Doe No. 1 v. United States

United States Court of Appeals
for the Federal Circuit
______________________
DOE NO. 1,
Plaintiff-Appellee
v.
UNITED STATES,
Defendant-Appellant
______________________
2023-1653
______________________
Appeal from the United States Court of Federal Claims
in No. 1:19-cv-01747-SSS, Judge Stephen S. Schwartz.
______________________
Decided: March 3, 2025
______________________
D ANIEL M. ROSENTHAL, James & Hoffman, P.C., Wash-
ington, DC, argued for plaintiff-appellee. Also represented
by MICHAEL PAUL ELLEMENT, CHARLOTTE S CHWARTZ;
LINDA LIPSETT , Bernstein & Lipsett, P.C., Washing-
ton, DC.
REBECCA S ARAH K RUSER , Commercial Litigation
Branch, Civil Division, United States Department of Jus-
tice, Washington, DC, argued for defendant-appellant.
Also represented by REGINALD THOMAS BLADES, J R ., BRIAN
M. BOYNTON, PATRICIA M. MC CARTHY.
______________________
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DOE NO. 1 v. US 2
Before MOORE , Chief Judge, D YK and CUNNINGHAM ,
Circuit Judges.
MOORE , Chief Judge.
The government appeals an order from the United
States Court of Federal Claims denying its motion for sum-
mary judgment and holding the United States Office of
Personnel Management (OPM) regulation 5 C.F.R.
§ 551.423(a)(3) invalid. We vacate and remand.
BACKGROUND
Plaintiff Doe No. 1 is an intelligence analyst with the
Federal Bureau of Investigation (FBI). To become an intel-
ligence analyst, Plaintiff was required to complete the FBI
Basic Field Training Course (BFTC). The BFTC required
Plaintiff to complete in-person training sessions, as well as
various tasks and assessments. Some activities were
scheduled outside working hours or had to be completed on
Plaintiff’s own time.
Plaintiff filed a complaint in the Court of Federal
Claims, on behalf of Plaintiff and all others similarly situ-
ated, alleging that Plaintiff was not compensated for all
overtime hours worked during the BFTC. The government
moved for summary judgment on the ground that BFTC
participants are entry level trainees and therefore ineligi-
ble for overtime compensation under OPM regulation
5 C.F.R. § 551.423(a)(3). The Court of Federal Claims con-
cluded 5 C.F.R. § 551.423(a)(3) is invalid and denied the
motion. Doe No. 1 v. United States, 161 Fed. Cl. 192, 200
(2022) (Decision). The Court of Federal Claims certified for
interlocutory appeal the validity of 5 C.F.R.
§ 551.423(a)(3). We have jurisdiction under 28 U.S.C.
§ 1292(d)(2).
D ISCUSSION
This case presents issues of statutory and regulatory
interpretation, which are questions of law we review de
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DOE NO. 1 v. US 3
novo. Johnson v. United States, 75 F.4th 1354, 1360 (Fed.
Cir. 2023).
The Fair Labor Standards Act (FLSA or the Act), first
enacted in 1938, requires an employer, inter alia, to com-
pensate employees at one and one-half times the regular
pay rate for work performed in excess of forty hours per
week. 29 U.S.C. § 207(a)(1). The Department of Labor
(DOL) administers the FLSA as to non-federal employees
through regulations promulgated under the Act. 29 U.S.C.
§ 204(a). Prior to 1974, the FLSA did not apply to federal
employees, for whom overtime entitlements were governed
by civil service statutes. In 1974, Congress amended the
FLSA to apply to federal employees. Pub. L. No. 93–259,
88 Stat. 55 (1974) (codified in pertinent part at 29 U.S.C.
§ 203(e)(2)(A)). Congress delegated to the Civil Service
Commission (now OPM) the authority to administer the
Act with respect to federal employees. 29 U.S.C. § 204(f).
DOL continues to administer the FLSA with respect to pri-
vate, State, and local government employees and employ-
ers. See 29 U.S.C. § 204(a).
We have previously addressed the validity of OPM reg-
ulations that depart from DOL regulations in administra-
tion of the FLSA. Billings v. United States, 322 F.3d 1328
(Fed. Cir. 2003). In Billings, we considered OPM and DOL
regulations that contained different definitions of an “exec-
utive” employee. Id. at 1330–31 (citing 5 C.F.R. § 551.204
(1997) and 29 C.F.R. pt. 541 (1997)). We held OPM’s regu-
lation was valid because (1) the OPM definition of an “ex-
ecutive” employee was a reasonable interpretation of the
FLSA, and (2) “the variance in OPM’s regulation [was] no
more than needed to accommodate the difference between
private and public sector employment.” Id. at 1334.
Relevant to this case, the FLSA overtime compensation
requirement applies not only to work directed by the em-
ployer, but also to work the employer “suffer[s] or per-
mit[s].” 29 U.S.C. § 203(g). This provision does not apply
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DOE NO. 1 v. US 4
to all work performed in excess of forty hours per week.
OPM and DOL have enacted regulations delineating excep-
tions to the general overtime compensation requirement.
Under OPM regulations, “hours of work” does not in-
clude “[t]ime spent in apprenticeship or other entry level
training, or internship or other career related work study
training . . . outside regular working hours . . . provided no
productive work is performed during such periods,” subject
to exceptions not present here. 5 C.F.R. § 551.423(a)(3).
This provision bars overtime compensation for entry level
training hours unless specific criteria are met. OPM’s ex-
ception to the FLSA overtime compensation requirement
applies only to federal employees.
DOL regulations do not contain an identical exception
for entry level training. Under DOL regulations, “hours of
work” does not include certain “bona fide apprenticeship
programs.” 29 C.F.R. § 785.32. DOL broadly allows com-
pensation for “lectures, meetings, training programs and
similar activities” unless certain conditions are met.
29 C.F.R. § 785.27. Entry level training is not categorically
excluded from overtime compensation under DOL regula-
tions.
The issue in this case is whether Plaintiff is entitled to
overtime pay for hours worked during the BFTC. The gov-
ernment argued before the Court of Federal Claims that
Plaintiff is not eligible for such compensation because OPM
regulation 5 C.F.R. § 551.423(a)(3) bars overtime pay for
entry level training, including the BFTC.
The Court of Federal Claims held 5 C.F.R.
§ 551.423(a)(3) is invalid. Decision at 197–200. Under
Billings, the court reasoned OPM regulations must gener-
ally conform to DOL regulations in administration of the
FLSA. Specifically, the court held “[w]hen OPM’s regula-
tions are inconsistent with DOL’s, a court must ‘determine
whether the OPM interpretation of the statute is reasona-
ble, as well as whether any difference between OPM’s
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DOE NO. 1 v. US 5
interpretation and the [DOL] standard is required to effec-
tuate the consistency of application of the provision to both
federal and non-federal employees.’” Id. at 197 (quoting
Billings, 322 F.3d at 1334). Regarding the OPM regulation
at issue here, 5 C.F.R. § 551.423(a)(3), the court held
OPM’s interpretation of the FLSA “could be reasonable, at
least in the abstract.” Id. at 198. The court concluded,
however, that the government failed to provide sufficient
justification for OPM’s categorical rule against overtime
compensation for entry level training, which does not exist
under DOL regulations. The court held OPM regulation
5 C.F.R. § 551.423(a)(3) is invalid under Billings and can-
not bar overtime compensation for hours Plaintiff worked
during the BFTC. The government appeals the validity of
5 C.F.R. § 551.423(a)(3).
The government makes two arguments on appeal as to
why the OPM regulation, 5 C.F.R. § 551.423(a)(3), is valid.
Appellant’s Opening Br. 8–16. First, the government ar-
gues it is not clear that Billings applies to this case. The
DOL regulations at issue in Billings were legislative rules
promulgated by notice-and-comment rulemaking proce-
dure. Here, in contrast, the DOL regulations are interpre-
tive statements of policy, which were not the product of
notice-and-comment rulemaking. 29 C.F.R. § 785.2 (“The
regulations in this part . . . . provide a ‘practical guide for
employers and employees as to how the office representing
the public interest in its enforcement will seek to apply it.’”
(quoting Skidmore v. Swift & Co., 323 U.S. 134, 138
(1944))); see 5 U.S.C. § 553(b)(A) (notice-and-comment pro-
cedure “does not apply” “to interpretative rules, general
statements of policy, or rules of agency organization, pro-
cedure, or practice”). The government argues Billings
therefore does not clearly apply. Second, the government
argues even if Billings does apply, it does not invalidate
5 C.F.R. § 551.423(a)(3) because any differences between
the OPM and DOL regulations at issue are justified. We
agree with the government on both counts.
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Billings does not apply in this case because the DOL
regulations at issue are interpretive rather than legisla-
tive. Legislative rules are promulgated according to the
notice-and-comment rulemaking procedure prescribed by
the Administrative Procedure Act (APA). 5 U.S.C. § 553.
Rules issued through the notice-and-comment process are
referred to as “legislative rules” because they have the force
and effect of law. Perez v. Mortg. Bankers Ass’n, 575 U.S.
92, 96 (2015). Not all regulations are required to issue
through the notice-and-comment process. The notice-and-
comment requirement does not apply to “interpretative
rules, general statements of policy, or rules of agency or-
ganization, procedure, or practice.” 5 U.S.C. § 553(b)(A).
“The absence of a notice-and-comment obligation makes
the process of issuing interpretive rules comparatively eas-
ier for agencies than issuing legislative rules. But that con-
venience comes at a price: Interpretive rules ‘do not have
the force and effect of law and are not accorded that weight
in the adjudicatory process.’” Perez, 575 U.S. at 97 (quoting
Shalala v. Guernsey Mem’l Hosp., 514 U.S. 87, 99 (1995)).
The OPM regulation at issue here, 5 C.F.R.
§ 551.423(a)(3), is a legislative rule promulgated through
the notice-and-comment rulemaking procedure. See
45 Fed. Reg. 85659–65 (1980) (Final Rule). In contrast, the
DOL regulations at issue are interpretive rules that serve
to “inform the public” on how DOL will apply the FLSA.
29 C.F.R. § 785.2. Our analysis in Billings considered the
validity of an OPM legislative rule in light of a conflicting
DOL legislative rule. Both regulations in Billings thus had
the force and effect of law. We see no reason to extend
Billings to allow interpretive statements of DOL policy to
invalidate an OPM regulation issued pursuant to notice-
and-comment rulemaking procedures.
Moreover, importantly, Billings does not require iden-
ticality between OPM and DOL regulations. Billings, 322
F.3d at 1334 (upholding the validity of an OPM regulation
where departure from DOL regulation was “needed to
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DOE NO. 1 v. US 7
accommodate the difference between private and public
sector employment”). Nor would such a requirement be
consistent with the statute. Congress gave OPM authority
to administer the FLSA with respect to federal employees
but retained DOL’s authority to administer the FLSA with
respect to non-federal employees. 29 U.S.C. § 204(a), (f).
This division of authority between different agencies con-
templates that the FLSA may be administered differently
for federal and non-federal employees. The statute broadly
grants OPM rulemaking authority that is neither subject
to nor limited by DOL regulations. 29 U.S.C. § 204(f).
OPM regulations are valid if they are consistent with the
FLSA and implement a legitimate policy choice. Billings
requires nothing more.
Here, the OPM regulation implements a legitimate pol-
icy choice. Differences between the OPM regulation,
5 C.F.R. § 551.423(a)(3), and corresponding DOL regula-
tions, 29 C.F.R. §§ 785.27, 785.32, are justified by OPM’s
need to regulate against statutes that apply only to federal
employees. Specifically, the Government Employees
Training Act (GETA), codified sixteen years before the
FLSA was extended to cover federal employees, generally
does not allow federal employees to receive premium pay,
including overtime pay, for time spent in training. 5 U.S.C.
§ 4109(a)(1) (“The head of an agency . . . may pay all or a
part of the pay (except overtime, holiday, or night differen-
tial pay) of an employee of the agency selected and assigned
for training under this chapter, for the period of training
. . . .”).
OPM is responsible for administering both the FLSA
and GETA. 5 U.S.C. § 4118; 29 U.S.C. § 204(f). That is,
OPM regulations pursuant to the FLSA must also be con-
sistent with GETA and other statutes specific to federal
employees. Ragsdale v. Wolverine World Wide, Inc., 535
U.S. 81, 86 (1997) (“A regulation cannot stand if it is arbi-
trary, capricious, or manifestly contrary to the statute.”).
GETA’s general prohibition against overtime
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compensation for training applies only to federal employ-
ees, 5 U.S.C. § 4109, and has no private sector counterpart.
DOL therefore does not need to ensure that its FLSA regu-
lations comply with the same sources of statutory authority
regarding training compensability.
The OPM regulation, which allows overtime pay for
training in certain circumstances, is an exception to
GETA’s general rule against such premium pay. See
5 C.F.R. § 551.423(a). OPM’s decision to narrow this ex-
ception by separately defining “hours of work” for entry
level training is a legitimate policy choice in light of its duty
to regulate in a manner consistent with both GETA and the
FLSA. “Because of the peculiar nature of the statutory
framework surrounding federal employment, it is reasona-
ble for OPM’s regulation to vary from the [DOL] standard.”
Billings, 322 F.3d at 1334. The Court of Federal Claims
erred in holding differences between OPM regulation
5 C.F.R. § 551.423(a)(3) and corresponding DOL regula-
tions were not justified.
OPM regulations pursuant to the FLSA are valid if
they are consistent with the statute and, to the extent they
differ from DOL regulations, any differences are justified
by legitimate reasons.1 For the foregoing reasons, the
Court of Federal Claims erred in holding the OPM regula-
tion is invalid. We vacate the Court of Federal Claims’
1 Our analysis in Billings incorporated Chevron def-
erence, which has since been overruled. Billings, 322 F.3d
at 1333 (citing Chevron, U.S.A. Inc. v. Nat. Res. Def. Coun-
cil, Inc., 467 U.S. 837, 848 (1984)); Loper Bright Enters. v.
Raimondo, 603 U.S. 369 (2024). Under Loper Bright, OPM
regulations implementing the FLSA must be consistent
with the statute. Loper Bright, 603 U.S. at 412 (“Courts
must exercise their independent judgment in deciding
whether an agency has acted within its statutory author-
ity, as the APA requires.”).
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holding that OPM regulation 5 C.F.R. § 551.423(a)(3) is in-
valid and remand to determine whether the OPM regula-
tion is consistent with the FLSA.
CONCLUSION
We have considered the parties’ remaining arguments
and find them unpersuasive. We vacate and remand for
further proceedings consistent with this opinion.
VACATED AND REMANDED
COSTS
No costs.
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