Even misclassified employees must prove one critical element to win overtime
Manager earning $600,000 annually lost overtime fight for failing to notify employer he was working extra hours.
The Fifth Circuit Court of Appeals delivered that message loud and clear on February 6, ruling against Jerry Merritt in his claim against Texas Farm Bureau. The decision reinforces what HR departments need to remember: workers have to prove their bosses knew about overtime before they can collect a dime for it.
Merritt supervised insurance agents across multiple Texas Farm Bureau offices from 2016 to 2018, earning between $552,000 and $627,000 annually. The company treated him as an independent contractor, paying him commissions on policies sold and renewed rather than an hourly wage. He set his own schedule, decided when and how much to work each day, and had no obligation to track his hours or report them to anyone at the company.
When Merritt sued in 2019, claiming he should have been classified as an employee entitled to overtime under federal labor law, a judge agreed he had been misclassified. The court even determined he was owed at least 816 hours of overtime. But there was a catch: a jury still had to decide whether Texas Farm Bureau actually knew Merritt was working those extra hours.
The jury said no. Texas Farm Bureau had no idea Merritt was working overtime, and Merritt appealed.
His first argument seemed logical enough. Federal law defines employment as allowing someone to...
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