Employer That Edited Overtime Records Liable for FLSA Violations

The Eleventh Circuit last month affirmed the basic principles of the Fair Labor Standards Act (FLSA) by denying an employer’s attempt to blame its employee’s conduct for the employer’s violation of overtime wage laws.

The case, Bailey v. TitleMax of Georgia, involved an FLSA overtime claim brought by an employee of the defendant. The plaintiff worked at TitleMax for approximately one year. During this time, the employee routinely worked off the clock at the direction of his supervisor, who erroneously asserted that the company did not pay overtime. Additionally, the supervisor also edited time records to underreport the hours the plaintiff worked. These practices resulted in overtime hours the employee worked but was not paid for.

The plaintiff brought a claim under the FLSA in federal court for unpaid overtime wages. In response to the lawsuit, the defendant contended that the employee’s violations of company policy absolved it from liability. The company adopted internal policies that required employees to accurately report their hours, regularly verify their hours, and report any problems at work to their supervisors or higher-level managers. Since the employee violated these policies, the defendant argued that it should be absolved from liability pursuant to a legal theory that prevents plaintiffs from recovering if they bear responsibility for their own injuries. The district court granted summary judgment for the defendant under this theory.

By design, proving an overtime claim under the FLSA is relatively simple. Plaintiffs must prove that they worked unpaid overtime and that the employer knew or should have known of the overtime work. The Court of Appeals noted that the plaintiff had clearly proven these elements, since there was no dispute that the employee worked overtime and that the supervisor knew about it. Yet the trial court granted summary judgment based on the defendant’s novel argument.

The Court of Appeals rejected that argument for several reasons. Most importantly, the defendant’s argument failed because knowledge of the FLSA violations was imputed to the company. The supervisor knew of — and, in fact, participated in — the FLSA violations.

In short, as long as the employer knows of the overtime violations, an employee’s violation of internal company policy will not act as a complete bar to an FLSA overtime claim.

The court also noted that the defendant’s argument is contrary to the purpose of the FLSA, which is to protect employees who may not have the same bargaining power as employers. Allowing a defendant to escape its overtime obligations by simply pointing to a violation of company policies would be undermine the very purpose of the law.

If you are owed overtime wages, your employer cannot deprive you of those wages simply because you may have violated company policy, especially if the policy in question is related to your overtime. The Atlanta employment law attorneys at Parks, Chesin & Walbert can help you get the back wages to which you are legally entitled. To schedule a free and confidential consultation, call us at 404-873-8048.

Who Wins in Overtime?, January 7, 2015

Waiving Overtime Rights, January 2, 2013