Wednesday, May 11, 2011

Win some, lose some under FLSA

The Second Circuit splits the baby in a FLSA case where the plaintiff worked for Black and Decker and was denied certain overtime pay in connection with his work at Home Depot.

The case is Kuebel v. Black & Decker, decided on May 5. Keubel was responsible for setting up Black & Decker displays at Home Depo. He frequently worked overtime because he could not get all the work done in a 40 hour week. Since he worked out in the field, he had to use a Personal Digital Assistant to let management know when he came and went from Home Depot stores. You had to synch the PDA which bounced that information off satellites over to his superiors. He did that at home after work, along with other work-related matters that took up about 30 minutes to an hour each night.

Since Keubel did all this work at home, he wants compensation for his commute. He argues that these tasks were indispensable to his principal job activities, and his workday therefore began and ended at home and encompassed his morning and evening drives to the Home Depot outlets. Good try, but no cigar, the Court of Appeals (Parker, Livingston and Lynch) says. It is true, under Second Circuit precedent, that "periods of time between the commencement of the employee's first principal activity and the completion of his last principle activity on any workday must be included in the computation of hours" to which he is entitled to compensation. But ordinary commutes are not compensable under the FLSA, and "the fact that Kuebel performs some administrative tasks at home, on his own schedule, does not make his commute time compensable any more than it makes his sleep time or his dinner time compensable." Since plaintiff had flexibility in deciding when to complete his daily administrative responsibilities of checking email and voicemail and synching his PDA, among other tasks, he could have done this right before leaving work, as opposed to at night, when he got home. As company policy did not require him to do this immediately after returning home, he does not get any compensation for the commute.

On the other hand, Kuebel's complaint is reinstated on his claim that he was denied overtime for hours that he did not record on his time sheets. The district court rejected plaintiff's claim because he falsified his records to reflect that he did not work overtime and therefore could not prove his damages with precision. The problem with this reasoning is that, according to Keubel, his superiors told him to omit the overtime hours from his time sheets because the company did not want to pay overtime. They told him "you're only supposed to mark forty on your timecard because we can't afford overtime." Acknowledging the realities of life, in addition to the fact that companies cannot delegate their obligation under the FLSA to maintain accurate records of their employees' hours, the Second Circuit says:

At least where the employee’s falsifications were carried out at the instruction of the employer or the employer’s agents, the employer cannot be exonerated by the fact that the employee physically entered the erroneous hours into the timesheets. As the district court emphasized, Kuebel admits that it was he who falsified his timesheets, notwithstanding B&D’s official policy requiring accurate recordkeeping. But his testimony — which must be credited at the summary judgement stage — was that he did so because his managers instructed him not to record more than forty hours per week. He specifically testified that at company meetings and during discussions with one of his supervisors, it was conveyed to him that he was not to record overtime no matter how many hours he actually worked. In other words, Kuebel has testified that it was B&D, through its managers, that caused the inaccuracies in his timesheets.

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