The opinion of the court was delivered by: PAUL E. PLUNKETT
This matter is before us on the City of Naperville's motion for reconsideration of our September 26, 1991 Order, which granted the Plaintiffs' motion for summary judgment and denied the Defendant's cross-motion. We entertain the motion at this time in large part because of the appearance on September 6, 1991, of an interim final rule, "Exemptions from Minimum Wage and Overtime Compensation Requirements of the Fair Labor Standards Act; Public Sector Employers", 56 Fed. Reg. 45824 (1991), (29 C.F.R. Pt. 541), which was brought to our attention after the final Order had been drafted. For the reasons that follow, we vacate our September 26, 1991 Order insofar as it holds that the policy of supervisory overtime is inconsistent with a salaried status, but we reaffirm our original holding that the impermissible docking of officers' pay for disciplinary infractions undercuts Naperville's argument that the Plaintiffs are salaried employees. Therefore, we stand by our original grant of the Plaintiffs' motion for summary judgment and denial of Naperville's motion.
Because we have detailed the facts in this case in our previous Order we shall not rehearse them at length. It is sufficient to say that the Plaintiffs, who are Naperville police sergeants, have brought suit against the City of Naperville ("Naperville"), alleging that they are non-salaried employees and therefore, pursuant to the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"), they are entitled to payment for overtime hours worked. Naperville contends that the sergeants are salaried employees and are therefore not entitled to overtime compensation.
We ruled that Naperville's policy of providing straight-time payment to sergeants for hours worked in excess of 45 in a given week was an overtime provision inconsistent with a salaried status. The second ground on which we ruled involved Naperville's policy of docking all employees' wages for disciplinary reasons. We found once again that, pursuant to 29 C.F.R. § 541.118(a), Naperville's policy (and its practice) of docking sergeants up to three days' pay was inconsistent with employment on a salary basis. We rejected Naperville's attempt to argue that it had docked several sergeants a day's pay for improperly accepting a sandwich on the basis that this behavior was a violation of a "safety rule of major significance" (§ 541.118(a)(5)).
At the time of our ruling on the original motions, Defendant's counsel informed us of the existence of the interim final rule ("the interim rule") from the Department of Labor, which he had not at that time either seen or brought to our attention.
While the interim rule does not directly address the bases on which we grounded our Order, we feel that the sentiment expressed in the background information is germane and worthy of our careful consideration in view of the possibly Draconian effect of our Order on the City of Naperville.
The interim rule addresses the growing tide of dissatisfaction among public sector employees regarding some payment practices that are arguably not aligned with the requirements of the FLSA. When the United States Supreme Court extended the reach of the FLSA to embrace state and municipal employees in Garcia v. San Antonio Metro Transit Auth., 469 U.S. 528, 105 S. Ct. 1005, 83 L. Ed. 2d 1016 (1985), the Act and its implementing regulations were superimposed on complex employment and compensation schemes that had long been in place. The provisions of the FLSA, however, do not distinguish in any way between employees in the private and public sectors.
Now recognizing that different treatment may be required, the Department states that it "has been considering (and continues to consider) a variety of possible changes to the regulations governing the exemption for bona fide executive, administrative, and professional employees, including the particular requirement in the public sector that such employees be paid on a salary basis." 56 Fed. Reg. at 45825.
Until such time as these changes are effected, however, the Department has expressed its concern that the confusion engendered by conflicting judicial interpretations has resulted in
the exposure of governmental employers to potentially enormous and generally unexpected back wage liabilities to employees, some of whom would clearly be exempt if duties and amount of compensation alone were examined. Such unforeseen liabilities could seriously threaten the fiscal integrity of State and local governmental agencies, and could seriously disrupt widespread pay practices that were designed and intended to serve the public trust and were established long before State and local government employees were subject to the Fair Labor Standards Act.
These pay systems are generally premised on the concept -- based on principles of public accountability -- that governmental employees should not be paid for time not worked, and that there is a need to be accountable to the taxpayers for the expenditure of public funds.
Id. Consequently, the Department has proposed the following additions to 29 C.F.R. § 541: