Scary new ruling makes it harder to combat unfair pay claims

Sorry, employers, but a new ruling by the Sixth Circuit Court of Appeals will make it darn near impossible — if adopted by other circuits — to keep a worker’s claims of unfair pay from going to trial. 

Some needed background info before we explain the ruling.

Jeffrey Moran was a mechanic at an auto repair shop owned and operated by a group we’ll refer to as “the defendants” (Al Basit LLC, Al Ghani LLC, Zain Syed and Zohaib Syed).

In his FLSA lawsuit, Moran claims that he and the defendants agreed that Moran would work 30 hours per week for $300 per hour, plus “bonus type profit sharing.”

But Moran claimed he actually worked an average of 65-68 hours per week for the duration of his employment while still only being paid $300 — except for a few occasions when he was paid “a little extra” money.

As a result, he sued for unpaid overtime under the FLSA.

Moran gave a somewhat detailed account of the hours he worked — claiming he’d show up at work at 7:30 a.m. on weekdays and leave between 6:30 and 7 p.m.

The defendants refuted his claims, saying he never worked more than 30 hours per week. To substantiate their assertions, they provided handwritten time sheets that included entries for the total number of hours Moran worked each day along with a weekly hour total for each week of his employment.

The court documents said, “Based on Defendants’ timesheets, Plaintiff almost always worked exactly thirty hours a week despite rarely, if ever, having the same weekly schedule.”

(Note: Reading between the lines here it seems the court was skeptical that these handwritten time sheets were on the up-and-up. But it’s important to keep in mind the validity of the records wasn’t being judged here.)

The defendants moved to get Moran’s case dismissed on summary judgment, and to strengthen their case they submitted an affidavit from John Blue, a manager Moran said he always worked with. In the affidavit, Blue stated, “Plaintiff barely worked 30 hours per week, and never worked over 30 hours per week. Plaintiff at times left work before completing his scheduled partial day.”

Does this seem like an open-and-shut case of documentation/witness testimony v. unsubstantiated worker claims to you? Well, it was to the court.

Can worker testimony alone beat employer’s claims?

The problem — at least for employers — is the court ruled the opposite way most would’ve expected it to.

It said Moran’s case should proceed to trial, showing how lenient some courts will be to employees’ unsubstantiated claims of wage-and-hour violations.

This is a ruling that’s sure to ruffle a lot of feathers in the employer community and, in fact, has already caught flak from some employment law attorneys.

In its ruling, the Sixth Circuit Court of Appeals said there was just one question before it:

“Where Plaintiff has presented no other evidence, is Plaintiff’s testimony sufficient to defeat Defendant’s motion for summary judgment?”

The decision:

“We hold that it is.”

Cue the groans from employers who’ve meticulously kept records to not only ensure their employees get a fair day’s pay for a fair day’s work — but to also protect themselves from claims like Moran’s.

The court then went on to say that whether Moran’s testimony was even credible is “a separate consideration that is inappropriate to resolve at the summary judgment stage.”

So Moran will get his day in court.

What to do now

So what’s an employer to do? Unfortunately, rulings like this leave very little room for employers to do anything to protect themselves from claims like this.

Even if you keep accurate records, this ruling suggests they aren’t going to be enough to overcome a worker’s allegations that those records aren’t accurate.

One thing you can try, however, is having employees sign off on their time sheets prior to submitting them to Payroll. While this may not save you from going to trail, it will help you mount a stronger defense, according to Rachel E. Burke, an employment law attorney for the firm Porter Wright.

Cite: Moran v. Al Basit LLC