On October 8 the United States Supreme Court heard arguments on an overtime case. Now, before you yawn (I hope you didn’t yawn yet) this case, while it may seem to be a sleeper and may seem to turn on arcane, nit-picky laws and details could actually have far-reaching impact on employers and employees. The case is Integrity Staffing v. Busk et al, and the burning question is whether the employees are entitled to be paid for the time they spend at the end of their work day going through security clearances. If you are a retail employer the Supreme Court’s decision may be of particular interest to you. Even if you are not, there may still be implications that could matter. Join The Emplawyerologist after the jump and find out why…
Before jumping right in: the Fair Labor Standards Act (FLSA) requires you to pay your employees minimum wage or better, and time and a half for all time worked in excess or 40 hours in any week (overtime)–unless s/he is performing functions that qualify for an exemption. That’s the general rule. Click here for review. Sounds straightforward enough. The problem is that employees sometimes perform activities that, while, they may not appear to be connected to their primary job functions may still be considered “work”. If so, the employer may have to pay for the time his or her employees spend performing those activities. Some activities are done before the employee starts the actual tasks in his or her job description. Some are done before the employee may leave for the day. Click here if you missed the post on that issue. The security check at issue in Integrity Staffing v. Busk et al falls into the latter category.
Here are the key factual allegations: Integrity Staffing Solutions provides warehouse space and staffing to clients. The two lead plaintiffs, Jesse Busk and Laurie Castro, worked in warehouses in Nevada filling orders placed by Amazon.com customers. Workers were required at the end of their shifts to pass through a security clearance checkpoint, where they had to remove their keys, wallets and belts, then pass through a metal detector and submit to a search. The process could take up to 25 minutes. Employees also had to submit to a clearance process before they could go to lunch. That process could take up to 10 minutes out of their 30-minute lunch break. The reason for the security clearance was to prevent employee theft. Employees were not paid for the time they spent going through security clearances. Busk and Castro sued Integrity, arguing that such practices violated both the FLSA and Nevada state labor laws. If time spent in security clearances is compensable, employees might not only be entitled to be paid for that time, but they might also be entitled to overtime. Multiply overtime by the number of employees over a period of months and not years, and, well… k-ching!
The U.S. District Court in Nevada holding that the time spent in security clearances was not compensable, and dismissed the claims. It also ruled that shortened meal breaks were irrelevant given that the plaintiffs did not argue that they performed work-related duties during their lunch periods. The U.S. Court of Appeals for the 9th Circuit agreed with the District Court about the shortened lunch periods, but ruled that the plaintiffs’ claims that security clearances were “integral and indispensable to their work” and were therefore plausible claims that could proceed to trial.
The crux of each side’s argument is as follows:
Integrity argues that : a) required post-shift security clearances are reasonable responses to the threat of theft; b) they amount to checking out of the workplace, which is non-compensable; c) allowing compensation will impose undue burdens on employers, including increased litigation-related costs and uncertainty as to legal obligations; d) the activities fall within the provisions of the Portal-to-Portal Act (I posted about that here), which grant employers limited immunity from liability for time employees spend traveling i) to and from the workplace; and ii) any activities which are preliminary or postliminary to principal activities of employment. Integrity cited Steiner v. Mitchell 350 U.S. 247 (1956), which held that employees can only get paid for activities that are “an integral and indispensable part of the principal activities”. Integrity argues that the security clearances are not integral to employees’ whose job is to fill orders. Integrity also argued that in IBP v. Alvarez 546 U.S. 21 (2005) the Court distinguished between activities only incidental to productive work, (e.g. waiting in line to pick up protective gear) and those that are essential to the worker’s job responsibilities, such as putting on protective gear. Integrity, of course argued that the security checks in issue here are sufficiently similar to waiting to pick up protective gear. ( By the way, you may be interested to know that the US Department of Labor sides with Integrity in this case. It is extremely rare for the DOL to side with an employer.)
The employees argue that: a) uncompensated post-shift security clearances would give employers license to require other activities by employees without pay, as long as the employer can show it is unrelated to the employee’s primary job function(s); b) requiring compensation for security clearances would encourage employers to operate more efficiently, as Integrity could reduce its costs by hiring more screeners or staggering the shift times to eliminate the long waiting periods; c) under Tennessee Iron and R. Co. v. Muscoda Local No. 123 321 U.S. 590 (1944) if such activity is required by and benefits the employer it is compensable. Clearly Integrity requires and benefits from the security clearances; d) The integral and indispensable standard under Steiner is only one of many ways to identify compensable work; and e) undergoing security clearances at the end of the workday is analagous to waiting in line to remove protective gear at the end of the workday, which the Court in IBP v. Alvarez held to be compensable as part of the continuous workday.
On side note, all the parties agreed at oral argument that time spent by a law clerk preparing a grapefruit breakfast for a judge (a hypothetical posed by Justice Kagan) would be compensable work. Wait. Preparing the grapefruit breakfast does not appear to be at all connected with the primary responsibilities of a law clerk. Hmmmm….
You can see how this case really turns on interpretation of the facts. The decision could change how, when or whether you might have to pay overtime to your employees. We’ll have to wait and see which way the US Supreme Court will go.
Next week, we’ll look at another case pending before the U.S. Supreme Court, about whether courts can enforce the EEOC’s duty to conciliate discrimination claims before filing suit. Bye for now!
Disclaimer: This post’s contents are for informational purposes only, are not legal advice and do not create an attorney-client relationship. Always consult with competent local employment counsel on any issues discussed here.
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