Employee security screening time in departing from warehouse work site is not compensable under FLSA, but California employers beware.

Posted in: Employment Law by Steven Vartabedian on

The Federal Labor Standards Act of 1938 (FLSA), which provides minimum wage and overtime compensation to employees for hours worked per week in excess of 40, was amended by Congress in 1947 (Portal-to-Portal Act) to exempt an employer from liability for (1) time spent by employee traveling to work site, and (2) activities preliminary or postliminary to the principal activity of employment. The United States Supreme Court has defined principal activity to embrace all activities which are an “integral and indispensable” part of the principal activity. (IBP, Inc.v. Alvarez, 546 U.S. 21, 29-30 (2005).

In Integrity Staffing Solutions, Inc. v. Busk ___ U.S.___ (filed 12-9-14), 2014 DJDAR 16104, the Supreme Court has revisited the meaning of “integral and indispensable” in this context as meaning “an intrinsic element of [one’s principal work] activities without which the employee cannot dispense if he is to perform his essential activities.” There, Integrity Staffing provided warehouse staffing to Amazon.com at various locations throughout the United States. Representative class employee Busk was an hourly worker who retrieved products from shelves and packaged them for delivery to Amazon customers. Integrity Staffing required its employees to undergo a security screening at the end of each work day that included requiring the employees to remove items on their person including metal items as they passed through a metal detector. This process took an average 25 minutes, as most all of the employees at a work site left work at the same time. The class plaintiffs alleged they should be compensated under the FLSA for this time, that their wait time could have been minimized by the employment of more screeners and/or staggering shifts, and the screenings were conducted solely for the benefit of the employers and their customers (to detect theft).

The Supreme Court disagreed with the claim that this time was compensable under the FLSA, reversing the Ninth Circuit Court of Appeals’ finding otherwise, and agreeing with the District Court which had previously dismissed the action. The High Court found that the integral-and- indispensable test was not met by plaintiffs. Examples of situations where the test is met include workers at a battery plant who must shower and change clothes after their work time because of the toxic nature of the products they worked with (Steiner v. Mitchell, 350 U.S. 247, 249-251 (1956), and meat packer employees who had to sharpen their knives before they started their work. (Mitchell v. King Packing Co., 350 U.S. 260, 262 (1956). These activities are indispensable, as explained in the concurring opinion, because the Steiner plaintiffs could not otherwise have safely performed their duties, and the Mitchell plaintiffs could not otherwise have effectively performed their duties.

Finding the security wait to be a matter of postliminary activity, the Court viewed the screenings as not being the principal activity, nor anything indispensable to that activity, for which the employees were employed; that principal activity was to retrieve products from the warehouse for shipment. The Court chided the Court of Appeal for improperly focusing on whether an employer required a particular activity; nor is a ‘for the benefit of the employer” test appropriate. Such tests are overbroad.

This opinion should cause some concern for plaintiff wage-and-hour counsel who commonly argue under California’s Labor Code that hours in excess of “clocked time” spent in activities required by and/or of benefit to the employer should be compensated.   They may still have an argument that all the Supreme Court has done here is interpret the FLSA, thus not precluding a different interpretation of state laws concerning wages. For this reason, California employers may not want to institute this type of security check with a lot of confidence they will not be required to pay for this time. Also, a question does come to mind as to dicta in the Integrity Staffing case stating, “[a] for the benefit of the employer test is similarly overbroad.”  Does that mean overbroad in the narrow sense of interpreting the FLSA statute as amended in 1947? Or does that mean overbroad in the broader sense of not being legally permissible at all for constitutional or other federally protected reasons? Even if the latter proves to be the case, then I suppose one could say this is mere dicta, but this is Supreme Court dicta. Will a court other than the High Court itself dare to reject such language found in a High Court opinion, especially a unanimous opinion?

Perhaps the safest approach for plaintiffs and their attorneys might be to distinguish their situation as truly “integral and indispensable:” even if this federal test applies to state statutory claims, should plaintiff employees fail to perform the activity in question, they would be terminated for failure to perform their work duties. Defense attorneys, I imagine, will argue that Integrity Staffing leaves very little in the functions performed before and after clocked time that truly fall into the safe and/or effective performance categories essential to one’s specific job duties.

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