Overtime and wage theft show up in an employee’s life the way a surprise pothole shows up on a dark highway: you do the work, you feel the damage, and your employer acts shocked you’re upset. If you worked extra hours and didn’t get time and a half, you already know the frustration. The Fair Labor Standards Act (“FLSA”) promises overtime pay, but the fine print can decide whether unpaid overtime ever turns into real money.
That fine print was front and center in Merritt v. Texas Farm Bureau, — F.4th —-, 2026 WL 321605. The case involved a simple but painful truth. A jury accepted that Jerry Merritt worked 816 hours of overtime. The work was real. The hours were real. But before those hours could legally become wage theft that forced the employer to pay time and a half, Merritt had to clear one more hurdle. That is where everything fell apart.
Merritt worked as an Agency Manager for Texas Farm Bureau, supervising insurance agents across multiple agencies. He controlled his schedule, did not track his time, and Texas Farm Bureau did not supervise his daily hours or tasks. He was paid by commission and earned between $552,000 and $627,000 per year from 2016 to 2018.
Those numbers matter. Assuming a standard 40-hour work week over 52 weeks, that compensation translates to an approximate hourly rate between $265 and $301. At time and a half, Merritt’s 816 overtime hours would have been worth roughly $325,000 to $369,000 in unpaid overtime wages alone. Under the FLSA, overtime back pay is often just the beginning. Employees may also seek liquidated damages, which can double unpaid wages, plus interest and attorney’s fees, meaning the total exposure in a case like this can easily push toward $650,000 to $740,000 or more.
But none of that mattered if Merritt could not prove one thing: that the employer knew, or reasonably should have known, he was working overtime.
Can My Employer Refuse Time And A Half By Claiming Ignorance?
This is the part of overtime law that blindsides employees.
You work the extra hours. The job gets done. The employer benefits. Then payday comes, and the employer says, “We didn’t know.”
In Merritt, the United States Court of Appeals for the Fifth Circuit confronted that exact defense. The jury accepted that Merritt worked 816 overtime hours, yet still found he was not entitled to overtime pay. Why? Because the employer lacked the required knowledge.
The Fifth Circuit Court of Appeals held that an employee seeking unpaid overtime must prove the employer had “knowledge, actual or constructive, that [the employees] w[ere] working” overtime. Without that knowledge, overtime does not legally count, no matter how much work was done.
Merritt argued that because Texas Farm Bureau allowed him to work as much as he wanted, overtime pay should automatically follow. The Fifth Circuit Court of Appeals rejected that argument, holding that permitting unlimited work does not require payment “regardless of [the employer’s] knowledge.”
That holding explains why so many wage and hour cases fail. Employers rarely deny the work happened. They deny they knew.
Practical Tip: If you assume your employer “must know” you are working overtime, you may be giving away leverage. Overtime claims depend on proof, not assumptions.
Best Wage Theft Lawyer Blogs on Point:
What Counts As Employer “Knowledge” Under The FLSA For Overtime Pay?
Once overtime turns on employer knowledge, the next question is unavoidable: what does “knowledge” actually mean?
The Fifth Circuit Court of Appeals made clear that employer knowledge comes in two forms: actual knowledge and constructive knowledge. Either can support an overtime claim. If neither exists, the claim fails.
Actual knowledge exists when the employer is directly aware that overtime work is being performed. The Fifth Circuit Court of Appeals held that overtime pay requires proof that the employer knew the employee was working extra hours. This is why it can be critical for employees to speak up when they believe overtime is happening but suspect the employer may not realize it. If the employer truly does not know, silence can quietly erase an otherwise valid overtime claim.
Constructive knowledge is more indirect. The Fifth Circuit Court of Appeals held that constructive knowledge exists when the employer had the “opportunity through reasonable diligence to acquire knowledge” of the overtime. In real life, that can include workloads that cannot reasonably be completed in forty hours, deadlines that require nights or weekends, or patterns of emails, reports, or results showing work happening well outside normal hours.
Merritt tried to argue that because he worked autonomously and without close supervision, the employer should be treated as having knowledge of his overtime. The Fifth Circuit Court of Appeals rejected that approach. Autonomy alone does not create notice.
Practical Tip: Look at whether your job makes overtime unavoidable. When expectations, deadlines, or volume demand extra hours, that can help establish employer knowledge even without a direct admission.
Best Overtime Pay Violations Attorney Blogs on Point:
Can Wage Theft Happen Even If No One Tracks My Hours?
Employees hear “wage theft” and picture something obvious. But Merritt exposes a quieter problem: what happens when nobody tracks hours at all?
Merritt argued that Texas Farm Bureau should be treated as having constructive knowledge because it made “no effort” to record his time. The Fifth Circuit Court of Appeals rejected that theory, holding that it has “never held that an employer’s failure to maintain a timekeeping system in itself constitutes constructive knowledge of an employee’s overtime work.”
Here is the crucial flip side under the FLSA. If an employer does have knowledge of overtime work but fails to keep accurate time records, the employee does not need perfect precision. In that situation, a reasonable estimate of overtime hours can be enough to establish hours worked. Poor recordkeeping does not protect an employer once awareness exists.
In Merritt’s case, the missing time records did not matter because the jury found the employer lacked knowledge of the overtime in the first place.
Practical Tip: If your employer knows you are working overtime, its failure to track hours can actually strengthen your case. Keep your own reasonable records—emails, calendars, call logs—because estimates can carry real weight once knowledge is established.
Best Wage and Hour Law Firm Blogs on Point:
How Do I Find The Best Lawyer For An Unpaid Overtime Claim?
When an employee realizes unpaid overtime may be illegal, the next step is not theoretical. It is personal. Wage and hour cases under the FLSA are technical, fact-driven, and aggressively defended by employers who know how to hide behind “lack of knowledge.”
Spitz, The Employee’s Law Firm is one of the largest law firms in the United States dedicated exclusively to employees and employment law. That focus matters. Overtime, wage theft, and time and a half cases require resources, experience, and attorneys who know how employers actually fight these claims. Spitz offers free initial consultations, a no-fee guarantee, vast trial experience, and a history of strong results. Just as important, Spitz treats employees with empathy and respect, understanding how personal it feels to realize your work was taken without fair pay.
If your employer knew—or should have known—you were working overtime and still failed to pay you, speaking with the right employment law lawyer can change everything. If this story sounds familiar, now is the time to talk to an attorney who does this work every day and knows how to hold employers accountable.
Employment Lawyer Disclaimer
This employee’s pay rights blog provides general information about overtime, wage theft, wage and hour issues, and the FLSA, and it is not legal advice that any employee or employer should rely on for a specific situation. For guidance about unpaid overtime, time and a half pay, or any employment law issue, you should consult with a qualified employment lawyer or attorney, because every wage and hour case depends on its own facts. No promises or guarantees are being made about outcomes, this blog is a legal advertisement, and reading it does not create an attorney-client relationship.