Richardson et al v. Alliance Residential Company

Filing 45

MEMORANDUM OPINION. Signed by Judge Ellen L. Hollander on 4/29/2020. (hmls, Deputy Clerk)

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 1 of 21

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
CHRISTINA RICHARDSON, et al.,
Plaintiffs
v.

Civil Action No. ELH-18-1114

ALLIANCE RESIDENTIAL
COMPANY,
Defendant.
MEMORANDUM OPINION
Plaintiffs Christina Richardson and Gordon Clark filed suit against their former employer,
defendant Alliance Residential Company (“Alliance” or the “Company”). ECF 1. They alleged
violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and corresponding
provisions under Maryland law. See Md. Code (2016 Repl. Vol., 2017 Supp.), § 3-401 et seq. of
the Labor & Employment Article. Following discovery, plaintiffs moved for partial summary
judgment. ECF 28. In a Memorandum Opinion (ECF 40) and Order (ECF 41) of February 4,
2020, I denied plaintiffs’ motion.
Alliance has filed a motion (ECF 42) seeking “an Order clarifying and/or reconsidering
one of the findings/conclusions contained” in the Court’s Memorandum Opinion. Id. at 1.
Specifically, the Company seeks to clarify whether the Memorandum Opinion forecloses it from
arguing at trial that it lacked knowledge that Mr. Clark worked overtime, without pay. See id. at
1-2. If so, Alliance asks the Court to revisit its ruling. Id. at 4. The Company’s motion is supported
by a memorandum of law. ECF 42-1 (collectively, the “Motion” or “Motion to Reconsider”).
Plaintiff opposes the Motion (ECF 43), and Alliance has replied. ECF 44.
No hearing is necessary to resolve the Motion to Reconsider. See Local Rule 105.6. For
the reasons that follow, I shall grant the Motion in part and deny it in part.

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 2 of 21

I.

Background

A. Factual Background1
Alliance, a property management company, manages an 82-unit apartment building located
on East Saratoga Street in Baltimore (the “Property”). ECF 3 (Answer), ¶ 4; see also Our
Company, ALLIANCE RESIDENTIAL COMPANY, http://www.allresco.com/ (last visited Jan. 23,
2020). An on-site “business manager” oversees the Property’s day-to-day operations, such as
marketing and leasing, collecting rent, managing on-site staff, and interfacing with residents. ECF
28-1 (Elizabeth Karl Deposition) at 23, Tr. 7, 9. Generally, the business manager reports to a
“regional manager,” who, in turn, is supervised by a “regional vice president.” Id. at 23, Tr. 7.
Ms. Richardson served as the Property’s business manager from April 18, 2016 to
November 1, 2017. ECF 28-1 (Richardson Answers to Interrogatories) at 60, No. 2. When Ms.
Richardson began working at Alliance, the Company lacked a regional manager. As a result, Ms.
Richardson was supervised by regional vice president Elizabeth Karl. ECF 28-1 at 23, Tr. 8. In
December 2016, Alliance hired Sarah Malone as a regional manager. As of that time, Ms. Malone
supervised Ms. Richardson until Ms. Richardson left employment with Alliance. Id.; see also ECF
28-1 at 60, No. 2.
Mr. Clark worked as the Property’s on-site service supervisor from approximately October
2016 to October 2017. ECF 28-1 (Clark Answers to Interrogatories) at 71, No. 2; see also ECF
28-3 (Clark Deposition) at 110, Tr. 12; id. at 115, Tr. 32. Employed as an hourly worker, Mr.
Clark’s regular hours were Monday through Friday from 8:00 a.m. to 4:00 p.m. ECF 28-1 at 81,

1

The facts underlying this dispute are set forth in the Memorandum Opinion of February
4, 2020. ECF 40. Those facts are incorporated herein. The facts presented in this Memorandum
Opinion are limited to those pertinent to the Motion to Reconsider.
2

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 3 of 21

No. 2; ECF 29-1 (Clark Deposition) at 4, Tr. 67.2 Mr. Clark was supervised by Ms. Richardson
throughout his time at Alliance. ECF 28-1 (Alliance Admissions) at 82, No. 6; see also ECF 281 at 25, Tr. 16. Per the Company’s policy, Ms. Richardson, as Mr. Clark’s direct supervisor, was
responsible for approving Mr. Clark’s overtime work. ECF 28-1 at 33, Tr. 46.
When Alliance hired Ms. Richardson and Mr. Clark, it provided them with a copy of its
Associate Handbook (the “Handbook”). ECF 28-2 at 6, Tr. 20-21; ECF 29-1 at 3-4, Tr. 65-66.
Plaintiffs agreed to read the Handbook and become familiar with its provisions. Id. The Handbook
advised employees that federal and state law require accurate timekeeping, and that Alliance had
implemented timekeeping procedures for employees to record and submit accurate time records.
See ECF 36-1 (Alliance Handbook) at 27. The Handbook stated, in part, id.:
Accurate Time. Accurately recording time worked is the responsibility of every
Associate. Federal and state laws require the Company to keep an accurate record
of time worked in order to calculate Associate pay and benefits. Time worked is all
the time actually spent on the job performing assigned duties. Associates are
expected to regularly arrive at work on time, ready to work. Associates will be
disciplined for excessive and/or unexcused absences. Non-exempt Associates
should accurately record the time they begin and end their work, as well as the
beginning and ending time of each meal period. They also should record the
beginning and ending time of any split shift or departure from work for personal
reasons.
Further, the Handbook contained a section titled “OVERTIME PAY FOR NONEXEMPT ASSOCIATES.” Id. at 57 (emphasis in original). The section provided, id.:
a. Prior Approval. Non-exempt Associates may be required to work overtime at
their Supervisor’s request. All overtime requires the prior approval of the
Associate’s Supervisor or Manager. Associates who work overtime without
prior approval will be paid in accordance with the law, however, may be subject
to disciplinary action up to and included termination for violating the prior
approval requirement.

2

At his deposition, Mr. Clark testified that he believed that his work schedule did not
include a break for lunch. ECF 29-1 at 4, Tr. 67-68. Although not entirely clear, it appears that
Ms. Richardson received an unpaid lunch break. ECF 28-2 at 8, Tr. 29.
3

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 4 of 21

b. Record All Hours Worked. If your position is classified as non-exempt, you
must record all hours worked. Working off the clock is prohibited, and no
manager has the authority to require any Associate to do so. Any Associate who
works off the clock or any manager that requests an Associate work off the
clock may be subject to disciplinary action up to and including termination.
c. Miscellaneous. To respect each Associate’s personal schedule, every effort will
be made to minimize unwanted overtime. However, business demands are such
that overtime may be required as a condition of employment. The company
pays overtime in accordance with applicable federal and state laws. “Hours
worked” does not include paid time off for holidays, vacation, illness, inclement
weather, jury duty or bereavement.
Mr. Clark acknowledged at his deposition that he had read the Handbook. ECF 29-1 at 7,
Tr. 78-79; see id. at 3-4, Tr. 65-57. When asked if he “understood that it was the company’s policy
that ‘working off the clock is prohibited and no manager has the authority to require an associate
to do so,’” Mr. Clark responded: “Yeah. I mean, its—it says it here.” Id. at Tr. 79.
According to plaintiffs, Ms. Malone met with Ms. Richardson in February 2017, and
instructed Ms. Richardson not to record more than forty hours of work per week. See ECF 28-2
at 16, Tr. 16; see id. at 18, Tr. 18. Ms. Richardson testified at her deposition that Ms. Malone said:
“[Alliance] didn’t have any money right now to pay overtime, my hours that I could get paid for
were 9:00 to 5:00, but my job description expectations did not change.” Id. at 25, Tr. 97; see also
id. at 26, Tr. 100 (“[S]he stated that I could only basically get paid from 9:00 to 5:00, but my
expectations and me being on call, none of that was changing.”). Further, Ms. Richardson testified
that she knew Ms. Malone’s directive violated Alliance’s policies. Id. at 29, Tr. 112. But, she did
not report the conversation to Ms. Karl or to the Company’s human resources department because
she was worried that doing so could lead to her termination. Id. at 29, Tr. 112-13; see also id. at
30, Tr. 115.
Shortly after Ms. Richardson met with Ms. Malone in February 2017, Ms. Richardson
spoke with Mr. Clark. ECF 28-2 at 13, Tr. 49; see ECF 29-1 at 14-15, Tr. 106-113. According to
4

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 5 of 21

Mr. Clark, Ms. Richardson indicated that she had just talked to Ms. Malone. ECF 29-1 at 14, Tr.
109. Both Ms. Richardson and Mr. Clark testified that Ms. Richardson then told Mr. Clark that he
could not record more than 40 hours of work per week on his timecard. ECF 28-2 at 13, Tr. 48;
ECF 29-1 at 15, Tr. 110, 113. Mr. Clark testified that he became upset and walked away from Ms.
Richardson, ending the conversation. ECF 29-1 at 16, Tr. 114. Mr. Clark never spoke directly
with Ms. Malone about his overtime work. Id. at 13, Tr. 105.
Mr. Clark maintains that when Ms. Karl supervised Ms. Richardson, Mr. Clark would
record time for work occurring outside of his regular hours when he considered it a “major” task,
such as a repair that took an hour or more to complete. ECF 29-1 at 12, Tr. 98; see id. at 19, Tr.
128-29. In contrast, he did not record “minor” tasks that took 15-20 minutes or less, such as
assisting a resident who was locked out of an apartment. Id. at 12, Tr. 98-100.
Following Mr. Clark’s conversation with Ms. Richardson, Mr. Clark claims that he worked
50 hours per week: 40 regular hours between Monday and Friday and an additional 10 hours of
overtime work on the evenings or weekends. ECF 28-1 at 71, No. 2. However, Mr. Clark admitted
during his deposition that he did not change how he recorded his hours after talking to Ms.
Richardson. That is, he continued to record hours outside of his regular schedule for “major” tasks,
but not for minor tasks. ECF 29-1 at 19, Tr. 129; see also id. at 12, Tr. 98-101.
Mr. Clark resigned from Alliance in October 2017, and Ms. Richardson left on November
1, 2017. ECF 28-1 at 60, No. 2. Mr. Clark seeks $14,944.20 for the ten hours of overtime that he
alleges he worked each week, without compensation, from February 1, 2017 to October 27, 2017.
ECF 28-1 at 76, No. 10. Ms. Richardson seeks compensation for 51.5 hours of overtime pay for
a period of 36 weeks. See ECF 28-1 at 76, No. 10; ECF 28-2 at 48, Tr. 189. The Motion implicates
the Court’s ruling only as to Mr. Clark.

5

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 6 of 21

B. Procedural History
Plaintiffs filed suit on April 17, 2018. ECF 1. On July 20, 2018, after defendants answered
the Complaint, the Court issued a Scheduling Order. ECF 8. It set, inter alia, a deadline of
December 17, 2018 to complete discovery, and January 29, 2019, as the deadline for filing
dispositive pretrial motions. Id. Following several extensions, dispositive motions were due by
June 11, 2019. See ECF 27.
On that date, plaintiffs moved for partial summary judgment, asserting, inter alia, that there
was no genuine dispute of material fact and that Alliance was liable to plaintiffs for unpaid
overtime hours. ECF 28. The motion was supported by several hundred pages of exhibits. See
ECF 28-1 at 21-120; ECF 29-1; ECF 30-1; ECF 31-1. As to the FLSA, plaintiffs argued that
Alliance violated the FLSA because “Plaintiffs’ supervisors knew that Plaintiffs were working
overtime hours but failed to ensure that the hours were recorded properly or take affirmative action
to stop them from doing so.” ECF 28-1 at 6. With respect to Mr. Clark, plaintiffs asserted that
“there is no question Alliance was aware he was working overtime hours,” given that Ms.
Richardson, Mr. Clark’s supervisor, “instructed him to work [overtime] hours, and told him that
he would not be paid for them and that he should not record the time.” ECF 28-1 at 10.
Alliance filed an opposition to the motion and submitted its own exhibits. ECF 34; ECF
35; ECF 36. The Company asserted that Mr. Clark was not entitled to summary judgment “because
the evidence demonstrates that he did not have an objectively reasonable basis for concluding that
Christina Richardson had actual authority or apparent authority to instruct him to work off the
clock.” ECF 34 at 35. Ms. Richardson lacked actual authority, Alliance contended, because the
Handbook was clear that a supervisor could not instruct a subordinate to perform unrecorded work.

6

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 7 of 21

Id. And, Ms. Richardson lacked apparent authority, according to Alliance, because Mr. Clark had
read the Handbook and knew Alliance’s policies. Id.
As indicated, I denied plaintiffs’ motion in a Memorandum Opinion (ECF 40) and Order
(ECF 41) of February 4, 2020. Of relevance here, I rejected Alliance’s “contention that it is
insulated from liability [as to Mr. Clark] because Ms. Richardson lacked actual or apparent
authority to instruct Mr. Clark to manipulate his timesheets.” ECF 40 at 26. I explained:
“‘Knowledge may be imputed to the employer when its supervisors or management encourage[]
artificially low reporting.’” Id. (internal quotation marks omitted) (quoting Bailey v. TitleMax of
Ga., Inc., 776 F.3d 797, 803-04 (11th Cir. 2015)).
The case of Brennan v. General Motors Acceptance Corp., 482 F.2d 825 (5th Cir. 1973),
was “instructive” on this point. ECF 40 at 26. I stated, id. 26-27:
There, the district court found that the employer was liable under the FLSA
because, although the employer’s upper echelon management encouraged accurate
timekeeping, the plaintiffs’ immediate supervisors directed them to perform offthe-clock work. Id. at 827. The employer appealed, arguing that it could not have
violated the FLSA because it had no knowledge of the unreported overtime. Id.
But, the former Fifth Circuit rejected that argument, reasoning that the employer
“cannot disclaim knowledge when certain segments of its management squelched
truthful responses.” Id. at 828. The court concluded that “[b]ecause the immediate
supervisors were primarily responsible for the employees’ failing to report all
overtime, . . . they may have had actual knowledge of the unreported overtime.” Id.
at 828. “At the very least,’ the court explained, “[the employer] had constructive
knowledge, for they had the opportunity to get truthful overtime reports but opted
to encourage artificially low reporting instead.” Accordingly, the court ruled that
the district court did not err in finding that the employer had knowledge of the
plaintiffs’ overtime. Id. at 827.
In light of Brennan and analogous cases, I concluded that Ms. Richardson’s knowledge of
Mr. Clark’s overtime work was imputable to Alliance. Id. at 28. I reasoned, id.:
Here, there is no dispute that Ms. Richardson acted as Mr. Clark’s direct
supervisor for the entirety of his employment at Alliance. ECF 28-1 at 82, No. 6.
Therefore, pursuant to the Handbook, Ms. Richardson was responsible for setting
Mr. Clark’s hours and for authorizing his overtime hours. Id. at No. 8; see also
7

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 8 of 21

ECF 36-1 at 57. Both Ms. Richardson and Mr. Clark testified that Ms. Richardson
informed Mr. Clark that he would not be compensated for overtime work. See ECF
28-2 at 13, Tr. 49; ECF 29-1 at 14-15, Tr. 106-113. And, Ms. Malone admits that
she never checked with Mr. Gordon to determine the accuracy of his timekeeping
sheets. ECF 28-3 at 24. Therefore, there is no genuine dispute of fact that Alliance
had actual or constructive notice that Mr. Clark was working uncompensated
overtime.
Nonetheless, I found that Mr. Clark was not entitled to summary judgment “because there
is a genuine issue of fact concerning the number of hours of work that he performed but for which
he was not paid.” ECF 40 at 28. Accordingly, I denied plaintiffs’ summary judgment motion as
to Mr. Clark. See ECF 41.
The Motion to Reconsider followed on February 18, 2020. ECF 42.
II.

Standards of Review

Although Alliance cites only Local Rule 105.10 in its Motion, a motion to reconsider an
interlocutory order such as one denying summary judgment is governed by Rule 54(b) of the
Federal Rules of Civil Procedure. See U.S. Tobacco Coop., Inc. v. Big S. Wholesale of Va., LLC,
899 F.3d 236, 256 (4th Cir. 2018); Carlson v. Bos. Sci. Corp., 856 F.3d 320, 325 (4th Cir. 2017);
Am. Canoe Ass’n v. Murphy Farms, Inc., 326 F.3d 505, 514-15 (4th Cir. 2003).3 Under Rule 54(b),
any order “that adjudicates fewer than all the claims or the rights and liabilities of fewer than all
the parties . . . may be revised at any time before the entry of a judgment adjudicating all the claims
and all the parties’ rights and liabilities.”
The Fourth Circuit has distinguished between Rule 54(b) and Rule 59(e), which governs
reconsideration of final judgments, explaining that Rule 54(b) “involves broader flexibility” to

3

Plaintiffs filed the Motion pursuant to Local Rule 105.10. With exceptions not applicable
here, Local Rule 105.10 provides that “any motion to reconsider any order issued by the Court
shall be filed with the Clerk not later than fourteen (14) days after entry of the order.” There is no
contention here that the Motion is untimely.
8

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 9 of 21

account for new facts and arguments as the litigation unfolds. See Carlson, 856 F.3d at 325; Am.
Canoe Ass’n, 326 F.3d at 514-15. However, the Fourth Circuit has admonished that “the discretion
afforded by Rule 54(b) ‘is not limitless,’” and the Court has “‘cabined revision pursuant to Rule
54(b) by treating interlocutory rulings as law of the case.’” Tobacco Coop., 899 F.3d at 256
(quoting Carlson, 856 F.3d at 325).
The law of the case doctrine “generally provides that ‘when a court decides upon a rule of
law, that decision should continue to govern the same issues in subsequent stages in the same
case.’” Musacchio v. United States, ___ U.S. ___, 136 S. Ct. 709, 716 (2016) (quoting Pepper v.
United States, 562 U.S. 476, 506 (2011)); accord Arizona v. California, 460 U.S. 605, 618 (1983);
Graves v. Lioi, 930 F.3d 307, 318 (4th Cir. 2019); Carlson, 856 F.3d at 325; TFWS, Inc. v.
Franchot, 572 F.3d 186, 191 (4th Cir. 2009). The doctrine’s effect is to bar a party from
resurrecting issues that were previously decided or “‘decided by necessary implication.’” United
States v. Lentz, 524 F.3d 501, 528 (4th Cir. 2008) (quoting Sejman v. Warner-Lambert Co., Inc.,
845 F.2d 66, 69 (4th Cir. 1988)). In so doing, the law of the case doctrine advances the interests
of efficiency, judicial economy, and finality. See Christianson v. Colt Indus. Oper. Corp., 486
U.S. 800, 816 (1988) (observing that the doctrine safeguards the “efficiency of the judicial process
by protecting against the agitation of settled issues”); United States v. Philip Morris USA Inc., 801
F.3d 250, 257 (D.C. Cir. 2015) (noting that the law of the case “reflects the understanding that
‘inconsistency is the antithesis of the rule of law’”) (citation and alteration omitted).
When applied to a court’s prior interlocutory rulings, the law of the case doctrine “is not
an ‘inexorable command’ but rather a prudent judicial response to the public policy favoring an
end to litigation.” Sejman, 845 F.2d at 68 (citation omitted). Accordingly, the Fourth Circuit has
instructed that a court should revise an interlocutory order only to account for “‘(1) a subsequent

9

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 10 of 21

trial producing substantially different evidence; (2) a change in applicable law; or (3) clear error
causing manifest injustice.’” Tobacco Coop., 899 F.3d at 256 (quoting Carlson, 856 F.3d at 325).
In this setting, the Fourth Circuit has colorfully explained that to be clearly erroneous the decision
cannot be “‘just maybe or probably wrong; it must . . . strike [the court] as wrong with the force
of a five-week-old, unrefrigerated dead fish.’” TFWS, Inc., 572 F.3d at 194 (first alteration in
original) (citation omitted). In short, the decision must be “‘dead wrong.’” Id. (citation omitted).
III.

Discussion

Alliance assigns no error to the Court’s Order denying summary judgment to Mr. Clark
with respect to his FLSA claim. Nor does the Company quarrel with the Court’s determination
that there is a genuine dispute of material fact as to whether Mr. Clark performed unpaid overtime
work and, if so, how many hours he worked. Rather, Alliance takes issue with the Court’s analysis
in the Memorandum Opinion concerning the Company’s knowledge of Mr. Clark’s
uncompensated work. ECF 42 at 1-2.
In particular, Alliance contends that it is “unclear” whether the Court has precluded it from
arguing at trial that Ms. Richardson’s knowledge of Mr. Clark’s unpaid work is not imputable to
the Company because Ms. Richardson had no authority to direct Mr. Clark to underreport his hours.
ECF 42-1 at 6. If the answer is “yes,” i.e., if the Company is foreclosed from making that argument,
then the Company urges the Court to set aside that ruling. See id. at 9-13. According to Alliance,
it should be able to argue to a jury that because the Handbook stripped Ms. Richardson of authority
to instruct Mr. Clark to work off the clock, and because Mr. Clark knew Ms. Richardson lacked
such authority, Ms. Richardson’s knowledge of Mr. Clark’s unpaid overtime cannot be imputed to
the Company. See id.
In plaintiffs’ view, “[t]here is nothing to clarify or reconsider.” ECF 43 at 2. They argue

10

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 11 of 21

that Ms. Richardson had actual authority over Mr. Clark’s hours, and that Mr. Clark understood
Ms. Richardson merely to be conveying Ms. Malone’s directive. Id. at 1-2. Therefore, plaintiffs
maintain that it is “uncontested” that “Ms. Richardson had knowledge of Mr. Clark’s overtime
hours worked, which knowledge is imputed to Defendant.” Id. at 2.
To start, in the Memorandum Opinion, I squarely rejected the Company’s reliance on
agency principles. In my view, the Memorandum Opinion was clear: “Defendant’s contention that
it is insulated from liability because Ms. Richardson lacked actual or apparent authority to instruct
Mr. Clark to manipulate his timesheets is not persuasive.” ECF 40 at 26. I explained that courts
have consistently held that where a supervisor encourages subordinates to falsify their time records,
the supervisor’s knowledge of unpaid work is imputable to the employer. See id. That was the
case here, I observed, because, “pursuant to the Handbook, Ms. Richardson was responsible for
setting Mr. Clark’s hours and for authorizing his overtime hours” and “[b]oth Ms. Richardson and
Mr. Clark testified that Ms. Richardson informed Mr. Clark that he would not be compensated for
overtime work.” Id. at 28.
Therefore, I found that “there is no genuine dispute of fact that Alliance had actual or
constructive notice that Mr. Clark was working uncompensated overtime.” Id. In this respect, the
Memorandum Opinion needs no clarification. Accordingly, I turn to consider whether to revise
my conclusion that Alliance in fact knew of Mr. Clark’s unpaid work.
There is no claim of an intervening change in the law, and no presentation of new evidence,
Therefore, I must determine whether my analysis amounted to clear error causing manifest
injustice. See Henslee v. Union Planters Nat. Bank & Tr. Co., 335 U.S. 595, 600 (1949)
(Frankfurter, J., dissenting) (“Wisdom too often never comes, and so one ought not to reject it
merely because it comes late.”).

11

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 12 of 21

The FLSA provides that “no employer shall employ” a covered employee in excess of forty
hours in a given week unless the employee is paid at “a rate not less than one and one-half times
the regular rate at which he is employed” for each additional hour worked. 29 U.S.C. § 207(a)(1);
see Encino Motorcars, LLC v. Navarro, ___ U.S. ___, 136 S. Ct. 2117, 2121 (2016); U.S. Dep’t
of Labor v. Fire & Safety Investigation Consulting Servs., LLC, 915 F.3d 277, 280 (4th Cir. 2019).
To “employ” is defined in the FLSA as “to suffer or permit to work.” 29 U.S.C. § 203(g). The
employer’s knowledge of the work is an element of a FLSA claim that the plaintiff must establish
to recover. See Bailey v. Cty. of Georgetown, 94 F.3d 152, 157 (4th Cir. 1996); Pforr v. Food Lion,
Inc., 851 F.2d 106, 108 (4th Cir. 1988); Davis v. Food Lion, 792 F.2d 1274 (4th Cir. 1986).
The broad definition of “employ” places the onus on the employer to “exercise its control
and see that the work is not performed if it does not want it to be performed.” 29 C.F.R. § 785.13.
Thus, employers must “pay for all work they know about, even if they did not ask for the work,
even if they did not want the work done, and even if they had a rule against doing the work.” Allen
v. City of Chicago, 865 F.3d 936, 938 (7th Cir. 2017); see also Chao v. Gotham Registry, Inc., 514
F.3d 280, 288 (2d Cir. 2008) (collecting cases). Conversely, the law “‘stops short of requiring the
employer to pay for work it did not know about, and had no reason to know about.’” Allen, 865
F.3d at 938 (citation omitted). In other words, an employer is liable under the FLSA only if it had
actual or constructive knowledge of the employee’s overtime work. Id.
In assessing whether a plaintiff has met his burden, courts have regularly found that a
supervisor’s knowledge of the plaintiff’s overtime work is imputable to the employer. See ECF
40 at 26-27 (collecting cases). For example, in Allen v. Board of Public Education, 495 F.3d 1306
(11th Cir. 2007), the Eleventh Circuit held that several plaintiffs had raised a genuine issue of
material fact as to the employer’s actual knowledge of unpaid work where their supervisor told

12

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 13 of 21

them that they could not be paid overtime but observed them working beyond their scheduled
hours. Id. at 1319. Similarly, in Kuebel v. Black & Decker, 643 F.3d 352 (2d Cir. 2011), the
Second Circuit found the plaintiff had raised a genuine issue of fact as to the employer’s knowledge
where he testified, inter alia, that supervisors instructed him not to record more than forty hours
per week. Id. at 356-57, 365. Notably, the employers in these cases implemented policies to
promote compliance with the FLSA. See, e.g., Kuebel, 643 F.3d at 356 (requiring employees to
accurately record their hours and encouraging employees to report violations of company policies).
Alliance concedes that the decisions are “similar” in that the employers in those cases had
policies requiring accurate timekeeping. ECF 42-1 at 11. But, the Company seeks to distinguish
this case, asserting that “none of the employers in the precedent decisions had policies in place that
expressly deprived supervisors of the authority to instruct an employee to not record all overtime
hours.” Id. As a result, “none of these cases discuss the legal doctrine of actual/apparent
authority.” Id. In contrast, the Company maintains that “Alliance not only has demonstrated that
it denied this authority to its managers, Alliance also has demonstrated that Mr. Clark knew about
this limitation on authority, and he understood it.” Id. It follows, Alliance contends, that a jury
should decide whether Ms. Richardson’s knowledge can be imputed to the Company, given that
she exceeded the scope of her authority when she instructed Mr. Clark to undercount his hours.
See id. at 13.
It is true that federal statutes are ordinarily read against a backdrop of common law agency
principles. See Krakauer v. Dish Network, LLC, 925 F.3d 643, 659 (4th Cir. 2019) (assuming that
“federal statutes are written with familiar common law agency principles in mind”); see, e.g.,
Campbell-Ewald Co. v. Gomez, ___ U.S. ___, 136 S. Ct. 663, 674 (2016) (applying “federal
common-law principles of agency” to the Telephone Consumer Protection Act); Vance Ball State

13

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 14 of 21

Univ., 570 U.S. 421, 428 (2013) (Title VII); Clackamas Gastroenterology Assocs., P.C. v. Wells,
538 U.S. 440, 444-45 (2003) (ADA); Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323
(1993) (ERISA); Am. Soc. of Mech. Eng’rs, Inc. v. Hydrolevel Corp., 456 U.S. 556, 567 (1982)
(antitrust law). Yet, because “‘federal statutes are generally intended to have uniform nationwide
application,’” courts apply a “federal rule of agency,” not state law. Community for Creative NonViolence v. Reid, 490 U.S. 730, 739-40 (1989) (citation omitted). For guidance, courts turn to the
Restatement of Agency. See Burlington Indus. v. Ellerth, 524 U.S. 742, 755 (1998) (describing
the Restatement as a “useful beginning point for a discussion of general agency principles”);
Hodgin v. UTC Fire & Sec. Ams. Corp., 885 F.3d 243, 252 (4th Cir. 2018) (observing that “courts
have traditionally looked to the Restatement of Agency” to derive a federal common law of
agency).
Under traditional principles of agency law, the agent acts as a representative of the
principal, who, in turn, has the right to control the agent’s actions. See RESTATEMENT (THIRD) OF
AGENCY § 1.01 cmt. c (2006). An agency relationship can arise in one of two ways: actual or
apparent authority. A principal confers actual authority on an agent when “the agent reasonably
believes, in accordance with the principal’s manifestations to the agent, that the principal wishes
the agent so to act.” Id. § 2.01. An agency relationship predicated on apparent authority is formed
“when a third party reasonably believes the actor has authority to act on behalf of the principal and
that belief is traceable to the principal’s manifestations.” Id. § 2.03.
As a result of the agency relationship, the legal consequences of an agent’s actions are
attributable to the principal when the agent acts within the scope of his or her authority. Id. § 7.04
cmt. b; see, e.g., Meyer v. Holley, 537 U.S. 280, 285 (2003) (discussing applicability of vicariously
liability principles to Fair Housing Act). The rule “creates incentives for a principal to choose

14

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 15 of 21

agents carefully and to use care in delegating functions to them.” RESTATEMENT, supra, § 5.03
cmt. b.
According to the Restatement, an employee “acts within the scope of employment when
performing work assigned by the employer or engaging in a course of conduct subject to the
employer’s control.” Id. § 7.07. In contrast, an “employee’s act is not within the scope of
employment when it occurs within an independent course of conduct not intended by the employee
to serve any purpose of the employer.” Id. Notably, the Restatement teaches that “conduct is not
outside the scope of employment merely because an employee disregards the employer’s
instructions.” Id. cmt. c. For instance, if a delivery company directs its employee to transport a
package with instructions to drive the speed limit and the employee speeds resulting in an accident,
the company is nonetheless liable because the employee’s conduct “is compatible with acting in
an assigned role to do an assigned task.” Id.
Generally, where the agent acquires information in furtherance of the agent-principal
relationship, that knowledge is deemed known by the principal. Id. § 5.03; see, e.g., Am. Sur. Co.
v. Pauly, 170 U.S. 133, 153 (1898) (“It is the rule that the knowledge of the agent is the knowledge
of his principal . . . .”). The Restatement, however, imposes two limitations on the imputation
principle. First, “[t]he scope of an agent’s duties delimits the content of knowledge that is imputed
to the principal.” RESTATEMENT, supra, § 5.03. Thus, an agent’s knowledge that he “acted or
intends to act in a manner unauthorized by the principal is not imputed to the principal.” Id.
Similarly, an agent’s knowledge is “not imputed to the principal if the agent acts adversely to the
principal in a transaction or matter, intending to act solely for the agent’s own purposes or those
of another person.” Id. § 5.04. Second, even if knowledge lies within the scope of an employee’s
duties, it is imputed to the principal only if material to the agent’s duties. Id. Stated differently,

15

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 16 of 21

the employee’s knowledge of a fact may be imputed to the employer only if it is of import to the
agent’s duties.
Although neither party addresses the applicability of agency principles to the FLSA, the
Supreme Court has instructed that “‘[i]n order to abrogate a common-law principle, the statute
must speak directly to the question addressed by the common law.’” United States v. Bestfoods,
524 U.S. 51, 63 (1998) (alteration in Bestfoods) (quoting United States v. Texas, 507 U.S. 529, 534
(1993)). Therefore, a federal statute will not displace traditional agency principles absent clear
indication from Congress. See, e.g., In re Crescent City Estates, LLC, 588 F.3d 822, 826 (4th Cir.
2009) (finding that fee-shifting provision in removal statute clearly replaced the American Rule);
DiFelice v. U.S. Airways, Inc., 397 F. Supp. 2d 758, 780 (E.D. Va. 2005) (concluding that ERISA
supplanted traditional agency principles because it directly addresses the liability of a fiduciary to
plan members).
The FLSA is silent with regard to agency principles; it evinces no congressional intent to
supersede agency common law. And, notably, other courts have applied the rules of agency to the
FLSA, albeit in circumstances different from those presented here. See Arriaga v. Fla. Pac. Farms,
LLC, 305 F.3d 1228, 1244-45 (11th Cir. 2002) (concluding that the FLSA did not require farm
owners to reimburse farmworkers for fees charged by recruiters where the allegations failed to
support the creation of apparent authority between the farm owners and recruiters); see also Ulloa
v. Fancy Farms, Inc., 762 F. App’x 859, 866 (11th Cir. 2019). Accordingly, Alliance is correct
that the FLSA does not supersede agency common law.
To be sure, the existence of an agent-principal relationship and the scope of an agent’s
authority are factual questions and so are ordinarily within the purview of the factfinder. See, e.g.,
Ashland Facility Operations, LLC v. NLRB, 701 F.3d 983 (4th Cir. 2012) (citing Metco Prods.,

16

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 17 of 21

Inc. v. NLRB, 884 F.2d 156, 159 (4th Cir. 1989)). Here, however, it is undisputed that Alliance
delegated to Ms. Richardson the authority to supervise Mr. Clark, which included the extent of any
overtime he worked.
The Handbook states: “All overtime requires the prior approval of the Associate’s
Supervisor or Manager.” ECF 36-1 at 57. Indeed, the Handbook warns: “Associates who work
overtime without prior approval . . . may be subject to disciplinary action up to and included
termination for violating the prior approval requirement.” Id. Moreover, Ms. Karl acknowledged
during her deposition that, according to Company policy, Mr. Clark would check with Ms.
Richardson, not with her or Ms. Malone, for approval to work more than forty hours in a week.
ECF 28-1 at 33, Tr. 46. Thus, there can be no dispute that Ms. Richardson had actual authority to
manage Mr. Clark’s hours, including the decision to permit Mr. Clark to work overtime.
Alliance disputes the conclusion that Ms. Richardson’s knowledge can be imputed to it,
insisting that the Handbook deprived Ms. Richardson of the authority to require Mr. Clark to falsify
his timesheets, and Mr. Clark knew that such a command contravened Company policy. See ECF
42-1 at 7. Certainly, Alliance is correct that, pursuant to the Handbook, Ms. Richardson’s alleged
conduct violated its policies. See 36-1 at 57 (stating that “[w]orking off the clock is prohibited,
and no manager has the authority to require any Associate to do so”). But, Alliance misses the
proverbial forest for the trees. Whether Ms. Richardson’s knowledge of Mr. Clark’s unpaid work
is imputable to Alliance turns on whether Ms. Richardson had authority over Mr. Clark’s hours
generally, not her authority specifically to direct Mr. Clark to work-off-the-clock.
It is illustrative to consider two hypothetical scenarios. First, imagine that Ms. Richardson
tells Mr. Clark not to record his hours and he listens, but Ms. Richardson and Mr. Clark are
similarly situated peers, not supervisor and subordinate. In that circumstance, Ms. Richardson is

17

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 18 of 21

not an agent of Alliance with respect to Mr. Clark’s hours; she can neither limit him to forty hours
of work nor order him to work in excess of forty hours. Consequently, her knowledge of Mr.
Clark’s unpaid labor would not be imputable to the Company.

In another scenario, Ms.

Richardson, as Mr. Clark’s supervisor, learns that Mr. Clark is consistently working unrecorded
overtime and makes no effort to stop him from doing so, nor does she ensure the accuracy of his
timesheets.

In that circumstance, Ms. Richardson’s knowledge is plainly imputable to the

Company: Alliance delegated control of Mr. Clark’s hours to Ms. Richardson and so Ms.
Richardson’s knowledge of Mr. Clark’s overtime is within the scope of her authority. That is so
even if she never discussed overtime with Mr. Clark. In sum, Ms. Richardson’s authority to order
Mr. Clark to work-off-the-clock is immaterial; what matters is her authority to control Mr. Clark’s
work hours.
Notably, Alliance has not cited a FLSA decision that supports its position that where
supervisors act in violation of the employer’s policies, their conduct is not imputable. Nor has the
Court uncovered such a case. To the contrary, those courts that have considered the issue focus on
whether the knowledgeable individual was a manager, not the precise scope of his or her authority.
See, e.g., Bailey v. TitleMax of Ga., Inc., 776 F. 3d 797, 802 (11th Cir. 2015) (“Knowledge may
be imputed to the employer when its supervisors or management ‘encourage artificially low
reporting.’”) (alteration and citation omitted); Kuebel, 643 F.3d at 363-64 (observing that plaintiff
asserted that “managers instructed him not to record more than forty hours per week” and that “it
was [defendant], through its managers, that caused the inaccuracies in his timesheets”); Allen, 495
F.3d at 1316 (finding genuine issue as to knowledge where employee’s “supervisor told her that
she could not be paid overtime, but observed her working beyond her scheduled hours”); Forrester
v. Roth's I.G.A. Foodliner, Inc., 646 F.2d 413, 414 (9th Cir. 1981) (“any official” of the employer);

18

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 19 of 21

Brennan, 482 F. 2d at 828 (“immediate supervisor,” or “management”).
Moreover, Alliance’s position is irreconcilable with the FLSA’s capacious definition of
“employ,” which imposes on an employer a non-delegable duty to prevent unwanted work. See
Chao v. Gotham Registry, Inc., 514 F.3d 280, 288 (2d Cir. 2008) (“An employer who has
knowledge that an employee is working, and who does not desire the work be done, has a duty to
make every effort to prevent its performance.”); Reich v. Dep’t of Conservation & Nat. Res., 28
F.3d 1076, 1082 (11th Cir. 1994) (“The reason an employee continues to work beyond his shift is
immaterial; if the employer knows or has reason to believe that the employee continues to work,
the additional hours must be counted.”); Forrester, 646 F.2d at 414 (holding that an employer
“cannot stand idly by and allow an employee to perform overtime work without proper
compensation”).
And, Alliance’s position is at odds with Department of Labor regulations, which make
manifest that policies alone are insufficient to insulate an employer from FLSA liability. See 29
C.F.R. § 785.13 (“The mere promulgation of a rule against [unwanted] work is not enough.
Management has the power to enforce the rule and must make every effort to do so.”). Alliance
offers no sound basis to distinguish its policy prohibiting management to order off-the-clock work
from others, such as requiring employees to obtain preapproval to perform overtime, which courts
have concluded does not discharge an employer’s duty to account for all overtime work. See Chao,
514 F.3d at 288-90; Reich, 28 F.3d at 1084. Indeed, allowing Alliance to hide behind its Handbook
would threaten to eviscerate the FLSA, as it would enable employers unofficially to pressure
employees not to record overtime through management, but then defeat ensuing claims on the
ground that its supervisors acted ultra vires.
However, after again combing through the parties’ submissions, I am satisfied that there is

19

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 20 of 21

a genuine dispute of material fact as to whether Ms. Richardson knew that Mr. Clark was not
accurately recording his hours.
Ms. Richardson and Mr. Clark both testified that Ms. Richardson told Mr. Clark that he
could not record more than forty hours per week, regardless of how much he actually worked. ECF
29-1 at 15, Tr. 110, 113. Further, Ms. Richardson testified that she knew Mr. Clark continued to
work overtime following the conversation. See ECF 28-2 at 13, Tr. 48-49 (Ms. Richardson
testifying that Mr. Clark “just worked the hours he needed to work without knowing that he could
get paid for them”).
On the other hand, in Alliance’s opposition to plaintiff’s motion for partial summary
judgment (ECF 34), the Company challenged whether the conversation between Ms. Richardson
and Mr. Clark in fact occurred, positing that the consistency of Mr. Clark’s timekeeping practices
throughout his employment at Alliance could lead a jury to “reasonably conclude that Richardson
gave no instruction to Clark to not record more than 40 hours of work in a week.” Id. at 37; see
ECF 29-1 at 19, Tr. 129 (admission of Mr. Clark during his deposition that his timekeeping
practices remained unchanged following his conversation with Ms. Richardson).4
The dispute turns on credibility. Accordingly, it must be decided by the fact finder, not the
court on summary judgment. See Wilson v. Prince George’s Cty., 893 F.3d 213, 218-19 (4th Cir.
2018); Black & Decker Corp. v. United States, 436 F.3d 431, 442 (4th Cir. 2006).
In sum, there is no dispute that Alliance charged Ms. Richardson with supervising Mr.
Clark, including his work hours. Therefore, under settled agency principles, Ms. Richardson’s
knowledge of Mr. Clark’s unpaid overtime is attributable to Alliance if, in fact, she had such
4

Although the Company’s contention is found only in the last sentence of the lengthy
brief’s penultimate page, it suffices to raise the issue of whether Ms. Richardson spoke with Mr.
Clark’s concerning his overtime.
20

Case 1:18-cv-01114-ELH Document 45 Filed 04/29/20 Page 21 of 21

knowledge. Thus, plaintiffs must prove at trial that Ms. Richardson knew that Mr. Clark was
working unpaid overtime. It is for the jury to decide whether Ms. Richardson had knowledge of
Mr. Clark’s overtime work.
IV.

Conclusion

For the foregoing reasons, I shall grant the Motion to Reconsider (ECF 42) in part and deny
it in part. An Order follows, consistent with this Memorandum Opinion.

Date: April 29, 2020

_______/s/______________
Ellen L. Hollander
United States District Judge

21