Like A Bad Neighbor, State Farm Doesn’t Pay Overtime?

In August 2010, former State Farm employee Lisa Nobles sued State Farm for allegedly violating the Fair Labor Standards Act (“FLSA”). Ms. Nobles, formerly a State Farm claims processor, asserts that she and other State Farm employees did not receive overtime compensation required by law. Recently, a federal judge in Missouri denied State Farm’s Motion for Summary Judgment. Thus, this case will be moving forward to trial (unless a settlement is reached between the parties before the trial commences, which often happens).

The judge’s denial of State Farm’s motion highlights many important aspects of modern FLSA litigation, especially about the role records of hours worked play in wage and hour suits. For example, as the court noted, the Department of Labor–the federal agency tasked with enforcing the FLSA–has issued a regulation which requires employers to record the hours their employees work each workday and, for overtime eligible employees, each workweek. That is, unless the employees have a fixed schedule. When employees have a fixed schedule, their employer must either (1) affirmatively indicate is some way that the fixed daily or weekly schedule was followed (for instance, by placing a check mark on an employee’s weekly hours record) or, when the fixed schedule is deviated from, (2) indicate the exact amount of hours the employee worked.

However, though the Department of Labor has issued this regulation regarding the recording of employee hours worked, as the court noted, there is no private right of action to sue for alleged recordkeeping violations under the FLSA. That is, employees cannot sue their employers simply for failing to keep proper records. Still, this does not mean that an employer’s failure to keep proper records will go completely unpunished: the court described how evidence of an unlawful recordkeeping can corroborate the willfulness of an employer’s failure to compensate for overtime. (When an employer willfully violates the FLSA, the period of recovery for unpaid wages extends from two years to three years, thus requiring an offending employer to pay a higher amount of damages.)

Also, if an employer fails to keep proper records of hours worked, it will be more difficult for them to rebut an employee’s claim that they were not compensated properly for all hours worked. If an employer keeps no records or inaccurate records of an employee’s work time, it is up to the employee to articulate, as a matter of just and reasonable inference, the amount of time they worked. An employee can meet this burden by simply stating, based solely on their recollection, the number of hours that he or she worked on a daily or weekly basis, on average. If the employee’s burden is met, then it is up to the employer to show that the hours calculation is unreasonable or to refute the calculation with specific evidence. In absence of accurate records, it is an uphill climb for an employer to refute an employee’s reasonable hours calculation.

For more information about the recording-keeping provisions of the FLSA, see this U.S. Department of Labor factsheet about the topic.

If you are working “off the clock” or working overtime hours without being paid overtime wages, you should contact a St. Louis overtime attorney.