by Dennis Crouch
The Federal Circuit has ordered sua sponte en banc review in Lesko v. United States, No. 2023-1823. The case presents important questions about statutory interpretation in the wake of the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), and could significantly impact the ability of the Office of Personnel Management (OPM) to determine the scope of its own power. Although this is not a Department of Government Efficiency (DOGE) case, DOGE has utilized OPM as a central conduit of its RTO and RIF initiatives.
This is a very interesting situation because there are almost 70 years of cases interpreting a specific statutory provision about overtime being “officially ordered or approved” and thus subject to overtime pay. Courts initially gave their fairly broad interpretation of the statute, but OPM later implemented narrow regulations that cut-off substantial overtime pay. In subsequent cases, the Federal Circuit continued to assert that its broad interpretation was correct, but that the statute was ambiguous enough to allow for Chevron deference to the agency. Now that Chevron is gone, and the court has agreed to take the case en banc, it seems to be a likely easy win for the appellant seeking overtime pay in a class action setting.
Background on Lesko v. US: A Federal Nurse’s Overtime Claims
Jillian Lesko served as a nurse practitioner for the Indian Health Service (IHS) during eight months of the COVID-19 pandemic. She brought a class action claiming that she and other similarly situated nurses were denied various pay enhancements in violation of federal law.
A core interpretive issue focuses on whether the additional work was “officially ordered or approved.” In its regulations, OPM interpreted this as requiring specific in-writing pre-approval from an appropriate employee with sufficient authority. But Lesko’s extra hours, while expected and necessary, did satisfy this strict requirement. This is where Loper-Bright comes into play — requiring courts to take a fresh look at statutory interpretation and no longer simply defer to agency interpretations.
The en banc order asks for new briefing specifically on three questions:
- Considering Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), how should ‘officially ordered or approved’ in 5 U.S.C. § 5542(a) be interpreted?
- Is this a case in which ‘the agency is authorized to exercise a degree of discretion’ such that OPM has authority to adopt its writing requirement? Loper, 603 U.S. at 394.
- Is there a statutory provision (e.g., 5 U.S.C. §§ 1104, 5548) that provides such authority?
Central to this case is the viability of an “inducement theory” of overtime for Title 5 employees. Under this theory, overtime is “officially ordered or approved” (as required by 5 U.S.C. § 5542) not only when explicitly authorized in writing, but also when induced by officials with the authority to order or approve overtime.
Three key Federal Circuit precedents are at play (although the first is from the predecessor court):
- Anderson v. United States, 136 Ct. Cl. 365 (1956). This case established the inducement theory — holding that if supervisors knew about and encouraged or implicitly required employees to work extra hours, that work should be considered “officially ordered or approved” even without a formal written order. This would permit the premium overtime pay. Anderson was applied by the courts for 40+ years until Doe.
- Doe v. United States, 372 F.3d 1347 (Fed. Cir. 2004): By the time of this decision, OPM had reinterpreted the language of the statute to require written authorization. The Federal Circuit decision had three important parts. First, it found that Anderson had been overruled by the Supreme Court in a fairly unrelated case; Second, it found the language “officially ordered or approved” to be ambiguous; and Third, upheld the OPM’s regulation based upon Chevron deference.
- Mercier v. United States, 786 F.3d 971 (Fed. Cir. 2015): This most recent case Held that “Anderson’s interpretation of 5 U.S.C. § 5542, namely that overtime is ‘officially ordered or approved’ where it is induced by one with the authority to order or approve overtime but not expressly directed, remains good law.” But, this case is obviously in direct tension with Doe.
Although Doe and Mercier were interpreting the same statutory phrase, they were actually interpreting two different statutes. The general federal employee statute in Doe had received a narrow OPM interpretation; while Mercier was interpreting parallel language for VA employees that did not have an associated regulatory interpretation. Because (for the most part) Lesko’s case falls under the general federal employee statute governed by the OPM regulation upheld in Doe, the Court of Federal Claims followed Doe and denied the extra pay.
The en banc court’s questions suggest it is likely to reject OPM’s narrow interpretation requiring written authorization for overtime and instead revert to its longstanding interpretation that induced overtime qualifies for the pay bump. The court is also examining whether OPM has explicit statutory authority to impose a writing requirement in the first place.
The Federal Circuit’s decision could important implications for federal employees — effectively allowing additional overtime pay for federal employees who were induced to work extra but without formal written pre-authorization. The case also presents an early test of how the Federal Circuit will re-interpret statutes and regulations in the post-Chevron landscape established by Loper Bright. It may provide guidance on how much weight agency interpretations receive when courts exercise their “independent judgment” under the new framework.
As Dimitri Korovilas (Counsel for Lesko) stated at oral arguments:
My point is that this is the first time the Federal Circuit, or I think any circuit, has had an opportunity to not just address the impact of Loper, but [to do so] in a context where there’s a very long history of seemingly conflicting opinions. . . . It cannot and should not be the law of this country, that work that is expected to be performed, required to be performed, where people could die if you don’t perform it, where you’re subject to discipline if you don’t perform it, that you don’t get paid, not just overtime, but in this case, even basic rates of pay.”
Timeline
The Federal Circuit has set an extended briefing schedule, with Lesko’s en banc opening brief due 60 days from the order (March 18, 2025), the government’s response due 45 days later, and Lesko’s reply 30 days after that. Oral argument is scheduled for September 12, 2025.