Tag Archives: Time Records

S.D.N.Y.: De Minimis Exception Applies Only in Cases Where There is a “Practical Administrative Difficulty in Recording Time”

Chavez v. Panda Jive, Inc.

Anyone who handles more than a handful of FLSA cases no doubt knows that defendants often raise an affirmative defense regarding the de minimis nature of the work. Typically the defense asserted claims that even if the defendants failed to properly pay the plaintiff for all time due and owing under the FLSA, such time was de minimis, so no damages are due and owing. And, while most of the decisions discussing the issue focus on the amount of time that is (or is not) de minimis as a matter of law, a recent case sheds light on the narrow circumstances where the defense is even available to an employer. And, as it turns out, the defense is likely applicable far less than you might have thought, only in circumstances where there is a “practical administrative difficulty in recording [the employee's] time,” as discussed briefly in this case.

In this case, the plaintiff’s time records clearly showed overtime hours worked, however the defendant paid him only straight time for his overtime hours, and not time and a half. As the court’s opinion indicates, initially the defendant had raised an exemption defense, however because the plaintiff was admittedly paid by the hour, the defendant ultimately conceded that the plaintiff was generally entitled to overtime (which he was not paid) when he worked over 40 hours in a work week. However, the defendant asserted that because such time was “de minimis” it was not recoverable under the FLSA. Rejecting defendant’s contention, the court explained:

The de minimis exception applies, however, only in cases where there is a “practical administrative difficulty of recording additional time,” such as an employee’s commuting time. Singh v. City of New York, 524 F.3d 361, 371 (2d Cir.2008) (Sotomayor, J.); Reich v. N.Y. Transit Auth., 45 F.3d 646, 652 (2d Cir.1995). This is not such a case: defendants concede that they paid Chavez only straight time for hours for which their own records explicitly show he was owed time and a half. See, e.g., Reply Memorandum of Law in Support of Defendants’ Motion for Summary Judgment dated May 4, 2012 at 4–5; Tr. at 5–6. Accordingly, the Court grants summary judgment to plaintiff on the issue of liability against defendant Panda Jive for overtime hours Chavez worked prior to moving back to Penelope’s kitchen in December 2009.

Click Chavez v. Panda Jive, Inc. to read the entire Memorandum Order.

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Filed under Affirmative Defenses, Damages, Work Time

D.Nev.: Defendant Compelled to Produce Time and Pay Records Maintained by Third-Party Payroll Company, Notwithstanding Objection That They Did Not “Possess” Same

Kiser v. Pride Communications, Inc.

This case was before the court on plaintiff’s motion to compel the production of discovery related his wages and hours.  As discussed here, the defendants objected to such discovery.  Defendants’ primary objection was that it did not have actual possession of the discovery sought.  Rather, defendants maintained that they should not be responsible to produce the discovery, because it was in the possession of their third-party payroll vendor.  The court rejected defendants’ contention and ordered the production of the discovery.

Overruling defendants’ objection regarding physical custody of the discovery sought, the court explained:

“Defendants’ objection based on their assertion that they do not possess the requested documents or electronically kept data because “a third-party vendor … process[ed][the] payroll” is overruled. Pursuant to Fed.R.Civ.P. 34, documents sought in discovery motions must be within the “possession, custody, or control” of the party upon whom the request is served. However, the “phrase ‘possession, custody, or control’ is disjunctive and only one of the numerated requirements need be met.” Soto v. City of Concord, 162 F.R.D. 603, 619 (N.D.Cal.1995)(quoting Cumis Ins. Society, Inc. v. South–Coast Bank, 610 F.Supp. 193, 196 (N.D.Ind.1985). Therefore, “actual possession” is not required. Soto, 162 F.R.D. at 619. Rather, a “party may be ordered to produce a document in the possession of a non-party entity if that party has a legal right to obtain the document or has control over the entity who is in possession of the document.” Id (internal citation omitted).

Here, the fact that defendants do not actually possess the documents does not matter. As admitted to in their response (# 28–1 Exhibit B) and their opposition (# 29), the defendants requested and ordered the third-party payroll vendor, Southwest Payroll Service, Inc., to perform the acts of processing and maintaining the payroll and the accompanying records. Thus, it is “inconceivable” that the defendants lack the ability to request and obtain such records from Southwest Payroll Service, Inc. Id. at 620 (holding that when a third-party physician performed evaluations on officers at the request of the defendant, “it seems inconceivable that the [defendant] lacks the ability to obtain such evaluations upon demand .”). Therefore, the court finds that such records are in Pride’s control, and should be disclosed in response to the plaintiffs’ request. Id. at 619 (finding that the “term ‘control’ includes the legal right of the producing party to obtain documents from other sources on demand)(emphasis added)(internal citations omitted); See also Japan Halan Co. v. Great Lakes Chem. Corp., 155 F.R.D. 626, 627 (N.D.Ind.1993)(holding that close business relationships constituted control of documents held by a third-party.).

Accordingly, and for good cause shown,

IT IS ORDERED that plaintiffs Anthony Kiser et al’s Motion To Compel The Production Of Documents (# 28) is GRANTED.

IT IS FURTHER ORDERED that defendants Pride Communications, Inc. et al shall produce the requested documents, in any and all available forms, on or before November 30, 2011.”

As more and more employers, small and large, continue to rely on third-party payroll vendors, this will likely be a decision with wide-felt impact in wage and hour circles.  Especially in cases involving so-called ESI (Electronically Stored Information)- where the employer transmits data to a payroll service like ADP or Paychex and retains little or none of the required records itself, this decision seems to say that anything the payroll company has, the defendant will be deemed to “have” as well.

Click Kiser v. Pride Communications, Inc. to read the entire Order.

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Filed under Discovery, Recordkeeping