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Employer defeats FLSA claim based on lack of knowledge


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Helou

By Gina Helou

Employee’s overtime claim

A dump-truck driver for a construction company often arrived to work early, sometimes 15 minutes before his shift started.  During this time, the driver stated he conducted his “pre-trip” inspection of his assigned dump-truck for safety issues and prepared the vehicle for the job duties each day.  The construction company claimed although it knew the driver often arrived to work early, it had no knowledge of him performing any work during those 15 minutes.  Furthermore, the construction company claimed it was unnecessary for the driver arrive early to conduct a “pre-trip” inspection of his truck because the construction company built time into his shift for the inspection.  The construction company did not pay the driver for the time he spent when he arrived early, and the driver sued for violation of the FLSA.

The court noted although an employer “cannot slyly sit back in order to reap extra work without pay,” it cannot obligated to compensate for that time if it did know about it.  The driver offered three examples of the construction company’s knowledge of his extra work.  He produced his required written logs of his daily activities, which included boxes at the top of each page to write in start times.  At the bottom of these logs, the driver entered his “pre-trip” start time, which included the extra 15 minutes of inspection work.  Second, the driver offered the testimony of his supervisor who stated he often showed up to work between 15 and 30 minutes early.  Last, the driver offered his own testimony stating his supervisors would often “hang around” his truck before his shift time started and would see him there.  

The construction company countered this evidence by providing testimony from its payroll department stating it never looked at the bottom of the written logs for start-time notes because boxes for the information were clearly labeled at the top of the logs.  Second, in response to the supervisor’s testimony, the construction company offered testimony it was customary for employees to show-up early and socialize before starting their shifts.  Last, the construction company stated although supervisors witnessed the driver arriving early, there was no evidence they witnessed him actually working during that extra 15 to 30 minutes.

The ruling
The court found the driver’s evidence was inconclusive on whether the construction company was aware of his extra work time.  Further, based on past cases, even “simple knowledge” the driver arrived to work early was not enough to show the construction company knew or should have known the driver was starting work early.  As it was customary for employees to arrive to work early and socialize, nothing about this particular employee arriving early would have “raised a flag” he was working overtime.  Furthermore, the court noted the driver did not have legitimate reason for coming in early for his “pre-trip” truck inspections because the construction company built additional time into his shift for those inspections.  Last, the court stated there was no evidence the driver ever informed anyone, over a three year period of showing up early, he was working overtime and not being paid for it.  Based on these reasons, the court dismissed the driver’s FLSA claim for unpaid overtime wages.

The takeaway

FLSA cases often end in an employer paying out lump sums in back wages for minimum wage violations and/or unpaid overtime.  The Seventh Circuit has given employers a helping hand here by requiring employees to show employers have actual and constructive knowledge of overtime worked.  This case helps employers avoid liability for employees who tend to work unauthorized overtime hours without ever informing the employer until they file suit for unpaid wages.  However, it is important to note the court took a moment to state employers cannot reap the benefits of uncompensated work.  This means there could be a scenario where the employee works unauthorized overtime, but the employer is liable to compensate him under the FLSA.  It is imperative to keep updated and compliant employment policies and detailed record-keeping on all employees to defeat an FLSA claim for unpaid wages.

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