By Stephen L. Knowles
On December 9, 2014, the Supreme Court ruled unanimously that time spent by warehouse workers to wait for and undergo security screenings after the end of their work shifts was not compensable under the Fair Labor Standards Act (FLSA). The case is Integrity Staffing Solutions, Inc. v. Busk, No. 13-433, and it reinforces existing legal principles relevant to the proper determination of “hours worked” by non-exempt employees.
The plaintiffs were two warehouse workers in Nevada who were employed by a staffing company that provided warehouse services to Amazon.com. The employees retrieved products from shelves and packaged them for shipment to Amazon’s customers. In order to deter thefts, the staffing company required all employees to go through a security screening device at the end of each shift. The plaintiffs claimed they were entitled to be paid for the time they spent waiting in line and going through the security devices, approximately 25 minutes each day. They sued the staffing company on behalf of similarly situated fellow employees, claiming they were entitled to additional compensation under the FLSA because the post-shift security screenings were solely for the benefit of their employer and Amazon’s customers.
The lower courts differed in their assessment of the claim. The federal district court dismissed the workers’ lawsuit, holding the screenings were not an integral and indispensable part of the regular workday. The Court of Appeals for the Ninth Circuit reversed, ruling that the post-shift screenings were a necessary part of the employees’ work because they were required as a means of preventing theft.
In an opinion written by Justice Thomas for a unanimous Court, the Supreme Court held that the Ninth Circuit had misinterpreted the FLSA. The key question was not whether the security screenings were required by the employer. Instead, as explained below, the key question was whether the screenings were an integral and indispensable part of the work the employees were hired to perform. Because the time spent on screenings was not integral and indispensable to the workers’ duties in the warehouse, the time was not compensable.
A brief historical review confirms that the Supreme Court’s opinion is consistent with the legislative intent of the FLSA as amended by the Portal-to-Portal Act. Enacted in 1938, the FLSA specifies a minimum wage and a time-and-one-half overtime requirement for non-exempt employees who work more than 40 hours in a workweek. But the Act does not define “work” or “workweek.” In early cases, the Supreme Court construed these terms broadly. For example, the time an employee was required to spend on the employer’s premises was considered work time and therefore compensable. Similarly, the Court held in another early case that the time employees spent walking from time clocks to their workstations was part of the workweek.
In 1947, and in response to these early decisions, Congress enacted the Portal-to-Portal Act, which became part of the FLSA. Subject to exceptions based on contract or custom that were not involved in the Integrity Staffing case and are not discussed here, the Portal-to-Portal Act excludes from the FLSA’s minimum wage and overtime requirements:
(1) walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is hired to perform, and
(2) activities which are preliminary to or postliminary to said activities, which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities.
Only the second of these exemptions was relevant to the claims in Integrity Staffing. The key issue was whether the time attributable to security screening was part of the “principal activities” the warehouse workers were hired to perform or “postliminary” to those principal activities. If the security screening time were considered integral and indispensable to the warehouse work the time would be compensable; if not, it would be excluded as a “postliminary” activity.
Relying on cases decided after the adoption of the Portal-to-Portal Act, the Supreme Court explained that an employee’s “principal activities” necessarily include other activities that are “integral and indispensable” to the accomplishment of the principal activities. In other words, if the principal activity cannot be performed unless another activity is also performed, the other activity is considered part of the principal activity and is therefore compensable.
Previous cases decided by the Supreme Court illustrate this point. In one case, employees in a battery plant were required to don protective clothing before each shift and to shower and change clothes after the end of the shift because their workplace contained toxic chemicals. They could not have performed their production work safely without the protective clothing, so showering and changing clothes were indispensable to their production work. In another case, the time meatpacking employees spent sharpening their knives was an integral and indispensable part of their work in the plant because dull knives would adversely affect production.
Based on previous decisions as well as Department of Labor regulations, the Court in Integrity Staffing concluded that the security screenings were not integral and indispensable to the activities the warehouse employees had been hired to perform. Security Staffing hired its warehouse workers to retrieve and package products for shipment to customers, which could be accomplished with or without post-shift security screenings. The fact that the employer required the security screenings did not make them integral and indispensable. The “integral and indispensable” test relates to the production work the employees were hired to perform, not merely to the employer’s requirements. Therefore, the screenings were “postliminary” activities that were not compensable under the FLSA.
The proper delineation of the compensable time worked by non-exempt employees is always important. FLSA claims are typically asserted on behalf of other similarly situated employees, and a few minutes of unpaid time for one worker can turn into a sizable claim when the entire workforce is considered. The Court’s opinion in Integrity Staffing is helpful in reiterating that activities do not need to be compensated unless they are integral and indispensable to the principal work employees were hired to perform. Nonetheless, each case must be determined based on its own facts, and employers should carefully analyze all ramifications in any particular situation.
If you have any questions regarding this article, please contact your Davis & Kuelthau attorney or the author, Stephen L. Knowles at 414.225.1422 / sknowles@dkattorneys.com.