Off-the-clock policies and procedures can shield employers from class liability

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In an appeal from summary judgment, Henry Jong, a non-exempt Outpatient Pharmacy Manager (“OPM”) for Kaiser Foundation (“Kaiser”), argued that the trial court erroneously held that he failed to present evidence that Kaiser had actual or constructive knowledge that Jong was working off-the-clock overtime. Jong v. Kaiser Foundation Health Plan, Inc. (2014) WL 2094270. On May 20, 2014, the First District Court of Appeal in Jong v. Kaiser affirmed the trial court’s judgment in favor of Kaiser and held that Jong failed to raise a triable issue of fact regarding Jong’s alleged off-the-clock overtime work activity.

Much of the evidence proffered by Jong in support of his suit had been introduced in an earlier class action challenging the classification of Kaiser’s OPMs as exempt from various wage and hour requirements. Lopez v. Kaiser Foundation Health Plan, Inc. (Super. Ct. Alameda County, No. RG 07-305405). The depositions of several class members revealed that OPMs regularly worked approximately 48 hours per week without overtime pay. Ultimately, Kaiser settled this action, and as part of the settlement, Kaiser reclassified all OPMs as non-exempt employees; thus, entitling them to overtime pay.

In January 2012, following the reclassification and reorganization of its pharmacy department, three former OPMs, including Jong, brought suit against Kaiser. In Jong v. Kaiser, Plaintiffs argued that Kaiser instituted a policy that forbade the payment of overtime pay, while simultaneously refusing to adjust Plaintiffs’ OPM responsibilities to allow them to perform their job duties within a 40 hour workweek. Kaiser moved for summary judgment on the ground, as to Jong’s claim, that Jong lacked evidence that Kaiser “failed to pay overtime wages for hours he worked that Kaiser knew or should have known he worked.”

In support of its motion for summary judgment on Jong’s subsequent off-the-clock claims, Kaiser submitted excerpts from Jong’s deposition where he testified he was aware of Kaiser’s policy to pay for all hours worked and to pay for all overtime hours recorded, even if the overtime was not pre-approved. Jong also testified that he was familiar with Kaiser’s time keeping rules and knew how to use the timekeeping software, and further, Jong had signed an attestation form acknowledging that off-the-clock work was prohibited. Additionally, Jong mentioned that he did not know if any of Kaiser’s managers were aware that he was performing off-the-clock work; and lastly, Jong testified that he did not record and was unable to recall the number of hours he worked off-the-clock.

The trial court granted Kaiser’s motion for summary judgment as to Jong, but denied Kaiser’s motions as to the other two Plaintiffs. In its discussion, the Court of Appeal first cites to the principles of the Fair Labor Standards Act in several federal court decisions. For example, the court mentions that in Forrester v. Roth’s I.G.A. Foodliner, Inc. (9th Cir. 1981) 646 F.2d 413, 414–15, the ninth circuit held, “Where an employer has no knowledge that an employee is engaging in overtime work and that 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 of [29 U.S.C.] § 207(a).”

Next, as for the deposition testimony from the earlier class action (Lopez v. Kaiser) that OPMs regularly worked 48 hours per week, the Court noted such testimony was hearsay, and even if admissible, the evidence only provided notice that when these employees were exempt, many worked more than 40 hours a week. However, the Court noted that this testimony “hardly put Kaiser on notice” that OPMs, and Jong in particular, worked in excess of 40 hours per week after they were reclassified and instructed not to work overtime without prior approval.

Jong also submitted alarm code data and cross-referenced this to his time records, which indicated that he deactivated the alarm prior to the time he reported beginning his work. The Court once again disagreed that this evidence raised a triable issue of fact because his alarm activity did not establish that he was in fact working whenever the alarm was deactivated, and further failed to establish that his off-the-clock work activity was known to Kaiser.


Jong v. Kaiser illustrates the importance of employers having strong and well-documented policies and consistently followed procedures regarding overtime and off-the-clock work. Kaiser was successful in its defense because it had explicit policies in place that prohibited off-the-clock work, and also, required that employees sign an attestation form that they would not perform off-the-clock work.

While Jong was a summary judgment case, it creates a roadmap for defeating class certification as well.  Specifically, in the face of lawful policies and procedures, the court considered the issue of what the employer knew about Jong's off-the-clock work in determining liability.  And answering that question as to the class representative or each class member can affect whether the case is appropriate for class treatment under Wal-Mart Stores, Inc. v. Dukes (U.S. 2011) 131 S. Ct. 2541; see also Wang v. Chinese Daily News, Inc. (9th Cir. 2013) 709 F.3d 829.  Therefore it may be proper to consider such evidence in evaluating the adequacy, commonality and superiority elements of class certification.

The policies and procedures that won the day for the employer in Jong included:

  1. All non-exempt employees will be paid overtime for all overtime hours recorded;
  2. All non-exempt employees should be clocked in whenever they are working;
  3. All non-exempt employees must request approval to work overtime; and
  4. All non-exempt employees are required to sign an attestation form acknowledging that he/she will not work off-the-clock.

Reviewing your wage and hour policies with competent employment counsel and implementing solid policies and procedures can help you avoid costly wage and hour class actions or at least help provide you with a good defense to them.