On December 14, 2011, the US Court of Appeals for the Seventh Circuit issued an opinion in Kellar v. Summit Seating Inc. The key issue in the case was whether an employee must be compensated for time spent preparing for a shift before the shift officially begins, where the employer does not know or have reason to know of the employee's pre-shift work.

Susan Kellar (Plaintiff) worked for Summit Seating (Summit) for eight years, most of which was spent as a sewing manager. In early 2009, Plaintiff voluntarily resigned and sued Summit claiming that she was not paid overtime wages for pre-shift work in violation of the FLSA.

Plaintiff alleged that she regularly arrived at work between 15 and 45 minutes before the start of her 5:00 a.m. shift. She claimed that apart from a five-minute smoking and coffee break, she spent the time unlocking doors, turning on equipment, reviewing schedules or distributing fabric and material to her subordinates' workstations. Plaintiff admitted that no one told her to arrive before the beginning of her shift, but said it would have been a "hassle" to arrive at the same time as her subordinates and get them ready to start working promptly at the start of their own 5:00 a.m. shifts.

Although company policy required employees to request pre-approval to work overtime, Plaintiff never informed Summit's owners, both of whom generally arrived at work between 7:00 and 8:00 a.m., that she was working before the start of her shift. Additionally, Plaintiff never reported errors with her paychecks, requested overtime pay or mentioned during weekly management meetings that her schedule needed to be adjusted to account for pre-shift work.

The district court granted summary judgment for the employer, finding that Plaintiff's pre-shift activities were not compensable because the activities were merely preliminary under the Portal-to-Portal Act of 1947, de minimis in nature and the employer did not know that Plaintiff was engaging in the pre-shift work.

On appeal, the Seventh Circuit found that Plaintiff's pre-shift activities were non-preliminary because it constituted work that was performed for the employer's significant benefit. The court also found that the work was not de minimis because a "substantial" amount of time (15 to 45 minutes, excluding a five-minute break) was spent on pre-shift work. The court noted that Summit could identify no case law finding that work exceeding between 10 and 15 minutes in duration is de minimis.

In spite of these findings, the court affirmed the judgment of the district court because Summit did not know or have reason to know that Plaintiff was working before her shift. To state a claim under the FLSA, an employee must show that her employer had either actual or constructive knowledge of her overtime work. Factors that persuaded the court that Summit had no knowledge, or reason to know, of the plaintiff's pre-shift work include:

Under these circumstances, the court held that there was nothing in the record to indicate that Summit knew or should have known that Plaintiff was working before her scheduled shift.

The Seventh Circuit decision indicates the high threshold that employers must meet to show lack of actual or constructive knowledge of any employee's off-shift work. To minimize their liability, employers should:

For additional information on compensable time and other wage and hour issues, see: