Compensable Work Activity

Decades ago, Congress fleshed out the definition of work, in an attempt to clarify what a compensable work activity is and what is not. Now the U.S. Supreme Court is preparing to take another look at the issue.

Problems can arise when employees believe they aren’t being paid for activities that the employer doesn’t consider work, but the employees do. That’s what happened at Integrity Staffing Solutions, Inc. (Integrity), a company which supplied warehouse workers for Amazon Inc. The employees’ jobs involved retrieving items from the warehouse inventory to fill customer orders.

Workers were subject to a security screening process at the end of each shift. After they punched out, they were required to empty their pockets and walk through a metal detector. In a class action case filed in 2010, employees sought back pay, overtime pay and damages for the time they had spent undergoing the security procedure.

The U.S. District Court that heard the case rejected the employees’ argument. However, on appeal, the U.S. Court of Appeals for the Ninth Circuit took the opposite view, and earlier this year the U.S. Supreme Court agreed to hear the case, Integrity Staffing Solutions v. Busk.

Portal-to-Portal Act

To put it in context, soon after Congress enacted the Fair Labor Standards Act (FLSA) in 1938, employees began suing their employers left and right, seeking wages for various activities involving gearing up for or winding down from work. The legal doctrine that was emerging was that any time employees spent at the workplace was “compensable.” That’s why Congress entered the picture again nine years later when it passed the Portal-to-Portal Act of 1947.

Lawyers for Integrity, in asking the Supreme Court to hear the case, stated the Portal-to-Portal Act “makes clear that the FLSA does not apply to activities that are ‘preliminary’ or ‘postliminary’ to an employee’s primary job responsibilities.” (Note: Things could be different if there is “a custom or contract to the contrary.”)

In a prior case, the Supreme Court “has construed the Portal-to-Portal Act as requiring compensation only for tasks that are an ‘integral and indispensable part of the principal activities for which covered workmen are employed.'”

So, does undergoing a “postliminary” security check meet that test? The Appeals Court believed it did merely because employees were required by Integrity to undergo the security check, and that the procedure was for Integrity’s benefit.

Security Screenings Compensable?

Not so, responded Integrity in its request to have the Supreme Court review the case. “Security screenings are indistinguishable from many other tasks that have been found non-compensable under the FLSA, such as waiting to punch in and out on the time clock, walking from the parking lot to the workplace, waiting to pick up a paycheck, or waiting to pick up protective gear before donning it for a work shift,” according to Integrity’s petition.

Department of Labor regulationsissued under the Portal-to-Portal Act offer some additional examples of preliminary and postliminary activities: changing clothes, washing up or showering “when performed under the conditions normally present.”

“All of these activities are “required” in a broad… sense, but they are not compensable under the FLSA because such tasks are fundamentally distinct from employees’ actual job duties,” Integrity argued. Also, the Ninth Circuit’s opinion conflicts with two other federal appeals courts — which may have contributed to the Supreme Court’s willingness to hear the case and resolve those conflicting interpretations.

Massive Liability

On a practical level, Integrity pointed out that if the Ninth Circuit’s ruling were allowed to stand, it could “impose massive retroactive liability on employers, and render the Portal-to-Portal Act… largely toothless.” Several additional class action suits were filed against employers (including Apple) following the Ninth Circuit Court’s ruling.

The Obama administration has filed an amicus brief supporting Integrity, arguing that to meet the “integral and indispensable” test for preliminary and postliminary activities, those activities require a “closer or more direct [relationship] between a principal activity and the activity in question.”

The brief cited a decades-old opinion from the U.S. Department of Labor that “made no distinction between searches conducted for general-security purposes, and those conducted, at least in part, for anti-theft purposes, finding that both were noncompensable under the circumstances.”

Given the overall philosophical balance of power on the Supreme Court today, it’s difficult to imagine an opinion that would not overturn the Ninth Circuit’s ruling in this case…but don’t count your chickens until they are hatched.

GTM will continue to monitor this issue and provide updates as necessary. Please contact us if you have any questions.