FLRA: CBP owes backpay to officers denied nightwork premium pay

The Federal Labor Relations Authority last week ordered U.S. Customs and Border Protection to provide backpay to customs officers who had been erroneously denied their premium pay for nighttime work in instances where they were on parental or emergency leave.

Most federal employees are entitled to premium pay of 10% of basic pay when much of their regularly scheduled work occurs between 6 p.m. and 6 a.m. However, according to the Federal Employees Pay Act, when a federal worker takes paid leave, they are subject to the so-called “eight-hour rule,” which states that they should not receive the 10% boost to their paid leave in instances where they have already taken at least eight hours of paid leave within the same biweekly pay period.

But in 1993, Congress passed the Customs Officer Pay Reform Act, a law that, among other things, establishes nightwork premium pay between 15% (for 3 p.m. to midnight shifts) and 20% of basic pay (for 11 p.m. to 8 a.m. shifts) for customs officers. COPRA lacks an eight-hour rule, and a 1995 arbitration settlement between CBP and the National Treasury Employees Union affirms that FEPA’s eight-hour rule does not apply to customs officers.

NTEU filed a grievance against CBP arguing that the agency was in violation of its 1995 settlement agreement because it made two recently enacted forms of leave—paid parental leave under the Federal Employee Paid Leave Act and emergency leave, as authorized by the American Rescue Plan Act—subject to the eight-hour rule, since the Office of Personnel Management’s guidance for implementing the two laws both note that they are subject to the eight-hour rule under FEPA. An independent arbitrator found mostly in favor of the union, though both NTEU and CBP filed exceptions for the FLRA to review.

 In hearing the case, the FLRA solicited a legal opinion from OPM on the matter. In short, OPM said that FEPA’s eight-hour rule should not apply to employees covered by COPRA in any circumstance, particularly since both the federal government’s parental leave and emergency leave programs base their payment rate on the rate used to compensate employees on annual leave.

“OPM also observed that both the parental-leave regulation and the emergency-leave guidance require agencies to pay these leave types at the same rate as ‘annual leave,’” FLRA wrote. “Since the agency ‘established a policy’ of paying COPRA nightwork premiums for annual leave without applying the eight-hour rule, OPM reasoned that the agency was precluded from applying the eight-hour rule to parental and emergency leave.”

In addition to the legal question of whether FEPA or COPRA govern parental and emergency leave, CBP objected to providing nightwork premium pay to employees taking leave under those provisions due to logistical difficulties in its payroll systems.

“The agency argues the employees’ losses are due solely to the coding of the agency’s payroll system," FLRA wrote. "Although the parties stipulated that the payroll system’s codes for parental and emergency leave do not permit the payment of nightwork premiums, the agency does not allege it would be impossible to create or change payroll coding to meet its regulatory requirements. Ultimately, it is the agency’s obligation to ensure that it pays its employees in accordance with law.”

Additionally, CBP argued that if the agency were to provide backpay to the impacted customs officers, it could violate the annual cap on premium pay earnings. But the FLRA members pointed out that CBP’s own regulations exempt backpay awards from the premium pay cap.

“COPRA caps customs officers’ annual overtime and premium pay earnings,” FLRA wrote. “[The] agency—as promulgator of this COPRA regulation—has interpreted [the statute] as ‘exempting’ backpay awards from pay-cap calculations. The authority has previously deferred to the agency’s publicly articulated interpretation of this regulation, and we continue to do so here.”

In a statement Monday, NTEU National President Doreen Greenwald applauded the FLRA’s unanimous decision.

“We are pleased that the FLRA affirmed an earlier decision from an arbitrator that CBP employees who took parental leave or COVID-related emergency leave are entitled to the same night differential pay that they would have received if they were working,” Greenwald said. “As NTEU successfully argued, CBP’s refusal to pay these employees for their regularly scheduled night shifts unfairly penalized them for taking paid leave.”

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One exception filed by NTEU but denied by the FLRA board was over whether CBP’s failure to provide premium pay for parental and emergency leave constituted a repudiation of the 1995 settlement agreement.

Although the FLRA found that CBP did not repudiate its agreement—because CBP’s decision was “reasonable” given OPM’s implementation guidance cited the eight-hour rule and the grievance involved two types of leave that did not exist for feds in 1995—FLRA Chairwoman Susan Tsui Grundmann penned a concurring opinion opening the door to changing how the agency assesses the severity of a contractual breach.

Specifically, Grundmann said that the second part of the repudiation test—whether a provision goes “to the heart” of the parties’ agreement, appears to been provided no rationale in the agency’s more than four decades of caselaw.

“The ‘heart of the agreement’ wording seems to have first appeared in DOD, Warner Robins Air Logistics Center, Robins Air Force Base, Georgia [in 1991],” she wrote. “[Although] the authority periodically employed this wording in subsequent decisions, it did not expressly frame it as part of the test for repudiation until Scott AFG [in 1996]. However, in doing so, it did not provide any rationale for imposing it.”

Grundmann said that although she did not have to examine this issue for this case, she would be open to considering changes to the repudiation test in the future.

“It is not clear to me why the authority should be deciding for itself how important a contract provision is, relative to other provisions in the contract, when assessing whether a party has committed an unlawful repudiation,” she wrote. “[If] one party tells another that it will not comply with—or engages in some other clear and patent breach of—a contract provision the parties have lawfully negotiated, it seems the party has failed to bargain in good faith—regardless of the provision’s ‘importance’ relative to other provisions in the contract.”