United States: Illinois Appellate Court Reverses Certification In Off-The-Clock Case

With many of the most common sources of overtime claims being exhausted (e.g., assistant manager cases), plaintiffs are bringing off-the-clock cases in increasing numbers. While employers should certainly pay nonexempt employees for the hours they work, these claims are being asserted based on ever-more vague allegations. The benefit to the plaintiffs (or their attorneys) is clear: There are many more nonexempt employees than there are exempt ones, and such allegations can be used to sidestep records reflecting that the employees were paid for all hours worked.

Despite the rhetoric, these claims suffer from many practical and policy problems. From a policy perspective, most employers do have time-keeping systems and rely upon those systems to calculate the appropriate pay. Policies requiring employees to report off-the-clock time (or even requests for such time) are becoming more common. Having those systems undermined by anecdotal evidence of deviations makes it all but impossible for employers to avoid litigation. It does little to ensure compliance.

And then there is the problem of whether and how employees may be required to work overtime – or whether the claimed off-the-clock time is compensable at all. Commute time, time walking to a workstation within a plant or in many cases time spent in an employee locker room may not be compensable. And off-the-clock time may result from an employee working without the employer's knowledge, a request by a supervisor that is contrary to company policy, or misunderstandings between the employer and supervisor. A company policy discouraging overtime, for example, is generally intended to mean that employees work efficiently and complete their assigned tasks within a 40-hour workweek. Yet some employees, often those struggling in their positions, may put in unrecorded time simply to meet performance standards –without telling their employer. Yes, some of these may create claims, but almost by definition they defy class action treatment.

So, it's a relief to see opinions such as the one recently issued by an Illinois appellate court in Murphy v. Group O, Inc., Case No. 12-L-138 (Ill. Ct. App., Sept. 20, 2017). In that case, the employer was a contractor who had approximately 700 employees working in a large manufacturing facility. Their work encompassed 27 different positions and they performed services throughout the plant. The employer used the common Kronos electronic time-keeping system, which in this instance was programmed to "round" time and to deduct 30 minutes per day for meal periods. Predictably, the employees characterized the rounding as indiscriminate and argued that on occasion they would be required by circumstances to work through their lunch break. Employees were expected only to work within a scheduled time frame, but were paid (and possibly disciplined) if they punched in outside of that period.

The plaintiffs testified that they worked approximately 10 minutes before their scheduled shifts and could not leave for the day until they had completed their assigned work. In depositions, the plaintiffs gave different explanations regarding how this might result in unpaid time. One employee pointed to the unique demands of her position. Another juggled time to meet child care obligations. Some employees were steps away from a plant entrance, while others might need to walk over 10 minutes away. The employee deponents gave different accounts of how they conducted their breaks, whether in a break room, socializing with other workers or smoking outside. Thus, the case looked like many other off-the-clock cases that are routinely brought. Relying primarily on the rounding procedure, the trial court certified the case under the Illinois equivalent to Federal Rule 23, and the defendant appealed.

The court of appeals found that the trial court abused its discretion in certifying the class. In essence, the court found that the issue in the case was not the use of rounding, or auto-deduct policies, but whether the employees were actually forced to work through the time that was auto-deducted. It found that the evidence on that score failed to reflect any common policy or scheme. Indeed, the court noted that the different plaintiffs gave different accounts of when, how or why they were not paid at various times. As the court concluded, "[i]n short, plaintiffs have failed to set forth any uniform mandate requiring all putative class members to work without compensation." Thus, the claims would have required the trial court to examine each employee's own situation, a task inconsistent with a class.

The Murphy case highlights the problems with even a single-site wage-and-hour case alleging off-the-clock work. Absent an illegal uniform policy, full examination frequently does devolve into a series of individual inquiries. In this instance, the employer was able to avail itself of interlocutory appellate review, but many other employers are not as fortunate.

The bottom line is this: Some courts will recognize that off-the-clock cases are poor candidates for class action treatment due to the number of individual circumstances involved.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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