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Employee Must Show an Employer "Knew of or Should Have Known" of Off the Clock Work in Order to Proceed On Unpaid Wages Claim


Jong v. Kaiser Foundation Health Plan, Inc. - California Court of Appeal, First Appellate District, Division Three 


Facts:  Henry Jong worked as an outpatient pharmacy manager for Kaiser.  After leaving Kaiser, Jong and two other outpatient pharmacy managers brought a class action against Kaiser and alleged they had not been paid for off the clock overtime hours worked, in violation of California Labor Code Section 1194.  The employees alleged that after being reclassified from exempt to non-exempt employees (exempt employees are generally not entitled to overtime pay while non-exempt employees are), they were "forced" to work off the clock overtime hours to keep up with Kasier's demands.  

The trial court granted Kaiser's motion for summary judgment and held that Jong failed to raise a triable issue of fact as to whether Kaiser knew or should have known that he worked overtime hours.  Jong appealed to the Court of Appeal.

Holding:  The Court of Appeal affirmed the lower court's ruling and held that while there was evidence that Jong was criticized for working overtime, there was no evidence that his supervisors instructed him to work off the clock, that Jong had advised his supervisors that he would work off the clock to meet their expectations, or that his supervisors knew he was doing so.  As well, while Jong had shown that Kaiser should have been aware that its pharmacy managers often worked in excess of 50 hours a week because of a previous class action, whether Kaiser was aware that an employee worked off the clock was specific to the circumstances of a particular employee.  

The Court of Appeal further held that Jong had failed to produce any evidence that Kaiser was aware of his off the clock work because Jong disabled the security alarm before clocking in for work.  As a result, Jong failed to present any evidence that Kaiser knew or should have known what he was doing between the time he turned off the alarm and clocked in for work.  

Judgment:  The Court of Appeal affirmed the lower court's ruling and held that Jong failed to show that Kaiser knew or should have known of his off the clock work.  Failure to present evidence of this resulted in Jong's inability to prevail upon his unpaid wages claim.

The Takeaway:  This is a good case for employers to rely upon and show that if they are not aware of an employee's off the clock work, employers should not be liable for the unpaid wages.  If an employer does not know or have reason to know of this off the clock work, it follows that they should not be forced to pay employees for the work done.  

On the other hand, employers cannot bury their heads in the sand and intentionally avoid being aware of an employee who works off the clock.  This type of willful ignorance likely would not allow an employer to escape liability for unpaid wages.  

Majority Opinion Judge:  Judge Pollak

Date:  May 20, 2014

Opinion:  http://www.courts.ca.gov/opinions/documents/A138725.PDF

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