Court is weighing whether to pay damages to employees who worked during the record-breaking 2018 shutdown

Tens of thousands of federal workers could soon receive payments for damages suffered during the 2018 shutdown after a court on Wednesday heard arguments that the government broke federal law by failing to timely deliver paychecks to its workers.

The U.S. Court of Appeals for the Federal Circuit consolidated arguments from three separate lawsuits in which federal employees are seeking liquidated damages for missing multiple paychecks during the record-breaking 35-day delay in funding, and heard from plaintiffs that the government had failed to meet the requirements Fair Labor Standards Act.

A federal claims judge ruled in 2020 that the government broke the law, a decision the government is appealing. The same lower court judge, in a lawsuit following the 16-day shutdown in 2013, ruled that the government had violated the FLSA and that the 25,000 federal agencies that ruled the case were entitled to monetary damages.

The three-judge panel expressed some skepticism about the plaintiffs’ cases, which were brought separately by members of the National Treasury Employees Union, the American Federation of Government Employees and others. A judge said because the government’s hands are tied by the Antideficiency Act, which prevents agencies from handing out funds during a shutdown, a ruling against the government would mean federal employees working during a funding shortfall would be entitled to bonus payments every time to have.

“It seems unlikely to me that Congress, knowing why they use government shutdowns and how they happen, would have automatically intended that a FLSA violation occur every time,” the judge said.

Mark Stern, a Justice Department attorney, said Congress made it clear that employees should be paid as soon as possible and, in the event of a closure, that would only happen once funds are restored.

“There is no basis for concluding that people who haven’t worked earn more wages than those who have,” Stern said.

At times, the jury expressed sympathy for the plaintiffs’ arguments. There is no “impossibility clause” in the FLSA that allows violations when another law prevents timely payments, a second judge said. He added that – even during a shutdown – the government can request a special allocation to pay staff on time, as was the case with the Pay Our Military Act of 2013.

Heidi Burkaweicz, one of the attorneys arguing on behalf of the staff, said Congress’s hands are not tied because it could have simply passed spending bills on time.

“It didn’t need a budget impasse,” Burkaweicz said. “It didn’t need a political argument.”

Leon Dayan, another attorney on the case, said the Antideficiency Act was “not intended to be a free card to get out of prison.”

Due to the timing of the paycheck payment during the 2013 shutdown, the plaintiffs were only owed $290 plus any overtime in this case. If the court again awards damages, the plaintiffs in this case would be owed a full four weeks of the state minimum wage — or $1,160 — in addition to any overtime they worked. Federal employees must vote positively on the new case to receive a possible award.

NTEU President Tony Reardon said the government acted illegally by not paying its employees on time and said many federal agencies are failing to pay their bills on time.

“We were pleased to be able to present our case in court today and I hope that, in the interests of fairness and justice, the judges will recognize that these employees were harmed,” Reardon said. “A lot of time has passed since this catastrophic 35-day shutdown, but we must remember that even though paychecks stopped, these federal employees had to remain on duty.”

More than 18,000 employees have joined NTEU’s case, while 32,000 joined AFGE’s case last year. The cases only concern employees who had to work during the shutdown, which corresponds to about 500,000 people.

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