§ 255(a) (1982). Plaintiffs' cause of action began to accrue on April 15, 1986. This action was filed on October 31, 1986, less than seven months later. Because plaintiffs' claims are well within the two year statute of limitations, there is no need to address an irrelevant issue.
II. The District's Deduction of Compensatory Time Against Plaintiffs' Back Pay Awards
The District distributed back pay awards after this court granted partial summary judgment in favor of plaintiffs in June 1988. Plaintiffs' second motion is for a declaration that the District improperly deducted compensatory time used by plaintiffs in calculating these awards.
The District computed each plaintiff's back pay award as follows: first, it determined the total hours of overtime the plaintiff worked during the violation period; second, it multiplied this number by one and a half times the plaintiff's then hourly wage to arrive at a monetary value of all overtime worked; third, it determined the total hours of compensatory time used by the plaintiff during the violation period; fourth, it multiplied this number by the plaintiff's then hourly wage to arrive at a monetary value of all overtime compensation already received; and fifth, it subtracted the monetary value of compensation received from the monetary value of overtime worked to arrive at the award of back pay. See Saylor Aff. at 1-2, Ex. A to Plaintiffs' Motion for a Declaration that Defendant Cannot Deduct Compensatory Time.
The FLSA does not expressly authorize such a deduction, nor does its legislative history offer any guidance. The Act provides that an employer "shall be liable . . . in the amount of . . . unpaid overtime compensation," 29 U.S.C. § 216(b), but it does not specify how this amount should be determined. Moreover, the permissibility of the District's method appears to be an issue of first impression before the courts.
Plaintiffs proffer two rationales for their argument that the District's deduction of compensatory time used was improper. First, they point to the District's policy requiring employees to use compensatory time within nine to twelve months after earning it. Employees who did not use the time within this period "lost" their overtime compensation forever. Plaintiffs' Motion for a Declaration that Defendant Cannot Deduct Compensatory Time at 2-3. Plaintiffs claim this policy precludes the District from arguing that plaintiffs used compensatory time "for their own benefit," since plaintiffs had no choice but to use it. Plaintiffs' Reply to Defendant's Opposition at 3.
Second, plaintiffs argue that the FLSA precludes the deduction. Plaintiffs do not offer any direct authority for this argument, and as we noted above, there apparently is none to be found. Instead, plaintiffs cite numerous cases that purportedly indicate a policy against the set-off the District took here.
The District essentially argues that, although its overtime compensation policy violated the FLSA, plaintiffs who took compensatory time received something of monetary value. It claims that a payment of monetary compensation at "time and a half" for all overtime earned, regardless of how much compensatory time was used, would unfairly penalize the District and award plaintiffs a windfall not intended by the FLSA. Plaintiffs who took compensatory time would recover full monetary compensation for those same overtime hours.
We conclude that the District's method of computing the back pay awards was fair and permissible under the Act. Plaintiffs who used compensatory time unquestionably received partial compensation for their overtime hours. In calculating the back pay awards, the District did not treat compensatory time used as full compensation. Rather, it determined that time off was worth two-thirds of the monetary compensation to which plaintiffs were entitled for each hour of overtime worked. We think this valuation was fair and equitable. Plaintiffs are entitled to be made whole, not to a windfall at the District's expense.
In addition to receiving a back pay award, each plaintiff will receive an equal amount in liquidated damages. These awards adequately compensate plaintiffs for the District's violation of the FLSA.
We agree with the District that the cases plaintiffs cite do not support their argument. See Defendant's Opposition to Plaintiffs' Motion for a Declaration that Defendant Cannot Deduct Compensatory Time at 4-7. In fact, some bolster the District's position and the one we adopt today. For example, plaintiffs cite EEOC v. O'Grady, 857 F.2d 383, 391 (7th Cir. 1988), for its reasoning that an employer who violated the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 621-634 (1982 & Supp. V 1987), could not "pay less than it would have paid had it acted lawfully." That case involved an employer who unsuccessfully sought to deduct pension benefits, a collateral source, from back pay awards. The O'Grady court reasoned that, as between employer and employees, employees should enjoy any windfall that resulted from the fact that they received both an award of back pay and pension benefits during the period of unlawful termination. See O'Grady, 857 F.2d at 391. As an example of the collateral source doctrine, O'Grady does not apply. In the present case, the District in no way received a windfall from a collateral source by deducting compensatory time from the back pay awards. Unlike the employer in O'Grady, who did not directly provide the pension benefits, the District "paid" plaintiffs compensatory time during the period of violation. By crediting the value of that time toward the total amount of overtime compensation earned, the District was not, as plaintiffs maintain, "attempting to enforce its illegal policy through the back door." Plaintiffs' Reply to Defendant's Opposition at 7. It simply and legitimately wanted to avoid paying for something twice.
O'Grady subsequently was cited in a decision that further undermines plaintiffs' position. In Graefenhain v. Pabst Brewing Co., 870 F.2d 1198 (7th Cir. 1989), the Seventh Circuit stated that an employer liable for front pay under the ADEA was "entitled to a set-off for the difference between the amount [in pension benefits] the employee did receive and the amount he would have received but for his unlawful termination." 870 F.2d at 1210 (citing O'Grady). While these cases are not binding on this court, we think they indicate the proper approach to back pay awards under the FLSA. The District was entitled to deduct the monetary value of compensatory time used against the total amount of overtime compensation earned during the period of violation.
For the foregoing reasons, this court holds that:
1) the District is liable for liquidated damages to all plaintiffs, including plaintiff-sergeants;