In Latest NTEU Victory, Arbitrator Rules That Grades 11-13 Securities Compliance Examiners Are Entitled to Overtime Compensation


12/8/08: In NTEU's latest national victory for SEC employees, a federal Arbitrator has ruled that all Securities Compliance Examiners in grades 11, 12 and 13 are now eligible to receive higher pay rates for their overtime work. Under the Arbitrator's decision, these employees are also eligible for back pay and damages. The SEC has not yet indicated if it will attempt to appeal this decision to the Federal Labor Relations Authority.

"The Union hopes that the SEC will opt to rectify its improper FLSA classification of these employees, rather than pursuing an appeal, so that they may earn the overtime compensation to which they are entitled under the law," Chapter 293 President Greg Gilman recently stated. "We believe that it is in the best interests of all concerned for the agency to address these issues forthrightly and without further delay," he added.

This case began on November 5, 2002, when NTEU filed a grievance with the SEC alleging that the agency had improperly exempted a number of positions, including Securities Compliance Examiners, from coverage under the Fair Labor Standards Act (“FLSA”). The SEC’s classification of the positions as "FLSA-exempt" caused employees working in these positions to receive compensatory time or overtime pay at a "capped" rate. The SEC’s classification decision may also have caused these employees to receive no compensation at all for time that may have been compensable under the FLSA.

On September 27-29, 2006, NTEU presented its case regarding the Securities Compliance Examiners in Grades 11-13 to Arbitrator Joseph M. Sharnoff. The SEC had previously agreed to reclassify Securities Compliance Examiners in grades 7 and 9 to FLSA coverage, effective in April 2006. In a well-reasoned decision received by NTEU last week, Arbitrator Sharnoff agreed with the Union that the SEC had improperly exempted these employees under the FLSA. To review the decision, click here, FLSA Decision.

If the SEC does not appeal the Arbitrator's decision, the change to FLSA coverage will mean that, going forward, the overtime provisions of the FLSA will apply to these Securities Compliance Examiners in Grades 11-13. They will be entitled to choose between receiving time-and-a-half their regular rate of pay or one hour of compensatory time off for each overtime hour worked. The SEC will no longer be permitted to require them to take compensatory time. In addition, under a previous agreement between NTEU and the SEC, these employees will be entitled to back pay and additional damages.

Chapter 293 will keep you posted on these issues as they develop. Until a final resolution, the Union urges all Securities Compliance Examiners in Grades 11-13 to maintain accurate records of all overtime that they are required to work.

Earlier this year, in March, NTEU and the SEC were able to reach a settlement under which the agency agreed to reclassify the following other positions under the FLSA and pay those employees back pay and damages: Administrative Program Specialist (Grade 9); ARP Specialist (Grades 9-11); Budget Analyst (Grade 9); Case Management Specialist (Grades 9-11); Contract Administrator (Grade 9); EDGAR Operations Assistant (Grade 9); General Supply Specialist (Grade 9); Internet Surveillance Specialist (Grade 9-11); Investor Assistance Specialist (Grades 9-11); Legal Instruments Examiner (Grades 8-9); Market Surveillance Specialist (Grades 7-11); Paralegal Specialist (Grades 7-13); Program Analyst (Grades 8-11); Program Information Specialist (Grades 9-11); Program Support Assistant/Specialist (Grade 9); Regulation Specialist (Grade 11); Research Assistant/ Specialist (Grades 7-9); Research Specialist (Grade 11); Securities Compliance Examiner (Grades 7-9); Securities Regulation Specialist (Grades 9-11); Space Management Specialist (Grades 9-11); and Telecommunications Specialist (Grade 9).