Notice & Comment

A Review of Shutdown Litigation

With the partial federal shutdown reaching over three weeks, federal employees who work for shut down agencies are missing full paychecks. Additionally those essential employees who worked the Saturday after the shutdown began have not been paid for that day of work. Employees who cannot afford to miss paychecks may start to incur severe adverse impacts from the shutdown.

In response to the shutdown, federal employee unions have filed four lawsuits and five individual federal employees have joined together to file a lawsuit regarding the shutdown. The District Court for The District of Columbia will hold a hearing on motions for a temporary restraining order and preliminary injunction regarding three of the cases this Monday, January 14. I will briefly detail all five cases. If anyone is aware of other cases or has a different interpretation of the cases, please feel free to mention them in the comments.

U.S. Court of Federal Claims Cases

Two unions have filed complaints in the U.S. Court of Federal Claims. Although both the district courts and U.S. Court of Federal Claims have concurrent jurisdiction, the Little Tucker Act (28 U.S. Code § 1346(a)(2)) limits each individual class member’s claims in district court to $10,000 in damages.

In two similar complaints, the American Federation of Government Employees (AFGE), which is the largest federal employee union, and the National Treasury Employees Union (NTEU), which represents employees at financial agencies and certain Department of Homeland Security employees, separately filed complaints alleging violations of the Federal Labor Standards Act (FLSA) because the government has not paid employees who must work during the shutdown.[1] Specifically, the FLSA requires certain employees to be paid overtime and to be paid at least a minimum wage, both of which they have not been paid. These arguments match a previously successful lawsuit that found that the federal government violated the FLSA during the 2013 shutdown.

If decided quickly enough, the FLSA complaints could provide an avenue for essential federal government employees to be paid during the shutdown as damages would not be coming from appropriations, but from the permanently appropriated Judgment Fund.

U.S. District Court for the District of Columbia Cases

The following three complaints were filed in the U.S. District Court for the District of Columbia. The district court has consolidated the cases and will hold a hearing on Monday, January 14 regarding a temporary restraining order and/or preliminary injunction.

NTEU has filed a second lawsuit, largely in response to President Trump stating that Internal Revenue Service (IRS) employees will be required to return to work to process tax returns, that (1) the Antideficiency Act (which authorizes essential employees to work during a shutdown) is unconstitutional and (2) the Executive Branch has too broadly interpreted the Act. NTEU seeks to enjoin the federal government from requiring employees to work during the shutdown.

The Antideficiency Act (13 U.S.C. § 1342) states that “[a]n officer or employee of the United States Government . . . may not may not accept voluntary services for [the] government or employ personal services exceeding that authorized by law except for emergencies involving the safety of human life or the protection of property. . . . As used in this section, the term ‘emergencies involving the safety of human life or the protection of property’ does not include ongoing, regular functions of government the suspension of which would not imminently threaten the safety of human life or the protection of property.” This has been commonly interpreted to mean that only “essential,” (otherwise known as “excepted”) employees may work absent an appropriations (i.e., during a shutdown).

First, NTEU alleges as the Constitution requires that “[n]o money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law,” and the Antideficiency Act obligates funds without an appropriations, the Act is unconstitutional.

Personally, I see this argument as unlikely to succeed because if there is a consequence of appropriations made by the exception in the Antideficiency Act, it is authorized by the Act itself (i.e., authorized by law). However, if successful, the complaint would likely in effect mean that no federal employees could work during a shutdown without Congress specifically passing a new statute.

Second, NTEU alleges that the Executive Branch has too broadly interpreted the exception in the Antideficiency Act to incorrectly designate some employees as essential. The complaint seeks to enjoin the Executive Branch from requiring those employees to work during the shutdown. Although the complaint is largely in response to potentially requiring the IRS to process tax returns, likely realizing that such an allegation could not be ripe, NTEU also alleges that the government is requiring other broad (unspecified) employees to work in violation of the Antideficiency Act.

Personally, I believe that as applied to the IRS, that not processing tax returns likely does not lead to any imminent threat to the safety of human life or the protection of property.

Similarly, the National Air Traffic Controllers Association (NATCA), the union for Federal Aviation Administration employees, has filed a lawsuit alleging (1) violations of the FLSA similar to AFGE’s and NTEU’s lawsuits and (2) that not paying essential employees has deprived them of their property interest in their pay in violation of the Due Process Clause of the 5th Amendment; employees are thus entitled to damages under the Back Pay Act (5 U.S.C. § 5596). If successful, damages under the Back Pay Act would likely be greater than under the FLSA as the base pay (without overtime) would be an employee’s current salary, not minimum wage.

Personally, I see this second allegation as likely having potential procedural issues. The Ford Act (49 U.S.C. § 40122) specifies that “[a]n employee of the Federal Aviation Administration who is the subject of a major adverse personnel action may contest the action either through any contractual grievance procedure that is applicable to the employee as a member of the collective bargaining unit or through the Administration’s internal process relating to review of major adverse personnel actions of the Administration, known as Guaranteed Fair Treatment, or under section 40122(g)(3) [the Merit System Protection Boad (MSPB)].” The Ford Act defines major adverse personnel action to include a “reduction in pay or grade.” Adding an additional legal wrinkle, the MSPB does not have a quorum and is currently shut down too. Further, it is unclear from the record whether the contractual grievance procedure or Guaranteed Fair Treatment is operating during the shutdown.

To pursue their argument in district court, NATCA would likely have to successfully argue that the district court has jurisdiction as (1) the Ford Act does not apply as a shutdown does not reach the meaning of pay or (2) the inability of some of the statutory remedies, if not all, to hear the case due to the shutdown eliminates the requirements in the Ford Act.

Finally, five individual plaintiffs have filed a lawsuit alleging: (1) a violation of the 13th Amendment as essential federal employees must work without receiving pay or they may be fired, (2) a violation of the 5th Amendment as the individual federal employees cannot seek non-governmental employment, yet are not being paid, (3) a similar argument to NTEU that the Antideficiency Act violates the Appropriations Clause of the Constitution, (4) a similar argument to the other cases that failing to pay employees is a violation of the FLSA, (5) generally requiring employees to work during the shutdown is a violation of the Antideficiency Act, and (6) as applied, an individual federal employee is required to work in violation of the Antideficiency Act limitation on emergency work. They seek injunctive relief preventing the government from requiring employees to work without pay, injunctive relief allowing employees to seek outside employment, and nominal damages.

First, the individual federal employees allege a violation of the 13th Amendment’s prohibition on slavery and involuntary servitude. If successful, the claim would likely prohibit any federal employee from working during a shutdown (or require Congress to change what may happen during a shutdown).

Given the soon to be enacted law guaranteeing back pay to federal employees (which the individual federal employees had no way of knowing was likely to become law) and that federal employees may avoid having to work by resigning from their jobs, the individual federal employees will likely have a tough argument as they would be breaking new legal ground. Although distinguishable, the two most relevant Supreme Court cases are not favorable: the Court has (1) held that a military draft does not violate the 13th Amendment and (2) held that the government may require people to work for free on public roads for a limited period of time.

Second, the individual federal employees allege a violation of the 5th Amendment. They claim that under 5 C.F.R. Part 2635 federal employees may not obtain outside employment without explicit authorization. However, federal employees have property interests in obtaining meaningful employment without arbitrary government interference. The government’s continued imposition of restrictions on their ability to obtain outside employment, while having no valid claim to their services, violates their 5th Amendment protections from arbitrary government interference.  If successful, this claim would likely have a more limited scope and merely eliminate some of the ethics rules for employees who work for shut down agencies.

Personally, although I believe the individual federal employees have a strong policy argument, the law likely is not on their side. To begin, I believe the individual federal employees slightly mischaracterize the ethics restrictions as 5 C.F.R. Part 2635.801 states that it is an “agency-specific requirement for prior approval of outside employment or activities.”

Further, the individual federal employees will likely have a tough argument as they likely would be breaking new legal ground. The individual federal employees do not cite (and I know of no precedent) that would expressly provide the individual federal employees relief. Specifically, I see a few likely issues with their claim.

First, it is not clear that the individual federal employees have a property interest in obtaining outside employment. The Supreme Court has held that “[p]roperty interests . . . are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as . . . law.” Although there is precedent for federal employees having a property interest in continued employment, I am unaware of any independent source granting federal employees the property interest to obtain outside employment—I will note that the individual federal employees’ motion for a temporary restraining order and preliminary injunction (I could not find a non-PACER copy of the motion) cites a Lochner era holding that individuals have a constitutional entitlement to work for a living in the common occupations of the community; however, that holding in its entirety is likely not still applicable precedent, and a better statement of the law might be another Supreme Court holding that the Constitution grants the “freedom to practice [a] chosen profession.” Either way, both precedents are likely not so broad as to specifically grant a property interest in federal employees holding outside employment as the government is not preventing employees from working in other employment generally (i.e., seeking another job), but preventing them from holding interests in two jobs at the same time. If anything, current regulation likely establishes that federal employees do not have a property interest in obtaining outside employment.

Second, it is not clear that the federal government’s actions are arbitrary. The government likely has a legitimate interest in preventing conflicts of interest involving employees, even those who will receive delayed pay, to ensure future conflicts do not develop.

The third unique argument the individual federal employees plead is that the Antideficiency Act in general prevents federal employees from working during a shutdown. They argue that the Antideficiency Act’s (13 U.S.C. § 1341(a)(1)(A)) general prohibition on “mak[ing] or authoriz[ing] an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation . . .” prevents employees from working during a shutdown. Like with the constitutional arguments, if successful, the complaint would likely in effect mean that no federal employees could work during a shutdown without Congress specifically passing a new statute.

Personally, I believe that the individual federal employees have likely cited the incorrect subparagraph. The cited subparagraph specifically mentions exceeding an appropriated amount. Although zero can be interpreted as an appropriated amount, the next subparagraph specifies that the government cannot “involve [the] government in a contract or obligation for the payment of money before an appropriation is made unless authorized by law.” This subparagraph both (1) anticipates a situation where there is no appropriation and (2) provides an exception for what is otherwise authorized by law (e.g., the Antideficiency Act allowing the government to employ services for emergency purposes). To interpret the Antideficiency Act as the individual federal employees request would effectively make the above subparagraph meaningless. Additionally, besides the likely upcoming law amending  the Antideficiency Act to guarantee retroactive pay to federal employees, Congress has several times amended the Antideficiency Act since the federal government has previously shut down and required essential employees to work. Congress has never modified language to or expressed an opinion that a shutdown prevents all employees from working.

Further, the anticipated new law regarding back pay would likely invalidate the argument. The law would specify that “each excepted employee who is required to perform work during a covered lapse in appropriations shall be paid for such work, at the employee’s standard rate of pay, at the earliest date possible after the lapse in appropriations ends, regardless of scheduled pay dates.” The law would be retroactive to the beginning of the shutdown. As such, if there was any doubt that the Antideficiency Act allows the government to require essential employees to work, the amended Antideficiency Act likely expressly allows the government to require essential employees to work during a shutdown.

Likewise, the individual federal employees argue that the government is improperly requiring employees to volunteer their services under the Antideficiency Act. The argument rides on the section of the Antideficiency Act (13 U.S.C. § 1342) entitled “Limitation on Voluntary Services”, cited in the NTEU portion of this post, which prevents the government from accepting “voluntary services for [the] government or employ[ing] personal services . . . except for emergencies. . . .” By requiring federal employees to work, the services are not voluntary.

Personally, I believe that the individual federal employees incorrectly ignore the term “employ personal services.” Although the title of the section references voluntary services, voluntary services are only one of two emergency powers in the Antideficiency Act. The federal government can also “employ personal services.” Perhaps in anticipation of this argument, the individual federal employees in their motion for a temporary restraining order and preliminary injunction state that the government has not “employ[ed] personal services” as to employ requires actual compensation and voluntary agreement by both the employee and employer, neither of which exist here. In support of this holding, they cite a Supreme Court case handling an alleged FLSA violation.

However, I believe that they likely misinterpret the case. The case held that “[t]he Fair Labor Standards Act was not designed to codify or perpetuate those customs and contracts which allow an employer to claim all of an employee’s time while compensating him for only a part of it. Congress intended, instead, to achieve a uniform national policy of guaranteeing compensation for all work or employment engaged in by employees covered by the Act. Any custom or contract falling short of that basic policy, like an agreement to pay less than the minimum wage requirements, cannot be utilized to deprive employees of their statutory rights.” I interpret the case merely to say that employment creates a legal obligation of compensation, no matter what any custom or contract may say. In other words, actual compensation does not determine whether an employee is employed. Here, federal employees are likely employed as the FLSA entitles federal employees working during the shutdown to compensation, as mentioned above.

Moreover, like the above analysis for another section of the Antideficiency Act, Congress has several times amended the Antideficiency Act since the federal government previously has shut down and required essential employees to work. Congress has never modified language to or expressed an opinion that a shutdown generally prevents the government from requiring essential employees to work. Similarly, the likely law amending the Antideficiency Act expressly contemplates employees who are “required to perform work.”

The final unique argument the individual federal employees make is that as applied, one of the employees is forced to work as an essential employee even though the employee is not performing emergency services, as required by the Antideficiency Act. Thus, the individual should not be required to work during the shutdown. Personally, I see this claim as likely to succeed, if the facts pled are accurate.

Conclusion

It is unclear how soon these lawsuits will be decided or if a temporary restraining order and/or preliminary injunction will be granted. However, the federal employees who have worked during the shutdown are likely to gain some compensatory damages for delayed paychecks. Additionally, the cases could effectively end (or partially end) the shutdown without congressional intervention or force Congress to act by prohibiting any essential employees from working during the shutdown.

Since making this post, a snowstorm delayed by a day the hearing regarding the motions for a temporary restraining order and preliminary injunction. The U.S. District Court for the District of Columbia declined to issue an order. 

[1] Out of full disclosure, I am a member of an NTEU affiliated organization. I have played no role in its litigation, I would not be impacted by its litigation, and the views expressed here are solely my own.

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