Newton v. City of Henderson

• Decision Date: 16 March 1995
• Docket Number: No. 93-5390,93-5390
• Citation: 47 F.3d 746
• Parties: 129 Lab.Cas. P 33,217, 2 Wage & Hour Cas.2d (BNA) 1025 Stephen R. NEWTON, Plaintiff-Appellee, v. CITY OF HENDERSON, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 746

47 F.3d 746

129 Lab.Cas. P 33,217, 2 Wage & Hour Cas.2d

(BNA) 1025

Stephen R. NEWTON, Plaintiff-Appellee, v. CITY OF HENDERSON, Defendant-Appellant.

No. 93-5390.

United States Court of Appeals, Fifth Circuit.

March 16, 1995.

Rehearing Denied April 13, 1995.

James Paul Nelson, Henderson, TX, for appellant.

Ron Adkison, Wellborn Houston Adkison Mann, Sadler & Hill, Henderson, TX, for appellee.

Appeal from the United States District Court for the Eastern District of Texas.

Before REAVLEY, DUHE and PARKER, Circuit Judges.

REAVLEY, Circuit Judge:

Stephen R. Newton brought suit for unpaid overtime compensation against the City of Henderson (the "City") under 29 U.S.C. Sec. 207, which codifies section 7(k) of the Fair Labor Standards Act ("FLSA"). After a bench trial, the district court found that: 1) Newton was an employee during the excess overtime hours claimed; 2) the City had not demonstrated good faith reliance that its actions were not unlawful; and 3) the City was guilty of a "continuing violation." The court awarded overtime compensation dating back to August, 1988 and also awarded liquidated damages. The City appeals. We hold that no FLSA violation was proved. We reverse and render judgment in favor of the City.

BACKGROUND

Newton was employed by the City as a police officer. In October 1987, he was assigned to the United States Drug Enforcement Agency ("DEA") East Texas Drug Task Force. He remained a member of the Task Force until his resignation on September 30, 1991. Newton claims he was not compensated for all of the overtime hours he worked as a Task Force Officer. Under the agreement entered into by the City and the DEA, the City remained Newton's employer and was responsible for "establishing the salary and benefits, including overtime, of the HPD [Henderson Police Department] officer assigned to the Task Force, and making all payments due [him]." The DEA had the right to control Newton's day-to-day functions and duties.

The City had a personnel policy that required all police department employees to obtain approval prior to working overtime. Newton admits that prior to March 7, 1990, he was not authorized by the City to work any overtime. After this time, he was authorized to work a limited amount of overtime (approximately 12.5 hours per biweekly pay period). Newton did request permission to work additional overtime. He made these requests to his supervisors at the Henderson Police Department, Captain Roy Tate and Newton submitted time reports to the City and was paid for all of the hours claimed on these time reports. City policy required that overtime be reported within 72 hours of the time it was actually worked. Newton admits that he never made a demand for payment for unauthorized overtime hours until he resigned in September, 1991. Newton did submit a separate time report to the DEA, a "352 form," which reflected the overtime hours he is now claiming. Newton knew that these forms were not for payroll purposes, and he did not present the DEA forms to the City until he resigned in September, 1991.

Chief Randall Freeman. Each time, Newton was told that he could not be paid for any more overtime, because the City could not afford to pay him.

Newton claims that his City supervisors, Captain Tate and Chief Freeman, knew that he was putting in excess overtime hours, because he reported his activities to them on a daily basis. He admits that he did not specify the number of hours he was working during these oral reports, but contends that based on these reports Tate and Freeman must have known that he was working overtime. Chief Freeman testified that when he was an undercover agent, he had to work outside his regularly scheduled hours because of the nature of undercover work. Both Freeman and Tate testified that they knew that the type of work Newton was doing required working unscheduled hours. Both also stated, however, that they assumed Newton was taking time off, taking "flex time," so that he never worked more than his authorized hours in a given pay period. Freeman testified that he had spoken with Newton's DEA supervisor, Jim Seay, and that they had an understanding that every time Newton worked overtime, he would take flex time to compensate.

Newton initialed a memo from Seay, written on March 9, 1990, acknowledging that he could work additional overtime hours only as authorized by the City. Seay testified that he did not require Newton to work overtime and was not authorized to require him to do so. He also testified, however, that he would not expect a Task Force Officer to refuse an assignment, because it required unpaid overtime.

Newton testified that Seay never explicitly told him to work overtime, but that Seay told him to "go out and do the job." The implication of Newton's testimony is that doing the job required overtime and Newton felt he could not refuse to do the job. Newton does not explicitly state, but we must assume that he implicitly claims that he could not use flex time to compensate for the extra hours that he was working.

Chief Freeman was on the Board of Directors of the Task Force, and therefore, had access to the 352 forms filled out by Newton. He testified that he never saw these forms and the subject of Newton's overtime never came up in the board meetings.

DISCUSSION

In order to recover, the plaintiff must show that he was "employed" by the City during the periods of time for which he claims unpaid overtime. He was employed during those hours if the City had knowledge, actual or constructive, that he was working. Davis v. Food Lion, 792 F.2d 1274, 1276 (4th Cir.1986). "An employer who is armed with [knowledge that an employee is working overtime] cannot stand idly by and allow an employee to perform overtime work without proper compensation, even if the employee does not make a claim for the overtime compensation." Forrester v. Roth's I.G.A. Foodliner, Inc., 646 F.2d 413, 414 (9th Cir.1981).

The court in Forrester, however, went on to state that if the "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 Sec. 207." Id. In that case, the appellate court affirmed the district court's grant of summary judgment for the employer because the employee turned in time...