Federal Court Judge Upholds Employer's Time Tracking Policies And Rejects Plaintiff's Claim For Alleged Unpaid Work

Reinforcing the importance of properly crafted and enforced work-time tracking policies, Judge  Michael Telesca of the Western District of New York recently dismissed the balance of a plaintiff’s claims in a lawsuit alleging failure to compensate non-exempt employees for all overtime hours. The Court based its decision on the employer’s strong time tracking policies and protocols. Kuebel v. Black & Decker (U.S.) Inc., 2010 U.S. Dist. LEXIS 46533 (W.D.N.Y. May 12, 2010).

The plaintiff in Kuebel was a retail specialist responsible for the stocking, pricing and display of Black & Decker products at six Home Depot stores. Id. at * 8-9. He alleged that his supervisors instructed him to “shave” his timesheets to reflect forty hours worked each week, regardless of how many he actually worked, in contravention of Black & Decker’s written policies regarding timekeeping. Id. at * 22-23. Based on the Court’s review of the claims and plaintiff’s records of hours worked, as  reflected by his timesheets, his calendar and his company-issued PDA, the Court granted summary judgment to Black & Decker. Id. at * 32-45. 

In analyzing the Defendant’s summary judgment motion, the Court considered whether Plaintiff had demonstrated the two “essential” components of his “off the clock” claim, namely “1) the amount of uncompensated work he actually performed and (2) that defendant had actual or constructive knowledge of the amount of time that plaintiff was working off-the-clock.” Id. at * 30. 

As to the first prong, evidence of the amount of uncompensated work, the Court held that plaintiff failed to demonstrate the inadequacy of Defendant’s time records (which would have entitled Plaintiff to a lesser burden of proof). Id. at * 30-32. The time records were thus an accurate record of Plaintiff’s overtime worked. And, the Court further reasoned that based on plaintiff’s own contradictory statements regarding the percentage of his timesheets which were allegedly inaccurate, plaintiff could not prevail even if entitled to the lower standard, which typically is available to Plaintiffs in FLSA cases only where the employer has failed to maintain accurate records of hours worked. Id. Thus, Plaintiff could not provide evidence of the amount of allegedly uncompensated work he had performed. Id.

Even if plaintiff was able to present evidence of uncompensated time, the Court stated no monies would be due since plaintiff could not meet the second prong of the test, in that he failed to demonstrate that the Defendant possessed “constructive knowledge” of his uncompensated work hours, despite his allegations that Defendant’s managers instructed him to underreport his time. Id

In an earlier opinion in the same case, the Judge had dismissed Plaintiff’s claims for alleged unpaid commuting time. Kuebel v. Black & Decker (U.S.) Inc., 2009 U.S. Dist. LEXIS 43846 (W.D.N.Y. May 18, 2009)(commute time up to 60 minutes to and from varying job sites not compensable under FLSA).   There, the Court held that despite the fact that Plaintiff’s initial “commute” could be to any one of his six assigned stores, Black & Decker’s policy of designating the first hour of that commute as non-compensable commuting time did not violate the FLSA. The Court did not reach the question of whether the entire commute was non-compensable, as Black & Decker treated commuting time in excess of the first hour as compensable.

Kuebel demonstrates that it is possible for an employer to obtain summary judgment on a claim for alleged unrecorded unpaid work time even where that employee is a “field” employee not under the employer’s roof and immediate supervision. It is essential for all employers to ensure that their timekeeping policies comport with applicable federal and state law, expressly prohibit “off the clock” work and clearly and unequivocally advise employees to report all hours worked. 

A Reminder Of The Importance Of Salary Basis Compliance

Often when analyzing whether a position is exempt, we only focus on whether the job duties are sufficient for exempt status. However, in most instances, there is a second requirement: compliance with the salary basis test.   A recent decision issued by Judge Larimer of the Western District of New York is a reminder to not overlook salary basis test compliance. Simply put, deductions from the salary of an exempt employee must be carefully monitored to ensure that they comply with the FLSA regulations and do not destroy the exemption. 

At issue in Scholtisek v. Eldre Corp., 2010 U.S. Dist. LEXIS 26664 (W.D.N.Y. Mar. 22, 2010) was evidence presented at the summary judgment stage that the employer “both engaged in an actual practice of making unlawful deductions, and maintained a policy that created a significant likelihood of such deductions [from the salary of exempt employees]”, and that such a practice and policy destroyed the plaintiffs’ exempt status, entitling them to overtime under the FLSA. The Court granted plaintiffs’ motion for summary judgment, based on documentary evidence and admissions from the HR professionals responsible for the company’s payroll which together demonstrated that there had been a policy of making partial day deductions from the salaries of exempt employees for missed work time, in contravention of 29 CFR § 541.602. Defendant was not entitled to the “window of correction” to remedy the error, because the window is available to correct payroll mistakes, not unlawful policies.

The Court did not rule as to the appropriate remedy for this violation, observing that “[o]n the record before me, however, the Court cannot determine as a matter of law during what periods those improper deductions did occur, the extent to which they occurred, exactly which employees or job classifications were affected by this practice, or the number of hours for which plaintiffs are entitled to overtime pay. The amount of damages therefore remains to be decided.” The Court will ultimately need to rule as to whether the exemption loss was limited to only those who were subject to an actual deduction and/or whether for the period of time for which the exemption was lost is limited only to those individual workweeks in which the deduction was taken.