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HomeMy WebLinkAboutAgenda Report - August 7, 1985 (99)~ A Y } 1 t C -Ty ODUNCL1J l�:l.al.tl.LlVti x Y;"r t REQUEST FRUI'i JIDAJO FOR CITY' S PAIZTICIPATIGNi 1`1 ACTIOiAi CONCERNING TIE FAIR L I -BOR STANDARDS ACT Foli(,w. ng intrcy..iuction Ci ,e Iriatter by staffs l0iir.C11 on 1jutioi. Of C c)wlcil i�tFlil �-'-r G1�O+t, 1�eid S2COnd, alit C Or lZE d the "turc: of $1,Ou0 from the Conti.lgency Fund for ushe ed ex -pend i _, City of Lodi to join in a litigation trust fund to for expensf's, legal fees, experts etc to support litigatioll in ions of the Fair Ix�or Standards Act attacking the provis. (FLSA) as interpreted in Garcia V. San Antonio because of constitutional invact ori its bur_densca'ne , costly and un �,�.�--� ia6 municipalities. �.��M It' PRESIDENT J. LAMAR SHELLEY City Attorney Mesa. Arizona FIRST VICE PRESIDENT JOHN W. WITT City Attorney San Diego, California SECOND VICE PRESIDENT ROGER F. CUTLER City Attorney Salt Lake City, Utah THIRD VICE PRESIDENT GEORGE AGNOST City Attorney San Francisco, California TREASURER ROY D. BATES City Attorney Columbia, South Carolina TRUSTEES: BENJAMIN L. BROWN Immediate Past President City Solicitor Baltimore, Maryland ROBERT J. ALFTON City Attorney Minneapolis, Minnesota JAMES K. BAKER City Attorney Birmingham, Alabama July 19, 1985 Dear NIMLO Member: GENERAL COUNSEL CHARLES S. RHYNE DEPUTY GENERAL COUNSEL WILLIAM S. RHYNE Washington. D.C. The Executive Committee has voted to recommend the filing of a lawsuit seeking a declaratory judgment that required changes in policies and the enormous cost of the Fair Labor Standards Act (FLSA) cannot constitutionally apply to health, police, fire and other essential local government functions. With estimated increased costs of application to municipalities now exceeding 5 billion dol- lars'per year this problem is major indeed as it will drastically curtail essential local safety protections. On May 1, 1985 we forwarded to you a set of materials outlining our recommendations for an all-out legislative, executive and court battle to retain or regain for munici- palities the exemption from FLSA won in National League but overruled in Garcia. The Supreme Court in fact limits its decision on pages 25 and 27 to the transit cases be- fore it but refuses to "define" or "identify" local govern- ment impacts or policies of FLSA which are unconstitutional referring to its prior decisions as precedent for deciding only the transit "controversy before the Court." Slip. op., 25, 27. MARVAJONESBROOKS City Attorney We feel it important to have this lawsuit on the way Atlanta. Georgia to the U.S. Supreme Court in case the Congressional relief DOUGLAS N.JEWETT is not grantede by the proposed legislation hereinafter City Attorney refereed to by me. Seattle. Washington BARBARA MATHER City Solicitor Philadelphia, Pennsylvania JAMES D. MONTGOMERY Corporation Counsel Chicago, Illinois JOSEPH 1. MULLIGAN Corporation Counsel Boston, Massachusetts ANALESLIE MUNCY City Attorney Dallas. Texas CLIFFORD D. PIERCE, 1R. City Attorney Memphis. Tennessee WILLIAM H. TAUBE Corporation Counsel Kankakee, Illinois WILLIAM I. THORNTON. JR. City Attorney Durham, North Carolina We are fortunate to have former U.S. Solicitor General Rex E. Lee agree to act as our lead counsel and fortunate also that the Attorney General, Edwin Meese, III, backs our position completely. Not only did he so tell this to NIMLO's recent Seminar on April 29 but in his address to the American Bar Association on July 9, 1985 he said: "In Garcia v. San Antonio Metropolitan Transit Authority, the Court displayed what was in the view of this Administration an inaccurate reading of the text of the Con- stitution and a disregard for the Framers' intention that state and local governments be a buffer against the centralizing ten- denc.es of the national Leviathan. Speci- fically, five Ju3tices denied that the Tenth Midyear Seminar, Washington, D.C., April 28-30, 1985 50th Annual Conference, Philadelphia, Pennsylvania, October 16-I9, 1985 Exhibit A - 2 - Amendment protects states from federal laws regulating the wages and hours of state and local employees. Thus the Court overruled -- but barely -- a contrary holding in National League of Cities v. Usery: We hope for a day when the Court returns to the basic principles of the Constitution as expressed in Usery; such instability in decisions concerning the fundamental principle of federalism does our Constitution no service." NIMLO's fact survey has received reports from 281 municipalities reporting increased costs of over 400 million dollars per year. Trans- lated by statistics into application to all municipalities this means a cost from FLSA application of over 5 billion dollars per year. This does not include the cost of changing and keeping city records to accord with FLSA and regulations under it of millions more in costs. The enor- mous increased costs of this preemption of local government policy and impact of limiting local government operations by the Federal Government could imperil local government's ability to furnish adequate safety, health, fire and police services thus creating a very serious local problem. Reaction in the Congress against Garcia is similar to that of Attorney General Meese. Twenty-six members of Congress introduced a bill H.R. 2866 amending FLSA to restore compensatory time off for over- time for police, fire and other safety officers of local government. A similar bill is H.R. 2936. In the U.S. Senate, Senator Wallop of Wyoming has introduced a bill similar to the House bills, S. 798. Oversight hearings on Garcia have been scheduled by Senator Nickels of Oklahoma, Chairman of the Labor Subcommittee of the Senate Labor and Human Resources Committee for July 25, 1985. NIMLO's cost and preemption study will be presented by NIMLO Vice President Roger Cutler, City Attorney of Salt Lake City, to the Senate Hearing. The same report will be given to the White House staff for President Reagan and to the sponsors of the House bills. ' . Enclosed with this letter is an "FLSA Litigation Trust Fund Agree- ment" which all municipal, state and county agencies who want to main- tain or regain exemptions from FLSA should sign and return as soon as possible. Non-members of NIMLO may join in this battle by executing the "agreement." We estimate the cost of the lawsuit to be filed by Mr. Lee and members of his Law Firm, Sidley and Austin, will be approx- imately $400,000. Each contributor will have its contribution returned pro rata for any money contributed in excess of the costs of this effort. Enclosure JLS/kfq Sincerely, (TNiML0 LaMar Shelley President 198 85 MONDAY. JULY 15, 1485 THF. WAAINGTON POST Sutpremd­%, Ruling Co-stly 0 Uourt to Overtime e 'sibility of layoffs, reduced services imum wage services from their em- Kuling sy 6 6calities Up to $15 Million Expense. for Disthet By Lee Hockstader r,1 SWI w6w A recent Supreme Court ruling forcing state and local governments to adhere to federal wage and hour lawswill add $10 million to $15 million a year to the costs of oper- ating the D.C. governm int and hun- dreds of thousands of dollars to sub- urban governments, area officials say. That is only a small portion of what is now estimated to be the overall 't2 billion to $4 billion cost to state and local governments from the ruling that forces the govern- ments to pay overtime wages to most of their workers instead of giving them compensatory time off. "It's too much money," com- plained attorney Gilbert J. Gins- burg, a labor lawyer who is an ad- viser to many cities, including Al- exandria and New York. The ruling "hits very, very hard and is a burden," said Cornelius J. O'Kane, Fairfax County's personnel director. Officials there estimate the court's Feb. 19 ruling will cost Fairfax taxpayers $500,000 to $1 million a year. Most of the added costs will come in overtime to police and fire- fighters, who in the past have earned substantial amounts of com- pensatory time off. For example, one immediate im- pact of the ruling is in western states such as California, where thousands of firefighters will be col- lecting time -and -a -half overtime pay for battling the forest fires that were out of control in that region List week. Paying the California firefighters overtime wages, rather than compensating them with time off later, will cost $10 million to $20 million, according to James D. Mosman, the state's director of personnel administration. Cities, which are expected to be hit the hardest when the Labor De- partment starts enforcing the court ruling Oct. 15, are raising the pos- or higher taxes. Officials in the La- bor Department and the White House say they have been flooded with calls and letters from mayors worried about the impact of the rul- ing on their budgets. Local governments attacked the ruling when it was announced, but say they are only now beginning to add up the likely costs as their bud- get and personnel officers supply them with more precise estimates. "We are just now getting a handle on it, and it is very difficult." said Donald Weinberg, the District's director of labor relations. "It is causing a real problem." District officials say the impact of the ruling here will not be as severe as in some other large cities be- cause Washington already pays overtime to many of its employes. "If there are no other pressures then it is clearly manageable," said Betsy Reveal, the District's budget director. "But it cannot be seen in ig*tion. In combination with other pr�wures it could c fuse problems." Tim District's annual payroll is about $850 million, t7�tler guidelines for the Fair La - L StandarkAcL which: -state and local governmenls now must follow, police must receive overtime pay if they work more than 171 hours in a 28 -day period. For firefighters, overtime must be paid after' 212 hours. Blue-collar employes in public works as well as clerical and tech- nical employes, many of whom com- monly work overtime hours, would also be covered. Teachers, as pro- fessional employes, are excluded from coverage under the law. The Supreme Court ruing came in a case known as Garcia v. San Antonio Metropolitan Transit Au- thority on the question of whether overtime provisions in the act apply to municipal workers. Joseph Garcia, a bus driver in San Antonio, had brought suit against the city, challenging its practice of paying time -and -a -half overtime only when bus drivers worked on their days off or on holidays. For all other overtime hours worked, bus drivers were paid at the normal hourly rate. The city said it should be exempt from the act; Garcia, backed by labor unions, said it should not. The 5 -to -4 high court ruling has diverse implications. For example: a Municipalities will no longer be able to accept volunteer or submin- ployes. Crossing guards—frequent ly senior citizens working for little or no pay—will have to paid at leas a minimum wage, for instance. This provision is expected to hurt smal towns, which frequently depend on volunteer workers to •a large de- gree. a Municipalities may have to pay substantial sums of overtirre wages to police recruits in academies who devote long hours to their training. "We've heard of an instance where trainees are paid at a higher rate than police captains," said a White House official. The official, who asked not to be identified, said the likely effect in that instance would be a cutback in training time ;•or police officers. n Public employes in some rural jurisdictions who saved compensa- tory time by working long hours in the winter so they could plant their crops in the spring will be unable to continue that practice. a In Puerto Rico, implementing the act is expected to cost millions of dollars because the government must start paying the minimum wage to public employes who have been earning less. Officials also express fears of cur- tailed work by public safety employ- es, and cite the case of four D.C. homicide detectives whose inves- tigation of a murder was cut short last week to avoid paying them overtime. The incident occurred shortly after police officials had cir- culated a memorandum outlining steps to comply with the ruling. "There's an increasing degree of alarm about the costs and the Dis- ruption, both of which will be sub- stantial," said the White House of- ficial. Congressional hearings on the is- sue are scheduled for July 25, and three governors as well as a host of iocat officials are expected to raise the prospect of budget -busting ex- penses because of the ruling. Groups such as the National As- sociation of Counties and the Na- UonaI League of Cities also are in- creasing pressure on the Reagan administration to introduce legis- lation that would repeal cvertime provisions of the Fair Labor Stan- dards Act and effectively neutralize the fiscal impact of the Supreme Court's ruling. The White House official ac- knowledged that. the administration is considering backing such a bill. Localmes Congressional aides say the meas- - ure would be opposed by organized labor, and would stand little chance t of passage in the Democratic -con- trolled House of Representatives. I "What happens on the House side depends on how much pressure we can gin up," said one Senate aide who would like to see the Garcia decision undone by Congress, "But Politically I just don't think we can do it" Susan Meisinger, deputy under- secretary for employment stan- dards in the Labor Department, said she believes legislation is pos- sible. "There's a growing concern about the impact," she said. "What w; happens depends on how hard state and local governments push." In a speech to the American Bar Association last week, Attorney General Edwin Meese III blasted s the court for the Garcia ruling, de- claring that it "undermines the sta- bility" of state and local govern- ments. To comply with the ruling, Los Angeles will have to pay $100 mil- lion a year; San Francisco, $50 mil- lion, and New York, $40 million, ac- cording to Cynthia M. Pols, counsel to the National League of Cities. Many municipalities are in the process of determining how many of their workers are covered by the r- federal guidelines and how many i are not. Some personnel officials acknowledge privately that in bor- derline cases where there is room for discretion, governments may tend ;o classify workers as exempt from the law, and therefore ineli- gible for premium pay. State and local government of- ficials also are afraid of the effects of a provision in the federal law that allows employes to bring private lawsuits to recover back overtime pay. Because the court's ruling was effective April 15, anv municipal worker who wants to collect over- time since that date will be able to do so, along with a penalty doubling the ertime aym ronical y, a t ough labor union officials initially were elated by the Supreme Court decision in Febru- ary, some are now acknowledging that their members are unhappy about losing compensatory time Qt, fiOUNCIL C011M - UNICATIP-N 10THE CITY COUNCIL DATE NO. FROM: THE CITY MANAGER'S OFFICE AUGUST 1, 1985 SUBJECT: FAIR LABOR STANDARDS ACT (FisA) Attached hereto as Exhibit "A" and incorporated herein by refFrence, is a July 19, 1985 letter which I received from the National Institute of Municipal Law Officers (NIMLO). They are requesting the City of Lodi to join in a litigation trust fund to be used for expen.6es, legal fees, experts and others, to support litigation in attacking the provisions of the Fair Labor Standards Act (FLSA) as interpreted in Garcia v. San Antonio because of its burdensome, costly and unconstitutional impact on municipalities. Specifically, as you may remember, Garcia v. San Antonio Metropolitan Transit Authority applied the FLSA to local municipalities. The NIMLO Executive Committee has voted to reconTe-nd the filing of a lawsuit seeking a declaratory judgmen':: that the required changes in policies and the enormous costs to the cities for the enforcement of the FLSA, cannot constitutionally apply to health, police, fixe and other essential local government functions. As you may be aware, there are at this time congressional solutions being looked at as it relates to the FLSA, however, NIMLO is concerned that these congressional solutions may not be forthcoming in the near future, and believes that a lawsuit to clarify the holding of Garcia might be apropos. Attached hereto as Exhibit "B" is the NIML0 FLSA Litigation Trust Fuad Agreement which we would enter into. Our participating share would be $1,000.00 and that amount would be returned to the City if no .litigation were persued. It is my recarm►endation that you do make this $1,000.00 payrcr-ant to the Trust Fund. M. STEIN CITY ATTORNEY RMS:vc PRESIDENT Jul 19 1985 GENERAL COUNSEL y J. LAMAR SHELLEY , CHARLES S. RHYNE City Attorney Mesa, Arizona DEPUTY GENERAL COUNSEL WILLIAM S. RHYNE FIRST VICE PRESIDENT Dear NIMLO Member: Washington. D.C. JOHN W. WITT City Attorney San Diego. California The. Executive Committee has voted to recommend the filing of a lawsuit seeking a declaratory judgment that SECGND VICE PRESIDENIT ROGER F. CUTLER required changes in policies and the enormous cost of the City Attorney Fair Labor Standards Act (FLSA) cannot constitutional) y Salt Lake City, Utah apply to health, police, fire and other essential local THIRD VICE PRESIDENT GEORGE AGNOST government functions. With estimated increased costs of City Attorney application to municipalities now exceeding 5 billion dol - San Francisco. California lars per year this problem is major indeed as it will TREASURER drastically curtail essential local safety protections. ROY D. BATES City Attorney Columbia, South Carolina On May 1, 1985 we forwarded to you a set of materials outlining our recommendations for an all-out legislative, TRUSTEES: executive and court battle to retain or regain for munici- BEN]AMINL.BROWN palities the exemption from FLSA won in National League Immediate Past President City Solicitor but overruled in Garcia. The Supreme Court in fact limits Baltimore. Maryland its decision on pages 25 and 27 to the transit cases be - ROBERT J.ALFTON fore it but refuses to "define" or "identify" local govern - City Attorney ment impacts or policies of FLSA which are unconstitutional Minneapolis. Minnesota Minnea referring to its prior decisions as precedent for deciding CityAttorney BAKER only the transit "controversy before the Court." Slip. op., Birmingham, Alabama 25, 27. MARVA JONES BROOKS City Attorney We feel it important to .have this lawsuit on the way Atlanta. Georgia to the U.S. Supreme Court in case the Congressional relief DOUGLAS N.JEWETT is not granted by the proposed legislation hereinafter City Attorney Seattle, Washington referred to by me. BARBARA.R City Solicitoritor We are fortunate to have former U.S. Solicitor General Philadelphia, Pennsylvania Rex E. Lee agree to act as our lead counsel and fortunate JAMES D. MONTGOMERY also that the Attorney General, Edwin Meese, III, backs our Corporation Counsel position completely. Not only did he so tell this to Chicago. Illinois NIMLO's recent Seminar on April 29 but in his address to JOSEPH 1. MULLIGAN the American Bar Association on July 9, 1985 he said: Corporation Counsel Boston. Massachusetts "In Garcia v. San Antonio Metropolitan ANALESLIEMUNCY City Attorney Transit Authority, the Court displayed what Dallas. Texas was in the view of this Administration an CLIFFORD D. PIERCE, JR. inaccurate reading of the text of the Con - City Attorney stitution and a disregard for the Framers' Memphis, Tennessee intention that state and local governments WILLIAM H.TAUBE be a buffer against the centralizing ten - Corporation Counsel dencies of the national Leviathan. Speci- - Kankakee. Illinois f ically, five Justices denied that the Tenth WILLIAM I. THORNTON, JR. City Attorney Durham, North Carolina Midyear Seminar, Washington, D.C., April 28-30, 1985 50th Annual Conference, Philadelphia, Pennsylvania, October 16-19, 1985 Exhibit A W - 2 - Amendment protects states from federal laws regulating the wages and hours of state and local employees. 'thus the Court overruled -- but barely -- a contrary holding in National League of Cities v. Usery. We hope for a day when the Court returns to the basic principles of the Constitution as expressed in Usery; such instability in decisions concerning the fundamental principle of federalism does our Constitution no service." NIMLO's fact survey has received reports from 281 municipalities reporting increased costs of over 400 million dollars per year. Trans- lated by statistics into application to all municipalities this means a cost from FLSA application of -ver 5 billion dollars per year. This does not include the cost of chap:ging and keeping city records to accord with FLSA and regulations under it of millions more in costs. The enor- mous increased costs of this preemption of local government policy and impact of limiting local government operations by the Federal Government could imperil local government's ability to furnish adequate safety, health, fire and police services thus creating a very serious local problem. Reaction in the Congress against Garcia is similar to that of Attorney General Meese. Twenty-six members of Congress introduced a bill H.R. 2866 amending FLSA to restore compensatory time off for over- time for police, fire and other safety officers of local government. A similar bill is H.R. 2936. In the U.S. Senate, Senator Wallop of Wyoming has introduced a bill similar to the House bills, S. 798. Oversight hearings on Garcia have been scheduled by Senator Nickels of Oklahoma, Chairman of the Labor Subcommittee of the Senate Labor and Human Resources Committee for July 25, 1985. NIMLO's cost and preemption study will be presented by NIMI.O Vice President Roger Cutler, City Attorney of Salt Lake City, to the Senate Hearing. The same report will be given to the White House staff for President Reagan and to the sponsors of the House bills. Enclosed with this letter is an "FLSA Litigation Trust Fund Agree- ment" which all municipal, state and county agencies who want to main- tain or regain exemptions from FLSA should sign and return as soon as possible. Non-members of NIMLO may join in this battle by executing the "agreement." We estimate the cost of the lawsuit to be filed by Mr. Lee and members of his Law Firm, Sidley and Austin, will be approx- imately $400,000. Each contributor will have its contribution returned pro rata for any money contributed in excess of the costs of this effort. Sincerely, q Avt ia4 LaMar Shelley ON,M'LO President 198b/85 Enclosure JLS/kfq