United States Court of Appeals,
Fifth Circuit.
No. 93-5390.
Stephen R. NEWTON, Plaintiff-Appellee,
v.
CITY OF HENDERSON, Defendant-Appellant.
March 16, 1995.
Appeal from the United States District Court for the Eastern
District of Texas.
Before REAVLEY, DUHÉ and PARKER, Circuit Judges.
REAVLEY, Circuit Judge:
Stephen R. Newton brought suit for unpaid overtime
compensation against the City of Henderson (the "City") under 29
U.S.C. § 207, which codifies section 7(k) of the Fair Labor
Standards Act ("FLSA"). After a bench trial, the district court
found that: 1) Newton was an employee during the excess overtime
hours claimed; 2) the City had not demonstrated good faith
reliance that its actions were not unlawful; and 3) the City was
guilty of a "continuing violation." The court awarded overtime
compensation dating back to August, 1988 and also awarded
liquidated damages. The City appeals. We hold that no FLSA
violation was proved. We reverse and render judgment in favor of
the City.
BACKGROUND
Newton was employed by the City as a police officer. In
October 1987, he was assigned to the United States Drug Enforcement
Agency ("DEA") East Texas Drug Task Force. He remained a member of
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the Task Force until his resignation on September 30, 1991. Newton
claims he was not compensated for all of the overtime hours he
worked as a Task Force Officer. Under the agreement entered into
by the City and the DEA, the City remained Newton's employer and
was responsible for "establishing the salary and benefits,
including overtime, of the HPD [Henderson Police Department]
officer assigned to the Task Force, and making all payments due
[him]." The DEA had the right to control Newton's day-to-day
functions and duties.
The City had a personnel policy that required all police
department employees to obtain approval prior to working overtime.
Newton admits that prior to March 7, 1990, he was not authorized by
the City to work any overtime. After this time, he was authorized
to work a limited amount of overtime (approximately 12.5 hours per
biweekly pay period). Newton did request permission to work
additional overtime. He made these requests to his supervisors at
the Henderson Police Department, Captain Roy Tate and Chief Randall
Freeman. Each time, Newton was told that he could not be paid for
any more overtime, because the City could not afford to pay him.
Newton submitted time reports to the City and was paid for all
of the hours claimed on these time reports. City policy required
that overtime be reported within 72 hours of the time it was
actually worked. Newton admits that he never made a demand for
payment for unauthorized overtime hours until he resigned in
September, 1991. Newton did submit a separate time report to the
DEA, a "352 form," which reflected the overtime hours he is now
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claiming. Newton knew that these forms were not for payroll
purposes, and he did not present the DEA forms to the City until he
resigned in September, 1991.
Newton claims that his City supervisors, Captain Tate and
Chief Freeman, knew that he was putting in excess overtime hours,
because he reported his activities to them on a daily basis. He
admits that he did not specify the number of hours he was working
during these oral reports, but contends that based on these reports
Tate and Freeman must have known that he was working overtime.
Chief Freeman testified that when he was an undercover agent, he
had to work outside his regularly scheduled hours because of the
nature of undercover work. Both Freeman and Tate testified that
they knew that the type of work Newton was doing required working
unscheduled hours. Both also stated, however, that they assumed
Newton was taking time off, taking "flex time," so that he never
worked more than his authorized hours in a given pay period.
Freeman testified that he had spoken with Newton's DEA supervisor,
Jim Seay, and that they had an understanding that every time Newton
worked overtime, he would take flex time to compensate.
Newton initialed a memo from Seay, written on March 9, 1990,
acknowledging that he could work additional overtime hours only as
authorized by the City. Seay testified that he did not require
Newton to work overtime and was not authorized to require him to do
so. He also testified, however, that he would not expect a Task
Force Officer to refuse an assignment, because it required unpaid
overtime.
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Newton testified that Seay never explicitly told him to work
overtime, but that Seay told him to "go out and do the job." The
implication of Newton's testimony is that doing the job required
overtime and Newton felt he could not refuse to do the job. Newton
does not explicitly state, but we must assume that he implicitly
claims that he could not use flex time to compensate for the extra
hours that he was working.
Chief Freeman was on the Board of Directors of the Task Force,
and therefore, had access to the 352 forms filled out by Newton.
He testified that he never saw these forms and the subject of
Newton's overtime never came up in the Board Meetings.
DISCUSSION
In order to recover, the plaintiff must show that he was
"employed" by the City during the periods of time for which he
claims unpaid overtime. He was employed during those hours if the
City had knowledge, actual or constructive, that he was working.
Davis v. Food Lion, 792 F.2d 1274, 1276 (4th Cir.1986). "An
employer who is armed with [knowledge that an employee is working
overtime] cannot stand idly by and allow an employee to perform
overtime work without proper compensation, even if the employee
does not make a claim for the overtime compensation." Forrester v.
Roth's I.G.A. Foodliner, Inc., 646 F.2d 413, 414 (9th Cir.1981).
The court in Forrester, however, went on to state that if the
"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
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of § 207." Id. In that case, the appellate court affirmed the
district court's grant of summary judgment for the employer because
the employee turned in time sheets which did not include the
overtime hours and the employee did not demonstrate that the
employer should have known that the employee worked more hours than
those claimed on his time sheets. Likewise, this court has also
upheld a judgment in favor of an employer in an overtime case
because the employee in that case was estopped from claiming that
she had worked more hours than the hours she claimed in her time
sheets. Brumbelow v. Quality Mills, Inc., 462 F.2d 1324, 1327 (5th
Cir.1972).
In Brumbelow, we acknowledged that an employee would not be
estopped from claiming additional overtime if "[t]he court found
that the employer knew or had reason to believe that the reported
information was inaccurate." Id. The district court based its
judgment in favor of Newton on the fact that Chief Freeman had
access to information regarding the Task Force's activities and on
Chief Freeman's statement, based on his former experience as an
undercover agent, that undercover work can require an officer to
work hours outside his regularly scheduled hours. Neither of these
facts support a conclusion that in this case that the City had
reason to believe that the information reported to it via Newton's
signed payroll forms was inaccurate.
The district court stated in its opinion that "much of the
[City's] knowledge" is derived from the "position and experience of
its Police Chief, Randall Freeman." Freeman was also the City
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Manager during this time period and was on the Board of Directors
of the DEA Task Force, serving as its chairman for one year. These
positions gave the Chief access to information regarding all the
activities performed by members of the Task Force. The district
court found that this access was a basis for imputing constructive
knowledge to the City with respect to the overtime being worked by
Newton. We hold that as a matter of law such "access" to
information does not constitute constructive knowledge that Newton
was working overtime.
Newton admits that he was explicitly told by both his HPD
supervisors, Freeman and Tate, and his DEA supervisor, Seay, that
he could not work unauthorized overtime hours. The City
established specific procedures to be followed in order to receive
payment for overtime. An employee was required to submit a request
for overtime within 72 hours of the time worked and to use a
specified payroll form. Newton ignored these procedures. If we
were to hold that the City had constructive knowledge that Newton
was working overtime because Freeman had the ability to investigate
whether or not Newton was truthfully filling out the City's payroll
forms, we would essentially be stating that the City did not have
the right to require an employee to adhere to its procedures for
claiming overtime. The fact that Freeman had access to the Task
Force's activities means that perhaps he could have known that
Newton was working overtime hours, but the question here is whether
he should have known. In light of the fact that Freeman explicitly
ordered Newton not to work overtime and in light of the fact that
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Newton admits that he never demanded payment for overtime already
worked, it is clear that access to information regarding the Task
Force's activities, standing alone, is insufficient to support the
conclusion that the City should have known that Newton was working
overtime.
The court also based its conclusion, however, on the fact that
Freeman was formerly an undercover narcotics agent and admitted in
his testimony that this kind of work requires an officer to work
outside his scheduled hours. The court acknowledged that Freeman
did not state that undercover work necessarily required overtime,
but stated that "his testimony suggests" that he should have known
that Newton would be required to work overtime. This conclusion
ignores Chief Freeman's testimony that he expected his officers to
compensate themselves for unscheduled hours worked by taking "flex
time." The court does not state that the evidence presented in
this case supports the contention, implicit in Newton's claim, that
he was required to work more than his scheduled hours and could not
take flex time to compensate for those unscheduled hours. Indeed,
there is no evidence in this record to support the contention that
Newton could not have used flex time to make up for unscheduled
hours worked. Since it was reasonable for the Freeman and Tate to
assume that Newton was taking flex time to compensate for
unscheduled hours worked, it was reasonable for Freeman and Tate to
rely on Newton's payroll submissions as a reliable indicator of the
number of hours being worked by Newton.
Newton's payroll forms would not be reliable indicators of the
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number of hours worked, if there was evidence to support the
conclusion that the City encouraged or forced Newton to submit
incorrect time sheets. The district court noted that in Brumbelow
this court stressed that there was no evidence that the company in
any manner encouraged workers to falsely report their hours. The
district court could be read to imply that there was such evidence
in this case. The court went on to reiterate that Chief Freeman
should have known that Newton was required to work overtime by the
DEA. Again, the facts upon which the district court relied in
imputing constructive knowledge to Chief Freeman do not support a
finding that the employer in this case encouraged Newton to falsely
report his hours. We find no basis for such a finding in the
record before us.
CONCLUSION
Newton does not deny that the City officially notified him
that he could not work additional overtime hours. He does not
present evidence that he was unofficially told otherwise. The
evidence will not support his contention that the City should have
known that the hours reported on his City time sheets were
incorrect. We conclude that Newton failed to show that the City
violated the FLSA by paying him only for the hours claimed on his
time sheets.
REVERSED AND RENDERED.
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