Margaret White v. Baptist Memorial Health Care Co. ( 2012 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 12a0379p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
-
MARGARET WHITE, on behalf of herself and
Plaintiff-Appellant, --
all others similarly situated,
-
No. 11-5717
,
>
-
v.
-
-
BAPTIST MEMORIAL HEALTH CARE
-
CORPORATION; BAPTIST MEMORIAL
-
Defendants-Appellees. N
HOSPITAL-DESOTO, INC.,
Appeal from the United States District Court
for the Western District of Tennessee at Memphis.
No. 2:08-CV-2478—Samuel H. Mays, Jr., District Judge.
Argued: July 19, 2012
Decided and Filed: November 6, 2012
Before: SILER and MOORE, Circuit Judges; VAN TATENHOVE, District Judge.*
_________________
COUNSEL
ARGUED: Alan G. Crone, CRONE & McEVOY, PLC, Memphis, Tennessee, for
Appellant. Paul E. Prather, LITTLER MENDELSON P.C., Memphis, Tennessee, for
Appellees. ON BRIEF: Alan G. Crone, CRONE & McEVOY, PLC, Memphis,
Tennessee, J. Nelson Thomas, THOMAS & SOLOMON, LLP, Rochester, New York,
for Appellant. Paul E. Prather, Lisa L. Leach, R. Alex Boals, LITTLER MENDELSON
P.C., Memphis, Tennessee, Craig A. Cowart, KIESEWETTER WISE KAPLAN
PRATHER, PLC, Memphis, Tennessee, for Appellees.
SILER, J., delivered the opinion of the court, in which VAN TATENHOVE,
D. J., joined. MOORE, J. (pp. 13-22), delivered a separate dissenting opinion.
*
The Honorable Gregory F. Van Tatenhove, United States District Judge for the Eastern District
of Kentucky, sitting by designation.
1
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 2
_________________
OPINION
_________________
SILER, Circuit Judge. Plaintiff Margaret White appeals the district court rulings
that granted summary judgment for Defendant Baptist Memorial Health Care Corp.
(Baptist) and decertified her class action against Baptist. She argues the district court
incorrectly held that Baptist’s policy for compensating hourly employees for missed
meal breaks was lawful under the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201,
et seq. White states this ruling caused the district court to wrongfully grant Baptist’s
motions for summary judgment and class action decertification. For the following
reasons, we affirm.
I.
A.
White was a nurse for Baptist from August 2005 to August 2007 and treated
patients that came to the emergency department. She did not have a regularly scheduled
meal break due to the nature of her job at the hospital. Meal breaks occurred during her
shift as work demands allowed.
During her new employee orientation, White received a copy of Baptist’s
employee handbook. The handbook stated employees working shifts of six or more
hours receive an unpaid meal break that is automatically deducted from their pay checks.
The handbook also provided that if an employee’s meal break was missed or interrupted
because of a work related reason, the employee would be compensated for the time she
worked during the meal break. Baptist employees were instructed to record all time
spent performing work during meal breaks in an “exception log” whether the meal break
was partially or entirely interrupted.
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 3
White signed a document that stated she understood the meal break policy and,
therefore, understood that if she worked during her meal break, she had to record that
time in an exception log in order to be compensated for her time.
White recorded the occasions where her meal break was partially or entirely
interrupted in the exception log. She stated that when she reported missing a meal break,
which her entire nurse unit missed as well, she was compensated for her time. She also
states that there were occasions where she individually missed meal breaks but was not
compensated. But on at least one occasion when she reported missing a meal break
individually, she was compensated for her time. From time to time she told her
supervisors that she was not getting a meal break and she also told Baptist’s human
resources department. However, she never told her supervisors or the human resources
department that she was not compensated for missing her meal breaks.
Eventually, White stopped reporting her missed meal breaks in the exception log
despite Baptist’s instructions for employees to record their time in the log. She does not
remember or have records of when her meal breaks were interrupted, either entirely or
partially, and Baptist failed to compensate her.
In addition to the exception log, White knew Baptist’s procedure to report and
correct payroll errors. If there was an error, she could report the mistake to a nurse
manager who would resolve the issue. White stated that when she used this procedure
the errors were “handled immediately.” However, she did not utilize this procedure to
correct the interrupted meal break errors that she failed to report because she felt it
would be “an uphill battle.”
B.
White filed suit and moved for conditional class certification against Baptist in
2008, alleging violations of the FLSA for failing to compensate her for working during
her lunch breaks. The district court granted in part and denied in part White’s motion
for conditional class certification. After Baptist moved for summary judgment and class
decertification, the district court granted Baptist’s motions.
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 4
II.
We review summary judgment rulings de novo. Provenzano v. LCI Holdings,
Inc., 663 F.3d 806, 811 (6th Cir. 2012). Summary judgment should be granted to the
moving party if there is no genuine issue of material fact and that party is entitled to
judgment as a matter of law. Id. We must draw all reasonable inferences in the
nonmoving party’s favor. Id.
Under the FLSA, we review class action certification rulings for an abuse of
discretion. O’Brien v. Ed Donnelly Enterprises, Inc., 575 F.3d 567, 584 (6th Cir. 2009).
III.
A.
“[A]n FLSA plaintiff must prove by a preponderance of the evidence that he or
she performed work for which he or she was not properly compensated.” Myers v.
Copper Cellar Corp., 192 F.3d 546, 551 (6th Cir. 1999) (citations and internal quotation
marks omitted). “Work not requested but suffered or permitted is work time.” 29 C.F.R.
§ 785.11.
An automatic meal deduction system is lawful under the FLSA. See generally
Hill v. United States, 751 F.2d 810 (6th Cir. 1984) (The U.S. Postal Service’s automatic
30 minute lunch deduction system was upheld against a FLSA suit brought by a postman
plaintiff where he claimed that he was continuously on duty during his mealtime and
should be compensated for his mealtime.). “Time spent predominantly for the
employer’s benefit during a period, although designated as a lunch period or under any
other designation, nevertheless constitutes working time compensable under the
provisions of the [FLSA].” F.W. Stock & Sons, Inc. v. Thompson, 194 F.2d 493, 496-97
(6th Cir. 1952) (citation and internal quotation marks omitted). “As long as the
employee can pursue his or her mealtime adequately and comfortably, is not engaged in
the performance of any substantial duties, and does not spend time predominantly for the
employer’s benefit, the employee is relieved of duty and is not entitled to compensation
under the FLSA.” Hill, 751 F.2d at 814. A de minimis rule applies when “the matter in
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 5
issue concerns only a few seconds or minutes of work beyond the scheduled working
hours.” Id. at 815. Compensation is necessary “only when an employee is required to
give up a substantial measure of his time.” Id.
If an “employer knows or has reason to believe that [a worker] is continuing to
work [then] the time is working time.” 29 C.F.R. § 785.11. Therefore, the issue is
whether Baptist knew or had reason to know it was not compensating White for working
during her meal breaks.
1.
There is a dearth of case law on compensation for missed meal breaks under the
FLSA as compared to the case law on unpaid overtime. But “[a] claim for non-payment
of work during an established mealtime is analytically similar to an unpaid overtime
claim.” Hertz v. Woodbury County, 566 F.3d 775, 783 (8th Cir. 2009) (citation omitted).
Since “[t]he gravamen of [White’s] complaint is that [she] performed ‘work’ during
mealtimes, [she is essentially arguing] that the work amounted to overtime because it
was in addition to their already-scheduled, eight-hour shift, and the work during these
mealtimes went uncompensated.” Id.
In Hertz, police officers sued under the FLSA for unpaid overtime compensation
and for work performed during mealtimes. 566 F.3d at 777-78. The County tracked the
duty-status of an officer through a program called the Computer Aided Dispatch (CAD),
which recorded when an officer radioed that he was on active duty and when he radioed
that he had completed his shift. Id. at 779. Officers were required to submit paperwork
to their supervisors to be paid overtime and “requests were ‘rarely denied.’” Id. The
police officers argued that the County had constructive knowledge of the amount of
overtime worked because of its access to the CAD records and, therefore, “the County
knew or should have known that they were working overtime.” Id. at 781.
The Eighth Circuit held, “Access to records indicating that employees were
working overtime, however, is not necessarily sufficient to establish constructive
knowledge.” Id. at 781-82 (citing Newton v. City of Henderson, 47 F.3d 746, 749 (5th
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 6
Cir. 1995)). The court ruled, “The FLSA’s standard for constructive knowledge in the
overtime context is whether the County ‘should have known,’ not whether it could have
known.” Id. at 782 (citation omitted). It went on to say, “It would not be reasonable to
require that the County weed through non-payroll CAD records to determine whether
or not its employees were working beyond their scheduled hours. This is particularly true
given the fact that the County has an established procedure for overtime claims that
Plaintiffs regularly used.” Id. (citing Newton, 47 F.3d at 749).
Turning to the issue of unpaid work during meal times, the court held the officers
were “in the best position[]” to prove that they were working during their mealtimes and
“[t]o require . . . the County [to] prove a negative – that an employee was not performing
‘work’ during a time reserved for meals – would perversely incentivize employers to
keep closer tabs on employees . . . .” Id. at 784. The court concluded that “under the
FLSA, the employee bears the burden to show that his or her mealtimes were
compensable work.” Id.
In Newton, a city police officer was assigned to a U.S. Drug Enforcement Agency
(DEA) Task Force, which had the authority to control his daily duties, but he remained
employed by the City, which still had the responsibility for paying his salary and
benefits as well as overtime. 47 F.3d at 747. The City told the officer that it could pay
him 12.5 hours of overtime per pay period but no more than that because the City could
not afford it. Id. at 747-48. The officer “submitted time reports to the City and was paid
for all of the hours claimed on [the] time reports.” Id. at 748.
The officer filed a FLSA suit because he claimed that the City did not
compensate him for all of the overtime hours he worked as a member of the Task Force.
Id. at 747. He admitted “that he never made a demand for payment for unauthorized
overtime hours until he resigned.” Id. at 748. He did, however, submit forms to the
DEA that stated the overtime hours he was claiming in his lawsuit. Id. The officer
understood that the DEA forms were not for payroll purposes and did not provide the
forms to the City until he resigned. Id. But he claimed that the City knew he was
working more overtime hours than he reported to them because he reported his activities
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 7
to his City supervisors on a daily basis. Id. Even though he admitted that in these daily
oral reports he did not specify the number of hours he was working, the officer argued
that, based on these reports, his City supervisors “must have known that he was working
overtime.” Id.
One of the officer’s City supervisors had access to information regarding the
activities of the Task Force as well as the activities of its individual members. The trial
court found that based on this access to the Task Force’s activities, the City had
constructive knowledge that the officer was working overtime. Id. at 749. But the Fifth
Circuit reversed, holding that “as a matter of law such ‘access’ to information does not
constitute constructive knowledge that [the officer] was working overtime.” Id.
The court ruled that the city had “specific procedures” for the officer to follow
in order to be paid overtime and the officer ignored these procedures. Id. The court
reasoned:
If we were to hold that the City had constructive knowledge that [the
officer] was working overtime because [his City supervisor] had the
ability to investigate whether or not [the officer] was truthfully filling out
the City’s payroll forms, we would essentially be stating that the City did
not have the right to require an employee to adhere to its procedures for
claiming overtime.
Id. The issue was not if the officer’s City supervisor “could have known that [the
officer] was working overtime hours,” but “whether he should have known.” Id.
In light of the fact that [his City supervisor] explicitly ordered [the
officer] not to work overtime and in light of the fact that [the officer]
admits that he never demanded payment for overtime already worked, it
is clear that access to information regarding the Task Force’s activities,
standing alone, is insufficient to support the conclusion that the City
should have known that [the officer] was working overtime.
Id. Therefore, the evidence did not “support [the officer’s] contention that the City
should have known that the hours reported on his City time sheets were incorrect.” Id.
at 750.
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 8
The Ninth Circuit, in Forrester v. Roth’s I.G.A. Foodliner, Inc., 646 F.2d 413,
414 (9th Cir. 1981), held that “where an employer has no knowledge that an employee
is engaging in overtime work and that employee fails to notify the employer or
deliberately prevents the employer from acquiring knowledge of the overtime work, the
employer’s failure to pay for the overtime hours is not a violation of [the FLSA].”
Elaborating on this principle, the court stated, “[t]he relevant knowledge is not ‘I know
that the employee was working,’ but ‘I know the employee was working and not
reporting his time.’” Raczkowski v. TC Const. Co., Inc., 8 F.3d 29 (table), 1993 WL
385483, at *1 (9th Cir. 1993) (citing Forrester).
The plaintiff in Forrester knew he had to report overtime on his time sheet and
that his employer regularly paid reported overtime. 646 F.2d at 414. He was paid for
the overtime he reported and he admitted that had he reported the additional overtime
hours that were the subject of his lawsuit that he would have been paid for those hours
too. Id. The court ruled:
An employer must have an opportunity to comply with the provisions of
the FLSA. This is not to say that an employer may escape responsibility
by negligently maintaining records required by the FLSA, or by
deliberately turning its back on a situation. However, where the acts of
an employee prevent an employer from acquiring knowledge, here of
alleged uncompensated overtime hours, the employer cannot be said to
have suffered or permitted the employee to work in violation of [the
FLSA].
Id. at 414-15.
Finally, we have held, in an unpublished opinion, that:
At the end of the day, an employee must show that the employer knew
or should have known that he was working overtime or, better yet, he
should report the overtime hours himself. Either way, the employee bears
some responsibility for the proper implementation of the FLSA’s
overtime provisions. An employer cannot satisfy an obligation that it has
no reason to think exists. And an employee cannot undermine his
employer’s efforts to comply with the FLSA by consciously omitting
overtime hours for which he knew he could be paid.
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 9
Wood v. Mid-America Mgmt. Corp., 192 F. App’x 378, 381(6th Cir. 2006).
2.
Under the FLSA, if an employer establishes a reasonable process for an
employee to report uncompensated work time the employer is not liable for non-payment
if the employee fails to follow the established process. See Hertz, 566 F.3d at 781-82;
Newton, 47 F.3d at 749-50; Forrester, 646 F.2d at 414-15. When 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. See Hertz, 566 F.3d at 781-82; Newton, 47 F.3d at 749-50; Forrester,
646 F.2d at 414-15. See also Raczkowski, 8 F.3d 29 (table), 1993 WL 385483, at *1;
Wood, 192 F. App’x at 381.
Each time White followed Baptist’s procedures for being compensated for
interrupted meal breaks or for payroll errors she was compensated. But now White
states she decided not to follow Baptist’s procedures for being compensated for
interrupted meal breaks and argues that Baptist violated the FLSA for not compensating
her for interrupted meal breaks. White occasionally told her supervisors that she was not
getting her meal breaks. But she never told her supervisors that she was not being
compensated for missing her meal breaks. Accordingly, there is no way Baptist should
have known she was not being compensated for missing her meal breaks. Therefore, her
claims fail.
White cites a number of cases to advance her position that Baptist should have
known she was working during her meal breaks despite its reporting system. However,
these cases involved situations where the employer prevented the employees from
reporting overtime or were otherwise notified of the employees’ unreported work. See,
e.g., Kuebel v. Black & Decker Inc., 643 F.3d 352, 356-57 (2d Cir. 2011) (employer did
not allow the employee to report overtime); Chao v. Gotham Registry, Inc., 514 F.3d
280, 283-84, 287-91 (2d Cir. 2008) (employer had “full knowledge” that its employees
were working overtime and failed to compensate them); Allen v. Bd. of Pub. Educ., 495
F.3d 1306, 1316 (11th Cir. 2007) (employer prevented the employee from reporting
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 10
overtime hours); Pabst v. Okla. Gas & Elec. Co., 228 F.3d 1128, 1131 (10th Cir. 2000)
(dispute revolved around whether all scheduled “on-call” time for technicians could
constitute overtime or only time when they were called into work); Reich v. Dep't of
Conservation & Natural Res., 28 F.3d 1076, 1083-84 (11th Cir. 1994) (employer had
constructive knowledge when supervisors were “specifically instructed” to “closely
monitor” hours to ensure compliance with the no overtime policy and when the employer
knew that the monitoring was not being done based on a previous study); Mumbower v.
Callicott, 526 F.2d 1183, 1188 (8th Cir. 1975) (with the employer’s knowledge, the
employee was never relieved for a meal break and always had to eat her meal while she
worked); Brennan v. Gen. Motors Acceptance Corp., 482 F.2d 825, 827 (5th Cir. 1973)
(employer discouraged employees from reporting overtime); Burry v. National Trailer
Convoy, Inc., 338 F.2d 422, 425-27 (6th Cir. 1964) (employer knew the employee’s time
sheets were inaccurate).
Here, there is no evidence that Baptist discouraged employees from reporting
time worked during meal breaks or that they were otherwise notified that their
employees were failing to report time worked during meal breaks. White alleges that
Baptist only allowed her to use the exception log when she missed her entire meal break.
However, the district court correctly disregarded this assertion because it came from a
post-deposition declaration that contradicted her earlier deposition testimony, which
indicated that she had entered partially missed meal breaks in the exception log. Under
Cleveland v. Policy Mgt. Sys. Corp., 526 U.S. 795, 806 (1999), “a party cannot create
a genuine issue of fact sufficient to survive summary judgment simply by contradicting
his or her own previous sworn statement (by, say, filing a later affidavit that flatly
contradicts that party’s earlier sworn deposition) without explaining the contradiction
or attempting to resolve the disparity.” “A directly contradictory affidavit should be
stricken unless the party opposing summary judgment provides a persuasive justification
for the contradiction.” Aerel, S.R.L. v. PCC Airfoils, L.L.C., 448 F.3d 899, 908 (6th Cir.
2006) (citations omitted). White did not offer an explanation for the contradiction.
Accordingly, the district court rightly ignored White’s new position in her post-
deposition declaration.
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 11
Baptist established a system to compensate its workers for time worked during
meal breaks. When White utilized the system she was compensated and when she failed
to use the system she was not compensated. Without evidence that Baptist prevented
White from utilizing the system to report either entirely or partially missed meal breaks,
White cannot recover damages from Baptist under the FLSA.
B.
Section 216(b) of the FLSA allows similarly situated employees to recover
compensation from their employer in “opt-in” class action litigation. 29 U.S.C.
§ 216(b). See also Comer v. Wal-Mart Stores, Inc. 454 F.3d 544, 546 (6th Cir. 2006).
District courts determine whether plaintiffs are similarly situated in a two-step process,
the first at the beginning of discovery and the second after all class plaintiffs have
decided whether to opt-in and discovery has concluded. Comer, 454 F.3d at 546.
District courts use a “fairly lenient standard” that “typically results in conditional
certification of a representative class” when determining whether plaintiffs are similarly
situated during the first stage of the class certification process. Id. at 547 (citation and
internal quotation marks omitted). Here, the district court applied the fairly lenient
standard at the first stage and conditionally certified a class of Baptist employees.
At the second stage of the class certification process, district courts apply a
“stricter standard” and more closely examine “the question of whether particular
members of the class are, in fact, similarly situated.” Id. Lead plaintiffs “bear the
burden of showing that the opt-in plaintiffs are similarly situated to the lead plaintiffs.”
O’Brien, 575 F.3d at 584 (citation omitted).
White bears the burden of showing that she and the opt-in plaintiffs are similarly
situated. However, the district court properly dismissed her FLSA claim. Therefore,
“[w]ithout a viable claim, [White] cannot represent others whom she alleged were
similarly situated.” In re Family Dollar FLSA Litigation, 637 F.3d 508, 519 (4th Cir.
2011). Just as opt-in plaintiffs are not similarly situated to a lead plaintiff if their claims
are dismissed, O’Brien, 575 F.3d at 586, a lead plaintiff cannot be similarly situated and
represent opt-in plaintiffs without a viable claim. In re Family Dollar FLSA Litigation,
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 12
637 F.3d at 519. Since White cannot meet her burden that she is similarly situated to the
opt-in plaintiffs because her FLSA claims were dismissed, decertification was proper.
AFFIRMED.
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 13
_________________
DISSENT
_________________
KAREN NELSON MOORE, Circuit Judge, dissenting. At the heart of this case
is the following simple fact: During her time as a nurse in the Baptist Hospital
Emergency Room, White would occasionally work through lunch, either partially or
entirely, and not receive compensation for that time. The defendants (collectively,
“Baptist”) do not appear to dispute this claim factually, but blame White for failing to
report the missed lunch on an exception log used by her department. The district court
granted summary judgment in favor of Baptist because White had presented no evidence
that Baptist knew or should have known that she was working through lunch without
compensation in violation of the Fair Labor Standards Act (“FLSA”). This is contrary
to the record, which contains evidence from which a jury could find that Baptist had
actual knowledge that White was working without compensation, namely, her deposition
testimony that she had recorded missed lunches on the exception log and was not
compensated for that time. Despite this evidentiary record, which we must view in
White’s favor on summary judgment, the majority affirms. I cannot agree, and I
therefore respectfully dissent.
The law is clear that an employer with actual or constructive knowledge that an
employee is working without compensation violates the Fair Labor Standards Act
irrespective of whether the employee has properly reported that time. Summary
judgment in these cases is exceedingly rare, because an employer’s knowledge of unpaid
work often turns on disputed issues of fact.1 The district court and now the majority err
by relying primarily on cases analyzing evidence of constructive knowledge, which
frequently do consider a plaintiff’s own failure to report hours, without first considering
1
Baptist itself seems to be aware that the district court’s decision is against the great weight of
the case law, devoting only the last six pages of its seventy-page brief to the propriety of summary
judgment (and spending two of them on a strained waiver argument). Baptist at one point even calls the
district court’s conclusion that Baptist lacked knowledge of White’s work a “fact-specific finding,”
Appellee Br. at 29, which is inherently inappropriate on summary judgment.
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 14
the evidence in support of actual knowledge. Because the plaintiff here has set forth
evidence of actual knowledge of her work, summary judgment on this basis was
inappropriate.
The parties generally agree on the relevant legal standard. To establish a prima
facie claim under the FLSA for unpaid time, the plaintiff must show “by a
preponderance of evidence that he or she performed work for which he or she was not
properly compensated.” Myers v. Copper Cellar Corp., 192 F.3d 546, 551 (6th Cir.
1999) (internal quotation marks and alterations omitted). “Work not requested but
suffered or permitted is work time” if “[t]he employer knows or has reason to believe
that [the employee] is continuing to work.” 29 C.F.R. § 785.11. The responsibility for
maintaining accurate records regarding when an employee is working at all times falls
on the employer. 29 U.S.C. § 211(c) (requiring that employers “shall make, keep, and
preserve” records of every employee’s hours); see also 29 C.F.R. § 516.2(a). As Judge
Friendly once put it long ago:
The obligation [to pay overtime under the FLSA] is the employer’s and
it is absolute. He cannot discharge it by attempting to transfer his
statutory burdens of accurate record keeping and of appropriate
payment[] to the employee. The employer at its peril had to keep track
of the amount of overtime worked by those of its employees . . . .
Caserta v. Home Lines Agency, Inc., 273 F.2d 943, 946 (2d Cir. 1959) (internal
quotation marks, alterations, and citations omitted).
An employer is not required to use time-sheets to assure accurate reporting of
hours and may institute a policy of automatically deducting a lunch period from an
employee’s compensation. See Hill v. United States, 751 F.2d 810, 811 (6th Cir. 1984),
cert. denied, 474 U.S. 817 (1985). However, the implementation of such a policy does
not shift the burden onto the employee to ensure accurate reporting of hours or alleviate
the employer’s obligations to pay for time actually worked under the FLSA:
[I]t is the duty of the management to exercise its control and see that the
work is not performed if it does not want it to be performed. It cannot sit
back and accept the benefits without compensating for them. The mere
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 15
promulgation of a rule against such work is not enough. Management
has the power to enforce the rule and must make every effort to do so.
29 C.F.R. § 785.13; see also Wage & Hour Div., U.S. Dep’t of Labor, Opinion Letter,
FLSA2007-1NA, at *1 (May 14, 2007) (implementation of automatic pay deduction for
lunch breaks “does not violate the FLSA so long as the employer accurately records
actual hours worked, including any work performed during the lunch period” (emphasis
added)); Wage & Hour Div., U.S. Dep’t of Labor, Fact Sheet #53, at *3 (July 2009)
(“When choosing to automatically deduct 30-minutes per shift, the employer must
ensure that the employees are receiving the full meal break.”).
The mere existence of a policy requiring an employee to inform management of
a missed break does not relieve an employer from its obligation to provide compensation
for that time. See Wage & Hour Div., U.S. Dep’t of Labor, Opinion Letter, FLSA2008-
7NA, at *1-2 (May 15, 2008) (an employer “must compensate the employee for all hours
worked including the time worked during the missed meal period,” even if the
“employee fails to take a meal break and does not notify the manager” in direct violation
of company policy). See also Reich v. Dep’t of Conservation and Natural Res., Ala., 28
F.3d 1076, 1083 (11th Cir. 1994) (“There is no indication in the record that the
Department did anything . . . to discourage the overtime required by the vast majority
of its officers to properly perform their duties other than to promulgate its policy against
such work.”). When an employer automatically deducts pay for lunch, particularly in
an environment like an understaffed emergency room where the record suggests that it
may be difficult to take an uninterrupted lunch break let alone a break at all, the
employer should do more than simply point to a policy against such practices to escape
responsibility. The employer must pay its employees for any missed or interrupted lunch
break the employer knows or should have known the employee was not taking, even if
the employee failed to report the missed break.
The cases consistently confirm this principle: An employer must pay its
employees for any time the employer knows or should have known the employee is
working, even if the employee fails to report the work. See Kuebel v. Black & Decker
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 16
Inc., 643 F.3d 352, 363 (2d Cir. 2011) (“[O]nce an employer knows or has reason to
know that an employee is working overtime, it cannot deny compensation simply
because the employee failed to properly record or claim his overtime hours.”); Chao v.
Gotham Registry, Inc., 514 F.3d 280, 288 (2d Cir. 2008) (Sotomayor, J., joining) (“An
employer who has knowledge that an employee is working, and who does not desire the
work be done, has a duty to make every effort to prevent its performance. This duty
arises even . . . where the employee fails to report his overtime hours.” (citations
omitted)); Pabst v. Okla. Gas & Elec. Co., 228 F.3d 1128, 1133 (10th Cir. 2000) (“To
claim, then, that [the employer] did not know [the employees] were working because
they did not report every hour of their evenings and weekends as overtime is
misleading.”); Holzapfel v. Town of Newburgh, 145 F.3d 516, 524 (2d Cir.) (“[O]nce an
employer knows or has reason to know that an employee is working overtime, it cannot
deny compensation even where the employee fails to claim overtime hours.”), cert.
denied, 525 U.S. 1055 (1998).
Whether an employer has actual or constructive knowledge of unpaid work is a
question of fact. Holzapfel, 145 F.3d at 521. As such, it is ill-suited for resolution on
summary judgment when the evidence is genuinely in dispute. See Curry v. Scott,
249 F.3d 493, 508 (6th Cir. 2001) (holding district court erred in determining defendants
had no actual knowledge on summary judgment because inquiry “should have been left
to the trier of fact”). For this reason, summary judgment is routinely reversed for the
precise reasons used by the district court and the majority in this case. Kuebel, 643 F.3d
at 365 (reversing summary judgment); Brown v. Family Dollar Stores of Ind., LP,
534 F.3d 593, 596-97 (7th Cir. 2008) (same); Allen v. Bd. of Pub. Educ. for Bibb Cnty.,
495 F.3d 1306, 1321 (11th Cir. 2007) (same); Pabst, 228 F.3d at 1133 (same).
The majority distinguishes these cases by arguing that summary judgment is
affirmed in other circuits when a plaintiff fails to report her hours under an established
system for doing so. But the majority misses the mark; these cases all involve only an
attempt to prove constructive knowledge, not actual knowledge, and when so viewed
they actually support the general principle of denying summary judgment when there is
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 17
evidence in the employee’s favor. See Hertz v. Woodbury Cnty., 566 F.3d 775, 782 (8th
Cir. 2009) (upholding jury verdict of no actual knowledge of overtime work and no
constructive knowledge because no evidence that hours of field officers were being
under-reported or that officers were discouraged from using the overtime system);
Newton v. City of Henderson, 47 F.3d 746, 748-49 (5th Cir. 1995) (reversing bench trial
because no actual knowledge that undercover officer with irregular, off-site hours was
working overtime, and the City’s mere access to information that could show such
information was insufficient without more); Davis v. Food Lion, 792 F.2d 1274, 1277-78
(4th Cir. 1986) (holding no clear error in bench-trial finding of no actual or constructive
knowledge when overtime-prohibition policy was regularly enforced through reprimands
and discipline, overtime work was unnecessary for job performance, and the employee
then deliberately concealed his overtime work despite being warned to stop).
It is important to be clear about the relevance of an employee’s failure to report
time worked in these cases. An employee may not voluntarily decline compensation for
time worked. See Tony & Susan Alamo Found. v. Sec’y of Labor, 471 U.S. 290, 302
(1985) (“[T]he purposes of the [FLSA] require that it be applied even to those who
would decline its protections.”). No court has held that failing to report hours can defeat
a claim under the FLSA where the employer had actual knowledge of the work
performed. Holding otherwise would be akin to holding that an employee may waive
FLSA protections by not reporting time her employer knows about, which would defeat
the very purposes of the FLSA and be contrary to direct Supreme Court precedent.
Barrentine v. Ark.-Best Freight Sys., Inc., 450 U.S. 728, 740 (1981) (noting FLSA rights
cannot be waived); see also Allen, 495 F.3d at 1321 (“[E]ven if these Plaintiffs did not
inform their supervisors that they were not recording their hours, a jury could still charge
the Board with constructive knowledge.”).
An employee’s failure to report extra hours can be relevant to rebutting a claim
of constructive knowledge in cases where an employer’s ability to unearth the
employee’s extra work would otherwise be difficult through reasonable diligence. For
example, when an employee works offsite or stays late without telling his employer, and
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 18
there is a complete lack of evidence that would suggest to his employer that he was
doing this work (i.e., he reported overtime in the past, his normal duties do not require
overtime, other coworkers do not work overtime, no one ever saw him working late,
etc.), the employee’s suggestion that his employer should have known he was working
falls flat. In such situations, asking the employee to tell the employer he is working
makes sense. But the employee’s failure to report remains just one piece of
circumstantial evidence suggesting a lack of constructive knowledge; an employer who
sees his employees working late or who pressures employees not to report hours may not
be as credible in relying on the employee’s reporting failures. See Reich, 28 F.3d at
1083-84 (holding employer had constructive knowledge of overtime despite policy and
irregular off-site hours because employer could have acquired actual knowledge of work
through the exercise of reasonable diligence); see also Allen, 495 F.3d at 1321; Brennan
v. Gen. Motors Acceptance Corp., 482 F.2d 825, 827 (5th Cir. 1973).
In the rare case that affirms summary judgment for the employer (only two
published opinions have done so to my knowledge), the evidence of actual knowledge
is completely absent and the evidence suggesting constructive knowledge is a mere
scintilla at best. In Forrester v. Roth’s I.G.A. Foodliner, Inc., 646 F.2d 413, 414-15
(9th Cir. 1981), the Ninth Circuit affirmed summary judgment for the employer because
the employee had failed to report overtime hours and there was no evidence the
employer should have known of the work. Forrester does broadly suggest that “where
the acts of an employee prevent an employer from acquiring knowledge, . . . the
employer cannot be said to have [committed a violation of the FLSA].” Id. at 414-15.
But this language must be read in context, however, because Forrester also reaffirms
that “[a]n employer who is armed with [knowledge of his employee’s work] cannot stand
idly by and allow an employee to perform overtime work without proper compensation,
even if the employee does not make a claim for the overtime compensation.” Id. at 414.
The other published opinion has already been mentioned—in Allen, the Eleventh
Circuit affirmed summary judgment for some plaintiffs despite reversing for others.
Allen, 495 F.3d at 1323. Summary judgment was affirmed against three plaintiffs who
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 19
had presented no evidence that their employer had actual knowledge of their overtime
and insufficient evidence of constructive knowledge: one plaintiff stayed late without
being asked and without telling anyone, another performed work at home without telling
anyone, and the third had simply alleged that “there must have been time” that went
unreported despite testifying that she never worked off the clock. Id. at 1323.
However, although summary judgment was affirmed against those three
plaintiffs, the Eleventh Circuit in Allen simultaneously reversed summary judgment
against other plaintiffs who also never informed their supervisors that they were working
overtime. One of these plaintiffs, Eleanor Welch, was never discouraged from reporting
her hours correctly, but the court noted that she presented evidence that her supervisor
“knew that she would be with the children all day without a break.” Id. at 1322. As a
result, the employer’s constructive knowledge was an issue of fact for trial and summary
judgment was inappropriate.
There are no published cases in our circuit addressing this issue. In an
unpublished opinion, we affirmed summary judgment for the employer for reasons
consistent with denying summary judgment here today. See Wood v. Mid-Am. Mgmt.
Corp., 192 F. App’x 378, 381 (6th Cir. 2006) (unpublished opinion). In Wood, the
employee regularly worked unsupervised as a maintenance technician at an apartment
complex. Id. at 378. He later sued for overtime of around five hours every day, but he
put forth no evidence that his employer had actual or constructive knowledge that he was
performing the extra after-hours work. Summary judgment was appropriate not solely
because the plaintiff had failed to report his extra hours, but because he presented no
evidence of actual knowledge and even less evidence to establish constructive
knowledge of those hours. The work did not need to be done after-hours, and when
Wood did suggest to a manager that he was working overtime, he was encouraged to
report all his time and was never discouraged from doing so. Id. at 380-81. Wood
reaffirms the general principle that an employer must have actual or constructive
knowledge of the uncompensated work, and constructive knowledge cannot be based on
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 20
conjecture alone. Id. at 381 (“An employer cannot satisfy an obligation that it has no
reason to think exists.” (emphasis added)).
Here, perhaps due to White’s own less-than-clear explanation of the evidence
establishing actual or constructive knowledge below, the district court appears to suggest
that an employee’s failure to report can generally relieve an employer of its obligation
to ensure accurate time reporting, regardless of other evidence suggesting actual or
constructive knowledge. The district court concluded that courts deny recovery “in
FLSA cases where an employee is aware of her employer’s system for reporting work
that falls outside the employee’s normal, forty-hour shift but fails to report that work.”
R. 258 (D. Ct. Order at 8) (Page ID #6499). The majority, without explanation or
support in the FLSA, adopts this broad exception to the traditional requirements of the
FLSA. The underlying principle is more nuanced than the broad brush the majority
applies to sweep away an otherwise valid claim for relief. At no point does Wood or any
of these cases suggest that an employer with actual knowledge of overtime can defeat
its obligations by pointing to incomplete time-sheets. There are no cases, on summary
judgment or otherwise, where an employee’s failure to report hours actually known to
be worked by the employer defeats a claim under the FLSA.
That leaves only the question of whether there is evidence of actual or
constructive knowledge on the record in this case. As an initial matter, there are several
facts that are undisputed. Baptist had a policy of automatically deducting pay for thirty
minutes from every shift over six hours. Baptist employees were instructed to take a
thirty-minute lunch break every day, and White acknowledged receipt of this
information upon starting at Baptist. R. 90-8 (White Dep. at 82-83) (Page ID #2665-66).
Baptist employees were instructed to report any instance when they were unable to take
a full, uninterrupted lunch break, and they were told they would be compensated or
permitted to take the break later. White testified that she knew how to report any partial
or missed lunch break—on an exception log in her department—and on several
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 21
occasions she used the log to report a missed lunch and successfully received her pay.2
Id. at 84-85 (Page ID #2667-68).
But there was also evidence suggesting that White was not compensated at all
for some missed lunch breaks, and that her employer had actual knowledge of the missed
break and failed to pay her for it.3 White testified that on previous occasions, she had
indicated a missed or interrupted break in the exception log and was not paid for it. Id.
at 86-87 (Page ID #2670). If believed by a jury, this evidence would constitute actual
knowledge of uncompensated work. Summary judgment was therefore improperly
granted on the basis of this disputed fact alone.4
Furthermore, the evidence of constructive knowledge here is also strong. White
testified at her deposition that she had once received a break of only fifteen or twenty
minutes and one of her supervisors, Sharon Fiveash, told her that counted as her lunch
break because “you got a bite.” Id. at 89-90 (Page ID #2673). She testified that she
complained about the missed lunch breaks directly to her supervisor, Chad Jones, and
to the ER director, and she even complained about it on her employee surveys. Id. at
107 (Page ID #2680). White admitted that her complaints were about the lack of a break
and not lack of pay, id. at 108 (Page ID #2681), but her supervisors knew she that was
working through lunch, knew that lunches were automatically uncompensated, and never
2
The parties spend a great deal of time debating White’s knowledge of how to record her time
properly and very little time on Baptist’s knowledge that she was failing to report properly. I agree with
the district court, however, that White’s deposition trumps her after-filed declaration and establishes that
she knew she could report any missed or interrupted break on the exception log. R. 258 (3/23/11 D. Ct.
Order 13-16) (Page ID #6504-07).
3
These facts distinguish this case from our recent unpublished opinion in Frye v. Baptist
Memorial Hospital, Inc., No. 11-5648, 2012 WL 3570657 (6th Cir. Aug. 21, 2012), where a different
plaintiff was also attempting to bring a class action against Baptist for its system of automatically
deducting pay for lunch breaks. Although we made no ruling on the merits of the individual plaintiffs’
FLSA claims in that suit, id. at *4, resolving the appeal on other grounds, we also observed that the lead
plaintiff “abandoned his only evidence” on the issue of whether Baptist had knowledge of the deficiencies
in its reporting system, id. at *6.
4
As the holder of the payroll records, Baptist could have easily responded to White’s statement
with a list of all times White completed the exception log and her payroll records demonstrating the
inaccuracy of her testimony. Instead, Baptist provided one exception log and evidence that White was
compensated that one time. Without the documentary evidence, Baptist is essentially asking this court to
make a credibility decision to disbelieve White’s statements, which is inappropriate on summary judgment.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
No. 11-5717 White v. Baptist Mem’l Health Care Corp., et al. Page 22
responded to White’s complaints by asking her to make sure she signed the exception
log for the missed break.5 A reasonable juror could interpret these actions as pressure
from White’s immediate supervisors not to report her missed lunches, which at a
minimum would constitute constructive knowledge of the unpaid time. See Brennan,
482 F.2d at 827-28.
Baptist’s decision to use an automatic-deduction and self-reporting system for
missed breaks is permissible, but the consequences of an employee’s failure to report a
missed break still fall on the employer, not the employee. Unlike many of the above-
cited cases, White performed all her work in a hospital on an emergency-room floor
surrounded by Baptist employees and was under active supervision by either a charge
nurse or some other supervisor at all times. White has met her burden of presenting
evidence from which a jury could find that her employer knew or should have known
that she was missing lunches and not receiving pay (or potential overtime). Whether the
discouragement White received from her supervisors was truly not about seeking pay for
that missed break is not resolvable on summary judgment. For all of these reasons, I
respectfully dissent.
5
By way of example, in other Baptist departments the employees were presented with a copy of
the exception logs for each pay period and asked to review their entries and sign to attest to the record’s
accuracy. R. 233-1 (Defs.’ Mot. to Decertify at 7) (Page ID #5046). Other Baptist employees who told
their supervisors they missed lunches were immediately instructed to record the missed lunch on the
exception log. See id. at 22, 25, 33 (Page ID #5061, 5064, 5072). See e.g., Wood, 192 F. App’x at 381
(employee instructed to report extra hours when reported to management). Baptist could have presented
such evidence of similar behavior in White’s department to support its motion for summary judgment, but
did not.