Your assistant sends you an email late in the evening (way after the 5:00 hour) and reminds you that you have an appointment in the morning. You respond: “Thanks for the reminder. Could you please make sure that I have everything I need in time for the appointment?” Your assistant—being an eager beaver—spends the next few hours looking over the information delivered to you at 2:00 that afternoon to make sure that there are no mistakes and that you are prepared. Several hours later, after reviewing all the information, your assistant emails you to let you know that you are ready to go. This situation happens often, but you think nothing of it. Problem? Yes, according to the Fifth Circuit, you may have suffered or permitted this employee to work, converting the after-hours time into compensable working time.

Fifth Circuit Ruling on After-Hours Work

In a recent case from the Fifth Circuit for the United States Court of Appeals, the court held that an employer should or should have known that an employee was working long hours beyond his regular schedule while responding to emails or returning voice mails during his hour-long commute home. This ruling came despite the parties’ agreement that the employee was paid for all the hours worked he reported to his employer and that the employer had a policy requiring employees to report all hours worked.

Employee’s Claim and Court’s Decision

The employee, a production manager[1], asserted that he received approximately 250 work-related emails in a day and that he would sort through the emails to determine which ones needed his immediate attention and which ones he could handle later when he logged onto the company’s computer that evening. When he responded to the emails, he would copy the company’s upper management team, including his direct supervisor and the general manager. In addition to the emails, the employee claimed that he spent many hours (off the clock) returning phone calls and remotely logging onto the company’s camera system using the company-issued laptop computer to oversee shop productivity and new hires.

All was fine until the employee was terminated. He then filed suit under the Fair Labor Standards Act asserting that he was not paid for all hours worked and that the company owed him overtime. The Fifth Circuit agreed.

Employer’s Defense and Court’s Rejection

The employer argued that it should not be held liable for the employee’s overtime hours because it never told the employee to work after hours and never instructed him not to report his hours. While noting that an employer’s lack of authorization to work additional hours was a “factor,” it was not the determinative factor. Despite the employer having specific rules regarding reporting overtime hours and prohibiting working overtime without authorization, the Fifth Circuit was not persuaded. The court noted that an employer has a duty to enforce its policies and that an employer “cannot sit back and accept the benefits [of work performed] without compensating for them.”

Supervisor’s Testimony and Court’s Reasoning

The court relied heavily on the supervisor’s testimony in which he admitted that he was aware that the employee had worked hours for which he was not compensated. The supervisor, however, made no effort to advise Human Resources or payroll of this fact. (Keep in mind that knowledge to a supervisor is often knowledge to the employer.) The two had even commiserated that this was the “company’s way.” The court also pointed out that the employee had copied upper management on the late-night emails; therefore, they “knew or should have known” that the employee was working outside of normal working hours.

Key Takeaways for Employers

What are the takeaways from this important decision?

• Train your supervisors on what is or is not compensable working time and to report anyone who may be working off the clock.

• Train your employees how to report off the clock work (there was evidence in this case that the employee did not have any such training).

• If you find that employees are logging in after hours and responding to emails, etc., put a stop to it immediately if you do not want to pay for the time doing so.

• Possibly cut off your nonexempt workers from their ability to access your computers remotely after hours.

[1] The opinion provides no information as to why this production manager should not have been exempt from overtime under the FLSA except to say that he was being paid “by the hour.” Almost all exemptions require an employee to be paid a set salary that is not subject to reduction due to the quantity or quality of work.