It's no secret that employers face an uphill battle when defending claims of unpaid hours worked by employees. These claims usually involve a similar pattern: the employee fails to report or record time worked, then the employee later raises that unpaid time worked in the form of a Fair Labor Standards Act claim for unpaid overtime against his employer. Many courts side with employees because the Fair Labor Standards Act places the burden upon employers, not employees, to accurately record time worked. But two recent federal appellate court decisions show that things may not be so grim when employers have adequate procedures in place for employees to record time worked and the employee fails to follow those procedures.
The Sixth Circuit Court of Appeals (which includes Ohio in its jurisdiction), recently upheld the dismissal of a similar claim by an employee under the FLSA, basing its decision upon the plaintiff's failure to follow the employer's reasonable procedures for reporting extra time worked. In White v. Baptist Memorial Health Care Corp., the employer automatically deducted its employees meal breaks, but allowed employees to report meals worked through an "exception log" submitted to the employer. The employer also had procedures for employees to report and correct payroll errors to a supervisor. The employee, White, claimed that she had worked through several lunch periods but was not paid for that time. She used the exception log in the past to report lunch time worked. But she did not use any of the employer's procedures to report the alleged unpaid meal periods at issue in her lawsuit.
The Court held that the employer did not know or have any reason to know of the time White worked during her meal breaks. It stated "[w]hen the employee fails to follow reasonable time reporting procedures she prevents the employer from knowing its obligation to compensate the employee and thwarts the employer's ability to comply with the FLSA." Because the hospital had reasonable procedures for White to report her time worked during meals and White failed to avail herself of those procedures, her FLSA claims lacked merit. The court added that there was no evidence that the hospital prevented or discouraged White from using its procedures to report her time.
The Tenth Circuit Court of Appeals (which covers Colorado, Kansas, Oklahoma, New Mexico, Utah, and Wyoming) followed similar reasoning to kick another plaintiff's FLSA lawsuit. In Brown v. ScriptPro LLC, the plaintiff, Brown, worked over 80 hours from home shortly after his second child was born. He failed to record any of this time in the employer's timekeeping system, which the plaintiff could access from home. After Brown was terminated, he alleged his employer violated the FLSA by its failure to paid him for the 80 hours he worked, among other claims.
Predictably, Brown argued that the FLSA obligates employers to keep accurate records of employees' time worked, and his employer's failure to do so in his case was an FLSA violation. The Tenth Circuit disagreed, stating that it was the employee's failure to comply with the employer's timekeeping system that was the problem. It said that "Mr. Brown chose not to enter any of the hours he allegedly worked from home in ScriptPro's timekeeping system," but noted that "Mr. Brown easily could have entered his hours [from home]; in fact he was required to do so." As a result of Brown's failure to appropriately enter his time, the Court found no FLSA violation occurred.
These cases show that clear policies and procedures requiring employees to record time worked outside of normally scheduled hours (including meal periods) can help employers defend themselves against FLSA claims for unpaid wages and overtime. But having these policies is just a start—the employer's procedures must be reasonable and easily understood, regularly communicated to employees and supervisors, and implemented in a manner that does not discourage employees from reporting additional time worked. With all of these elements in place, an employer can be well-positioned to defend itself against wage and hour claims when an employee fails to follow its procedures.