Margaret White v. Baptist Memorial Health Care Co.

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

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MARGARET WHITE, on behalf of herself and

Plaintiff-Appellant, --

all others similarly situated,

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No. 11-5717

,

>

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v.

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BAPTIST MEMORIAL HEALTH CARE

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CORPORATION; BAPTIST MEMORIAL

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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.*

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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

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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

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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.