Seyfarth Synopsis: In a misclassification-to-trial case, the Fifth Circuit affirmed a defense verdict because the plaintiff failed to prove the employer had actual or constructive knowledge of alleged overtime...
Seyfarth Synopsis: In a misclassification-to-trial case, the Fifth Circuit affirmed a defense verdict because the plaintiff failed to prove the employer had actual or constructive knowledge of alleged overtime, rejected the theory that "no timekeeping system," standing alone, creates constructive knowledge for the employer, and upheld the Fifth Circuit pattern jury instruction that employees must notify employers when working extra hours.
In this recent decision, Merritt v. Texas Farm Bureau, 166 F.4th 490 (5th Cir. 2026), the Fifth Circuit underscored that even when a plaintiff clears the classification hurdle, the overtime claim may still turn on a separate, dispositive issue: whether the employer knew, or had reason to know, the employee was working overtime.
Jerry Merritt worked for Texas Farm Bureau ("TFB") as an Agency Manager, where he supervised a team of insurance agents and sold and renewed insurance policies. TFB classified Merritt and other Agency Managers as independent contractors. In his role, Merritt set his own work schedule, was paid by commission rather than hourly, and had no obligation to track or disclose his hours to TFB. TFB did not supervise Merritt's hours or completion of daily tasks.
In 2019, Merritt sued TFB alleging he was...
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