What happens when an employer fails to keep accurate or adequate records of all time worked by an employee?

Seventy-five years ago, the United States Supreme Court, in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946), superseded by statute on other grounds, 29 U.S.C. § 254(a), created a burden-shifting framework for FLSA claims where an employer fails to maintain proper records.  More specifically, in those cases, a plaintiff need only show by “just and reasonable inference” that she was an employee, worked the hours, and wasn’t paid.”  Id.  

On February 9, 2021, the Fifth Circuit released its opinion in United States Department of Labor v. Five Star Automatic Fire Protection, L.L.C., No. 19-51119, applying this framework and affirming a bench trial award of nearly $250,000 in damages, including liquidated damages, to employees of a fire-sprinkler installation and service company who claimed they were not compensated for pre- and post-shift work including, for example, time spent loading material onto company trucks.  

In Five Star, the employer required its employees to maintain their own time records, which only included the total number of hours worked at a jobsite, even though they performed pre- and post-shift work and often traveled between jobsites.  At the bench trial, the DOL presented six employee witnesses who testified about the activities in which they and others engaged but for which they were not paid.  The court found for the DOL, and the employer appealed.

Affirming the findings of fact on liability and damages, the Fifth Circuit, relying on Mt. Clements, agreed the district court properly relied on the testimony of the six employee witnesses to fill in the “evidentiary gaps” left by the incomplete time records.  The Court also rejected the employer’s attempt to rely on an after-the-fact chart created from the company President’s memory related to different work projects, agreeing that such “evidence” was unreliable.  And, the Court noted that all testifying employees stated their lead supervisor either said or implied they shouldn’t record pre- and post-shift time worked, which created a de facto policy that they shouldn’t.

In short, the opinion provides a valuable reminder of the importance of understanding the record-keeping and substantive provisions of the FLSA to avoid both liability and liquidated damages findings.  The opinion can be found here:  https://www.ca5.uscourts.gov/opinions/pub/19/19-51119-CV0.pdf