Feds who work during government shutdowns aren’t entitled to damages, appeals court rules

Federal employees forced to work without pay during government shutdowns need to be made whole eventually. But the government’s late payments don’t mean those workers are entitled to damages, a federal appeals court ruled Wednesday.

The Court of Appeals for the Federal Circuit sided with the government in two separate lawsuits — one dealing with the 2013 government shutdown, and another with the partial shutdown in 2018 and 2019. In both cases, employees claimed the government violated the Fair Labor Standards Act by not paying them on time, which would have entitled them to damages — twice the amount of their late paychecks.

Attorneys for both the government and the employees agreed that agencies couldn’t have possibly paid workers while they were shut down, because doing so would have violated another law: the Anti-Deficiency Act, which prohibits agencies from making payments when Congress hasn’t appropriated the funds to do so. But they differed over whether not paying employees on time still violated the FLSA.

The government argued that can’t possibly be the case, because the FLSA “doesn’t require the impossible.” In Wednesday’s rulings, a 2-1 majority of the three-judge panel agreed.

“If we were to adopt Plaintiffs-Appellees’ proposed interpretation, we would be forcing the government to choose between a violation of the Anti-Deficiency Act or the FLSA. This is an absurd result that we should avoid, if possible,” the majority wrote. “The FLSA requires employers to pay their employees as soon as practicable under the circumstances. Paying federal government wages during a lapse in appropriations is not practicable because the government would violate the Anti-Deficiency Act and could incur civil and criminal liability by making those expenditures.”

The appellate court decisions overturned lower court rulings by the Court of Federal Claims. In 2017, Judge Patricia E. Campbell-Smith found the government was liable for damages to “excepted” employees who worked during the 2013 shutdown. In 2020, the same judge ruled employees who worked during the 2018-2019 shutdown could pursue damages.

Following the 2017 ruling, attorneys for the government and the plaintiffs spent years haggling over how many employees were owed damages, and how much. They were only able to agree on 157 workers by the time the government appealed the decision in its entirety last year.

But Wednesday’s ruling — unless it is overturned by another decision by the full court or the Supreme Court — means no employees would receive damages in connection with past or future shutdowns.

The lone dissenting judge, Jimmie V. Reyna, said he would have sided with the federal employees in the cases. He said his colleagues erred by finding that there was a conflict between the Anti-Deficiency Act and the Fair Labor Standards Act, and that even though the government had to follow the ADA, in this case, doing so also violated the FLSA.

“There is no principled basis for the majority view. Indeed, the opposite is true. The FLSA is remedial in nature, and it acts as a shield to protect workers. Not so with the ADA. The ADA is meant to punish government officials for certain actions,” Reyna wrote. “Payday is important to the everyday worker. Missing a paycheck can have devastating consequences. That is what this case is about. Congress sought a remedy for such consequences by extending the potential for liquidated damages. Here, the employer should not be absolved of adherence to the FLSA, more so where the employer is the government that brought on the shutdown.”

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