear arguments in Sandifer v. U.S. Steel Corporation next Monday, November 4, 2013, asking the question “What constitutes “changing clothes” within the meaning of Section 203(o) of the Fair Labor Standards Act.”  Why Sandifer matters to administrative law practitioners beyond the presented statutory interpretation issue is not readily apparent.  The history of Sandifer, however, suggests that the United States would rather avoid an administrative law issue on which it has not fared well recently:  whether courts should defer to an agency interpretation of its programmatic statute that appears only in briefs filed in court or in something less than a regulation.  The United States may get its wish, but must be careful for what it wishes.

Background:  Under the Fair Labor Standards Act (FLSA), a covered employee must be paid for time the employee engages in a principal activity.  Under the key provision of the FLSA, however, employees need not be paid for time spent “changing clothes” if that time is expressly excluded from paid time under a collective bargaining agreement.  Thus, does “donning and doffing” fire-retardant outfits, hard hats, and other safety gear used in employment constitute “changing clothes” within the meaning of the FLSA?  Anyone who has set foot in a steel mill will understand that (1) safety gear is of paramount importance in a dangerous occupation and that the time for donning and doffing safety equipment (or “personal protective equipment” (PPE)) and (2) travelling from the locker room to any work station can require a significant amount of time – and, therefore, money at high steel worker wages – to both the worker and the mill.  Congress revised the original FLSA to meet this type of problem with the Portal-to-Portal Act and distinguishes between “clothes” (unpaid) and PPE (paid).  If “changing clothes” in this case must be paid, then the significant travel time from locker room to work station must also be paid.

The Case:  Sandifer and fellow steelworkers sued U.S. Steel for wages for time spent changing into their work gear and reaching their work stations.  The U.S. Steel collective bargaining agreement is silent on the issue (and always has been), but the plaintiffs argue that the FLSA itself requires that they be paid.  The district court ruled that the FLSA does not require that the clothes-changing time be paid time, but that the plaintiffs were engaged in donning safety equipment which must be paid, and that the FLSA may require that the travel time be compensated.  The district court certified the payment for “travel time” for an interlocutory appeal, which the United States Court of Appeals for the Seventh Circuit accepted.  Sandifer cross-appealed on the payment of clothes-changing time issue.

The Appeal:  The 7th Circuit noted that plaintiffs had never sought leave to file the interlocutory appeal as is required by statute, but set that procedural issue aside as inconsequential in the posture of the case, and, indeed, it plays no part of the disposition.

The problem of interpreting the FLSA is that terms such as “clothes” are not defined in the statute, any more than “work.”  The meaning may change given the circumstances and, here, the circumstances become critical.  The 7th Circuit held that the steelworkers were engaged in “changing clothes” and that time was not paid time.

But there is more, and more is the administrative law problem.  The Department of Labor (DOL) participated in briefing before the 7th Circuit as amicus curiae, which it may do without the formal approval of the Department of Justice (DOJ).  Past experience with this statutory practice has led to SCOTUS’s admonition that such briefs – when interpreting a statute under the agency’s jurisdiction or the agency’s regulations – should be granted deference in Auer v. Robbins, a point of continuing contention before the High Court and the lower courts.  The 7th Circuit recognized the political trade winds of such briefs:

After the change in administrations in 2009 the Department reverted to the Clinton Administration’s position on “changing clothes” and also rejected the Bush Administration’s position on “principal activity.”  ….  Such oscillation is a normal phenomenon of American politics.  Democrats are friendlier to unions than Republicans are, though we cannot see how a decision in favor of the plaintiffs in this case would help unions.

But the court was not pleased:

Naturally the Department of Labor does not acknowledge that its motive in switching sides was political; that would be a crass admission in a brief or in oral argument, and unlikely to carry weight with the judges.  The Department says instead that it is right as a matter of law and that the position the Department took in the Bush years is wrong; it adds that since it enforces the Fair Labor Standards Act its (current) position should carry weight with us.  But all the Department does to demonstrate the “rightness” of its current position is to echo the plaintiffs’ arguments. Nowhere in the Department’s brief is there a reference to any institutional knowledge of labor markets possessed by the Department’s staff – or to anything indeed to which the parties might not have complete access – that might help the court to decide the case sensibly; and at the oral argument the Department’s lawyer acknowledged this void.  All that the Department has contributed to our deliberations, therefore, though it is not quite nothing, is letting us know that it disagrees with the position taken by the Bush Department of Labor; for if it were silent, from which one might infer that it agreed with that position, it would be inviting U.S. Steel to argue that the Department of Labor had been consistent, at least since 2001, and thus across Administrations controlled by opposite political parties, in rejecting the plaintiffs’ position.

It would be a considerable paradox if before 2001 the plaintiffs would win because the President was a Democrat, between 2001 and 2009 the defendant would win because the President was a Republican, and in 2012 the plaintiffs would win because the President is again a Democrat.  That would make a travesty of the principle of deference to interpretations of statutes by the agencies responsible for enforcing them, …, since that principle is based on a belief either that agencies have useful knowledge that can aid a court or that they are delegates of Congress charged with interpreting and applying their organic statutes consistently with legislative purpose.  We are not surprised to discover that courts of appeals that have reached varied conclusions on the issues presented by this appeal have come together in spurning, as Judge Wilkinson has put it, “the gyrating agency letters on the subject.”

Not quite nothing remains a conceptual intercircuit conflict and an important recurring issue that warrants another SCOTUS review.

Certiorari:  Sandifer’s petition for certiorari argued that SCOTUS should review the decision below because it involves an important intercircuit conflict over “changing clothes” and over whether the FLSA exempt donning and doffing  can constitute a “principal activity” forming the beginning of the workday.  U.S. Steel initially waived responding to the petition, but on prompting by SCOTUS, opposed certiorari, noting that the intercircuit conflict was minimal and would benefit from further percolation.  The Solicitor General remained silent.  With this limited issue, SCOTUS granted certiorari and equally limited the issue that it wished to hear to the first distinct question presented by the petition:  What constitutes ‘changing clothes’ within the meaning of the FLSA?

Merit Briefs:  The parties held their positions in full briefing, never mentioning the Auer issue or DOL’s vacillation over the meaning of the FLSA or its own regulations.  The Solicitor General, however, took a side – U.S. Steel’s side, not the employee’s side – but in the narrow confines of statutory interpretation.  Noted the fact of DOL’s changing position, but only in a footnote stating the unenviable facts, and did not seeking deference to his DOL “client’s” interpretation:

The Department [of Labor]’s 2010 guidance rescinded portions of the 2002 and 2007 opinion letters and returned to the view set forth in its earlier opinion letters.  ….  The government does not urge deference to the 2010 Administrator’s Interpretation in the context of this case.

The Solicitor General did, however, request, and was granted, leave to participate in oral argument and for divided argument.  His argument must be limited to the question presented and he cannot now – at least not without great risk – argue for the deference that he has already eschewed.

Argument or Supplication:  While DOL may continue to espouse deference to its interpretation in amicus curiae briefs in the lower courts, the Solicitor General appears to be taking a more conservative and humble position in SCOTUS.  A not particularly pleasant history of amicus brief positions by a single agency has left the Solicitor General in the unenviable position of resolving disagreements over the position to be taken by the United States late in the day and against scenery that he did not create.  In Sandifer, bound by SCOTUS’s definition of the issue presented, and perhaps chafing against the criticism of the 7th Circuit, the Solicitor General cannot reassert deference to a DOL position that he does not appear to support.  Next Monday’s oral argument in Sandifer may not be very exciting, the fireworks of Auer being quelled, but the substance of the issue presented is at least important in the labor realm.  The ongoing travail of court deference to agency briefs and other things less than regulations or precedent adjudications under the Administrative Procedure Act (APA) will not be ended by Sandifer, but it must and should – and soon.

SCOTUSblog:  A special thanks to colleagues at SCOTUSblog – the most complete source of SCOTUS documents, a font of wisdom on SCOTUS process, and a valuable public service.  All of the briefs (and soon argument transcript) in Sandifer can be found on SCOTUSblog.