California Class Actions: Great Decision in “Off-The-Clock” Claim

Published: July 30, 2014

A recent California Court of Appeal upheld the trial court’s order granting defendant’s pre-certification motion for summary judgment against off-the-clock class claims made by the named plaintiff in a putative class action. The case is named Jong v. Kaiser Foundation Health Plan, Inc., Case No. A138725, ___ Cal. App. 4th __, (Cal. App. 1st Dist. 5/20/2014) (Jong). Jong is welcome news for California employers.

In 2012, the named plaintiff brought a class action with two other former employees, claiming they regularly worked off-the-clock. This is a fairly prevalent claim here in California. The trial court granted summary judgment prior to class certification and dismissed the claims. Plaintiff appealed.

The appellate court, as they should, placed great weight on the plaintiff’s own admissions during his deposition. There, he admitted that (1) he was aware of the employer’s policy to pay for all hours worked; (2) he knew how to use the employer’s timekeeping system; (3) he was aware that the employer paid for all overtime hours recorded, even if not approved by supervisors; (4) he kept no record of the alleged off-the-clock hours worked; (5) he did not know whether any manager was aware of his alleged off-the-clock work; and (6) he never made a request to work or be paid for the alleged off-the-clock work.

Faced with these admissions, the Plaintiff went to the common argument that his employment position was such that he was pressured to stay within labor budget. He said this caused the “unenviable dilemma” of choosing to “maintain his accountability and avoid the imposition of discipline” or report all his hours worked. Despite his admissions, he said he chose the later.

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). The Court specifically noted that the Forrester standard applied to state law claims. White v. Starbucks Corp., 497 F. Supp. 2d 1080, 1083 (N.D.Cal. 2007) (White). Forrester is “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. Insert California Labor Code wherever you see “FLSA” and you can see the Court’s rationale.

The Court applied the above standard to the Plaintiff’s admissions and reasoned that the Plaintiff had no disputed facts that could demonstrate liability of the employer for the alleged off-the-clock work. The Court rejected 18 of the plaintiff’s fellow employees, finding they were largely irrelevant because they did not show that the employer was on notice that he was performing off-the-clock work, contrary to the employer’s policy, practice and expectation.

This decision is extremely helpful in clarifying 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. Jong leads the way in showing that in order to be successful in defeating off-the-clock claims the employer should be able to show that it has a policy authorizing all hours worked to be reported, did not have a practice that was different from the stated policy, the employer paid for all hours recorded, and supervisors were not aware of off-the-clock work. In those instances, Jong gives employers a strong framework for summary judgment motions being granted in their favor against off-the-clock claims.

The case is Jong v. Kaiser Foundation Health Plan, Inc., Case No. A138725, ___ Cal. App. 4th __, (Cal. App. 1st Dist. 5/20/2014). Read it here. http://www.courts.ca.gov/opinions/documents/A138725.PDF