Blame the employee” defense rejected by 11th Circuit

The 11th circuit has made it very clear that an employer who knew that an employee was underreporting their works hours cannot escape liability under the Fair Labor Standards Act claim.

The Fair Labor Standards Act (FLSA) requires employers to pay their employees for overtime. If an employer knew its employee underreported his hours, it cannot still assert equitable defenses based on the employee’s own conduct in underreporting as a total bar to the employee’s Fair Labor Standards Act claim.

Santonias Bailey was an employee of TitleMax, Georgia. He worked overtime hours for which he was not paid.  At the direction of his supervisor, who told him that TitleMax did not pay overtime, he regularly worked off the clock. The same supervisor also repeatedly edited Mr. Bailey’s time records to report fewer hours than he actually worked. Bailey eventually brought a lawsuit suit against TitleMax under the FLSA, which requires employers to pay their employees for overtime.

TitleMax argued and put the blame of unpaid overtime on Bailey. TitleMax insisted that Bailey was responsible for any unpaid overtime, because he could have complained about his supervisor, but he did not. Further, the company claimed that Bailey did not follow TitleMax’s policies for ensuring accurate time records. While the District Court agreed with the employer’s argument, the 11th circuit rejected it and reversed the summary judgment granted in favor of TitleMax.

The court held that in an employee’s unpaid overtime suit under the Fair Labor Standards Act (FLSA), where he underreported hours by working off the clock and his supervisor changed his time records to decrease the number of hours he reported, his claim survived because he worked overtime without pay and the employer knew or should have known he worked overtime. Further, the unclean hands and in pari delicto defenses did not bar the employee’s FLSA claim, because the supervisor’s knowledge could be imputed to the employer, making it liable for the FLSA violation, since an employer cannot invoke equitable defenses based on underreporting to bar an employee’s FLSA claim where the employer knew or had reason to know that its employee underreported his hours.