76 F.4th 1145
8th Cir.2023Background
- St. Luke’s used an automated timekeeping system that recorded exact clock-in/out times but rounded any clocked time within six minutes of a scheduled shift start or end to the scheduled time for pay purposes.
- Employees (led by Torri Houston) stipulated that all time recorded "on the clock" was compensable work time and sued under the FLSA for unpaid overtime and under Missouri law for unjust enrichment; Houston also asserted individual Missouri wage-law and breach-of-contract claims.
- Experts for both sides analyzed millions of shifts. Plaintiffs’ expert (Baggett) found the rounding policy produced a net loss of about 74,000 employee-hours (Apr 2012–Sep 2018) and estimated lost overtime of ~$140,000 for the two-year FLSA period and ~$2.2M for the six-year Missouri class period; most employees were net losers.
- The district court granted summary judgment for St. Luke’s, finding the rounding policy facially neutral and neutral as applied because rounding sometimes added time and sometimes subtracted time.
- The Eighth Circuit vacated and remanded, holding there is a genuine dispute whether the rounding policy "averaged out" over time: the record showed most employees lost time and overall net losses (about one free hour per employee per year), and St. Luke’s did not rebut that inference with alternative lookback periods.
- Because the FLSA/Missouri wage issues remain in dispute, the court also vacated summary judgment on the unjust-enrichment and breach claims and declined to resolve de minimis issues or Missouri-law thresholds at this stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether St. Luke’s rounding policy was neutral as applied under the FLSA | Rounding produced systematic, long‑run undercompensation for employees (most employees lost time; net losses across lookback periods) | Policy is facially neutral and, because rounding sometimes added time, it averages out; per‑shift/minute losses are minor | Genuinely disputed; summary judgment improper — data show a discernible pattern of undercompensation that did not "average out" on this record |
| Proper metric for "averages out" inquiry | Focus on long‑run effects for employees as a whole (per‑employee and aggregate over multiple lookback periods) | Shorter/pay‑period slices or per‑shift minutiae can show neutrality; requiring perpetual auditing is burdensome | Court adopts long‑run aggregate focus; employer failed to rebut inference of systematic loss |
| Missouri unjust‑enrichment claim (whether retention of rounding benefit is inequitable) | If rounding was not lawfully neutral in application, retention could be unjust and enrichment actionable | If rounding was lawfully neutral and applied, retention is not unjust | Vacated summary judgment; unjust‑enrichment remains for further proceedings because neutrality is disputed |
| Breach of contract / de minimis issues | Contract/breach claim and de minimis questions depend on whether rounding unlawfully deprived employees of pay | If rounding lawfully neutral/applied, no breach and no unjust retention; de minimis defense supports SJ | Court remanded these claims; declined to resolve de minimis or Missouri‑law incorporation issues at this stage |
Key Cases Cited
- Lyons v. Conagra Foods Packaged Foods LLC, 899 F.3d 567 (8th Cir. 2018) (summary judgment standard reviewed de novo)
- Aguilar v. Management & Training Corp., 948 F.3d 1270 (10th Cir. 2020) (evidence that rounding routinely undercompensated employees defeated summary judgment)
- Corbin v. Time Warner Entertainment-Advance/Newhouse P’ship, 821 F.3d 1069 (9th Cir. 2016) (rounding need only "average out in the long term" to be lawful)
- 303 Creative LLC v. Elenis, 143 S. Ct. 2298 (2023) (parties are bound by stipulations they make)
- Fergin v. Westrock Co., 955 F.3d 725 (8th Cir. 2020) (appellate courts decline to address issues the district court did not pass on)
- Jennings v. SSM Health Care St. Louis, 355 S.W.3d 526 (Mo. Ct. App. 2011) (unjust enrichment requires showing unjust retention of a benefit)