The Sword and the Shield: The Benefits of Opinion Letters by Employment and Labor Agencies.

• Author: Sonderling, Keith E.

TABLE OF CONTENTS ABSTRACT 1171 TABLE OF CONTENTS 1173 I. INTRODUCTION 1175 II. BACKGROUND 1180 A. Early History of the FLSA 1180 B. The George W. Bush Administration and the Expansion of Opinion Letters 1184 C. The Obama Administration and the Cessation of Opinion Letters 1185 D. The Trump Administration 1187 E. The Biden Administration 1189 F. The Future of Opinion Letters 1191 III. OVERVIEW OF FEDERAL OPINION LETTERS, STATE AGENCY OPINION LETTERS, AND DEFERENCE 1191 A. Opinion Letters in a Nutshell 1191 B. Opinion Letters at Other Federal Agencies 1193 C. State Agency Opinion Letters 1194 D. Deference 1195 IV. BENEFITS OF OPINION LETTERS 1196 A. Opinion Letters: An Efficient and Effective Way of Providing Guidance 1197 B. Liability Shield 1203 C. Aid to the Courts 1209 D. Opinion Letters Apply Decades-Old Statutory Provisions and Regulations to a Modern Economy and Workforce 1212 E. Clarity and Consistency in Application of the Law 1215 1. Accounting for Significant Changes in the Legal Landscape. 1215 2. Bridge the Divide Between Policy Positions and the Case Law 1217 3. Clarity in Litigation 1219 F. Opinion Letters Help Ensure that Certain Programs are in Compliance with the Relevant Laws 1221 1. The SkillBridge Program Opinion Letters 1221 2. Volunteer Programs 1224 3. Wellness and Health Programs 1225 4. Work Opportunity Tax Credit Program 1226 G. Opinion Letters Have Helped Clarify the Scope and Breadth of Religious Liberty 1228 H. Opinion Letters Benefit Both Employers and Employees 1230 V. THE CONTINUED VALUE OF WITHDRAWN OPINION LETTERS 1233 VI. STRENGTHENING OPINION LETTERS: SOME SUGGESTIONS 1235 A. Model Based on Past Successful Opinion Letter Programs 1235 B. Opinion Letters Should be Used to Preview Rules 1236 C. State Labor and Employment Agencies Should Issue Opinion Letters 1236 VII. CONCLUSION 1238 I. INTRODUCTION

Opinion letters are an often overlooked yet highly beneficial vehicle for federal and state agencies to provide meaningful guidance for the public, especially in labor and employment law. (1) in a nutshell, an opinion letter is an official written opinion from an agency on how a statute, its implementing regulations, and related case law apply to a specific situation presented by the person or entity requesting the opinion. (2) opinion letters do not establish new standards, requirements, obligations, or duties. instead, they enable businesses, employees, labor groups, or any other interested entities to seek guidance from the relevant enforcement agency regarding how governing laws apply to particular circumstances that may give rise to complex or perplexing legal issues that were previously unanswered. (3)

The U.S. Department of Labor's Wage and Hour Division ("WHD") is perhaps the most well-known agency for issuing opinion letters, particularly in response to questions regarding the Fair Labor standards Act ("FLSA"). (4) A number of other agencies also issue opinion letters, including the U.S. Equal Employment Opportunity Commission ("EEOC") and DOL's Office of Federal Contract Compliance Programs ("OFCCP"). (5) Opinion letters are a valuable resource for courts, employers, employees, unions, trade groups, practitioners, advocacy groups, and the general public. (6) Opinion letters are intended to be fact-specific in that they are based on the particular facts presented in the individual inquiry; but the explanation set forth in them provides valuable insight into how an agency interprets the laws it is responsible for enforcing. Not surprisingly, these interpretations are frequently cited by courts when deciding cases, most notably in wage and hour lawsuits. (7) From a more functional perspective, opinion letters also are proactive and provide a guidepost for human resource professionals, business owners, and practitioners to structure their payroll practices to comply with the operative regulations and applicable case law. (8) Typically, although not required by law, agencies such as WHD only require that the request for an opinion is not being requested to respond to an agency investigation or for any litigation that was initiated prior to making the request. (9) The respective agency has discretion as to which requests it will respond to and how it will respond. (10)

The benefits of opinion letters find considerable support in the purpose, intent, and history of the Portal-to-Portal Act. (11) In the wake of the FLSA's enactment in 1938, a series of Supreme Court decisions regarding the law triggered a flood of litigation. (12) Congress responded by declaring the situation to be an emergency and passed the Portal-to-Portal Act in 1947. (13) In addition to limiting the retroactive effect of the FLSA and redefining its statute of limitations, (14) the Portal-to-Portal Act provides employers with a liability shield if the employer can show that an action that violates the FLSA was nonetheless taken in good faith reliance on a written administrative regulation, order, ruling, approval, interpretation, practice, or enforcement policy. (15) The Portal-to-Portal Act provides the express statutory authority for WHD opinion letters and for the majority of EEoC opinion letters. (16)

For more than seventy years after the enactment of the FLSA, DOL issued opinion letters during both Democratic and Republican administrations to provide guidance to employees and employers. (17) in more recent years, however, opinion letters inexplicably have become a rather contentious political topic. (18) Moreover, for the first time in history, DOL under the Obama Administration abruptly ceased the practice of issuing opinion letters in favor of more generalized - and far less frequent - topic-based sub-regulatory guidance known as Administrator's Interpretations. (19) Oftentimes, opinion letters were the only guidance available to both employees and companies that were attempting to comply with the FLSA and its numerous complex regulations. (20) Fortunately, shortly after the change in presidential administrations, DOL announced in 2017 that it would return to its historical practice of issuing opinion letters. (21)

Opinion letters are one of the most effective and efficient ways of providing meaningful guidance to the public and afford incentives to employers who conscientiously undertake efforts to understand and comply with the law. (22) Opinion letters benefit both employers and workers by providing important assurance regarding how to satisfy statutory and regulatory requirements. (23) in the event that an employer is not in compliance, opinion letters might serve to provide instructions on how employers can adjust course and come into compliance. (24) As noted above, opinion letters also provide a liability shield whereby employers who receive an opinion letter can assert a good faith defense against liability. (25) In fact, the law provides that any purported violation of the FLSA's minimum wage and overtime requirements can be excused if the employer relied in good faith upon "any written administrative regulation, order, ruling, approval, or interpretation" provided to the particular employer by WHD. (26) Moreover, opinion letters often aid courts and practitioners by providing a legal roadmap--directions from the agency charged with construing and enforcing the law regarding its conclusion about how the law applies. (27) Opinion letters thereby can promote uniformity and consistency in the application of the law and regulations to new situations and contexts, especially in the wage and hour arena. (28) In addition, the FLSA is often described as a textbook example of an anachronistic statute that was passed before World War II, which effectuated technological and demographic transformations in the American economy. (29) Opinion letters helped account for these broad changes and provide topical guidance regarding the modern economy and workforce. (30) Some lesser-known benefits of opinion letters are that they have helped to ensure that certain programs comply with applicable laws, including employment programs benefiting military service members and tax programs benefitting underprivileged communities. (31) They have likewise helped the regulated community comply with relevant labor and employment laws and have also helped clarify the scope and breadth of religious liberty in recent years. (32)

Meanwhile, critics argue that opinion letters largely serve employers' interests, predominantly because those letters provide employers with a good faith defense. (33) Opponents of opinion letters often refer to them as "get out of jail free cards" because the agency will not necessarily initiate enforcement proceedings on that issue against a company with a favorable letter. (34) Critics further contend that opinion letters could burden federal agencies' resources by creating "a cottage industry" of parties wanting agencies to weigh in on disputes. (35) These arguments are wrong. Opinion letters do not purport to change the law--they seek to clarify it. And clarifying the law as written cannot promote violations of the law. Furthermore, because opinion letters are the most efficient and direct means of providing guidance, they are a great use of agency resources.

This Article argues that opinion letters are highly beneficial for courts, employers, workers or employees, unions, trade groups, practitioners, individuals, and the public at large. This Article largely focuses on WHD opinion letters because they furnish a helpful lens through which to examine the value of opinion letters and have been a reliable resource since the 1940s. However, this Article also discusses the value of opinion letters issued by other federal agencies and by some state agencies. Part II of this Article discusses the background of the opinion letters, including their history and purpose. Specifically, it highlights the history of the Portal-to-Portal Act, an emergency statute enacted to curb out-of-control...