A common dodge to overtime claims is the assertion by the employer either that it prohibited or did not know of the overtime work by the employee. A good example can be found in the recent Sixth Circuit decision in Craig v. Bridges Brothers Trucking. There a bookkeeper for the trucking company filed suit seeking payment of the overtime she had earned and the district court, Judge Edmund A. Sargus, granted summary judgment to the employer finding that it "did not know or have reason to know" that the employee had worked overtime hours. This was a major and, frankly, a perplexing error by the district court given the evidence in the case, which the Sixth Circuit described as follows:
... the undisputed evidence demonstrates that [plaintiff] kept meticulous records, reporting not only how many hours she worked each week, but also where she was working and the tasks she completed each day. She then placed those records, along with the time cards of the other Bridges Brothers employees and a summary report, directly onto the chair of Mr. Bridges for his approval each week. While she may have miscalculated her pay rate, she did not miscalculate her time.
Although the employer had been regularly presented with "meticulous" records detailing the work performed and task completed by the plaintiff, the Sixth Circuit still saw fit to announce a general rule applicable to situations where the employer asserts that it did not know or have reason to know that an employee was working overtime:
If an "employer knows or has reason to believe" that an employee "is continuing to work" in excess of 40 hours a week, "the time is working time" that must be compensated at a time-and-a-half rate, even if the extra work performed was "not requested" or even officially prohibited.
In other contexts, we have found that a "reason to believe," or constructive knowledge of something, exists when the employer "should have discovered it through the exercise of reasonable diligence." We now adopt the reasonable diligence standard for FLSA cases. (citations omitted)
Of Course, the Sixth Circuit Has to Give the Employer a Chance for an Out:
Given the court's description of the "undisputed evidence" regarding the "meticulous" time worked records that the plaintiff provided to the president of the trucking company each week, one might expect the Sixth Circuit to have also ordered that a partial summary judgment be entered on the employee's behalf. However in that one would be wrong:
No one disputes that Craig worked overtime or that she was not compensated at the statutory rate. As such, this case turns entirely on whether Bridges Brothers "knew or had reason to believe" that Craig was working overtime. Whether a party had the requisite knowledge is a question of fact. It requires "credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences," all of which "are jury functions, not those of a judge." While a jury could conclude that an employer exercising reasonable diligence should know what is on its own timesheets and payroll records, we cannot say as a matter of law that a jury could not conclude otherwise here. (citations omitted).
The court does not explain how a reasonable jury could reject the undisputed evidence, although the ruling denying summary judgment to the employee is remarkable since the Sixth Circuit regularly affirms summary judgment in favor of employers where the evidence is much stronger for the employee.
But you take what you can get. And so it goes.
The Sixth Circuit's opinion was authored Senior District Judge Robert Cleland of the Eastern District of Michigan joined by Circuit Judges Richard Griffin and Raymond Kethledge, who was recently cited by Donald Trump as a Supreme Court short-lister.