In Furry v. East Bay Publishing (A151986, Filed 12/12/2018), a California appeals court held that imprecise evidence by an employee can provide a sufficient basis for damages when the employer fails to keep accurate records of the employee’s work hours.

Plaintiff Terry Furry sued his former employers, East Bay Express and East Bay Publishing, LLC (collectively East Bay) for unpaid overtime wages, meal and rest break compensation, and statutory penalties for inaccurate wage statements. Furry’s compensation was a base salary, plus commissions, bonuses, and vacation pay. Each employee of East Bay received a commission breakdown for each pay period. Furry’s wage statements, however, did not break down the information in terms of hours worked, his hourly rate, his overtime rate, his double time rate, or the amount of any overtime worked. East Bay did not keep track of the hours that Furry worked.

Furry’s typical work day was from 8:30 or 9:00 a.m. until 5:30 or 6:00 p.m. Meal breaks were left to his discretion, and he typically did not take lunch breaks on Mondays or Tuesdays. Furry also performed work in the evenings, on weekends, and at various events and promotions sponsored by East Bay. Finally, Furry created original artwork, advertising, and props that were used at East Bay events over the years.

During the bench trial, the trial court found that East Bay did not keep detailed records of the hours worked by Furry and failed to meet its burden of proof that Furry was exempt from the laws pertaining to overtime, minimum wage, and meal and rest breaks. The trial court, however, concluded that Furry was not entitled to unpaid and overtime pay because he “failed to present sufficient evidence regarding the amount and extent of his work to allow the Court to draw a just and reasonable inference that he engaged in any work for which he was not paid.” The court characterized Furry’s testimony as “uncertain, speculative, vague and unclear.”

The appeals court held that the trial court erred in refusing to award damages for unpaid overtime. Furry argued that a relaxed standard of proof applied due to East Bay’s failure to keep records of his hours, and his testimony regarding work performed was sufficient to meet that relaxed burden. The appeals court agreed, reasoning that the assertion of an exemption from the overtime laws is considered to be an affirmative defense; therefore, the employer bears the burden of proving the employee’s exemption. Citing to Hernandez v. Mendoza (1988) Cal.App.3d 721, 727, the appeals court found that the consequences of the employer’s failure to keep records required by statute should fall on the employer, not the employee. In such a situation, imprecise evidence by the employee can provide a sufficient basis for damages.

Furry’s performance of additional work beyond his regular 40-hour workweek was established through the testimony of himself and two other witnesses. Thus, it was undisputed that a wage and hour violation occurred, and Furry was therefore damaged. The only uncertainty was the amount of damage, which may be proven by imprecise evidence by the employee. The employee provided estimates of hours of uncompensated work based on his recollection of his workload over the years, as well as the duties and tasks he performed for specific events. The appeals court found that the detail provided in Furry’s testimony was sufficient to shift the burden to the employer to provide specific detail on the amount of overtime or to disprove what was not correct with the employee’s figures. The fact that Furry had to draw his time estimates from memory was no basis to deny relief.

However, the appeals court also held that the trial court did not err in denying relief on the meal break claim. Furry did not deny that he was provided with the opportunity to take meal breaks, but chose to take meals at his desk. Instead, he argued that even if he is not entitled to premium pay under Labor Code section 226.7(c), he is entitled to regular compensation for the hours when East Bay knew or had reason to know he was working through meal breaks. The appeals court found that Furry failed to demonstrate that East Bay knew or reasonably should have known that he worked during some of his meal breaks. Thus, the trial court correctly denied Furry relief on his meal break claim.

Given the court’s findings, employers are reminded of their obligation to record and maintain accurate time records under California law.