Bailey v. TitleMax of Georgia, Inc. United States Court of Appeals, Eleventh Circuit 776 F.3d 797 (2015) Background and Facts Santonias Bailey was an employee of TitleMax of Georgia, Inc., in Jones- boro, Georgia. Bailey’s supervisor told him that TitleMax did not pay overtime, so he regularly worked off the clock. For example, on some Saturdays, he would work from 8:30 AM to 5:30 P.M., but-as ordered by his supervisor-would log only seven hours deÅ¡pite having worked nine. His supervisor also Copyright 2018 Cangage Learning. All rights Reserved. May not be copied, scanned, er duplicated, in whole or insert WCN 02-200-202 CHAPTER 34 Employment Immigration, and Labor Law 645 Case 34.1 Continued edited Bailey’s time records to report felter hours than he actually worked by, for instance, subtracting a one-hour lunch break when there had been none. Bailey resigned from TitleMax and filed a suit in a federal district court against the employer to recover for the unpaid overtime under the Fair Labor Standards Act (FLSA). TitleMax argued that Bailey was responsible for the unpaid time. According to Title Max, he had never complained about his supervisor, and he had violated company policy with respect to keeping accurate time records. The court issued a judgment in the defendant’s favor. Bailey appealed. In the Language of the Court MARTIN, Circuit Judge The goal of the FISA is to counteract the inequality of bargaining power between employees and employers In the broadest sense, this principle. ** compels our holding here. If an employer knew or had rea son to know that its employce underreported his hours, it cannot escape FLSA liability by asserting fal English (United States) O Focus 116% MacBook Pro In the Language of the Court MARTIN, Circuit Judge: * The goal of the FLSA is to counteract the inequality of bargaining power between employe and employers. In the broadest sense, this principle compels our holding here. If an employer knew or had son to know that its employee underreported his hours, it cannot escape FLSA liability by asserting defense based on that underreporting. To hold otherwise would allow an employer to wield its supe bargaining power to pressure or even compel its employees to underreport their work hours. If an employee has worked overtime without pay, he may bring a private FLSA action for damag An unpaid-overtime claim has two elements: (1) an employee worked unpaid overtime, and (2) the employer knew or should have known of the overtime work, Knowledge may be imputed (attributed] the employer when its supervisors or management encourage artificially low reporting. (Emphasis added. Mr. Bailey has shown both required elements. He worked overtime without pay. TitleMax knew should have known he worked overtime, because Mr. Bailey’s supervisor both encouraged artificially reporting and squelched truthful timekeeping, No one disputes that his supervisor knew he was working off the clock. The supervisor’s know edge may be imputed to TitleMax, making it liable for the FLSA violation. * * * TitleMax argues that an employee [is] deprived of his FLSA claim because he underreported his time, even if knowledge o underreporting is imputed to the employer. [Emphasis added.] TitleMax has identified no case in which (any federal appellate court) approved the use of this) defense as a total bar to an employee’s FLSA claim when the employer knew the employee underrepe his hours. * The dearth (scarcity) of precedent supporting TitleMax’s argument is persuasive, if not conclusive, evidence that its argument is misguided. Decision and Remedy The u.s. caurt of Appeals for the Eleventh Circuit reversed the judgment of the lower court and remanded the case for further proceedings. “Where, as here, an employer knew or had reason to know that its employee underreported his hours, it cannot invoke [a] defense based on that underreporting to bar the employee’s FLSA claim.