Company Not Liable When It Had No Reason To Believe Employee Was Working Overtime
KELLAR v. SUMMIT SEATING INC. (December 14, 2011)
Susan Kellar was promoted to a sewing manager at Summit Seating, a small vehicle-seat manufacturer, in 2004. She remained an hourly employee. Keller managed about eight employees and was responsible for making sure they had their equipment and instructions and that their work was completed on time. Shortly after she voluntarily resigned in 2009, she brought a Fair Labor Standards Act claim. She alleged that she regularly arrived at work 15-45 minutes early and that she used much of the time working (checking schedules, handing out materials, checking patterns, etc.). Her sister, another Summit employee who was frequently with her during those times, claims that Kellar did not work before her shift began. Keller admits that she never told Summit's owners that she was working prior to the beginning of her shift and that Summit had a written policy requiring preapproval for overtime. Magistrate Judge Nuechterlein (N.D. Ind.) granted summary judgment to Summit. Keller appeals.
In their opinion, Seventh Circuit Judges Evans (who, as a result of his death, took no part in the decision) and Williams and District Judge Conley affirmed, although on different grounds. Although the FLSA requires an employer to pay overtime when an employee works over 40 hours, the Portal-To-Portal Act exempts certain preliminary activities. The magistrate judge concluded that the exemption applied, but in doing so ignored Kellar’s own affidavit. He erred in doing so. Although she offered no additional evidence, her affidavit was sufficient to create an issue of fact with respect to the preliminary activities exemption. The Court also concluded that Kellar's work did not fit within the de minimis doctrine, which allows an employer to ignore otherwise compensable work if it only amounts to a few minutes. Keller asserts that she worked anywhere from 10-40 minutes a day before her actual shift began. That does not qualify as to minimus. In order to qualify for overtime, however, Keller must demonstrate that her employer had actual or constructive knowledge of her effort. The FLSA does require an employer to be reasonably diligent and oversee the work of its employees. Here, Summit had no reason to believe that Kellar was working overtime and is not liable for overtime payments under the FLSA.
Michael Rigney practices in the law offices of GVC Ltd. in Chicago. In this blog, he reports on select