Vedder Thinking | Articles Whose Time Is It Anyway? Key Decisions Clarify the Meaning of Compensable Time
Late last year, the U.S. Supreme Court issued an opinion in Integrity Staffing Solutions v. Busk, providing some clarity regarding whether employees must be compensated for certain "mandatory" activities engaged in before they start and after they finish their workday. The plaintiffs, contract workers assigned to an Amazon.com, Inc. fulfillment facility, accused their employer, Integrity Staffing Solutions, of violating the Fair Labor Standards Act (FLSA) by failing to compensate them for the time they were required to spend each day going through a theft-prevention security checkpoint before leaving the warehouse. The Ninth Circuit Court of Appeals, when presented with the issue, held that the security screenings were compensable employment activities, reasoning that "the screenings were 'necessary' to the employees' primary work as warehouse employees and done for Integrity Staffing's benefit."
In a unanimous decision, the U.S. Supreme Court concluded that the Ninth Circuit erred in its decision by incorrectly focusing on "whether an employer required a particular activity." In its opinion, the Supreme Court relied on the Portal-to-Portal Act, which Congress passed in 1947 to create an exemption for "activities which are preliminary to or postliminary to [one's] principal [employment] activity." The Court explained that "principal activity" under the Act should be interpreted as an activity that is "integral and indispensable to the principal activities that an employee is employed to perform." Elaborating further, the Court explained that "intrinsic elements" of one's principal activities are those activities that "an employee cannot dispense if he is to perform his principal activities."
Explaining that although some activities, such as "the time battery-plant employees spent showering and changing clothes because the chemicals in the plant were 'toxic to human beings,'" satisfy the intrinsic-element test, that was not the case with respect to post-shift security screenings. Addressing the nature of the work performed by the employees at issue, i.e., the contract workers assigned to the Amazon.com, Inc. facility, the Court noted that these employees were hired to "retrieve products from warehouse shelves and package those products for shipment . . . [not] to undergo security screenings." Accordingly, the time spent going through the security check was deemed a noncompensable postliminary activity.
The distinction between compensable and noncompensable time was also addressed by a federal district court judge in Gibbs v. City of New York. Claiming that the New York City Police Department violated the FLSA, the Gibbs plaintiffs argued that they were entitled to overtime compensation stemming from their attendance at mandatory counseling and treatment sessions that occurred after regularly scheduled work hours. Relying on Integrity Staffing, the court concluded that "the counseling sessions do not amount to 'work'" and "even if they were 'work' . . ., [the counseling] would amount to noncompensable postliminary activities." As a result, the court granted the city's motion for summary judgment.
While the Court's decision in Integrity Staffing was arguably narrowly tailored to address the compensability of time spent in security check points, it (and the Gibbs decision) nevertheless helps clarify which types of activities associated with an individual's work qualify as noncompensable preliminary and postliminary activities in contrast to those activities that are intrinsic to an employee's principal activities and for which the employee must be compensated.
These decisions are also a good reminder for employers to periodically review their wage and hour policies to ensure that their employees are paid for all those job duties that are intrinsic to the employees' principal job activities. As we have written about for years, wage and hour class actions are very expensive to defend, even when the employers' position is correct. Vedder Price is very experienced in helping clients with these types of complicated wage and hour issues. If you have any questions about these decisions or wage and hour claims in general, please contact Jonathan A. Wexler at +1 (212) 407 7732, Joseph K. Mulherin at +1 (312) 609 7725, Kaitlyn E. Fallon at +1 (212) 407 7779 or any other Vedder Price attorney with whom you have worked.
Click below to download the complete newsletter featuring this article.