A Sunny "Off-The-Clock" Result For Golden State Employers

A California Court of Appeal in Jong v. Kaiser Foundation Health Plan, Inc., Case No. A138725, ___ Cal. App. 4th __,  (Cal. App. 1st Dist. 5/20/2014) (Jong) recently upheld the trial court’s grant of the defendant’s pre-certification motion for summary judgment against California law off-the-clock claims made by the named plaintiff in a putative class action.  Jong is a very favorable result for employers, and is notable for several reasons.

The named plaintiff, a former Outpatient Pharmacy Manager (OPM), brought a putative class action suit in 2012 along with two other former OPMs against Kaiser, claiming that they regularly worked off-the-clock.  The trial court granted summary judgment against the named plaintiff’s claims, and he appealed.

In assessing the summary judgment ruling, the appellate court focused on the record evidence specifically applicable to the named plaintiff, which included deposition admissions that he:

(1)   was aware of the employer’s policy to pay for all hours worked;

(2)   was aware that the employer paid for all hours recorded, including overtime hours, regardless of whether prior approval for overtime work was obtained;

(3)   knew how to use the employer’s timekeeping system;

(4)   signed an attestation affirming that all of his work would be on-the-clock;

(5)   did not know whether any manager knew of his alleged off-the-clock work (significantly, plaintiff “proffered no ... evidence of conversations as to his [off-the-clock] working hours” with supervisors [emphasis supplied]);

(6)   kept no record of the alleged off-the-clock hours worked; and,

(7)   never made a request to work or be paid for overtime denied by the employer. 

Against this backdrop, the named plaintiff argued that the mere circumstances of his employment (pressure to stay within labor budget and unchanged duties post-reclassification) put him in the “unenviable” dilemma of choosing whether (i) to report all of his hours worked or (ii) to “maintain his accountability and avoid the imposition of discipline.” 

The Jong court applied the off-the-clock standard set forth in Forrester v. Roth’s I.G.A. Foodliner, Inc., 646 F.2d 413 (9th Cir. 1981) (Forrester), after noting that (i) the Forrester standard was assumed to apply to state law claims by both parties and the trial court (Judge Carvill of the Alameda County Superior Court), (ii) was actually applied to state law claims by White v. Starbucks Corp., 497 F. Supp. 2d 1080, 1083 (N.D.Cal. 2007) (White), and (iii) was implicitly endorsed in Morillion v. Royal Packing Co., 22 Cal.4th 575, 585 (2000) (Morillion).  Forrester 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].”  Forrester, 646 F.2d at 414.  Thus, “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. 

The Jong court then focused on the evidence (or lack thereof) squarely applicable to the named plaintiff’s off-the-clock claims – as the trial grant of the motion for summary judgment applied only to him – following White in this regard.  The fact that the named plaintiff was criticized (from a labor budget perspective) for overtime work was immaterial, given that he “proffered no evidence that his supervisors told him he could or should work off the clock or that he advised the supervisors that he would discontinue reporting his overtime hours rather than limiting the time he spent on the job.”  (Emphasis supplied.)  The Jong court also emphasized that mere pressure not to incur overtime labor costs is not sufficient to withstand summary judgment in an off-the-clock case.  Citing Davis v. Food Lion, 792 F.2d 1274, 1277-78 (4th Cir. 1986) (affirming grant of summary judgment where employer had no actual or constructive knowledge of a market manager’s off-the-clock work, despite the manager’s argument that the employer should have known of his off-the-clock work “because of the pressure put on market managers by the unrealistically stringent” scheduling system used by the market).

The Jong court also upheld the trial court’s finding that the deposition excerpts from 18 of the plaintiff’s fellow employees were insufficient to withstand the employer’s motion for summary judgment – although the court held that the employer’s objection to such evidence “is more properly characterized as irrelevance rather than hearsay,” because the named plaintiff’s testimony was already sufficient to create a triable issue of fact as to whether he worked more than 40 hours per week.  Such testimony was, nonetheless, insufficient to withstand summary judgment because the plaintiff did not present evidence that the employer was on notice that he was performing off-the-clock work, contrary to the employer’s policy, practice and expectation. 

The Jong court noted that its holding was in accord with Newton v. City of Henderson, 47 F.3d 746, 749-50 (5th Cir. 1995), in which the Fifth Circuit granted summary judgment against a plaintiff’s off-the-clock claim despite the fact that the plaintiff had been told not to work any overtime hours, in light of the absence of any evidence that the employer told the plaintiff not to record hours actually worked.  In such a situation, the employer has no reason to doubt the accuracy of the time reported by the plaintiff and thus has no actual or constructive knowledge that off-the-clock work was being performed.   

Finally, applying and citing with approval See’s Candy Shops, Inc. v. Superior Court, 210 Cal. App. 4th 889, 909 (2012), the Jong court approved the trial court’s rejection of evidence submitted by the named plaintiff that he was on-site prior to being paid (specifically, evidence that he had disarmed the alarm prior to the time he reported beginning work), because the plaintiff provided no evidence that he was working or subject to the control of the employer during such on-site but off-the-clock time.  Jong then underscored the importance, in the summary judgment context, of the plaintiff’s submission of admissible evidence of actual work performed off-the-clock.  Citing Reich v. Department of Conservation & Natural Resources, 28 F.3d 1076, 1083 (11th Cir. 1994) (“the Department had actual knowledge through the 1987 AMIP study that unreported overtime during deer hunting season [involving actual night-time patrolling by state conservation officers, off-the-clock] continued to be a substantial problem despite the Department’s 1985 written policy prohibiting all such work”)].)

Jong thus helpfully clarifies that, in order to obtain summary judgment against an off-the-clock claim, employers need not affirmatively prove that no off-the-clock work was performed, or that any off-the-clock work was performed in a clandestine manner, with the employee taking active steps to hide his or her efforts from the employer.  Where an employee (i) is expected and authorized to report all hours worked, (ii) is never told otherwise, (iii) is paid for all hours recorded, and (iv) attests to the accuracy of his or her own timecard submissions, Jong provides a strong argument that summary judgment should be granted in the employer’s favor against an off-the-clock claim brought under California law, just as under federal law.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.