The City of Chicago lacked either actual or constructive knowledge that members of the Chicago Police Department were performing after-hours work on their smartphones, the Seventh Circuit Court of Appeals has ruled, affirming a trial court’s earlier ruling that the City was not liable for this work under the Fair Labor Standards Act. Allen v. City of Chicago, 2017 U.S. App. LEXIS 14230 (7th Cir. Aug. 3, 2017). The Seventh Circuit has jurisdiction over Illinois, Indiana, and Wisconsin.

Background

Current and former members of the Chicago Police Department’s Bureau of Organized Crime alleged they were owed overtime pay for time spent after normal work hours monitoring and responding to email on their BlackBerrys. Although during a bench trial the court found that the plaintiff-employees in fact responded to email as alleged and that the time they spent on such activity was substantial enough to otherwise constitute compensable “work,” the trial court nevertheless held the City was not liable for the uncompen¬sated hours because the plaintiffs failed to prove the Bureau had actual or constructive knowledge the work had been performed. Allen v. City of Chicago, 2015 U.S. Dist. LEXIS 165906 (N.D. Ill. Dec. 10. 2015).

Employer Knowledge Required

On appeal, the Court of Appeals echoed the findings of the trial court. It noted that while generally “[e]mployers must [] pay for all work they know about, even if they did not ask for the work, even if they did not want the work done, and even if they had a rule against doing the work,” this mandate “stops short of requiring the employer to pay for work it did not know about, and had no reason to know about.” Thus, while an employer may be deemed to have had constructive knowledge of, and therefore liability for, unreported work being performed by its employees “if it should have acquired knowledge of that work through reasonable diligence,” that standard asks what the employer reasonably should have known, not what it theoretically could have known.

In this case, the Bureau had a formal procedure for obtaining overtime compensation, which the officers regularly used. Moreover, while some plaintiffs testified that notwithstanding the Bureau’s policy, its “culture” would frown on submitting overtime request slips premised on BlackBerry use, other plaintiffs had submitted requests on this very basis and were paid accordingly. In addition, while certain guidelines issued by the Chicago Police Department suggested that off-duty smartphone use would only be compensated under limited circumstances and with advance approval, in practice these guidelines were neither followed by the officers nor enforced by their supervisors. Thus, agreeing with the trial court, the Court of Appeals concluded the plaintiffs had failed to demonstrate an unwritten policy existed to deny them compensation for off-duty BlackBerry work.

Lessons

The Seventh Circuit’s decision reminds employers that a plaintiff under the FLSA must demonstrate more than having performed the unreported “work” in question; the Act further requires the plaintiff to prove that his or her employer had knowledge, actual or constructive, of that work. To that end, policies requiring employees to report all hours worked, including work performed off site or after regular hours, can be helpful (but may not be dispositive in defending against such claims).