Employer Prevails on Misclassification Claim Where Employee Fails to Prove Hours Worked

Greg Holaway worked as a Field Service Engineer for Stratasys, Inc. He was categorized as exempt from the provisions of the Fair Labor Standards Act (FLSA) requiring the payment of overtime. Even though his title was "Engineer," his position was closer to that of a customer service technician who installed machines and maintained previously installed machines. He was responsible for customers in various states. On February 8, 2012, Holaway sent an email to other Field Service Engineers complaining about being expected to work 45 to 60 hour weeks without overtime pay. He was terminated shortly after he sent the e-mail, ostensibly for violating the company's online protocol.

On April 24, 2012, Holaway filed suit as a collective action in the United States District Court for the District of Minnesota, alleging that Stratasys had miscategorized him and, thereby, had violated the FLSA. Following discovery, Stratasys moved for summary judgment. The district court granted Stratasys's motion, holding that Holaway had failed to put forth evidence sufficient to show that he worked more than 40 hours a week. Holaway appealed.

In its decision, Holaway v. Stratasys, Inc., No. 14-1146 (8th Cir. November 6, 2014), the Eighth Circuit Court of Appeals affirmed the lower court's ruling, holding that Holaway failed to meet the relaxed evidentiary standards by putting forth evidence sufficient to demonstrate he worked more than 40 hours per week. The Court determined that Holaway had made contradictory assertions and conclusions regarding overtime worked, and that he had failed to account specifically for the hours allegedly worked. The Court also found that Holaway failed to provide a meaningful explanation of how he arrived at his work hour estimations.

Holaway is a favorable decision for employers.  The employer did not keep precise records regarding the employee's hours worked, because he was considered FLSA exempt, and the employer therefore had no documentation to establish the precise extent of allegedly uncompensated work.  Regardless, the Court found in the employer's failure, reasoning that it was reasonable to require that the employee put forth some evidence of the amount and extent of his work in excess of 40 hours per week, or to provide some explanation of how he arrived at his time estimates. Vague testimony, the court held, was simply not enough.

Though this employer scored a victory, employers are nevertheless cautioned to keep accurate records concerning the time worked by all employees. With questions regarding the Holaway case or your time-keeping practices generally, contact Hinshaw attorney.